Self-Regulatory Organizations; BOX Exchange LLC; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Article 4 of the Exchange's Bylaws To Establish a Staggered Board, 60717-60719 [2022-21677]
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Federal Register / Vol. 87, No. 193 / Thursday, October 6, 2022 / Notices
Select Service Contract 54 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2022–144, CP2022–148.
FOR FURTHER INFORMATION CONTACT:
Sarah Sullivan,
Attorney, Ethics & Legal Compliance.
[FR Doc. 2022–21673 Filed 10–5–22; 8:45 am]
BILLING CODE 7710–12–P
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gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on Sepember 26,
2022, it filed with the Postal Regulatory
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Priority Mail Express, Priority Mail,
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Select Service Contract 52 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2022–141, CP2022–145.
Sarah Sullivan,
Attorney, Ethics & Legal Compliance.
[FR Doc. 2022–21671 Filed 10–5–22; 8:45 am]
BILLING CODE 7710–12–P
The Postal Service gives
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United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on Sepember 29,
2022, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express, Priority Mail,
First-Class Package Service, and Parcel
Select Service Contract 56 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2022–146, CP2022–150.
SUMMARY:
Sarah Sullivan,
Attorney, Ethics & Legal Compliance.
[FR Doc. 2022–21675 Filed 10–5–22; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail
Express, Priority Mail, First-Class
Package Service, and Parcel Select
Service Negotiated Service Agreement
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
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the list of Negotiated Service
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DATES: Date of required notice: October
6, 2022.
lotter on DSK11XQN23PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:46 Oct 05, 2022
Jkt 259001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95961; File No. SR–BOX–
2022–19]
Self-Regulatory Organizations; BOX
Exchange LLC; Order Approving a
Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Article 4
of the Exchange’s Bylaws To Establish
a Staggered Board
September 30, 2022.
I. Introduction
On June 17, 2022, BOX Exchange LLC
(‘‘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 Article 4 of the Exchange’s
Bylaws (‘‘Bylaws’’) to establish a
staggered board. The proposed rule
change was published for comment in
the Federal Register on July 6, 2022.3
On August 9, 2022, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 On September 28, 2022,
the Exchange filed Amendment No. 1 to
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 95174
(June 29, 2022), 87 FR 40321 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 95446
(August 9, 2022), 87 FR 50142 (August 15, 2022).
The Commission designated October 4, 2022, as the
date by which the Commission shall approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
2 17
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Sfmt 4703
60717
the proposed rule change.6 The
Commission received no comments on
the proposed rule change. This order
approves the proposed rule change, as
modified by Amendment No. 1.
II. Description of the Proposed Rule
Change 7
The Exchange proposes to amend its
Bylaws to establish a staggered Board.
Specifically, the Exchange proposes to
amend Section 4.03 (‘‘Term of
Directors’’) of the Bylaws to provide that
Exchange Directors will be divided into
three classes, designated Class I, Class II
and Class III, which will be as nearly
equal in number and classification as
the total number of such Directors then
serving on the Board permits. As
proposed, each class of Directors will
serve staggered three-year terms, with
the term of office of one class expiring
each year.8
In order to commence such staggered
three-year terms, the Exchange proposes
to amend Section 4.03 of the Bylaws to
provide that Class I Directors will
initially serve a one-year term; Class II
Directors will initially serve a two-year
term; and Class III Directors will
initially serve a three-year term.9
Thereafter, all Directors shall serve
staggered three-year terms, with the
term of office of one class expiring each
year.10
The Exchange further proposes to
amend Section 4.03 of the Bylaws to
provide that, in the case of any new
Director as contemplated by Article IV,
Section 4.02, such Director will be
added to a class, as determined by the
Board at the time of such Director’s
initial election or appointment, and will
6 In Amendment No. 1, the Exchange clarified
how the transition to a staggered board would be
implemented. Because Amendment No. 1 does not
materially alter the substance of the proposed rule
change, Amendment No. 1 is not subject to notice
and comment. Amendment No. 1 is available at:
https://www.sec.gov/comments/sr-box-2022-19/
srbox202219-20144374-309297.pdf (‘‘Amendment
No. 1’’).
