Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change, as Modified by Amendment No. 1, to Reduce the Minimum Size of the Nominating and Governance Committee, 37867-37868 [2011-16133]
Download as PDF
<![CDATA[
Federal Register / Vol. 76, No. 124 / Tuesday, June 28, 2011 / Notices
reasonable fees and other charges among
Exchange members and other persons
using its facilities.
The Exchange believes that it is
reasonable to remove DNDN, MSI and
XHB from its list of Select Symbols and
add VXX to its list of Select Symbols to
attract additional order flow to the
Exchange. The Exchange anticipates
that the addition of VXX to Section I of
the Fee Schedule would attract market
participants to transact equity options at
the Exchange because of the available
rebates. In addition, the Exchange
believes that applying the fees in
Section II, entitled ‘‘Equity Options
Fees’’ 6 to DNDN, MSI and XHB,
including the opportunity to receive
payment for order flow, would also
attract order flow to the Exchange.
The Exchange believes that it is
equitable to amend the list of Select
Symbols by removing DNDN, MSI and
XHB and adding VXX because the list
of Select Symbols would apply
uniformly to all categories of
participants in the same manner. All
market participants who trade the Select
Symbols would be subject to the rebates
and fees in Section I of the Fee
Schedule. Also, all market participants
would be uniformly subject to the fees
in Section II.
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.
mstockstill on DSK4VPTVN1PROD 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 either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.7 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
6 Section II includes options overlying equities,
ETFs, ETNs, indexes and HOLDRS which are
Multiply Listed.
7 15 U.S.C. 78s(b)(3)(A)(ii).
VerDate Mar<15>2010
16:46 Jun 27, 2011
Jkt 223001
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
37867
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–16148 Filed 6–27–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64725; File No. SR–CBOE–
2011–044]
• 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–2011–85 on the
subject line.
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving
Proposed Rule Change, as Modified by
Amendment No. 1, to Reduce the
Minimum Size of the Nominating and
Governance Committee
Paper Comments
June 22, 2011.
I. Introduction
On April 27, 2011, Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
All submissions should refer to File
19(b)(1) of the Securities Exchange Act
Number SR–Phlx–2011–85. This file
of 1934 (‘‘Act’’),1 and Rule 19b–4
number should be included on the
thereunder,2 a proposed rule change to
subject line if e-mail is used. To help the reduce the minimum size of the
Commission process and review your
Nominating and Governance Committee
comments more efficiently, please use
(‘‘NGC’’) from seven to five. On May 18,
only one method. The Commission will 2011, the Exchange filed Amendment
post all comments on the Commission’s No. 1 to the proposed rule change.3 The
Internet Web site (https://www.sec.gov/
proposed rule change was published for
rules/sro.shtml). Copies of the
comment in the Federal Register on
submission, all subsequent
May 10, 2011.4 The Commission
amendments, all written statements
received no comment letters regarding
with respect to the proposed rule
the proposal. This order approves the
change that are filed with the
proposed rule change, as modified by
Commission, and all written
Amendment No. 1.
communications relating to the
II. Description of the Proposal
proposed rule change between the
CBOE is proposing to reduce the
Commission and any person, other than
minimum size of its NGC from seven to
those that may be withheld from the
five directors. Section 4.4 of the Second
public in accordance with the
Amended and Restated Bylaws of CBOE
provisions of 5 U.S.C. 552, will be
(‘‘Bylaws’’) currently provides, in
available for Web site viewing and
printing in the Commission’s Public
8 17 CFR 200.30–3(a)(12).
Reference Room, 100 F Street, NE.,
1 15 U.S.C. 78s(b)(1).
Washington, DC 20549, on official
2 17 CFR 240.19b–4.
business days between the hours of 10
3 At the time CBOE submitted the original
a.m. and 3 p.m. Copies of the filing also proposed rule change, it had not yet obtained
formal approval from its Board of Directors for the
will be available for inspection and
specific Bylaw changes set forth in this proposed
copying at the principal office of the
rule change. CBOE stated that once that approval
Exchange. All comments received will
was obtained, it would file a technical amendment
be posted without change; the
to its proposed rule change to reflect that approval.
