The Nasdaq Stock Market LLC v. SEC

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 24, 2022 Decided July 5, 2022

No. 21-1167

THE NASDAQ STOCK MARKET LLC, ET AL.,
PETITIONERS

v.

SECURITIES AND EXCHANGE COMMISSION,
RESPONDENT

Consolidated with 21-1168, 21-1169

On Petitions for Review of an Order
of the Securities and Exchange Commission

Thomas G. Hungar argued the cause for petitioners. With
him on the briefs were Paul S. Mishkin, Amir C. Tayrani,
Joshua M. Wesneski, Paul E. Greenwalt III, and Michael K.
Molzberger. Matthew A. Kelley entered an appearance.

Tracey A. Hardin, Assistant General Counsel, Securities
and Exchange Commission, argued the cause for respondent.
With her on the brief were Dan M. Berkovitz, General Counsel,
Michael A. Conley, Solicitor, and Emily True Parise, Senior
Litigation Counsel.
 2
Robert A. Skinner and Douglas H. Hallward-Driemeier
were on the brief for amicus curiae Investment Company
Institute in support of respondent.

Before: HENDERSON and WILKINS, Circuit Judges, and
SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: The
Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C.
§ 78a et seq., directs the Securities and Exchange Commission
(Commission) to facilitate the establishment of a national
market system (NMS), a key component of which is the public
dissemination of market data regarding quotations for and
transactions in equity securities. Equity market data is
collected, consolidated and disseminated pursuant to NMS
plans governed and operated by “self-regulatory
organizations” (SROs), groups comprising, in large part, the
major national securities exchanges for equity securities.
Beginning in 2020, the Commission issued two orders aimed
at consolidating the existing NMS plans governing the
dissemination of equity market data into a single, consolidated
plan (CT Plan) and modifying the governance structure to
increase efficiencies, mitigate conflicts of interest among the
securities exchanges and facilitate greater involvement by non-
exchange stakeholders. See Order Directing the Exchanges and
the Financial Industry Regulatory Authority To Submit a New
National Market System Plan Regarding Consolidated Equity
Market Data, 85 Fed. Reg. 28,702 (May 13, 2020) (Governance
Order); Order Approving, as Modified, a National Market
System Plan Regarding Consolidated Equity Market Data, 86
Fed. Reg. 44,142 (Aug. 11, 2021) (CT Plan Order).
 3
A group of national securities exchanges associated with
Nasdaq, Inc. (Nasdaq), the New York Stock Exchange (NYSE)
and Cboe Global Markets (Cboe) (collectively, petitioners)
challenge the Commission’s orders, arguing that several
elements are arbitrary and capricious under the Administrative
Procedure Act (APA), 5 U.S.C. § 551 et seq., or contrary to the
text and goals of the Exchange Act. In particular, petitioners
challenge three provisions of the final, Commission-approved
CT Plan: (1) the inclusion of representatives of non-SROs as
voting members of the CT Plan’s operating committee; (2) the
grouping of SROs based on corporate affiliation for voting; and
(3) the requirement that the administrator of the CT Plan be
“independent,” meaning independent of any SRO that sells
equity market data products.

As detailed infra, we grant petitioners’ three petitions as to
the first challenged provision—non-SRO representation—and
deny them in all other respects. Further, because the non-SRO-
representation provision is not severable from the CT Plan
Order, we vacate that Order in its entirety. We do, however,
uphold in large part the Governance Order, which preceded the
CT Plan Order and merely directed the SROs to propose an
NMS plan that included the three challenged provisions.

I. BACKGROUND

A.

In 1975, the Congress sought to modernize regulation of
the securities markets through the establishment of a national
market system to “distribute market data economically and
equally and to promote fair competition among all market
participants,” NetCoalition v. SEC, 615 F.3d 525, 528 (D.C.
Cir. 2010), superseded by statute as stated in NetCoalition v.
SEC, 715 F.3d 342, 344 (D.C. Cir. 2013); see also Bradford
Nat’l Clearing Corp. v. SEC, 590 F.2d 1085, 1091 (D.C. Cir.
 4
1978) (citing “operational breakdowns and economic
distortions” in securities markets as impetus for reforms
(quoting H.R. Rep. No. 94-229, at 91 (1975))), and its efforts
culminated in the Securities Acts Amendments of 1975, Pub.
L. No. 94-29, 89 Stat. 97. The Securities Acts Amendments
granted the Commission “broad, discretionary powers” to
ensure “maximum flexibility” in “oversee[ing] the
development of a national market system” and
“implement[ing] its specific components in accordance with
the findings and . . . objectives” of the legislation. See S. Rep.
94-75, at 7 (1975); see also Bradford, 590 F.2d at 1091.

Of importance here, section 11A of the amended Exchange
Act, Pub. L. No. 94-29, § 7, 89 Stat. 97, 111 (codified at 15
U.S.C. § 78k-1), “direct[s]” the Commission to “facilitate the
establishment of a national market system for securities . . . in
accordance with the findings and to carry out the objectives set
forth” in the section. 15 U.S.C. § 78k-1(a)(2). As to those
statutory findings and objectives, the Congress concluded that
“[i]t is in the public interest and appropriate for the protection
of investors and the maintenance of fair and orderly markets to
assure,” inter alia, “economically efficient execution of
securities transactions,” “fair competition among” market
participants and “the availability to brokers, dealers, and
investors of information with respect to quotations for and
transactions in securities.” Id. § 78k-1(a)(1)(C).

To this end, section 11A “authorize[s]” the Commission,
“by rule or order, to authorize or require self-regulatory
organizations”—a group currently comprised in large part of
the various securities exchanges, including petitioners—“to act
jointly with respect to matters as to which they share authority
under [the Exchange Act] in planning, developing, operating,
or regulating a national market system (or a subsystem thereof)
or one or more facilities thereof.” Id. § 78k-1(a)(3)(B); see also
 5
id. § 78c(a)(26) (defining “self-regulatory organization”).
Section 11A also creates a National Market Advisory Board—
consisting of “persons associated with brokers and dealers
(who shall be a majority) and persons not so associated who are
representative of the public”—to advise the Commission on
matters related to the national market system or its system of
self-regulation by SROs. See id. § 78k-1(d). With respect to
market data, section 11A authorizes the Commission to
prescribe rules and regulations, “as necessary or appropriate”
to carry out the Exchange Act’s purposes, to “assure the
prompt, accurate, reliable, and fair collection, processing,
distribution, and publication of information with respect to
quotations for and transactions in . . . securities and the fairness
and usefulness of the form and content of such information.”
Id. § 78k-1(c)(1)(B).

B.

