Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Amendments to the NASDAQ OMX Group, Inc.'s By-Laws, 24947-24949 [2011-10651]

Download as PDF Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Notices prevent the execution or display of a short sale order of a covered security in violation of the short sale price test restrictions established in Rule 201. To that end, the proposed rule change expands the ability of the Exchange, as a listing market, to lift short sale price test restrictions to include situations where another exchange or a SRO has determined that a triggering transaction was a clearly erroneous execution under the rules of that exchange or SRO. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. srobinson on DSKHWCL6B1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 16 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),17 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission has considered the Exchange’s request to waive the 30-day U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 16 17 CFR 240.19b–4(f)(6). 17 17 CFR 240.19b–4(f)(6)(iii). 15 17 20:39 May 02, 2011 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: 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–NYSEAmex–2011–29 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–NYSEAmex–2011–29. 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 18 For the purposes only of waiving the operative delay of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 15 VerDate Mar<15>2010 operative delay, and hereby grants the request. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, as it will permit the Exchange to lift Rule 201’s short sale price test restrictions, in a covered security for which the Exchange is the listing market, when such restrictions were triggered by a transaction that another exchange or a SRO has determined to be a clearly erroneous execution, pursuant to the rules of that exchange or SRO.18 For this reason, the Commission designates the proposed rule change to be operative upon filing. At any time within 60 days of the filing of such proposed rule 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. Jkt 223001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 24947 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 20549–1090. Copies of the filing will also 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– NYSEAmex–2011–29 and should be submitted on or before May 24, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–10656 Filed 5–2–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64346; File No. SR–PHLX– 2011–54] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Amendments to the NASDAQ OMX Group, Inc.’s By-Laws April 27, 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 April 14, 2011, NASDAQ OMX PHLX LLC (‘‘PHLX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II, 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. 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\03MYN1.SGM 03MYN1 24948 Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to file a rule change related to the By-Laws of its parent corporation, The NASDAQ OMX Group, Inc. (‘‘NASDAQ OMX’’). The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nasdaqtrader.com/ micro.aspx?id=PHLXRulefilings, at the principal office of the Exchange, on the Commission’s Web site at https:// www.sec.gov, and at the Commission’s Public Reference Room. 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. srobinson on DSKHWCL6B1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NASDAQ OMX recently made certain clarifying amendments to its By-Laws.3 Specifically, the recently approved NASDAQ OMX rule change: (i) Amended the name of the Nominating Committee to the Nominating & Governance Committee; (ii) amended the PHLX reference to reflect a recent conversion to a limited liability company; and (iii) clarified By-Law Article IV, Section 4.4 that broker nonvotes are not counted as a vote cast either ‘‘for’’ or ‘‘against’’ a Director in an uncontested election.4 NASDAQ OMX By-Laws previously provided for a Nominating Committee which is appointed pursuant to the ByLaws. In addition to the responsibilities listed in By-Law Article IV, Section 4.13(h), the Nominating Committee also conducts certain governance functions such as consulting with the Board and the management to determine the 3 See Securities Exchange Act Release No. 64285 (April 8, 2011) (SR–NASDAQ–2011–025) (‘‘Approval Order’’). SR–NASDAQ–2011–025 was filed by NASDAQ Stock Market LLC on behalf of NASDAQ OMX to amend the By-Laws of its parent corporation. 4 Id. VerDate Mar<15>2010 20:39 May 02, 2011 Jkt 223001 characteristics, skills and experience desired for the Board as a whole and for its individual members, overseeing the annual director evaluation, and reviewing the overall effectiveness of the Board. Accordingly, NASDAQ OMX renamed and changed all references to the ‘‘Nominating Committee’’ in the ByLaws, to the ‘‘Nominating & Governance Committee’’ so that the title of the committee accurately reflects all of its current functions, including those that are deemed governance functions. The proposal to rename the Nominating Committee did not change the function of the committee, but was intended to clarify the current functions and its governance role with respect to the Board selection process. Additionally, NASDAQ OMX amended Article 1, Section (o) of NASDAQ OMX’s By-Laws to change the reference to ‘‘NASDAQ OMX PHLX, Inc.’’ to ‘‘NASDAQ OMX PHLX LLC’’ to reflect a recently filed rule change by the Exchange from a Delaware corporation to a Delaware limited liability company.5 Finally, NASDAQ OMX added the words ‘‘and broker nonvotes’’ to NASDAQ OMX’s By-Law Article IV, Section 4.4 to make clear that broker nonvotes will not be counted as a vote cast either ‘‘for’’ or ‘‘against’’ that director’s election. In its filing to amend NASDAQ OMX’s By-Laws, NASDAQ Stock Market LLC noted that NASDAQ OMX’s past practice has been to not count a broker nonvote as a vote cast either for or against a director’s election.6 Accordingly, this change clarifies this practice by codifying it into the By-Laws, especially in light of NASDAQ OMX’s recent change to a majority vote standard in the uncontested election of directors. In 2010, NASDAQ OMX amended its By-Laws to state that in an uncontested election, a majority voting standard would apply to the election of its directors, requiring directors to be elected by the holders of a majority of the votes cast at any meeting for the election of directors at which a quorum is present in an uncontested election.7 A plurality standard would still remain in a contested election. While in its filing to amend NASDAQ OMX’s By-Laws, NASDAQ Stock Market LLC noted that it has always been NASDAQ OMX’s 5 See Securities Exchange Act Release No. 62783 (August 27, 2010), 75 FR 54204 (September 3, 2010) (SR–Phlx–2010–104). 