15800 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 

6See Section 2.03(a)(i) and (iii) of the NYSE 

Operating Agreement and Article III, Section 1(A) 

and (B) of the NYSE Market Bylaws. 

7As defined in the NYSE Operating Agreement, 

fair representation candidates are NYSE Board 

members that are determined by member 

organizations of the Exchange through a specified 

petition process (‘‘Petition Candidates’’) or, in the 

absence of Petition Candidates, candidates 

recommended jointly by the Director Candidate 

Recommendation Committee (‘‘DCRC’’) of NYSE 

Market and of NYSE Regulation, Inc. In the case of 

NYSE Market, fair representation candidates on the 

Market Board are determined similarly except that, 

in the absence of Petition Candidates, they are 

individuals recommended by the DCRC of NYSE 

Market. 

8See Article I, paragraph (q) of the By-Laws of the 

NASDAQ Stock Market LLC, which states that, 

‘‘ ‘Membership Representative Director’ means a 

Director who has been elected or appointed after 

having been nominated by the Member Nominating 

Committee or by a Nasdaq Member pursuant to 

these By-Laws.’’ 

9See Section 9(a) of the NASDAQ Stock Market 

LLC Agreement. 

10See Securities Exchange Act Release No. 58673 

(September 29, 2008), 73 FR 57707 (October 3, 

2008) (SR–Amex–2008–62). 

11 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

12 15 U.S.C. 78f(b)(3). 

13See supra notes 4 and 5. 

14See, e.g., Section 9(a) of the NASDAQ Stock 

Market LLC Agreement and Article IV, Section 4– 

1 of the NASDAQ OMX PHLX, Inc. By-Laws. 

15 15 U.S.C. 78f(b)(3). 

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

17 17 CFR 200.30–3(a)(12). 

fair representation candidates for each 

the NYSE Board and the NYSE Market 

Board, if the number that is equal to 

20% of the total number of directors on 

their respective boards is not a whole 

number, such number would be 

rounded up to the next whole number.6

The Exchange has stated that the 

practical effect of the proposed rule 

change would be to enable the size of 

both the NYSE Board and the NYSE 

Market Board to be reduced from ten 

members to five members. The 

Exchange has represented that the 

initial implementation of the proposed 

changes immediately following 

approval by the Commission would be 

accomplished through the voluntary 

resignation of five of the ten directors 

from the NYSE Board and NYSE Market 

Board, respectively, including one ‘‘fair 

representation’’ director from each of 

the boards, in connection with a 

reduction in the size of each board to 

five directors. The Exchange’s proposal 

would not revise the current fair 

representation candidate selection and 

petition process for, or the appointment 

or election of a fair representation 

candidate to, the NYSE Board and the 

NYSE Market Board.7

The Exchange has stated that its 

proposal is consistent with the 

governance structures of other national 

securities exchanges that have been 

approved by the Commission. The 

Exchange has noted, for example, that 

The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’) has a 20% fair 

representation requirement, without 

specifying a minimum number of fair 

representation directors,8 and that 

Nasdaq has complete discretion as to 

the number of board members.9 The 

Exchange also has noted that in the 

approval order relating to the 

acquisition of the American Stock 

Exchange LLC by NYSE Euronext, the 

Commission similarly approved a 

discretionary board size (noting that 

Amex intended to have a five-member 

board), a 20% fair representation 

requirement, and no minimum number 

of fair representation directors.10 The 

Exchange indicated that, by eliminating, 

for itself and NYSE Market, the current 

requirements for a minimum of two 

non-affiliated directors and two fair 

representation candidates, it will be able 

to improve administrative efficiency 

and effectiveness by operating with a 

smaller number of directors, while 

continuing to fulfill its statutory 

obligations regarding the fair 

representation of its members. 

