54204 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Notices 

20 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 Nos. 58179 

(July 17, 2008), 73 FR 42874 (July 23, 2008) (SR– 

Phlx–2008–31); and 58183 (July 17, 2008), 73 FR 

42850 (July 23, 2008) (SR–NASDAQ–2008–035). 

4Additionally, the proposed limited liability 

company agreement of the Exchange (the ‘‘LLC 

Agreement’’) post-conversion is consistent in form 

and scope with the Second Amended and Restated 

Limited Liability Company Agreement of The 

Nasdaq Stock Market LLC, dated as of July 9, 2009 

(the ‘‘NSM LLC Agreement’’). See Securities 

Exchange Act Release No. 34–53128 (Jan. 13, 2006), 

71 FR 3550 (January 23, 2006), (approval of 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–NYSEArca–2010–78 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–NYSEArca–2010–78. 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–NYSEArca–2010–78 and 

should be submitted on or before 

September 24, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–22111 Filed 9–2–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62783; File No. SR–Phlx– 

2010–104] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Conversion of NASDAQ OMX PHLX, 

Inc. to a Limited Liability Company 

August 27, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on August 

16, 2010, NASDAQ OMX PHLX, Inc. 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II, 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 proposes to convert 

NASDAQ OMX PHLX, Inc. from a 

Delaware corporation to a Delaware 

limited liability company (a ‘‘Delaware 

LLC’’). This proposal is solely a 

technical rule change. There are no new 

regulatory issues implicated in this 

proposal. Further, the Exchange is not 

proposing any material changes, but 

rather only amendments to make 

technical conforming changes to the 

formation documents to correspond 

with the LLC conversion. All 

substantive provisions that govern an 

exchange are consistent with the Act 

and remain intact. The Exchange’s 

proposed formation documents, 

including the Certificate of Formation, 

Limited Liability Agreement and ByLaws, are consistent in form and scope 

with the most recent governing 

documents that were approved by the 

Commission. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

principal office of the Exchange, 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 

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 

Exchange 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 purpose of the proposed rule 

change is to convert NASDAQ OMX 

PHLX, Inc. from a Delaware corporation 

to a Delaware LLC. The NASDAQ OMX 

Group, Inc. acquired NASDAQ OMX 

PHLX, Inc. (formerly the Philadelphia 

Stock Exchange, Inc.) on July 24, 2008.3

At this time, The NASDAQ OMX Group, 

Inc. proposes to convert NASDAQ OMX 

PHLX, Inc., a Delaware corporation to 

NASDAQ OMX PHLX LLC, a Delaware 

limited liability company (the ‘‘LLC’’), to 

more closely conform its organizational 

structure to that of other NASDAQ OMX 

entities. Pursuant to the Delaware 

Limited Liability Company Act, as 

amended from time to time (the ‘‘LLC 

Act’’), the LLC will continue the 

existence of NASDAQ OMX PHLX, Inc. 

and all rights, privileges, powers, 

property and liabilities shall vest in the 

LLC at the time of conversion. As such, 

this proposed rule change will merely 

effect a change in entity form of the 

Exchange and have no substantive effect 

on the current rights and obligations of 

the current members and owners of the 

Exchange.4


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Nasdaq’s application for registration as a national 

securities exchange). 

5The LLC Act requires a limited liability 

company agreement in order for an entity to be duly 

formed (see Section 18–201(d) of the LLC Act). 

Additionally, a limited liability company agreement 

is defined in Section 18–101(7) as an agreement that 

governs the affairs of the LLC. Both the LLC ByLaws and the LLC Agreement together constitute 

the limited liability company agreement for 

purposes of the LLC Act. 

6Neither NASDAQ OMX Group nor the Trust is 

a member organization of the Exchange within the 

meaning of the By-Laws. 

7See 6 Del. C. § 18–101(7). 

8 Interests in a Delaware LLC are referred to as 

limited liability company interests under the LLC 

Act rather than stock or shares. However, these 

interests can be referred to by whatever term the 

limited liability company agreement provides. The 

LLC Agreement defines such interests as Common 

Stock and Preferred Stock. 

9NASDAQ OMX PHLX would be converted 

pursuant to Section 18–214 of the Delaware LLC 

Act (6 Del. C. § 18–101, et seq.). 

Following the conversion, the 

Exchange proposes to be governed by a 

Certificate of Formation, the LLC 

Agreement and the By-Laws of the LLC 

(the ‘‘LLC By-Laws’’) in accordance with 

the LLC Act. These proposed formation 

documents reflect all of the current 

rights and obligations of the members 

and owners of the Exchange in the 

appropriate form of governing 

documents of a Delaware LLC. The 

specific changes to the current 

documents are discussed in the 

following sections. 

