Self-Regulatory Organizations; Stock Clearing Corporation of Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Restated Certificate of Incorporation of the NASDAQ OMX Group, Inc., 61391-61393 [E9-28095]
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Federal Register / Vol. 74, No. 225 / Tuesday, November 24, 2009 / Notices
that Shareholder Approval is not
obtained, the Series A Preferred will
accrue cumulative dividends, accrued
on a daily basis and compounded
quarterly, at a per annum rate equal to
12%. In addition, in the event that
Shareholder Approval is not obtained,
the Series A Preferred will be subject to
optional redemption by NASDAQ OMX
subject to the terms of the Certificate of
Designation. The Series A Preferred will
be mandatorily redeemable by NASDAQ
OMX on the fourth anniversary of the
original issuance date and will be
redeemable at the option of the holders
upon a Fundamental Change (as defined
in the Certificate of Designation).
The issuance of Series A Preferred
will result in no substantive change in
the ownership or governance structure
of NASDAQ OMX since the Series A
Preferred will have no voting rights
other than the limited rights described
above. The Transaction also has resulted
in the conversion of most of the
outstanding Notes into Common Stock.7
2. Statutory Basis
BSECC believes that the proposed rule
change is consistent with the provisions
of Section 17A of the Act,8 in general,
and with Section 17A(b)(3)(A) of the
Act,9 in particular, in that it is designed
to ensure that BSECC is so organized
and has the capacity to be able to
facilitate the prompt and accurate
clearance and settlement of securities
transactions. BSECC believes that the
proposed rule change and the issuance
of Series A Preferred to existing
investors will result in no substantive
change to the corporate ownership
structure of its parent NASDAQ OMX.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
WReier-Aviles on DSKGBLS3C1PROD with NOTICES
BSECC 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.
that the conversion results in Silver Lake obtaining
beneficial ownership of shares of voting securities
in excess of five percent (5%) of the thenoutstanding shares of stock entitled to vote, Silver
Lake will be subject to the existing voting
restrictions in Article Fourth, Section C.3 of the
Certificate. This provision provides that no person
who is the beneficial owner of voting securities of
NASDAQ OMX in excess of five percent (5%) of the
then-outstanding shares of stock generally entitled
to vote (‘‘Excess Securities’’) may vote such Excess
Securities.
7 Prior to the Transaction, the Silver Lake
Affiliates held approximately $119.5 million in
aggregate principal amount of the outstanding
Notes. Another holder continues to hold
approximately $500,000 in aggregate principal
amount of the outstanding Notes.
8 15 U.S.C. 78q–1.
9 15 U.S.C. 78q–1(b)(3)(A).
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15:15 Nov 23, 2009
Jkt 220001
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and
subparagraph (f)(3) of Rule 19b–4
thereunder.11 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, as amended, 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–BSECC–2009–005 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BSECC–2009–005. 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 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
offices of the 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–BSECC–2009–005, and
should be submitted on or before
December 15, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28094 Filed 11–23–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61001; File No. SR–SCCP–
2009–04]
Self-Regulatory Organizations; Stock
Clearing Corporation of Philadelphia;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Amend the Restated
Certificate of Incorporation of the
NASDAQ OMX Group, Inc.
November 13, 2009.
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 October
1, 2009, Stock Clearing Corporation of
Philadelphia (‘‘SCCP’’) 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
prepared by SCCP. 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 the Substance
of the Proposed Rule Change
SCCP is filing this proposed rule
change with regard to proposed changes
to the Restated Certificate of
Incorporation (‘‘Certificate’’) of its
12 17
10 15
U.S.C. 78s(b)(3)(a)(iii).
11 17 CFR 240.19b–4(f)(3).
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
61391
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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61392
Federal Register / Vol. 74, No. 225 / Tuesday, November 24, 2009 / Notices
parent corporation, The NASDAQ OMX
Group, Inc. (‘‘NASDAQ OMX’’). The
proposed rule change will be
implemented as soon as practicable
following filing with the Commission.
