Self-Regulatory Organizations; the NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend the Amended and Restated Certificate of Incorporation and By-Laws of the NASDAQ OMX Group, Inc., 58388-58390 [2014-23049]
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58388
Federal Register / Vol. 79, No. 188 / Monday, September 29, 2014 / Notices
market data revenues, transaction
revenues or any other aspect of the
commercial operations of the Company
or a facility of the Company, even if a
portion of such revenues are used to pay
costs associated with the regulatory
operations of the Company.; (3)
incorporate in Section 5.2 the correct
provision that the Board of Directors
shall consist of no less than eight (8)
directors; and (4) to incorporate in
Section 6.3(b) the correct provision
stating that any exercise of voting rights
in excess of twenty percent (20%) of the
outstanding Exchange Rights by a
holder of Exchange Rights, together with
any affiliate, as such term is defined in
the Constitution, shall be deemed null
and void.
None of the foregoing changes are
substantive.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) that an exchange
have rules that are designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism for a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Exchange proposes
to amend the LLC Agreement to reflect
changes that the Exchange had
incorporated into its Amendment No. 1
to the Form 1 Application, but had
inadvertently dropped when the
Exchange submitted its Amendment No.
3 to the Form 1 Application.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The proposed rule changes are nonsubstantive in nature and do not
implicate any burdens on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3) of
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the Act 4 and Rule 19b–4(f)(3)
thereunder.5 At any time within 60 days
of the filing of such proposed rule
change, the Commission may summarily
abrogate such rule change if it appears
to the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
ISEGemini–2014–23 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ISEGemini–2014–23. 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, 100 F Street NE.,
Washington, DC 20549 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 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–
ISEGemini–2014–23 and should be
submitted on or before October 20,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–23052 Filed 9–26–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73193; File No. SR–
NASDAQ–2014–093]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing of Proposed Rule Change To
Amend the Amended and Restated
Certificate of Incorporation and ByLaws of the NASDAQ OMX Group, Inc.
September 23, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 10, 2014, 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 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 Substance of
the Proposed Rule Change
The Exchange is filing this proposed
rule change with respect to amendments
of the Amended and Restated Certificate
of Incorporation (the ‘‘Charter’’) and ByLaws (the ‘‘By-Laws’’) of its parent
corporation, The NASDAQ OMX Group,
Inc. (‘‘NASDAQ OMX’’ or the
‘‘Company’’). The proposed
amendments will be implemented on a
date designated by NASDAQ OMX
following approval by the Commission.
The text of the proposed rule change is
available on the Exchange’s Web site at
https://nasdaq.cchwallstreet.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
6 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
4 15
U.S.C. 78s(b)(3)(A).
5 17 CFR 19b–4(f)(3).
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Federal Register / Vol. 79, No. 188 / Monday, September 29, 2014 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Article Fourth, Paragraph C of
NASDAQ OMX’s Charter includes a
voting limitation that generally
prohibits a stockholder from voting
shares beneficially owned, directly or
indirectly, by such stockholder in
excess of 5% of the then-outstanding
shares of capital stock of NASDAQ
OMX entitled to vote as of the record
date in respect of any matter. Pursuant
to Article Fourth, Paragraph C(6) of the
Charter, NASDAQ OMX’s Board may
grant exemptions to this limitation prior
to the time a stockholder beneficially
owns more than 5% of the outstanding
shares of stock entitled to vote on the
election of a majority of directors at
such time. NASDAQ OMX’s Board has
never granted an exemption to the 5%
voting limitation and has no current
plans to do so. However, in the event
the Board decides to grant such an
exemption in the future, Article Fourth,
Paragraph C(6) of the Charter and
Section 12.5 of the By-Laws limit the
Board’s authority to grant the
exemption. These provisions, which are
intended to be substantively identical,
currently contain some language
differences. Following discussions with
the SEC staff,3 NASDAQ OMX proposes
the amendments described below to the
Charter and By-Laws to conform these
provisions and remove any ambiguity
(ii) Proposed Amendments to Charter
First, unlike the Charter, the By-Laws
state that for so long as NASDAQ OMX
shall control, directly or indirectly, any
self-regulatory subsidiary, a resolution
of the Board to approve an exemption
for any person under Article Fourth,
Paragraph C(6) of the Charter shall not
be permitted to become effective until
such resolution has been filed with and
approved by the SEC under Section 19
of the Act. NASDAQ OMX proposes that
this requirement be added to the Charter
and that ‘‘self-regulatory subsidiary,’’
which is currently not a defined term in
the Charter, be defined as any
subsidiary of NASDAQ OMX that is a
‘‘self-regulatory organization’’ as
defined under Section 3(a)(26) of the
Act.4 At present, this defined term
would include NASDAQ, BX and Phlx,
which are national securities exchanges,
and BSECC and SCCP, which are
registered clearing agencies that are both
currently dormant.
