Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change To Amend the Bylaws and Certificate of Incorporation, 20399-20401 [2017-08700]
Download as PDF
<![CDATA[
srobinson on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices
Commission three copies of all materials
they issue or make generally available to
their participants or other entities with
which they have a significant
relationship, such as pledges, transfer
agents, or self-regulatory organizations.
Such materials include manuals,
notices, circulars, bulletins, lists, and
periodicals. The filings with the
Commission must be made within ten
days after the materials are issued or
made generally available. When the
Commission is not the clearing agency’s
appropriate regulatory agency, the
clearing agency must file one copy of
the material with its appropriate
regulatory agency. The Commission is
responsible for overseeing clearing
agencies and uses the information filed
pursuant to Rule 17a–22 to determine
whether a clearing agency is
implementing procedural or policy
changes. The information filed aides the
Commission in determining whether
such changes are consistent with the
purposes of Section 17A of the
Exchange Act. Also, the Commission
uses the information to determine
whether a clearing agency has changed
its rules without reporting the actual or
prospective change to the Commission
as required under Section 19(b) of the
Exchange Act.
The respondents to Rule 17a–22 are
registered clearing agencies. The
frequency of filings made by clearing
agencies pursuant to Rule 17a–22 varies
but on average there are approximately
200 filings per year per active clearing
agency. There are seven active
registered clearing agencies. The
Commission staff estimates that each
response requires approximately .25
hours (fifteen minutes), which
represents the time it takes for a staff
person at the clearing agency to
properly identify a document subject to
the rule, print and makes copies, and
mail that document to the Commission.
Thus, the total annual burden for all
active clearing agencies is 350 hours (7
clearing agencies multiplied by 200
filings per clearing agency multiplied by
.25 hours) and a total of 50 hours (1400
responses multiplied by .25 hours,
divided by 7 active clearing agencies)
per year are expended by each
respondent to comply with the rule.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following Web site:
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
VerDate Sep<11>2014
20:35 Apr 28, 2017
Jkt 241001
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
100 F Street NE., Washington, DC
20549, or by sending an email to: PRA_
Mailbox@sec.gov. Comments must be
submitted to OMB within 30 days of
this notice.
Dated: April 25, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–08759 Filed 4–28–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–408, OMB Control No.
3235–0464]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street, NE, Washington, DC
20549–2736.
Extension:
Rule 101.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 101 of Regulation M (17 CFR
242.101), under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.).
Rule 101 prohibits distribution
participants from purchasing activities
at specified times during a distribution
of securities. Persons otherwise covered
by this rule may seek to use several
applicable exceptions such as a
calculation of the average daily trading
volume of the securities in distribution,
the maintenance of policies regarding
information barriers between their
affiliates, and the maintenance of a
written policy regarding general
compliance with Regulation M for de
minimus transactions.
There are approximately 1550
respondents per year that require an
aggregate total of 30,218 hours to
comply with this rule. Each respondent
makes an estimated 1 annual response.
Each response takes on average
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
20399
approximately 19.495 hours to
complete. Thus, the total compliance
burden per year is 30,218 burden hours.
The total estimated internal labor
compliance cost for the respondents is
approximately $1,964,170.00, resulting
in an internal cost of compliance for
each respondent per response of
approximately $1267.21 (i.e.,
$1,964,170.00/1550 responses).
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view the background
documentation for this information
collection at the following Web site:
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, c/o Remi Pavlik-Simon, 100 F
Street, NE., Washington, DC 20549 or by
sending an email to: PRA_Mailbox@
sec.gov. Comments must be submitted
within 30 days of this notice.
Dated: April 25, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–08767 Filed 4–28–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80523; File No. SR–CBOE–
2017–017]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving a
Proposed Rule Change To Amend the
Bylaws and Certificate of Incorporation
April 25, 2017.
I. Introduction
On February 22, 2017, Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend its Bylaws 3 and Certificate of
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Amended and Restated Bylaws of Chicago
Board Options Exchange, Incorporated (‘‘Bylaws’’).
2 17
E:\FR\FM\01MYN1.SGM
01MYN1
20400
Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices
Incorporation.4 The Commission
published the proposed rule change for
comment in the Federal Register on
March 13, 2017.5 The Commission
received no comments on the proposal.
This order approves the proposed rule
change.
II. Description of the Proposed Rule
Change
First, the Exchange proposes to
amend its Bylaws relating to the Board
of Directors (‘‘Board’’) size range.
