Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Prohibit Members From Voting Uninstructed Shares on Certain Matters, 13012-13014 [2011-5303]

Download as PDF 13012 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Emcdonald on DSK2BSOYB1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2011–020 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–CBOE–2011–020. 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 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–CBOE– VerDate Mar<15>2010 18:04 Mar 08, 2011 Jkt 223001 2011–020 and should be submitted on or before March 30, 2011. 2251. Forwarding of Proxy and Other Issuer-Related Materials For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Cathy H. Ahn, Deputy Secretary. (a)–(c) No change. (d) Notwithstanding the foregoing, an Exchange 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. [FR Doc. 2011–5377 Filed 3–8–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64023; File No. SR–BX– 2011–012] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Prohibit Members From Voting Uninstructed Shares on Certain Matters March 3, 2011. 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 February 18, 2011, NASDAQ OMX BX, Inc. (the ‘‘Exchange’’ or ‘‘BX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. 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. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange 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 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Changes are marked to the rule text that appears in the electronic manual of Nasdaq [sic] found at https://nasdaqomxbx.cchwallstreet.com. 1 15 PO 00000 Frm 00081 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 Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose 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 E:\FR\FM\09MRN1.SGM U.S.C. 78f(b)(10). 09MRN1 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices Emcdonald on DSK2BSOYB1PROD with NOTICES BX Rule 2251 governs when BX 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 assure compliance, in all cases, with newly adopted Section 6(b)(10), the Exchange 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 The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,6 in general and with Sections 6(b)(5) and 6(b)(10) of the Act,7 in particular. Section 6(b)(5) requires 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 foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The proposed rule change is consistent with this requirement in that it will protect investors and the public interest by adopting the requirements of Section 957 of the Dodd-Frank Act. 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 5 The Commission notes that the FINRA rule, and by reference BX’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). 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(5) and (10). VerDate Mar<15>2010 18:04 Mar 08, 2011 Jkt 223001 Commission. The proposed rule change will adopt the prohibition required by Section 6(b)(10) and is therefore consistent with that provision. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. 13013 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–BX– 2011–012 and should be submitted on or before March 30, 2011. IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change In its filing, BX requested that the Commission approve the proposal on an III. Solicitation of Comments accelerated basis so that the Exchange Interested persons are invited to could immediately comply with the submit written data, views, and requirements imposed by the Doddarguments concerning the foregoing, Frank Act. After careful consideration, including whether the proposed rule the Commission finds that the proposed change, as amended, is consistent with rule change is consistent with the the Act. Comments may be submitted by requirements of the Act and the rules any of the following methods: and regulations thereunder applicable to a national securities exchange.8 Electronic Comments The Commission believes that the • Use the Commission’s Internet proposal is consistent with Section comment form (https://www.sec.gov/ 6(b)(10) 9 of the Act, which requires that rules/sro.shtml); or national securities exchanges adopt • Send an e-mail to rulerules prohibiting members that are not comments@sec.gov. Please include File beneficial holders of a security from Number SR–BX–2011–012 on the voting uninstructed proxies with respect subject line. to the election of a member of the board of directors of an issuer (except for Paper Comments uncontested elections of directors for • Send paper comments in triplicate companies registered under the to Elizabeth M. Murphy, Secretary, Investment Company Act), executive Securities and Exchange Commission, compensation, or any other significant 100 F Street, NE., Washington, DC matter, as determined by the 20549–1090. Commission by rule. The Commission All submissions should refer to File also believes that the proposal is Number SR–BX–2011–012. This file consistent with Section 6(b)(5) 10 of the number should be included on the Act, which provides, among other subject line if e-mail is used. To help the things, that the rules of the Exchange Commission process and review your must be designed to promote just and comments more efficiently, please use equitable principles of trade, remove only one method. The Commission will impediments to and perfect the post all comments on the Commission’s mechanism of a free and open market Internet Web site (https://www.sec.gov/ and a national market system, and, in rules/sro.shtml). Copies of the general, to protect investors and the submission, all subsequent public interest, and are not designed to amendments, all written statements permit unfair discrimination between with respect to the proposed rule customers, issuers, brokers, or dealers. The Commission believes that the change that are filed with the proposal is consistent with Section Commission, and all written 6(b)(10) of the Act because it adopts communications relating to the revisions that comply with that section. proposed rule change between the Commission and any person, other than As noted in the accompanying Senate Report, Section 957, which adopts those that may be withheld from the public in accordance with the 8 In approving this rule change, the Commission provisions of 5 U.S.C. 552, will be notes that it has considered the proposed rule’s available for website viewing and impact on efficiency, competition, and capital printing in the Commission’s Public formation. See 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(10). Reference Room, 100 F Street, NE., 10 15 U.S.C. 78f(b)(5). Washington, DC 20549, on official PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\09MRN1.SGM 09MRN1 13014 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 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 BX compliant with the new requirements of Section 6(b)(10) by specifically prohibiting, in BX’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 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 BX 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 11 See S. Rep. No. 111–176, at 136 (2010). 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 BX 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). Emcdonald on DSK2BSOYB1PROD with NOTICES 12 The VerDate Mar<15>2010 18:04 Mar 08, 2011 Jkt 223001 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 BX Rule 2251 to the requirements of Section 6(b)(10) of the Act. Moreover, the Commission notes that BX’s proposed rule change is identical to Nasdaq Rule 2251(d), which was previously approved by the Commission and for which no comments were received.15 Therefore, the Exchange’s proposed rule change raises no new regulatory issues. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,16 that the proposed rule change (SR–BX–2011– 012) be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–5303 Filed 3–8–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64024; File No. SR–BX– 2011–011] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Adopt Section 16 (Proxy Voting) to Chapter III of the BOX Trading Rules Concerning Broker Voting March 3, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 15 See Securities Exchange Act Release No. 62992 (September 24, 2010), 75 FR 60844 (October 1, 2010) (SR–Nasdaq–2010–114). 16 15 U.S.C. 78s(b)(2). 17 17 CFR 200.30–3(a)(12). PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 18, 2011, NASDAQ OMX BX, Inc. (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons, and is approving the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to add Section 16 (Proxy Voting) to Chapter III, of the Rules of the Boston Options Exchange Group, LLC (‘‘BOX’’) in accordance with the provision of Section 957 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ‘‘Dodd-Frank Act’’). The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s Internet Web site at https:// nasdaqomxbx.cchwallstreet.com/ NASDAQOMXBX/Filings/. 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 and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 In accordance with Section 957 of the Dodd-Frank Act, the Exchange is proposing to adopt Section 16 (Proxy Voting) to Chapter III of the BOX Trading Rules. As proposed, this section will codify a provision to prohibit Participants from voting uninstructed shares if the matter voted on relates to (i) the election of a member of the board of directors of an issuer (other than an 1 15 2 17 E:\FR\FM\09MRN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 09MRN1

