Self-Regulatory Organizations; NASDAQ OMX PHLX 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., 58393-58395 [2014-23050]

Download as PDF Federal Register / Vol. 79, No. 188 / Monday, September 29, 2014 / Notices trends and assess the related impact on firms’ liquidity and funding needs. The information provided on the proposed SIS would be used by FINRA to monitor firms’ financial condition and perform more targeted examinations of firms’ market risk exposure. The Commission believes that the proposed rule change, as modified by Amendment No. 1, works in conjunction with the existing Commission broker-dealer financial responsibility rules and will further FINRA’s ability to oversee its members by, among other things, capturing trends in the securities held in broker-dealers’ inventory. The Commission does not believe that the proposed rule change, as modified by Amendment No. 1, will result in burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. As stated above, the Commission believes the proposed SIS will allow FINRA to better understand the potential impact of broker-dealers’ inventory on net capital, leverage and liquidity, and ability to fulfill customer protection obligations. Ready access to the information in the proposed SIS is important for FINRA to efficiently monitor on an ongoing basis the financial condition of firms. The Commission also believes FINRA has carefully crafted the proposed SIS to achieve its intended and necessary regulatory purpose while being cognizant of the burden on firms. The information required to complete the proposed SIS should be readily available to firms due to firms’ obligations to maintain books and records and apply applicable capital charges to their inventory. Further, for smaller firms, the proposed SIS contains exceptions for firms that (1) have a minimum dollar net capital or liquid capital requirement, as applicable, of less than $100,000, or (2) have inventory positions consisting only of money market mutual funds. tkelley on DSK3SPTVN1PROD with NOTICES V. Accelerated Approval The Commission finds good cause, pursuant to Section 19(b)(2) of the Exchange Act 31 for approving the proposal, as modified by Amendment No. 1, prior to the 30th day after publication of Amendment No. 1 in the Federal Register. The changes proposed in Amendment No. 1 are technical or clarifying changes and do not raise regulatory concerns. Accordingly, the Commission finds that good cause exists to approve the 31 See 15 U.S.C. 78s(b)(2). VerDate Sep<11>2014 16:44 Sep 26, 2014 Jkt 232001 proposal, as modified by Amendment No. 1, on an accelerated basis. VI. Solicitation of Comments 58393 VII. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,32 that the proposed rule change (SR– FINRA–2014–025), as modified by Amendment No. 1, be and hereby is approved on an accelerated basis. Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether Amendment No. 1 to the proposed rule change is consistent with the Exchange Act. Comments may be submitted by any of the following methods: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 Jill M. Peterson, Assistant Secretary. Electronic Comments [FR Doc. 2014–23048 Filed 9–26–14; 8:45 am] • 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– FINRA–2014–025 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–FINRA–2014–025. 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 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of FINRA. 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–FINRA–2014–025 and should be submitted on or before October 20, 2014. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73194; File No. SR–Phlx– 2014–61) Self-Regulatory Organizations; NASDAQ OMX PHLX 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, NASDAQ OMX PHLX LLC (‘‘Phlx’’ 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:// nasdaqomxphlx.cchwallstreet.com, at 32 See 15 U.S.C. 78s(b)(2). 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 33 See E:\FR\FM\29SEN1.SGM 29SEN1 58394 Federal Register / Vol. 79, No. 188 / Monday, September 29, 2014 / Notices 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 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. (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 (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 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). 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. tkelley on DSK3SPTVN1PROD with NOTICES Charter and By-Laws to conform these provisions and remove any ambiguity that may exist because of the current language differences. VerDate Sep<11>2014 16:44 Sep 26, 2014 Jkt 232001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 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 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 E:\FR\FM\29SEN1.SGM 29SEN1 Federal Register / Vol. 79, No. 188 / Monday, September 29, 2014 / Notices for purposes of the Charter as described above, will capture NASDAQ OMX’s 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. 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Sep<11>2014 16:44 Sep 26, 2014 Jkt 232001 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– Phlx–2014–61 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–Phlx–2014–61. 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 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 58395 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–Phlx– 2014–61, 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. 2014–23050 Filed 9–26–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73191; File No. SR–OC– 2014–04] Self-Regulatory Organizations; OneChicago, LLC; Notice of Filing of Proposed Rule Change to Update OCX’s Rulebook To Remove References To the OCX.BETS and CBOEdirect Trading Platforms September 23, 2014. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (the ‘‘Act’’), 1 notice is hereby given that on September 4, 2014, OneChicago, LLC (‘‘OneChicago,’’ ‘‘OCX,’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. OneChicago has also filed this rule change with the Commodity Futures Trading Commission (‘‘CFTC’’). 7 17 1 15 E:\FR\FM\29SEN1.SGM CFR 200.30–3(a)(12). U.S.C. 78s(b)(7). 29SEN1

Agencies

[Federal Register Volume 79, Number 188 (Monday, September 29, 2014)]
[Notices]
[Pages 58393-58395]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23050]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73194; File No. SR-Phlx-2014-61)


Self-Regulatory Organizations; NASDAQ OMX PHLX 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, NASDAQ OMX PHLX LLC (``Phlx'' 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://nasdaqomxphlx.cchwallstreet.com, at

[[Page 58394]]

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 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

[[Page 58395]]

for purposes of the Charter as described above, will capture NASDAQ 
OMX's 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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    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-Phlx-2014-61 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-Phlx-2014-61. 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-Phlx-2014-61, 
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. 2014-23050 Filed 9-26-14; 8:45 am]
BILLING CODE 8011-01-P
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