Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Amending Sections 110, 801, 803 and 805 of the Exchange's Company Guide To Comply With the Requirements of Securities and Exchange Commission Rule 10C-1, 62576-62582 [2012-25222]
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62576
Federal Register / Vol. 77, No. 199 / Monday, October 15, 2012 / Notices
14.10 to comply with the requirements
of Section 952 of the Dodd-Frank Act,
and therefore believes the proposed rule
change to be consistent with the Act,
particularly with respect to the
protection of investors and the public
interest.
The Exchange also believes that the
proposal will contribute to investor
protection and the public interest by
requiring that only Independent
Directors of an issuer oversee executive
officer compensation matters, consider
independence criteria before retaining
compensation advisers, and have
ultimate responsibility for the
appointment, compensation, and
oversight of these advisers. As discussed
above, after considering the factors
provided in Rule 10C–1(b)(1)(ii) and
evaluating how the factors could impact
the ability of a director to act
independently in the determination of
executive compensation, the Exchange
believes that it can best comply with
Rule 10C–1 by adopting in its Rules the
factors set forth in Rule 10C–1(b)(1)(ii).
The Exchange believes that this
approach will best provide the board of
directors of a Company with the
requisite guidance and discretion to
evaluate the independence of each
director as it relates to the
determination of executive
compensation.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change imposes any
burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission will: (a) By order
approve or disapprove such proposed
rule change, or (b) institute proceedings
to determine whether the proposed rule
change should be disapproved.
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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 email to rule-comments@
sec.gov. Please include File Number SR–
BATS–2012–039 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–BATS–2012–039. This file
number should be included on the
subject line if email 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 on official business
days between the hours of 10:00 a.m.
and 3:00 p.m. Copies of such filing also
will be available for inspection and
copying at the principal offices of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BATS–
2012–039, and should be submitted on
or before November 5, 2012.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–25280 Filed 10–12–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68007; File No. SR–
NYSEMKT–2012–48]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing of Proposed
Rule Change, as Modified by
Amendment No. 1, Amending Sections
110, 801, 803 and 805 of the
Exchange’s Company Guide To
Comply With the Requirements of
Securities and Exchange Commission
Rule 10C–1
October 9, 2012.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on
September 25, 2012, NYSE MKT LLC
(the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which filing
was amended and replaced in its
entirety by Amendment No. 1 thereto on
October 1, 2012, and 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.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend
Sections 110, 801, 803 and 805 of the
Exchange’s Company Guide (the
‘‘Company Guide’’) to comply with the
requirements of Securities and
Exchange Commission (‘‘Commission’’
or ‘‘SEC’’) Rule 10C–1.4 The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 17 CFR 240.10C–1.
1 15
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
This Amendment No. 1 to SR–
NYSEMKT–2012–48 (the ‘‘filing’’)
replaces the original Filing submitted on
September 25, 2012 in its entirety.
Amendment No. 1 corrects a single error
in the rule text in Exhibit 5 as originally
filed. The error was in Section 805(c)(5)
under the heading ‘‘Transition Period.’’
NYSE MKT proposes to amend
Sections 110, 801, 803 and 805 of the
Company Guide to comply with the
requirements of SEC Rule 10C–1.
The proposed changes to Sections
110, 801, 803 and 805 will become
operative on July 1, 2013. Consequently,
the existing text of these sections will
remain in the Company Guide until
June 30, 2013 and will be removed
immediately thereafter.5 Upon approval
of this filing, the amended provisions of
those sections will be included in the
Company Guide with introductory text
indicating that the revised text does not
become operative until July 1, 2013.
Section 952 of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act of 2010 (the ‘‘Dodd-Frank Act’’) 6
added Section 10C to the Securities
Exchange Act of 1934.7 Section 10C
requires the Commission to adopt rules
directing the national securities
exchanges and national securities
associations to prohibit the listing of
any equity security of an issuer that is
not in compliance with Section 10C’s
compensation committee and
compensation adviser requirements. On
June 20, 2012, to comply with the
requirements of Section 10C, the
Commission adopted new Rule 10C–1,
which directs the national securities
5 The Commission notes that the Exchange will
have to comply with Section 19(b) of the Act.
6 Pub. L. No. 111–203, 124 Stat. 1900 (2010).
7 15 U.S.C. 78j–3.
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exchanges to adopt listing rules
effectuating the compensation
committee and compensation adviser
requirements of Section 10C.
Rule 10C–1 does not by its terms
require a national securities exchange to
mandate that listed companies must
have a compensation committee.
However, in the absence of a
compensation committee, most of the
provisions of Rule 10C–1 applicable to
compensation committees are
applicable to ‘‘the members of the board
of directors who oversee executive
compensation matters on behalf of the
board of directors.’’ 8 NYSE MKT’s
listing standard with respect to
executive compensation, Section 805 of
the Company Guide, provides that the
compensation of the chief executive
officer of a listed company must be
determined, or recommended to the
board for determination, either by a
compensation committee comprised of
independent directors or by a majority
of the independent directors on the
company’s board of directors.
Consequently, if a listed company does
not have a compensation committee, the
Exchange’s proposed amendments to its
rules pursuant to Rule 10C–1 would
apply to the independent directors of
the listed company individually and as
a group, as applicable. The Exchange
proposes to amend Section 805(a) to
provide that all references to a listed
company’s compensation committee in
Section 805 will, in the case of a listed
company that does not have a
compensation committee, be applicable
to the listed company’s independent
directors as a group, and the same
approach is utilized in this filing.
Compensation Committee Director
Independence Requirement
In adopting independence
requirements for compensation
committee members, 10C–1(b)(1)(ii) 9
requires the exchanges to consider
relevant factors including, but not
limited to: (i) The source of the
director’s compensation, including any
consulting, advisory or other
compensatory fees paid by the listed
company; and (ii) whether the director
has an affiliate relationship with the
company, a subsidiary of the company
or an affiliate of a subsidiary of the
company. Rule 10C–1(a)(4) 10 requires
that the rule filing submitted to the SEC
by each exchange in connection with
the adoption of the rules required by
Rule 10C–1 must include a review of
8 See the definition of the term ‘‘compensation
committee’’ in Rule 10C–1(c)(2)(iii).
9 17 CFR 240.10C–1(b)(1)(ii).
10 17 CFR 240.10C–1(a)(4).
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62577
whether and how the proposed listing
standards satisfy the requirements of the
final rule; a discussion of the exchange’s
consideration of factors relevant to
compensation committee independence;
and the definition of independence
applicable to compensation committee
members that the exchange proposes to
adopt or retain in light of such review.
The Exchange’s director
independence standards are set forth in
Section 803(A)(2). That section provides
that no director qualifies as independent
unless the issuer’s board of directors
affirmatively determines that the
director does not have a relationship
that would interfere with the exercise of
independent judgment in carrying out
the responsibilities of a director. In
addition, Section 803(A)(2) provides
that a director may not be deemed to be
independent if such director has a
relationship with the listed company
which violates any one of five ‘‘bright
line’’ tests.11
The provisions of Section 803(A)(2)
will continue to be applicable to
11 The following are the ‘‘bright line’’ tests set
forth in Section 803(A)(2): (a) The director is, or
during the past three years was, employed by the
company, other than prior employment as an
interim executive officer (provided the interim
employment did not last longer than one year); (b)
The director accepted or has an immediate family
member who accepted any compensation from the
company in excess of $120,000 during any period
of twelve consecutive months within the three years
preceding the determination of independence, other
than the following: (i) Compensation for board or
board committee service; or, (ii) compensation paid
to an immediate family member who is an
employee (other than an executive officer) of the
company; or, (iii) compensation received for former
service as an interim executive officer (provided the
interim employment did not last longer than one
year); or, (iv) benefits under a tax-qualified
retirement plan, or non-discretionary
compensation; (c) The director is an immediate
family member of an individual who is, or at any
time during the past three years was, employed by
the company as an executive officer; (d) The
director is, or has an immediate family member
who is, a partner in, or a controlling shareholder
or an executive officer of, any organization to which
the company made, or from which the company
received, payments (other than those arising solely
from investments in the company’s securities or
payments under non-discretionary charitable
contribution matching programs) that exceed 5% of
the organization’s consolidated gross revenues for
that year, or $200,000, whichever is more, in any
of the most recent three fiscal years; (e) The director
is, or has an immediate family member who is,
employed as an executive officer of another entity
where at any time during the most recent three
fiscal years any of the issuer’s executive officers
serve on the compensation committee of such other
entity; or (f) The director is, or has an immediate
family member who is, a current partner of the
company’s outside auditor, or was a partner or
employee of the company’s outside auditor who
worked on the company’s audit at any time during
any of the past three years. In lieu of Section
803A(2)(a) through (f), a director of a business
development company is considered to be
independent if he or she is not an ‘‘interested
person’’ of the company, as defined in Section
2(a)(19) of the Investment Company Act of 1940.