At “the heart of the national market system” is the
collection, consolidation and dissemination of securities
market data from the various securities exchanges. H.R. Rep.
No. 94-229, at 93 (1975); see also NetCoalition, 615 F.3d at
529. In 2005, the Commission adopted Regulation NMS, 70
Fed. Reg. 37,496 (June 29, 2005), in order to streamline and
promote the availability of data regarding quotations for and
transactions in securities. Before 2021, Regulation NMS
required each securities exchange to report its “core” market
data for its NMS-traded securities to one of two centralized
securities information processors (SIPs), see 17 C.F.R.
§§ 242.601, 242.602 (2020), which in turn consolidated and
disseminated the core data to subscribers, including investors,
broker-dealers and data vendors, see id. § 242.603(a)–(b). See
NetCoalition, 615 F.3d at 529. Consolidated core data for an
NMS-traded security consisted of (1) the price, size and venue
of the last sale; (2) each exchange’s current highest bid and
 6
lowest offer; and (3) the highest bid and lowest offer currently
available on any exchange. Id. Possessing this data, “investors
of all types have access to a reliable source of information for
the best prices in NMS stocks.” Regulation NMS, 70 Fed. Reg.
at 37,503.1

At present, three SRO-administered NMS plans, known as
the Equity Data Plans, govern the collection, consolidation and
dissemination of core market data. Two plans, referred to by
the Commission as the CTA and CQ Plans, cover Tape A, the
consolidated data feed for securities listed on the NYSE, and
Tape B, the data feed for securities listed on exchanges other
than the NYSE and Nasdaq. The third plan, referred to as the
UTP Plan, covers Tape C, the data feed for securities listed on
Nasdaq. A NYSE affiliate serves as the SIP for Tapes A and B
and Nasdaq is the SIP for Tape C. Subscribers to a particular
data feed pay fees set according to the governing Equity Data
Plan. Each Equity Data Plan is controlled by an operating
committee, whose voting membership is limited to the SROs
participating in the particular plan. Each plan also has an
1
Parallel to the Commission orders at issue here, the
Commission proposed and approved a rule amending Regulation
NMS’s “centralized consolidation model” for securities market data
by expanding the definition of core market data and facilitating
greater competition among data consolidators. See generally Market
Data Infrastructure, 86 Fed. Reg. 18,596 (Apr. 9, 2021). We recently
upheld the rule against challenges from these petitioners. See
generally Nasdaq Stock Mkt. LLC v. SEC, 34 F.4th 1105 (2022).
Although tangentially related to the petitions at issue here, the
Market Data Infrastructure rule is not pertinent to their resolution;
the Commission itself has iterated that with respect to the Market
Data Infrastructure rule and the orders at issue here, “[n]either
initiative depends on the other initiative being implemented before it
may take effect.” Order Denying Stay, Exchange Act Release No.
93,051, at 6 (Sept. 17, 2021), 2021 WL 4267323, at *7 (alteration in
original and citation omitted).
 7
administrator which, among other things, supervises the audit
process for data subscriber usage and fee payments. The NYSE
serves as administrator for the CTA and CQ Plans and Nasdaq
serves as administrator for the UTP Plan.

C.

Since the adoption of Regulation NMS, the Commission
has observed two notable changes regarding the structure of the
equity markets. First, although securities exchanges were once
nonprofit entities mutually owned by their members—meaning
those companies whose stock is traded on the exchange—they
are now, generally speaking, demutualized and for-profit
entities owned by shareholders that sell proprietary-data
products. These proprietary-data products often contain
exchange-specific data that goes beyond the best bid and best
offer quotes contained in the core data feeds and are generally
delivered much faster than the core data feeds, thereby
resulting in what the Commission characterizes as a “two-
tiered market-data environment.” Notice of Proposed Order
Directing the Exchanges and the Financial Industry Regulatory
Authority to Submit a New National Market System Plan
Regarding Consolidated Equity Market Data, 85 Fed. Reg.
2,164, 2,169 (Jan. 14, 2020) (Proposed Governance Order).
Second, the emergence of “exchange groups”—multiple
exchanges operating under the same corporate umbrella—has
“consolidat[ed] much of the voting power and control of the
Equity Data Plans” and resulted in uniform voting by blocs of
four or five votes. Id. at 2,168. The Commission also observed
that these exchange groups—which could command a majority
of votes on the Equity Data Plans’ operating committees—are
the “primary producers of exchange proprietary data products.”
Id. at 2,175. The Commission concluded that the confluence of
these two developments has created and exacerbated conflicts
of interests between exchanges’ business interests and
 8
regulatory obligations under the Exchange Act, id., and
“perpetuates disincentives for the Equity Data Plans to invest
in certain improvements to enhance the distribution of core
data or the content of the core data itself,” id. at 2,170.

In response to these perceived deficiencies in the Equity
Data Plans, the Commission issued its Proposed Governance
Order, which proposed to direct the SROs to formulate and
propose a single “New Consolidated Data Plan” (later renamed
the CT Plan) to replace the three Equity Data Plans. See
generally Proposed Governance Order, 85 Fed. Reg. 2,164.
Despite largely leaving the formulation of the CT Plan up to
the SROs, the Commission set out three governance features.
First, the CT Plan’s operating committee would include
representatives of six classes of equity market participants:
institutional investors, broker-dealers with a predominantly
retail investor customer base, broker-dealers with a
predominantly institutional investor customer base, securities
market-data vendors, issuers of NMS stock and retail investors.
Id. at 2,179. These representatives would serve as voting
members on the operating committee administering the CT
Plan, collectively controlling one-third of the committee’s
voting power—using fractional votes to preserve the ratio. Id.
at 2,180–81.

Second, the Commission recommended allocating the
votes held by the SROs according to an SRO’s corporate
affiliation. Each “exchange group” (later called SRO Groups),
defined as “multiple exchanges operating under one corporate
umbrella,” id. at 2,168, and “unaffiliated SRO,” meaning an
SRO not affiliated with another SRO, id. at 2,175 n.140, would
be granted one vote on the operating committee, id. at 2,175.
Each exchange group or unaffiliated SRO would have an
additional vote if it has a “consolidated equity market share”
 9
greater than 15%.2 Id. at 2,175–76. As an illustration, the SROs
under the NYSE’s umbrella—New York Stock Exchange
LLC, NYSE American LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc.—would be treated as
one SRO Group and receive two votes, instead of receiving one
vote for each SRO. Relatedly, the existing unanimity
requirement for certain operating-committee actions would be
replaced by an “augmented majority vote”—defined by the
Commission as a “two-thirds majority of all votes on the
operating committee, provided this vote also includes a
majority of the SRO votes,” meaning SRO Group votes. Id. at
2,181.

