Self-Regulatory Organizations; the NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Nasdaq Stockholders' Agreement Between the Nasdaq Stock Market, Inc. and Borse Dubai Limited, 1901-1903 [E8-187]
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Federal Register / Vol. 73, No. 7 / Thursday, January 10, 2008 / Notices
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposal.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission will:
(A) By order approve such proposed
rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
yshivers on PROD1PC62 with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2007–143 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2007–143. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
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14:29 Jan 09, 2008
Jkt 214001
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the CBOE. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–CBOE–2007–143 and
should be submitted on or before
January 31, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–188 Filed 1–9–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57099; File No. SR–
NASDAQ–2008–002]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Nasdaq Stockholders’ Agreement
Between the Nasdaq Stock Market, Inc.
and Borse Dubai Limited
January 4, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder, 2
notice is hereby given that on January 2,
2008, the NASDAQ Stock Market LLC
(the ‘‘Nasdaq Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
substantially by the Nasdaq Exchange.
The Nasdaq Exchange filed the
proposed rule change pursuant to
section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
it effective upon filing with the
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
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1901
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Nasdaq Exchange’s parent
corporation, The Nasdaq Stock Market,
Inc. (‘‘Nasdaq’’),5 proposes to enter into
a Nasdaq Stockholders’’ Agreement (the
‘‘Agreement’’) with Borse Dubai Limited
(‘‘Borse Dubai’’). There is no proposed
rule text.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Nasdaq Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Nasdaq Exchange has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On November 15, 2007, Nasdaq
entered into definitive agreements with
Borse Dubai and BD Stockholm AB, and
with Borse Dubai and Dubai
International Financial Exchange
(‘‘DIFX’’) (the ‘‘Definitive Agreements’’)
pursuant to which (i) Borse Dubai will
acquire up to 100% of the outstanding
share capital of OMX AB (‘‘OMX’’) by
means of a public tender offer, (ii) Borse
Dubai will acquire shares of common
stock of Nasdaq representing
approximately 28% of its outstanding
share capital, with the shares in excess
of 19.9% held in a trust subject to an
obligation to sell under certain
conditions, (iii) Nasdaq will acquire
33.3% of the outstanding share capital
of DIFX, an exchange subsidiary of
Borse Dubai, and (iv) Nasdaq will
acquire up to 100% of the outstanding
share capital of OMX from Borse Dubai
(collectively, the ‘‘Transactions’’).6 The
5 On December 12, 2007, Nasdaq’s stockholders
voted to approve a change in its name from The
Nasdaq Stock Market, Inc. to The NASDAQ OMX
Group, Inc. The change will become effective upon
the closing of the Transactions (as defined below).
6 Copies of the Definitive Agreements and a
description of their terms were filed by Nasdaq on
Continued
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Federal Register / Vol. 73, No. 7 / Thursday, January 10, 2008 / Notices
yshivers on PROD1PC62 with NOTICES
shares held by Borse Dubai directly and
in the trust will be subject to Article
Fourth of Nasdaq’s Restated Certificate
of Incorporation,7 which provides that
no person who is the beneficial owner
of voting securities of Nasdaq in excess
of 5% of the then-outstanding shares of
stock generally entitled to vote (‘‘Excess
Securities’’) may vote such Excess
Securities.
At the time of the closing of the
Transactions, Nasdaq and Borse Dubai
will enter into the Agreement, under
which, among other things, Borse Dubai
will have the right to recommend two
persons reasonably acceptable to the
Nasdaq Nominating Committee (the
‘‘Board Designees’’) to serve as directors
of Nasdaq. Under the Agreement,
Nasdaq will: (i) Include the Board
Designees on each slate of nominees
proposed by management of Nasdaq; (ii)
recommend the election of the Board
Designees to the stockholders of Nasdaq;
and (iii) otherwise use reasonable best
efforts to cause the Board Designees to
be elected to the Board of Directors.
Nasdaq has also agreed to use
reasonable best efforts to cause the
appointment of one of the Board
Designees to the Audit, Executive,
Finance, and Management
Compensation committees of the Board
of Directors, and to cause the
appointment of another person
designated by Borse Dubai to serve on
the Nominating Committee (the
‘‘Nominating Committee Designee’’, and
together with the Board Designees, the
‘‘Borse Dubai Designees’’), but in each
case only if such person meets the
requirements for service on the
committee.8
The Agreement relates solely to the
Board of Directors of Nasdaq, and not to
the boards of any of its subsidiaries,
including the Board of Directors of the
Nasdaq Exchange. Nevertheless, the
provisions of the Agreement described
above could be considered a proposed
rule change of the Nasdaq Exchange, if
they were viewed as affecting the
influence that a significant stockholder
of Nasdaq might be seen as exercising
over the business and affairs of the
Nasdaq Exchange in its capacity as a
wholly owned subsidiary of Nasdaq.
