Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 1743 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59014 

(November 25, 2008), 73 FR 73358. 

4See Nasdaq Rule 4350(i)(1)(A). 

5See Nasdaq Rules 4350(i)(1)(A) and 4360. 

6See proposed Nasdaq Rule 4360(k). 

7Section 102 of the Sarbanes Oxley Act, 15 U.S.C. 

7212. 

8 Id. 

9See http://www.nasdaq.com/about/ 

Listing_Agreement.pdf. 

10 15 U.S.C. 78f(b)(5). 11 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). 

12For a detailed discussion of the reasons that 

LPs differ from other issuers and may be 

appropriately excluded from certain shareholder 

approval rules, see Securities Exchange Act Release 

No. 55796 (May 22, 2007), 72 FR 29566 (SR–NYSE– 

2007–28) (approving NYSE’s proposal to exempt 

LPs from certain of its shareholder approval rules, 

excluding its equity compensation requirement). 

13See id., 72 FR at 29567. 

mandate of the MSRB to protect 

investors and the public interest. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–MSRB–2008– 

07), as modified by Amendment No. 1, 

be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–441 Filed 1–12–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59203; File No. SR– 

NASDAQ–2008–084] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Approving Proposed Rule Change to 

Require Limited Partnerships to Obtain 

Shareholder Approval for the Use of 

Equity Compensation and Make Other 

Clarifying Changes to the Listing 

Requirements for Limited Partnerships 

January 6, 2009. 

I. Introduction 

On November 18, 2008, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

require limited partnerships to obtain 

shareholder approval for the use of 

equity compensation and to make other 

clarifying changes to the listing 

requirements for limited partnerships. 

The proposed rule change was 

published for comment in the Federal 

Register on December 2, 2008.3 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

Nasdaq’s current listing requirements 

provide that issuers must obtain 

shareholder approval for a variety of 

corporate actions, including the 

issuance of equity compensation.4

However, these requirements do not 

currently apply to Limited Partnerships 

(‘‘LPs’’).5 Nasdaq is proposing to expand 

the requirement to obtain shareholder 

approval for equity compensation to 

entities that are LPs. As such, the 

proposed rule would provide that each 

issuer that is a limited partnership must 

obtain shareholder approval when a 

stock option or purchase plan is to be 

established or materially amended or 

other equity compensation arrangement 

is to be made or materially amended, 

pursuant to which stock may be 

acquired by officers, directors, 

employees, or consultants, as would be 

required under Nasdaq Rule 

4350(i)(1)(A) and IM–43540–5.6

In addition, Nasdaq proposes to make 

two other changes to the listing 

requirements for LPs. Specifically, the 

Exchange proposes to amend the rules 

applicable to LPs to require that: (1) the 

auditor of a listed LP must be registered 

as a public accounting firm with the 

Public Company Accounting Oversight 

Board (‘‘PCAOB’’), as provided for in 

the Sarbanes-Oxley Act of 2002; 7 and 

(2) an LP must notify Nasdaq of any 

material non-compliance with the 

qualitative listing requirements for LPs 

in Rule 4360. Nasdaq states that when 

it adopted these requirements for other 

companies in 2003 in response to 

requirements imposed by the SarbanesOxley Act, Nasdaq inadvertently 

excluded LPs from these requirements. 

The Exchange notes, however, that these 

requirements are already applicable to 

LPs. Specifically, with respect to the 

proposed auditor registration 

requirement, it is unlawful for an 

auditor to participate in the preparation 

or issuance of an audit report with 

respect to any listed company, 

including an LP, unless it is registered 

with the PCAOB.8 With respect to the 

proposed notification requirement, each 

listed company is required to sign a 

listing agreement prior to listing on 

Nasdaq in which the company has 

agreed to promptly notify Nasdaq in 

writing of any corporate action or other 

event which will cause the company to 

cease to be in compliance with Nasdaq 

listing requirements.9 As such, Nasdaq 

asserts that these changes are simply 

clarifying changes designed to highlight 

the requirements and facilitate 

understanding and compliance of the 

rules by LPs. 

III. Discussion and Commission 

Findings 

After careful review, 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 and, in particular, 

with Section 6(b)(5) of the Act,10 which 

requires, among other things, 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 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 issuers.11

The Commission notes the 

importance of shareholder approval 

rules, as such rules provide 

shareholders with a voice in 

transactions that are material to, and 

may have an effect on, their respective 

investments. With respect to equity 

compensation plans, shareholder 

approval rules also help to protect 

investors against the potential dilutive 

effect of such plans. The Commission 

acknowledges that treating LPs 

differently with respect to certain 

limited types of shareholder approval 

rules may be appropriate given the 

structure and use of LPs and the 

expectations of investors in such 

entities.12 However, as the Commission 

has indicated previously, it believes that 

the rationale for treating an LP 

differently from other types of issuers 

with respect to shareholder input on 

equity compensation is less 

compelling.13 Accordingly, the 

Commission believes that it is 

consistent with the protection of 

investors and the public interest to 

require LPs to obtain shareholder 

approval for the issuance of equity 

compensation, as it will ensure that 

investors in LP securities have a check 

on the potential dilution that may result 

from the issuance of equity-based 

awards. Further, by requiring LPs to 

obtain shareholder approval for stock 

1744 Federal Register / Vol. 74, No. 8 / Tuesday, January 13, 2009 / Notices 

14See supra notes 8 and 9 and accompanying 

text. 