Certificate of Formation 

In order to convert from a Delaware 

corporation to a Delaware LLC, a 

Certificate of Conversion and a 

Certificate of Formation of the LLC will 

be filed with the Secretary of State of 

the State of Delaware. The Certificate of 

Conversion is necessary to effect the 

conversion of the Exchange from a 

Delaware corporation to a Delaware LLC 

pursuant to the LLC Act. Further, the 

LLC Act requires that a Certificate of 

Formation of the LLC be filed to 

accomplish the formation of the LLC. 

Unlike a Certificate of Incorporation 

which contains actual governing 

provisions, a Certificate of Formation 

only sets forth three pieces of 

information, the name of the company, 

the address of the registered office and 

the name and address of the registered 

agent. As such, only the information in 

the FIRST and SECOND provisions of 

the Certificate of Incorporation are 

reflected in the Certificate of Formation 

with certain minor changes. First, a 

Delaware LLC must contain the words 

‘‘LLC’’ in its name. In light of this 

requirement, the name set forth in the 

FIRST provision of the Certificate of 

Formation of the LLC reflects the 

proposed name ‘‘NASDAQ OMX PHLX 

LLC’’ rather than ‘‘NASDAQ OMX 

PHLX, Inc.’’ Additionally, the LLC is 

referred to as a ‘‘limited liability 

company’’ in this provision rather than 

a ‘‘corporation.’’ 

The governing provisions of a 

Delaware LLC need to be set forth in the 

limited liability company agreement of 

such Delaware LLC. As such, the 

remaining provisions of the Certificate 

of Incorporation are proposed to be 

reflected in the LLC Agreement and the 

LLC By-Laws, as together, these 

documents are considered the limited 

liability company agreement of the LLC 

for purposes of the LLC Act (the 

‘‘Agreement’’).5

Limited Liability Company Agreement 

Following the conversion of the 

Exchange, it is proposed that the 

Exchange adopt the Agreement. As 

noted above, the Agreement will consist 

of the LLC Agreement and the LLC ByLaws. The LLC By-Laws proposed to be 

adopted are in substantially the same 

form as the By-Laws currently in effect, 

with certain modifications as further 

explained below. 

The LLC Agreement proposed by the 

Exchange is similar to that of the NSM 

LLC Agreement. Schedule A of the LLC 

describes the proposed ownership of the 

limited liability company interests 

(designated therein as ‘‘shares’’ of the 

LLC), which ownership structure is 

identical to that currently in place. The 

NASDAQ OMX Group, Inc. (‘‘NASDAQ 

OMX Group’’) is the sole common 

shareholder of NASDAQ OMX PHLX, 

Inc. and is proposed to become a 

member of the Exchange (within the 

meaning of the LLC Act) and the sole 

owner of all of the Common Stock (as 

defined in the LLC Agreement) of the 

LLC. There is also the PHLX Member 

Voting Trust (the ‘‘Trust’’) which holds 

the one (1) Series A Preferred Stock of 

NASDAQ OMX PHLX, Inc. The Trust is 

proposed to become a member of the 

Exchange (within the meaning of the 

LLC Act) 6 and the owner of the one (1) 

Series A Preferred Stock (as defined in 

the LLC Agreement) in the LLC. 

The Exchange is incorporating the 

current By-Laws of NASDAQ OMX 

PHLX, Inc. into the LLC Agreement as 

Exhibit A to that LLC Agreement. The 

Exchange proposes to make minimal 

conforming amendments to the current 

By-Laws to comport with the conversion 

to an LLC. Specifically, the Exchange 

proposes to create an introductory 

paragraph to the By-Laws to explain that 

the By-Laws together with the LLC 

Agreement constitute the LLC 

Agreement within the meaning of the 

LLC Act.7

Discussion of the Proposed LLC 

Agreement 

As mentioned above, the Exchange 

proposes to adopt an LLC Agreement as 

part of its conversion to a Delaware LLC. 

Such LLC Agreement will contain many 

provisions set forth in the Certificate of 

Incorporation of the Exchange, with 

such modifications as are necessary to 

reflect the new entity form. NASDAQ 

OMX Group and the Trust, the current 

common and preferred stockholders of 

the Exchange, respectively, would each 

be admitted to, and become a member 

of, the LLC. As a member of the LLC, 

each such person will hold limited 

liability company interests in the LLC, 

denoted in the LLC Agreement as 

Common Stock and Preferred Stock.8

The proposed LLC Agreement begins 

with an introductory paragraph 

identifying the parties to the LLC 

Agreement and certain recitals. Such 

recitals set forth the conversion process 

generally, including (i) the applicable 

Delaware law 9 by which the conversion 

is effected, (ii) the conversion of all of 

the shares of the capital stock of the 

NASDAQ OMX PHLX, Inc. into limited 

liability company interests of the LLC 

(designated therein as Common Stock 

and Preferred Stock), (iv) the admission 

of NASDAQ OMX Group and the PHLX 

Trust to the LLC as members thereof, 

and (v) the ownership structure postconversion. As provided for in the LLC 

Agreement, NASDAQ OMX Group and 

the Trust will hold Common Stock and 

Preferred Stock, respectively, in the 

LLC, with the same rights and 

obligations as such entities had under 

the Certificate of Incorporation and the 

By-Laws immediately prior to the 

conversion. With respect to the other 

sections of the LLC Agreement, the 

changes from or additions to the 

existing organizational documents of the 

Exchange are discussed below by 

Section. 

