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, 24949-24951 [2011-10652]
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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
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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
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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
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24950
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 NASDAQ Stock Market LLC
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.nasdaq.cchwallstreet.com, 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.
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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
NASDAQ OMX PHLX 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
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 ByLaws, 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 noted that it has always been
NASDAQ OMX’s practice to not count
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 00103
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Sfmt 4703
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–NASDAQ–2011–054 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–2011–054. 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 00104
Fmt 4703
Sfmt 4703
24951
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 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–NASDAQ–
2011–054 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. 2011–10652 Filed 5–2–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64348; File No. SR–Phlx–
2011–58]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing of Proposed Rule Change To
Increase the Position Limit for Options
on the Standard and Poor’s®
Depositary Receipts (SPDRs®)
April 27, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 18,
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, II, and
III below, which Items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
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
[Federal Register Volume 76, Number 85 (Tuesday, May 3, 2011)]
[Notices]
[Pages 24949-24951]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10652]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 24950]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NASDAQ Stock Market LLC 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.nasdaq.cchwallstreet.com, 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
NASDAQ OMX PHLX 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 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
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.
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\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).
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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.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(1), (5).
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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 24951]]
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.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
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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.
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\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).
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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-NASDAQ-2011-054 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-2011-054. 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 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-NASDAQ-
2011-054 and should be submitted on or before May 24, 2011.
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\19\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10652 Filed 5-2-11; 8:45 am]
BILLING CODE 8011-01-P