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

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Release No. 34–59039 (December 2, 2008); 

File No. SR–NYSEArca–2006–21. 

option or other equity compensation 

plans under the same terms and 

conditions as other Nasdaq listed 

companies, the new rule will ensure 

that shareholders of all Nasdaq 

companies will have the same 

protections against the potential dilutive 

effects of such plans. 

The Commission also believes that the 

proposed clarifying changes specifying 

that an auditor of a listed LP must be 

registered with the PCAOB and that an 

LP must notify Nasdaq of any material 

non-compliance with the corporate 

governance rules should eliminate any 

confusion regarding the requirements 

for LPs. As noted above, Nasdaq asserts 

that LPs are already subject to these 

requirements, but these proposed 

changes will ensure that such 

requirements are part of Nasdaq’s 

rulebook governing the listing 

requirements for LPs and thus are 

transparent to issuers.14 Accordingly, 

the Commission finds that the proposed 

rule change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,15 that the 

proposed rule change (SR–NASDAQ– 

2008–084) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–437 Filed 1–12–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59202; File No. SR–NYSE– 

2008–132] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change to 

Introduce a NYSE Order Imbalance 

Information Fee 

January 6, 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 December 

19, 2008, the New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 the Exchange. 

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 

The Exchange is proposing to 

introduce a fee for access to its NYSE 

Order Imbalance Information datafeed. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NYSE 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. NYSE 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 

(a) The Service. 

In June 2008, the Exchange added 

Order Imbalance Information to the 

NYSE OpenBook® package of products.3

For no additional charge, the Exchange 

decided to make available to recipients 

of NYSE OpenBook an additional 

datafeed containing Order Imbalance 

Information. 

NYSE Order Imbalance Information is 

a datafeed of real-time order imbalances 

that accumulate prior to the opening of 

trading on the Exchange and prior to the 

close of trading on the Exchange. These 

orders are subject to execution at the 

market’s opening or closing price, as the 

case may be, and represent issues that 

are likely to be of particular trading 

interest at the opening or closing. 

The Exchange distributes information 

about these imbalances in real-time at 

specified intervals prior to the opening 

and closing auctions. Initially, the 

Exchange proposes to make order 

imbalance information available at the 

following intervals. 

For opening order imbalances: 

• Every five minutes between 8:30 

a.m. EST and 9 a.m. EST. 

• Every one minute between 9 a.m. 

EST and 9:20 a.m. EST. 

• Every 15 seconds between 9:20 a.m. 

EST and the opening (or 9:35 a.m. EST 

if the opening is delayed). 

For closing order imbalances: 

• Every fifteen seconds between 3:40 

p.m. EST and 3:50 p.m. EST. 

• Every five seconds between 3:50 

p.m. EST and 4 p.m. EST. 

If the Exchange were to change these 

intervals, it would notify NYSE Order 

Imbalance Information recipients in 

advance and/or post the changes on the 

Exchange’s Web site. 

NYSE Order Imbalance Information 

also includes the imbalance information 

that the Exchange is required to 

disseminate under NYSE Rule 123C(5), 

as well as automated real-time 

streaming order imbalance information 

at specified intervals. 

After consultation with its customers, 

the Exchange has determined to make 

the NYSE Order Imbalance Information 

datafeed available as a stand-alone 

market data product, separate and apart 

from NYSE OpenBook. This would 

enable all investors to gain access to 

information regarding opening and 

closing imbalances on the Exchange, 

especially because the Exchange is not 

imposing end-user fees, is not requiring 

end-users to sign contracts and is 

making vendor receipt and use of the 

information inexpensive and very few 

administrative burdens (e.g., no 

reporting requirements and no end-user 

contracts). 

Many investors have not been able to 

access this data. However, as a result of 

the Commission’s NYSE ArcaBook 

Approval Order, the Exchange may now 

bring the NYSE order Imbalance 

Information product to market. The 

Exchange anticipates that this will 

provide important information to 

millions of investors. 

In the Exchange’s view, the 

Commission’s recent ‘‘Order Setting 

Aside Action by Delegated Authority 

and Approving Proposed Rule Change 

Relating to NYSE Arca Data’’ (the 

‘‘NYSE ArcaBook Approval Order’’) 

makes this product offering possible. In 

the NYSE ArcaBook Approval Order, 

the Commission strongly supported the 

right of SROs to expand their market 

data offerings outside of the 

consolidated products that markets offer 

under joint industry plans such as the 

CTA Plan and the CQ Plan. It 

established fee-setting standards for 

market data products for those non-core 

offerings. Prior to the NYSE ArcaBook 

Approval Order, the Exchange’s ability 

to bring the NYSE Order Imbalance 

Information product to market was 

limited distribution to NYSE OpenBook 

subscribers only. That order affirmed 

the Commission’s embrace of allowing