The text of the proposed rule change is
available at https://
www.nasdaqtrader.com/
Trader.aspx?id=SCCPApprovedRules.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
SCCP 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. SCCP 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
WReier-Aviles on DSKGBLS3C1PROD with NOTICES
1. Purpose
NASDAQ OMX is proposing to file
the Certificate of Designation described
below. Under Article Four, Paragraph B
of the Certificate, NASDAQ OMX’s
Board of Directors may authorize the
issuance of preferred stock, establish the
number of shares to be included in such
series, and fix the designation, powers,
preferences and rights of the shares of
such series, and the qualifications,
limitations, and restrictions thereof. As
provided in Articles XI and XII of the
NASDAQ OMX By-Laws, proposed
amendments to the Certificate are to be
reviewed by the Board of Directors of
each self-regulatory subsidiary of
NASDAQ OMX, and if any such
proposed amendment must under
Section 19 of the Act and the rules
promulgated thereunder be filed with or
filed with and approved by the
Commission before such amendment
may be effective, then such amendment
shall not be effective until filed with or
filed with and approved by the
Commission, as the case may be. Senior
management of NASDAQ, PHLX, and
BX, through delegated authority of their
governing boards, have determined that
the proposed change should be filed
with the Commission, and the governing
boards of BSECC and SCCP have each
reviewed the proposed change and
determined that it should be filed with
VerDate Nov<24>2008
15:15 Nov 23, 2009
Jkt 220001
the Commission.3 Under Delaware law,
the amendment of the Certificate by the
filing of a Certificate of Designation does
not require approval by the stockholders
of NASDAQ OMX.
The issuance of the Series A Preferred
is part of a transaction between
NASDAQ OMX and one of its existing
shareholders, Silver Lake Partners
(‘‘Silver Lake’’), whereby Silver Lake
agreed to convert all of the 3.75% Series
A Convertible Notes due 2012 (‘‘Notes’’)
held by certain of its affiliates (‘‘Silver
Lake Affiliates’’) into shares of
NASDAQ OMX common stock
(‘‘Common Stock’’) prior to the maturity
date of such Notes.4 As an inducement
to convert the Notes, NASDAQ OMX
has delivered a cash payment and has
agreed to deliver 1,600,000 shares of
Series A Preferred to the Silver Lake
Affiliates (‘‘Transaction’’). Effective
September 28, 2009, the Silver Lake
Affiliates converted Notes into
8,246,680 shares of Common Stock. As
a result, Silver Lake no longer holds any
Notes and through certain of the Silver
Lake Affiliates currently is the
beneficial owner of shares of Common
Stock that equal less than five percent
(5%) of the outstanding voting securities
of NASDAQ OMX.
Under the Certificate of Designation,
up to two million shares will be
designated for issuance as shares of
Series A Preferred. The Series A
Preferred will be senior in preference
and priority to the Common Stock and
on parity with all other classes and
series of preferred stock.
The Series A Preferred will have
limited voting rights and will not have
the right to vote on any matters that are
subject to the vote of the holders of
Common Stock. The approval of at least
a majority of the then outstanding
shares of Series A Preferred will be
required to approve any amendment to
the Certificate or the NASDAQ OMX ByLaws that would adversely affect the
rights, preferences, or privileges of the
Series A Preferred (including any
change in the dividends payable or
liquidation preference). In addition, any
amendments to reduce the dividend
payable to the Series A Preferred, to
increase the number of authorized
shares of the Series A Preferred, or to
change certain specified provisions of
the Certificate of Designation will
3 NASDAQ, PHLX, BX, BSECC and SCCP are each
submitting this filing pursuant to Section
19(b)(3)(A)(iii) of the Act, 15 U.S.C. 78s(b)(3)(A)(iii).
4 Under Article Four, Section C.1(b) of the
Certificate, the Notes are entitled to vote on an asconverted basis on matters that are submitted to a
vote of the stockholders of NASDAQ OMX, voting
together with the holders of the Common Stock and
any other shares of capital stock entitled to vote.
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
require the written consent of 75
percent of the then outstanding shares
of Series A Preferred, voting together as
a class.
The shares of Series A Preferred will
be convertible into shares of Common
Stock. Under the applicable NASDAQ
listing rules, approval by the
stockholders of NASDAQ OMX
(‘‘Shareholder Approval’’) is required to
permit the conversion of the Series A
Preferred.5 NASDAQ OMX intends to
seek Shareholder Approval at the
company’s 2010 annual meeting of
stockholders.
