Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval to a Proposed Rule Change Relating to Bylaw and Other Changes Concerning the Board of Directors of the Exchange, 8203-8205 [2013-02423]

Download as PDF tkelley on DSK3SPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 24 / Tuesday, February 5, 2013 / Notices Combined License Application (COLA). The subcommittee will also review the ‘‘Loss of Large Areas (LOLA) of the Plant due to Explosions or Fires,’’ for the Comanche Peak Combined License Application (COLA). The Subcommittee will hear presentations by and hold discussions with representatives of the NRC staff, Mitsubishi Heavy Industries, Luminant Generation Company, LLC, and other interested persons regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the Full Committee. Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official (DFO), Girija Shukla (Telephone 301–415–6855 or Email: Girija.Shukla@nrc.gov) five days prior to the meeting, if possible, so that appropriate arrangements can be made. Thirty-five hard copies of each presentation or handout should be provided to the DFO thirty minutes before the meeting. In addition, one electronic copy of each presentation should be emailed to the DFO one day before the meeting. If an electronic copy cannot be provided within this timeframe, presenters should provide the DFO with a CD containing each presentation at least thirty minutes before the meeting. Electronic recordings will be permitted only during those portions of the meeting that are open to the public. Detailed procedures for the conduct of and participation in ACRS meetings were published in the Federal Register on October 18, 2012, (77 FR 64146–64147). Detailed meeting agendas and meeting transcripts are available on the NRC Web site at https://www.nrc.gov/readingrm/doc-collections/acrs. Information regarding topics to be discussed, changes to the agenda, whether the meeting has been canceled or rescheduled, and the time allotted to present oral statements can be obtained from the Web site cited above or by contacting the identified DFO. Moreover, in view of the possibility that the schedule for ACRS meetings may be adjusted by the Chairman as necessary to facilitate the conduct of the meeting, persons planning to attend should check with these references if such rescheduling would result in a major inconvenience. If attending this meeting, please enter through the One White Flint North building, 11555 Rockville Pike, Rockville, MD. After registering with security, please contact Mr. Theron VerDate Mar<15>2010 17:18 Feb 04, 2013 Jkt 229001 Brown (Telephone 240–888–9835) to be escorted to the meeting room. Dated: January 29, 2013. Antonio Dias, Technical Advisor, Advisory Committee on Reactor Safeguards. [FR Doc. 2013–02478 Filed 2–4–13; 8:45 am] BILLING CODE 7590–01–P NUCLEAR REGULATORY COMMISSION [NRC–2013–0001] Sunshine Act Meetings AGENCY HOLDING THE MEETINGS: Nuclear Regulatory Commission. DATE: Weeks of February 4, 11, 18, 25, March 4, 11, 2013. PLACE: Commissioners’ Conference Room, 11555 Rockville Pike, Rockville, Maryland. STATUS: Public and Closed. Week of February 4, 2013 Thursday, February 7, 2013 1:00 p.m. Briefing on Steam Generator Tube Degradation (Public Meeting) (Contact: Ken Karwoski, 301–415– 2752) This meeting will be webcast live at the web address—www.nrc.gov Week of February 11, 2013—Tentative There are no meetings scheduled for the week of February 11, 2013. 8203 Contact person for more information: Rochelle Bavol, 301–415–1651. * * * * * The NRC Commission Meeting Schedule can be found on the Internet at: https://www.nrc.gov/public-involve/ public-meetings/schedule.html. * * * * * The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (e.g. braille, large print), please notify Kimberly Meyer, NRC Disability Program Manager, at 301–287–0727, or by email at kimberly.meyerchambers@nrc.gov. Determinations on requests for reasonable accommodation will be made on a case-by-case basis. * * * * * This notice is distributed electronically to subscribers. If you no longer wish to receive it, or would like to be added to the distribution, please contact the Office of the Secretary, Washington, DC 20555 (301–415–1969), or send an email to darlene.wright@nrc.gov. Dated: January 31, 2013. Rochelle C. Bavol, Policy Coordinator, Office of the Secretary. [FR Doc. 2013–02619 Filed 2–1–13; 4:15 pm] BILLING CODE 7590–01–P Week of February 18, 2013—Tentative Wednesday, February 20, 2013 1:00 p.m. Briefing on Uranium Recovery (Public Meeting) (Contact: Bill von Till, 301–415–0598) This meeting will be webcast live at the web address—www.nrc.gov SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68766; File No. SR–CBOE– 2012–116] 9:30 a.m. Briefing on the Threat Environment Assessment (Closed— Ex. 1) Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval to a Proposed Rule Change Relating to Bylaw and Other Changes Concerning the Board of Directors of the Exchange Week of February 25, 2013—Tentative January 30, 2013. There are no meetings scheduled for the week of February 25, 2013. I. Introduction On November 30, 2012, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend its Bylaws concerning the nomination of Representative Directors, petition candidates, and the size of the Thursday, February 21, 2013 Week of March 4, 2013—Tentative There are no meetings scheduled for the week of March 4, 2013. Week of March 11, 2013—Tentative There are no meetings scheduled for the week of March 11, 2013. * * * * * *The schedule for Commission meetings is subject to change on short notice. To verify the status of meetings, call (recording)—301–415–1292. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 1 15 2 17 E:\FR\FM\05FEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 05FEN1 8204 Federal Register / Vol. 78, No. 24 / Tuesday, February 5, 2013 / Notices Exchange’s Board of Directors (‘‘Board’’), and to make conforming changes to the CBOE Certificate of Incorporation. On December 19, 2012, the proposed rule change was published for comment in the Federal Register.3 The Commission received no comments on the proposed rule change. This order grants approval to the proposed rule change. II. Description of the Proposed Rule Change tkelley on DSK3SPTVN1PROD with NOTICES Compositional Requirements Determined by the Board In December of 2011, CBOE amended its Bylaws and Certificate of Incorporation to, among other things: (i) eliminate the requirement that its Board of Directors be composed of at least 30% Industry Directors, and (ii) eliminate the requirement in Section 3.2 of the Bylaws that the Representative Directors must be Industry Directors.4 In connection with these changes, CBOE also amended Section 3.1 of the Bylaws to provide that: ‘‘[T]he Board shall determine from time to time pursuant to resolution adopted by the Board the total number of directors, the number of Non-Industry Directors and Industry Directors (if any), and the number of Representative Directors that are NonIndustry Directors and Industry Directors (if any).’’ 5 CBOE proposed to amend the Bylaws to expressly provide that any person nominated by the Representative Director Nominating Body 6 and any petition candidate nominated pursuant to the Section 3.2 of the Bylaws must satisfy the compositional requirements determined by the Board pursuant to a resolution adopted by the Board in accordance with Section 3.1 designating the number of Representative Directors that are Non-Industry Directors and Industry Directors (if any). CBOE also proposed to amend Section 3.5 of the Bylaws relating to the filling of vacancies on the Board to provide that the Representative Director Nominating 3 See Securities Exchange Act Release No. 68428 (December 13, 2012), 77 FR 75230 (‘‘Notice’’). 4 See Securities Exchange Act Release Nos. 65682 (November 3, 2011), 76 FR 69780 (November 9, 2011) (SR–CBOE–2011–099) (noticing for comment); and 65980 (December 15, 2011), 76 FR 79252 (December 21, 2011) (approving SR–CBOE– 2011–099). 5 See CBOE Bylaw 3.1. See also Securities Exchange Act Release Nos. 65682 (November 3, 2011), 76 FR 69780 at (November 9, 2011) (SR– CBOE–2011–099) (noticing for comment). 6 The Exchange noted that at all times at least 20% of the directors serving on the Board would be Representative Directors nominated by the Representative Director Nominating Body as provided in Section 3.2 of the Bylaws (or otherwise selected through the petition process). See Notice, supra note 3, at 75230. VerDate Mar<15>2010 17:18 Feb 04, 2013 Jkt 229001 Body may only recommend individuals to fill a vacancy in a Representative Director position who satisfy those same compositional requirements. Board Size Range Currently, the Bylaws provide that the Board shall consist of not less than 11 and not more than 23 directors. CBOE proposed to change the Board size range such that the Board would consist of not less than 12 and not more than 16 directors. Conforming Amendments to Certificate of Incorporation Finally, CBOE proposed to make conforming changes to its Certificate of Incorporation and to include in its Certificate of Incorporation that the Board and/or Nominating and Governance Committee, as applicable, shall make determinations as to whether a director candidate satisfies applicable qualifications