Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change To Amend Its Bylaws Relating to the Definition of a Public Director, 23287 [E8-9334]

Download as PDF Federal Register / Vol. 73, No. 83 / Tuesday, April 29, 2008 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.41 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–9320 Filed 4–28–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57699; File No. SR–CHX– 2008–02] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change To Amend Its Bylaws Relating to the Definition of a Public Director April 23, 2008. I. Introduction On February 26, 2008, the Chicago Stock Exchange, Inc. (‘‘CHX’’ 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 the definition of ‘‘Public Director’’ in the Exchange’s Bylaws. The proposed rule change was published for comment in the Federal Register on March 17, 2008.3 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of the Proposal The Exchange’s Bylaws currently define a ‘‘Public Director’’ as a director who (i) is not a participant, or an officer, managing member, partner or employee of an entity that is a participant, (ii) is not an employee of CHX or any of its affiliates; (iii) is not a broker or dealer or an officer or employee of a broker or dealer; or (iv) does not have any other material business relationship with (a) CHX Holdings, Inc., CHX, or any of their affiliates, or (b) any broker or dealer.4 The Exchange proposes to amend the definition of ‘‘Public Director.’’ 5 Specifically, the Exchange proposes to exclude from the definition of ‘‘Public Director,’’ a director who (1) is a broker or dealer that is registered under the Act; (2) is an officer or employee of a 41 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57464 (March 11, 2008), 73 FR 14286. 4 See Article II, Section 2(b) of the Exchange’s Bylaws. 5 See proposed Article II, Section 2(b)(iii) and 2(b)(iv) of the Exchange’s Bylaws. sroberts on PROD1PC70 with NOTICES 1 15 VerDate Aug<31>2005 21:01 Apr 28, 2008 Jkt 214001 broker or dealer that is registered under the Act; or (3) has any other material business relationship with CHX Holdings Inc. (‘‘CHX Holdings’’) or CHX or any of their affiliates, or any broker or dealer that is registered under the Act.6 Thus, the proposed rule change may permit a person to serve as a Public Director if he or she is a foreign broker or dealer or an officer or employee of such a foreign broker or dealer,7 provided that such person has no material business relationship with CHX Holdings or CHX or any of their affiliates or with any broker or dealer that is registered under the Act, and meets the other criteria of the Exchange’s definition of Public Director. III. Discussion After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, with Section 6(b)(5) of the Act,8 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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.9 The Commission believes that CHX’s proposed change to the definition of ‘‘Public Director’’ is similar to the director independence standards approved by the Commission for another self-regulatory organization.10 The Commission also notes that, although a broker or dealer that is not registered under the Act, or an officer or 6 See id. 7 Section 15(a) of the Act generally requires that any broker or dealer using the mails or any means or instrumentality of interstate commerce must register as a broker-dealer with the Commission, unless it is subject to an applicable exception or exemption. 15 U.S.C. 78o(a)(1). 8 15 U.S.C. 78f(b)(5). 9 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 10 See Independence Policy of the NYSE Euronext Board of Directors, Independence Qualifications, Section 1(c), which provides that, in considering the independence of a director, the board must consider whether the director has any relationships or interests in any non-member broker-dealers that are registered under the Act, in addition to other criteria. The Commission notes that the New York Stock Exchange LLC, NYSE Market, Inc., and NYSE Regulation, Inc. apply the Independence Policy of NYSE Euronext to their respective boards. See Securities Exchange Act Release No. 55293 (February 14, 2007), 71 FR 8033 (February 22, 2007). PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 23287 employee of such broker or dealer, no longer would be categorically prohibited from serving as a Public Director on CHX’s board of directors, the Exchange must still determine, before any such person is nominated for a Public Director position, that such person otherwise meets the Exchange’s definition of Public Director. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–CHX–2008– 02) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–9334 Filed 4–28–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57697; File No. SR– NYSEArca–2008–32] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of a Proposed Rule Change as Modified by Amendment No. 1 Thereto Relating to the Minor Rule Plan April 22, 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 March 18, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. On April 17, 2008, the Exchange submitted Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca through its wholly owned subsidiary, NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or the ‘‘Corporation’’), proposes to amend Rule 10.12 (Minor Rule Plan) (‘‘MRP’’) and other related rules that underlie the minor rules violations, including Rules 11 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 12 17 E:\FR\FM\29APN1.SGM 29APN1

Agencies

[Federal Register Volume 73, Number 83 (Tuesday, April 29, 2008)]
[Notices]
[Page 23287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9334]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57699; File No. SR-CHX-2008-02]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving Proposed Rule Change To Amend Its Bylaws Relating to 
the Definition of a Public Director

April 23, 2008.

