The proposal submitted by the NYSE provided that the board would no longer rely on NYSE Regulation to perform oversight of the regulatory functions of the Exchange.  Instead, the functions would be overseen by a a regulatory oversight committee (ROC) created by the board of the exchange.  

As proposed, the structure would permit significant potential influence from the holding company.  

First, the ROC is to be appointed by the Board of the Exchange.  There is nothing in the Operating Agreement of the Exchange that prevents the board from being under the control of directors from the holding company. The board of the Exchange must have a majority of independent directors and at least 20% of the directors must be non-affiliated directors (directors who are not members of the board of the holding company).  The operating agreement is here.  Thus, 80% of the board can consist of directors from the holding company.  

Moreover, because the board of the Exchange is only required to have a majority of independent directors, the board can include directors from the holding company who do not meet the independence standards of the Exchange.  

In addition, the ROC itself must consist only of independent directors but nothing in the proposal prevents those directors from also being directors of the holding company, so long as they are independent.  

Thus, under the NYSE proposal, the regulatory function would be under the oversight of a committee appointed by a board that could include a supermajority of directors from the holding company, including at least some directors from the holding company who do not meet the independence standards of the Exchange. The Board would have the authority to designate directors annually and to remove directors at any time "for cause." Finally, the ROC itself could consist of independent directors entirely from the holding company.  

These issues are discussed in an exchange of letters with the NYSE.  The letters are here.