Form 8–K on November 16, 2007 and are available
at https://www.sec.gov/Archives/edgar/data/
1120193/000119312507249279/d8k.htm.
7 As amended most recently on July 31, 2006. See
Securities Exchange Act Release No. 53128 (January
13, 2006), 71 FR 3550 (January 23, 2006).
8 These provisions relating to the Borse Dubai
Designees remain in effect as long as Borse Dubai
maintains at least 50% of its initial 19.9% direct
investment in Nasdaq. As long as Borse Dubai
maintains at least 25% of this investment, it will
be entitled to propose one director for nomination,
but will have no rights with regard to committees.
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In general, directors of Nasdaq,
including the Board Designees, must be
nominated by a Nominating
Committee,9 the composition of which
is subject to the requirements of the
Nasdaq By-Laws and Nasdaq Exchange
Rule 4350,10 and must then be elected
by the stockholders of Nasdaq. The
Nasdaq Board is currently composed of
13 members, but will be expanded to 16
members at the time of the closing of the
Transactions. Thus, the Board Designees
would represent 12.5% of the Nasdaq
Board.
The committees that are the subject of
the Agreement are subject to
compositional requirements established
by the Nasdaq By-Laws; moreover, the
Audit, Management Compensation, and
Nominating Committees are subject to
independence requirements established
by Nasdaq Exchange Rule 4350 and, in
the case of the Audit Committee, by
10A–3 under the Act.11 Thus,
depending on the affiliations of the
Borse Dubai Designees and the
judgment of the Nasdaq Board with
regard to their independence, they
would not be eligible for service on
these three committees. Each of these
committees currently has between four
and seven members. Upon the closing of
the Transactions, the size of each
committee would remain the same or
grow to reflect the increased size of the
whole Board. Thus, each of the
committees on which a Borse Dubai
Designee serves will include at least five
directors.
2. Statutory Basis
The Nasdaq Exchange believes that
the proposed rule change is consistent
with the provisions of section 6 of the
Act,12 in general, and with sections
6(b)(1) and (b)(5) of the Act,13 in
9 An exception to the requirement of nomination
by the Nominating Committee exists for
nominations by a stockholder who is conducting a
proxy contest and who complies with the strict
requirements of the Nasdaq By-Laws governing
direct stockholder nomination. The Board
Designees would not be nominated by Borse Dubai
under these provisions.
10 Currently, the Nasdaq By-Laws provide that the
Nominating Committee must be composed of
directors in their final year of service on the Nasdaq
Board or other persons who are not officers or
employees of Nasdaq. Rule 4350, which governs
Nasdaq as a company whose securities are listed on
the Nasdaq Exchange, requires Nominating
Committee members to satisfy the definition of
‘‘independence’’ in Nasdaq Exchange Rule 4200
and IM–4200 and to otherwise be deemed
independent by the Nasdaq Board. In the future,
Nasdaq may propose a by-law amendment to
require all Nominating Committee members to be
directors (with no limitation as to length of service),
but Rule 4350 would continue to apply in that
event.
11 17 CFR 240.10A–3.
12 15 U.S.C. 78f.
13 15 U.S.C. 78f(b)(1), (5).