Upon the date of Shareholder
Approval, the Series A Preferred will
mandatorily convert into shares of
Common Stock as provided in the
Certificate of Designation.6 In the event
that Shareholder Approval is not
obtained, the Series A Preferred will
accrue cumulative dividends, accrued
on a daily basis and compounded
quarterly, at a per annum rate equal to
12%. In addition, in the event that
Shareholder Approval is not obtained,
the Series A Preferred will be subject to
optional redemption by NASDAQ OMX
subject to the terms of the Certificate of
Designation. The Series A Preferred will
be mandatorily redeemable by NASDAQ
OMX on the fourth anniversary of the
original issuance date and will be
redeemable at the option of the holders
upon a Fundamental Change (as defined
in the Certificate of Designation).
The issuance of Series A Preferred
will result in no substantive change in
the ownership or governance structure
of NASDAQ OMX since the Series A
Preferred will have no voting rights
other than the limited rights described
above. The Transaction also has resulted
in the conversion of most of the
outstanding Notes into Common Stock.7
5 Pursuant to NASDAQ Listing Rule 5635(c),
shareholder approval is required when an equity
compensation arrangement is made pursuant to
which stock may be acquired by an issuer’s officers,
directors, employees, or consultants. Pursuant to
agreements relating to the issuance of the Notes, a
Silver Lake representative currently serves on the
NASDAQ OMX Board of Directors.
6 The number of shares of Common Stock to be
issued upon conversion is variable. To the extent
that the conversion results in Silver Lake obtaining
beneficial ownership of shares of voting securities
in excess of five percent (5%) of the thenoutstanding shares of stock entitled to vote, Silver
Lake will be subject to the existing voting
restrictions in Article Fourth, Section C.3 of the
Certificate. This provision provides that no person
who is the beneficial owner of voting securities of
NASDAQ OMX in excess of five percent (5%) of the
then-outstanding shares of stock generally entitled
to vote (‘‘Excess Securities’’) may vote such Excess
Securities.
7 Prior to the Transaction, the Silver Lake
Affiliates held approximately $119.5 million in
aggregate principal amount of the outstanding
Notes. Another holder continues to hold
E:\FR\FM\24NON1.SGM
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61393
Federal Register / Vol. 74, No. 225 / Tuesday, November 24, 2009 / Notices
2. Statutory Basis
SCCP believes that the proposed rule
change is consistent with the provisions
of Section 17A of the Act,8 in general,
and with Section 17A(b)(3)(A) of the
Act,9 in particular, in that it is designed
to ensure that SCCP is so organized and
has the capacity to be able to facilitate
the prompt and accurate clearance and
settlement of securities transactions.
SCCP believes that the proposed rule
change and the issuance of Series A
Preferred to existing investors will
result in no substantive change to the
corporate ownership structure of its
parent NASDAQ OMX.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
SCCP 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 were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and
subparagraph (f)(3) of Rule 19b–4
thereunder.11 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, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
WReier-Aviles on DSKGBLS3C1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
approximately $500,000 in aggregate principal
amount of the outstanding Notes.
8 15 U.S.C. 78q–1.
9 15 U.S.C. 78q–1(b)(3)(A).
10 15 U.S.C. 78s(b)(3)(a)(iii).
11 17 CFR 240.19b–4(f)(3).
VerDate Nov<24>2008
15:15 Nov 23, 2009
Jkt 220001
• Send an e-mail to rulecomments@sec.gov. Please include File
Number R–SCCP–2009– on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–SCCP–2009–04. 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 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
offices of the 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–SCCP–2009–04, and should
be submitted on or before December 15,
2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28095 Filed 11–23–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61016; File No. SR–ISE–
2009–96]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Extend the Pilot Program
To Expose All-Or-None Orders Until
December 31, 2009
November 17, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
13, 2009, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission the proposed
rule change as described in Items I and
II below, which items have been
prepared by the self-regulatory
organization. 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 Exchange is proposing to amend
its rules to implement a broadcast
message that will inform market
participants when a non-marketable allor-none limit order is placed on the
limit order book. The text of the
proposed rule change is as follows, with
deletions in [brackets] and additions
italicized:
Rule 717. Limitations on Orders
*
*
*
*
PO 00000
CFR 200.30–3(a)(12).
Frm 00077
Fmt 4703
Sfmt 4703
*
*
*
*
*
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
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
1 15
12 17
*
Supplementary Material to Rule 717
.01–.03 No Change.