Second, both the Charter and the ByLaws state that the Board may not
approve an exemption to the 5% voting
limitation for: (i) A registered broker or
dealer or an affiliate thereof or (ii) an
individual or entity that is subject to a
statutory disqualification under Section
3(a)(39) of the Act. The By-Laws include
a further proviso stating that, for these
purposes, an ‘‘affiliate’’ shall not be
deemed to include an entity that either
owns 10% or less of the equity of a
broker or dealer, or receives 1% or less
of its consolidated gross revenues from
a broker or dealer. This proviso, which
is not currently included in the Charter,
allows NASDAQ OMX’s Board to grant
exemptions to the 5% voting limitation
for entities that either own 10% or less
of the equity of a broker or dealer, or
receive 1% or less of their consolidated
gross revenues from a broker or dealer.
NASDAQ OMX proposes that this
proviso be added to the Charter to
ensure consistency between the Charter
and By-Laws.
Third, both the Charter and By-Laws
require the Board to make certain
determinations prior to granting an
exemption to the 5% voting limitation.
Regarding the first of these
determinations, the Charter states that
the Board must determine that granting
such an exemption would not
reasonably be expected to diminish the
quality of, or public confidence in,
3 See Securities Exchange Act Release No. 71353
(January 17, 2014), 79 FR 4209 (January 24, 2014)
(SR–BSECC–2013–001, SR–BX–2013–057, SR–
NASDAQ–2013–148, SR–Phlx–2013–115, SR–
SCCP–2013–01), at note 14.
4 Under Section 3(a)(26) of the Act, a ‘‘selfregulatory organization’’ is ‘‘any national securities
exchange, registered securities association, or
registered clearing agency . . . ’’ 15 U.S.C.
78c(a)(26).
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ OMX is proposing to make
certain amendments to its Charter and
By-Laws.
(i) Background
tkelley on DSK3SPTVN1PROD with NOTICES
that may exist because of the current
language differences.
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58389
NASDAQ OMX or The NASDAQ Stock
Market LLC or the other operations of
NASDAQ OMX and its subsidiaries, on
the ability to prevent fraudulent and
manipulative acts and practices and on
investors and the public. The By-Laws
include similar language, but state that
the Board must make this determination
with respect to NASDAQ OMX or its
self-regulatory subsidiaries. Because the
term ‘‘self-regulatory subsidiary’’
includes The NASDAQ Stock Market
LLC but also includes other entities,
NASDAQ OMX proposes that the
provisions be made fully consistent by
amending the Charter to refer to
NASDAQ OMX or the self-regulatory
subsidiaries, and to define the term
‘‘self-regulatory subsidiary’’ as
described above.
Fourth, unlike the Charter, the ByLaws further provide that prior to
granting an exemption from the 5%
voting limitation, the Board must also
determine that granting the exemption
would promote the prompt and accurate
clearance and settlement of securities
transactions (and to the extent
applicable, derivative agreements,
contracts and transactions), assure the
safeguarding of securities and funds in
the custody or control of the selfregulatory subsidiaries that are clearing
agencies or securities and funds for
which they are responsible, foster
cooperation and coordination with
persons engaged in the clearance and
settlement of securities transactions,
and remove impediments to and perfect
the mechanism of a national system for
the prompt and accurate clearance and
settlement of securities transactions.
NASDAQ OMX proposes that this
language be added to the Charter.
Finally, NASDAQ OMX proposes that
Article Fourth, Paragraph C(6) of the
Charter be amended to correct a crossreference to subparagraph 6(b), which
no longer exists.
