13012 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 

7 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Changes are marked to the rule text that appears 

in the electronic manual of Nasdaq [sic] found at 

http://nasdaqomxbx.cchwallstreet.com. 4 15 U.S.C. 78f(b)(10). 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2011–020 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2011–020. This file 

number should be included on the 

subject line if e-mail 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 (http://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 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–CBOE– 

2011–020 and should be submitted on 

or before March 30, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5377 Filed 3–8–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64023; File No. SR–BX– 

2011–012] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Order Granting Accelerated 

Approval of Proposed Rule Change To 

Prohibit Members From Voting 

Uninstructed Shares on Certain 

Matters 

March 3, 2011. 

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 February 

18, 2011, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’ or ‘‘BX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 and is 

approving the proposed rule change on 

an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify 

Rule 2251 to prohibit members from 

voting on the election of a member of 

the board of directors of an issuer 

(except for a vote with respect to the 

uncontested election of a member of the 

board of directors of any investment 

company registered under the 

Investment Company Act of 1940), 

executive compensation, or any other 

significant matter, as determined by the 

Commission, unless instructed by the 

beneficial owner of the shares. The text 

of the proposed rule change is below. 

Proposed new language is in italics; 

proposed deletions are in brackets.3

2251. Forwarding of Proxy and Other 

Issuer-Related Materials 

(a)–(c) No change. 

(d) Notwithstanding the foregoing, an 

Exchange Member that is not the 

beneficial owner of a security registered 

under Section 12 of the Act is prohibited 

from granting a proxy to vote the 

security in connection with a 

shareholder vote on the election of a 

member of the board of directors of an 

issuer (except for a vote with respect to 

the uncontested election of a member of 

the board of directors of any investment 

company registered under the 

Investment Company Act of 1940), 

executive compensation, or any other 

significant matter, as determined by the 

Commission, by rule, unless the 

beneficial owner of the security has 

instructed the member to vote the proxy 

in accordance with the voting 

instructions of the beneficial owner. 

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 

Section 957 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’) adopted 

new Section 6(b)(10) of the Securities 

Exchange Act.4 This new provision 

requires all national securities 

exchanges to adopt rules that prohibit 

their members from voting on the 

election of a member of the board of 

directors of an issuer (except for a vote 

with respect to the uncontested election 

of a member of the board of directors of 

any investment company registered 

under the Investment Company Act of 

1940), executive compensation, or any 

other significant matter, as determined 

by the Commission, unless the member 

receives voting instructions from the 

beneficial owner of the shares. 


Emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 13013 

5The Commission notes that the FINRA rule, and 

by reference BX’s rule, only allows a member to 

follow the rules of another SRO of which it is a 

member, provided that the records of the member 

clearly indicate the procedure it is following. See 

FINRA Rule 2251(c)(2). 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(5) and (10). 

8 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

9 15 U.S.C. 78f(b)(10). 

10 15 U.S.C. 78f(b)(5). 

BX Rule 2251 governs when BX 

members may vote shares held for 

customers by adopting the FINRA rule 

on this point. The FINRA rule, in turn, 

prohibits members from voting any 

uninstructed shares, but also permits 

the member to follow the rules of 

another SRO instead.5 In order to assure 

compliance, in all cases, with newly 

adopted Section 6(b)(10), the Exchange 

proposes to modify Rule 2251 to 

provide that in no event could a 

member vote uninstructed shares on the 

election of a member of the board of 

directors of an issuer (except for a vote 

with respect to the uncontested election 

of a member of the board of directors of 

any investment company registered 

under the Investment Company Act of 

1940), executive compensation, or any 

other significant matter, as determined 

by the Commission, unless instructed by 

the beneficial owner of the shares. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,6

in general and with Sections 6(b)(5) and 

6(b)(10) of the Act,7 in particular. 

Section 6(b)(5) requires that the rules of 

a national securities exchange be 

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 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. The proposed rule change is 

consistent with this requirement in that 

it will protect investors and the public 

interest by adopting the requirements of 

Section 957 of the Dodd-Frank Act. 

Section 6(b)(10) requires that a national 

securities exchange’s rules must 

prohibit any member that is not the 

beneficial owner of a security registered 

under Section 12 from granting a proxy 

to vote the security in connection with 

a shareholder vote on the election of a 

member of the board of directors of an 

issuer (except for a vote with respect to 

the uncontested election of a member of 

the board of directors of any investment 

company registered under the 

Investment Company Act of 1940), 

executive compensation, or any other 

significant matter, as determined by the 

Commission. The proposed rule change 

will adopt the prohibition required by 

Section 6(b)(10) and is therefore 

consistent with that provision. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, is consistent with 

the Act. Comments may be submitted by 

any of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–BX–2011–012 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BX–2011–012. This file 

number should be included on the 

subject line if e-mail 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 (http://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 website 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 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–BX– 

2011–012 and should be submitted on 

or before March 30, 2011. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

In its filing, BX requested that the 

Commission approve the proposal on an 

accelerated basis so that the Exchange 

could immediately comply with the 

requirements imposed by the DoddFrank Act. After careful consideration, 

the Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.8

The Commission believes that the 

proposal is consistent with Section 

6(b)(10) 9 of the Act, which requires that 

national securities exchanges adopt 

rules prohibiting members that are not 

beneficial holders of a security from 

voting uninstructed proxies with respect 

to the election of a member of the board 

of directors of an issuer (except for 

uncontested elections of directors for 

companies registered under the 

Investment Company Act), executive 

compensation, or any other significant 

matter, as determined by the 

Commission by rule. The Commission 

also believes that the proposal is 

consistent with Section 6(b)(5) 10 of the 

Act, which provides, among other 

things, that the rules of the Exchange 

must be designed to promote just and 

equitable principles of trade, 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, and are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Commission believes that the 

proposal is consistent with Section 

6(b)(10) of the Act because it adopts 

revisions that comply with that section. 