6 See Securities Exchange Act Release No. 63925 (February 17, 2011), 76 FR 10418 (February 24, 2011) (SR–NASDAQ–2011–025). 7 See Securities Exchange Act Release No. 63925 [sic] (April 8, 2010), 75 FR 19436 (April 14, 2010) (SR–NASDAQ–2010–025). PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 practice to not count broker nonvotes ‘‘for’’ or ‘‘against’’ in director elections, as the Commission noted in its Approval Order the impact of the broker nonvote and how such votes are counted will take on added significance under NASDAQ OMX’s newly adopted majority vote standard for director elections. Although in its filing NASDAQ Stock Market LLC stated that under Delaware case law,8 broker nonvotes are not considered as votes cast for or against a proposal or director nominee, the Exchange proposes the change for clarity and transparency purposes. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,9 in general, and with Sections 6(b)(1) and 6(b)(5) of the Act,10 in particular, in that the proposal enables the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Act, the rules and regulations thereunder, and self-regulatory organization rules, and is 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes changing the name of the Nominating Committee to the Nominating and Governance Committee and amending references to an exchange name to reflect a corporate change to a limited liability company are both clarifying in nature. The changes will ensure that the committee’s title accurately reflects its functions and will ensure that the ByLaws accurately and properly reflect an exchange entity name. As discussed above, the amendment that broker nonvotes will not be counted as a vote either ‘‘for’’ or ‘‘against’’ in director elections will codify NASDAQ OMX’s past practice, providing clarity and transparency. Accordingly the Exchange believes that the amendments are consistent with investor protection and the public interest. 8 See Berlin v. Emerald Partners, 552 A.2d 482 494 (Del Supr. 1988). 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(1),(5). E:\FR\FM\03MYN1.SGM 03MYN1 Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 11 and Rule 19b–4(f)(6) thereunder.12 Because the proposed rule change does not (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6) (iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 13 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),14 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay to ensure that NASDAQ OMX is able to implement the rule changes. The Commission finds that waiver of the operative delay is consistent with the protection of investors and the public interest. The Commission notes in waiving the 30-day operative delay that the Commission published for comment in the Federal Register the initial filing to amend NASDAQ OMX’s By-Laws, did not receive any 11 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires that a self-regulatory organization submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission notes that the Exchange has satisfied this requirement. 14 17 CFR 240.19b–4(f)(6)(iii). srobinson on DSKHWCL6B1PROD with NOTICES 12 17 VerDate Mar<15>2010 20:39 May 02, 2011 Jkt 223001 comments,15 and subsequently approved the proposed rule change.16 Further, the Commission notes that the Exchange’s proposal is identical to the proposed rule change previously approved by the Commission.17 Accordingly, the Commission finds that it is consistent with investor protection and the public interest to waive the 30day operative delay in accordance with 19b–4(f)(6)(iii) so that NASDAQ OMX’s By-Laws can be effective without undue delay, and therefore designates the proposal operative upon filing.18 At any time within 60 days of the filing of such proposed rule 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: 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–Phlx–2011–54 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–Phlx–2011–54. 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 15 See 16 See supra note 6. supra note 3. 17 Id. 18 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 24949 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 No. SR–Phlx–2011– 54 and should be submitted on or before May 24, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–10651 Filed 5–2–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64347; File No. SR– NASDAQ–2011–054] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Amendments to the NASDAQ OMX Group, Inc.’s By-Laws April 27, 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 April 14, 2011, 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, which Items have been prepared by NASDAQ. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\03MYN1.SGM 03MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 76, Number 85 (Tuesday, May 3, 2011)]
[Notices]
[Pages 24947-24949]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10651]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64346; File No. SR-PHLX-2011-54]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to Amendments to the NASDAQ OMX Group, Inc.'s By-Laws