Section 1 of the LLC Agreement, titled 

‘‘Name; Conversion’’, specifies the name 

of the entity in addition to other 

information with respect to the 

conversion process. As discussed above, 

the name of the Exchange, ‘‘NASDAQ 

OMX PHLX, Inc.’’, set forth in provision 

FIRST of the Certificate of 

Incorporation, is proposed to be 

changed to ‘‘NASDAQ OMX PHLX LLC’’ 

as required by the LLC Act. Section 1 of 

the LLC Agreement also notes that the 

organization documents, namely the 

Certificate of Formation and LLC 

Agreement with attachments, supersede 

the former organizational documents, in 

this case the Certificate of Incorporation 


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54206 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Notices 

10For example, see Section 2 of the NSM LLC 

Agreement. 

11For example, see Section 3 and 4 of the NSM 

LLC Agreement. 

12For example, see Section 7 of the NSM LLC 

Agreement. 

13The introductory paragraph of provision SIXTH 

of the Certificate of Incorporation is reflected in 

Section 8(a) and (b) of the LLC Agreement. 

Subsection (a) of provision SIXTH of the Certificate 

of Incorporation is reflected in Section 8(c) of the 

LLC Agreement. Subsection (b) of provision SIXTH 

of the Certificate of Incorporation is reflected in 

Section 8(f) of the LLC Agreement. 

14As the term ‘‘Governor’’ is not a term used in 

the LLC Act, to ensure that provisions of the LLC 

Act that relate to ‘‘managers’’ of a Delaware LLC (i.e. 

those Persons who manage a Delaware LLC), the 

Governors have been denoted as such solely for this 

purpose. 

15For example, see Section 9(a), (c) and (j) of the 

NSM LLC Agreement. 

and the By-Laws of NASDAQ OMX 

PHLX, Inc. Further Section 1 of the LLC 

Agreement reiterates the conversion of 

all of the shares of the capital stock of 

the Exchange and the admission of the 

members of the LLC as generally set 

forth in the recitals of the LLC 

Agreement. The LLC Act provision 

which provides for the continued 

existence of the Exchange as a Delaware 

LLC is noted in the last sentence of this 

Section as well. This sentence, while 

not identical to, is similar in nature to 

the perpetual existence of the Exchange 

set forth in provision FIFTH of the 

Certificate of Incorporation in that it 

recognizes the continuation of the 

Exchange without a set term. This 

language was used in lieu of the 

language of provision FIFTH of the 

Certificate of Incorporation as it derives 

from the LLC Act and is more 

appropriate to the proposed new entity 

form of the Exchange. Identical language 

can be found in Section 6 of the NSM 

LLC Agreement. 

Section 2 of the LLC Agreement, titled 

Principal Business Office, lists the 

principal business office of the 

Exchange and provides notice of such 

information to those reviewing the LLC 

Agreement. Such provision is standard 

in limited liability company agreements 

of Delaware LLCs 10 and such addition 

will have no material substantive effect 

on the current operations or governance 

of the Exchange. 

Section 3 of the LLC Agreement, titled 

Registered Office; Registered Agent, lists 

the Exchange’s registered office and 

registered agent, which was formerly 

reflected in provision SECOND of the 

Certificate of Incorporation. The entity 

acting as the registered agent and the 

place of the registered office will remain 

unchanged post-conversion. 

Section 4 of the LLC Agreement, titled 

Members, sets out the name and mailing 

address of each Stockholder, providing 

notice of such information to those 

reviewing the LLC Agreement. Such 

provision is standard in limited liability 

company agreements of Delaware 

LLCs 11 and such addition will have no 

material substantive effect on the 

current operations or governance of the 

Exchange. 

Section 5 of the LLC Agreement, titled 

Certificates, refers to the filing of 

Certificate of Formation and the 

Certificate of Conversion of the LLC. 

Such provision acknowledges and 

confirms that such filings, which were 

necessary for the conversion to be 

effected, were authorized by the LLC. 