.04 A non-marketable all-or-none limit
order shall be deemed ‘‘exposed’’ for the
purposes of paragraphs (d) and (e) one
second following a broadcast notifying
[members] market participants that such an
order to buy or sell a specified number of
contracts at a specified price has been
received in the options series. This provision
shall be in effect on a pilot basis expiring
[November 9, 2009] December 31, 2009.
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\24NON1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 225 (Tuesday, November 24, 2009)]
[Notices]
[Pages 61391-61393]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28095]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61001; File No. SR-SCCP-2009-04]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Amend the Restated Certificate of Incorporation of the
NASDAQ OMX Group, Inc.
November 13, 2009.
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 October 1, 2009, Stock Clearing Corporation of Philadelphia
(``SCCP'') 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 prepared by SCCP. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
SCCP is filing this proposed rule change with regard to proposed
changes to the Restated Certificate of Incorporation (``Certificate'')
of its
[[Page 61392]]
parent corporation, The NASDAQ OMX Group, Inc. (``NASDAQ OMX''). The
proposed rule change will be implemented as soon as practicable
following filing with the Commission. The text of the proposed rule
change is available at https://www.nasdaqtrader.com/Trader.aspx?id=SCCPApprovedRules.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, SCCP 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. SCCP 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
NASDAQ OMX is proposing to file the Certificate of Designation
described below. Under Article Four, Paragraph B of the Certificate,
NASDAQ OMX's Board of Directors may authorize the issuance of preferred
stock, establish the number of shares to be included in such series,
and fix the designation, powers, preferences and rights of the shares
of such series, and the qualifications, limitations, and restrictions
thereof. As provided in Articles XI and XII of the NASDAQ OMX By-Laws,
proposed amendments to the Certificate are to be reviewed by the Board
of Directors of each self-regulatory subsidiary of NASDAQ OMX, and if
any such proposed amendment must under Section 19 of the Act and the
rules promulgated thereunder be filed with or filed with and approved
by the Commission before such amendment may be effective, then such
amendment shall not be effective until filed with or filed with and
approved by the Commission, as the case may be. Senior management of
NASDAQ, PHLX, and BX, through delegated authority of their governing
boards, have determined that the proposed change should be filed with
the Commission, and the governing boards of BSECC and SCCP have each
reviewed the proposed change and determined that it should be filed
with the Commission.\3\ Under Delaware law, the amendment of the
Certificate by the filing of a Certificate of Designation does not
require approval by the stockholders of NASDAQ OMX.
---------------------------------------------------------------------------
\3\ NASDAQ, PHLX, BX, BSECC and SCCP are each submitting this
filing pursuant to Section 19(b)(3)(A)(iii) of the Act, 15 U.S.C.
78s(b)(3)(A)(iii).
---------------------------------------------------------------------------
The issuance of the Series A Preferred is part of a transaction
between NASDAQ OMX and one of its existing shareholders, Silver Lake
Partners (``Silver Lake''), whereby Silver Lake agreed to convert all
of the 3.75% Series A Convertible Notes due 2012 (``Notes'') held by
certain of its affiliates (``Silver Lake Affiliates'') into shares of
NASDAQ OMX common stock (``Common Stock'') prior to the maturity date
of such Notes.\4\ As an inducement to convert the Notes, NASDAQ OMX has
delivered a cash payment and has agreed to deliver 1,600,000 shares of
Series A Preferred to the Silver Lake Affiliates (``Transaction'').
Effective September 28, 2009, the Silver Lake Affiliates converted
Notes into 8,246,680 shares of Common Stock. As a result, Silver Lake
no longer holds any Notes and through certain of the Silver Lake
Affiliates currently is the beneficial owner of shares of Common Stock
that equal less than five percent (5%) of the outstanding voting
securities of NASDAQ OMX.
---------------------------------------------------------------------------
\4\ Under Article Four, Section C.1(b) of the Certificate, the
Notes are entitled to vote on an as-converted basis on matters that
are submitted to a vote of the stockholders of NASDAQ OMX, voting
together with the holders of the Common Stock and any other shares
of capital stock entitled to vote.
---------------------------------------------------------------------------
Under the Certificate of Designation, up to two million shares will
be designated for issuance as shares of Series A Preferred. The Series
A Preferred will be senior in preference and priority to the Common
Stock and on parity with all other classes and series of preferred
stock.