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particular, in that the proposal enables
the Nasdaq Exchange to be so organized
as to have the capacity to be able to
carry out the purposes of the Act and to
comply with and enforce compliance by
members and persons associated with
members with provisions of the Act, the
rules and regulations thereunder, and
self-regulatory organization (‘‘SRO’’)
rules, and is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Nasdaq Exchange does not
believe that the proposed rule change
will result in any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments on the proposed
rule change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, if consistent with the
protection of investors and public
interest, it has become effective
pursuant to section 19(b)(3)(A) of the
Act 14 and Rule 19b–4(f)(6)
thereunder.15
A proposed rule change filed under
19b–4(f)(6) may not become operative
prior to 30 days after the date of filing
unless the Commission designates a
shorter time if such action is consistent
with the protection of investors and the
public interest.16 The Nasdaq Exchange
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires that a SRO submit to the
15 17
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Federal Register / Vol. 73, No. 7 / Thursday, January 10, 2008 / Notices
has requested that the Commission
waive the 30-day operative delay set
forth in Rule 19b–4(f)(6)(iii) under the
Act 17 to ensure that the filing is
effective and therefore does not delay
the commencement of the offer or the
closing of the Transactions. The parties
to the Transactions expect all regulatory
actions necessary for the closing of the
Transactions to be completed prior to
Borse Dubai commencing its offer for
OMX shares. The Commission believes
that the earlier operative date is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission
designates the proposal to be operative
upon filing with the Commission.18
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2008–002 on the
subject line.
Paper Comments
yshivers on PROD1PC62 with NOTICES
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR-NASDAQ–2008–002. This
file number should be included on the
subject line if e-mail is used. To help the
Commission written notice of its intent to file the
proposed rule change, along with a brief description
and text of the proposed rule change, at least five
business days prior to the date of filing of the
proposed rule change, or such shorter time as
designated by the Commission. The Commission
notes that the Nasdaq Exchange has satisfied the
five-day pre-filing notice requirement.
17 17 CFR 240.19b–4(f)(6)(iii).
18 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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14:29 Jan 09, 2008
Jkt 214001
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the Nasdaq
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2008–002 and should be
submitted on or before January 31, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–187 Filed 1–9–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57103; File No. SR–
NYSEArca–2007–115]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Approval of
a Proposed Rule Change Relating to
Rule 6.87—Obvious Error
January 4, 2008.
On November 8, 2007, NYSE Arca,
Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend NYSE Arca Rule 6.87
governing obvious errors to revise the
review procedure for contesting
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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1903
decisions made pursuant to the rule.
The proposed rule change was
published for comment in the Federal
Register on November 27, 2007.3 The
Commission received no comment
letters on the proposal. This order
approves the proposed rule change.
Currently, NYSE Arca Rule 6.87
provides that the Exchange will
determine whether a transaction
resulted from an ‘‘Obvious Error’’ 4 after
it receives notification within the
prescribed time frame. If the Exchange
believes that an Obvious Error has
occurred, the Exchange will adjust the
price of the trade, with or without an
adjustment penalty, or will nullify the
trade, depending on the status of the
parties to the trade. Currently, a party
may appeal the Exchange’s decision to
the Exchange’s Board of Directors
(‘‘Board’’) pursuant to NYSE Arca Rule
10.14.
The Exchange proposes to eliminate a
party’s right to appeal to the Board and
instead allow a party to appeal to an
Obvious Error Panel (‘‘OE Panel’’). The
OE Panel would be composed of the
Exchange’s Chief Regulatory Officer
(‘‘CRO’’), or a designee of the CRO,5 and
representatives from two options trading
permit firms (‘‘OTP Firms’’).6 One OE
Panel representative would be from an
OTP Firm directly engaged in market
making activities and one OE Panel
representative would be from an OTP
Firm directly engaged in the handling of
options orders for public customers.
In addition, requests for an appeal
would have to be made via facsimile or
e-mail within thirty minutes after the
party requesting the appeal is given
notification of the initial determination.
Thereafter, the OE Panel would review
the information and may overturn or
modify the action previously taken by
the Exchange. Such determination by
the OE Panel would be considered a
final action by the Exchange on the
matter at issue. All final determinations
made by the OE Panel would be
rendered, without prejudice, as to the
rights of the parties to the transaction to
submit their dispute to arbitration. The
3 Securities Exchange Act Release No. 56819
(November 19, 2007), 72 FR 66214.
4 ‘‘Obvious Error’’ is defined in NYSE Arca Rule
6.87(a)(1).
5 The Exchange represents that a designee of the
CRO would be an employee of the Exchange,
working closely with and reporting directly to, the
CRO, such as one of the Directors of Options
Regulation.
6 The Exchange proposes to designate at least ten
OTP Firm representatives to be called upon to serve
on the OE Panel. In no case would the OE Panel
include a person related to a party to the trade in
question. To the extent reasonably possible, the
Exchange proposes to call upon the designated
representatives to participate on an OE Panel on an
equally frequent basis.