Third, the Commission proposed requiring that the CT
Plan administrator be “independent,” meaning “not . . . owned
or controlled by a corporate entity that separately offers for
sale” its own proprietary-data products. Id. at 2,183. The
independence requirement would preclude both of the current
Equity Data Plan administrators—the NYSE and Nasdaq—
from subsequently serving as the CT Plan administrator.

After notice and comment, the Proposed Governance
Order was finalized and approved without material change. See
Governance Order, 85 Fed. Reg. 28,702. The SROs complied
with the Governance Order, submitting a proposed CT Plan
that included the three features proposed by the Commission,

2
The 15% threshold was selected in order to “limit[] the total
votes available to an exchange group or unaffiliated exchange to two
votes.” Proposed Governance Order, 85 Fed. Reg. at 2,176. The
Commission concluded that the consolidated market shares of the
largest exchange groups range from 17% to 23% and that setting the
threshold for an additional vote at 10% would “suggest that a third
vote would be appropriate at 20% of consolidated equity market
share,” thereby giving some exchange groups a third vote
unavailable to the unaffiliated exchanges. Id.
 10
see Notice of Filing of a National Market System Plan
Regarding Consolidated Equity Market Data, 85 Fed. Reg.
64,565 (October 13, 2020), while at the same time reserving
their objections to the legality of the three features, see Joint
Appendix 209 n.13 (NYSE Comment Letter). Petitioners
sought review of the Governance Order but we dismissed the
challenge, concluding that the Commission had not committed
to any particular governance structure and therefore the
Governance Order did not constitute reviewable final agency
action. See Nasdaq Stock Mkt. LLC v. SEC, 1 F.4th 34, 37–38,
39 (D.C. Cir. 2021); see also 15 U.S.C. § 78y(a)(1).

In August 2020, the Commission approved the proposed
CT Plan. See CT Plan Order, 86 Fed. Reg. 44,142. Petitioners
timely filed for review, challenging the three Commission-
recommended features. Petitioners also filed with the
Commission a motion to stay the CT Plan Order, which the
Commission denied. Petitioners then filed for and received a
stay from this Court. See Order, Nasdaq Stock Mkt. LLC v.
SEC, No. 21-1167 (D.C. Cir. Oct. 13, 2021). We have
jurisdiction of their challenge pursuant to section 25(a) of the
Exchange Act. See 15 U.S.C. 78y(a)(1).

II. ANALYSIS

Petitioners’ challenge reaches both the Commission’s
interpretation of section 11A of the Exchange Act as well as its
decisionmaking given the record and comments before it. As
to the former, we review using the familiar Chevron two-step
framework. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,
Inc., 467 U.S. 837, 842–43 (1984). At step one, we ask
“whether the agency-administered statute is ambiguous on the
precise question at issue.” Eagle Pharms., Inc. v. Azar, 952
F.3d 323, 330 (D.C. Cir. 2020) (internal quotation marks
omitted) (quoting Guedes v. Bureau of Alcohol, Tobacco,
 11
Firearms & Explosives, 920 F.3d 1, 28 (D.C. Cir. 2019)). If
not, we assume at step two that the “Congress has empowered
the agency to resolve the ambiguity” and accordingly defer to
the agency’s interpretation so long as it is a reasonable
construction of the statute. Util. Air Reg. Grp. v. EPA, 573 U.S.
302, 315 (2014).

In addition, we may set aside a Commission order if it is
found to be “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A);
see NetCoalition, 615 F.3d at 532. Besides adhering to
statutory and regulatory requirements, the Commission is
required to “examine the relevant data and articulate a
satisfactory explanation for its action including a ‘rational
connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto
Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck
Lines v. United States, 371 U.S. 156, 168 (1962)). The
Commission’s factual findings are conclusive if supported by
substantial evidence. See 15 U.S.C. § 78y(a)(4); NetCoalition,
615 F.3d at 533.

Petitioners challenge the Commission’s CT Plan Order
and Governance Order on three grounds: First, the Commission
exceeded its authority under both section 11A of the Exchange
Act and Rule 608 of Regulation NMS by placing
representatives of non-SROs on the CT Plan’s operating
committee as voting members. Second, the Commission’s
decision to group SROs based on corporate affiliation for
voting purposes is contrary to law, as it prevents SROs from
“act[ing] jointly” to effectuate the CT Plan, and it is otherwise
arbitrary and capricious by failing to explain adequately the
Commission’s departure from its past practice of treating
affiliated and unaffiliated SROs the same. Third, the
Commission’s requirement that the administrator of the CT
 12
Plan be “independent”—not owned or controlled by a
corporate entity that directly or indirectly sells proprietary-data
products that compete with the core data feed—is arbitrary and
capricious. We ultimately agree with petitioners as to their first
challenge but reject their second and third challenges.

A. Non-SRO Membership on CT Plan Operating
Committee

To begin, the Commission does not argue that its
interpretation of section 11A of the Exchange Act as permitting
non-SRO representation on the CT Plan operating committee
is necessarily compelled by the statute; the Commission instead
argues that the “Congress has not ‘directly spoken to th[is]
precise’ issue.” See Resp’t Br. 29 n.3 (alteration in original)
(quoting City of Clarksville v. FERC, 888 F.3d 477, 482 (D.C.
Cir. 2018)); see also Oral Arg. Tr. 19:25–20:1 (Commission is
“not arguing that the statute is clear at Chevron [step one]”); id.
at 20:15–18 (“[I]n the [1975] [A]mendments, Congress very
specifically did not make a decision as to the precise manner in
which the national market system was going to be structured.”).

Our ordinary course of action would be to first determine
whether section 11A is, as the Commission suggests, silent or
ambiguous as to non-SRO representation issue; if so, we would
then assess whether the Commission’s permissive
interpretation, as embodied in the various orders at issue, is
reasonable. See Chevron, 467 U.S. at 842–43. Occasionally,
however, we have assumed arguendo that a statute is
ambiguous or silent and proceeded to the second step of the
Chevron analysis. See, e.g., Good Fortune Shipping SA v.
Comm’r, 897 F.3d 256, 261 (D.C. Cir. 2018); Lubow v. U.S.
Dep’t of State, 783 F.3d 877, 884 (D.C. Cir. 2015); U.S. Postal
Serv. v. Postal Regul. Comm’n, 599 F.3d 705, 710 (D.C. Cir.
2010); see also Babbitt v. Sweet Home Chapter of Cmtys. for a
 13
Great Or., 515 U.S. 687, 703 (1995). We do so here, confident
in doing so because the Commission has failed to demonstrate
that its construction of section 11A is reasonable.3

