46258 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4Changes are marked to the rules of The 

NASDAQ Stock Market LLC found at http:// 

nasdaqomx.cchwallstreet.com. 

out their investment objectives with 

exchange-traded products. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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) become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 8 and Rule 

19b–4(f)(6) thereunder.9

As for permitting FLEX Options on 

Corporate Debt Security Options, the 

Exchange notes that new products 

brought up and approved by the SEC 

during the past couple of years (e.g., 

Range Options, binary options, Credit 

Options) have contained rules 

designating them as FLEX eligible. As a 

result, the Exchange believes the 

proposed change is consistent with 

existing rules for products and conforms 

the rules for Corporate Debt Security 

Options to other existing product rules. 

For the foregoing reasons, the Exchange 

believes the rule filing qualifies for 

expedited effectiveness as a ‘‘noncontroversial’’ rule change under 

paragraph (f)(6) of Rule 19b–4 of the 

Act. 

At any time within 60 days of the 

filing of such 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–CBOE–2009–053 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–2009–053. 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 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 No. 

SR–CBOE–2009–053 and should be 

submitted on or before September 29, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21582 Filed 9–4–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60590; File No. SR– 

NASDAQ–2009–078] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change to the 

Nasdaq Listing Rules To Make Certain 

Conforming and Technical Changes 

August 31, 2009. 

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 August 

18, 2009, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by Nasdaq. Nasdaq has designated the 

proposed rule change as constituting a 

non-controversial rule change under 

Rule 19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to revert to the 

previously approved requirements of 

certain listing standards that were 

inadvertently changed when adopting 

the new Listing Rules, and to complete 

certain conforming changes to the 

Listing Rules that were not fully 

implemented with their adoption. The 

text of the proposed rule change is 

below. Proposed new language is 

italicized and proposed deletions are in 

brackets.4

5415. Initial Listing Requirements for 

Preferred Stock and Secondary Classes 

of Common Stock 

(a) No change. 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 46259 

5Securities Exchange Act Release No. 59663 

(March 31, 2009), 74 FR 15552 (April 6, 2009) (SR– 

NASDAQ–2009–018). 

6 15 U.S.C. 80–a1 [sic] et seq. 

7The text of Nasdaq’s prior rules is included in 

Exhibit 5B of SR–NASDAQ–2009–018, supra note 

5, available at: http://nasdaq.cchwallstreet.com/ 

NASDAQ/pdf/nasdaq-filings/2009/SR-NASDAQ2009-018.pdf. 

8Listing Rule 5005(a)(9) defines a Covered 

Security as ‘‘a security described in Section 18(b) 

of the Securities Act of 1933.’’ 

(b) When the Company’s Primary 

Equity Security is not listed on [either] 

the Global Market or is not a Covered 

Security, the preferred stock and/or 

secondary class of common stock may 

be listed on the Global Market so long 

as it satisfies the initial listing criteria 

for Primary Equity Securities set forth in 

Rule 5405. 

* * * * * 

5460. Continued Listing Requirements 

for Preferred Stock and Secondary 

Classes of Common Stock 

(a) When the Company’s Primary 

Equity Security of the Company is listed 

on the Global Market or is a Covered 

Security [another National Securities 

Exchange], the preferred stock or 

secondary class of common stock must 

meet all of the requirements set forth in 

(1) through (5) below. 

(1) At least 100,000 Publicly Held 

Shares; 

(2) A Market Value of Publicly Held 

Shares of at least $1,000,000; 

(3) Minimum bid price of at least $1 

per share; 

(4) At least 100 Public Holders; and 

(5) At least two registered and active 

Market Makers. 

(b) When the Primary Equity Security 

of the Company is not listed on [either] 

the Global Market or is not a Covered 

Security [another National Securities 

Exchange], the preferred stock and/or 

secondary class of common stock may 

continue to be listed on the Global 

Market so long as it satisfies the 

continued listing criteria for Primary 

Equity Securities set forth in Rule 5450. 

* * * * * 

5615. Exemptions From Certain 

Corporate Governance Requirements 

This rule provides the exemptions 

from the corporate governance rules 

afforded to certain types of Companies, 

and sets forth the phase-in schedules for 

initial public offerings, Companies 

emerging from bankruptcy and 

Companies transferring from other 

markets. This rule also describes the 

applicability of the corporate 

governance rules to controlled 

companies and sets forth the phase-in 

schedule afforded to Companies ceasing 

to be controlled companies. 

(a) No change. 

(1) No change. 

IM–5615–1. No change. 

(2) No change. 

IM–5615–2. No change. 

(3) No change. 

IM–5615–3. No change. 

(4) No change. 

(5) Management Investment 

Companies 

Management investment companies 

(including business development 

companies) are subject to all the 

requirements of the Rule 5600 Series, 

except that management investment 

companies registered under the 

Investment Company Act of 1940 are 

exempt from the [requirements of] 

Independent Directors requirement, the 

Independent Director Oversight of 

Executive Officer Compensation and 

Director Nominations requirements, and 

the Code of Conduct [requirements] 

requirement, set forth in Rules 5605(b), 

(d) and (e), and 5610, respectively. 

IM–5615–4. Management Investment 

Companies 

Management investment companies 

registered under the Investment 

Company Act of 1940 are already 

subject to a pervasive system of federal 

regulation in certain areas of corporate 

governance covered by 5600. In light of 

this, Nasdaq exempts from [Rule] Rules 

5605(b), (d), (e) and 5610 management 

investment companies registered under 

the Investment Company Act of 1940. 