April 27, 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 April 14, 2011, NASDAQ OMX PHLX LLC (``PHLX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II, 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.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.

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[[Page 24948]]

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to file a rule change related to the By-Laws
of its parent corporation, The NASDAQ OMX Group, Inc. (``NASDAQ OMX'').
The text of the proposed rule change is available on the Exchange's Web
site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, at
the principal office of the Exchange, on the Commission's Web site at
https://www.sec.gov, and at the Commission's Public Reference Room.

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
NASDAQ OMX recently made certain clarifying amendments to its By-
Laws.\3\ Specifically, the recently approved NASDAQ OMX rule change:
(i) Amended the name of the Nominating Committee to the Nominating &
Governance Committee; (ii) amended the PHLX reference to reflect a
recent conversion to a limited liability company; and (iii) clarified
By-Law Article IV, Section 4.4 that broker nonvotes are not counted as
a vote cast either ``for'' or ``against'' a Director in an uncontested
election.\4\
---------------------------------------------------------------------------

\3\ See Securities Exchange Act Release No. 64285 (April 8,
2011) (SR-NASDAQ-2011-025) (``Approval Order''). SR-NASDAQ-2011-025
was filed by NASDAQ Stock Market LLC on behalf of NASDAQ OMX to
amend the By-Laws of its parent corporation.
\4\ Id.
---------------------------------------------------------------------------

NASDAQ OMX By-Laws previously provided for a Nominating Committee
which is appointed pursuant to the By-Laws. In addition to the
responsibilities listed in By-Law Article IV, Section 4.13(h), the
Nominating Committee also conducts certain governance functions such as
consulting with the Board and the management to determine the
characteristics, skills and experience desired for the Board as a whole
and for its individual members, overseeing the annual director
evaluation, and reviewing the overall effectiveness of the Board.
Accordingly, NASDAQ OMX renamed and changed all references to the
``Nominating Committee'' in the By-Laws, to the ``Nominating &
Governance Committee'' so that the title of the committee accurately
reflects all of its current functions, including those that are deemed
governance functions. The proposal to rename the Nominating Committee
did not change the function of the committee, but was intended to
clarify the current functions and its governance role with respect to
the Board selection process.
Additionally, NASDAQ OMX amended Article 1, Section (o) of NASDAQ
OMX's By-Laws to change the reference to ``NASDAQ OMX PHLX, Inc.'' to
``NASDAQ OMX PHLX LLC'' to reflect a recently filed rule change by the
Exchange from a Delaware corporation to a Delaware limited liability
company.\5\
---------------------------------------------------------------------------

\5\ See Securities Exchange Act Release No. 62783 (August 27,
2010), 75 FR 54204 (September 3, 2010) (SR-Phlx-2010-104).
---------------------------------------------------------------------------

Finally, NASDAQ OMX added the words ``and broker nonvotes'' to
NASDAQ OMX's By-Law Article IV, Section 4.4 to make clear that broker
nonvotes will not be counted as a vote cast either ``for'' or
``against'' that director's election. In its filing to amend NASDAQ
OMX's By-Laws, NASDAQ Stock Market LLC noted that NASDAQ OMX's past
practice has been to not count a broker nonvote as a vote cast either
for or against a director's election.\6\ Accordingly, this change
clarifies this practice by codifying it into the By-Laws, especially in
light of NASDAQ OMX's recent change to a majority vote standard in the
uncontested election of directors.
---------------------------------------------------------------------------

