Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Prohibit Members From Voting Uninstructed Shares on Certain Matters, 60844-60846 [2010-24606]
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60844
Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / 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–FINRA–2010–048 on the
subject line.
Paper Comments
emcdonald on DSK2BSOYB1PROD with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, Station Place, 100 F Street,
NE., Washington, DC 20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62992; File No. SR–
NASDAQ–2010–114]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change To
Prohibit Members From Voting
Uninstructed Shares on Certain
Matters
September 24, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
All submissions should refer to File
Number SR–FINRA–2010–048. This file notice is hereby given that on
September 14, 2010, The NASDAQ
number should be included on the
subject line if e-mail is used. To help the Stock Market LLC (‘‘Nasdaq’’ or
‘‘Exchange’’) filed with the Securities
Commission process and review your
and Exchange Commission
comments more efficiently, please use
only one method. The Commission will (‘‘Commission’’) the proposed rule
post all comments on the Commission’s change as described in Items I and II
below, which Items have been
Internet Web site (https://www.sec.gov/
substantially prepared by Nasdaq. The
rules/sro.shtml). Copies of the
Commission is publishing this notice to
submission, all subsequent
solicit comments on the proposed rule
amendments, all written statements
change from interested persons and is
with respect to the proposed rule
approving the proposed rule change on
change that are filed with the
an accelerated basis.
Commission, and all written
I. Self-Regulatory Organization’s
communications relating to the
Statement of the Terms of the Substance
proposed rule change between the
Commission and any person, other than of the Proposed Rule Change
those that may be withheld from the
Nasdaq proposes to modify Rule 2251
public in accordance with the
to prohibit members from voting on the
provisions of 5 U.S.C. 552, will be
election of a member of the board of
directors of an issuer (except for a vote
available for Web site viewing and
with respect to the uncontested election
printing in the Commission’s Public
of a member of the board of directors of
Reference Room, 100 F Street, NE.,
any investment company registered
Washington, DC 20549, on official
under the Investment Company Act of
business days between the hours of 10
1940), executive compensation, or any
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and other significant matter, as determined
by the Commission, unless instructed by
copying at the principal office of
the beneficial owner of the shares. The
FINRA. All comments received will be
posted without change; the Commission text of the proposed rule change is
below. Proposed new language is in
does not edit personal identifying
italics; proposed deletions are in
information from submissions. You
brackets.3
should submit only information that
you wish to make publicly available. All 2251. Forwarding of Proxy and Other
Issuer-Related Materials
submissions should refer to File
Number SR–FINRA–2010–048 and
(a)–(c) No change.
should be submitted on or before
(d) Notwithstanding the foregoing, a
October 22, 2010.
Nasdaq Member that is not the
beneficial owner of a security registered
For the Commission, by the Division of
under Section 12 of the Act is prohibited
Trading and Markets, pursuant to delegated
from granting a proxy to vote the
authority.9
security in connection with a
Florence E. Harmon,
shareholder vote on the election of a
Deputy Secretary.
member of the board of directors of an
[FR Doc. 2010–24675 Filed 9–30–10; 8:45 am]
BILLING CODE 8010–01–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Changes are marked to the rule text that appears
in the electronic manual of Nasdaq found at
https://nasdaqomx.cchwallstreet.com.
2 17
9 17
CFR 200.30–3(a)(12).
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17:34 Sep 30, 2010
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issuer (except for a vote with respect to
the uncontested election of a member of
the board of directors of any investment
company registered under the
Investment Company Act of 1940),
executive compensation, or any other
significant matter, as determined by the
Commission, by rule, unless the
beneficial owner of the security has
instructed the member to vote the proxy
in accordance with the voting
instructions of the beneficial owner.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq 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 III below. Nasdaq 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
Section 957 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’) adopted
new Section 6(b)(10) of the Securities
Exchange Act.4 This new provision
requires all national securities
exchanges to adopt rules that prohibit
their members from voting on the
election of a member of the board of
directors of an issuer (except for a vote
with respect to the uncontested election
of a member of the board of directors of
any investment company registered
under the Investment Company Act of
1940), executive compensation, or any
other significant matter, as determined
by the Commission, unless the member
receives voting instructions from the
beneficial owner of the shares.