(iii) Proposed Amendments to the ByLaws
NASDAQ OMX also proposes
amendments to NASDAQ OMX’s ByLaws to further conform the Charter and
By-Law provisions discussed above.
Specifically, the proposed amendment
to Article I(s) revises the definition of
‘‘self-regulatory subsidiary’’ in the ByLaws to refer to any subsidiary of
NASDAQ OMX that is a self-regulatory
organization as defined under Section
3(a)(26) of the Act, rather than list
specific subsidiaries that would fall
within this category. This revised
definition, which is the same definition
of ‘‘self-regulatory subsidiary’’ proposed
for purposes of the Charter as described
above, will capture NASDAQ OMX’s
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Federal Register / Vol. 79, No. 188 / Monday, September 29, 2014 / Notices
current self-regulatory subsidiaries as
well as any subsidiaries that in the
future meet the definition of ‘‘selfregulatory organization’’ under the Act.
Consequently, such future selfregulatory subsidiaries will
automatically be subject to the By-Law
provisions relating to these subsidiaries
without NASDAQ OMX having to take
formal action to amend the By-Laws to
include them.
The proposed By-Law amendments
also include the correction of a
typographical error in Article I and
minor edits to Section 12.5 to conform
the language regarding the 5% voting
limitation to the language in the
analogous provision of the Charter.
tkelley on DSK3SPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,5 in general, and furthers the
objectives of Section 6(b)(5) of the Act,6
in particular, in that it is designed 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.
NASDAQ OMX is proposing changes
to its Charter and By-Laws to conform
the provisions in each document
relating to the procedures by which
NASDAQ OMX’s Board may grant an
exemption to the prohibition on any
NASDAQ OMX stockholder voting
shares in excess of 5% of the Company’s
then-outstanding shares of capital stock.
The Exchange believes that the changes
will protect investors and the public
interest by eliminating confusion that
may exist because of the current
language differences between the two
provisions. In addition, NASDAQ OMX
is proposing to define ‘‘self-regulatory
subsidiary’’ with reference to a
definition in the Act. The Exchange
believes that this will protect investors
and the public interest by ensuring that
any NASDAQ OMX subsidiary that
meets the definition of ‘‘self-regulatory
organization’’ in the Act will be subject
to the Charter and By-Law provisions
relating to self-regulatory subsidiaries.
Finally, the remaining changes are
clarifying in nature, and they enhance
investor protection by making NASDAQ
OMX’s governance documents clearer
and easier to understand.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Because the proposed rule change
relates to the governance of NASDAQ
5 15
U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
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OMX and not to the operations of the
Exchange, the Exchange does not
believe that the proposed rule change
will impose any burden on competition
not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 shall: (a) By order
approve or disapprove such proposed
rule change, or (b) institute proceedings
to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2014–093 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2014–093. 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
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 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–
NASDAQ–2014–093, and should be
submitted on or before October 20,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–23049 Filed 9–26–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73192; File No. SR–FINRA–
2014–025]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Amendment No. 1, and Order Granting
Accelerated Approval of a Proposed
Rule Change, as Modified by
Amendment No. 1, To Adopt a
Supplementary Schedule for Inventory
Positions Pursuant to FINRA Rule 4524
(Supplemental FOCUS Information)
September 23, 2014.
I. Introduction
On June 16, 2014, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to adopt a supplementary
schedule for inventory positions
pursuant to FINRA Rule 4524
(Supplemental FOCUS Information).
The proposed rule change was
7 17
CFR 200.30–3(a)(12).
15 U.S.C. 78s(b)(1).
2 See 17 CFR 240.19b–4.
1 See
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]]>Agencies
[Federal Register Volume 79, Number 188 (Monday, September 29, 2014)]
[Notices]
[Pages 58388-58390]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23049]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73193; File No. SR-NASDAQ-2014-093]
Self-Regulatory Organizations; the NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change To Amend the Amended and
Restated Certificate of Incorporation and By-Laws of the NASDAQ OMX
Group, Inc.