for election as a director pursuant to and in accordance with Section 3.1 of the Exchange’s Bylaws, which is nearly identical to the current provisions in the Exchange’s existing Bylaws. III. Discussion After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.7 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(1) of the Act,8 which requires a national securities exchange to be so organized and have the capacity to carry out the purposes of the Act and to enforce compliance by its members and persons associated with its members with the provisions of the Act; Section 6(b)(3) of the Act,9 which requires that the rules of a national securities exchange assure the fair representation of its members in the selection of its directors and administration of its affairs, and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer (the ‘‘fair representation requirement’’); and Section 6(b)(5) of the Act,10 in that it is designed, among other things, to prevent fraudulent and manipulative acts and practices; to promote just and 7 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b)(1). 9 15 U.S.C. 78f(b)(3). 10 15 U.S.C. 78f(b)(5). PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 equitable principles of trade; 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 Commission believes that the Exchange’s proposal to expressly provide that any person nominated by the Representative Director Nominating Body 11 and any petition candidate nominated pursuant to the Section 3.2 of the Bylaws must satisfy the compositional requirements determined by the Board pursuant to a resolution adopted by the Board in accordance with Section 3.1 of the Bylaws, as well as the proposal to amend Section 3.5 of the Bylaws to provide that the Representative Director Nominating Body may only recommend individuals to fill a vacancy in a Representative Director position who satisfy those same compositional requirements, are consistent with Section 6(b) of the Act,12 including Section 6(b)(3) of the Act.13 The Exchange’s proposal would not impact its current process to ensure fair representation of its Trading Permit Holders in the selection of its directors and administration of its affairs as required by Section 6(b)(3) of the Act.14 Specifically, the proposed changes are consistent with the changes to the Bylaws that CBOE made in December of 2011 and simply reflect the application of those changes. As the Commission noted when it approved that prior proposal, the Commission had previously approved proposals in which an exchange’s board of directors was composed of all or nearly all nonindustry directors where the process was nevertheless designed to comply with the ‘‘fair representation’’ requirement in the selection and election of directors.15 In addition, the Commission believes that the Exchange’s proposal to change the Board size range to consist of not less than 12 and not more than 16 directors is consistent with Section 6(b) of the Act,16 including Section 6(b)(3) of 11 See supra note 6. U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(3). Section 6(b)(3) of the Act requires that the rules of a national securities exchange assure the fair representation of its members in the selection of its directors and administration of its affairs, and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer. 14 See id. 15 See Securities Exchange Act Release No. 65980 (December 15, 2011), 76 FR 79252 at 79253 (December 21, 2011) (approving SR–CBOE–2011– 099) (citing to Securities Exchange Act Release No. 48946 (December 17, 2003), 68 FR 74678 (December 24, 2003) (approving SR–NYSE–2003–34)). 16 15 U.S.C. 78f(b). 12 15 E:\FR\FM\05FEN1.SGM 05FEN1 Federal Register / Vol. 78, No. 24 / Tuesday, February 5, 2013 / Notices the Act.17 The Exchange’s proposal would not impact in any manner its current process to ensure fair representation of its Trading Permit Holders in the selection of its directors and administration of its affairs as required by Section 6(b)(3) of the Act.18 Further, the proposed change is consistent with the current size of CBOE’s Board and simply narrows the possible size range from 11 to 23 to 12 to 16. IV. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,19 that the proposed rule change (SR–CBOE–2012– 116) be and hereby is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–02423 Filed 2–4–13; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68761; File No SR– NASDAQ–2013–013] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Chapter XV, Section 2 of the Rules Governing the NASDAQ Options Market, NASDAQ’s Facility for Executing and Routing Standardized Equity and Index Options tkelley on DSK3SPTVN1PROD with NOTICES January 29, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 2 thereunder, notice is hereby given that on January 22, 2013. The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by NASDAQ. The Commission is publishing this notice to U.S.C. 78f(b)(3). id. 19 15 U.S.C. 78s(b)(2). 