Currently, Section 3.1 of the Bylaws
provides that the Board shall consist of
not less than 12 and not more than 16
directors. The Exchange proposes to
change the Board size range such that
the Board shall consist of no less than
five directors. The Exchange also
proposes to make conforming changes to
its Certificate of Incorporation by
amending subparagraph (b) of Article
Fifth to also provide that the Board shall
consist of not less than five directors
and to eliminate the current referenced
range of 12 to 16 directors.6
Second, the Exchange proposes to
eliminate the Exchange-level
Compensation Committee. CBOE is
proposing to delete Section 4.3 of the
Bylaws, which provides for the CBOE
Compensation Committee, and to delete
a reference to the CBOE Compensation
Committee in Section 4.1(a) of the
Bylaws (which lists the required Board
committees). CBOE also proposes to
eliminate the reference to the CBOE
Compensation Committee in Section
5.11 of the Bylaws, which provides that
officers are entitled to salaries,
compensation or reimbursement as shall
be fixed or allowed from time to time by
the Board unless otherwise delegated to
the Board’s Compensation Committee or
to senior management. The Exchange
justifies eliminating the CBOE
Compensation Committee because its
functions largely are duplicative of
those of the Compensation Committee of
its parent company, CBOE Holdings.7
srobinson on DSK5SPTVN1PROD with NOTICES
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of
Section 6 of the Act,8 and the rules and
regulations thereunder applicable to a
4 See Certificate of Incorporation of Chicago
Board Options Exchange, Incorporated (‘‘Certificate
of Incorporation’’).
5 See Securities Exchange Act Release No. 80167
(March 7, 2017), 82 FR 13527 (‘‘Notice’’).
6 Id. at 13528.
7 Id. The Exchange notes that the composition of
both committees currently are the same. See id. at
13528 n.6.
8 15 U.S.C. 78f.
VerDate Sep<11>2014
20:35 Apr 28, 2017
Jkt 241001
national securities exchange.9 In
particular, the Commission finds that
the proposed rule change is consistent
with Section 6(b)(1) of the Act,10 which
requires a national securities exchange
to be so organized and have the capacity
to carry out the purposes of the Act and
to comply, and to enforce compliance
by its members and persons associated
with its members, with the provisions of
the Act. The Commission also finds that
the proposed rule change is consistent
with Section 6(b)(3) of the Act,11 which
requires that the rules of a national
securities exchange assure a 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
Commission further finds that the
proposed rule change is consistent with
Section 6(b)(5) of the Act,12 which
requires, among other things, that a
national securities exchange have rules
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
In particular, the Commission notes
that the proposal to require at least five
directors for the Board, rather than a
required range of not less than 12 and
not more than 16, is comparable to the
board size requirements stipulated in
the bylaws of at least one other
exchange, which was approved by the
Commission.13 Importantly, the
Exchange represents that it is not
proposing to amend any of the
compositional requirements of the
Board, including its provision relating
to the fair representation of members,
which are set forth in Section 3.2 of the
Bylaws.14 The Commission notes that
the Exchange represents that, while the
9 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
10 15 U.S.C. 78f(b)(1).
11 15 U.S.C. 78f(b)(3).
12 15 U.S.C. 78f(b)(5).
13 See Securities Exchange Act Release No. 69884
(June 27, 2013), 78 FR 40255 (July 3, 2013) (SR–
BYX–2013–013) (providing that the BATS YExchange board of directors will consist of four or
more directors).
14 See Notice, supra note 5, at 13528–29.
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
proposal provides the Board with
greater flexibility to determine the size
of the Board without amending the
Bylaws, it will continue to allow the
Exchange to ensure that the Board is of
adequate size and includes directors
with relevant and diverse experience.15
The Exchange also notes that it has no
current plans to change the size of its
Board outside of the original range of
12–16 directors.16
With regard to the proposal to
eliminate the CBOE Compensation
Committee, the Commission notes that
this change is comparable to the
governing structures of other exchanges,
which the Commission has previously
approved.17 As more fully set forth in
the Notice, the Exchange explains that
the CBOE Compensation Committee’s
responsibilities largely are duplicative
of those of the corresponding
Compensation Committee of CBOE
Holdings, other than to the extent that
the CBOE Compensation Committee
recommends the compensation of
executive officers whose compensation
is not already determined by the CBOE
Holdings Compensation Committee.18
Accordingly, under the proposed rule
change, such functions now will be
performed by the CBOE Holdings
Compensation Committee or as
otherwise provided in the Bylaws.19 The
Commission notes that the Exchange
represents that currently, each of the
executive officers whose compensation
would need to be determined by the
Compensation Committee are officers of
both CBOE and CBOE Holdings, but
should compensation need to be
determined in the future for any CBOE
officer who is not also a CBOE Holdings
officer, the CBOE Board or CBOE senior
management will perform such action
without the use of a compensation
committee, as provided for in Section
5.11 of the Bylaws.20 Further, the
Commission notes that the CBOE
Regulatory Oversight and Compliance
Committee (‘‘ROCC’’) of the Board will
continue to recommend to the Board the
compensation for the Chief Regulatory
Officer and any Deputy Chief Regulatory
15 See
id. at 13529.
id. at 13528 n.3.