7 For a more complete description of the changes
proposed, see Notice, supra note 3.
8 Currently, Directors serve one-year terms, and
all Directors are nominated and begin serving each
year at the annual meeting of Members. See Notice,
supra note 3, at 40322 n.4.
9 According to the Exchange, the 2022 annual
meeting of the Members of the Exchange has not yet
occurred. If the proposed rule change is approved
before the 2022 annual meeting of Members, Class
I Directors, Class II Directors and Class III Directors
would each be nominated and selected in 2022 and
the initial term of Class I Directors would end at
the 2023 annual meeting of Members, and a new
slate of Class I Directors would be nominated and
selected in 2023 in accordance with the Bylaws. See
Amendment 1, supra note 6, at 2. In this
circumstance, the term of Class II and Class III
directors would end at the Members annual meeting
in 2024 and 2025, respectively. See id. at 2 n.5.
10 See Amendment 1, supra note 6 at 2.
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Federal Register / Vol. 87, No. 193 / Thursday, October 6, 2022 / Notices
have an initial term expiring at the same
time as the term of the class to which
such Director has been added. In
making such determinations, the Board
will balance the categories of Directors
(e.g., Non-Industry, Public, Participant,
and Facility Directors) among the
classes to the extent possible. Pursuant
to Section 4.02 of the Bylaws, the total
number of Directors is determined by
the Board and must be between five and
eleven directors. Therefore, the
Exchange proposes this provision
specify that if a new Director is added
to the Board, the term of that Director
will correspond to the class to which
that Director is assigned at the time of
election or appointment.11 In addition,
the Exchange proposes to amend
Section 4.02 of the Bylaws to specify
that no decrease in the number of
Directors will have the effect of
shortening the term of any incumbent
Director.12
The Exchange also proposes to make
certain conforming edits to other
provisions of the Bylaws to clarify the
responsibilities of the Board’s
Nominating Committee and to address
Director vacancies that may arise. For
example, the Exchange proposes to
amend Section 4.06 (‘‘Nominating
Committee’’) of the Bylaws to specify
that the Board’s Nominating Committee
will nominate individuals in advance of
each annual meeting of the Members to
begin service as Directors ‘‘for the
applicable class term then expiring (i.e.,
Class I, Class II or Class III)’’ at such
annual meeting of the Members.13 The
Exchange also proposes to amend
Section 4.06(d) (‘‘Selection of
Directors’’) of the Bylaws to provide
that, prior to the first annual meeting of
the Members following adoption of the
amended Section 4.06(d), each Director
position set forth in Section 4.02 shall
be designated, as determined by the
Board, to one of the three classes for
nomination by the Nominating
Committee to begin service at such
annual meeting. Thereafter, prior to
each annual meeting of the Members,
the Nominating Committee will select
nominees for each Director position ‘‘for
the class with its term then expiring’’ to
11 See
Notice, supra note 3, at 40322.
example, the Exchange notes that it could
not determine to reduce the size of the Board by
eliminating the Director seat for a Director who had
two years of his or her term remaining. See Notice,
supra note 3, at 40322.
13 Similarly, the Exchange also proposes to amend
the final sentence of Section 4.06 to specify that at
each annual meeting of the Members, the
individuals selected ‘‘for the applicable class term’’
pursuant to Section 4.06 of the Bylaws would begin
serving as Directors. See Notice, supra note 3, at
40322 n.7.