20 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 18 See VerDate Mar<15>2010 17:18 Feb 04, 2013 Jkt 229001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The NASDAQ Stock Market LLC proposes to modify Chapter XV, Section 2 of the rules governing the NASDAQ Options Market. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose BILLING CODE 8011–01–P 17 15 solicit comments on the proposed rule change from interested persons. NASDAQ proposes to modify Chapter XV, entitled ‘‘Options Pricing,’’ at Section 2(1) governing the rebates and fees assessed for option orders entered into NOM, by limiting the transactions to which ‘‘Customer’’ fees and rebates apply and by adding a new ‘‘BrokerDealer’’ category. The Exchange will apply the new Broker-Dealer fees and rebates rather than Customer fees and rebates to transactions for the account of a broker or dealer that are currently assessed at Customer rates. Transactions that are subject to the new Broker-Dealer fee category will no longer be considered ‘‘Customer’’ transactions for any purpose in Chapter XV, including rebates. There is currently NOM pricing for five separate categories of market participants: Customer, Professional, Firm, Non-NOM Market Maker and NOM Market Maker. ‘‘Customer’’ pricing currently applies to any transaction that is identified for clearing in the Customer range at The Options Clearing Corporation (‘‘OCC’’) which is not for the account of a Professional.3 3 See Securities Exchange Act Release No. 64494 (May 13, 2011), 76 FR 29014 (May 19, 2011) (SR– NASDAQ–2011–066) (‘‘Professional Filing’’). In this filing, the Exchange addressed the perceived favorable pricing of Professionals who were assessed fees and paid rebates like a Customer prior to the filing. The Exchange noted in that filing that a Professional, unlike a retail Customer, has access to sophisticated trading systems that contain functionality not available to retail Customers. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 8205 NOM now proposes to further limit the ‘‘Customer’’ fee category so that it does not apply to transactions identified for clearing in the Customer range at OCC that are for the account of a broker or dealer. Going forward, these transactions for the account of a broker or dealer that are currently charged ‘‘Customer’’ fees will be charged under the new ‘‘Broker-Dealer’’ fee category. The new Broker-Dealer category would be an addition to the existing fee categories. Broker-Dealer transactions will be any transactions that do not fall within any of the other categories.4 As discussed above, transactions currently identified for clearing in the Customer range at OCC for the account of a broker or dealer will fall within the new Broker-Dealer category. The Exchange proposes to charge transactions in the Broker-Dealer category the same fees charged for transactions currently in the Firm category, and to provide the same rebates offered with respect to transactions in the Firm category. Additionally, the Exchange currently pays NOM Participants a tiered Rebate to Add Liquidity in Penny Pilot Options based on the volume of Customer and Professional orders they execute on the Exchange. Orders for brokers and dealers that currently fall within the Customer pricing category and that will now fall within the Broker-Dealer pricing category will no longer be eligible for this rebate. However, BrokerDealer orders, just like Firm orders, will count toward Total Volume for purposes of calculating the Tier 5 Rebate to Add Liquidity in Penny Pilot Options. Section 2(2) is being amended to reflect that, like transactions in the Firm fee category, Broker-Dealer transactions will be assessed the Fee for Removing Liquidity during the Exchange’s Opening Cross. Finally, the Exchange is eliminating Section 2(3), Closing Cross, as unnecessary. The Exchange no longer conducts a closing cross and the fees are no longer applicable to any transactions. 2. Statutory Basis NASDAQ believes that the proposed rule changes are consistent with the provisions of Section 6 of the Act,5 in general, and with Section 6(b)(4) of the Act,6 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons 4 The other categories are Customer, Professional Firm, Non-NOM Market Maker and NOM Market Maker. 5 15 U.S.C. 78f. 6 15 U.S.C. 78f(b)(4). E:\FR\FM\05FEN1.SGM 05FEN1