At Chevron step two, we ask whether the agency’s
interpretation is “arbitrary or capricious in substance, or
manifestly contrary to the statute.” Good Fortune Shipping,
897 F.3d at 261 (quoting Mayo Found. for Med. Educ. &
Research v. United States, 562 U.S. 44, 53 (2011)); see also
Village of Barrington v. Surface Transp. Bd., 636 F.3d 650, 665
(D.C. Cir. 2011) (asking “whether the [agency] has reasonably
explained how the permissible interpretation it chose is
‘rationally related to the goals of’ the statute” (quoting AT&T
Corp. v. Iowa Utils. Bd., 525 U.S. 366, 388 (1999))).
Importantly, “[t]he reasonableness of an agency’s construction
depends on the construction’s fit with the statutory language as
well as its conformity to statutory purposes.” Abbott Labs. v.
Young, 920 F.2d 984, 988 (D.C. Cir. 1990) (internal quotation
marks omitted); see also Van Hollen v. FEC, 811 F.3d 486, 492
(D.C. Cir. 2016) (“The starting place for any Chevron Step
Two inquiry is the text of the statute.”).

Begin with the primary textual hook for the Commission’s
decision: section 11A(a)(3)(B) states that “[t]he Commission is
authorized . . . to authorize or require self-regulatory
organizations to act jointly with respect to matters as to which
they share authority under [the Exchange Act] in planning,
developing, operating, or regulating a national market system
(or a subsystem thereof) or one or more facilities thereof.” 15
U.S.C. § 78k-1(a)(3)(B); see also CT Plan Order, 86 Fed. Reg.
at 44,157 (“Here, the Commission is acting pursuant to its

3
Because we find the Commission’s interpretation of section
11A—the principal basis for its asserted statutory authority—
unreasonable at Chevron step two, we do not address petitioners’
parallel argument regarding Rule 608 of Regulation NMS.
 14
authority under Section 11A(a)(3)(B) . . . .”). The Congress
explicitly reserved a role for SROs in developing and
effectuating NMS plans, at the Commission’s discretion. The
statute is silent, however, with respect to many details of
whatever joint action the Commission so authorizes.

The Commission contends that the statutory silence allows
it the discretion to direct SROs to formulate an NMS plan that
permits non-SRO involvement in NMS planning and
governance, albeit in a minority voting role. See Resp’t Br. 25–
26. But section 11A(a)(3)(B) specifically identifies SROs that
“share authority under [the Exchange Act]” as those the
Commission authorizes to “act jointly . . . in planning,
developing, operating, or regulating a national market system,”
15 U.S.C. § 78k-1(a)(3)(B), making it less likely that there is a
“gap[]” for the Commission to fill with respect to what entities
may act jointly, see Ethly Corp. v. EPA, 51 F.3d 1053, 1060
(D.C. Cir. 1995). This is the maxim of expressio unius est
exclusio alterius at work: “[M]ention of one thing”—SROs—
“implies exclusion of another thing”—non-SROs. Ethyl Corp,
51 F.3d at 1061 (quoting Am. Methyl Corp. v. EPA, 749 F.2d
826, 835–36 (D.C. Cir. 1984)). Application of the canon here
is analogous to its application in Halverson v. Slater, 129 F.3d
180 (D.C. Cir. 1997), where we applied the expressio unius
canon in interpreting 46 U.S.C. § 2104(a), which provides that
the Secretary of Transportation may delegate certain duties “to
any officer, employee, or member of the Coast Guard,” to
preclude delegation to non-Coast Guard officials. Halverson,
129 F.3d at 184–86. We did so notwithstanding the Secretary’s
general statutory authority to delegate to subordinates, see 49
U.S.C. § 322, finding that “the more specific provision
controls.” Halverson, 129 F.3d at 186. Thus, although the
Commission is correct that the Congress did not insert the word
“exclusively” into section 11A(a)(3)(B), see Resp’t Br. 28–29,
 15
the language it did choose evinces exclusivity that, in our
reading, forecloses the Commission’s desired interpretation.

Granted, the weight of the expressio unius canon is
sensitive to statutory context, especially in the administrative
realm where the “Congress is presumed to have left to
reasonable agency discretion questions that it has not directly
resolved.” Adirondack Med. Ctr. v. Sebelius, 740 F.3d 692, 697
(D.C. Cir. 2014) (quoting Cheney R.R. Co. v. I.C.C., 902 F.2d
66, 68–69 (D.C. Cir. 1990)); see also Indep. Ins. Agents of Am.,
Inc. v. Hawke, 211 F.3d 638, 644 (D.C. Cir. 2000). But “where
the context shows that the ‘draftsmen’s mention of one thing,
like a grant of authority, does really necessarily, or at least
reasonably, imply the preclusion of alternatives,’ the canon is
a useful aide.” Hawke, 211 F.3d at 644 (quoting Shook v. D.C.
Fin. Resp. & Mgmt. Assistance Auth., 132 F.3d 775, 782 (D.C.
Cir. 1998)).

Here, several aspects of the statutory context cut against
the Commission’s interpretation. First, the Commission’s
reading of section 11A(a)(3)(B) both to expressly identify
SROs as those entities that can act jointly in developing and
effectuating the national market system and to authorize by
implication a non-SRO to exercise similar governance
authority would render the former superfluous. See TRW Inc.
v. Andrews, 534 U.S. 19, 31 (2001) (“[A] statute ought, upon
the whole, to be so construed that, if it can be prevented, no
clause, sentence, or word shall be superfluous, void, or
insignificant.” (quoting Duncan v. Walker, 533 U.S. 167, 174
(2001)). Further, we have observed that the canon against
surplusage and the expressio unius canon “are at their zenith
when they apply in tandem,” as they appear to do here. Hawke,
211 F.3d at 645. The Commission’s only counter is that the
express mention of SROs as those entities that may act jointly
was to alleviate antitrust concerns. See Resp’t Br. 36–38. But
 16
the antitrust explanation, even if assumed to be plausible and
supported by the legislative history, fails to answer the key
question whether section 11A(a)(3)(B) implicitly permits non-
SROs in governance.