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independence determinations in
relation to compensation committee
service, as compensation committee
members will be required to be
independent under the Exchange’s
general board independence standards
set forth in Section 803(A)(2), in
addition to the independence
requirements proposed specifically for
compensation committee service.
The Exchange proposes to amend
Section 803(A)(2) of the Company Guide
to require that, in affirmatively
determining the independence of any
director who will serve on the
compensation committee of the listed
company’s board of directors, or, in the
case of a company that does not have a
compensation committee, in
affirmatively determining the
independence of all independent
directors, the board of directors must
consider all factors specifically relevant
to determining whether a director has a
relationship to the listed company
which is material to that director’s
ability to be independent from
management, in connection with the
duties of a compensation committee
member including, but not limited to,
the two factors that are explicitly
enumerated in Rule 10C–1(b)(ii) that are
set forth in proposed Section 805(c)(1).
When considering the sources of a
director’s compensation in determining
his independence for purposes of
compensation committee service,
proposed new commentary .03 to
Section 805 provides that the board
should consider whether the director
receives compensation from any person
or entity that would impair his ability
to make independent judgments about
the listed company’s executive
compensation. Similarly, when
considering any affiliate relationship a
director has with the company, a
subsidiary of the company, or an
affiliate of a subsidiary of the company,
in determining his independence for
purposes of compensation committee
service, the proposed commentary
provides that the board should consider
whether the affiliate relationship places
the director under the direct or indirect
control of the listed company or its
senior management, or creates a direct
relationship between the director and
members of senior management, in each
case of a nature that would impair his
ability to make independent judgments
about the listed company’s executive
compensation.
The Exchange does not propose to
adopt any specific numerical tests with
respect to the factors specified in
proposed Section 805(c)(1) or to adopt
a requirement to consider any other
specific factors. In particular, the
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Exchange does not intend to adopt an
absolute prohibition on a board making
an affirmative finding that a director is
independent solely on the basis that the
director or any of the director’s affiliates
are shareholders owning more than
some specified percentage of the listed
company. In the adopting release for
Rule 10C–1 (the ‘‘Adopting Release’’),12
the SEC recognized that the exchanges
might determine that not all affiliate
relationships would adversely affect a
director’s ability to be independent from
management.13 Consistent with the
views of commenters on the SEC’s rules
as originally proposed, the Exchange
believes that—rather than adversely
affecting a director’s ability to be
independent from management as a
compensation committee member—
share ownership in the listed company
aligns the director’s interests with those
of unaffiliated shareholders, as their
stock ownership gives them the same
economic interest in ensuring that the
listed company’s executive
compensation is not excessive.
The Exchange believes that its
existing ‘‘bright line’’ independence
standards as set forth in Section
803(A)(2) of the Company Guide are
sufficiently broad to encompass the
types of relationships which would
generally be material to a director’s
independence for compensation
committee service. In addition, Section
803(A)(2) already requires the board to
consider any relationship that would
interfere with the director’s exercise of
independent judgment in carrying out
the responsibilities of a director. The
Exchange believes that these
requirements with respect to general
director independence, when combined
with the specific considerations
required by proposed Section 805(c)(1),
represent an appropriate standard for
compensation committee independence
that is consistent with the requirements
of Rule 10C–1.
Compensation Committee Advisers
Rule 10C–1(b)(2) 14 requires exchange
rules to mandate that compensation
committees must have broad authority
to engage advisers to assist in their
performance of the committee’s
functions. Specifically, exchange rules
must mandate that:
(a) The compensation committee may,
in its sole discretion, retain or obtain the
advice of a compensation consultant,
independent legal counsel or other
adviser; and
12 Release Nos. 33–9330; 34–67220 (June 20,
2012); 77 FR 38422 (June 27, 2012).
13 See Adopting Release at 38428.
14 17 CFR 240.10C–1(b)(2).
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(b) The compensation committee shall
be directly responsible for the
appointment, compensation and
oversight of the work of any
compensation consultant, independent
legal counsel and other adviser retained
by the compensation committee.
Rule 10C–1(b)(3) 15 requires exchange
rules to mandate that the listed
company must provide for appropriate
funding, as determined by the
compensation committee, for payment
of reasonable compensation to a
compensation consultant, independent
legal counsel or any other adviser
retained by the compensation
committee.
The Exchange proposes to adopt the
requirements specified in Rule 10C–
1(b)(2) and (3) verbatim as new
subsection (c)(3) to Section 805.
Compensation Adviser Independence
Factors
Rule 10C–1(b)(4) 16 provides that the
compensation committee of a listed
issuer may select a compensation
consultant, legal counsel or other
adviser to the compensation committee
only after taking into consideration the
following factors, as well as any other
factors identified by the relevant
national securities exchange or national
securities association in its listing
standards:
(i) The provision of other services to
the listed company by the person that
employs the compensation consultant,
legal counsel or other adviser;
(ii) The amount of fees received from
the listed company by the person that
employs the compensation consultant,
legal counsel or other adviser, as a
percentage of the total revenue of the
person that employs the compensation
consultant, legal counsel or other
adviser;
(iii) The policies and procedures of
the person that employs the
compensation consultant, legal counsel
or other adviser that are designed to
prevent conflicts of interest;
(iv) Any business or personal
relationship of the compensation
consultant, legal counsel or other
adviser with a member of the
compensation committee;
(v) Any stock of the listed company
owned by the compensation consultant,
legal counsel or other adviser; and
(vi) Any business or personal
relationship of the compensation
consultant, legal counsel, other adviser
or the person employing the adviser
with an executive officer of the listed
company.
15 17
16 17
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CFR 240.10C–1(b)(3).
CFR 240.10C–1(b)(4).
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Accordingly, the Exchange proposes
to add as new subsection (c)(4) to
Section 805 a provision specifying that,
before engaging an adviser, the
compensation committee must consider
the factors enumerated above. As
proposed, Section 805(c)(4) would not
include any additional factors for
consideration, as the Exchange believes
that the list included in Rule 10C–
1(b)(4) is very comprehensive and the
proposed listing standard would also
require the compensation committee to
consider any other factors that would be
relevant to the adviser’s independence
from management.
Consistent with Rule 10C–
1(b)(2)(iii),17 the Exchange proposes to
include as new Commentary .04 to Rule
805 an explicit statement that nothing in
Section 805(c) shall be construed: (A) to
require the Compensation Committee to
implement or act consistently with the
advice or recommendations of the
compensation consultant, independent
legal counsel or other adviser to the
compensation committee; or (B) to affect
the ability or obligation of the
Compensation Committee to exercise its
own judgment in fulfillment of the
duties of the Compensation Committee
(or, if applicable, the independent
directors). In addition, as provided by
Rule 10C–1(b)(4), proposed new
Commentary .05 to Section 805 would
specify that the compensation
committee need not engage in an
analysis of the independence factors
before consulting with or obtaining
advice from in-house legal counsel.
Cure Periods
Rule 10C–1(a)(3) 18 requires that
exchange rules must include
appropriate procedures for a listed
issuer to have a reasonable opportunity
to cure any non-compliance with the
provisions of exchange rules adopted as
required by Rule 10C–1. In addition,
Rule 10C–1(a)(3) states that such rules
may provide that if a member of a
compensation committee ceases to be
independent in accordance with the
requirements of Rule 10C–1 for reasons
outside the member’s reasonable
control, that person, with notice by the
issuer to the exchange, may remain a
compensation committee member of the
listed issuer until the earlier of the next
annual meeting or one year from the
occurrence of the event that caused the
member to be no longer independent.