This Section additionally sets forth 

those person(s) who have the authority 

to file any other certificates with the 

Delaware Secretary of State on behalf of 

the LLC pursuant to the LLC Act. This 

provision has no analog under the 

existing organizational documents of the 

Exchange but given its administrative 

nature, such change will have no 

material substantive effect on the 

current operations of the Exchange. 

Section 6 of the LLC Agreement, titled 

Purpose, discusses the Exchange’s 

business purpose. This provision is 

virtually identical to provision THIRD 

of the Certificate of Incorporation with 

the following modifications: (i) This 

Section references a limited liability 

company instead of a corporation to 

reflect the appropriate entity form of the 

Exchange post-conversion, and (ii) this 

section also includes standard language 

to clarify that not only can the LLC 

engage in the general purpose set forth 

therein but it can also engage in those 

activities necessary or incidental to such 

purpose. This clarifying language is 

common in limited liability company 

agreements of Delaware LLCs 12 and 

such addition will have no material 

substantive effect on the current 

operations or governance of the 

Exchange. 

Section 7 of the LLC Agreement, titled 

Powers, discusses the general powers of 

the Exchange, the Board of Governors 

and the Officers and largely defers to the 

applicable provisions set forth in the 

LLC By-Laws. The LLC By-Laws at 

Article IV, Section 4–4 delineate in 

more detail the powers of the Board of 

Governors which are referred to in 

Section 7 of the LLC Agreement. 

Similarly, the LLC By-Laws delineate in 

more detail the powers of the Officers of 

the Exchange in Article V. Article IV, 

Section 4–4 and Article V of the LLC 

By-Laws are identical to the 

corresponding provisions in the current 

By-Laws of the Exchange. 

Section 8 of the LLC Agreement, titled 

Management, sets forth the general 

management structure of the Exchange. 

It is proposed that the management 

structure of the LLC be the same as 

currently in effect under the governing 

documents of NASDAQ OMX PHLX, 

Inc. As proposed, the management 

would remain vested with the Board of 

Governors, the general powers, 

composition and removal of which are 

set forth in Section 8 of the LLC 

Agreement. Such provision is 

substantially identical to that of 

provision SIXTH of the Certificate of 

Incorporation.13 Certain additions have 

been made to the language retained from 

provision SIXTH of the Certificate of 

Incorporation, including (i) a provision 

referencing the applicable provisions of 

the By-Laws and their incorporation 

into the LLC Agreement in order to 

acknowledge the inter-relationship of 

these two documents in the governance 

of the LLC, (iii) a sentence denoting 

each Governor as a ‘‘manager’’ of the LLC 

for purposes of the LLC Act,14 and (iv) 

a provision acknowledging that the 

Governors are agents of the LLC in 

performing their duties as prescribed by 

the Agreement. Each such addition 

represents standard language typically 

contained in limited liability company 

agreements of Delaware LLCs 15 and 

such additions will have no material 

substantive effect on the current 

operations or governance of the 

Exchange. 

Section 9 of the LLC Agreement, titled 

Officers, discusses generally the officers 

of the LLC and their appointment, role 

as agent and duties but defaults to the 

By-Laws for a more detailed description 

of such topics. The applicable 

provisions of the LLC By-Laws are in 

Article V and remain identical to the 

description provided in Article V of the 

By-Laws currently in effect. 

Section 10 of the LLC Agreement, 

titled Limited Liability, corresponds, in 

part, with provision FIFTEENTH of the 

Certificate of Incorporation and Article 

IV, Section 4–18 of the current By-Laws 

in that it limits the personal liability of 

Governors for the debts and obligations 

of the Exchange. The Exchange also 

proposes to include, in Section 10 of the 

LLC Agreement, standard language, 

which is consistent with, and reflective 

of, the limitation on liability of members 

provided for in the LLC Act, to limit the 

personal liability of the Stockholders for 

the debts and obligations of the 

Exchange. Similar language is contained 

in the NSM LLC Agreement in Section 

11 therein. 

Sections 11 through 14 of the LLC 

Agreement are equity-related provisions 

which encompass the topics of capital 

contributions, additional capital 


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16Currently, pursuant to the Certificate of 

Incorporation at provision FOURTH at (b), the 

Series A Preferred is entitled to no dividends and 

a de minimis amount in a liquidation preference. 

The Series A Preferred Shareholder retains these 

rights in the LLC Agreement at Section 16 (c)(iii). 

17A virtually identical provision is set forth in 

Section 16 of the NSM LLC Agreement. 