NASDAQ Rule 2251 governs when
NASDAQ members may vote shares
held for customers by adopting the
FINRA rule on this point. The FINRA
rule, in turn, prohibits members from
voting any uninstructed shares, but also
permits the member to follow the rules
of another SRO instead.5 In order to
4 15
U.S.C. 78f(b)(10).
Commission notes that the FINRA rule, and
by reference Nasdaq’s rule, only allows a member
to follow the rules of another SRO of which it is
a member, provided that the records of the member
5 The
E:\FR\FM\01OCN1.SGM
01OCN1
Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Notices
assure compliance, in all cases, with
newly adopted Section 6(b)(10),
NASDAQ proposes to modify Rule 2251
to provide that in no event could a
member vote uninstructed shares on the
election of a member of the board of
directors of an issuer (except for a vote
with respect to the uncontested election
of a member of the board of directors of
any investment company registered
under the Investment Company Act of
1940), executive compensation, or any
other significant matter, as determined
by the Commission, unless instructed by
the beneficial owner of the shares.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,6 in
general and with Section 6(b)(10) of the
Act,7 in particular. Section 6(b)(10)
requires that a national securities
exchange’s rules must prohibit any
member that is not the beneficial owner
of a security registered under Section 12
from granting a proxy to vote the
security in connection with a
shareholder vote on the election of a
member of the board of directors of an
issuer (except for a vote with respect to
the uncontested election of a member of
the board of directors of any investment
company registered under the
Investment Company Act of 1940),
executive compensation, or any other
significant matter, as determined by the
Commission. The proposed rule change
will adopt the prohibition required by
Section 6(b)(10).
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq 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.
emcdonald on DSK2BSOYB1PROD with NOTICES
III. 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:
clearly indicate the procedure it is following. See
FINRA Rule 2251(c)(2).
6 15 U.S.C. 78f.
7 15 U.S.C. 78f(b)(10).
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17:34 Sep 30, 2010
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60845
and regulations thereunder applicable to
a national securities exchange.8
• Use the Commission’s Internet
The Commission believes that the
comment form (https://www.sec.gov/
proposal is consistent with Section
rules/sro.shtml); or
6(b)(10) 9 of the Act, which requires that
• Send an e-mail to rulenational securities exchanges adopt
comments@sec.gov. Please include File
Number SR–NASDAQ–2010–114 on the rules prohibiting members that are not
beneficial holders of a security from
subject line.
voting uninstructed proxies with respect
Paper Comments
to the election of a member of the board
of directors of an issuer (except for
• Send paper comments in triplicate
uncontested elections of directors for
to Elizabeth M. Murphy, Secretary,
companies registered under the
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
Investment Company Act), executive
20549–1090.
compensation, or any other significant
matter, as determined by the
All submissions should refer to File
Commission by rule. The Commission
Number SR–NASDAQ–2010–114. This
also believes that the proposal is
file number should be included on the
subject line if e-mail is used. To help the consistent with Section 6(b)(5) 10 of the
Act, which provides, among other
Commission process and review your
things, that the rules of the Exchange
comments more efficiently, please use
only one method. The Commission will must be designed to promote just and
post all comments on the Commission’s equitable principles of trade, remove
Internet Web site (https://www.sec.gov/
impediments to and perfect the
rules/sro.shtml). Copies of the
mechanism of a free and open market
submission, all subsequent
and a national market system, and, in
amendments, all written statements
general, to protect investors and the
with respect to the proposed rule
public interest, and are not designed to
change that are filed with the
permit unfair discrimination between
Commission, and all written
customers, issuers, brokers, or dealers.
communications relating to the
The Commission believes that the
proposed rule change between the
proposal is consistent with Section
Commission and any person, other than
6(b)(10) of the Act because it adopts
those that may be withheld from the
revisions that comply with that section.