Business development companies, 

which are a type of closed-end 

management investment company 

defined in Section 2(a)(48) of the 

Investment Company Act of 1940 that 

are not registered under that Act, are 

required to comply with all of the 

provisions of the Rule 5600 Series. 

(b)–(c) No change. 

IM–5615–5. No change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 

On March 12, 2009, Nasdaq filed a 

proposed rule change to revise the rules 

relating to the qualification, listing, and 

delisting of companies listed on, or 

applying to list on, Nasdaq to improve 

the organization of the rules, eliminate 

redundancies and simplify the rule 

language.5 These new listing rules (the 

‘‘Listing Rules’’) were effective April 13, 

2009. Nasdaq has observed that the 

March filing introduced inadvertent 

changes in the Listing Rules related to 

the Global Market listing requirements 

for preferred stock and secondary 

classes of securities, and to the 

governance requirements applicable to 

management investment companies 

registered under the Investment 

Company Act of 1940.6 This filing 

modifies those rules to revert to the 

requirements as they previously existed 

in the listing rules (the ‘‘Old Rules’’), 

and to make certain conforming 

changes.7

Nasdaq is proposing technical 

changes to conform Listing Rule 5415(b) 

and Listing Rules 5460(a) and (b) with 

the meaning of Old Rules 4420(k) and 

4450(h), respectively, and to make them 

consistent with each other and the 

analogous Capital Market rules. Old 

Rules 4420(k) and 4450(h) provided 

quantitative initial and continued listing 

requirements for preferred stock and 

secondary classes of common stock. 

These rules also allowed the application 

of the respective initial and continued 

listing requirements applicable to 

common stock if the issuer’s common 

stock or common stock equivalent 

security was not listed on either Nasdaq 

or another national securities exchange. 

In adopting Listing Rule 5415(a), 

Nasdaq replaced the term ‘‘national 

securities exchange’’ with the newlydefined term ‘‘Covered Security,’’ 8

which was also used in the analogous 

Capital Market Listing Rules 5510 and 

5555. Nasdaq did not, however, make 

conforming changes to Listing Rules 

5415(b) and 5460 to replace the old term 

with the new. Further, in the case of 

Rule 5415(b), rule text inadvertently 

omits the word ‘‘not,’’ which is 

necessary for the rule to retain its 

meaning. In the case of Rules 5460(a) 

and (b), the term ‘‘Covered Security’’ 

was not used at all. Accordingly, 

Nasdaq is proposing technical changes 

to Listing Rule 5415(b), and Listing 

Rules 5460(a) and (b) to make them 

consistent with each other and Rules 

5610 and 5655, the analogous Capital 

Market rules. 


jlentini on DSKJ8SOYB1PROD with NOTICES
46260 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 

9 15 U.S.C. 80–a1 [sic] et seq. 

10 15 U.S.C. 78f. 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 14 17 CFR 200.30–3(a)(12). 

Under Old Rule 4350(a)(2) and IM– 

4350–6, a management investment 

company registered under the 

Investment Company Act of 1940 9 was 

exempt from Old Rule 4350(c), which 

contained the requirements for a 

company to have a majority 

independent board, hold executive 

sessions, and for independent directors 

to make certain compensation and 

nomination decisions, and Old Rule 

4350(n), which contained the code of 

conduct requirement. Old Rule 

4350(a)(2) was moved to Listing Rule 

5615(a)(5) and exempts a registered 

management investment company from 

Listing Rule 5605(b), which contains the 

requirement for a company to have a 

majority independent board and 

executive sessions, and Listing Rule 

5610, which contains the code of 

conduct requirement. However, the part 

of Old Rule 4350(c) which relates to the 

requirement for independent directors 

to make certain compensation and 

nomination decisions was moved to 

Listing Rules 5605(d) and (e), both of 

which are not cross-referenced in 

Listing Rule 5615(a)(5). As a 

consequence, Listing Rule 5615(a)(5) no 

longer contains the full range of 

exemptions that were previously 

provided under Old Rule 4350(a)(2). 

Accordingly, Nasdaq is proposing to 

amend the cross-reference found in 

Listing Rule 5615(a)(5) and IM–5615–4 

to include Listing Rules 5605(d) and (e), 

thus conforming Listing Rule 5615(a)(5) 

with Old Rule 4350(a)(2). Nasdaq also 

proposes to expand the explanation of 

the cross references in the rule, 

consistent with the style of the Listing 

Rules. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,10 in 

general and with Sections 6(b)(5) of the 

Act,11 in particular in that it is 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. The 

proposed rule change is designed to 

revert to the previously approved 

requirements of certain listing standards 

that were inadvertently changed when 

adopting the new Listing Rules, and to 

complete certain conforming changes to 

the Listing Rules that were not fully 

implemented with their adoption. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

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) become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) 12 of the Act and 

Rule 19b–4(f)(6) thereunder.13

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–NASDAQ–2009–078 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–NASDAQ–2009–078. 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 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 No. 

SR–NASDAQ–2009–078 and should be 

submitted on or before September 29, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21584 Filed 9–4–09; 8:45 am] 

BILLING CODE 8010–01–P 


jlentini on DSKJ8SOYB1PROD with NOTICES