September 23, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 10, 2014, 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 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\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing this proposed rule change with respect to
amendments of the Amended and Restated Certificate of Incorporation
(the ``Charter'') and By-Laws (the ``By-Laws'') of its parent
corporation, The NASDAQ OMX Group, Inc. (``NASDAQ OMX'' or the
``Company''). The proposed amendments will be implemented on a date
designated by NASDAQ OMX following approval by the Commission. The text
of the proposed rule change is available on the Exchange's Web site at
https://nasdaq.cchwallstreet.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
[[Page 58389]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ OMX is proposing to make certain amendments to its Charter
and By-Laws.
(i) Background
Article Fourth, Paragraph C of NASDAQ OMX's Charter includes a
voting limitation that generally prohibits a stockholder from voting
shares beneficially owned, directly or indirectly, by such stockholder
in excess of 5% of the then-outstanding shares of capital stock of
NASDAQ OMX entitled to vote as of the record date in respect of any
matter. Pursuant to Article Fourth, Paragraph C(6) of the Charter,
NASDAQ OMX's Board may grant exemptions to this limitation prior to the
time a stockholder beneficially owns more than 5% of the outstanding
shares of stock entitled to vote on the election of a majority of
directors at such time. NASDAQ OMX's Board has never granted an
exemption to the 5% voting limitation and has no current plans to do
so. However, in the event the Board decides to grant such an exemption
in the future, Article Fourth, Paragraph C(6) of the Charter and
Section 12.5 of the By-Laws limit the Board's authority to grant the
exemption. These provisions, which are intended to be substantively
identical, currently contain some language differences. Following
discussions with the SEC staff,\3\ NASDAQ OMX proposes the amendments
described below to the Charter and By-Laws to conform these provisions
and remove any ambiguity that may exist because of the current language
differences.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 71353 (January 17,
2014), 79 FR 4209 (January 24, 2014) (SR-BSECC-2013-001, SR-BX-2013-
057, SR-NASDAQ-2013-148, SR-Phlx-2013-115, SR-SCCP-2013-01), at note
14.
---------------------------------------------------------------------------
(ii) Proposed Amendments to Charter
First, unlike the Charter, the By-Laws state that for so long as
NASDAQ OMX shall control, directly or indirectly, any self-regulatory
subsidiary, a resolution of the Board to approve an exemption for any
person under Article Fourth, Paragraph C(6) of the Charter shall not be
permitted to become effective until such resolution has been filed with
and approved by the SEC under Section 19 of the Act. NASDAQ OMX
proposes that this requirement be added to the Charter and that ``self-
regulatory subsidiary,'' which is currently not a defined term in the
Charter, be defined as any subsidiary of NASDAQ OMX that is a ``self-
regulatory organization'' as defined under Section 3(a)(26) of the
Act.\4\ At present, this defined term would include NASDAQ, BX and
Phlx, which are national securities exchanges, and BSECC and SCCP,
which are registered clearing agencies that are both currently dormant.
---------------------------------------------------------------------------
\4\ Under Section 3(a)(26) of the Act, a ``self-regulatory
organization'' is ``any national securities exchange, registered
securities association, or registered clearing agency . . . '' 15
U.S.C. 78c(a)(26).
---------------------------------------------------------------------------
Second, both the Charter and the By-Laws state that the Board may
not approve an exemption to the 5% voting limitation for: (i) A
registered broker or dealer or an affiliate thereof or (ii) an
individual or entity that is subject to a statutory disqualification
under Section 3(a)(39) of the Act. The By-Laws include a further
proviso stating that, for these purposes, an ``affiliate'' shall not be
deemed to include an entity that either owns 10% or less of the equity
of a broker or dealer, or receives 1% or less of its consolidated gross
revenues from a broker or dealer. This proviso, which is not currently
included in the Charter, allows NASDAQ OMX's Board to grant exemptions
to the 5% voting limitation for entities that either own 10% or less of
the equity of a broker or dealer, or receive 1% or less of their
consolidated gross revenues from a broker or dealer. NASDAQ OMX
proposes that this proviso be added to the Charter to ensure
consistency between the Charter and By-Laws.