In Amendment No. 1, the Exchange notes that the
Commission does not edit personal
CBOE Board of Directors approved the specific
identifying information from
Bylaw changes set forth in SR–CBOE–2011–044 on
submissions. You should submit only
May 17, 2011 and stated that no further action was
information that you wish to make
necessary in connection with its proposal. Because
Amendment No. 1 is technical in nature, the
available publicly. All submissions
Commission is not required to publish it for public
should refer to File Number SR–Phlx–
comment.
2011–85 and should be submitted on or
4 See Securities Exchange Act Release No. 64395
before July 19, 2011.
(May 4, 2011), 76 FR 27125 (‘‘Notice’’).
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
E:\FR\FM\28JNN1.SGM
28JNN1
37868
Federal Register / Vol. 76, No. 124 / Tuesday, June 28, 2011 / Notices
pertinent part, that the NGC shall
consist of at least seven directors,
including both Industry and NonIndustry Directors; that a majority of the
directors on the Committee shall be
Non-Industry Directors; and that the
exact number of members on the
Committee shall be determined from
time to time by CBOE’s Board of
Directors (the ‘‘Board’’ or ‘‘CBOE
Board’’). Pursuant to the proposed rule
change, Section 4.4 of the Bylaws would
be amended to provide that the NGC
shall consist of at least five directors.
The other provisions of Section 4.4 of
the Bylaws would remain unchanged.5
In outlining the purpose behind its
proposal, the Exchange noted that the
size of its Board declined from its initial
size of twenty-three to nineteen
directors in 2009 and again to sixteen
directors in 2011.6 As the size of its
Board has declined, the Exchange noted
that it has become more challenging to
populate larger-size Board committees
since there are fewer directors to serve
on a multitude of committees.7 The
Exchange’s proposal to reduce the
minimum size of the NGC is intended
to help address this issue.
mstockstill on DSK4VPTVN1PROD with NOTICES
III. Discussion
After careful review of the proposal,
the Commission finds that the proposed
rule change, as modified by Amendment
No. 1, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.8 In
particular, the Commission finds that
the proposal is consistent with Section
6(b)(1) of the Act,9 which requires a
national securities exchange to be so
organized and have the capacity to carry
out the purposes of the Act and to
comply, and to enforce compliance by
its members and persons associated
with its members, with the provisions of
the Act, as well as Section 6(b)(5) of the
Act,10 in that it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to remove
impediments to, and perfect the
mechanism of a free and open market,
and, in general, to protect investors and
5 Additionally, the title of the Bylaws would be
changed to the Third Amended and Restated
Bylaws of CBOE.
6 Section 3.1 of the Bylaws provides that the
CBOE Board shall consist of not less than eleven
and not more than twenty-three directors, with the
exact size determined by the Board.
7 See Notice, supra note 4, at 27125–26.
8 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
9 15 U.S.C. 78f(b)(1).
10 15 U.S.C. 78f(b)(5).
VerDate Mar<15>2010
16:46 Jun 27, 2011
Jkt 223001
the public interest. While the Exchange
has proposed to reduce the minimum
size of the NGC, it has not proposed any
other changes to the composition of the
committee or the scope or exercise of its
responsibilities. In its filing, the
Exchange affirmatively represented that
the NGC ‘‘will continue to be able to
appropriately perform its functions’’
despite the reduction in minimum
required size.11 The Commission further
finds that the proposal, as modified by
Amendment No. 1, is consistent with
the requirements of Section 6(b)(3) of
the Act,12 which requires that one or
more directors of an exchange shall be
representative of issuers and investors
and not be associated with a member of
the exchange, broker or dealer.
In particular, the Commission notes
that the Exchange will continue to
provide for the fair representation of
CBOE Trading Permit Holders in the
selection of directors and the
administration of the Exchange
consistent with Section 6(b)(3) of the
Act 13 following this rule change.
Specifically, the CBOE Bylaws will
continue to require that at least thirty
percent of the directors on the Board be
Industry Directors and that at least
twenty percent of CBOE’s directors be
Representative Directors elected by
permit holders.14 Further, the NGC will
continue to include both Industry and
Non-Industry Directors (including a
majority Non-Industry Directors) and
have an Industry-Director Subcommittee
that is composed of all of the Industry
Directors serving on the Committee.
Representative Directors will continue
to be nominated (or otherwise selected
through a petition process) by the
Industry-Director Subcommittee.
Additionally, CBOE Trading Permit
Holders will continue to be able to
nominate alternative Representative
Director candidates to those nominated
by the Industry Director Subcommittee,
in which case a Run-off Election will be
held in which CBOE’s Trading Permit
Holders vote to determine which
candidates will be elected to the Board
to serve as Representative Directors.