III. Discussion and Commission 

Findings 

The Commission finds that the 

proposed rule change is consistent with 

the Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.11 In particular, the 

Commission finds that the proposal is 

consistent with the requirements of 

Section 6(b)(3) of the Act, which 

provides that the rules of an exchange 

must assure a fair representation of its 

members in the selection of its directors 

and administration of its affairs and 

provide that one or more directors shall 

be representative of issues and investors 

and not be associated with a member of 

the exchange, broker, or dealer.12

The fair representation requirement in 

Section 6(b)(3) of the Act is intended to 

give members a voice in the selection of 

the exchange’s directors and the 

administration of its affairs. Moreover, 

the Section 6(b)(3) requirement helps to 

ensure that members are protected from 

unfair, unfettered actions by an 

exchange and that, in general, an 

exchange is administered in a way that 

is equitable to all those who trade on its 

market or through its facilities. The 

Commission notes that the requirement 

that at least 20% of the directors on the 

NYSE and NYSE Market boards be nonaffiliated directors and fair 

representation candidates is designed to 

ensure the fair representation of NYSE 

members on the NYSE Board and the 

NYSE Market Board.13 The Commission 

notes that, while the proposal 

eliminates the requirement regarding a 

specific minimum number of nonaffiliated directors and fair 

representation candidates on the boards, 

it does not alter the minimum 20% 

requirement for non-affiliated directors 

or fair representation candidates or the 

process by which members can directly 

petition and vote for representatives on 

the boards. Moreover, the proposal adds 

to the NYSE Operating Agreement and 

NYSE Market Bylaws a provision that: 

whenever 20% of the board would not 

result in a whole number, such number 

would in all cases be rounded up to the 

nearest whole number, thus ensuring 

that the non-affiliated directors and fair 

representation candidates never 

constitute less than 20% of the board. 

The Commission further notes that the 

proposed changes to the NYSE 

Operating Agreement and NYSE Market 

Bylaws are consistent with previous 

proposals approved by the Commission 

for other exchanges, which also do not 

specify the number of fair 

representation directors and which 

allow discretion as to the size of their 

boards.14 The Commission therefore 

finds that the Exchange’s proposal is 

consistent with Section 6(b)(3) of the 

Act.15

IV. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–NYSE–2009– 

12) is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7834 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59677; File No. SR–NYSE– 

2009–38] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Revise 

Transaction Fees for the New York 

Block Exchange 

April 1, 2009. 

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

Securities Exchange Act of 1934 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 15801 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78f. 

4 15 U.S.C. 78f(b)(4). 

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 240.19b–4(f)(2). 7 17 CFR 200.30–3(a)(12). 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 27, 

2009, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule changes 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 changes from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

transaction fees for the New York Block 

ExchangeSM, with effect from April 1, 

2009. The text of the proposed rule 

change is available at NYSE’s principal 

office, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com. 

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 

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 

The Exchange proposes to increase 

the charge per share for all NYBX 

transactions from $.0025 per share to 

$.0030 per share, with effect from April 

1, 2009. The NYBX is an electronic 

facility of the Exchange that provides for 

the continuous matching and execution 

of securities listed on the NYSE of all 

non-displayed orders with the aggregate 

of all displayed and non-displayed 

orders of the NYSE Display Book 

(‘‘Display Book’’ or ‘‘DBK’’) while also 

considering protected quotations of all 

automated trading centers (‘‘away 

markets’’). The proposed transactional 

fee of $.0030 per executed share will be 

charged to both the buyer(s) and 

seller(s) of the executed shares. The fee 

will be charged for all executions of 

NYBX orders, including those NYBX 

executions that take place in the DBK or 

in away markets. Only NYSE members, 

member organizations and sponsoring 

member organizations will be charged 

this transaction fee. Transaction fees for 

executions of orders entered by 

sponsored participants will be charged 

to the sponsoring member organization. 

Member organizations will not pay any 

additional transactional fee for the 

execution of NYBX orders to the extent 

that an NYBX order or a portion thereof 

may be executed in the DBK or is routed 

to an away market. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,3

in general, and furthers the objectives of 

Section 6(b)(4),4 in particular, in that it 

is designed provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. 

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 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 5 of the Act and Rule 19b– 

4(f)(2) 6 thereunder. 

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–NYSE–2009–38 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2009–38. 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 publicly available. All 

submissions should refer to File 

Number SR–NYSE–2009–38 and should 

be submitted on or before April 28, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7832 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P