25012 Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(6). 

4Article Eighth, Paragraph B of the Restated 

Certificate of Incorporation of NASDAQ OMX and 

Section 11.3 of the By-Laws provides that proposed 

amendments to the By-Laws are to be reviewed by 

the Board of Directors of each regulatory subsidiary 

of NASDAQ OMX and under certain circumstances 

be filed with the Commission. 

5The Commission has modified the text of the 

summaries prepared by BSECC. 

6Securities Exchange Act Release No. 61876 

(April 8, 2010), 75 FR 19436 (April 14, 2010) (SR– 

NASDAQ–2010–025). 

7NASDAQ OMX also amended its Corporate 

Governance Guidelines to reflect the majority vote 

standard for uncontested director elections. 

8NASDAQ OMX Certificate of Incorporation at 

Article IV, C.1(a). 

9NASDAQ OMX Certificate of Incorporation at 

Article IV, C.1(b)2. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10646 Filed 5–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62011; File No. SR– 

BSECC–2010–001] 

Self-Regulatory Organizations; Boston 

Stock Exchange Clearing Corporation; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Regarding Amendments to the 

By-Laws of The NASDAQ OMX Group, 

Inc. 

April 30, 2010. 

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

Securities Exchange Act of 1934 

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

April 9, 2010, the Boston Stock 

Exchange Clearing Corporation 

(‘‘BSECC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change described in 

Items I, II, and III below, which items 

have been prepared primarily by 

BSECC. BSECC filed the proposal 

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

the Act 2 and Rule 19b–4(f)(6) 3

thereunder 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 

BSECC is filing the proposed rule 

change relating to amendments to the 

By-Laws of its parent corporation The 

NASDAQ OMX Group, Inc. (‘‘NASDAQ 

OMX’’).4

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

BSECC 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. BSECC has prepared 

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

and (C) below, of the most significant 

aspects of these statements.5

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ OMX has proposed making 

certain amendments to its By-Laws to 

make improvements in its governance. 

In SR–NASDAQ–2010–025, The 

NASDAQ Stock Market LLC (‘‘NASDAQ 

Exchange’’) sought and received 

Commission approval to adopt these ByLaws changes as part of the rules of 

NASDAQ Exchange.6 BSECC is now 

submitting this filing regarding these 

By-Law changes. The text of the changes 

to the By-Laws of NASDAQ OMX can be 

viewed at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/pdf/bsecc-filings/ 

2010/SR-BSECC-2010-001.pdf. 

The NASDAQ OMX By-Laws 

previously provided that each director 

receiving a plurality of the votes at any 

election of directors at which a quorum 

was present was duly elected to the 

board of directors (‘‘Board’’). Under 

Corporate Governance Guidelines 

adopted by the Board, however, any 

director in an uncontested election who 

received a greater number of votes 

‘‘withheld’’ from his or her election than 

votes ‘‘for’’ such election was required to 

tender his or her resignation promptly 

following receipt of the certification of 

the stockholder vote. The NASDAQ 

OMX Nominating & Governance 

Committee (‘‘Nominating & Governance 

Committee’’) then considered the 

resignation offer and recommended to 

the Board whether or not to accept it. 

Within 90 days after the certification of 

the election results, the Board 

determined whether to accept or reject 

the resignation. Promptly thereafter, the 

Board announced its decision by means 

of a press release. In a contested election 

(i.e., where the number of nominees 

exceeded the number of directors to be 

elected), the unqualified plurality 

standard controlled. 

Uncontested Election: 

NASDAQ OMX recently amended its 

by-laws to adopt a majority vote 

standard. Specifically By-Law Article 

IV, Section 4.4 was amended to provide 

that in an uncontested election, 

directors shall be elected by holders of 

a majority of the votes cast at any 

meeting for the election of directors at 

which a quorum is present.7 Under the 

majority voting standard, a nominee 

who fails to receive the requisite vote 

will not be duly elected to the Board. 

The By-Laws also now require that any 

incumbent director nominee, as a 

condition to his or her nomination for 

reelection to the Board, must submit in 

writing an irrevocable resignation, the 

effectiveness of which is conditioned 

upon the director’s failure to receive the 

requisite vote in any uncontested 

election and the Board’s acceptance of 

the resignation. Acceptance of the 

resignation by the Board shall be in 

accordance with the policies and 

procedures adopted by the Board for 

such purpose. 

Contested Election: 

NASDAQ OMX codified its process 

for a contested election. The directors 

will continue to be elected by a plurality 

vote in a contested election. There is no 

change to the process for contested 

elections because if a majority voting 

standard were to apply in a contested 

election, the likelihood of a ‘‘failed 

election’’ (i.e., a situation in which no 

director receives the requisite vote) 

would be more pronounced. Moreover, 

the rationale underpinning the majority 

voting policy does not apply in 

contested elections where stockholders 

are offered a choice among competing 

candidates. Directors are elected by a 

plurality of votes present in person or 

represented by proxy at a meeting 

convened for that purpose. The 

directors who receive the greatest 

number of votes cast will be elected. 

General Election Requirements: 

The following requirements apply to 

elections of directors and were not 

amended. Each share of common stock 

has one vote,8 subject to the voting 

limitation in NASDAQ OMX’s 

certificate of incorporation that 

generally prohibits a holder from voting 

in excess of 5% of the total voting 

power of NASDAQ OMX.9 In addition, 

each note holder is entitled to the 

number of votes equal to the number of 

shares of common stock into which 

such note could be converted on the 

record date, subject to the 5% voting 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / Notices 25013 

10 15 U.S.C. 78q–1. 

11 15 U.S.C. 78q–1(b)(3)(A). 

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

13 17 CFR 240.19b–4(f)(6). 

14 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

limitation contained in the certificate of 

incorporation. 

At a meeting to elect directors, the 

presence of holders of a majority 

(greater than 50%) of NASDAQ OMX 

voting securities constitutes a quorum. 

Presence may be in-person or by proxy. 

Any securities not voted will not impact 

the vote. 

2. Statutory Basis 

BSECC believes that the proposed rule 

change is consistent with Section 17A of 

the Act,10 as amended, and with Section 

17A(b)(3)(A) of the Act,11 in particular, 

because it is designed to ensure that 

BSECC 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. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

BSECC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change were not and are 

not intended to be solicited or received. 

BSECC will notify the Commission of 

any written comments received by 

BSECC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective upon filing 

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

the Act 12 and Rule 19b–4(f)(6) 13

thereunder because the proposed rule 

change does not (i) significantly affect 

the protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not become 

operative for 30 days after the date of 

filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest. At any time within sixty 

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–BSECC–2010–001 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Elizabeth M. Murphy, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BSECC–2010–001. 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 filings 

also will be available for inspection and 

copying at the principal office of BSECC 

and on BSECC’s Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/pdf/bsecc-filings/ 

2010/SR-BSECC-2010-001.pdf. 

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–BSECC–2010–001 and 

should be submitted on or before May 

27, 2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10645 Filed 5–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62004; File No. SR– 

NYSEArca–2010–27] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Its Mid-Point 

Passive Liquidity Order 

April 29, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on April 21, 

2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. 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 proposes to amend the 

operation of its Mid-Point Passive 

Liquidity Order (‘‘MPL Order’’). The text 

of the proposed rule change is available 

on the Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office, on the Commission’s 

Web site at http://www.sec.gov 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, 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 

mstockstill on DSKH9S0YB1PROD with NOTICES