Third, both the Charter and By-Laws require the Board to make
certain determinations prior to granting an exemption to the 5% voting
limitation. Regarding the first of these determinations, the Charter
states that the Board must determine that granting such an exemption
would not reasonably be expected to diminish the quality of, or public
confidence in, NASDAQ OMX or The NASDAQ Stock Market LLC or the other
operations of NASDAQ OMX and its subsidiaries, on the ability to
prevent fraudulent and manipulative acts and practices and on investors
and the public. The By-Laws include similar language, but state that
the Board must make this determination with respect to NASDAQ OMX or
its self-regulatory subsidiaries. Because the term ``self-regulatory
subsidiary'' includes The NASDAQ Stock Market LLC but also includes
other entities, NASDAQ OMX proposes that the provisions be made fully
consistent by amending the Charter to refer to NASDAQ OMX or the self-
regulatory subsidiaries, and to define the term ``self-regulatory
subsidiary'' as described above.
Fourth, unlike the Charter, the By-Laws further provide that prior
to granting an exemption from the 5% voting limitation, the Board must
also determine that granting the exemption would promote the prompt and
accurate clearance and settlement of securities transactions (and to
the extent applicable, derivative agreements, contracts and
transactions), assure the safeguarding of securities and funds in the
custody or control of the self-regulatory subsidiaries that are
clearing agencies or securities and funds for which they are
responsible, foster cooperation and coordination with persons engaged
in the clearance and settlement of securities transactions, and remove
impediments to and perfect the mechanism of a national system for the
prompt and accurate clearance and settlement of securities
transactions. NASDAQ OMX proposes that this language be added to the
Charter.
Finally, NASDAQ OMX proposes that Article Fourth, Paragraph C(6) of
the Charter be amended to correct a cross-reference to subparagraph
6(b), which no longer exists.
(iii) Proposed Amendments to the By-Laws
NASDAQ OMX also proposes amendments to NASDAQ OMX's By-Laws to
further conform the Charter and By-Law provisions discussed above.
Specifically, the proposed amendment to Article I(s) revises the
definition of ``self-regulatory subsidiary'' in the By-Laws to refer to
any subsidiary of NASDAQ OMX that is a self-regulatory organization as
defined under Section 3(a)(26) of the Act, rather than list specific
subsidiaries that would fall within this category. This revised
definition, which is the same definition of ``self-regulatory
subsidiary'' proposed for purposes of the Charter as described above,
will capture NASDAQ OMX's
[[Page 58390]]
current self-regulatory subsidiaries as well as any subsidiaries that
in the future meet the definition of ``self-regulatory organization''
under the Act. Consequently, such future self-regulatory subsidiaries
will automatically be subject to the By-Law provisions relating to
these subsidiaries without NASDAQ OMX having to take formal action to
amend the By-Laws to include them.
The proposed By-Law amendments also include the correction of a
typographical error in Article I and minor edits to Section 12.5 to
conform the language regarding the 5% voting limitation to the language
in the analogous provision of the Charter.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\6\ in particular, in that it is designed 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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NASDAQ OMX is proposing changes to its Charter and By-Laws to
conform the provisions in each document relating to the procedures by
which NASDAQ OMX's Board may grant an exemption to the prohibition on
any NASDAQ OMX stockholder voting shares in excess of 5% of the
Company's then-outstanding shares of capital stock. The Exchange
believes that the changes will protect investors and the public
interest by eliminating confusion that may exist because of the current
language differences between the two provisions. In addition, NASDAQ
OMX is proposing to define ``self-regulatory subsidiary'' with
reference to a definition in the Act. The Exchange believes that this
will protect investors and the public interest by ensuring that any
NASDAQ OMX subsidiary that meets the definition of ``self-regulatory
organization'' in the Act will be subject to the Charter and By-Law
provisions relating to self-regulatory subsidiaries. Finally, the
remaining changes are clarifying in nature, and they enhance investor
protection by making NASDAQ OMX's governance documents clearer and
easier to understand.
B. Self-Regulatory Organization's Statement on Burden on Competition
Because the proposed rule change relates to the governance of
NASDAQ OMX and not to the operations of the Exchange, the Exchange does
not believe that the proposed rule change will impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2014-093 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-093. 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, 100 F Street NE.,
Washington, DC 20549, 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-NASDAQ-2014-
093, and should be submitted on or before October 20, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23049 Filed 9-26-14; 8:45 am]
BILLING CODE 8011-01-P