Furthermore, the Commission notes that
the Exchange’s proposal to reduce the
minimum size of its NGC is consistent
with a proposal that the Commission
previously approved for another selfregulatory organization in which that
self-regulatory organization reduced the
minimum size of its nominating and
11 See
Notice, supra note 4, at 27126.
U.S.C. 78f(b)(3).
13 15 U.S.C. 78f(b)(3).
14 See Section 3.2 of the CBOE Bylaws (defining
‘‘Representative Director’’).
12 15
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
governance committee from six to four
members.15
Finally, the Exchange has represented
that, although the proposed rule change
would permit the Exchange to appoint
a five-person NGC and the Exchange
may elect to do so in the future, it is the
current intention of the Exchange to
appoint a six-person NGC.16
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–CBOE–2011–
044), as modified by Amendment No. 1,
be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–16133 Filed 6–27–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64722; File No. SR–CBOE–
2011–055]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of
Proposed Rule Change to Trade
Options on the CBOE Silver ETF
Volatility Index
June 22, 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 June 15,
2011, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
15 See Securities Exchange Act Release No. 54494
(September 25, 2006), 71 FR 58023 (October 2,
2006) (SR–CHX–2006–23) (approving reduction of
the Chicago Stock Exchange’s Nominating and
Governance Committee from six directors to four
directors). See also Article II, Section 3 of the
Bylaws of the Chicago Stock Exchange, Inc.
(providing for a Nominating and Governance
Committee with four directors).
16 See Notice, supra note 4, at 27126.
17 15 U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
E:\FR\FM\28JNN1.SGM
28JNN1
]]>Agencies
[Federal Register Volume 76, Number 124 (Tuesday, June 28, 2011)]
[Notices]
[Pages 37867-37868]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16133]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64725; File No. SR-CBOE-2011-044]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change, as Modified by
Amendment No. 1, to Reduce the Minimum Size of the Nominating and
Governance Committee
June 22, 2011.
I. Introduction
On April 27, 2011, Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to reduce the minimum size of the
Nominating and Governance Committee (``NGC'') from seven to five. On
May 18, 2011, the Exchange filed Amendment No. 1 to the proposed rule
change.\3\ The proposed rule change was published for comment in the
Federal Register on May 10, 2011.\4\ The Commission received no comment
letters regarding the proposal. This order approves the proposed rule
change, as modified by Amendment No. 1.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ At the time CBOE submitted the original proposed rule
change, it had not yet obtained formal approval from its Board of
Directors for the specific Bylaw changes set forth in this proposed
rule change. CBOE stated that once that approval was obtained, it
would file a technical amendment to its proposed rule change to
reflect that approval. In Amendment No. 1, the Exchange notes that
the CBOE Board of Directors approved the specific Bylaw changes set
forth in SR-CBOE-2011-044 on May 17, 2011 and stated that no further
action was necessary in connection with its proposal. Because
Amendment No. 1 is technical in nature, the Commission is not
required to publish it for public comment.
\4\ See Securities Exchange Act Release No. 64395 (May 4, 2011),
76 FR 27125 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
CBOE is proposing to reduce the minimum size of its NGC from seven
to five directors. Section 4.4 of the Second Amended and Restated
Bylaws of CBOE (``Bylaws'') currently provides, in
[[Page 37868]]
pertinent part, that the NGC shall consist of at least seven directors,
including both Industry and Non-Industry Directors; that a majority of
the directors on the Committee shall be Non-Industry Directors; and
that the exact number of members on the Committee shall be determined
from time to time by CBOE's Board of Directors (the ``Board'' or ``CBOE
Board''). Pursuant to the proposed rule change, Section 4.4 of the
Bylaws would be amended to provide that the NGC shall consist of at
least five directors. The other provisions of Section 4.4 of the Bylaws
would remain unchanged.\5\
---------------------------------------------------------------------------
\5\ Additionally, the title of the Bylaws would be changed to
the Third Amended and Restated Bylaws of CBOE.
---------------------------------------------------------------------------
In outlining the purpose behind its proposal, the Exchange noted
that the size of its Board declined from its initial size of twenty-
three to nineteen directors in 2009 and again to sixteen directors in
2011.\6\ As the size of its Board has declined, the Exchange noted that
it has become more challenging to populate larger-size Board committees
since there are fewer directors to serve on a multitude of
committees.\7\ The Exchange's proposal to reduce the minimum size of
the NGC is intended to help address this issue.