Agencies

[Federal Register Volume 78, Number 24 (Tuesday, February 5, 2013)]
[Notices]
[Pages 8203-8205]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02423]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68766; File No. SR-CBOE-2012-116]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Granting Approval to a Proposed Rule Change 
Relating to Bylaw and Other Changes Concerning the Board of Directors 
of the Exchange

January 30, 2013.

I. Introduction

    On November 30, 2012, the Chicago Board Options Exchange, 
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and 
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its Bylaws concerning 
the nomination of Representative Directors, petition candidates, and 
the size of the

[[Page 8204]]

Exchange's Board of Directors (``Board''), and to make conforming 
changes to the CBOE Certificate of Incorporation. On December 19, 2012, 
the proposed rule change was published for comment in the Federal 
Register.\3\ The Commission received no comments on the proposed rule 
change. This order grants approval to the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 68428 (December 13, 
2012), 77 FR 75230 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

Compositional Requirements Determined by the Board

    In December of 2011, CBOE amended its Bylaws and Certificate of 
Incorporation to, among other things: (i) eliminate the requirement 
that its Board of Directors be composed of at least 30% Industry 
Directors, and (ii) eliminate the requirement in Section 3.2 of the 
Bylaws that the Representative Directors must be Industry Directors.\4\ 
In connection with these changes, CBOE also amended Section 3.1 of the 
Bylaws to provide that: ``[T]he Board shall determine from time to time 
pursuant to resolution adopted by the Board the total number of 
directors, the number of Non-Industry Directors and Industry Directors 
(if any), and the number of Representative Directors that are Non-
Industry Directors and Industry Directors (if any).'' \5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release Nos. 65682 (November 3, 
2011), 76 FR 69780 (November 9, 2011) (SR-CBOE-2011-099) (noticing 
for comment); and 65980 (December 15, 2011), 76 FR 79252 (December 
21, 2011) (approving SR-CBOE-2011-099).
    \5\ See CBOE Bylaw 3.1. See also Securities Exchange Act Release 
Nos. 65682 (November 3, 2011), 76 FR 69780 at (November 9, 2011) 
(SR-CBOE-2011-099) (noticing for comment).
---------------------------------------------------------------------------

    CBOE proposed to amend the Bylaws to expressly provide that any 
person nominated by the Representative Director Nominating Body \6\ and 
any petition candidate nominated pursuant to the Section 3.2 of the 
Bylaws must satisfy the compositional requirements determined by the 
Board pursuant to a resolution adopted by the Board in accordance with 
Section 3.1 designating the number of Representative Directors that are 
Non-Industry Directors and Industry Directors (if any). CBOE also 
proposed to amend Section 3.5 of the Bylaws relating to the filling of 
vacancies on the Board to provide that the Representative Director 
Nominating Body may only recommend individuals to fill a vacancy in a 
Representative Director position who satisfy those same compositional 
requirements.
---------------------------------------------------------------------------

    \6\ The Exchange noted that at all times at least 20% of the 
directors serving on the Board would be Representative Directors 
nominated by the Representative Director Nominating Body as provided 
in Section 3.2 of the Bylaws (or otherwise selected through the 
petition process). See Notice, supra note 3, at 75230.
---------------------------------------------------------------------------

Board Size Range

    Currently, the Bylaws provide that the Board shall consist of not 
less than 11 and not more than 23 directors. CBOE proposed to change 
the Board size range such that the Board would consist of not less than 
12 and not more than 16 directors.