17 See e.g., Securities Exchange Act Release No.
60276 (July 9, 2009), 74 FR 34840 (July 17, 2009)
(SR–NASDAQ–2009–042); see also Securities
Exchange Act Release No. 62304 (June 16, 2010), 75
FR 36136 (June 24, 2010) (SR–NYSEArca–2010–31).
18 See Notice, supra note 5, at 13528.
19 Id.
20 See Bylaws Section 5.11 (providing that
‘‘[o]fficers of the Corporation shall be entitled to
such salaries, compensation or reimbursement as
shall be fixed or allowed from time to time by the
Board unless otherwise delegated to the
Compensation Committee of the Board or to
members of senior management’’).
16 See
E:\FR\FM\01MYN1.SGM
01MYN1
Federal Register / Vol. 82, No. 82 / Monday, May 1, 2017 / Notices
Officers, and this process is not be
affected by this proposed rule change.
For the reasons noted above, the
Commission finds that the proposed
rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,21 that the
proposed rule change (SR–CBOE–2017–
017) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–08700 Filed 4–28–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–259, OMB Control No.
3235–0269]
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street, NE.,Washington, DC
20549–2736.
srobinson on DSK5SPTVN1PROD with NOTICES
Extension:
Rule 17f–5.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) requests for extension of the
previously approved collections of
information discussed below.
Rule 17f–5 (17 CFR 270.17f–5) under
the Investment Company Act of 1940
[15 U.S.C. 80a] (the ‘‘Act’’) governs the
custody of the assets of registered
management investment companies
(‘‘funds’’) with custodians outside the
United States. Under rule 17f–5, a fund
or its foreign custody manager (as
delegated by the fund’s board) may
maintain the fund’s foreign assets in the
care of an eligible fund custodian under
certain conditions. If the fund’s board
delegates to a foreign custody manager
authority to place foreign assets, the
fund’s board must find that it is
reasonable to rely on each delegate the
board selects to act as the fund’s foreign
custody manager. The delegate must
agree to provide written reports that
notify the board when the fund’s assets
are placed with a foreign custodian and
21 15
22 17
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:35 Apr 28, 2017
when any material change occurs in the
fund’s custody arrangements. The
delegate must agree to exercise
reasonable care, prudence, and
diligence, or to adhere to a higher
standard of care. When the foreign
custody manager selects an eligible
foreign custodian, it must determine
that the fund’s assets will be subject to
reasonable care if maintained with that
custodian, and that the written contract
that governs each custody arrangement
will provide reasonable care for fund
assets. The contract must contain
certain specified provisions or others
that provide at least equivalent care.
The foreign custody manager must
establish a system to monitor the
performance of the contract and the
appropriateness of continuing to
maintain assets with the eligible foreign
custodian.
The collection of information
requirements in rule 17f–5 are intended
to provide protection for fund assets
maintained with a foreign bank
custodian whose use is not authorized
by statutory provisions that govern fund
custody arrangements,1 and that is not
subject to regulation and examination
by U.S. regulators. The requirement that
the fund board determine that it is
reasonable to rely on each delegate is
intended to ensure that the board
carefully considers each delegate’s
qualifications to perform its
responsibilities. The requirement that
the delegate provide written reports to
the board is intended to ensure that the
delegate notifies the board of important
developments concerning custody
arrangements so that the board may
exercise effective oversight. The
requirement that the delegate agree to
exercise reasonable care is intended to
provide assurances to the fund that the
delegate will properly perform its
duties.
The requirements that the foreign
custody manager determine that fund
assets will be subject to reasonable care
with the eligible foreign custodian and
under the custody contract, and that
each contract contain specified
provisions or equivalent provisions, are
intended to ensure that the delegate has
evaluated the level of care provided by
the custodian, that it weighs the
adequacy of contractual provisions, and
that fund assets are protected by
minimal contractual safeguards. The
requirement that the foreign custody
manager establish a monitoring system
is intended to ensure that the manager
periodically reviews each custody
arrangement and takes appropriate
1 See
Jkt 241001
PO 00000
section 17(f) of the Act. 15 U.S.C. 80a–17(f).