public in accordance with the
As noted in the accompanying Senate
provisions of 5 U.S.C. 552, will be
Report, Section 957, which adopts
available for Web site viewing and
Section 6(b)(10), reflects the principle
printing in the Commission’s Public
that ‘‘final vote tallies should reflect the
Reference Room, 100 F Street, NE.,
wishes of the beneficial owners of the
Washington, DC 20549, on official
stock and not be affected by the wishes
business days between the hours of 10
of the broker that holds the shares.’’ 11
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and The proposed rule change will make
Nasdaq compliant with the new
copying at the principal office of
requirements of Section 6(b)(10) by
Nasdaq. All comments received will be
posted without change; the Commission specifically prohibiting, in Nasdaq’s
rule language, broker-dealers, who are
does not edit personal identifying
not beneficial owners of a security, from
information from submissions. You
voting uninstructed shares in
should submit only information that
you wish to make available publicly. All connection with a shareholder vote on
the election of a member of the board of
submissions should refer to File
directors of an issuer (except for a vote
Number SR–NASDAQ–2010–114 and
with respect to the uncontested election
should be submitted on or before
of a member of the board of directors of
October 22, 2010.
any investment company registered
IV. Commission’s Findings and Order
under the Investment Company Act of
Granting Accelerated Approval of the
1940), executive compensation, or any
Proposed Rule Change
other significant matter, as determined
In its filing, Nasdaq requested that the by the Commission by rule, unless the
Commission approve the proposal on an member receives voting instructions
accelerated basis so that the Exchange
8 In approving this rule change, the Commission
could immediately comply with the
notes that it has considered the proposed rule’s
requirements imposed by the Doddimpact on efficiency, competition, and capital
Frank Act. After careful consideration,
formation. See 15 U.S.C. 78c(f).
the Commission finds that the proposed
9 15 U.S.C. 78f(b)(10).
rule change is consistent with the
10 15 U.S.C. 78f(b)(5).
requirements of the Act and the rules
11 See S. Rep. No. 111–176, at 136 (2010).
Electronic Comments
PO 00000
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60846
Federal Register / Vol. 75, No. 190 / Friday, October 1, 2010 / Notices
emcdonald on DSK2BSOYB1PROD with NOTICES
from the beneficial owner of the
shares.12
The Commission believes that the
proposal is consistent with Section
6(b)(5) of the Act because the proposal
will further investor protection and the
public interest by assuring that
shareholder votes on the election of the
board of directors of an issuer (except
for a vote with respect to the
uncontested election of a member of the
board of directors of any investment
company registered under the
Investment Company Act of 1940) and
on executive compensation matters are
made by those with an economic
interest in the company, rather than by
a broker that has no such economic
interest, which should enhance
corporate governance and accountability
to shareholders.13
Based on the above, the Commission
finds that the Nasdaq proposal will
further the purposes of Sections 6(b)(5)
and 6(b)(10) of the Act because it should
enhance corporate accountability to
shareholders while also serving to fulfill
the Congressional intent in adopting
Section 6(b)(10) of the Act.
The Commission also finds good
cause, pursuant to Section 19(b)(2) of
the Act,14 for approving the proposed
rule change prior to the 30th day after
the date of publication of notice in the
Federal Register. Section 6(b)(10) of the
Act, enacted under Section 957 of the
Dodd-Frank Act, does not provide for a
transition phase, and requires rules of
national securities exchanges to prohibit
broker voting on the election of a
member of the board of directors of an
issuer (except for a vote with respect to
the uncontested election of a member of
the board of directors of any investment
company registered under the
Investment Company Act of 1940),
executive compensation, or any other
significant matter, as determined by the
Commission by rule. The Commission
believes that good cause exists to grant
accelerated approval to the Exchange’s
proposal, because it will conform
Nasdaq Rule 2251 to the requirements of
Section 6(b)(10) of the Act.
12 The Commission has not, to date, adopted rules
concerning other significant matters where
uninstructed broker votes should be prohibited,
although it may do so in the future. Should the
Commission adopt such rules, we would expect
Nasdaq to adopt coordinating rules promptly to
comply with the statute.
13 As the Commission stated in approving NYSE
rules prohibiting broker voting in the election of
directors, having those with an economic interest in
the company vote the shares, rather than the broker
who has no such economic interest, furthers the
goal of enfranchising shareholders. See Securities
Exchange Act Release No. 60215 (July 1, 2009), 74
FR 33293 (July 10, 2009) (SR–NYSE–2006–92).
14 15 U.S.C. 78s(b)(2).