---------------------------------------------------------------------------
\6\ Section 3.1 of the Bylaws provides that the CBOE Board shall
consist of not less than eleven and not more than twenty-three
directors, with the exact size determined by the Board.
\7\ See Notice, supra note 4, at 27125-26.
---------------------------------------------------------------------------
III. Discussion
After careful review of the proposal, the Commission finds that the
proposed rule change, as modified by Amendment No. 1, is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\8\ In
particular, the Commission finds that the proposal is consistent with
Section 6(b)(1) of the Act,\9\ which requires a national securities
exchange to be so organized and have the capacity to carry out the
purposes of the Act and to comply, and to enforce compliance by its
members and persons associated with its members, with the provisions of
the Act, as well as Section 6(b)(5) of the Act,\10\ in that it is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to remove impediments
to, and perfect the mechanism of a free and open market, and, in
general, to protect investors and the public interest. While the
Exchange has proposed to reduce the minimum size of the NGC, it has not
proposed any other changes to the composition of the committee or the
scope or exercise of its responsibilities. In its filing, the Exchange
affirmatively represented that the NGC ``will continue to be able to
appropriately perform its functions'' despite the reduction in minimum
required size.\11\ The Commission further finds that the proposal, as
modified by Amendment No. 1, is consistent with the requirements of
Section 6(b)(3) of the Act,\12\ which requires that one or more
directors of an exchange shall be representative of issuers and
investors and not be associated with a member of the exchange, broker
or dealer.
---------------------------------------------------------------------------
\8\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(1).
\10\ 15 U.S.C. 78f(b)(5).
\11\ See Notice, supra note 4, at 27126.
\12\ 15 U.S.C. 78f(b)(3).
---------------------------------------------------------------------------
In particular, the Commission notes that the Exchange will continue
to provide for the fair representation of CBOE Trading Permit Holders
in the selection of directors and the administration of the Exchange
consistent with Section 6(b)(3) of the Act \13\ following this rule
change. Specifically, the CBOE Bylaws will continue to require that at
least thirty percent of the directors on the Board be Industry
Directors and that at least twenty percent of CBOE's directors be
Representative Directors elected by permit holders.\14\ Further, the
NGC will continue to include both Industry and Non-Industry Directors
(including a majority Non-Industry Directors) and have an Industry-
Director Subcommittee that is composed of all of the Industry Directors
serving on the Committee. Representative Directors will continue to be
nominated (or otherwise selected through a petition process) by the
Industry-Director Subcommittee. Additionally, CBOE Trading Permit
Holders will continue to be able to nominate alternative Representative
Director candidates to those nominated by the Industry Director
Subcommittee, in which case a Run-off Election will be held in which
CBOE's Trading Permit Holders vote to determine which candidates will
be elected to the Board to serve as Representative Directors.
Furthermore, the Commission notes that the Exchange's proposal to
reduce the minimum size of its NGC is consistent with a proposal that
the Commission previously approved for another self-regulatory
organization in which that self-regulatory organization reduced the
minimum size of its nominating and governance committee from six to
four members.\15\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b)(3).
\14\ See Section 3.2 of the CBOE Bylaws (defining
``Representative Director'').
\15\ See Securities Exchange Act Release No. 54494 (September
25, 2006), 71 FR 58023 (October 2, 2006) (SR-CHX-2006-23) (approving
reduction of the Chicago Stock Exchange's Nominating and Governance
Committee from six directors to four directors). See also Article
II, Section 3 of the Bylaws of the Chicago Stock Exchange, Inc.
(providing for a Nominating and Governance Committee with four
directors).
---------------------------------------------------------------------------
Finally, the Exchange has represented that, although the proposed
rule change would permit the Exchange to appoint a five-person NGC and
the Exchange may elect to do so in the future, it is the current
intention of the Exchange to appoint a six-person NGC.\16\
---------------------------------------------------------------------------
\16\ See Notice, supra note 4, at 27126.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\17\ that the proposed rule change (SR-CBOE-2011-044), as modified
by Amendment No. 1, be, and hereby is, approved.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16133 Filed 6-27-11; 8:45 am]
BILLING CODE 8011-01-P
