Self-Regulatory Organizations; The Stock Clearing Corporation of Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to the By-Laws of Its Parent Corporation, The NASDAQ OMX Group, Inc., 25382-25384 [2011-10854]
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Federal Register / Vol. 76, No. 86 / Wesnesday, May 4, 2011 / Notices
information regarding registered brokerdealers and their registered personnel.
Therefore, the 515 broker-dealers that
withdraw from registration by filing
Form BDW would incur an aggregate
annual reporting burden of
approximately 515 hours.2
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
The Commission may not conduct or
sponsor a collection of information
unless it displays a currently valid
control number. No person shall be
subject to any penalty for failing to
comply with a collection of information
subject to the PRA that does not display
a valid Office of Management and
Budget (OMB) control number.
Please direct your written comments
to: Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
VA 22312 or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: April 28, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–10852 Filed 5–3–11; 8:45 am]
jlentini on DSKJ8SOYB1PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64355; File No. SR–SCCP–
2011–02]
Self-Regulatory Organizations; The
Stock Clearing Corporation of
Philadelphia; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Amendments
to the By-Laws of Its Parent
Corporation, The NASDAQ OMX
Group, Inc.
April 27, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
April 14, 2011, the Stock Clearing
Corporation of Philadelphia (‘‘SCCP’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change described in Items
I, II, and III below, which Items have
been prepared primarily by SCCP. SCCP
filed the proposal pursuant to Section
19(b)(3)(A)(iii) of the Act 2 and Rule
19b–4(f)(6) 3 thereunder so that the
proposal was effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the rule change from
interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change relate to
amendments to the By-Laws of SCCP’s
parent corporation, The NASDAQ OMX
Group, Inc. (‘‘NASDAQ OMX’’).
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
SCCP included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. SCCP has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.4
1 15
U.S.C. 78s(b)(1).
U.S.C. 78s(b)(3)(A)(iii).
3 17 CFR 240.19b–4(f)(6).
4 The Commission has modified the text of the
summaries prepared by SCCP.
2 15
2 (515
× 1 hour) = 515 hours.
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(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
NASDAQ OMX recently made certain
clarifying amendments to its By-Laws.5
Specifically, the recently approved
NASDAQ OMX rule change: (i)
Amended the name of the Nominating
Committee to the Nominating &
Governance Committee; (ii) amended
the NASDAQ OMX PHLX, Inc. 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.6
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 of
Directors (‘‘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 to
convert NASDAQ OMX PHLX, Inc. from
a Delaware corporation to a Delaware
limited liability company.7
Finally, NASDAQ OMX added the
words ‘‘and broker nonvotes’’ to
NASDAQ OMX’s By-Law Article IV,
5 Securities Exchange Act Release No. 34–64285
(April 8, 2011) 76 FR 21085 (April 14, 2011) (File
No. 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.
6 Id.
7 Securities Exchange Act Release No. 34–62783
(August 27, 2010), 75 FR 54204 (September 3, 2010)
(File No. SR–Phlx–2010–104).
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Federal Register / Vol. 76, No. 86 / Wesnesday, May 4, 2011 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
Section 4.4 to make clear that broker
nonvotes will not be counted as votes
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.8 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.9 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,
the Commission noted in its Approval
Order that 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,10 broker
nonvotes are not considered as votes
cast for or against a proposal or director
nominee, SCCP proposes the change for
clarity and transparency purposes.
SCCP believes that the proposed rule
change is consistent with the provisions
of Section 6 of the Act,11 in general, and
with Sections 6(b)(1) and 6(b)(5) of the
Act,12 in particular, in that the proposal
enables SCCP 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 selfregulatory 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
8 Securities Exchange Act Release No. 34–63925
(February 17, 2011), 76 FR 10418 (February 24,
2011) (File No. SR–NASDAQ–2011–025).
9 Securities Exchange Act Release No. 34–61786
(April 8, 2010), 75 FR 19436 (April 14, 2010) (File
No. SR–NASDAQ–2010–025).
10 Berlin v. Emerald Partners, 552 A.2d 482 494
(Del Supr. 1988).
11 15 U.S.C. 78f.
12 15 U.S.C. 78f(b)(1), (5).
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17:45 May 03, 2011
Jkt 223001
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.
SCCP believes that 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 SCCP believes that the
amendments are consistent with
investor protection and the public
interest.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
SCCP does not believe that the
proposed rule change will have any
impact or impose any burden on
competition.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments relating to the
proposed rule change have not been
solicited or received. SCCP will notify
the Commission of any written
comments received by SCCP.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A)(iii) of
the Act 13 and Rule 19b–4(f)(6) 14
thereunder 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 for 30 days after the date of
the filing, or such shorter time as the
13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. NASDAQ OMX PHLX LLC has
satisfied this requirement.