The Exchange proposes to adopt, as new
Rule 805(c)(2), this cure provision
period for events of non-compliance
with the proposed compensation
17 17
18 17
CFR 240.10C–1(b)(2)(iii).
CFR 240.10C–1(a)(3).
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committee independence requirements
that are outside of the director’s
reasonable control.19 However, the
Exchange proposes to modify this cure
provision by limiting its use to
circumstances where the committee
continues to have a majority of
independent directors, as this would
ensure that the applicable committee
could not take any action without the
agreement of one or more independent
directors. The Exchange believes that
this requirement addresses any actual or
apparent conflict of interest which may
arise due to the continued service of a
non-independent director on the
compensation committee.
Transition Periods
The Adopting Release contemplates
that exchanges may provide transition
periods through the exemptive authority
provided to the exchanges under Rule
10C–1(b)(1)(iii).20 Consistent with the
transition periods approved by the SEC
for inclusion in the Exchange’s current
corporate governance requirements at
the time of their original adoption,21 the
Exchange proposes to adopt new
Section 805(c)(5), under which listed
companies would have until the earlier
of their first annual meeting after
January 15, 2014, or October 31, 2014,
to comply with the new Section
805(c)(1) compensation committee
independence standards. Existing
compensation committee independence
standards would continue to apply
pending the transition to the new
independence standards. The Exchange
believes that its prior use of a similar
transition period was satisfactory and
that it is reasonable to follow the same
approach in connection with the
proposed changes to the compensation
committee independence standards. In
addition, the Exchange proposes to
continue to apply to the proposed new
compensation committee requirements
the existing transition periods available
to newly-listed companies under
Section 809(a) of the Company Guide.22
19 See
proposed Section 803(c)(3).
Adopting Release at 38444.
21 See Securities Exchange Act Release No. 48863
(December 1, 2003), 68 FR 68432 (December 8,
2003) (SR–Amex–2003–65).
22 Section 809(a) affords companies that have
listed in conjunction with their initial public
offering exemptions from all board composition
requirements consistent with the exemptions
afforded in Exchange Act Rule 10A–3. That is, for
each applicable committee that the company
establishes (i.e., nominating and/or compensation)
the company must have one independent member
at the time of listing, a majority of independent
members within 90 days of listing and all
independent members within one year.
20 See
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The Exchange proposes to exempt
smaller reporting companies 23 from
compliance with the proposed new
independence requirements with
respect to compensation committee
service. Under SEC Rule 12b–2, a
smaller reporting company is required
to test whether it continues to qualify
for that status as of the last business day
of its second quarter of each fiscal year
(the ‘‘Smaller Reporting Company
Determination Date’’) and ceases as of
the first day of the next fiscal year to be
able to avail itself of the benefits under
SEC rules applicable to smaller
reporting companies. Consequently, the
Exchange proposes to include in
proposed Section 805(c)(5) a transition
provision applicable to companies that
cease to be smaller reporting companies
and become subject to the compensation
committee independence requirements
of proposed Section 805(c)(1).24 As
proposed, a company that ceases to be
a smaller reporting company would be
required, if applicable, to (I) have a
committee composed entirely of
members that meet the independence
requirements of proposed Section 805(c)
within six months of the Smaller
Reporting Company Determination Date
and (II) have a compensation committee
as of the Smaller Reporting Company
Determination Date that complies with
the requirements of proposed Section
805(c)(4) with respect to compensation
consultant independence
considerations.
General Exemptions
Rule 10C–1(b)(5) 25 provides an
automatic exemption from the
application of the entirety of Rule 10C–
1 for controlled companies and smaller
reporting companies,26 and Rule 10C–
1(b)(1)(iii)(A) 27 provides an automatic
23 As defined in SEC Rule 12b–2 and Item 10(f)
of Regulation S–K.
24 A company that is otherwise exempt from the
requirement to have an independent compensation
committee when it ceases to be a smaller reporting
company would not, of course, be subject to a
transition period. See discussion infra.
25 17 CFR 240.10C–1(b)(5).
26 The Exchange proposes to amend subsection
(h) of Section 801 to include a statement that
smaller reporting companies are required to comply
with Section 805(c), with the exception of the
compensation committee independence
requirements of [sic] Section 803(c)(1) [sic] and the
requirements of proposed Section 805(c)(4) with
respect to compensation consultant independence
considerations. The same statement will be
included in proposed Commentary .01 to Section
805. In addition, the Exchange proposes to amend
Section 805(b) to clarify that henceforth only
smaller reporting companies will be eligible to avail
themselves of the ability of the board under
exceptional and limited circumstances to appoint a
non-independent director to the compensation
committee.
27 17 CFR 240.10C–1(b)(1)(iii)(A).
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exemption from the compensation
committee independence requirements
for limited partnerships, companies in
bankruptcy, open-end management
investment companies registered under
the Investment Company Act of 1940
(‘‘1940 Act’’). Rule 10C–1(b)(1)(iii)(A)
also exempts from the compensation
committee independence requirements
any foreign private issuer that discloses
in its annual report filed with the SEC
the reasons that the foreign private
issuer does not have an independent
compensation committee.
Pursuant to the general exemptive
authority granted in Rule 10C–1(b)(5)(i),
the Exchange proposes to exempt from
all of the proposed requirements each
category of issuers that qualifies for a
general or specific exemption under
Rule 10C–1(b)(1)(iii)(A). The Exchange
also proposes to provide a general
exemption from all of the requirements
to all of the other categories of issuers
that are currently exempt from the
Exchange’s existing compensation
committee requirements. Thus, as
proposed, controlled companies, limited
partnerships, companies in bankruptcy,
and open-end and closed-end funds that
are registered under the 1940 Act, assetbacked issuers and other passive
business organizations (such as royalty
trusts) or derivatives and special
purpose securities listed pursuant to
Exchange Rules 1000, and 1200 and
Sections 106, 107 and 118B would be
exempt from both the new
compensation committee independence
requirements and the new
compensation adviser requirements.
The Exchange notes that these
categories of issuers typically: (i) Are
externally managed and do not directly
employ executives (e.g., limited
partnerships that are managed by their
general partner or closed-end funds
managed by an external investment
adviser); (ii) do not by their nature have
employees (e.g., passive business
organizations (such as royalty trusts)); or
(iii) have executive compensation policy
set by a body other than the board (e.g.,
bankrupt companies have their
executive compensation determined by
the bankruptcy court). In light of these
structural reasons why these categories
of issuers generally do not have
compensation committees, the Exchange
believes that it would be a significant
and unnecessarily burdensome
alteration in their governance structures
to require them to comply with the
proposed new requirements and that it
is appropriate to grant them an
exemption.
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15:21 Oct 12, 2012
Jkt 229001
Foreign private issuers 28 are currently
permitted by Section 110 to apply for an
exemption from the Exchange’s
compensation committee requirements.
The Exchange proposes to follow this
approach by granting a general
exemption, pursuant to the discretion
granted to the Exchange by Rule 10C–
1(b)(5)(i),29 from the proposed new
compensation committee requirements
to foreign private issuers that seek an
exemption on the basis that they follow
home country practice. The Exchange
notes that Section 110 provides that
foreign based entities availing
themselves of exemptions from
compliance with Exchange rules must
provide English language disclosure of
any significant ways in which their
corporate governance practices differ
from those followed by domestic
companies pursuant to the Exchange’s
standards. Section 110 currently
provides that this disclosure may be
provided on the company’s Web site
and/or in its annual report as
distributed to shareholders in the U.S.
