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Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices approving Article XI, Section 11.2 of the CT Plan as proposed.
c Termination Article XI, Section 11.3 of the CT Plan sets forth termination procedures following the dissolution of the LLC.
Specifically, Section 11.3 provides that each Member will receive a statement prepared by the independent accountants retained on behalf of the Company that sets forth i the assets and liabilities of the Company as of the date of the final distribution of Companys assets under Section 10.2 of the CT Plan and ii the net profit or net loss for the fiscal period ending on such date. The CT Plan further specifies that, upon compliance with the distribution process set forth in Section 10.2 of the CT Plan, the Members will cease to be such, and the liquidating trustee is required to execute, acknowledge, and file a certificate of cancellation of the Company.849 Finally, the CT Plan provides that upon completion of the dissolution, winding up, liquidation, and distribution of the liquidation proceeds, the Company will terminate.850
The termination procedures following the dissolution of the LLC are similar to those existing in other NMS plans,851
and the Commission received no comments addressing this provision.
The Commission has, however, identified two incorrect cross references in Article XI, Section 11.3. In particular, Section 11.3 incorrectly cites to Section 10.2 Tax Status; Returns instead of Section 11.2 Liquidation and Distribution of the CT Plan when describing provisions related to the liquidation of the LLC. The Commission is therefore modifying Section 11.3 to correct these incorrect cross references.
For the reasons discussed above, the Commission is approving Article XI, Section 11.3 as modified.

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11. Exculpation and Indemnification a Exculpation and Indemnification Article XII, Section 12.1 and Section 12.2 of the CT Plan provide broad liability, exculpation, and indemnification protections for SROs and SRO Voting Representatives.
Specifically, Section 12.1 provides that the liability of each Member and each individual currently or formerly serving as an SRO Voting Representative each, an Exculpated Party will be limited to the maximum extent permitted by law for any loss suffered in connection 849 See
Article XI, Section 11.3 of the CT Plan.
id.
851 See Article X, Section 10.3 of the CAT NMS
Plan; Article IX, Section 9.3 of the OPRA Plan.

with a breach of any fiduciary duty, errors in judgment or other acts or omissions by such Exculpated Party.
The provision explicitly does not extend to Non-Exculpated Itemsacts or omissions that involve gross negligence, willful misconduct or a knowing violation of law or losses resulting from such Exculpated Partys Transaction Reports, Quotation Information or other information reported to the Processors by such Exculpated Party. Moreover, Section 12.1b, among other things, explicitly permits an Exculpated Party, in making decisions authorized to be in its sole discretion, to consider such interests and factors as it desires including its own interests and asserts that the Exculpated Party shall have no duty or obligation fiduciary or otherwise to give any consideration to any interest of or factors affecting the Company or the Members.
Section 12.2 provides indemnification to SROs and SRO Voting Representatives Company Indemnified Party for losses from being a Party to a Proceeding, so long as the CT Plan is not a claimant against the Company Indemnified Party and the claim does not involve Non-Exculpated Items. Paragraph c of Section 12.2
expressly acknowledges that indemnification provided in this Article XII could involve indemnification for negligence or under theories of strict liability. Paragraph d of Section 12.2 makes clear that the CT
Plan is primarily responsible for advancement of expenses, or for providing insurance for any Company Indemnified Partys claim for indemnification.
In the Notice, the Commission sought comment on whether the indemnification and exculpation provisions of the CT Plan should also cover Non-SRO Voting Representatives.852 In response, the Commission received several comments addressing this issue. Most commenters addressing the issue argue that the CT
Plan should extend liability protection and indemnification coverage to NonSRO Voting Representatives acting in their role on the Operating Committee.
One commenter recommends that the CT Plan should state that no liability can be imputed to Non-SRO Voting Representatives acting in their role on the Operating Committee and that NonSRO Voting Representatives would be entitled to indemnification against any claims made against them related to their role on the Operating
850 See
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852 See Notice, supra note 3, 85 FR at 64572
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Committee.853 Other commenters suggest that the exculpation and indemnification protections under Article XII of the CT Plan be extended to non-SRO representatives.854 One of these commenters states that it is customary and widespread in corporate situations to minimize potential personal liability for the directors of a company and that NonSRO Voting Representatives may be equally exposed to the risk of litigation and penalties. 855 Further, this commenter is concerned that without comparable protection from liabilities, the CT Plan may find it difficult to attract and retain qualified representatives, decreasing the pool of interested candidates, 856 and Non-SRO
Voting Representatives may potentially be hindered from freely providing input on CT Plan matters.857
One commenter states that, since Non-SRO Voting Representatives are individuals, their ability to shoulder liability is of concern.858 This commenter also does not believe that the rights and responsibilities of an Exculpated Party under Article XII, Section 12.1b are consistent with the SROs obligations with respect to the operation of an NMS plan.859
One commenter states that the liability carve-out for SROs is too broad and supports a limitation on liability for SROs carrying out quintessentially regulatory functions of the CT Plan.860
This commenter argues that it is neither appropriate nor warranted for SROs to have a blanket limitation on liability for non-regulatory activities. 861 This commenter contends that the vast majority of activities carried out by the SROsfrom technology services, to operations, to maintenancewould not involve quintessentially regulatory functions and SRO liability should not be limited for those functions.862
Another commenter argues that the SROs should be precluded from receiving any special liability protections.863 One commenter states the Plan incentivizes the SROs to run the Plan and the LLC poorly to the 853 See SIFMA Letter I, supra note 30, at 5;
SIFMA Letter II, supra note 30, at 2.
854 See BlackRock Letter I, supra note 247, at 3;
RBC Letter, supra note 30, at 10; ICI Letter I, supra note 31, at 6 these protections are typically provided for the members of any governing body.
855 BlackRock Letter I, supra note 247, at 34.
856 Id. at 4.
857 See id.
858 See Data Boiler Letter I, supra note 31, at 5, 46.
859 See id. at 46, 49.
860 Virtu Letter, supra note 30, at 3.
861 Id.
862 Id.
863 See RBC Letter, supra note 30, at 9.

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