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12 For
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17:46 Oct 05, 2022
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begin service as Directors.14 Finally, the
Exchange proposes to amend Section
4.10 (‘‘Vacancies’’) to provide that a
Director who is elected by the Board to
fill a vacancy (e.g., as a result of the
death, resignation, removal, or increase
in the authorized number of Directors),
will serve for the remainder of the
applicable class term. For example,
according to the Exchange, if a Director
in Class II resigns, the Director elected
to fill the vacancy would serve for the
remainder of the term of Class II
Directors.15
The Exchange notes that it is not
proposing any change to the
composition of the Board, such as the
requirement that 20% of Directors must
be a Participant Directors or that a
majority of Directors must be NonIndustry Directors.16 Further, all
nominations and elections of Directors
under the proposed staggered Board
structure must be consistent with the
existing composition requirements in
the Bylaws and Directors may continue
to serve consecutive terms.17
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No.1, is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.18 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,19 which requires,
among other things, that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
14 The Exchange proposes to amend Section
4.06(d)(i) to include the same conforming edits to
specify that the Nominating Committee will meet
for the purposes of selecting proposed Director
nominees ‘‘for the class then expiring’’ and that the
Nominating Committee will provide the names of
all proposed Director nominees ‘‘for the class then
expiring’’ to the Exchange’s Secretary not later than
sixty days prior to the date of the annual meeting
of the Members. See Notice, supra note 3, at 40322
n.8.
15 With respect to a vacancy arising from an
increase in the number of authorized Directors,
pursuant to proposed Section 4.03 of the Bylaws,
the Director filling such vacancy would be assigned
to a class by the Board and would have an initial
term expiring at the same time as the term of the
class to which such Director has been added. See
Notice, supra note 3, at 40322 n.9.
16 See Notice, supra note 3, at 40323; Section 4.02
of the Bylaws.
17 See Notice, supra note 3, at 40323; Section 4.03
of the Bylaws.
18 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).
19 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
in facilitating transactions in securities,
to remove impediments to and perfect
the mechanism of a free and open
market and a national market system,
and, in general, to protect investors and
the public interest. The Commission
also finds that the proposed rule change,
as amended, is consistent with Section
6(b)(3) of the Exchange Act,20 which,
among other things, requires that the
rules of a national securities exchange
ensure fair representation of its
members in the selection of its directors
and administration of its affairs.
As discussed above, the Exchange
proposes to amend its Bylaws to
establish a staggered Board. The
Commission believes that, by dividing
Directors into three classes with only
one class selected by the Nominating
Committee each year to serve a threeyear term, a staggered Board may
improve the function of the Board by
ensuring continuity and preserving
institutional knowledge among its
Directors. As the Exchange notes,
retaining a majority of the incumbent
Directors year-to-year may facilitate an
orderly transition to new leadership.
Moreover, according to the Exchange,
the existing composition requirements
related to Directors would remain the
same under the proposed rule change
and categories of Directors shall be
balanced among the classes. Further, all
Directors would be subject to the same
requirements under the proposed rule
change (i.e., all Directors, regardless of
type, would be divided into one of three
classes, each serving three-year terms).
The Commission also notes that the
proposed staggered Board structure is
substantially similar to the staggered
board structures of at least two
exchanges 21 and therefore poses no
novel regulatory issues. Finally, the
Commission believes that the proposed
conforming changes to the Bylaws are
consistent with the Act because they
serve to clarify the responsibilities of
the Board’s Nominating Committee and
to address Director vacancies that may
arise.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,22 that the
proposed rule change (SR–BOX–2022–
20 15
U.S.C. 78f(b)(3).
Amended and Restated By-Laws of Miami
International Securities Exchange LLC (‘‘MIAX’’),
Section 2.3(b) and First Amended and Restated
Bylaws of Long-Term Stock Exchange, Inc.
(‘‘LTSE’’), Section 3.3(b). The bylaws of The
Options Clearing Corporation (‘‘OCC’’), another selfregulatory organization, also provide for a similar
staggered board consisting of three classes. See OCC
By-Laws, Article III, Section 3.
22 15 U.S.C. 78s(b)(2).
