Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend the Definition of “Non-Industry Director” in the By-Laws of The NASDAQ OMX Group, Inc. and The NASDAQ Stock Market LLC, 43812 [E8-17210]

Download as PDF 43812 Federal Register / Vol. 73, No. 145 / Monday, July 28, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58201; File No. SR– NASDAQ–2008–043] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend the Definition of ‘‘Non-Industry Director’’ in the ByLaws of The NASDAQ OMX Group, Inc. and The NASDAQ Stock Market LLC July 21, 2008. On May 12, 2008, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ 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, a proposed rule change to amend the definition of ‘‘Non-Industry Director’’ in The NASDAQ OMX Group, Inc.’s by-laws (‘‘NASDAQ OMX ByLaws’’) and Nasdaq’s by-laws (‘‘Nasdaq By-Laws’’). On May 28, 2008, Nasdaq filed Amendment No. 1. The proposed rule change was published for comment in the Federal Register on June 9, 2008.2 The Commission received no comments regarding the proposal. This order approves the proposed rule change, as modified by Amendment No. 1. Nasdaq proposes to amend NASDAQ OMX By-Laws and Nasdaq By-Laws to clarify that a director of an issuer of securities may be considered an ‘‘issuer representative’’ for purposes of provisions in these by-laws that require issuer representation on NASDAQ OMX’s board of directors (‘‘NASDAQ OMX Board’’) and Nasdaq’s board of directors (‘‘Nasdaq Board’’), respectively. Section 4.3 of the NASDAQ OMX ByLaws currently provides that the number of Non-Industry Directors,3 including at least one issuer representative, must equal or exceed the number of Industry Directors,4 unless the NASDAQ OMX Board consists of ten or more directors, in which case at least two directors must be issuer representatives. Likewise, Article III, Section 2(a) of the Nasdaq By-Laws provides that the number of NonIndustry Directors,5 including at least one issuer representative, must equal or exceed the number of Industry Directors6 and Member Representative Directors,7 unless the Nasdaq Board consists of ten or more directors, in which case at least two directors shall be issuer representatives. The term ‘‘issuer representative,’’ however, is not defined in either the NASDAQ OMX By-Laws or the Nasdaq By-Laws. Instead, NASDAQ OMX ByLaws provide that ‘‘Non-Industry Director’’ means a director who is a Public Director,8 an officer or employee of an issuer of securities listed on a national securities exchange operated by any Self-Regulatory Subsidiary,9 or any other individual who would not be an Industry Director or Industry committee member. Similarly, Nasdaq By-Laws provide that ‘‘Non-Industry Director’’ means a director who is a Public Director,10 an officer or employee of an issuer of securities listed on the national securities exchange operated by Nasdaq, or any other individual who would not be an Industry Director. Because these definitions of NonIndustry Director could be construed to require that an issuer representative must be an officer or employee of an issuer but not a director, Nasdaq proposes to clarify the NASDAQ OMX By-Laws’ and Nasdaq By-Laws’ definitions of Non-Industry Director to include a reference to ‘‘director’’ so that these definitions could not preclude a director of an issuer from serving as an issuer representative. 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.11 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(3) of the Act,12 which requires that the rules of the exchange assure a fair representation of its members in the selection of its directors and administration of its affairs and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer. The Commission believes that the proposed rule change is appropriate, because it would clarify that the director of a Nasdaq issuer could serve as an issuer representative on the NASDAQ OMX Board and Nasdaq Board. Article I(q), Nasdaq By-Laws. Article I(n), NASDAQ OMX By-Laws. 9 See Article I(o), NASDAQ OMX By-Laws. 10 See Article I(y), Nasdaq By-Laws. 11 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). 12 15 U.S.C. 78f(b)(5). jlentini on PROD1PC65 with NOTICES U.S.C. 78s(b)(1). 2 See Securities Exchange Act Release No. 57911 (June 3, 2008), 73 FR 32615. 3 See Article I(m), NASDAQ OMX By-Laws. 4 See Article I(j), NASDAQ OMX By-Laws. 5 See Article I(v), Nasdaq By-Laws. 6 See Article I(l), Nasdaq By-Laws. VerDate Aug<31>2005 18:35 Jul 25, 2008 Jkt 214001 PO 00000 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Acting Secretary. [FR Doc. E8–17210 Filed 7–25–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58203; File No. SR– NYSEArca–2008–57] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change Amending NYSE Arca Rule 5.3 and Rule 5.4 To Enable the Listing and Trading of Options on Index-Linked Securities July 22, 2008. On May 29, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 2 thereunder to amend NYSE Arca Rules 5.3 and 5.4 to list and trade options on equity index-linked securities, commodity-linked securities, currency-linked securities, fixed income index-linked securities, futures-linked securities, and multifactor index-linked securities (collectively referred to as ‘‘Index-Linked Securities’’) 3 that are principally traded on a national securities exchange and an ‘‘NMS stock’’ as defined in Rule 600 of Regulation NMS.4 The proposed rule change was published for comment in the Federal Register on June 18, 2008 for a 21-day comment period.5 The Commission received no comment letters regarding the proposal. This order approves the proposed rule change. Index-Linked Securities are designed for investors who desire to participate in a specific market segment by providing exposure to one or more identifiable underlying securities, commodities, currencies, derivative instruments or 7 See 8 See 1 15 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,13 that the proposed rule change (SR–NASDAQ– 2008–043), as modified by Amendment No. 1, be, and it hereby is, approved. Frm 00138 Fmt 4703 Sfmt 4703 13 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. 3 See NYSE Arca Equities Rule 5.2(j)(6). 4 See 17 CFR 242.600(b)(47). 5 See Securities Exchange Act Release No. 57950 (June 11, 2008), 73 FR 34815. 14 17 E:\FR\FM\28JYN1.SGM 28JYN1