Second, section 11A(a)(3)(B) specifies that SROs may be
authorized “to act jointly with respect to matters as to which
they share authority under [the Exchange Act] in planning,
developing, operating, or regulating a national market system.”
15 U.S.C. § 78k-1(a)(3)(B) (emphasis added). Such shared
authority includes, inter alia, the specified duties “to protect
investors and the public interest,” id. § 78f(b)(5); see also id.
§§ 78o-3(b)(6), 78q-1(b)(3)(F), the promulgation of internal
rules subject to Commission approval, see id. § 78s(b), and the
obligations to “comply” and “enforce compliance” with the
provisions of the Exchange Act, rules and regulations
thereunder and its own rules, id. § 78s(g)(1). The “share
authority” language thus qualifies the SROs’ quasi-regulatory
authority and also explains why SROs are granted such
authority. The non-SROs and their representatives, on the other
hand, lack similarly unifying statutory and regulatory
obligations and the Commission has acknowledged as much.
See CT Plan Order, 86 Fed. Reg. at 44,154 (“Non-SRO Voting
Representatives will not have the same legal obligations as the
SRO Voting Representatives . . . .”); id. at 44,168 (“Non-SRO
Voting Representatives will serve on the Operating Committee
in their individual capacity and do not have regulatory
obligations paralleling those of the SROs . . . .”). The
Commission has not adequately explained why the Congress
expressly highlighted the SROs’ shared authority under the
Exchange Act as support for their authority pursuant to section
11A and at the same time impliedly gave similar section 11A
authority to entities that lack such shared authority under the
Exchange Act.
 17
Third, and finally, elsewhere in section 11A, the
Commission is authorized to create advisory committees and
employ outside experts, see 15 U.S.C. § 78k-1(a)(3)(A), as
well as establish a “National Market Advisory Board”
consisting of “persons associated with brokers and dealers” and
certain “representative[s] of the public,” id. § 78k-1(d)(1).
Thus, it cannot be said that the Congress was agnostic about
the role of non-SROs in the national market system. Instead, it
appears to us that the Congress “considered the unnamed
possibility” of non-SROs serving in a regulatory or quasi-
regulatory role in the national market system “and meant to say
no to it” by providing a separate, advisory role for them. Marx
v. Gen. Revenue Corp., 568 U.S. 371, 381 (2013) (quoting
Barnhart v. Peabody Coal Co., 537 U.S. 149, 168 (2003).

In addition to section 11A(a)(3)(B), the Commission
invokes section 11A(c)(1)(B), see CT Plan Order, 86 Fed. Reg.
at 44,142 & n.14, 44,157; see also Resp’t Br. 25–26, 29, 31,
which provides, in relevant part:

No self-regulatory organization, member
thereof, securities information processor,
broker, or dealer shall . . . collect, process,
distribute, publish, or prepare for distribution or
publication any information with respect to
quotations for or transactions in any security . . .
in contravention of such rules and regulations as
the Commission shall prescribe as necessary or
appropriate in the public interest, for the
protection of investors, or otherwise in
furtherance of the purposes of this chapter to . . .
assure the prompt, accurate, reliable, and fair
collection, processing, distribution, and
publication of information with respect to
quotations for and transactions in such
 18
securities and the fairness and usefulness of the
form and content of such information[.]

15 U.S.C. § 78k-1(c)(1)(B). In the Commission’s view, this
provision supports its overarching interpretation that section
11A “necessarily contemplates the involvement of non-SROs
in the collection, processing, distribution and publication of
market data, because it prohibits them from doing any of those
things in contravention of rules prescribed by the
Commission.” Resp’t Br. 29; see also CT Plan Order, 86 Fed.
Reg. at 44,157 & n.241.

But section 11A(c)(1)(B), which says nothing about the
national market system or its development or operation, merely
indicates that non-SROs, specifically SIPs and broker-dealers,
play enough of a role in the dissemination of market data to
warrant granting the Commission antifraud authority to police
non-SROs. Cf. 15 U.S.C. § 78j (antifraud provision using
similar language). It does little to support the Commission’s
interpretation that those same non-SROs are meant to play an
affirmative role in the planning and operation of an NMS plan.
Further, even if section 11A(c)(1)(B) could be read the way the
Commission asserts, its general grant of authority does not
override the more narrowly tailored section 11A(a)(3)(B). See,
e.g., Gozlon-Peretz v. United States, 498 U.S. 395, 407 (1991)
(“A specific provision controls over one of more general
application.”).

In short, even assuming the Commission is correct that
section 11A is ambiguous or silent on the issue of non-SRO
representation in NMS plan governance, it nevertheless fails to
anchor its interpretation to any reasonable reading of section
11A. As a result, the Commission’s decision to include
representatives of non-SROs on the CT Plan operating
 19
committee is unreasonable and therefore invalid under
Chevron step two.

B. SRO Groups

Petitioners next object to the Commission’s decision to
allocate and limit SRO votes according to an SRO’s corporate
affiliation with another SRO, arguing that the decision is
contrary to section 11A and otherwise arbitrary and capricious.
As explained below, we find petitioners’ arguments on this
issue are without merit.

1. “Contrary to Law”

To begin, petitioners make two arguments that center on
the text of section 11A of the Exchange Act. First, they point
to the statutory definition of “self-regulatory organization,”
which includes “any national securities exchange.” 15 U.S.C.
§ 78c(a)(26). Petitioners construe this definition to mean “any
and all exchanges . . . each of which is a discrete, legally
distinct entity” and argue that SRO Groups prevent an
individual SRO from being recognized as an SRO for the
purpose of joint action under section 11A(a)(3)(B). Pet’rs
Reply Br. 21 (emphasis in original). Second, petitioners
contend that the combination of SRO Groups and the
augmented majority voting structure—which requires a
majority of SRO votes and a two-thirds majority of all votes,
including non-SROs—would permit committee approval even
if there is opposition from a majority of individual SROs. See
Pet’rs Br. 43–46. As an example,

a proposal that is supported by all of the non-
SRO voting representatives (a total of four-and-
a-half votes), the four unaffiliated SROs, and
the Nasdaq-affiliated SRO Group (with two
votes for its three exchanges) would have
 20
sufficient support to be adopted under the
Commission’s voting framework. But assuming
that the nine remaining SROs opposed the
proposal, the proposal would be supported by
only seven out of the sixteen individual SROs.

Id. at 45. As petitioners see it, this outcome “erects a barrier to
‘joint[]’ SRO operation of the CT Plan that is incompatible
with the Exchange Act.” Id. at 46 (quoting 15 U.S.C.§ 78k-
1(a)(3)(B)).

Because we find that the Commission failed to provide a
reasonable interpretation of section 11A that would permit non-
SRO representation in the first place, see supra p. 12–19, we
see little need to address hypothetical voting outcomes among
the SRO Groups and non-SROs or whether a particular
outcome would “erect[] a barrier” to joint action pursuant to
section 11A, as petitioners contend.