Frm 00089
Fmt 4703
Sfmt 4703
20401
action if developing custody risks may
threaten fund assets.2
Commission staff estimates that each
year, approximately 97 registrants 3
could be required to make an average of
one response per registrant under rule
17f–5, requiring approximately 2.5
hours of board of director time per
response, to make the necessary
findings concerning foreign custody
managers. The total annual burden
associated with these requirements of
the rule is up to approximately 243
hours (97 registrants × 2.5 hours per
registrant). The staff further estimates
that during each year, approximately 15
global custodians 4 are required to make
an average of 4 responses per custodian
concerning the use of foreign custodians
other than depositories. The staff
estimates that each response will take
approximately 270 hours, requiring
approximately 1080 total hours
annually per custodian (270 hours × 4
responses per custodian). The total
annual burden associated with these
requirements of the rule is
approximately 16,200 hours (15 global
custodians × 1080 hours per custodian).
Therefore, the total annual burden of all
collection of information requirements
of rule 17f–5 is estimated to be up to
16,443 hours (243 + 16,200). The total
annual cost of burden hours is estimated
to be $4,522,392 ((243 hours × $4,144/
hour for board of director’s time) +
(16,200 hours × $217/hour for a trust
administrator’s time)).5 Compliance
with the collection of information
requirements of the rule is necessary to
obtain the benefit of relying on the
rule’s permission for funds to maintain
their assets in foreign custodians.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act. The estimate
is not derived from a comprehensive or
even a representative survey or study of
2 The staff believes that subcustodian monitoring
does not involve ‘‘collection of information’’ within
the meaning of the Paperwork Reduction Act of
1995 (44 U.S.C. 3501–3520) (‘‘Paperwork Reduction
Act’’).
3 This figure is an estimate of the number of new
funds each year, based on data reported by funds
for 2014, 2015, and 2016. In practice, not all funds
will use foreign custody managers. The actual figure
therefore may be smaller.
4 This estimate is based on staff research.
5 Based on fund industry representations, the staff
estimated in 2014 that the average cost of board of
director time, for the board as a whole, was $4,000
per hour. Adjusting for inflation, the staff estimates
that the current average cost of board of director
time is approximately $4,144 per hour. The $217/
hour figure for a trust administrator is from
SIFMA’s Management & Professional Earnings in
the Securities Industry 2013, modified by
Commission staff to account for an 1800-hour workyear and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits,
and overhead.
E:\FR\FM\01MYN1.SGM
01MYN1
]]>Agencies
[Federal Register Volume 82, Number 82 (Monday, May 1, 2017)]
[Notices]
[Pages 20399-20401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08700]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80523; File No. SR-CBOE-2017-017]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving a Proposed Rule Change To Amend the
Bylaws and Certificate of Incorporation
April 25, 2017.
I. Introduction
On February 22, 2017, Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend its Bylaws \3\ and
Certificate of
[[Page 20400]]
Incorporation.\4\ The Commission published the proposed rule change for
comment in the Federal Register on March 13, 2017.\5\ The Commission
received no comments on the proposal. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Amended and Restated Bylaws of Chicago Board Options
Exchange, Incorporated (``Bylaws'').
\4\ See Certificate of Incorporation of Chicago Board Options
Exchange, Incorporated (``Certificate of Incorporation'').
\5\ See Securities Exchange Act Release No. 80167 (March 7,
2017), 82 FR 13527 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
First, the Exchange proposes to amend its Bylaws relating to the
Board of Directors (``Board'') size range. Currently, Section 3.1 of
the Bylaws provides that the Board shall consist of not less than 12
and not more than 16 directors. The Exchange proposes to change the
Board size range such that the Board shall consist of no less than five
directors. The Exchange also proposes to make conforming changes to its
Certificate of Incorporation by amending subparagraph (b) of Article
Fifth to also provide that the Board shall consist of not less than
five directors and to eliminate the current referenced range of 12 to
16 directors.\6\
---------------------------------------------------------------------------
\6\ Id. at 13528.