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17:34 Sep 30, 2010
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V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,15 that the
proposed rule change (SR–Nasdaq–
2010–114) be, and it hereby is, approved
on an accelerated basis.
This certification will be published in
the Federal Register.
Dated: September 27, 2010.
Paul D. Bouey,
Deputy Coordinator, Office of the U.S. Global
AIDS Coordinator, Department of State.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–24691 Filed 9–30–10; 8:45 am]
[FR Doc. 2010–24606 Filed 9–30–10; 8:45 am]
[Public Notice: 7184]
BILLING CODE 4710–10–P
DEPARTMENT OF STATE
BILLING CODE 8010–01–P
DEPARTMENT OF STATE
Bureau of Consular Affairs;
Registration for the Diversity
Immigrant (DV–2012) Visa Program
[Public Notice 7164]
AGENCY:
ACTION:
Notice of Intent To Establish the
President’s Emergency Plan for AIDS
Relief (PEPFAR) Scientific Advisory
Board, Hereinafter Referred to as ‘‘the
Board’’
This is a notice of intent to
establish The President’s Emergency
Plan for AIDS Relief (PEPFAR)
Scientific Advisory Board, hereinafter
referred to as ‘‘the Board.’’
The Board serves the Global AIDS
Coordinator (‘‘the Coordinator’’) in a
solely advisory capacity concerning
scientific, implementation, and policy
issues related to the global response to
HIV/AIDS. These issues will be of
concern as they influence the priorities
and direction of PEPFAR evaluation and
research, the content of national and
international strategies and
implementation, and the role of
PEPFAR in the international discourse
regarding appropriate and resourced
responses.
The Board will be composed of 25 to
30 members appointed by the
Coordinator, representing U.S.
Government and non-U.S. Government
personnel. The membership will be
representative of the HIV/AIDS
community, academia, international
experts, partner government
representatives, multilateral and
bilateral agency representatives,
foundations, advocates, and nongovernmental organizations. Members
who are not U.S. employees will be
representative members.
Public notice of all meetings of the
Panel will be provided in the Federal
Register in accordance with the FACA.
FOR FURTHER INFORMATION CONTACT: Paul
D. Bouey, Office of the U.S. Global AIDS
Coordinator, Washington, DC 20037,
BoueyPD@state.gov.
SUMMARY:
15 15
16 17
PO 00000
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
Frm 00136
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Sfmt 4703
Department of State.
Notice.
This public notice provides
information on how to apply for the
DV–2012 Program. This notice is issued
pursuant to 22 CFR 42.33(b)(3) which
implements sections 201(a)(3), 201(e),
203(c) and 204(a)(1)(I) of the
Immigration and Nationality Act, as
amended, (8 U.S.C. 1151, 1153, and
1154(a)(1)(I)).
SUMMARY:
Instructions for the 2012 Diversity
Immigrant Visa Program (DV–2012)
The congressionally mandated
Diversity Immigrant Visa Program is
administered on an annual basis by the
Department of State and conducted
under the terms of Section 203(c) of the
Immigration and Nationality Act (INA).
Section 131 of the Immigration Act of
1990 (Pub. L. 101–649) amended INA
203 and provides for a class of
immigrants known as ‘‘diversity
immigrants.’’ Section 203(c) of the INA
provides a maximum of 55,000 Diversity
Visas (DV) each fiscal year to be made
available to persons from countries with
low rates of immigration to the United
States.
The annual DV program makes
permanent residence visas available to
persons meeting the simple, but strict,
eligibility requirements. A computergenerated random lottery drawing
chooses selectees for Diversity Visas.
The visas are distributed among six
geographic regions with a greater
number of visas going to regions with
lower rates of immigration, and with no
visas going to nationals of countries
sending more than 50,000 immigrants to
the United States over the period of the
past five years. Within each region, no
single country may receive more than
seven percent of the available Diversity
Visas in any one year.
For DV–2012, natives of the following
countries are not eligible to apply
because the countries sent a total of
E:\FR\FM\01OCN1.SGM
01OCN1
]]>Agencies
[Federal Register Volume 75, Number 190 (Friday, October 1, 2010)]
[Notices]
[Pages 60844-60846]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24606]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62992; File No. SR-NASDAQ-2010-114]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change To Prohibit Members From Voting Uninstructed Shares on
Certain Matters
September 24, 2010.