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]]>Agencies
[Federal Register Volume 73, Number 7 (Thursday, January 10, 2008)]
[Notices]
[Pages 1901-1903]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-187]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57099; File No. SR-NASDAQ-2008-002]
Self-Regulatory Organizations; the NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Nasdaq Stockholders' Agreement Between the Nasdaq Stock
Market, Inc. and Borse Dubai Limited
January 4, 2008.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder, \2\ notice is hereby given
that on January 2, 2008, the NASDAQ Stock Market LLC (the ``Nasdaq
Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared substantially by the Nasdaq
Exchange. The Nasdaq Exchange filed the proposed rule change pursuant
to section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it effective upon filing with the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Nasdaq Exchange's parent corporation, The Nasdaq Stock Market,
Inc. (``Nasdaq''),\5\ proposes to enter into a Nasdaq Stockholders''
Agreement (the ``Agreement'') with Borse Dubai Limited (``Borse
Dubai''). There is no proposed rule text.
---------------------------------------------------------------------------
\5\ On December 12, 2007, Nasdaq's stockholders voted to approve
a change in its name from The Nasdaq Stock Market, Inc. to The
NASDAQ OMX Group, Inc. The change will become effective upon the
closing of the Transactions (as defined below).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Nasdaq Exchange included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The Nasdaq Exchange has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On November 15, 2007, Nasdaq entered into definitive agreements
with Borse Dubai and BD Stockholm AB, and with Borse Dubai and Dubai
International Financial Exchange (``DIFX'') (the ``Definitive
Agreements'') pursuant to which (i) Borse Dubai will acquire up to 100%
of the outstanding share capital of OMX AB (``OMX'') by means of a
public tender offer, (ii) Borse Dubai will acquire shares of common
stock of Nasdaq representing approximately 28% of its outstanding share
capital, with the shares in excess of 19.9% held in a trust subject to
an obligation to sell under certain conditions, (iii) Nasdaq will
acquire 33.3% of the outstanding share capital of DIFX, an exchange
subsidiary of Borse Dubai, and (iv) Nasdaq will acquire up to 100% of
the outstanding share capital of OMX from Borse Dubai (collectively,
the ``Transactions'').\6\ The
[[Page 1902]]
shares held by Borse Dubai directly and in the trust will be subject to
Article Fourth of Nasdaq's Restated Certificate of Incorporation,\7\
which provides that no person who is the beneficial owner of voting
securities of Nasdaq in excess of 5% of the then-outstanding shares of
stock generally entitled to vote (``Excess Securities'') may vote such
Excess Securities.
---------------------------------------------------------------------------
\6\ Copies of the Definitive Agreements and a description of
their terms were filed by Nasdaq on Form 8-K on November 16, 2007
and are available at https://www.sec.gov/Archives/edgar/data/1120193/
000119312507249279/d8k.htm.
\7\ As amended most recently on July 31, 2006. See Securities
Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550
(January 23, 2006).
---------------------------------------------------------------------------
At the time of the closing of the Transactions, Nasdaq and Borse
Dubai will enter into the Agreement, under which, among other things,
Borse Dubai will have the right to recommend two persons reasonably
acceptable to the Nasdaq Nominating Committee (the ``Board Designees'')
to serve as directors of Nasdaq. Under the Agreement, Nasdaq will: (i)
Include the Board Designees on each slate of nominees proposed by
management of Nasdaq; (ii) recommend the election of the Board
Designees to the stockholders of Nasdaq; and (iii) otherwise use
reasonable best efforts to cause the Board Designees to be elected to
the Board of Directors. Nasdaq has also agreed to use reasonable best
efforts to cause the appointment of one of the Board Designees to the
Audit, Executive, Finance, and Management Compensation committees of
the Board of Directors, and to cause the appointment of another person
designated by Borse Dubai to serve on the Nominating Committee (the
``Nominating Committee Designee'', and together with the Board
Designees, the ``Borse Dubai Designees''), but in each case only if
such person meets the requirements for service on the committee.\8\
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\8\ These provisions relating to the Borse Dubai Designees
remain in effect as long as Borse Dubai maintains at least 50% of
its initial 19.9% direct investment in Nasdaq. As long as Borse
Dubai maintains at least 25% of this investment, it will be entitled
to propose one director for nomination, but will have no rights with
regard to committees.