As the Exchange no longer requires
companies to distribute annual reports,
except for its requirements in Section
610 with respect to the Web site posting
and distribution of annual reports filed
with the SEC, the Exchange proposes to
modify this provision to provide that a
company must either include this
disclosure on its web site or in the
annual report it is required to file with
the SEC that includes audited financial
statements (including on Forms 10–K,
20–F, or 40–F) While Section 110 does
not require a statement as to why a
company does not comply with an
applicable requirement in the manner
provided by Rule 10C–1(b)(1)(iii)(A), the
Exchange does not believe that this is a
significant difference, as the explanation
companies would likely provide for not
having an independent compensation
committee would simply be that they
were not required to do so by home
country law.
The Exchange currently does not
require issuers whose only listed
security is a preferred stock to comply
with Section 805. The Exchange
proposes to grant these issuers a general
exemption from compliance with the
proposed amended rule. The Exchange
believes this approach is appropriate
because holders of listed preferred stock
have significantly greater protections
with respect to their rights to receive
dividends and a liquidation preference
upon dissolution of the issuer, and
28 The term ‘‘foreign private issuer’’ used in
Section 110 is defined in Exchange Act Rule 3b–
4(c).
29 17 CFR 240.10C–1(b)(5)(i).
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Fmt 4703
Sfmt 4703
preferred stocks are typically regarded
by investors as a fixed income
investment comparable to debt
securities, the issuers of which are
exempt from compliance with Rule
10C–1.
2. Statutory Basis
The Exchange believes that the
proposed rule change in relation to the
Exchange’s compensation committee
requirements and the proposed
compensation consultant independence
requirements are consistent with
Section 10C of the Exchange Act and
Rule 10C–1 thereunder in that they
comply with the requirements of Rule
10C–1 with respect to the adoption by
national securities exchanges of
compensation committee listing
standards. The Exchange believes that
the proposed rule change is consistent
with Section 6(b) 30 of the Exchange Act
in general, and furthers the objectives of
Section 6(b)(5) of the Exchange Act,31 in
particular in that it is designed 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 that the
proposed amendments to its
compensation committee listing
standards are consistent with the
protection of investors and the public
interest in that they strengthen the
independence requirements for
compensation committee membership,
provide additional authority to
compensation committees and require
compensation committees to consider
the independence of compensation
consultants.
The Exchange believes that the
general exemptions from the proposed
requirements that it is granting to
foreign private issuers that request an
exemption based on home country
practice and smaller reporting
companies are consistent with Section
10C and Rule 10C–1, for the reasons
stated above in the ‘‘Purpose’’ section,
including because (i) Rule 10C–
1(b)(5)(ii) explicitly exempts smaller
reporting companies and (ii) foreign
private issuers will comply with their
home country law and, if they avail
themselves of the exemption, will be
required to disclose that fact under
30 15
31 15
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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existing Exchange listing requirements.
The Exchange believes it is an
appropriate use of its exemptive
authority under Rule 10C–1(b)(5)(i), and
that it is not unfairly discriminatory
under Section 6(b)(5) of the Act, to
provide general exemptions under the
proposed rules to issuers whose only
listed class of equity securities on the
Exchange is a preferred stock, as holders
of listed preferred stock have
significantly greater protections with
respect to their rights to receive
dividends and a liquidation preference
upon dissolution of the issuer, and
preferred stocks are typically regarded
by investors as a fixed income
investment comparable to debt
securities, the issuers of which are
exempt from compliance with Rule
10C–1. The Exchange believes that it is
an appropriate use of its exemptive
authority under Rule 10C–1(b)(5)(i), and
that it is not unfairly discriminatory
under Section 6(b)(5) of the Act, to
provide general exemptions under the
proposed rules for all of the other
categories of issuers that are not
currently subject to the Exchange’s
compensation committee requirement,
for the structural reasons discussed in
the ‘‘Purpose’’ section and because it
would be a significant and
unnecessarily burdensome alteration in
their governance structures to require
them to comply with the proposed new
requirements.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
erowe on DSK2VPTVN1PROD with
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited
written comments on the proposed rule
change. The Exchange has received two
comment letters on the proposed rule
change.32 One commenter made the
following points: (i) The Exchange
should specify that the relevant factors
for consideration with respect to
compensation committee independence
should include a consideration of fees
received for service on the board itself;
(ii) the relevant factors should explicitly
32 Both of these letters were addressed to NYSE
Regulation, Inc. Neither author indicated that the
comments related to just one of the three national
securities exchanges owned by NYSE Euronext.
Therefore, the Exchange is addressing those
comments to the extent they are applicable to its
existing rules and the proposed amendments.
VerDate Mar<15>2010
15:21 Oct 12, 2012
Jkt 229001
include consideration of the personal
and business relationships between
directors and officers; (iii) the additional
factors to be considered for
compensation committee independence
should be considered as a part of
general board independence
determinations; and (iv) the listing
standards should specify that, while the
factors must be considered in their
totality, a single factor can result in the
loss of board independence.
The Exchange does not believe that it
is appropriate to consider board
compensation as part of the
compensation committee independence
determination with respect to
individual directors. Non-executive
directors devote considerable time to
the affairs of the companies on whose
boards they sit and eligible candidates
would be difficult to find if board and
committee service were unpaid in
nature. Consequently, independent
directors of listed companies are almost
invariably paid for their board and
committee service. As all independent
directors are almost certainly going to
receive board compensation from the
company and do so on terms
determined by the board as a whole, the
Exchange does not believe that an
analysis of the board compensation of
individual directors is a meaningful
consideration in determining their
independence for purposes of
compensation committee service.
The Exchange interprets its existing
director independence requirements as
requiring the board to consider
relationships between the director and
any member of management in making
its affirmative independence
determinations. Consequently, the
Exchange does not believe that any
further clarification of this requirement
is necessary.
The Exchange does not believe that it
is necessary to explicitly require that the
additional independence considerations
for compensation committee service
should be a part of the board’s general
independence determinations for all
independent directors. Section 803(A)
provides that, in making its affirmative
determination with respect to a
director’s independence, the board must
satisfy itself that the director ‘‘does not
have a relationship that would interfere
with the exercise of independent
judgment in carrying out the
responsibilities of a director.’’ As such,
the Exchange believes that, where
appropriate, listed company boards
should already be including in their
general independence determinations
factors including those being added to
the compensation committee
independence determination.
PO 00000
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62581
The Exchange does not believe it is
necessary to include in the listing
standards a statement that a single factor
may be sufficiently material to render a
director non-independent, as this is
clearly the intention of the listing
standards as drafted. Section 803(A) in
its current form and in its proposed
amended form requires the board to
consider the materiality of each separate
relationship between the director and
the listed company or its management.
The second commenter proposed that
the Exchange should require companies
to make a public disclosure with respect
to the factors considered by the
compensation committee in reviewing
the independence of compensation
consultants, legal counsel and other
compensation advisers. This commenter
also proposed that the Exchange should
require with respect to outside counsel
hired by the compensation committee
the same disclosure as is required by
Item 407(e)(3)(iv) of Regulation S–K
with respect to the nature of any conflict
that arises from the engagement of a
compensation consultant identified in
the proxy statement The Exchange does
not believe that it is necessary to
establish additional disclosure
requirements of this nature. Item 407 of
Regulation S–K contains extensive
disclosure requirements with respect to
a listed company’s corporate
governance. Moreover, with respect to
disclosure of any conflicts of interest
that may arise with respect to outside
counsel hired by the compensation
committee, the Exchange believes that
the rigorous conflict of interest
requirements applicable to attorneys
adequately address such concerns. And
the Exchange is mindful that requiring
additional public disclosures regarding
outside counsel could require a listed
company to disclose information that
otherwise may be protected by attorneyclient privilege.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
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Federal Register / Vol. 77, No. 199 / Monday, October 15, 2012 / Notices
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:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEMKT–2012–48 on the
subject line.
Paper Comments
erowe on DSK2VPTVN1PROD with
• 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–NYSEMKT–2012–48. This
file number should be included on the
subject line if email 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 on official business
days between the hours of 10:00 a.m.
and 3:00 p.m. Copies of such filing also
will be available for inspection and
copying at the principal office and the
Internet Web site of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSEMKT–2012–48, and
should be submitted on or before
November 5, 2012.