18Specifically, the last sentence of Section 16(a) 

of the LLC Agreement would state: ‘‘The Exchange 

may issue or establish such other interests in the 

Exchange or such other Exchange securities as the 

Board determines in accordance with this 

Agreement and the By-Laws.’’ With respect to this 

proposed sentence, the Exchange notes that if it 

decided to issue or establish such other interests in 

the Exchange or other Exchange securities, the 

Exchange would take the necessary corporate 

actions and would seek the necessary approvals to 

do so. See E-mail from Angela S. Dunn, Assistant 

General Counsel, Phlx, to Richard Holley, Assistant 

Director, Division of Trading and Markets, 

Commission, dated August 25, 2010. 

contributions, allocations of profits and 

losses and distributions. These 

provisions set forth the basic economic 

arrangement of the Stockholders and 

remain consistent with the economic 

arrangement under the current corporate 

documents. For example, NASDAQ 

OMX Group, as the sole common 

shareholder, is generally entitled to all 

dividends declared by the Exchange. As 

the sole economic member of the LLC, 

NASDAQ OMX Group is entitled to all 

distributions made by the LLC. Profits 

and losses will also be allocated to 

NASDAQ OMX Group. This is a slight 

change from the current allocation 

structure, which allocates such profits 

and losses to the Exchange rather than 

directly to its stockholders. However, 

the LLC is a disregarded entity for tax 

purposes unlike a corporation, and as 

such profits and losses need to be 

allocated to the appropriate members of 

the LLC. The Trust does not share in 

such allocation as it has no economic 

rights associated with the Series A 

Preferred Stock it holds.16 Additionally, 

these Sections of the LLC Agreement 

require that NASDAQ OMX Group’s 

contributions be noted in the books and 

records of the LLC and that no member 

shall be required to make any additional 

capital contribution to the LLC without 

its consent and the consent of the Board 

of Governors. These provisions are 

virtually identical to provisions 12 

through 15 of the NSM LLC Agreement, 

and given their administrative nature 

shall have no material substantive effect 

on the operations of the Exchange. 

Section 14(b) also incorporates the 

language of Article FOURTEENTH of 

the Certificate of Incorporation, relating 

to distributions to foreign currency 

options participants, with certain 

modifications necessary in light of 

distribution limitations contained in the 

LLC Act. For example, the entire 

provision, which discusses certain 

distributions to foreign currency option 

participants, is ‘‘subject to’’ the LLC Act 

to ensure that the mandatory limitations 

on distributions contained in Sections 

18–607 and 18–804 of the LLC Act will 

be respected in contemplating any 

distribution under Section 14(b) of the 

LLC Agreement to the extent such 

provisions would be applicable to such 

distributions. 

The first sentence of Section 15 of the 

LLC Agreement, titled Books and 

Records, is reflective of Article 

TWELFTH of the Certificate of 

Incorporation. Section 15 of the LLC 

Agreement also sets forth certain 

additional information relating to 

general administrative matters with 

respect to the books and records of the 

LLC including that (i) the Board of 

Governors will keep and maintain 

complete books and records of the LLC, 

(ii) the Stockholders have the right to 

inspect such books and records, and (iii) 

the Board of Governors has the right to 

select method by which the books will 

be kept and the public accounting firm 

who will provide any independent audit 

of such books and records. Given the 

general administrative nature of such 

additions, none of these additions shall 

have any material substantive effect on 

the manner in which the Exchange is 

governed by the Board of Governors or 

the general operations of the 

Exchange.17

Section 16 of the LLC Agreement, 

titled Limited Liability Company 

Interests, sets forth the classes of limited 

liability company interests, denoted as 

shares, of the LLC and the rights and 

obligations of each class. The language 

pertaining to the authorized shares, 

classes, rights and obligations of the 

Stockholders contained in this section is 

virtually identical to the language 

contained in provision FOURTH of the 

Certificate of Incorporation, which 

relates to the current shares and classes 

of the Exchange. There has been no 

material change to any of the rights and 

obligations of the Stockholders. A 

sentence has been added to allow for the 

Exchange to issue additional interests or 

securities in the Exchange upon 

approval by the Board of Governors.18

This gives the Exchange versatility in 

issuing the various ‘‘interests’’ to the 

members utilizing the Exchange, which 

are otherwise not contemplated 

generally in the LLC context. Any such 

‘‘interests’’ would be limited in the 

manner prescribed by the Board of 

Governors. Also, this Section includes 

language tracing the conversion of the 

corporate shares held by the 

Stockholders into shares of the LLC. 

Finally, the term ‘‘dividend’’ has been 

changed to ‘‘distribution’’ as, under the 

LLC Act, a Delaware LLC makes 

distributions whereas a Delaware 

corporation would declare a dividend. 

This change does not affect the 

underlying right of the Stockholder to 

such property; it is merely a change in 

terminology. The information contained 

in Section 16 of the LLC Agreement is 

also set forth in Article XXIX, Section 

29–4 of the LLC By-Laws. The definition 

for ‘‘Designated Independent Governors’’ 

contained in provision FOURTH of the 

Certificate of Incorporation is not 

defined in Section 16, as the definition 

of this term is already set forth in in [sic] 

Article I of the By-Laws of the LLC. 