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The Agreement relates solely to the Board of Directors of Nasdaq,
and not to the boards of any of its subsidiaries, including the Board
of Directors of the Nasdaq Exchange. Nevertheless, the provisions of
the Agreement described above could be considered a proposed rule
change of the Nasdaq Exchange, if they were viewed as affecting the
influence that a significant stockholder of Nasdaq might be seen as
exercising over the business and affairs of the Nasdaq Exchange in its
capacity as a wholly owned subsidiary of Nasdaq.
In general, directors of Nasdaq, including the Board Designees,
must be nominated by a Nominating Committee,\9\ the composition of
which is subject to the requirements of the Nasdaq By-Laws and Nasdaq
Exchange Rule 4350,\10\ and must then be elected by the stockholders of
Nasdaq. The Nasdaq Board is currently composed of 13 members, but will
be expanded to 16 members at the time of the closing of the
Transactions. Thus, the Board Designees would represent 12.5% of the
Nasdaq Board.
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\9\ An exception to the requirement of nomination by the
Nominating Committee exists for nominations by a stockholder who is
conducting a proxy contest and who complies with the strict
requirements of the Nasdaq By-Laws governing direct stockholder
nomination. The Board Designees would not be nominated by Borse
Dubai under these provisions.
\10\ Currently, the Nasdaq By-Laws provide that the Nominating
Committee must be composed of directors in their final year of
service on the Nasdaq Board or other persons who are not officers or
employees of Nasdaq. Rule 4350, which governs Nasdaq as a company
whose securities are listed on the Nasdaq Exchange, requires
Nominating Committee members to satisfy the definition of
``independence'' in Nasdaq Exchange Rule 4200 and IM-4200 and to
otherwise be deemed independent by the Nasdaq Board. In the future,
Nasdaq may propose a by-law amendment to require all Nominating
Committee members to be directors (with no limitation as to length
of service), but Rule 4350 would continue to apply in that event.
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The committees that are the subject of the Agreement are subject to
compositional requirements established by the Nasdaq By-Laws; moreover,
the Audit, Management Compensation, and Nominating Committees are
subject to independence requirements established by Nasdaq Exchange
Rule 4350 and, in the case of the Audit Committee, by 10A-3 under the
Act.\11\ Thus, depending on the affiliations of the Borse Dubai
Designees and the judgment of the Nasdaq Board with regard to their
independence, they would not be eligible for service on these three
committees. Each of these committees currently has between four and
seven members. Upon the closing of the Transactions, the size of each
committee would remain the same or grow to reflect the increased size
of the whole Board. Thus, each of the committees on which a Borse Dubai
Designee serves will include at least five directors.
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\11\ 17 CFR 240.10A-3.
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2. Statutory Basis
The Nasdaq Exchange believes that the proposed rule change is
consistent with the provisions of section 6 of the Act,\12\ in general,
and with sections 6(b)(1) and (b)(5) of the Act,\13\ in particular, in
that the proposal enables the Nasdaq Exchange to be so organized as to
have the capacity to be able to carry out the purposes of the Act and
to comply with and enforce compliance by members and persons associated
with members with provisions of the Act, the rules and regulations
thereunder, and self-regulatory organization (``SRO'') rules, and is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
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\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(1), (5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Nasdaq Exchange does not believe that the proposed rule change
will result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, if
consistent with the protection of investors and public interest, it has
become effective pursuant to section 19(b)(3)(A) of the Act \14\ and
Rule 19b-4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) may not become
operative prior to 30 days after the date of filing unless the
Commission designates a shorter time if such action is consistent with
the protection of investors and the public interest.\16\ The Nasdaq
Exchange
[[Page 1903]]
has requested that the Commission waive the 30-day operative delay set
forth in Rule 19b-4(f)(6)(iii) under the Act \17\ to ensure that the
filing is effective and therefore does not delay the commencement of
the offer or the closing of the Transactions. The parties to the
Transactions expect all regulatory actions necessary for the closing of
the Transactions to be completed prior to Borse Dubai commencing its
offer for OMX shares. The Commission believes that the earlier
operative date is consistent with the protection of investors and the
public interest.
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\16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires that a SRO submit to the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Commission notes that the Nasdaq Exchange has satisfied the five-day
pre-filing notice requirement.
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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Accordingly, the Commission designates the proposal to be operative
upon filing with the Commission.\18\
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\18\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2008-002 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2008-002. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Nasdaq Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NASDAQ-2008-
002 and should be submitted on or before January 31, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-187 Filed 1-9-08; 8:45 am]
BILLING CODE 8011-01-P