21 See
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Federal Register / Vol. 87, No. 193 / Thursday, October 6, 2022 / Notices
19), as modified by Amendment No. 1,
be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–21677 Filed 10–5–22; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34721]
Notice of Applications for
Deregistration under Section 8(f) of the
Investment Company Act of 1940
BILLING CODE 8011–01–P
September 30, 2022.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
AGENCY:
SECURITIES AND EXCHANGE
COMMISSION
ACTION:
Notice.
Sunshine Act Meetings
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission Small Business
Capital Formation Advisory Committee
will hold a public meeting on Thursday,
October 13, 2022, at the Commission’s
headquarters and via videoconference.
TIME AND DATE:
The meeting will be conducted
by remote means (videoconference) and
at the Commission’s headquarters, 100 F
Street NE Washington, DC 20549, in
Multi-Purpose Room LL–006. Members
of the public may watch the webcast of
the meeting on the Commission’s
website at www.sec.gov.
PLACE:
The meeting will begin at 10:00
a.m. (ET) and will be open to the public
via webcast on the Commission’s
website at www.sec.gov. This Sunshine
Act notice is being issued because a
majority of the Commission may attend
the meeting.
STATUS:
The agenda
for the meeting includes matters relating
to rules and regulations affecting small
and emerging businesses and their
investors under the federal securities
laws.
MATTERS TO BE CONSIDERED:
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Dated: October 4, 2022.
J. Matthew DeLesDernier,
Deputy Secretary.
lotter on DSK11XQN23PROD with NOTICES1
FOR FURTHER INFORMATION CONTACT:
BILLING CODE 8011–01–P
Shawn Davis, Assistant Director, at
(202) 551–6413 or Chief Counsel’s
Office at (202) 551–6821; SEC, Division
of Investment Management, Chief
Counsel’s Office, 100 F Street, NE,
Washington, DC 20549–8010.
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:46 Oct 05, 2022
The Commission:
Secretarys-Office@sec.gov.
ADDRESSES:
[FR Doc. 2022–21909 Filed 10–4–22; 4:15 pm]
23 17
The following is a notice of
applications for deregistration under
section 8(f) of the Investment Company
Act of 1940 for the month of September
2022. A copy of each application may be
obtained via the Commission’s website
by searching for the applicable file
number listed below, or for an applicant
using the Company name search field,
on the SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090. An order
granting each application will be issued
unless the SEC orders a hearing.
Interested persons may request a
hearing on any application by emailing
the SEC’s Secretary at SecretarysOffice@sec.gov and serving the relevant
applicant with a copy of the request by
email, if an email address is listed for
the relevant applicant below, or
personally or by mail, if a physical
address is listed for the relevant
applicant below. Hearing requests
should be received by the SEC by 5:30
p.m. on October 25, 2022, and should be
accompanied by proof of service on
applicants, in the form of an affidavit or,
for lawyers, a certificate of service.
Pursuant to Rule 0–5 under the Act,
hearing requests should state the nature
of the writer’s interest, any facts bearing
upon the desirability of a hearing on the
matter, the reason for the request, and
the issues contested. Persons who wish
to be notified of a hearing may request
notification by writing to the
Commission’s Secretary at SecretarysOffice@sec.gov.
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60719
Broadstone Real Estate Access Fund
[File No. 811–23360]
Summary: Applicant, a closed-end
investment company, seeks an order
declaring that it has ceased to be an
investment company. On April 22,
2021, August 25, 2021, November 3,
2021 and May 20, 2022, applicant made
liquidating distributions to its
shareholders based on net asset value.
Expenses of $238,121 incurred in
connection with the liquidation were
paid by the applicant.
Filing Date: The application was filed
on September 2, 2022.
Applicant’s Address:
Alexander.Karampatsos@dechert.com.