Such definition, other than updating the 

reference to the applicable governing 

documents, remains unchanged postconversion. 

Section 17 of the LLC Agreement, 

titled Other Business, is standard 

language in the limited liability 

company context and merely states that 

the Stockholders may engage in other 

business other than their interest in the 

LLC and that the LLC has no rights to 

such other business or the proceeds 

derived therefrom. This concept is 

consistent with that of a stockholder of 

a corporation in that a stockholder, 

generally, has no obligation to present 

opportunities to the corporation or turn 

over proceeds derived from other 

ventures of the stockholder. A similar 

provision is contained in Section 18 of 

the NSM LLC Agreement. 

Section 18 of the LLC Agreement, 

titled Exculpation and Indemnification, 

provides for the exculpation and the 

indemnification of the Stockholders and 

related persons. The inclusion of such a 

provision in the limited liability context 

is not uncommon as it reflects the fact 

that Stockholders, under the LLC Act, 

can act on behalf of the LLC to the 

extent authorized under the LLC 

Agreement and the LLC By-Laws. As 

such, it is proposed to provide the same 

level of exculpation and 

indemnification for such persons as is 

given to the Board of Governors to the 

extent such persons are authorized to 

act on behalf of the LLC. As such, the 

same standard of conduct applicable to 

the Board of Governors under Article 

SIXTEENTH of the Certificate of 

Incorporation is proposed to be used in 

Section 18 of the LLC Agreement. 

Articles FIFTEENTH and SIXTEENTH 

of the Certificate of Incorporation, 

relating to the exculpation and 

indemnification of the Board of 

Governors, have been set forth in Article 

IV, Sections 4–18(g) and 4–18(h) of the 

LLC By-Laws. 

Section 19 of the LLC Agreement is 

merely a general statement that any 


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19Section 20 of the LLC Agreement is 

intentionally omitted and may be used at a future 

date. The Exchange would file a proposed rule 

change with the Commission if it intended to 

amend this provision. 

20For example, see Sections 22 through 26, and 

28 of the NSM LLC Agreement. 

21The meaning of ‘‘Member’’ as set forth in the 

LLC By-Laws is not proposed to change. 

22This language was added to the By-Laws at the 

time of the merger between a wholly owned 

subsidiary of NASDAQ OMX Group and the 

Philadelphia Stock Exchange, Inc. See Securities 

Exchange Act Release Nos. 58179 (July 17, 2008), 

73 FR 42874 (July 23, 2008) (SR–Phlx–2008–31); 

and 58183 (July 17, 2008), 73 FR 42850 (July 23, 

2008) (SR–NASDAQ–2008–035). 

transfer of an interest in the LLC must 

be made in accordance with the ByLaws and the LLC Agreement. The LLC 

Agreement addresses transfers in 

Section 16 thereof. Such section 

provides certain conditions to the 

transfer of the outstanding Common 

Stock and Preferred Stock and, as noted 

previously, such conditions are virtually 

identical to those conditions currently 

contained in provision FOURTH of the 

Certificate of Incorporation. 

Additionally, Article XXIX, Section 29– 

4 of the LLC By-Laws also addresses the 

transfer of shares in the Exchange. With 

minor modifications addressing limited 

liability company specific issues, 

Article XXIX, Section 29–4 of the LLC 

By-Laws remains identical to Article 

XXIX, Section 29–4 of the By-Laws 

currently in effect.19

Section 21 of the LLC Agreement sets 

forth the events which will cause the 

dissolution of the LLC, as prescribed by 

mandatory provisions of the LLC Act or 

as otherwise agreed among the parties. 

A similar provision is contained in 

Section 21 of the NSM LLC Agreement. 

Sections 22 through 26 and 28 of the 

LLC Agreement are general provisions 

which are relatively standard in limited 

liability company agreements of 

Delaware LLCs.20 These provisions 

include: A benefits of agreement clause, 

a severability clause, a binding 

agreement clause, an entire agreement 

clause, a governing law clause and a 

notice provision. We note that the 

Trustee, Members and Member 

Organizations are acknowledged as 

holding rights under the Agreement and 

included as third-party beneficiaries to 

the LLC Agreement as is similarly 

provided in the NSM LLC Agreement. 

Section 27 of the LLC Agreement 

contains the necessary vote under 

which the LLC Agreement may be 

amended. Under the Certificate of 

Incorporation, the Board of Governors 

had the right to amend the By-Laws 

currently in effect. Such By-Laws 

provide for amendment in the manner 

prescribed in Article XXII, Section 22– 

1. This same amendment vote has been 

set forth in Section 27 of the LLC 

Agreement so that the authority of the 

Board of Governors to amend will 

remain unchanged following the 

conversion. 