Agencies

[Federal Register Volume 73, Number 145 (Monday, July 28, 2008)]
[Notices]
[Page 43812]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17210]



[[Page 43812]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58201; File No. SR-NASDAQ-2008-043]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval of a Proposed Rule Change, as Modified by Amendment 
No. 1 Thereto, To Amend the Definition of ``Non-Industry Director'' in 
the By-Laws of The NASDAQ OMX Group, Inc. and The NASDAQ Stock Market 
LLC

July 21, 2008.
    On May 12, 2008, The NASDAQ Stock Market LLC (``Nasdaq'' 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, a 
proposed rule change to amend the definition of ``Non-Industry 
Director'' in The NASDAQ OMX Group, Inc.'s by-laws (``NASDAQ OMX By-
Laws'') and Nasdaq's by-laws (``Nasdaq By-Laws''). On May 28, 2008, 
Nasdaq filed Amendment No. 1. The proposed rule change was published 
for comment in the Federal Register on June 9, 2008.\2\ The Commission 
received no comments regarding the proposal. This order approves the 
proposed rule change, as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ See Securities Exchange Act Release No. 57911 (June 3, 
2008), 73 FR 32615.
---------------------------------------------------------------------------

    Nasdaq proposes to amend NASDAQ OMX By-Laws and Nasdaq By-Laws to 
clarify that a director of an issuer of securities may be considered an 
``issuer representative'' for purposes of provisions in these by-laws 
that require issuer representation on NASDAQ OMX's board of directors 
(``NASDAQ OMX Board'') and Nasdaq's board of directors (``Nasdaq 
Board''), respectively.
    Section 4.3 of the NASDAQ OMX By-Laws currently provides that the 
number of Non-Industry Directors,\3\ including at least one issuer 
representative, must equal or exceed the number of Industry 
Directors,\4\ unless the NASDAQ OMX Board consists of ten or more 
directors, in which case at least two directors must be issuer 
representatives. Likewise, Article III, Section 2(a) of the Nasdaq By-
Laws provides that the number of Non-Industry Directors,\5\ including 
at least one issuer representative, must equal or exceed the number of 
Industry Directors\6\ and Member Representative Directors,\7\ unless 
the Nasdaq Board consists of ten or more directors, in which case at 
least two directors shall be issuer representatives.
---------------------------------------------------------------------------

    \3\ See Article I(m), NASDAQ OMX By-Laws.
    \4\ See Article I(j), NASDAQ OMX By-Laws.
    \5\ See Article I(v), Nasdaq By-Laws.
    \6\ See Article I(l), Nasdaq By-Laws.
    \7\ See Article I(q), Nasdaq By-Laws.
---------------------------------------------------------------------------

    The term ``issuer representative,'' however, is not defined in 
either the NASDAQ OMX By-Laws or the Nasdaq By-Laws. Instead, NASDAQ 
OMX By-Laws provide that ``Non-Industry Director'' means a director who 
is a Public Director,\8\ an officer or employee of an issuer of 
securities listed on a national securities exchange operated by any 
Self-Regulatory Subsidiary,\9\ or any other individual who would not be 
an Industry Director or Industry committee member. Similarly, Nasdaq 
By-Laws provide that ``Non-Industry Director'' means a director who is 
a Public Director,\10\ an officer or employee of an issuer of 
securities listed on the national securities exchange operated by 
Nasdaq, or any other individual who would not be an Industry Director.
---------------------------------------------------------------------------

    \8\ See Article I(n), NASDAQ OMX By-Laws.
    \9\ See Article I(o), NASDAQ OMX By-Laws.
    \10\ See Article I(y), Nasdaq By-Laws.
---------------------------------------------------------------------------

    Because these definitions of Non-Industry Director could be 
construed to require that an issuer representative must be an officer 
or employee of an issuer but not a director, Nasdaq proposes to clarify 
the NASDAQ OMX By-Laws' and Nasdaq By-Laws' definitions of Non-Industry 
Director to include a reference to ``director'' so that these 
definitions could not preclude a director of an issuer from serving as 
an issuer representative.
    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.\11\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(3) of the Act,\12\ which requires that the 
rules of the exchange assure a fair representation of its members in 
the selection of its directors and administration of its affairs and 
provide that one or more directors shall be representative of issuers 
and investors and not be associated with a member of the exchange, 
broker, or dealer. The Commission believes that the proposed rule 
change is appropriate, because it would clarify that the director of a 
Nasdaq issuer could serve as an issuer representative on the NASDAQ OMX 
Board and Nasdaq Board.
---------------------------------------------------------------------------

    \11\ 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).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-NASDAQ-2008-043), as 
modified by Amendment No. 1, be, and it hereby is, approved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-17210 Filed 7-25-08; 8:45 am]
BILLING CODE 8010-01-P