Conforming Amendments to Certificate of Incorporation

    Finally, CBOE proposed to make conforming changes to its 
Certificate of Incorporation and to include in its Certificate of 
Incorporation that the Board and/or Nominating and Governance 
Committee, as applicable, shall make determinations as to whether a 
director candidate satisfies applicable qualifications for election as 
a director pursuant to and in accordance with Section 3.1 of the 
Exchange's Bylaws, which is nearly identical to the current provisions 
in the Exchange's existing Bylaws.

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\7\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(1) of the Act,\8\ which requires a 
national securities exchange to be so organized and have the capacity 
to carry out the purposes of the Act and to enforce compliance by its 
members and persons associated with its members with the provisions of 
the Act; Section 6(b)(3) of the Act,\9\ which requires that the rules 
of a national securities exchange assure the fair representation of its 
members in the selection of its directors and administration of its 
affairs, and provide that one or more directors shall be representative 
of issuers and investors and not be associated with a member of the 
exchange, broker, or dealer (the ``fair representation requirement''); 
and Section 6(b)(5) of the Act,\10\ in that it is designed, among other 
things, to prevent fraudulent and manipulative acts and practices; to 
promote just and equitable principles of trade; to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system; and, in general, to protect investors and the public 
interest.
---------------------------------------------------------------------------

    \7\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(3).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the Exchange's proposal to expressly 
provide that any person nominated by the Representative Director 
Nominating Body \11\ and any petition candidate nominated pursuant to 
the Section 3.2 of the Bylaws must satisfy the compositional 
requirements determined by the Board pursuant to a resolution adopted 
by the Board in accordance with Section 3.1 of the Bylaws, as well as 
the proposal to amend Section 3.5 of the Bylaws to provide that the 
Representative Director Nominating Body may only recommend individuals 
to fill a vacancy in a Representative Director position who satisfy 
those same compositional requirements, are consistent with Section 6(b) 
of the Act,\12\ including Section 6(b)(3) of the Act.\13\ The 
Exchange's proposal would not impact its current process to ensure fair 
representation of its Trading Permit Holders in the selection of its 
directors and administration of its affairs as required by Section 
6(b)(3) of the Act.\14\ Specifically, the proposed changes are 
consistent with the changes to the Bylaws that CBOE made in December of 
2011 and simply reflect the application of those changes. As the 
Commission noted when it approved that prior proposal, the Commission 
had previously approved proposals in which an exchange's board of 
directors was composed of all or nearly all non-industry directors 
where the process was nevertheless designed to comply with the ``fair 
representation'' requirement in the selection and election of 
directors.\15\
---------------------------------------------------------------------------

    \11\ See supra note 6.
    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(3). Section 6(b)(3) of the Act requires 
that the rules of a national securities exchange assure the fair 
representation of its members in the selection of its directors and 
administration of its affairs, and provide that one or more 
directors shall be representative of issuers and investors and not 
be associated with a member of the exchange, broker, or dealer.
    \14\ See id.
    \15\ See Securities Exchange Act Release No. 65980 (December 15, 
2011), 76 FR 79252 at 79253 (December 21, 2011) (approving SR-CBOE-
2011-099) (citing to Securities Exchange Act Release No. 48946 
(December 17, 2003), 68 FR 74678 (December 24, 2003) (approving SR-
NYSE-2003-34)).
---------------------------------------------------------------------------

    In addition, the Commission believes that the Exchange's proposal 
to change the Board size range to consist of not less than 12 and not 
more than 16 directors is consistent with Section 6(b) of the Act,\16\ 
including Section 6(b)(3) of

[[Page 8205]]

the Act.\17\ The Exchange's proposal would not impact in any manner its 
current process to ensure fair representation of its Trading Permit 
Holders in the selection of its directors and administration of its 
affairs as required by Section 6(b)(3) of the Act.\18\ Further, the 
proposed change is consistent with the current size of CBOE's Board and 
simply narrows the possible size range from 11 to 23 to 12 to 16.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(3).
    \18\ See id.
---------------------------------------------------------------------------

IV. Conclusion

    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-CBOE-2012-116) be and hereby 
is approved.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02423 Filed 2-4-13; 8:45 am]
BILLING CODE 8011-01-P
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