Cohen & Steers MLP Income & Energy
Opportunity Fund, Inc. [File No. 811–
22780]
Summary: Applicant, a closed-end
investment company, seeks an order
declaring that it has ceased to be an
investment company. On August 6,
2021, applicant made a final liquidating
distribution to its shareholders based on
net asset value. Expenses of $194,560
incurred in connection with the
liquidation were paid by the applicant.
Filing Dates: The application was
filed on July 14, 2022, and amended on
September 15, 2022.
Applicant’s Address: ddevivo@
cohenandsteers.com.
Delaware Life NY Variable Account J
[File No. 811–21937]
Summary: Applicant, a unit
investment trust, seeks an order
declaring that it has ceased to be an
investment company. Applicant has
never made a public offering of its
securities and does not propose to make
a public offering or engage in business
of any kind.
Filing Dates: The application was
filed on July 22, 2022, and amended on
September 20, 2022.
Applicant’s Address: maura.murphy@
delawarelife.com.
Delaware Life NY Variable Account N
[File No. 811–22013]
Summary: Applicant, a unit
investment trust, seeks an order
declaring that it has ceased to be an
investment company. Applicant has
never made a public offering of its
securities and does not propose to make
a public offering or engage in business
of any kind.
Filing Dates: The application was
filed on July 22, 2022, and amended on
September 20, 2022.
Applicant’s Address: maura.murphy@
delawarelife.com.
E:\FR\FM\06OCN1.SGM
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]]>Agencies
[Federal Register Volume 87, Number 193 (Thursday, October 6, 2022)]
[Notices]
[Pages 60717-60719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21677]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95961; File No. SR-BOX-2022-19]
Self-Regulatory Organizations; BOX Exchange LLC; Order Approving
a Proposed Rule Change, as Modified by Amendment No. 1, To Amend
Article 4 of the Exchange's Bylaws To Establish a Staggered Board
September 30, 2022.
I. Introduction
On June 17, 2022, BOX Exchange LLC (``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 Article 4
of the Exchange's Bylaws (``Bylaws'') to establish a staggered board.
The proposed rule change was published for comment in the Federal
Register on July 6, 2022.\3\ On August 9, 2022, pursuant to Section
19(b)(2) of the Act,\4\ the Commission designated a longer period
within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ On September 28, 2022, the
Exchange filed Amendment No. 1 to the proposed rule change.\6\ The
Commission received no comments on the proposed rule change. This order
approves the proposed rule change, as modified by Amendment No. 1.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 95174 (June 29,
2022), 87 FR 40321 (``Notice'').
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 95446 (August 9,
2022), 87 FR 50142 (August 15, 2022). The Commission designated
October 4, 2022, as the date by which the Commission shall approve
or disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change.
\6\ In Amendment No. 1, the Exchange clarified how the
transition to a staggered board would be implemented. Because
Amendment No. 1 does not materially alter the substance of the
proposed rule change, Amendment No. 1 is not subject to notice and
comment. Amendment No. 1 is available at: https://www.sec.gov/comments/sr-box-2022-19/srbox202219-20144374-309297.pdf (``Amendment
No. 1'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change 7
---------------------------------------------------------------------------
\7\ For a more complete description of the changes proposed, see
Notice, supra note 3.
---------------------------------------------------------------------------
The Exchange proposes to amend its Bylaws to establish a staggered
Board. Specifically, the Exchange proposes to amend Section 4.03
(``Term of Directors'') of the Bylaws to provide that Exchange
Directors will be divided into three classes, designated Class I, Class
II and Class III, which will be as nearly equal in number and
classification as the total number of such Directors then serving on
the Board permits. As proposed, each class of Directors will serve
staggered three-year terms, with the term of office of one class
expiring each year.\8\
---------------------------------------------------------------------------
\8\ Currently, Directors serve one-year terms, and all Directors
are nominated and begin serving each year at the annual meeting of
Members. See Notice, supra note 3, at 40322 n.4.