The provisions in the Certificate of 

Incorporation have been incorporated 

into the Certificate of Formation, LLC 

Agreement and By-Laws as indicated 

herein but for provisions FIFTH and 

TENTH. The language used in provision 

FIFTH of the Certificate of Incorporation 

was not incorporated verbatim into the 

LLC Agreement; however, as noted 

previously, the general concept of this 

provision is reflected in the last 

sentence of Section 5 of the LLC 

Agreement. Additionally, provision 

TENTH of the Certificate of 

Incorporation was not carried over to 

the proposed Agreement because such 

provision is not consistent with 

applicable Delaware law in the limited 

liability company context. 

III. Proposed By-Laws of the LLC 

As noted above, the Exchange 

proposes to adopt the By-Laws of 

NASDAQ OMX PHLX, Inc. as the LLC 

By-Laws with the changes noted below. 

It is proposed to incorporate certain 

global changes to the By-Laws currently 

in effect including (i) referencing the 

Certificate of Formation of the LLC, the 

LLC By-Laws and/or the LLC 

Agreement, as applicable, instead of the 

Certificate of Incorporation as such 

documents will replace and supersede 

the Certificate of Incorporation and 

existing By-Laws, (ii) deleting references 

to the DGCL (including the definition 

thereof) throughout the By-Laws as such 

law will no longer be applicable to the 

Exchange post-conversion and 

substituting in lieu thereof the phrase 

‘‘applicable law,’’ and (iii) updating all 

references to ‘‘NASDAQ OMX PHLX, 

Inc.’’ to ‘‘NASDAQ OMX PHLX LLC’’ 

consistent with the name change 

associated with the conversion. 

Specifically, in Article I, titled 

Definitions, the Exchange proposes to 

delete the reference to Section 1–1 

Definitions. The Exchange proposes to 

reference the LLC By-Laws, the LLC 

Agreement and the Trust Agreement in 

the definition for both Designated 

Governors and Designated Independent 

Governor, in lieu of the reference to 

provision FOURTH of the Certificate of 

Incorporation, which will no longer be 

effective post-conversion. None of these 

changes will have a material substantive 

effect but are merely reflective of the 

proposed change in applicable 

governing documents. 

Further, the Exchange proposes to 

include in the text associated with the 

term ‘‘Member’’ a sentence that such 

term as used in the LLC By-Laws is 

distinct from the usage of member 

within the meaning of the LLC 

Agreement and the LLC Act.21 Again 

this change has no material substantive 

effect but merely reflects that the term 

‘‘member’’ is a term of art under the LLC 

Act, with rights and obligations 

associated with it that are distinct from 

how the term ‘‘Member’’ is used in the 

LLC By-Laws. The Exchange also 

proposes to amend the text in the term 

‘‘Demutualized [sic] Merger’’ to be 

historically accurate in that NASDAQ 

OMX PHLX, Inc. was a party to such 

transaction rather than the LLC, which 

was not in existence on the date of such 

merger. 

The term ‘‘Stockholder’’ is proposed to 

be modified to reflect that NASDAQ 

OMX Group and the Trust are no longer 

stockholders of a corporation but 

members of a Delaware LLC. Such 

change does not have material 

substantive effect but is merely a 

conforming change to the new entity 

form of the Exchange. The rights and 

obligations of these persons remain 

unchanged following the conversion, 

only the terminology is proposed to be 

revised. Such definition is consistent 

with the meaning given to such term in 

the LLC Agreement. 

The Exchange proposes to define 

‘‘NASDAQ OMX Conversion’’ to refer to 

the conversion proposed and described 

herein from the Delaware corporation, 

‘‘NASDAQ OMX PHLX, Inc.’’ to the 

Delaware LLC, ‘‘NASDAQ OMX PHLX 

LLC.’’ The Exchange proposes to 

eliminate references to the Merger 

Subsidiary 22 and replace those 

references with language referencing the 

conversion to an LLC. 

The Exchange proposes to amend 

Article III, titled Member and Member 

Organization Nominations—Member 

and Member Organization Annual 

Elections—Member and Member 

Organization Meetings, to remove 

references to the Certificate of 

Incorporation and instead reference the 

By-Laws, as the By-Laws, following the 

conversion, will be the appropriate 

governing document. 

Section 3–3 of Article III, titled 

Removal of Designated Governors, is 

proposed to refer to a special meeting in 

the first sentence thereof in lieu of the 

current reference to an annual meeting. 

The reference to an ‘‘annual’’ meeting is 

inconsistent with the remainder of the 

first sentence in Section 3–3. Such 

sentence discusses a meeting called in 

accordance with Section 3–2(e). Section 

3–2(e) sets forth the procedure to call a 


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23 15 U.S.C. 78f(b). 

