Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 42721 

9CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4(f)(6). 

3The Commission has modified the text of the 

summaries prepared by DTC. 

4Securities Exchange Act Release No. 59858 (May 

4, 2009), 74 FR 22191 (May 12, 2009) (SR– 

NASDAQ–2009–039); Securities Exchange Act 

Release No. 60183 (June 26, 2009), 74 FR 32207 

(July 7, 2009) (SR–NASDAQ–2009–039). 

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 inspection and copying 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 CBOE. 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–2009–059 and 

should be submitted on or before 

September 14, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20195 Filed 8–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60494; File No. SR–SCCP– 

2009–03] 

Self-Regulatory Organizations; Stock 

Clearing Corporation of Philadelphia; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Related to an Amendment to 

the By-Laws of The NASDAQ OMX 

Group, Inc. 

August 12, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

July 22, 2009, Stock Clearing 

Corporation of Philadelphia (‘‘SCCP’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’) 

the proposed rule change described in 

Items I and II below, which items have 

been prepared primarily by SCCP. SCCP 

filed the proposed rule change under 

Rule 19b–4(f)(6) under the Act 2 so that 

the proposal was effective upon filing 

with the Commission. The Commission 

is publishing this notice to solicit 

comments on the rule change from 

interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

SCCP is filing this proposed rule 

change with regard to proposed changes 

to the by-laws of its parent corporation, 

The NASDAQ OMX Group, Inc. 

(‘‘NASDAQ OMX’’). The proposed rule 

change will be implemented as soon as 

practicable following submission of this 

filing. The text of the proposed rule 

change is available at http:// 

nasdaqomxbx.cchwallstreet.com, at 

SCCP’s principal office, 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, 

SCCP 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. SCCP has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ OMX made certain 

amendments to its by-laws to update its 

by-laws and to make improvements in 

its governance. In SR–NASDAQ–2009– 

039, The NASDAQ Stock Market LLC 

(‘‘NASDAQ Exchange’’) sought and 

received Commission approval to adopt 

these by-law changes as part of the rules 

of the NASDAQ Exchange.4 SCCP is 

submitting this filing to adopt the same 

by-law changes as rules of SCCP. 

The proposed changes to the by-laws 

are as follows: 

• Article I is being amended to reflect 

the recent name changes of the 

Philadelphia Stock Exchange and the 

Boston Stock Exchange to NASDAQ 

OMX PHLX, Inc. and NASDAQ OMX 

BX, Inc., respectively. 

• Article III is being amended to 

modify the procedures governing 

proposals by stockholders, including 

proposals by stockholders to nominate 

directors. Specifically, the amendment 

will require a stockholder making a 

proposal to supply more complete 

information about the stockholder’s 

background, including a description of 

any agreement, arrangement, or 

understanding between the stockholder, 

the beneficial owner of the stock, and 

any other persons acting in concert with 

them; a description of any agreement, 

arrangement or understanding 

(including any derivative or short 

positions, profit interests, options, 

warrants, convertible securities, stock 

appreciation or similar rights, hedging 

transactions, and borrowed or loaned 

shares), the effect or intent of which is 

to mitigate loss to, manage risk or 

benefit of share price changes for, or 

increase or decrease the voting power 

of, such stockholder or such beneficial 

owner, with respect to shares of stock of 

NASDAQ OMX; and any other 

information regarding the stockholder 

and beneficial owner that would be 

required to be disclosed in a proxy 

statement under Section 14(a) of the 

Act. These changes are designed to 

provide the NASDAQ OMX Board of 

Directors and its stockholders with 

greater insight into the identity and 

intentions of persons presenting 

stockholder proposals to allow more 

thorough consideration of the merits of 

such proposals. These requirements are 

deemed satisfied, however, in the case 

of a proposal that is validly submitted 

under the rules and regulations 

promulgated under the Act (i.e. , SEC 

Rule 14a–8) and included in NASDAQ 

OMX’s proxy. However, compliance 

with the By-Laws or with SEC Rule 14a– 

8 provides the exclusive means for 

stockholders to make proposals. The 

amendments also provide that a 

representative of a stockholder qualified 

to appear at an annual meeting must be 

an officer, manager, or partner of the 

stockholder or must have written 

authorization from the stockholder. The 

amendments also make several minor 

clarifying changes to the text of Article 

III. 

• Article IV is being amended to state 

explicitly that the Management 

Compensation Committee and the Audit 

Committee must be composed 

exclusively of independent directors 

within the meaning of the rules of the 

NASDAQ Stock Market that govern 

NASDAQ OMX’s listing (and in the case 

of the Audit Committee, Section 10A of 


erowe on DSK5CLS3C1PROD with NOTICES
42722 Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 

5 15 U.S.C. 78j–1(m). Notably, ‘‘Staff Directors,’’ 

who are officers of NASDAQ OMX serving on the 

NASDAQ OMX Board, are not considered 

independent under these provisions, and are 

therefore ineligible for service on the Audit 

Committee or Management Compensation 

Committee or, as discussed below, the newly 

constituted Nominating Committee. 