---------------------------------------------------------------------------
In order to commence such staggered three-year terms, the Exchange
proposes to amend Section 4.03 of the Bylaws to provide that Class I
Directors will initially serve a one-year term; Class II Directors will
initially serve a two-year term; and Class III Directors will initially
serve a three-year term.\9\ Thereafter, all Directors shall serve
staggered three-year terms, with the term of office of one class
expiring each year.\10\
---------------------------------------------------------------------------
\9\ According to the Exchange, the 2022 annual meeting of the
Members of the Exchange has not yet occurred. If the proposed rule
change is approved before the 2022 annual meeting of Members, Class
I Directors, Class II Directors and Class III Directors would each
be nominated and selected in 2022 and the initial term of Class I
Directors would end at the 2023 annual meeting of Members, and a new
slate of Class I Directors would be nominated and selected in 2023
in accordance with the Bylaws. See Amendment 1, supra note 6, at 2.
In this circumstance, the term of Class II and Class III directors
would end at the Members annual meeting in 2024 and 2025,
respectively. See id. at 2 n.5.
\10\ See Amendment 1, supra note 6 at 2.
---------------------------------------------------------------------------
The Exchange further proposes to amend Section 4.03 of the Bylaws
to provide that, in the case of any new Director as contemplated by
Article IV, Section 4.02, such Director will be added to a class, as
determined by the Board at the time of such Director's initial election
or appointment, and will
[[Page 60718]]
have an initial term expiring at the same time as the term of the class
to which such Director has been added. In making such determinations,
the Board will balance the categories of Directors (e.g., Non-Industry,
Public, Participant, and Facility Directors) among the classes to the
extent possible. Pursuant to Section 4.02 of the Bylaws, the total
number of Directors is determined by the Board and must be between five
and eleven directors. Therefore, the Exchange proposes this provision
specify that if a new Director is added to the Board, the term of that
Director will correspond to the class to which that Director is
assigned at the time of election or appointment.\11\ In addition, the
Exchange proposes to amend Section 4.02 of the Bylaws to specify that
no decrease in the number of Directors will have the effect of
shortening the term of any incumbent Director.\12\
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\11\ See Notice, supra note 3, at 40322.
\12\ For example, the Exchange notes that it could not determine
to reduce the size of the Board by eliminating the Director seat for
a Director who had two years of his or her term remaining. See
Notice, supra note 3, at 40322.
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The Exchange also proposes to make certain conforming edits to
other provisions of the Bylaws to clarify the responsibilities of the
Board's Nominating Committee and to address Director vacancies that may
arise. For example, the Exchange proposes to amend Section 4.06
(``Nominating Committee'') of the Bylaws to specify that the Board's
Nominating Committee will nominate individuals in advance of each
annual meeting of the Members to begin service as Directors ``for the
applicable class term then expiring (i.e., Class I, Class II or Class
III)'' at such annual meeting of the Members.\13\ The Exchange also
proposes to amend Section 4.06(d) (``Selection of Directors'') of the
Bylaws to provide that, prior to the first annual meeting of the
Members following adoption of the amended Section 4.06(d), each
Director position set forth in Section 4.02 shall be designated, as
determined by the Board, to one of the three classes for nomination by
the Nominating Committee to begin service at such annual meeting.
Thereafter, prior to each annual meeting of the Members, the Nominating
Committee will select nominees for each Director position ``for the
class with its term then expiring'' to begin service as Directors.\14\
Finally, the Exchange proposes to amend Section 4.10 (``Vacancies'') to
provide that a Director who is elected by the Board to fill a vacancy
(e.g., as a result of the death, resignation, removal, or increase in
the authorized number of Directors), will serve for the remainder of
the applicable class term. For example, according to the Exchange, if a
Director in Class II resigns, the Director elected to fill the vacancy
would serve for the remainder of the term of Class II Directors.\15\
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\13\ Similarly, the Exchange also proposes to amend the final
sentence of Section 4.06 to specify that at each annual meeting of
the Members, the individuals selected ``for the applicable class
term'' pursuant to Section 4.06 of the Bylaws would begin serving as
Directors. See Notice, supra note 3, at 40322 n.7.