15:21 Oct 12, 2012
[FR Doc. 2012–25222 Filed 10–12–12; 8:45 am]
Jkt 229001
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Mar<15>2010
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
Kevin M. O’Neill,
Deputy Secretary.
[Release No. 34–68004; File No. SR–
NYSEMKT–2012–49]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Establish Fees for
Certain Proprietary Options Market
Data Products
October 9, 2012.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
September 26, 2012, NYSE MKT LLC
(the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to establish
fees for certain proprietary options
market data products. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
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
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those 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,
33 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Sfmt 4703
1. Purpose
The Exchange proposes to establish
fees for certain proprietary options
market data products. The products
covered by the fees are ArcaBook for
Amex Options—Trades, ArcaBook for
Amex Options—Top of Book, ArcaBook
for Amex Options—Depth of Book,
ArcaBook for Amex Options—Complex,
ArcaBook for Amex Options—Series
Status, and ArcaBook for Amex
Options—Order Imbalance (collectively,
the ‘‘Amex Options Products’’).4 The
fees set forth below, which will be
implemented on October 1, 2012, are for
all six of the Amex Options Products
collectively; at this time, the Exchange
is not establishing separate pricing for
each of the individual products.
Access and Redistribution Fees
The Exchange proposes to charge an
Access Fee of $3,000 per month and a
Redistribution Fee of $2,000 per month.
Professional End-User 5 Fee
For the receipt and use of the Amex
Options Products, the Exchange
proposes to charge Professional EndUsers $50 per month for each ‘‘User per
Source.’’ 6 A ‘‘Source’’ is a Professional
End-User-controlled source of data from
a Redistributor,7 such as a data feed; in
this case, it is the Amex Options
Products. Professional End-Users must
receive approval to report User per
Source by way of a license with the
4 See Securities Exchange Act Release No. 67719
(Aug. 23, 2012); 77 FR 52767 (Aug. 30, 2012) (SR–
NYSEMKT–2012–40).
5 A Professional End-User is a person or entity
that receives market data from the Exchange or a
Redistributor and uses that market data solely for
its own internal purposes. A Professional End-User
is not permitted to redistribute that market data to
any person or entity outside of its organization.
6 The Exchange notes that the User per Source
reporting policy differs from the unit-of-count
policy used for other Exchange market data
products, such as NYSE MKT Trades and NYSE
MKT BBO. See Securities Exchange Act Release No.
62187 (May 27, 2010), 75 FR 31500 (June 3, 2010)
(SR–NYSEAmex–2010–35). Because the Amex
Options Products are new and the Exchange has not
charged for them before, the Exchange has
determined to utilize an updated methodology that
it believes may be easier for it and its customers to
administer. Based on its experience with these
products, the Exchange will consider adopting User
per Source reporting for other market data products
in the future.
7 A Redistributor is any entity that makes market
data available to any person other than the
Redistributor and its employees, directors, officers
and partners, irrespective of the means of
transmission or access.
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]]>Agencies
[Federal Register Volume 77, Number 199 (Monday, October 15, 2012)]
[Notices]
[Pages 62576-62582]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25222]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68007; File No. SR-NYSEMKT-2012-48]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change, as Modified by Amendment No. 1, Amending Sections
110, 801, 803 and 805 of the Exchange's Company Guide To Comply With
the Requirements of Securities and Exchange Commission Rule 10C-1
October 9, 2012.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on September 25, 2012, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II and III below, which filing was amended and replaced in its
entirety by Amendment No. 1 thereto on October 1, 2012, and which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend Sections 110, 801, 803 and 805 of
the Exchange's Company Guide (the ``Company Guide'') to comply with the
requirements of Securities and Exchange Commission (``Commission'' or
``SEC'') Rule 10C-1.\4\ The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
---------------------------------------------------------------------------
\4\ 17 CFR 240.10C-1.
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[[Page 62577]]
II. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
This Amendment No. 1 to SR-NYSEMKT-2012-48 (the ``filing'')
replaces the original Filing submitted on September 25, 2012 in its
entirety. Amendment No. 1 corrects a single error in the rule text in
Exhibit 5 as originally filed. The error was in Section 805(c)(5) under
the heading ``Transition Period.''
NYSE MKT proposes to amend Sections 110, 801, 803 and 805 of the
Company Guide to comply with the requirements of SEC Rule 10C-1.
The proposed changes to Sections 110, 801, 803 and 805 will become
operative on July 1, 2013. Consequently, the existing text of these
sections will remain in the Company Guide until June 30, 2013 and will
be removed immediately thereafter.\5\ Upon approval of this filing, the
amended provisions of those sections will be included in the Company
Guide with introductory text indicating that the revised text does not
become operative until July 1, 2013.
---------------------------------------------------------------------------
\5\ The Commission notes that the Exchange will have to comply
with Section 19(b) of the Act.
---------------------------------------------------------------------------
Section 952 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the ``Dodd-Frank Act'') \6\ added Section 10C
to the Securities Exchange Act of 1934.\7\ Section 10C requires the
Commission to adopt rules directing the national securities exchanges
and national securities associations to prohibit the listing of any
equity security of an issuer that is not in compliance with Section
10C's compensation committee and compensation adviser requirements. On
June 20, 2012, to comply with the requirements of Section 10C, the
Commission adopted new Rule 10C-1, which directs the national
securities exchanges to adopt listing rules effectuating the
compensation committee and compensation adviser requirements of Section
10C.
---------------------------------------------------------------------------
\6\ Pub. L. No. 111-203, 124 Stat. 1900 (2010).
\7\ 15 U.S.C. 78j-3.
---------------------------------------------------------------------------
Rule 10C-1 does not by its terms require a national securities
exchange to mandate that listed companies must have a compensation
committee. However, in the absence of a compensation committee, most of
the provisions of Rule 10C-1 applicable to compensation committees are
applicable to ``the members of the board of directors who oversee
executive compensation matters on behalf of the board of directors.''
\8\ NYSE MKT's listing standard with respect to executive compensation,
Section 805 of the Company Guide, provides that the compensation of the
chief executive officer of a listed company must be determined, or
recommended to the board for determination, either by a compensation
committee comprised of independent directors or by a majority of the
independent directors on the company's board of directors.
Consequently, if a listed company does not have a compensation
committee, the Exchange's proposed amendments to its rules pursuant to
Rule 10C-1 would apply to the independent directors of the listed
company individually and as a group, as applicable. The Exchange
proposes to amend Section 805(a) to provide that all references to a
listed company's compensation committee in Section 805 will, in the
case of a listed company that does not have a compensation committee,
be applicable to the listed company's independent directors as a group,
and the same approach is utilized in this filing.
---------------------------------------------------------------------------
\8\ See the definition of the term ``compensation committee'' in
Rule 10C-1(c)(2)(iii).
---------------------------------------------------------------------------
Compensation Committee Director Independence Requirement
In adopting independence requirements for compensation committee
members, 10C-1(b)(1)(ii) \9\ requires the exchanges to consider
relevant factors including, but not limited to: (i) The source of the
director's compensation, including any consulting, advisory or other
compensatory fees paid by the listed company; and (ii) whether the
director has an affiliate relationship with the company, a subsidiary
of the company or an affiliate of a subsidiary of the company. Rule
10C-1(a)(4) \10\ requires that the rule filing submitted to the SEC by
each exchange in connection with the adoption of the rules required by
Rule 10C-1 must include a review of whether and how the proposed
listing standards satisfy the requirements of the final rule; a
discussion of the exchange's consideration of factors relevant to
compensation committee independence; and the definition of independence
applicable to compensation committee members that the exchange proposes
to adopt or retain in light of such review.
---------------------------------------------------------------------------
\9\ 17 CFR 240.10C-1(b)(1)(ii).
\10\ 17 CFR 240.10C-1(a)(4).