6NASDAQ Exchange Rule 4350(c)(3). 

7The existing reference to ‘‘agents’’ in the 

sentence is proposed to be deleted. 

the Act).5 Although NASDAQ OMX 

adheres scrupulously to the 

independence requirements imposed by 

the NASDAQ Stock Market and the Act, 

it believes that these requirements 

should be explicitly stated in the ByLaws as well. NASDAQ OMX is also 

removing language making its Chief 

Executive Officer an ex-officio, nonvoting member of the Management 

Compensation Committee. In this 

regard, listing standards of the NASDAQ 

Stock Market require management 

compensation determinations regarding 

executive officers to be made by vote of 

the Board’s independent directors or by 

vote of or upon the recommendation of 

a committee composed solely of 

independent directors.6 NASDAQ OMX 

has satisfied this requirement by 

submitting compensation decisions to 

the vote of all of NASDAQ OMX’s 

independent directors, but removing the 

Chief Executive Officer as an ex-officio 

director will provide it with flexibility 

to act upon the vote or upon the 

recommendation of the committee. 

• Currently, NASDAQ OMX’s 

Nominating Committee is required to be 

composed of persons who are not 

directors or who are directors not 

standing for reelection. This 

compositional requirement, which 

NASDAQ OMX’s predecessor, The 

Nasdaq Stock Market, Inc., originally 

adopted while it was a wholly owned 

subsidiary of the National Association 

of Securities Dealers (‘‘NASD’’), is 

highly unusual for a public company 

such as NASDAQ OMX. In light of 

NASDAQ OMX’s continued evolution 

into a public company with global 

operations, NASDAQ OMX believes that 

it is appropriate to adopt a standard 

nominating committee structure in 

which the committee is composed 

exclusively of independent directors. 

Under the amended bylaw, the 

nominating committee shall consist of 

four or five directors, each of whom 

shall be an independent director within 

the meaning the rules of the NASDAQ 

Exchange. In addition, the number of 

Non-Industry Directors (i.e., Directors 

without material ties to the securities 

industry) must equal or exceed the 

number of Industry Directors, and at 

least two members of the committee 

must be Public Directors (i.e., directors 

who have no material business 

relationship with a broker or dealer, 

NASDAQ OMX, or its affiliates, or 

FINRA). 

• Article VIII is being amended to 

provide that NASDAQ OMX shall 

provide indemnification against 

liability, advancement of expenses, and 

the power to purchase and maintain 

insurance on behalf of persons serving 

as a director, officer, or employee of any 

wholly owned subsidiary of NASDAQ 

OMX to the same extent as 

indemnification, advancement of 

expenses, and the power to maintain 

insurance is provided for directors, 

officers, or employees of NASDAQ 

OMX. Thus, for example, a director of 

one of NASDAQ OMX’s U.S. or Nordic 

exchanges would be entitled to 

indemnification (and advancement of 

expenses) by NASDAQ OMX if made a 

party to a lawsuit to the same extent as 

a director of NASDAQ OMX. Similarly, 

the discretionary authority of NASDAQ 

OMX under Section 8.1(c) of the ByLaws to provide indemnification to 

persons serving as an agent of NASDAQ 

OMX is being extended to persons 

serving as an agent of any wholly owned 

subsidiary of NASDAQ OMX. Article 

VIII is also being amended to clarify that 

any repeal, modification, or amendment 

of, or adoption of any provision 

inconsistent with the indemnification 

and advancement of expenses provided 

for in Article VIII will not adversely 

affect the right of any person covered by 

the provision if the act or omission that 

any proceeding arises out of or is related 

to had occurred prior to the time for the 

repeal, amendment, adoption, or 

modification. 

• Article IX is being amended to 

modernize the language of the 

provisions dealing with capital stock to 

reflect possible participation in the 

Direct Registration System (‘‘DRS’’). 

DRS provides for the electronic 

registration of eligible securities in an 

investor’s name on the books of the 

transfer agent or corporation eliminating 

the need for physical stock certificates 

or shares held in book-entry form by the 

beneficial owner’s broker. Although 

under the Delaware General Corporation 

Law, NASDAQ OMX can authorize 

participation in the program through a 

resolution, the various amendments to 

Article IX track more closely the 

language of Section 158 of the Delaware 

General Corporation Law, as recently 

revised, to explicitly reference the 

possibility of capital stock in 

uncertificated form. The amendments, 

however, do not require NASDAQ OMX 

to participate in DRS or to eliminate 

stock certificates. 