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 September 14, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or
``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 substantially prepared by Nasdaq. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons and is approving the
proposed rule change on an accelerated basis.
---------------------------------------------------------------------------
\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
Nasdaq proposes to modify Rule 2251 to prohibit members from voting
on the election of a member of the board of directors of an issuer
(except for a vote with respect to the uncontested election of a member
of the board of directors of any investment company registered under
the Investment Company Act of 1940), executive compensation, or any
other significant matter, as determined by the Commission, unless
instructed by the beneficial owner of the shares. The text of the
proposed rule change is below. Proposed new language is in italics;
proposed deletions are in brackets.\3\
---------------------------------------------------------------------------
\3\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at https://nasdaqomx.cchwallstreet.com.
---------------------------------------------------------------------------
2251. Forwarding of Proxy and Other Issuer-Related Materials
(a)-(c) No change.
(d) Notwithstanding the foregoing, a Nasdaq Member that is not the
beneficial owner of a security registered under Section 12 of the Act
is prohibited from granting a proxy to vote the security in connection
with a shareholder vote on the election of a member of the board of
directors of an issuer (except for a vote with respect to the
uncontested election of a member of the board of directors of any
investment company registered under the Investment Company Act of
1940), executive compensation, or any other significant matter, as
determined by the Commission, by rule, unless the beneficial owner of
the security has instructed the member to vote the proxy in accordance
with the voting instructions of the beneficial owner.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq 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 III below. Nasdaq 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
Section 957 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the ``Dodd-Frank Act'') adopted new Section 6(b)(10) of
the Securities Exchange Act.\4\ This new provision requires all
national securities exchanges to adopt rules that prohibit their
members from voting on the election of a member of the board of
directors of an issuer (except for a vote with respect to the
uncontested election of a member of the board of directors of any
investment company registered under the Investment Company Act of
1940), executive compensation, or any other significant matter, as
determined by the Commission, unless the member receives voting
instructions from the beneficial owner of the shares.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b)(10).
---------------------------------------------------------------------------
NASDAQ Rule 2251 governs when NASDAQ members may vote shares held
for customers by adopting the FINRA rule on this point. The FINRA rule,
in turn, prohibits members from voting any uninstructed shares, but
also permits the member to follow the rules of another SRO instead.\5\
In order to
[[Page 60845]]
assure compliance, in all cases, with newly adopted Section 6(b)(10),
NASDAQ proposes to modify Rule 2251 to provide that in no event could a
member vote uninstructed shares on the election of a member of the
board of directors of an issuer (except for a vote with respect to the
uncontested election of a member of the board of directors of any
investment company registered under the Investment Company Act of
1940), executive compensation, or any other significant matter, as
determined by the Commission, unless instructed by the beneficial owner
of the shares.
---------------------------------------------------------------------------
\5\ The Commission notes that the FINRA rule, and by reference
Nasdaq's rule, only allows a member to follow the rules of another
SRO of which it is a member, provided that the records of the member
clearly indicate the procedure it is following. See FINRA Rule
2251(c)(2).
---------------------------------------------------------------------------
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general and with Section
6(b)(10) of the Act,\7\ in particular. Section 6(b)(10) requires that a
national securities exchange's rules must prohibit any member that is
not the beneficial owner of a security registered under Section 12 from
granting a proxy to vote the security in connection with a shareholder
vote on the election of a member of the board of directors of an issuer
(except for a vote with respect to the uncontested election of a member
of the board of directors of any investment company registered under
the Investment Company Act of 1940), executive compensation, or any
other significant matter, as determined by the Commission. The proposed
rule change will adopt the prohibition required by Section 6(b)(10).
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(10).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq 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. 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-2010-114 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-NASDAQ-2010-114. 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 Web site
viewing and printing 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 Nasdaq.
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-2010-
114 and should be submitted on or before October 22, 2010.
IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change
In its filing, Nasdaq requested that the Commission approve the
proposal on an accelerated basis so that the Exchange could immediately
comply with the requirements imposed by the Dodd-Frank Act. After
careful consideration, 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.\8\
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\8\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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The Commission believes that the proposal is consistent with
Section 6(b)(10) \9\ of the Act, which requires that national
securities exchanges adopt rules prohibiting members that are not
beneficial holders of a security from voting uninstructed proxies with
respect to the election of a member of the board of directors of an
issuer (except for uncontested elections of directors for companies
registered under the Investment Company Act), executive compensation,
or any other significant matter, as determined by the Commission by
rule. The Commission also believes that the proposal is consistent with
Section 6(b)(5) \10\ of the Act, which provides, among other things,
that the rules of the Exchange must be designed to promote just and
equitable principles of trade, 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, and are not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\9\ 15 U.S.C. 78f(b)(10).
\10\ 15 U.S.C. 78f(b)(5).
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The Commission believes that the proposal is consistent with
Section 6(b)(10) of the Act because it adopts revisions that comply
with that section. As noted in the accompanying Senate Report, Section
957, which adopts Section 6(b)(10), reflects the principle that ``final
vote tallies should reflect the wishes of the beneficial owners of the
stock and not be affected by the wishes of the broker that holds the
shares.'' \11\ The proposed rule change will make Nasdaq compliant with
the new requirements of Section 6(b)(10) by specifically prohibiting,
in Nasdaq's rule language, broker-dealers, who are not beneficial
owners of a security, from voting uninstructed shares in connection
with a shareholder vote on the election of a member of the board of
directors of an issuer (except for a vote with respect to the
uncontested election of a member of the board of directors of any
investment company registered under the Investment Company Act of
1940), executive compensation, or any other significant matter, as
determined by the Commission by rule, unless the member receives voting
instructions
[[Page 60846]]
from the beneficial owner of the shares.\12\
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\11\ See S. Rep. No. 111-176, at 136 (2010).
\12\ The Commission has not, to date, adopted rules concerning
other significant matters where uninstructed broker votes should be
prohibited, although it may do so in the future. Should the
Commission adopt such rules, we would expect Nasdaq to adopt
coordinating rules promptly to comply with the statute.
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The Commission believes that the proposal is consistent with
Section 6(b)(5) of the Act because the proposal will further investor
protection and the public interest by assuring that shareholder votes
on the election of the board of directors of an issuer (except for a
vote with respect to the uncontested election of a member of the board
of directors of any investment company registered under the Investment
Company Act of 1940) and on executive compensation matters are made by
those with an economic interest in the company, rather than by a broker
that has no such economic interest, which should enhance corporate
governance and accountability to shareholders.\13\
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\13\ As the Commission stated in approving NYSE rules
prohibiting broker voting in the election of directors, having those
with an economic interest in the company vote the shares, rather
than the broker who has no such economic interest, furthers the goal
of enfranchising shareholders. See Securities Exchange Act Release
No. 60215 (July 1, 2009), 74 FR 33293 (July 10, 2009) (SR-NYSE-2006-
92).
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Based on the above, the Commission finds that the Nasdaq proposal
will further the purposes of Sections 6(b)(5) and 6(b)(10) of the Act
because it should enhance corporate accountability to shareholders
while also serving to fulfill the Congressional intent in adopting
Section 6(b)(10) of the Act.
The Commission also finds good cause, pursuant to Section 19(b)(2)
of the Act,\14\ for approving the proposed rule change prior to the
30th day after the date of publication of notice in the Federal
Register. Section 6(b)(10) of the Act, enacted under Section 957 of the
Dodd-Frank Act, does not provide for a transition phase, and requires
rules of national securities exchanges to prohibit broker voting on the
election of a member of the board of directors of an issuer (except for
a vote with respect to the uncontested election of a member of the
board of directors of any investment company registered under the
Investment Company Act of 1940), executive compensation, or any other
significant matter, as determined by the Commission by rule. The
Commission believes that good cause exists to grant accelerated
approval to the Exchange's proposal, because it will conform Nasdaq
Rule 2251 to the requirements of Section 6(b)(10) of the Act.
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\14\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\15\ that the proposed rule change (SR-Nasdaq-2010-114) be, and it
hereby is, approved on an accelerated basis.
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\15\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24606 Filed 9-30-10; 8:45 am]
BILLING CODE 8010-01-P