---------------------------------------------------------------------------
The Exchange's director independence standards are set forth in
Section 803(A)(2). That section provides that no director qualifies as
independent unless the issuer's board of directors affirmatively
determines that the director does not have a relationship that would
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. In addition, Section 803(A)(2) provides
that a director may not be deemed to be independent if such director
has a relationship with the listed company which violates any one of
five ``bright line'' tests.\11\
---------------------------------------------------------------------------
\11\ The following are the ``bright line'' tests set forth in
Section 803(A)(2): (a) The director is, or during the past three
years was, employed by the company, other than prior employment as
an interim executive officer (provided the interim employment did
not last longer than one year); (b) The director accepted or has an
immediate family member who accepted any compensation from the
company in excess of $120,000 during any period of twelve
consecutive months within the three years preceding the
determination of independence, other than the following: (i)
Compensation for board or board committee service; or, (ii)
compensation paid to an immediate family member who is an employee
(other than an executive officer) of the company; or, (iii)
compensation received for former service as an interim executive
officer (provided the interim employment did not last longer than
one year); or, (iv) benefits under a tax-qualified retirement plan,
or non-discretionary compensation; (c) The director is an immediate
family member of an individual who is, or at any time during the
past three years was, employed by the company as an executive
officer; (d) The director is, or has an immediate family member who
is, a partner in, or a controlling shareholder or an executive
officer of, any organization to which the company made, or from
which the company received, payments (other than those arising
solely from investments in the company's securities or payments
under non-discretionary charitable contribution matching programs)
that exceed 5% of the organization's consolidated gross revenues for
that year, or $200,000, whichever is more, in any of the most recent
three fiscal years; (e) The director is, or has an immediate family
member who is, employed as an executive officer of another entity
where at any time during the most recent three fiscal years any of
the issuer's executive officers serve on the compensation committee
of such other entity; or (f) The director is, or has an immediate
family member who is, a current partner of the company's outside
auditor, or was a partner or employee of the company's outside
auditor who worked on the company's audit at any time during any of
the past three years. In lieu of Section 803A(2)(a) through (f), a
director of a business development company is considered to be
independent if he or she is not an ``interested person'' of the
company, as defined in Section 2(a)(19) of the Investment Company
Act of 1940.
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The provisions of Section 803(A)(2) will continue to be applicable
to
[[Page 62578]]
independence determinations in relation to compensation committee
service, as compensation committee members will be required to be
independent under the Exchange's general board independence standards
set forth in Section 803(A)(2), in addition to the independence
requirements proposed specifically for compensation committee service.
The Exchange proposes to amend Section 803(A)(2) of the Company
Guide to require that, in affirmatively determining the independence of
any director who will serve on the compensation committee of the listed
company's board of directors, or, in the case of a company that does
not have a compensation committee, in affirmatively determining the
independence of all independent directors, the board of directors must
consider all factors specifically relevant to determining whether a
director has a relationship to the listed company which is material to
that director's ability to be independent from management, in
connection with the duties of a compensation committee member
including, but not limited to, the two factors that are explicitly
enumerated in Rule 10C-1(b)(ii) that are set forth in proposed Section
805(c)(1). When considering the sources of a director's compensation in
determining his independence for purposes of compensation committee
service, proposed new commentary .03 to Section 805 provides that the
board should consider whether the director receives compensation from
any person or entity that would impair his ability to make independent
judgments about the listed company's executive compensation. Similarly,
when considering any affiliate relationship a director has with the
company, a subsidiary of the company, or an affiliate of a subsidiary
of the company, in determining his independence for purposes of
compensation committee service, the proposed commentary provides that
the board should consider whether the affiliate relationship places the
director under the direct or indirect control of the listed company or
its senior management, or creates a direct relationship between the
director and members of senior management, in each case of a nature
that would impair his ability to make independent judgments about the
listed company's executive compensation.
The Exchange does not propose to adopt any specific numerical tests
with respect to the factors specified in proposed Section 805(c)(1) or
to adopt a requirement to consider any other specific factors. In
particular, the Exchange does not intend to adopt an absolute
prohibition on a board making an affirmative finding that a director is
independent solely on the basis that the director or any of the
director's affiliates are shareholders owning more than some specified
percentage of the listed company. In the adopting release for Rule 10C-
1 (the ``Adopting Release''),\12\ the SEC recognized that the exchanges
might determine that not all affiliate relationships would adversely
affect a director's ability to be independent from management.\13\
Consistent with the views of commenters on the SEC's rules as
originally proposed, the Exchange believes that--rather than adversely
affecting a director's ability to be independent from management as a
compensation committee member--share ownership in the listed company
aligns the director's interests with those of unaffiliated
shareholders, as their stock ownership gives them the same economic
interest in ensuring that the listed company's executive compensation
is not excessive.
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\12\ Release Nos. 33-9330; 34-67220 (June 20, 2012); 77 FR 38422
(June 27, 2012).
\13\ See Adopting Release at 38428.
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The Exchange believes that its existing ``bright line''
independence standards as set forth in Section 803(A)(2) of the Company
Guide are sufficiently broad to encompass the types of relationships
which would generally be material to a director's independence for
compensation committee service. In addition, Section 803(A)(2) already
requires the board to consider any relationship that would interfere
with the director's exercise of independent judgment in carrying out
the responsibilities of a director. The Exchange believes that these
requirements with respect to general director independence, when
combined with the specific considerations required by proposed Section
805(c)(1), represent an appropriate standard for compensation committee
independence that is consistent with the requirements of Rule 10C-1.
Compensation Committee Advisers
Rule 10C-1(b)(2) \14\ requires exchange rules to mandate that
compensation committees must have broad authority to engage advisers to
assist in their performance of the committee's functions. Specifically,
exchange rules must mandate that:
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\14\ 17 CFR 240.10C-1(b)(2).
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(a) The compensation committee may, in its sole discretion, retain
or obtain the advice of a compensation consultant, independent legal
counsel or other adviser; and
(b) The compensation committee shall be directly responsible for
the appointment, compensation and oversight of the work of any
compensation consultant, independent legal counsel and other adviser
retained by the compensation committee.
Rule 10C-1(b)(3) \15\ requires exchange rules to mandate that the
listed company must provide for appropriate funding, as determined by
the compensation committee, for payment of reasonable compensation to a
compensation consultant, independent legal counsel or any other adviser
retained by the compensation committee.
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\15\ 17 CFR 240.10C-1(b)(3).
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The Exchange proposes to adopt the requirements specified in Rule
10C-1(b)(2) and (3) verbatim as new subsection (c)(3) to Section 805.
Compensation Adviser Independence Factors
Rule 10C-1(b)(4) \16\ provides that the compensation committee of a
listed issuer may select a compensation consultant, legal counsel or
other adviser to the compensation committee only after taking into
consideration the following factors, as well as any other factors
identified by the relevant national securities exchange or national
securities association in its listing standards:
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\16\ 17 CFR 240.10C-1(b)(4).
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(i) The provision of other services to the listed company by the
person that employs the compensation consultant, legal counsel or other
adviser;
(ii) The amount of fees received from the listed company by the
person that employs the compensation consultant, legal counsel or other
adviser, as a percentage of the total revenue of the person that
employs the compensation consultant, legal counsel or other adviser;
(iii) The policies and procedures of the person that employs the
compensation consultant, legal counsel or other adviser that are
designed to prevent conflicts of interest;
(iv) Any business or personal relationship of the compensation
consultant, legal counsel or other adviser with a member of the
compensation committee;
(v) Any stock of the listed company owned by the compensation
consultant, legal counsel or other adviser; and
(vi) Any business or personal relationship of the compensation
consultant, legal counsel, other adviser or the person employing the
adviser with an executive officer of the listed company.
[[Page 62579]]
Accordingly, the Exchange proposes to add as new subsection (c)(4)
to Section 805 a provision specifying that, before engaging an adviser,
the compensation committee must consider the factors enumerated above.
As proposed, Section 805(c)(4) would not include any additional factors
for consideration, as the Exchange believes that the list included in
Rule 10C-1(b)(4) is very comprehensive and the proposed listing
standard would also require the compensation committee to consider any
other factors that would be relevant to the adviser's independence from
management.