The crux of petitioners’ remaining arguments is that
section 11A(a)(3)(B) requires that each SRO, as defined in the
Exchange Act, be on equal terms with respect to the
governance of NMS plans, including voting. Yet nothing in
section 11A appears to require the strict one-to-one voting
representation by individual SROs contemplated by
petitioners. For one thing, although petitioners are correct that
the term “self-regulatory organization” is defined at the
individual level in the definitions section of the statute, the use
of its plural form in section 11A(a)(3)(B) simply establishes the
universe of entities (i.e., SROs) that may be authorized by the
Commission to act jointly—and no party argues that the
Commission excludes any SROs from the CT Plan operating
committee. Thus, the definition of “self-regulatory
organization” sheds little, if any, light as to how the
 21
Commission may allocate NMS plan operating committee
votes among individual SROs.

Moreover, the undefined term “act jointly,” given its
ordinary meaning, see Sorenson Commc’ns, LLC v. FCC, 897
F.3d 214, 228 (D.C. Cir. 2018) (attributing to undefined
statutory term “its ordinary meaning”), simply means to act
cooperatively, together or in conjunction, see, e.g., Jointly, The
Oxford English Dictionary (2d ed. 1989) (“[t]ogether, in
union” and “[i]n conjunction, combination, or concert”);
Jointly, Webster’s Third New International Dictionary (1981)
(“together” and “unitedly”); Jointly, Ballentine’s Law
Dictionary (3d ed. 1969) (“[u]nitedly” and “sharing together”).
“Jointly” does not require a particular level of involvement
among the individual members—such as “one SRO, one vote,”
as petitioners seem to suggest—so long as all participants are
involved to some degree. Section 11A(a)(3)(B) does not
specify many details as to how the Commission may set the
contours of SRO joint action. The provision makes no mention
of NMS plans, operating committees or administrators yet no
party objects to the Commission’s use of those governance
structures. This, in our view, makes it unlikely that the
Congress would combine broad Commission discretion to fill
in the details of whatever governance structure it envisions
with an unusually rigid understanding of “act jointly” that
requires one-to-one representation. Thus, we see little merit to
petitioners’ textual arguments.

2. Departure from Commission Precedent and Disparate
Treatment

Aside from the text of section 11A, petitioners contend
that the Commission’s use of SRO Groups departs from the
Commission’s past practice of treating affiliated SROs as
distinct legal entities in other regulatory settings and subjects
 22
affiliated SROs to less favorable treatment as compared to
unaffiliated SROs. Again, we find these arguments without
merit.

Petitioners first cite several matters in which the
Commission has required individual SROs to maintain their
separate regulatory identity. See, e.g., Order Setting Aside
Action by Delegated Authority and Approving Proposed Rule
Change Relating to NYSE Arca Data, 73 Fed. Reg. 74,770,
74,790 (Dec. 9, 2008) (separate pools of liquidity); Order
Disapproving Proposed Rule Change to Offer a Rebate Based
on Members’ Aggregate Customer Volume in Multiply-Listed
Options Transacted on NASDAQ OMX PHLX LLC or Its
Affiliated Options Exchanges, 79 Fed. Reg. 42,578, 42,585–86
(July 22, 2014) (separate rebate schedules). But the fact that the
Commission treats SROs as distinct and separate entities vis-à-
vis their individual statutory and regulatory obligations does
not necessarily mandate similar treatment of NMS plans where
SROs act collectively to effectuate a market-wide plan. The
Commission made this precise point. See CT Plan Order, 86
Fed. Reg. at 44,164 (“But both the applicable legal
requirements and the function being performed here by the
SROs differ in the context of the responsibility of the SROs to
jointly operate the NMS plans pursuant to Section 11A of the
Act and to disseminate consolidated market data, to which
different SROs may contribute in varying degrees.”).

Petitioners next point to the Commission’s past practice of
treating SROs individually with respect to earlier NMS plan
operating committees. See, e.g., Order Approving the National
Market System Plan Governing the Consolidated Audit Trail,
81 Fed. Reg. 84,696, 84,948 (Nov. 23, 2016). We have often
recognized that an agency must acknowledge and explain its
departure from past policy. See Sw. Airlines Co. v. FERC, 926
F.3d 851, 856 (D.C. Cir. 2019). “A central principle of
 23
administrative law is that, when an agency decides to depart
from decades-long past practices and official policies, the
agency must at a minimum acknowledge the change and offer
a reasoned explanation for it.” Am. Wild Horse Pres. Campaign
v. Perdue, 873 F.3d 914, 923 (D.C. Cir. 2017) (citing Encino
Motorcars, LLC v. Navarro, 579 U.S. 211, 221–22 (2016)).

Here, the Commission easily cleared the “not . . .
especially high bar” of acknowledging and explaining its
departure. Sw. Airlines, 926 F.3d at 856. It acknowledged
comments about the differing treatment of SROs for voting,
recognized that “the Commission’s treatment of corporate
affiliations varies based on the particular facts and
circumstances” and took into account corporate affiliation for
voting “[b]ecause of the concentrated power affiliated SROs
exert in the governance structure of consolidated equity market
data, as demonstrated by the indisputable fact that affiliated
SROs vote as blocs.” CT Plan Order, 86 Fed. Reg. at 44,164.
The Commission iterated its findings that “[i]ndividual
exchanges that historically had only one vote on NMS plans
are now a part of groups that can control blocs of four or five
votes,” id., and that “‘in its oversight of the Equity Data Plans,
[it] is unaware of an individual affiliated exchange member’
ever having ‘cast its vote differently than the votes cast by its
affiliated exchanges,’” id. (quoting Governance Order, 85 Fed.
Reg. at 28,713), in support of its decision to use group-based
voting. The Commission also stated its “belie[f] that
reallocating votes by SRO Group should help to ensure the
prompt, accurate, reliable, and fair collection, processing,
distribution, and publication of” NMS market data. Id.

As their final argument, petitioners object to the
Commission’s decision on the ground that it subjects affiliated
SROs to less favorable treatment than unaffiliated SROs,
without adequate explanation. As a general principle, agency
 24
action “is at its most arbitrary when it treats similarly situated
people differently,” Etelson v. Off. of Pers. Mgmt., 684 F.2d
918, 926 (D.C. Cir. 1982), meaning that agencies must
“provide an adequate explanation to justify treating similarly
situated parties differently,” Burlington N. and Santa Fe Ry.
Co. v. Surface Transp. Bd., 403 F.3d 771, 776 (D.C. Cir. 2005).
But here, the Commission has provided an adequate
explanation, citing the need to mitigate the Equity Data Plans’
practical dilution of unaffiliated exchanges’ voting power. In
response to comments that the SRO-Group-based voting
system would unfairly dilute the votes of affiliated exchanges,
the Commission countered that any perceived disparate
treatment between affiliated and unaffiliated exchanges was
justified “from a policy perspective because of the
disproportionate influence affiliated exchange groups currently
exercise in [Equity Data] Plan matters by voting as a block and
diluting the voting power of other Participants.” Governance
Order, 85 Fed. Reg. at 28,713. The Commission also reasoned
that “bloc voting has diluted the voting power of unaffiliated
SROs over time, and that this concentration of ‘voting power
in a small number of exchange group stakeholders, which also
have inherent conflicts of interest,’ has ‘perpetuated
disincentives for the Equity Data Plans to make improvements
to the SIP data products.’” CT Plan Order, 86 Fed. Reg. at
44,164 (quoting Governance Order, 85 Fed. Reg. at 28,713).