\6\ See Securities Exchange Act Release No. 63925 (February 17,
2011), 76 FR 10418 (February 24, 2011) (SR-NASDAQ-2011-025).
---------------------------------------------------------------------------

In 2010, NASDAQ OMX amended its By-Laws to state that in an
uncontested election, a majority voting standard would apply to the
election of its directors, requiring directors to be elected by the
holders of a majority of the votes cast at any meeting for the election
of directors at which a quorum is present in an uncontested
election.\7\ A plurality standard would still remain in a contested
election. While in its filing to amend NASDAQ OMX's By-Laws, NASDAQ
Stock Market LLC noted that it has always been NASDAQ OMX's practice to
not count broker nonvotes ``for'' or ``against'' in director elections,
as the Commission noted in its Approval Order the impact of the broker
nonvote and how such votes are counted will take on added significance
under NASDAQ OMX's newly adopted majority vote standard for director
elections. Although in its filing NASDAQ Stock Market LLC stated that
under Delaware case law,\8\ broker nonvotes are not considered as votes
cast for or against a proposal or director nominee, the Exchange
proposes the change for clarity and transparency purposes.
---------------------------------------------------------------------------

\7\ See Securities Exchange Act Release No. 63925 [sic] (April
8, 2010), 75 FR 19436 (April 14, 2010) (SR-NASDAQ-2010-025).
\8\ See Berlin v. Emerald Partners, 552 A.2d 482 494 (Del Supr.
1988).
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\9\ in general, and with
Sections 6(b)(1) and 6(b)(5) of the Act,\10\ in particular, in that the
proposal enables the Exchange to be so organized as to have the
capacity to be able to carry out the purposes of the Act, the rules and
regulations thereunder, and self-regulatory organization rules, and is
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 regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(1),(5).
---------------------------------------------------------------------------

The Exchange believes changing the name of the Nominating Committee
to the Nominating and Governance Committee and amending references to
an exchange name to reflect a corporate change to a limited liability
company are both clarifying in nature. The changes will ensure that the
committee's title accurately reflects its functions and will ensure
that the By-Laws accurately and properly reflect an exchange entity
name. As discussed above, the amendment that broker nonvotes will not
be counted as a vote either ``for'' or ``against'' in director
elections will codify NASDAQ OMX's past practice, providing clarity and
transparency. Accordingly the Exchange believes that the amendments are
consistent with investor protection and the public interest.

[[Page 24949]]

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

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

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

No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the proposed rule change does not (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) (iii) thereunder.
---------------------------------------------------------------------------

\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay to
ensure that NASDAQ OMX is able to implement the rule changes.
---------------------------------------------------------------------------

\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires that a self-regulatory organization submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Commission notes that the Exchange has satisfied
this requirement.
\14\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

The Commission finds that waiver of the operative delay is
consistent with the protection of investors and the public interest.
The Commission notes in waiving the 30-day operative delay that the
Commission published for comment in the Federal Register the initial
filing to amend NASDAQ OMX's By-Laws, did not receive any comments,\15\
and subsequently approved the proposed rule change.\16\ Further, the
Commission notes that the Exchange's proposal is identical to the
proposed rule change previously approved by the Commission.\17\
Accordingly, the Commission finds that it is consistent with investor
protection and the public interest to waive the 30-day operative delay
in accordance with 19b-4(f)(6)(iii) so that NASDAQ OMX's By-Laws can be
effective without undue delay, and therefore designates the proposal
operative upon filing.\18\
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\15\ See supra note 6.
\16\ See supra note 3.
\17\ Id.
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
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:

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-Phlx-2011-54 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-Phlx-2011-54. 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 No. SR-Phlx-
2011-54 and should be submitted on or before May 24, 2011.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10651 Filed 5-2-11; 8:45 am]
BILLING CODE 8011-01-P

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