Consistent with Rule 10C-1(b)(2)(iii),\17\ the Exchange proposes to
include as new Commentary .04 to Rule 805 an explicit statement that
nothing in Section 805(c) shall be construed: (A) to require the
Compensation Committee to implement or act consistently with the advice
or recommendations of the compensation consultant, independent legal
counsel or other adviser to the compensation committee; or (B) to
affect the ability or obligation of the Compensation Committee to
exercise its own judgment in fulfillment of the duties of the
Compensation Committee (or, if applicable, the independent directors).
In addition, as provided by Rule 10C-1(b)(4), proposed new Commentary
.05 to Section 805 would specify that the compensation committee need
not engage in an analysis of the independence factors before consulting
with or obtaining advice from in-house legal counsel.
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\17\ 17 CFR 240.10C-1(b)(2)(iii).
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Cure Periods
Rule 10C-1(a)(3) \18\ requires that exchange rules must include
appropriate procedures for a listed issuer to have a reasonable
opportunity to cure any non-compliance with the provisions of exchange
rules adopted as required by Rule 10C-1. In addition, Rule 10C-1(a)(3)
states that such rules may provide that if a member of a compensation
committee ceases to be independent in accordance with the requirements
of Rule 10C-1 for reasons outside the member's reasonable control, that
person, with notice by the issuer to the exchange, may remain a
compensation committee member of the listed issuer until the earlier of
the next annual meeting or one year from the occurrence of the event
that caused the member to be no longer independent. The Exchange
proposes to adopt, as new Rule 805(c)(2), this cure provision period
for events of non-compliance with the proposed compensation committee
independence requirements that are outside of the director's reasonable
control.\19\ However, the Exchange proposes to modify this cure
provision by limiting its use to circumstances where the committee
continues to have a majority of independent directors, as this would
ensure that the applicable committee could not take any action without
the agreement of one or more independent directors. The Exchange
believes that this requirement addresses any actual or apparent
conflict of interest which may arise due to the continued service of a
non-independent director on the compensation committee.
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\18\ 17 CFR 240.10C-1(a)(3).
\19\ See proposed Section 803(c)(3).
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Transition Periods
The Adopting Release contemplates that exchanges may provide
transition periods through the exemptive authority provided to the
exchanges under Rule 10C-1(b)(1)(iii).\20\ Consistent with the
transition periods approved by the SEC for inclusion in the Exchange's
current corporate governance requirements at the time of their original
adoption,\21\ the Exchange proposes to adopt new Section 805(c)(5),
under which listed companies would have until the earlier of their
first annual meeting after January 15, 2014, or October 31, 2014, to
comply with the new Section 805(c)(1) compensation committee
independence standards. Existing compensation committee independence
standards would continue to apply pending the transition to the new
independence standards. The Exchange believes that its prior use of a
similar transition period was satisfactory and that it is reasonable to
follow the same approach in connection with the proposed changes to the
compensation committee independence standards. In addition, the
Exchange proposes to continue to apply to the proposed new compensation
committee requirements the existing transition periods available to
newly-listed companies under Section 809(a) of the Company Guide.\22\
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\20\ See Adopting Release at 38444.
\21\ See Securities Exchange Act Release No. 48863 (December 1,
2003), 68 FR 68432 (December 8, 2003) (SR-Amex-2003-65).
\22\ Section 809(a) affords companies that have listed in
conjunction with their initial public offering exemptions from all
board composition requirements consistent with the exemptions
afforded in Exchange Act Rule 10A-3. That is, for each applicable
committee that the company establishes (i.e., nominating and/or
compensation) the company must have one independent member at the
time of listing, a majority of independent members within 90 days of
listing and all independent members within one year.
---------------------------------------------------------------------------
The Exchange proposes to exempt smaller reporting companies \23\
from compliance with the proposed new independence requirements with
respect to compensation committee service. Under SEC Rule 12b-2, a
smaller reporting company is required to test whether it continues to
qualify for that status as of the last business day of its second
quarter of each fiscal year (the ``Smaller Reporting Company
Determination Date'') and ceases as of the first day of the next fiscal
year to be able to avail itself of the benefits under SEC rules
applicable to smaller reporting companies. Consequently, the Exchange
proposes to include in proposed Section 805(c)(5) a transition
provision applicable to companies that cease to be smaller reporting
companies and become subject to the compensation committee independence
requirements of proposed Section 805(c)(1).\24\ As proposed, a company
that ceases to be a smaller reporting company would be required, if
applicable, to (I) have a committee composed entirely of members that
meet the independence requirements of proposed Section 805(c) within
six months of the Smaller Reporting Company Determination Date and (II)
have a compensation committee as of the Smaller Reporting Company
Determination Date that complies with the requirements of proposed
Section 805(c)(4) with respect to compensation consultant independence
considerations.
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\23\ As defined in SEC Rule 12b-2 and Item 10(f) of Regulation
S-K.
\24\ A company that is otherwise exempt from the requirement to
have an independent compensation committee when it ceases to be a
smaller reporting company would not, of course, be subject to a
transition period. See discussion infra.
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General Exemptions
Rule 10C-1(b)(5) \25\ provides an automatic exemption from the
application of the entirety of Rule 10C-1 for controlled companies and
smaller reporting companies,\26\ and Rule 10C-1(b)(1)(iii)(A) \27\
provides an automatic
[[Page 62580]]
exemption from the compensation committee independence requirements for
limited partnerships, companies in bankruptcy, open-end management
investment companies registered under the Investment Company Act of
1940 (``1940 Act''). Rule 10C-1(b)(1)(iii)(A) also exempts from the
compensation committee independence requirements any foreign private
issuer that discloses in its annual report filed with the SEC the
reasons that the foreign private issuer does not have an independent
compensation committee.
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\25\ 17 CFR 240.10C-1(b)(5).
\26\ The Exchange proposes to amend subsection (h) of Section
801 to include a statement that smaller reporting companies are
required to comply with Section 805(c), with the exception of the
compensation committee independence requirements of [sic] Section
803(c)(1) [sic] and the requirements of proposed Section 805(c)(4)
with respect to compensation consultant independence considerations.
The same statement will be included in proposed Commentary .01 to
Section 805. In addition, the Exchange proposes to amend Section
805(b) to clarify that henceforth only smaller reporting companies
will be eligible to avail themselves of the ability of the board
under exceptional and limited circumstances to appoint a non-
independent director to the compensation committee.
\27\ 17 CFR 240.10C-1(b)(1)(iii)(A).
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Pursuant to the general exemptive authority granted in Rule 10C-
1(b)(5)(i), the Exchange proposes to exempt from all of the proposed
requirements each category of issuers that qualifies for a general or
specific exemption under Rule 10C-1(b)(1)(iii)(A). The Exchange also
proposes to provide a general exemption from all of the requirements to
all of the other categories of issuers that are currently exempt from
the Exchange's existing compensation committee requirements. Thus, as
proposed, controlled companies, limited partnerships, companies in
bankruptcy, and open-end and closed-end funds that are registered under
the 1940 Act, asset-backed issuers and other passive business
organizations (such as royalty trusts) or derivatives and special
purpose securities listed pursuant to Exchange Rules 1000, and 1200 and
Sections 106, 107 and 118B would be exempt from both the new
compensation committee independence requirements and the new
compensation adviser requirements. The Exchange notes that these
categories of issuers typically: (i) Are externally managed and do not
directly employ executives (e.g., limited partnerships that are managed
by their general partner or closed-end funds managed by an external
investment adviser); (ii) do not by their nature have employees (e.g.,
passive business organizations (such as royalty trusts)); or (iii) have
executive compensation policy set by a body other than the board (e.g.,
bankrupt companies have their executive compensation determined by the
bankruptcy court). In light of these structural reasons why these
categories of issuers generally do not have compensation committees,
the Exchange believes that it would be a significant and unnecessarily
burdensome alteration in their governance structures to require them to
comply with the proposed new requirements and that it is appropriate to
grant them an exemption.