I. Introduction

    On February 26, 2008, the Chicago Stock Exchange, Inc. (``CHX'' 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 the definition of ``Public Director'' in 
the Exchange's Bylaws. The proposed rule change was published for 
comment in the Federal Register on March 17, 2008.\3\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57464 (March 11, 
2008), 73 FR 14286.
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II. Description of the Proposal

    The Exchange's Bylaws currently define a ``Public Director'' as a 
director who (i) is not a participant, or an officer, managing member, 
partner or employee of an entity that is a participant, (ii) is not an 
employee of CHX or any of its affiliates; (iii) is not a broker or 
dealer or an officer or employee of a broker or dealer; or (iv) does 
not have any other material business relationship with (a) CHX 
Holdings, Inc., CHX, or any of their affiliates, or (b) any broker or 
dealer.\4\
---------------------------------------------------------------------------

    \4\ See Article II, Section 2(b) of the Exchange's Bylaws.
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    The Exchange proposes to amend the definition of ``Public 
Director.'' \5\ Specifically, the Exchange proposes to exclude from the 
definition of ``Public Director,'' a director who (1) is a broker or 
dealer that is registered under the Act; (2) is an officer or employee 
of a broker or dealer that is registered under the Act; or (3) has any 
other material business relationship with CHX Holdings Inc. (``CHX 
Holdings'') or CHX or any of their affiliates, or any broker or dealer 
that is registered under the Act.\6\ Thus, the proposed rule change may 
permit a person to serve as a Public Director if he or she is a foreign 
broker or dealer or an officer or employee of such a foreign broker or 
dealer,\7\ provided that such person has no material business 
relationship with CHX Holdings or CHX or any of their affiliates or 
with any broker or dealer that is registered under the Act, and meets 
the other criteria of the Exchange's definition of Public Director.
---------------------------------------------------------------------------

    \5\ See proposed Article II, Section 2(b)(iii) and 2(b)(iv) of 
the Exchange's Bylaws.
    \6\ See id.
    \7\ Section 15(a) of the Act generally requires that any broker 
or dealer using the mails or any means or instrumentality of 
interstate commerce must register as a broker-dealer with the 
Commission, unless it is subject to an applicable exception or 
exemption. 15 U.S.C. 78o(a)(1).
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III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange 
and, in particular, with Section 6(b)(5) of the Act,\8\ which requires, 
among other things, that the rules of a national securities exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, 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.\9\
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    \8\ 15 U.S.C. 78f(b)(5).
    \9\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Commission believes that CHX's proposed change to the 
definition of ``Public Director'' is similar to the director 
independence standards approved by the Commission for another self-
regulatory organization.\10\ The Commission also notes that, although a 
broker or dealer that is not registered under the Act, or an officer or 
employee of such broker or dealer, no longer would be categorically 
prohibited from serving as a Public Director on CHX's board of 
directors, the Exchange must still determine, before any such person is 
nominated for a Public Director position, that such person otherwise 
meets the Exchange's definition of Public Director.
---------------------------------------------------------------------------

    \10\ See Independence Policy of the NYSE Euronext Board of 
Directors, Independence Qualifications, Section 1(c), which provides 
that, in considering the independence of a director, the board must 
consider whether the director has any relationships or interests in 
any non-member broker-dealers that are registered under the Act, in 
addition to other criteria. The Commission notes that the New York 
Stock Exchange LLC, NYSE Market, Inc., and NYSE Regulation, Inc. 
apply the Independence Policy of NYSE Euronext to their respective 
boards. See Securities Exchange Act Release No. 55293 (February 14, 
2007), 71 FR 8033 (February 22, 2007).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-CHX-2008-02) be, and hereby 
is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-9334 Filed 4-28-08; 8:45 am]
BILLING CODE 8010-01-P