The Series A Preferred will have limited voting rights and will not
have the right to vote on any matters that are subject to the vote of
the holders of Common Stock. The approval of at least a majority of the
then outstanding shares of Series A Preferred will be required to
approve any amendment to the Certificate or the NASDAQ OMX By-Laws that
would adversely affect the rights, preferences, or privileges of the
Series A Preferred (including any change in the dividends payable or
liquidation preference). In addition, any amendments to reduce the
dividend payable to the Series A Preferred, to increase the number of
authorized shares of the Series A Preferred, or to change certain
specified provisions of the Certificate of Designation will require the
written consent of 75 percent of the then outstanding shares of Series
A Preferred, voting together as a class.
The shares of Series A Preferred will be convertible into shares of
Common Stock. Under the applicable NASDAQ listing rules, approval by
the stockholders of NASDAQ OMX (``Shareholder Approval'') is required
to permit the conversion of the Series A Preferred.\5\ NASDAQ OMX
intends to seek Shareholder Approval at the company's 2010 annual
meeting of stockholders.
---------------------------------------------------------------------------
\5\ Pursuant to NASDAQ Listing Rule 5635(c), shareholder
approval is required when an equity compensation arrangement is made
pursuant to which stock may be acquired by an issuer's officers,
directors, employees, or consultants. Pursuant to agreements
relating to the issuance of the Notes, a Silver Lake representative
currently serves on the NASDAQ OMX Board of Directors.
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Upon the date of Shareholder Approval, the Series A Preferred will
mandatorily convert into shares of Common Stock as provided in the
Certificate of Designation.\6\ In the event that Shareholder Approval
is not obtained, the Series A Preferred will accrue cumulative
dividends, accrued on a daily basis and compounded quarterly, at a per
annum rate equal to 12%. In addition, in the event that Shareholder
Approval is not obtained, the Series A Preferred will be subject to
optional redemption by NASDAQ OMX subject to the terms of the
Certificate of Designation. The Series A Preferred will be mandatorily
redeemable by NASDAQ OMX on the fourth anniversary of the original
issuance date and will be redeemable at the option of the holders upon
a Fundamental Change (as defined in the Certificate of Designation).
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\6\ The number of shares of Common Stock to be issued upon
conversion is variable. To the extent that the conversion results in
Silver Lake obtaining beneficial ownership of shares of voting
securities in excess of five percent (5%) of the then-outstanding
shares of stock entitled to vote, Silver Lake will be subject to the
existing voting restrictions in Article Fourth, Section C.3 of the
Certificate. This provision provides that no person who is the
beneficial owner of voting securities of NASDAQ OMX in excess of
five percent (5%) of the then-outstanding shares of stock generally
entitled to vote (``Excess Securities'') may vote such Excess
Securities.
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The issuance of Series A Preferred will result in no substantive
change in the ownership or governance structure of NASDAQ OMX since the
Series A Preferred will have no voting rights other than the limited
rights described above. The Transaction also has resulted in the
conversion of most of the outstanding Notes into Common Stock.\7\
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\7\ Prior to the Transaction, the Silver Lake Affiliates held
approximately $119.5 million in aggregate principal amount of the
outstanding Notes. Another holder continues to hold approximately
$500,000 in aggregate principal amount of the outstanding Notes.
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[[Page 61393]]
2. Statutory Basis
SCCP believes that the proposed rule change is consistent with the
provisions of Section 17A of the Act,\8\ in general, and with Section
17A(b)(3)(A) of the Act,\9\ in particular, in that it is designed to
ensure that SCCP is so organized and has the capacity to be able to
facilitate the prompt and accurate clearance and settlement of
securities transactions. SCCP believes that the proposed rule change
and the issuance of Series A Preferred to existing investors will
result in no substantive change to the corporate ownership structure of
its parent NASDAQ OMX.
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\8\ 15 U.S.C. 78q-1.
\9\ 15 U.S.C. 78q-1(b)(3)(A).
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B. Self-Regulatory Organization's Statement on Burden on Competition
SCCP 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 were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and subparagraph (f)(3) of Rule 19b-4
thereunder.\11\ 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.
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\10\ 15 U.S.C. 78s(b)(3)(a)(iii).
\11\ 17 CFR 240.19b-4(f)(3).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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 R-SCCP-2009- on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-SCCP-2009-04. 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 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 offices of the 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-SCCP-2009-04, and
should be submitted on or before December 15, 2009.
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. E9-28095 Filed 11-23-09; 8:45 am]
BILLING CODE 8011-01-P