Foreign private issuers \28\ are currently permitted by Section 110
to apply for an exemption from the Exchange's compensation committee
requirements. The Exchange proposes to follow this approach by granting
a general exemption, pursuant to the discretion granted to the Exchange
by Rule 10C-1(b)(5)(i),\29\ from the proposed new compensation
committee requirements to foreign private issuers that seek an
exemption on the basis that they follow home country practice. The
Exchange notes that Section 110 provides that foreign based entities
availing themselves of exemptions from compliance with Exchange rules
must provide English language disclosure of any significant ways in
which their corporate governance practices differ from those followed
by domestic companies pursuant to the Exchange's standards. Section 110
currently provides that this disclosure may be provided on the
company's Web site and/or in its annual report as distributed to
shareholders in the U.S. As the Exchange no longer requires companies
to distribute annual reports, except for its requirements in Section
610 with respect to the Web site posting and distribution of annual
reports filed with the SEC, the Exchange proposes to modify this
provision to provide that a company must either include this disclosure
on its web site or in the annual report it is required to file with the
SEC that includes audited financial statements (including on Forms 10-
K, 20-F, or 40-F) While Section 110 does not require a statement as to
why a company does not comply with an applicable requirement in the
manner provided by Rule 10C-1(b)(1)(iii)(A), the Exchange does not
believe that this is a significant difference, as the explanation
companies would likely provide for not having an independent
compensation committee would simply be that they were not required to
do so by home country law.
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\28\ The term ``foreign private issuer'' used in Section 110 is
defined in Exchange Act Rule 3b-4(c).
\29\ 17 CFR 240.10C-1(b)(5)(i).
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The Exchange currently does not require issuers whose only listed
security is a preferred stock to comply with Section 805. The Exchange
proposes to grant these issuers a general exemption from compliance
with the proposed amended rule. The Exchange believes this approach is
appropriate because holders of listed preferred stock have
significantly greater protections with respect to their rights to
receive dividends and a liquidation preference upon dissolution of the
issuer, and preferred stocks are typically regarded by investors as a
fixed income investment comparable to debt securities, the issuers of
which are exempt from compliance with Rule 10C-1.
2. Statutory Basis
The Exchange believes that the proposed rule change in relation to
the Exchange's compensation committee requirements and the proposed
compensation consultant independence requirements are consistent with
Section 10C of the Exchange Act and Rule 10C-1 thereunder in that they
comply with the requirements of Rule 10C-1 with respect to the adoption
by national securities exchanges of compensation committee listing
standards. The Exchange believes that the proposed rule change is
consistent with Section 6(b) \30\ of the Exchange Act in general, and
furthers the objectives of Section 6(b)(5) of the Exchange Act,\31\ in
particular in that it is designed 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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\30\ 15 U.S.C. 78f(b).
\31\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed amendments to its
compensation committee listing standards are consistent with the
protection of investors and the public interest in that they strengthen
the independence requirements for compensation committee membership,
provide additional authority to compensation committees and require
compensation committees to consider the independence of compensation
consultants.
The Exchange believes that the general exemptions from the proposed
requirements that it is granting to foreign private issuers that
request an exemption based on home country practice and smaller
reporting companies are consistent with Section 10C and Rule 10C-1, for
the reasons stated above in the ``Purpose'' section, including because
(i) Rule 10C-1(b)(5)(ii) explicitly exempts smaller reporting companies
and (ii) foreign private issuers will comply with their home country
law and, if they avail themselves of the exemption, will be required to
disclose that fact under
[[Page 62581]]
existing Exchange listing requirements. The Exchange believes it is an
appropriate use of its exemptive authority under Rule 10C-1(b)(5)(i),
and that it is not unfairly discriminatory under Section 6(b)(5) of the
Act, to provide general exemptions under the proposed rules to issuers
whose only listed class of equity securities on the Exchange is a
preferred stock, as holders of listed preferred stock have
significantly greater protections with respect to their rights to
receive dividends and a liquidation preference upon dissolution of the
issuer, and preferred stocks are typically regarded by investors as a
fixed income investment comparable to debt securities, the issuers of
which are exempt from compliance with Rule 10C-1. The Exchange believes
that it is an appropriate use of its exemptive authority under Rule
10C-1(b)(5)(i), and that it is not unfairly discriminatory under
Section 6(b)(5) of the Act, to provide general exemptions under the
proposed rules for all of the other categories of issuers that are not
currently subject to the Exchange's compensation committee requirement,
for the structural reasons discussed in the ``Purpose'' section and
because it would be a significant and unnecessarily burdensome
alteration in their governance structures to require them to comply
with the proposed new requirements.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited written comments on the proposed
rule change. The Exchange has received two comment letters on the
proposed rule change.\32\ One commenter made the following points: (i)
The Exchange should specify that the relevant factors for consideration
with respect to compensation committee independence should include a
consideration of fees received for service on the board itself; (ii)
the relevant factors should explicitly include consideration of the
personal and business relationships between directors and officers;
(iii) the additional factors to be considered for compensation
committee independence should be considered as a part of general board
independence determinations; and (iv) the listing standards should
specify that, while the factors must be considered in their totality, a
single factor can result in the loss of board independence.
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\32\ Both of these letters were addressed to NYSE Regulation,
Inc. Neither author indicated that the comments related to just one
of the three national securities exchanges owned by NYSE Euronext.
Therefore, the Exchange is addressing those comments to the extent
they are applicable to its existing rules and the proposed
amendments.
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The Exchange does not believe that it is appropriate to consider
board compensation as part of the compensation committee independence
determination with respect to individual directors. Non-executive
directors devote considerable time to the affairs of the companies on
whose boards they sit and eligible candidates would be difficult to
find if board and committee service were unpaid in nature.
Consequently, independent directors of listed companies are almost
invariably paid for their board and committee service. As all
independent directors are almost certainly going to receive board
compensation from the company and do so on terms determined by the
board as a whole, the Exchange does not believe that an analysis of the
board compensation of individual directors is a meaningful
consideration in determining their independence for purposes of
compensation committee service.
The Exchange interprets its existing director independence
requirements as requiring the board to consider relationships between
the director and any member of management in making its affirmative
independence determinations. Consequently, the Exchange does not
believe that any further clarification of this requirement is
necessary.
The Exchange does not believe that it is necessary to explicitly
require that the additional independence considerations for
compensation committee service should be a part of the board's general
independence determinations for all independent directors. Section
803(A) provides that, in making its affirmative determination with
respect to a director's independence, the board must satisfy itself
that the director ``does not have a relationship that would interfere
with the exercise of independent judgment in carrying out the
responsibilities of a director.'' As such, the Exchange believes that,
where appropriate, listed company boards should already be including in
their general independence determinations factors including those being
added to the compensation committee independence determination.
The Exchange does not believe it is necessary to include in the
listing standards a statement that a single factor may be sufficiently
material to render a director non-independent, as this is clearly the
intention of the listing standards as drafted. Section 803(A) in its
current form and in its proposed amended form requires the board to
consider the materiality of each separate relationship between the
director and the listed company or its management.
The second commenter proposed that the Exchange should require
companies to make a public disclosure with respect to the factors
considered by the compensation committee in reviewing the independence
of compensation consultants, legal counsel and other compensation
advisers. This commenter also proposed that the Exchange should require
with respect to outside counsel hired by the compensation committee the
same disclosure as is required by Item 407(e)(3)(iv) of Regulation S-K
with respect to the nature of any conflict that arises from the
engagement of a compensation consultant identified in the proxy
statement The Exchange does not believe that it is necessary to
establish additional disclosure requirements of this nature. Item 407
of Regulation S-K contains extensive disclosure requirements with
respect to a listed company's corporate governance. Moreover, with
respect to disclosure of any conflicts of interest that may arise with
respect to outside counsel hired by the compensation committee, the
Exchange believes that the rigorous conflict of interest requirements
applicable to attorneys adequately address such concerns. And the
Exchange is mindful that requiring additional public disclosures
regarding outside counsel could require a listed company to disclose
information that otherwise may be protected by attorney-client
privilege.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
[[Page 62582]]
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 email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2012-48 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-NYSEMKT-2012-48. This
file number should be included on the subject line if email 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 on official business
days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for inspection and copying at the
principal office and the Internet Web site of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEMKT-2012-48, and should
be submitted on or before November 5, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25222 Filed 10-12-12; 8:45 am]
BILLING CODE 8011-01-P