• Article XII is being amended to 

conform certain of its provisions more 

closely to corresponding provisions in 

the Amended and Restated By-Laws of 

NYSE Euronext (‘‘NYSE Euronext ByLaws’’). Article XII contains provisions 

that govern the relationship between 

NASDAQ OMX and each of its 

subsidiaries that is a self-regulatory 

organization. First, the article requires 

NASDAQ OMX’s ‘‘[d]irectors, officers, 

employees, and agents’’ (emphasis 

added) to give due regard to the 

preservation of the independence of 

each self-regulatory subsidiary, not to 

take any actions that would interfere 

with each self-regulatory subsidiary’s 

regulatory functions, to cooperate with 

the Commission, to consent to U.S. 

jurisdiction, and to consent in writing to 

the applicability of these provisions. 

Corresponding provisions of Articles 

VII, VIII, and IX of the NYSE Euronext 

By-Laws, however, do not include the 

ambiguous and potentially expansive 

word ‘‘agent.’’ NASDAQ OMX is 

concerned that a broad construction of 

the term to include not only parties with 

which it establishes an explicit 

contractual agency relationship but also 

other service providers such as law 

firms and financial advisors that may 

act on NASDAQ OMX’s behalf on 

certain occasions may deter some 

parties from providing services to 

NASDAQ OMX. However, in lieu of the 

requirement to obtain specific consents 

from agents, NASDAQ OMX proposes to 

adopt a provision from the NYSE 

Euronext By-Laws providing that 

NASDAQ OMX shall comply with the 

U.S. Federal securities laws and the 

rules and regulations thereunder and 

shall cooperate with the Commission 

and the self-regulatory subsidiaries 

pursuant to and to the extent of their 

respective regulatory authority and shall 

take reasonable steps necessary to cause 

its agents to cooperate with the 

Commission and where applicable with 

the self-regulatory subsidiaries pursuant 

to their regulatory authority. Second, 

Article XII provides that NASDAQ OMX 

and its officers, directors, and 

employees 7 agree to maintain an agent 

for service of process in the U.S. By 

contrast, Article VII of the NYSE 

Euronext By-Laws includes a statement 

that officers, directors, and employees 

shall be deemed to agree that the 

Corporation may serve as the U.S. agent 

for service of process. Accordingly, 

NASDAQ OMX proposes to adopt this 

more self-executing version. Finally, 

while the NASDAQ OMX By-Laws 

provide that NASDAQ OMX shall take 

such action as is necessary to insure that 

officers, directors, and employees 


erowe on DSK5CLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 42723 

8 15 U.S.C. 78q–1. 

9 15 U.S.C. 78q–1(b)(3)(A). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6)(iii). 

13For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

14See infra note 3. 15 17 CFR 200.30–3(a)(12). 

consent in writing to the applicability of 

these provisions, Article IX of the NYSE 

Euronext By-Laws requires only that 

NYSE Euronext take reasonable steps 

necessary to cause officers, directors, 

and employees to consent. Although 

NASDAQ OMX has begun the process of 

collecting written consents from current 

officers, directors, and employees, it 

believes that the current language may 

be unreasonably demanding as applied 

to a multinational exchange operator 

with over 2,000 employees in over 20 

countries. Accordingly, NASDAQ OMX 

proposes to adopt a version of NYSE 

Euronext’s language, which will require 

reasonable steps to obtain consent from 

both current officers, directors, and 

employees, as well as prospective 

officers, directors, and employees prior 

to their acceptance of a position. 

2. Statutory Basis 

The proposed rule change is 

consistent with provisions of Section 

17A of the Act 8 in general and with 

Section 17A(b)(3)(A) of the Act 9 in 

particular because it is designed to 

ensure that SCCP is so organized and 

has the capacity to be able to facilitate 

the prompt and accurate clearance and 

settlement of securities transactions and 

to enforce compliance by its 

participants with the rules of the 

clearing agency. The proposed changes 

will enhance the clarity of NASDAQ 

OMX’s governance documents and 

improve its Board committee structures. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

SCCP 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. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) 

becomes operative for 30 days from the 

date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 10 and Rule 19b–4(f)(6) 

thereunder.11

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. SCCP 

requests that the Commission waive the 

30-day pre-operative waiting period 

contained in Rule 19b–4(f)(6)(iii).12

Waiver of the waiting period will ensure 

that NASDAQ OMX is able to 

implement the proposed rule change, 

which has already been approved as a 

rule of the NASDAQ Exchange, without 

undue delay. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest.13 The 

Commission notes the proposal is 

substantively identical to proposals that 

were recently approved by the 

Commission and does not raise any new 

regulatory issues.14 For these reasons, 

the Commission designates the 

proposed rule change as operative upon 

filing. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

Number SR–SCCP–2009–03 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–SCCP–2009–03. 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 inspection and copying 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 filings also will be 

available for inspection and copying at 

the principal office of SCCP. 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–SCCP–2009–03 and should 

be submitted on or before September 14, 

2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20194 Filed 8–21–09; 8:45 am] 

BILLING CODE 8010–01–P 


erowe on DSK5CLS3C1PROD with NOTICES