\14\ The Exchange proposes to amend Section 4.06(d)(i) to
include the same conforming edits to specify that the Nominating
Committee will meet for the purposes of selecting proposed Director
nominees ``for the class then expiring'' and that the Nominating
Committee will provide the names of all proposed Director nominees
``for the class then expiring'' to the Exchange's Secretary not
later than sixty days prior to the date of the annual meeting of the
Members. See Notice, supra note 3, at 40322 n.8.
\15\ With respect to a vacancy arising from an increase in the
number of authorized Directors, pursuant to proposed Section 4.03 of
the Bylaws, the Director filling such vacancy would be assigned to a
class by the Board and would have an initial term expiring at the
same time as the term of the class to which such Director has been
added. See Notice, supra note 3, at 40322 n.9.
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The Exchange notes that it is not proposing any change to the
composition of the Board, such as the requirement that 20% of Directors
must be a Participant Directors or that a majority of Directors must be
Non-Industry Directors.\16\ Further, all nominations and elections of
Directors under the proposed staggered Board structure must be
consistent with the existing composition requirements in the Bylaws and
Directors may continue to serve consecutive terms.\17\
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\16\ See Notice, supra note 3, at 40323; Section 4.02 of the
Bylaws.
\17\ See Notice, supra note 3, at 40323; Section 4.03 of the
Bylaws.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No.1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\18\ In particular, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\19\ which requires, among other things,
that the rules of a national securities exchange be designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. The Commission also finds
that the proposed rule change, as amended, is consistent with Section
6(b)(3) of the Exchange Act,\20\ which, among other things, requires
that the rules of a national securities exchange ensure fair
representation of its members in the selection of its directors and
administration of its affairs.
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\18\ 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).
\19\ 15 U.S.C. 78f(b)(5).
\20\ 15 U.S.C. 78f(b)(3).
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As discussed above, the Exchange proposes to amend its Bylaws to
establish a staggered Board. The Commission believes that, by dividing
Directors into three classes with only one class selected by the
Nominating Committee each year to serve a three-year term, a staggered
Board may improve the function of the Board by ensuring continuity and
preserving institutional knowledge among its Directors. As the Exchange
notes, retaining a majority of the incumbent Directors year-to-year may
facilitate an orderly transition to new leadership. Moreover, according
to the Exchange, the existing composition requirements related to
Directors would remain the same under the proposed rule change and
categories of Directors shall be balanced among the classes. Further,
all Directors would be subject to the same requirements under the
proposed rule change (i.e., all Directors, regardless of type, would be
divided into one of three classes, each serving three-year terms). The
Commission also notes that the proposed staggered Board structure is
substantially similar to the staggered board structures of at least two
exchanges \21\ and therefore poses no novel regulatory issues. Finally,
the Commission believes that the proposed conforming changes to the
Bylaws are consistent with the Act because they serve to clarify the
responsibilities of the Board's Nominating Committee and to address
Director vacancies that may arise.
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\21\ See Amended and Restated By-Laws of Miami International
Securities Exchange LLC (``MIAX''), Section 2.3(b) and First Amended
and Restated Bylaws of Long-Term Stock Exchange, Inc. (``LTSE''),
Section 3.3(b). The bylaws of The Options Clearing Corporation
(``OCC''), another self-regulatory organization, also provide for a
similar staggered board consisting of three classes. See OCC By-
Laws, Article III, Section 3.
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\22\ that the proposed rule change (SR-BOX-2022-
[[Page 60719]]
19), as modified by Amendment No. 1, be, and hereby is, approved.
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\22\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21677 Filed 10-5-22; 8:45 am]
BILLING CODE 8011-01-P