14 17
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
25383
Commission may designate. At any time
within 60 days of the filing of the
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. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
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–SCCP–2011–002 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–SCCP–2011–002. 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 filings
also will be available for inspection and
copying at the principal office of SCCP
and on SCCP’s Web site at https://
E:\FR\FM\04MYN1.SGM
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25384
Federal Register / Vol. 76, No. 86 / Wesnesday, May 4, 2011 / Notices
nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/pdf/sccp-filings/
2011/SR-SCCP-2011-02.pdf.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–SCCP–2011–02 and should
be submitted on or before May 25, 2011.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.15
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–10854 Filed 5–3–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64365; File No. SR–
NASDAQ–2011–058]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Regarding
Limitation of Liability
April 28, 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 28,
2011, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’), filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by NASDAQ.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
jlentini on DSKJ8SOYB1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ is filing with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) a proposal for The
NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) to amend
Rule 4626 (Limitation of Liability)
regarding expansion of the Exchange’s
limitation of liability under specified
circumstances.
The Exchange requests that the
Commission waive the 30-day operative
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Jkt 223001
delay period contained in Exchange Act
Rule 19b–4(f)(6)(iii).3
The text of the proposed rule change
is available from NASDAQ’s Web site at
https://nasdaq.cchwallstreet.com/
Filings/, at NASDAQ’s principal office,
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,
NASDAQ included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below.
NASDAQ has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to amend Rule 4626 regarding
expansion of the Exchange’s limitation
of liability rule under specified
circumstances.
Rule 4626 currently states that except
as provided for in subsection (b) of the
rule, Nasdaq and its affiliates shall not
be liable for any losses, damages, or
other claims arising out of the Nasdaq
Market Center or its use. Subsection
(b)(1) states that for the aggregate of all
claims made by all market participants
related to the use of the Nasdaq Market
Center during a single calendar month,
Nasdaq’s payments under Rule 4676
[sic] shall not exceed the larger of
$500,000, or the amount of the recovery
obtained by Nasdaq under any
applicable insurance policy.4
The Exchange now proposes to add a
new section to expand the maximum
amount of payments that the Exchange
may make during a calendar month
pursuant to Rule 4626 in enumerated
circumstances added in new subsection
(b)(2).
First, the (b)(2) claims have to be
related to a systems malfunction or error
3 17
CFR 240.19b–4(f)(6)(iii).
4676 [sic] was amended in 2009 to the
current version. See Securities Exchange Act
Release No. 60794 (October 6, 2009), 74 FR 52522
(October 13, 2009) (SR–NASDAQ–2009–084)
(notice of filing and immediate effectiveness). The
Commission notes that the references to ‘‘Rule
4676’’ herein are typographical errors and the
correct rule number is 4626.
4 Rule
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
of the Nasdaq Market Center concerning
one the following functions that are
system enforced by the Nasdaq trading
system on behalf of the claimant:
locked/crossed markets, trade through
protection, market maker quoting, order
protection, or firm quote compliance.5
And second, Nasdaq has to determine in
its sole discretion that such systems
malfunction or error was caused
exclusively by Nasdaq’s trading system
and that no outside factors contributed
to the malfunction or error. That is, the
trading system issue would have to be
caused exclusively by the Exchange to
trigger subsection (b)(2).6
For example, if the needed market
data provided to the Exchange to
properly perform a locked/crossed
markets analysis was incorrect and
therefore caused the Exchange’s relevant
trading system functionality to quote or
execute improperly, the requirements of
subsection (b)(2) would not be met
because any resulting issue was not
caused exclusively by the Exchange. A
similar result would occur should any
other third party or non-Exchange
specific input to the Exchange’s trading
systems likewise cause incorrect
processing by the Exchange.
Nasdaq’s payments under subsection
(b)(2) for all claims made by all market
participants during a single calendar
month, shall not exceed the larger of
$3,000,000, or the amount of the
recovery obtained by Nasdaq under any
applicable insurance policy, subject to
the overall cap on payments under Rule
4626 discussed below.
Finally, the Exchange proposes to add
new subsection (b)(3) stating that
Nasdaq’s total payment during a single
calendar month pursuant to Rule 4626
(including both subsections (b)(1) and
(b)(2)) shall not exceed $3,000,000.7
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 8 in general, and furthers the
objectives of Section 6(b)(5) of the Act 9
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
5 Rule 610 and 611 of Regulation NMS and
Exchange Rule 4613. Notwithstanding this
provision, the Exchange notes that market
participants are not absolved of their compliance
obligations under the Exchange rules or the Act.