As noted in the accompanying Senate 

Report, Section 957, which adopts 


Emcdonald on DSK2BSOYB1PROD with NOTICES
13014 Federal Register / Vol. 76, No. 46 / Wednesday, March 9, 2011 / Notices 

11See S. Rep. No. 111–176, at 136 (2010). 

12The Commission has not, to date, adopted rules 

concerning other significant matters where 

uninstructed broker votes should be prohibited, 

although it may do so in the future. Should the 

Commission adopt such rules, we would expect BX 

to adopt coordinating rules promptly to comply 

with the statute. 

13As the Commission stated in approving NYSE 

rules prohibiting broker voting in the election of 

directors, having those with an economic interest in 

the company vote the shares, rather than the broker 

who has no such economic interest, furthers the 

goal of enfranchising shareholders. See Securities 

Exchange Act Release No. 60215 (July 1, 2009), 74 

FR 33293 (July 10, 2009) (SR–NYSE–2006–92). 

14 15 U.S.C. 78s(b)(2). 

15See Securities Exchange Act Release No. 62992 

(September 24, 2010), 75 FR 60844 (October 1, 

2010) (SR–Nasdaq–2010–114). 

16 15 U.S.C. 78s(b)(2). 

17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

Section 6(b)(10), reflects the principle 

that ‘‘final vote tallies should reflect the 

wishes of the beneficial owners of the 

stock and not be affected by the wishes 

of the broker that holds the shares.’’ 11

The proposed rule change will make BX 

compliant with the new requirements of 

Section 6(b)(10) by specifically 

prohibiting, in BX’s rule language, 

broker-dealers, who are not beneficial 

owners of a security, from voting 

uninstructed shares in connection with 

a shareholder vote on the election of a 

member of the board of directors of an 

issuer (except for a vote with respect to 

the uncontested election of a member of 

the board of directors of any investment 

company registered under the 

Investment Company Act of 1940), 

executive compensation, or any other 

significant matter, as determined by the 

Commission by rule, unless the member 

receives voting instructions from the 

beneficial owner of the shares.12

The Commission believes that the 

proposal is consistent with Section 

6(b)(5) of the Act because the proposal 

will further investor protection and the 

public interest by assuring that 

shareholder votes on the election of the 

board of directors of an issuer (except 

for a vote with respect to the 

uncontested election of a member of the 

board of directors of any investment 

company registered under the 

Investment Company Act of 1940) and 

on executive compensation matters are 

made by those with an economic 

interest in the company, rather than by 

a broker that has no such economic 

interest, which should enhance 

corporate governance and accountability 

to shareholders.13

Based on the above, the Commission 

finds that the BX proposal will further 

the purposes of Sections 6(b)(5) and 

6(b)(10) of the Act because it should 

enhance corporate accountability to 

shareholders while also serving to fulfill 

the Congressional intent in adopting 

Section 6(b)(10) of the Act. 

The Commission also finds good 

cause, pursuant to Section 19(b)(2) of 

the Act,14 for approving the proposed 

rule change prior to the 30th day after 

the date of publication of notice in the 

Federal Register. Section 6(b)(10) of the 

Act, enacted under Section 957 of the 

Dodd-Frank Act, does not provide for a 

transition phase, and requires rules of 

national securities exchanges to prohibit 

broker voting on the election of a 

member of the board of directors of an 

issuer (except for a vote with respect to 

the uncontested election of a member of 

the board of directors of any investment 

company registered under the 

Investment Company Act of 1940), 

executive compensation, or any other 

significant matter, as determined by the 

Commission by rule. The Commission 

believes that good cause exists to grant 

accelerated approval to the Exchange’s 

proposal, because it will conform BX 

Rule 2251 to the requirements of 

Section 6(b)(10) of the Act. Moreover, 

the Commission notes that BX’s 

proposed rule change is identical to 

Nasdaq Rule 2251(d), which was 

previously approved by the Commission 

and for which no comments were 

received.15 Therefore, the Exchange’s 

proposed rule change raises no new 

regulatory issues. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,16 that the 

proposed rule change (SR–BX–2011– 

012) be, and it hereby is, approved on 

an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5303 Filed 3–8–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64024; File No. SR–BX– 

2011–011] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Order Granting Accelerated 

Approval of Proposed Rule Change To 

Adopt Section 16 (Proxy Voting) to 

Chapter III of the BOX Trading Rules 

Concerning Broker Voting 

March 3, 2011. 

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 February 

18, 2011, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons, and is 

approving the proposed rule change on 

an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to add 

Section 16 (Proxy Voting) to Chapter III, 

of the Rules of the Boston Options 

Exchange Group, LLC (‘‘BOX’’) in 

accordance with the provision of 

Section 957 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’). The text of 

the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

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 

self-regulatory organization 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 self-regulatory organization 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 

In accordance with Section 957 of the 

Dodd-Frank Act, the Exchange is 

proposing to adopt Section 16 (Proxy 

Voting) to Chapter III of the BOX 

Trading Rules. As proposed, this section 

will codify a provision to prohibit 

Participants from voting uninstructed 

shares if the matter voted on relates to 

(i) the election of a member of the board 

of directors of an issuer (other than an 


Emcdonald on DSK2BSOYB1PROD with NOTICES