C. Independent Administrator

Petitioners’ final objection is to the Commission’s
decision that the CT Plan administrator must be
“independent”—meaning “not . . . owned or controlled by a
corporate entity that, either directly or via another subsidiary,
offers for sale its own [proprietary-data products].” CT Plan
Order, 86 Fed. Reg. at 44,195. The Commission supported the
independence requirement by noting that “an entity that acts as
 25
the administrator while also offering for sale its own
proprietary data products faces a substantial, inherent conflict
of interest, because it would have access to sensitive SIP
customer information of significant commercial value.” Id.; see
also id. at 44,196 (“Unlike the exchanges that offer for sale
their own proprietary equity market data products, an
independent Administrator would not have the competing
objective of maximizing its own proprietary data products’
profitability.”). Petitioners make three arguments in support of
their contention that the Commission failed to articulate a
rational explanation for its decision, none of which we find
persuasive.

Petitioners first contend that the Commission failed to
substantiate its “purely theoretical” concern that a CT Plan
administrator could misappropriate confidential information,
such as by pointing to a plan administrator’s past misconduct
or by highlighting the shortcomings of existing safeguards.
Pet’rs Br. 54. Granted, an agency is generally on sounder
footing when it “act[s] upon the basis of empirical data.”
Chamber of Com. of U.S. v. SEC, 412 F.3d 133, 142 (D.C. Cir.
2005). But an agency “need not—indeed cannot—base its
every action upon empirical data” and may, “depending upon
the nature of the problem, . . . be ‘entitled to conduct . . . a
general analysis based on informed conjecture.’” Id. (quoting
Melcher v. FCC, 134 F.3d 1143, 1158 (D.C. Cir. 1998)). Here,
the Commission highlighted a plausible conflict of interest: the
potential misuse of “sensitive SIP customer information of
significant commercial value” by administrators that sell
competing market data products. CT Plan Order, 86 Fed. Reg.
at 44,195–96 (quoting Governance Order, 85 Fed. Reg. at
28,722). In support, the Commission invoked its experience in
overseeing the existing Equity Data Plans as well as industry
comments supporting the separation of the plan administrator’s
regulatory responsibilities from an exchange’s commercial
 26
interests. See id. at 44,195–96; Governance Order, 85 Fed. Reg.
at 28,722–23. We have found this reasoning sufficient in the
past. See Stilwell v. Off. of Thrift Supervision, 569 F.3d 514,
519 (D.C. Cir. 2009) (sanctioning agency’s reliance on its
“long experience of supervising” regulated entities and
“support in various comments submitted in response to the
proposed rule”); Am. Great Lakes Ports Ass’n v. Schultz, 962
F.3d 510, 516 (D.C. Cir. 2020) (“A degree of agency reliance
on [comments from affected parties] is not only permissible but
often unavoidable.” (alteration in original) (quoting Nat’l Ass’n
of Regul. Util. Comm’rs v. FCC, 737 F.2d 1095, 1124 (D.C.
Cir. 1984))); cf. FCC v. Nat’l Citizens Comm. for Broad., 436
U.S. 775, 814 (1978) (permitting agencies to rely on
“deductions based on the expert knowledge of the agency”
(citation omitted)). That the Commission’s conflict of interest
worry has not yet manifested itself is of little consequence, as
an agency has the latitude to “adopt prophylactic rules to
prevent potential problems before they arise”—that is, “[a]n
agency need not suffer the flood before building the levee.”
Stilwell, 569 F.3d at 519.

Petitioners next fault the Commission for not extending
the independent administrator requirement to non-SRO data
vendors, even though those vendors sell market data products
and could have similar conflicts of interest. See Pet’rs Br. 54–
56. But “an agency need not target every danger in order to
target any danger,” Am. Coal Co. v. Fed. Mine Safety and
Health Rev. Comm’n, 796 F.3d 18, 29 (D.C. Cir. 2015), and
instead “may marshal their limited resources by pursuing their
goals ‘as priorities demand,’” id. (quoting Nat’l Cong. of
Hispanic Am. Citizens (El Congreso) v. Marshall, 626 F.2d
882, 888 (D.C. Cir. 1979)). Here, the Commission explicitly
acknowledged that it “chose to address one substantial,
inherent conflict of interest” in imposing the independent
administrator requirement but permits the CT Plan operating
 27
committee to “exercise discretion in selecting the new
Administrator” in order to police other conflicts that may arise.
CT Plan Order, 86 Fed. Reg. at 44,197. Although petitioners
contend that non-SRO data vendors face “the exact same
conflict” as SROs selling competing data products, see Pet’rs
Br. 55 (emphasis omitted), the conflict is not the same because,
as the Commission notes, the SROs have “sufficient voting
power” and “incentive” to ensure that any non-SRO chosen to
serve as administrator “would [not] face a financial conflict of
interest and act as a direct competitor to the SROs’ proprietary
data business,” CT Plan Order, 86 Fed. Reg. at 44,158, 44,197.
Even if the CT Plan Order permits disparate treatment between
SROs and representatives of non-SROs, the Commission has
provided “a reasoned explanation” for such treatment.
Burlington N. & Santa Fe Ry., 403 F.3d at 777.

Third, and finally, petitioners assert that the Commission
failed to consider whether “more good than harm will come”
from an independent administrator requirement that excludes
incumbent administrators that possess institutional knowledge
and expertise—the NYSE and Nasdaq. See Pet’rs Br. 56–57
(quoting Md. Peoples Counsel v. FERC, 761 F.2d 768, 779
(D.C. Cir. 1985)); cf. Michigan v. EPA, 576 U.S. 743, 753
(2015) (“[R]easonable regulation ordinarily requires paying
attention to the advantages and the disadvantages of agency
decisions.” (emphasis in original)). But the Commission
acknowledged this argument in the CT Plan Order and
reasoned that any loss in incumbent experience would be
mitigated by the “broad range of financial service firms,
unaffiliated with an SRO,” capable of serving as plan
administrator and by the current administrators’ abilities to
“advise and facilitate the onboarding process of the new
Administrator.” CT Plan Order, 86 Fed. Reg. at 44,196–97. It
further concluded any lingering “costs” resulting from a loss of
expertise or experience are “justified because the inherent
 28
conflicts of interest identified by the Commission . . . raise[]
significant concerns regarding access to confidential subscriber
information.” Id. at 44,197. Thus, we see no merit to
petitioners’ argument that the Commission failed to consider
the disadvantages or costs of the independent administrator
requirement.