6 Claims under subsection (b)(2) would remain
subject to the other limitations for recovery
contained in Rule 4672 [sic], including the
limitations on covered losses contained in the
introductory language of subsection (b).
7 The Exchange proposes to add the word
‘‘payment’’ in subsection (b)(1) for consistency with
proposed new subsections (b)(2) and (b)(3).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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]]>Agencies
[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Notices]
[Pages 25382-25384]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10854]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64355; File No. SR-SCCP-2011-02]
Self-Regulatory Organizations; The Stock Clearing Corporation of
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Amendments to the By-Laws of Its Parent
Corporation, The NASDAQ OMX Group, Inc.
April 27, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 14, 2011, the Stock
Clearing Corporation of Philadelphia (``SCCP'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change described in Items I, II, and III below, which Items have been
prepared primarily by SCCP. SCCP filed the proposal pursuant to Section
19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(6) \3\ thereunder so
that the proposal was effective upon filing with the Commission. The
Commission is publishing this notice to solicit comments on the rule
change from interested parties.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78s(b)(3)(A)(iii).
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change relate to amendments to the By-Laws of
SCCP's parent corporation, The NASDAQ OMX Group, Inc. (``NASDAQ OMX'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, SCCP included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. SCCP has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\4\
---------------------------------------------------------------------------
\4\ The Commission has modified the text of the summaries
prepared by SCCP.
---------------------------------------------------------------------------
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
NASDAQ OMX recently made certain clarifying amendments to its By-
Laws.\5\ Specifically, the recently approved NASDAQ OMX rule change:
(i) Amended the name of the Nominating Committee to the Nominating &
Governance Committee; (ii) amended the NASDAQ OMX PHLX, Inc. 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.\6\
---------------------------------------------------------------------------
\5\ Securities Exchange Act Release No. 34-64285 (April 8, 2011)
76 FR 21085 (April 14, 2011) (File No. 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.
\6\ 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 of Directors (``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 to
convert NASDAQ OMX PHLX, Inc. from a Delaware corporation to a Delaware
limited liability company.\7\
---------------------------------------------------------------------------
\7\ Securities Exchange Act Release No. 34-62783 (August 27,
2010), 75 FR 54204 (September 3, 2010) (File No. SR-Phlx-2010-104).
---------------------------------------------------------------------------
Finally, NASDAQ OMX added the words ``and broker nonvotes'' to
NASDAQ OMX's By-Law Article IV,
[[Page 25383]]
Section 4.4 to make clear that broker nonvotes will not be counted as
votes 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.\8\
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.
---------------------------------------------------------------------------
\8\ Securities Exchange Act Release No. 34-63925 (February 17,
2011), 76 FR 10418 (February 24, 2011) (File No. 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.\9\ 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,
the Commission noted in its Approval Order that 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,\10\ broker nonvotes are not
considered as votes cast for or against a proposal or director nominee,
SCCP proposes the change for clarity and transparency purposes.
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\9\ Securities Exchange Act Release No. 34-61786 (April 8,
2010), 75 FR 19436 (April 14, 2010) (File No. SR-NASDAQ-2010-025).
\10\ Berlin v. Emerald Partners, 552 A.2d 482 494 (Del Supr.
1988).
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SCCP believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\11\ in general, and with Sections
6(b)(1) and 6(b)(5) of the Act,\12\ in particular, in that the proposal
enables SCCP 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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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(1), (5).
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SCCP believes that 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 SCCP believes that the amendments are
consistent with investor protection and the public interest.
(B) Self-Regulatory Organization's Statement on Burden on Competition
SCCP does not believe that the proposed rule change will have any
impact or impose any burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments relating to the proposed rule change have not been
solicited or received. SCCP will notify the Commission of any written
comments received by SCCP.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective upon filing
pursuant to Section 19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-
4(f)(6) \14\ thereunder 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 for 30 days after the date of the filing, or such
shorter time as the Commission may designate. At any time within 60
days of the filing of the 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. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
NASDAQ OMX PHLX LLC has satisfied this requirement.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change 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-SCCP-2011-002 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-SCCP-2011-002. 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 filings also will be available for
inspection and copying at the principal office of SCCP and on SCCP's
Web site at https://
[[Page 25384]]
nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/pdf/sccp-filings/2011/SR-
SCCP-2011-02.pdf.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-SCCP-2011-02
and should be submitted on or before May 25, 2011.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10854 Filed 5-3-11; 8:45 am]
BILLING CODE 8011-01-P