Agencies

[Federal Register Volume 76, Number 46 (Wednesday, March 9, 2011)]
[Notices]
[Pages 13012-13014]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-5303]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64023; File No. SR-BX-2011-012]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule Change 
To Prohibit Members From Voting Uninstructed Shares on Certain Matters

March 3, 2011.
    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 February 18, 2011, NASDAQ OMX BX, Inc. (the ``Exchange'' or ``BX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. 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

    The Exchange 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 [sic] found at https://nasdaqomxbx.cchwallstreet.com.
---------------------------------------------------------------------------

2251. Forwarding of Proxy and Other Issuer-Related Materials

    (a)-(c) No change.
    (d) Notwithstanding the foregoing, an Exchange 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, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    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).

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[[Page 13013]]

    BX Rule 2251 governs when BX 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 assure compliance, in all cases, with newly adopted Section 
6(b)(10), the Exchange 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 
BX'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
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\6\ in general and with 
Sections 6(b)(5) and 6(b)(10) of the Act,\7\ in particular. Section 
6(b)(5) requires 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 foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system. The proposed rule 
change is consistent with this requirement in that it will protect 
investors and the public interest by adopting the requirements of 
Section 957 of the Dodd-Frank Act. 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) and 
is therefore consistent with that provision.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5) and (10).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments 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, 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 SR-BX-2011-012 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-BX-2011-012. 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 website 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 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-BX-2011-012 and should be 
submitted on or before March 30, 2011.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    In its filing, BX 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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(10).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    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

[[Page 13014]]

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 BX compliant with the new 
requirements of Section 6(b)(10) by specifically prohibiting, in BX'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 from 
the beneficial owner of the shares.\12\
---------------------------------------------------------------------------

    \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 BX 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 BX 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 BX Rule 
2251 to the requirements of Section 6(b)(10) of the Act. Moreover, the 
Commission notes that BX's proposed rule change is identical to Nasdaq 
Rule 2251(d), which was previously approved by the Commission and for 
which no comments were received.\15\ Therefore, the Exchange's proposed 
rule change raises no new regulatory issues.
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    \14\ 15 U.S.C. 78s(b)(2).
    \15\ See Securities Exchange Act Release No. 62992 (September 
24, 2010), 75 FR 60844 (October 1, 2010) (SR-Nasdaq-2010-114).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the proposed rule change (SR-BX-2011-012) be, and it 
hereby is, approved on an accelerated basis.
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    \16\ 15 U.S.C. 78s(b)(2).
    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-5303 Filed 3-8-11; 8:45 am]
BILLING CODE 8011-01-P
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