D. Severability Vel Non

Because we conclude that only one component of the
Commission’s orders is invalid, there is the resulting question
of severability. The APA defines “agency action” as “the whole
or a part of an agency rule [or] order,” 5 U.S.C. § 551(13)
(incorporated by 5 U.S.C. § 701(b)(2)), meaning that we are
permitted to sever and set aside an offending portion while
keeping intact the rest of the order. See Carlson v. Postal Reg.
Comm’n, 938 F.3d 337, 351 (D.C. Cir. 2019); see also K Mart
Corp. v. Cartier, Inc., 486 U.S. 281, 294 (1988). Severability
turns on agency intent, meaning that “[w]here there is
substantial doubt that the agency would have adopted the same
disposition regarding the unchallenged portion if the
challenged portion were subtracted, partial affirmance is
improper.” Epsilon Elecs., Inc. v. U.S. Dep’t of Treasury, 857
F.3d 913, 929 (D.C. Cir. 2017) (quoting North Carolina v.
FERC, 730 F.2d 790, 795–96 (D.C. Cir. 1984)). Further, we
ask whether the remaining parts of the agency action can
“function sensibly without the stricken provision.” Carlson,
938 F.3d at 351 (quoting Sorenson Commc’ns Inc. v. FCC, 755
F.3d 702, 710 (D.C. Cir. 2014)). Here, we decline to sever with
respect to the CT Plan Order—and thus vacate the order in its
entirety. Regarding the antecedent Governance Order, we sever
only the provision requiring petitioners to provide for non-SRO
representation on the operating committee of any proposed
plan and uphold the remainder of the Governance Order.
 29
As to the CT Plan Order, the Commission made clear that
its principal focus was replacing the three Equity Data Plans
with a single, consolidated NMS plan that included the three
Commission-recommended governance features. See CT Plan
Order, 86 Fed. Reg. at 44,142–43; see also Proposed
Governance Order, 85 Fed. Reg. at 2,182. In fact, the
Commission evinced little regard for the rest of the CT Plan,
stating that terms “not directed by the Governance Order” were
within the control of the SROs, subject to Commission review
and approval. CT Plan Order, 86 Fed. Reg. at 44,143. We
therefore have “substantial doubt[s]” that the Commission
would have permitted the CT Plan to be implemented in a
piecemeal fashion and absent the provision requiring non-SRO
representation on the operating committee, one of only three
features the Commission required all SRO-proposed plans to
include. See Epsilon, 857 F.3d at 929; see also Sierra Club v.
FERC, 867 F.3d 1357, 1367 (D.C. Cir. 2017) (finding
“substantial[] doubt” agency would have conducted piecemeal
environmental review of pipeline project when it had
previously “treated the project as a single, integrated
proposal”).

Moreover, permitting the remaining provisions of the CT
Plan to take effect raises the question whether the CT Plan
could “function sensibly.” Carlson, 938 F.3d at 351 (quoting
Sorenson Commc’ns, 755 F.3d at 710). For example, the CT
Plan, as proposed and approved by the Commission, requires
that representatives of non-SROs hold one-third of the voting
power on the committee and that committee approval under its
“augmented majority” voting structure requires a “two-thirds
majority of all votes on the operating committee” alongside “a
majority of the SRO . . . votes.” CT Plan Order, 86 Fed. Reg.
at 44,165; see also id. at 44,213 (CT Plan § 4.3(b)). Yet, if we
were to invalidate the non-SRO representation provision and
leave the remainder of the CT Plan intact, that would result in
 30
simultaneously requiring both a two-thirds and a simple
majority vote of approval by the SROs alone. This one example
highlights how the challenged features of the CT Plan are
“intertwined” in such a way that makes severance problematic.
See Epsilon, 857 F.3d at 929 (quoting Davis Cty. Solid Waste
Mgmt. v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997)).

The Commission, for its part, pays little more than lip
service to our concern that severing parts of the CT Plan Order
would render the plan unworkable. It first makes the
unsupported statement that, if one of the challenged provisions
of the CT Plan is found to be unlawful, “the remaining
provisions could ‘function sensibly.’” Resp’t Br. 56 (quoting
Carlson, 938 F.3d at 351–52). As explained above, we struggle
to see how that is the case. The Commission then invokes the
severability provision included in the CT Plan itself, which
states that “any determination that any provision of the CT Plan
is invalid or unenforceable shall not affect the validity or
enforceability of any other provisions of the CT Plan, all of
which shall remain in full force and effect.” CT Plan Order, 86
Fed. Reg. at 44,207. But “the ultimate determination of
severability will rarely turn on the presence or absence” of a
severability clause. Cmty. for Creative Non-Violence v. Turner,
893 F.2d 1387, 1394 (D.C. Cir. 1990) (quoting United States v.
Jackson, 390 U.S. 570, 585 n.27 (1968)). Instead, we look to
agency intent and whether the valid portions can function
absent the invalid portions, id.; doing so, we conclude that the
CT Plan, as currently constructed, would be unworkable if we
simply severed the provision requiring non-SRO
representation.

As to the Governance Order, it does not commit the
Commission to any particular NMS plan or plan feature and is
instead “no more than a call for a proposal that would then be
subject to further notice, comment, and revision.” Nasdaq, 1
 31
F.4th at 37; see also Order Denying Stay, 85 Fed. Reg. 36,921,
36,922 (June 18, 2020) (describing Governance Order as “first
step toward establishing a new governance structure”). It was
based on its lack of finality that we dismissed as premature
petitioners’ earlier challenge to the Governance Order. Nasdaq,
1 F.4th at 39. In line with this understanding of the Governance
Order, we see no need to vacate those portions that direct the
SROs to include plan features we have found permissible. We
therefore sever only those parts of the Governance Order
directing petitioners to include non-SRO representation in its
proposed plan, leaving the remainder in place.

For the foregoing reasons, we grant the petitions for
review as to the inclusion of non-SROs on the CT Plan’s
operating committee as voting members and vacate the CT
Plan Order in its entirety. With respect to the Governance
Order, we vacate only those portions authorizing the invalid
non-SRO representation, leaving the remainder of the
Governance Order intact.

So ordered.