---------------------------------------------------------------------------
Second, the Exchange proposes to eliminate the Exchange-level
Compensation Committee. CBOE is proposing to delete Section 4.3 of the
Bylaws, which provides for the CBOE Compensation Committee, and to
delete a reference to the CBOE Compensation Committee in Section 4.1(a)
of the Bylaws (which lists the required Board committees). CBOE also
proposes to eliminate the reference to the CBOE Compensation Committee
in Section 5.11 of the Bylaws, which provides that officers are
entitled to salaries, compensation or reimbursement as shall be fixed
or allowed from time to time by the Board unless otherwise delegated to
the Board's Compensation Committee or to senior management. The
Exchange justifies eliminating the CBOE Compensation Committee because
its functions largely are duplicative of those of the Compensation
Committee of its parent company, CBOE Holdings.\7\
---------------------------------------------------------------------------
\7\ Id. The Exchange notes that the composition of both
committees currently are the same. See id. at 13528 n.6.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act,\8\
and the rules and regulations thereunder applicable to a national
securities exchange.\9\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(1) of the Act,\10\
which requires a national securities exchange to be so organized and
have the capacity to carry out the purposes of the Act and to comply,
and to enforce compliance by its members and persons associated with
its members, with the provisions of the Act. The Commission also finds
that the proposed rule change is consistent with Section 6(b)(3) of the
Act,\11\ which requires that the rules of a national securities
exchange assure a 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
Commission further finds that the proposed rule change is consistent
with Section 6(b)(5) of the Act,\12\ which requires, among other
things, that a national securities exchange have rules designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\10\ 15 U.S.C. 78f(b)(1).
\11\ 15 U.S.C. 78f(b)(3).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Commission notes that the proposal to require at
least five directors for the Board, rather than a required range of not
less than 12 and not more than 16, is comparable to the board size
requirements stipulated in the bylaws of at least one other exchange,
which was approved by the Commission.\13\ Importantly, the Exchange
represents that it is not proposing to amend any of the compositional
requirements of the Board, including its provision relating to the fair
representation of members, which are set forth in Section 3.2 of the
Bylaws.\14\ The Commission notes that the Exchange represents that,
while the proposal provides the Board with greater flexibility to
determine the size of the Board without amending the Bylaws, it will
continue to allow the Exchange to ensure that the Board is of adequate
size and includes directors with relevant and diverse experience.\15\
The Exchange also notes that it has no current plans to change the size
of its Board outside of the original range of 12-16 directors.\16\
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 69884 (June 27,
2013), 78 FR 40255 (July 3, 2013) (SR-BYX-2013-013) (providing that
the BATS Y-Exchange board of directors will consist of four or more
directors).
\14\ See Notice, supra note 5, at 13528-29.
\15\ See id. at 13529.
\16\ See id. at 13528 n.3.
---------------------------------------------------------------------------
With regard to the proposal to eliminate the CBOE Compensation
Committee, the Commission notes that this change is comparable to the
governing structures of other exchanges, which the Commission has
previously approved.\17\ As more fully set forth in the Notice, the
Exchange explains that the CBOE Compensation Committee's
responsibilities largely are duplicative of those of the corresponding
Compensation Committee of CBOE Holdings, other than to the extent that
the CBOE Compensation Committee recommends the compensation of
executive officers whose compensation is not already determined by the
CBOE Holdings Compensation Committee.\18\ Accordingly, under the
proposed rule change, such functions now will be performed by the CBOE
Holdings Compensation Committee or as otherwise provided in the
Bylaws.\19\ The Commission notes that the Exchange represents that
currently, each of the executive officers whose compensation would need
to be determined by the Compensation Committee are officers of both
CBOE and CBOE Holdings, but should compensation need to be determined
in the future for any CBOE officer who is not also a CBOE Holdings
officer, the CBOE Board or CBOE senior management will perform such
action without the use of a compensation committee, as provided for in
Section 5.11 of the Bylaws.\20\ Further, the Commission notes that the
CBOE Regulatory Oversight and Compliance Committee (``ROCC'') of the
Board will continue to recommend to the Board the compensation for the
Chief Regulatory Officer and any Deputy Chief Regulatory
[[Page 20401]]
Officers, and this process is not be affected by this proposed rule
change.
---------------------------------------------------------------------------
\17\ See e.g., Securities Exchange Act Release No. 60276 (July
9, 2009), 74 FR 34840 (July 17, 2009) (SR-NASDAQ-2009-042); see also
Securities Exchange Act Release No. 62304 (June 16, 2010), 75 FR
36136 (June 24, 2010) (SR-NYSEArca-2010-31).
\18\ See Notice, supra note 5, at 13528.
\19\ Id.
\20\ See Bylaws Section 5.11 (providing that ``[o]fficers of the
Corporation shall be entitled to such salaries, compensation or
reimbursement as shall be fixed or allowed from time to time by the
Board unless otherwise delegated to the Compensation Committee of
the Board or to members of senior management'').
---------------------------------------------------------------------------
For the reasons noted above, the Commission finds that the proposed
rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\21\ that the proposed rule change (SR-CBOE-2017-017) be, and
hereby is, approved.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
---------------------------------------------------------------------------
\22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08700 Filed 4-28-17; 8:45 am]
BILLING CODE 8011-01-P