24 15 U.S.C. 78f(b)(5). 

25 ‘‘The conversion of any entity into a domestic 

limited liability company shall not be deemed to 

affect any obligations or liabilities of the other 

entity prior to its conversion to a domestic limited 

liability company * * *’’ See 6 Del. C. § 18–214(e). 

‘‘special’’ meeting not an ‘‘annual’’ 

meeting. As such, the correct meeting 

reference is to a ‘‘special’’ meeting not an 

‘‘annual’’ meeting. The Exchange 

proposes to make this change so that the 

sentence is consistent throughout. This 

proposal does not amend the 

composition of the Board of Governors. 

The Exchange proposes to amend 

Article IV, titled Board of Governors, to 

remove references to the Merger and 

Merger Subsidiary and instead reference 

the Conversion. Section 4–18 of Article 

IV of the LLC By-Laws, titled 

Indemnification, is proposed to reflect 

the relevant indemnification standard 

provided in provision FIFTEENTH of 

the Certificate of Incorporation 

pertaining to the indemnification of 

Governors. It is proposed to include in 

Section 4–21 of Article IV of the LLC 

By-Laws clarifying language regarding 

the necessary purpose behind a books 

and records inspection request. Such 

language is consistent with and 

provided by the LLC Act. 

The Exchange proposes to add a 

Section 4–24 to Article IV of the LLC 

By-Laws. This provision, entitled 

‘‘Interested Transactions’’ is 

substantially identical to the language 

used in provision ELEVENTH of the 

Certificate of Incorporation and ensures 

that the guidelines relating to the types 

of transactions described therein are 

retained following the conversion of the 

Exchange. 

The Exchange proposes to remove the 

reference to ‘‘corporate’’ in each instance 

where the phrase ‘‘corporate seal’’ is 

used in Article V of the current ByLaws, specifically Section 5–8. The term 

‘‘corporate’’ is not applicable to the 

Exchange post-conversion. 

The Exchange proposes certain 

changes to Article VIII, titled Presiding 

Officials of the Exchange, Article X, 

titled Standing Committees, Article XII, 

titled Permits-Eligibility-ElectionInitiation Fee, Article XV, titled 

Transfer of Foreign Currency Options 

Participations, Article XVII, titled 

Insolvency-Suspension-Reinstatement, 

and Article XVIII, titled Offenses, 

Discipline, Penalties and Business 

Connections [sic], to add clarifying 

language, correct minor inconsistencies 

and remove extraneous language within 

these sections. These changes have no 

material substantive effect on the above 

noted provisions or the operations of the 

Exchange but are merely clerical in 

nature. 

The Exchange proposes to make 

certain clerical changes to Article XV, 

titled Transfer of Foreign Currency 

Options Participations. These changes 

are not substantive in nature and merely 

reflect a reorganization of the existing 

provisions. Specifically, the terms 

ordering Section 15–3 (e.g. ‘‘First’’) have 

been deleted as such terms are 

redundant in light of the phrase ‘‘in the 

following order of seniority’’ contained 

in Section 15–3(a). Additionally, the 

sub-sections of Section 15–3(a)(iii) have 

been given a letter ordering designation. 

Finally, the sub-section of Section 15– 

3 entitled ‘‘Balance of Proceeds’’ has 

been moved to follow the last paragraph 

relating to the priority of payments in 

order to have such sub-section be in the 

appropriate payment priority. Such subsection was not otherwise modified. 

The Exchange proposes to incorporate 

additional language to the transfer 

provision contained in Article XXIX, 

Section 29–4(b) to address Delaware 

LLC-specific issues. The existing 

conditions to transfers previously set 

forth in Section 29–4(b) remain 

unchanged. Rather, the additional 

language in the first sentence of Section 

29–4(b) merely adds a new requirement 

to the effectiveness of a transfer. Under 

the proposed Section 29–4(b), a written 

instrument in which the transferee 

agrees to be bound by the LLC 

Agreement must be delivered along with 

the other instruments noted in Section 

29–4(b) prior to a transfer being 

effective. This will ensure that any 

transferee is aware of, and bound by, all 

relevant governing provisions. 

Additionally, two sentences have been 

added to this subsection in order to 

address the admission of any transferee 

who complies with this Section to the 

LLC. Unlike a stockholder in the 

corporation, a transferee needs to be 

admitted to the LLC before it can obtain 

the rights of a member thereof. This is 

an additional formality in the limited 

liability company context that needs to 

be provided for; however, the provision 

for admission contained in Section 29– 

4(b) does not effect a material 

substantive change on the transfer 

provision as a whole but is merely 

reflective of a nuance specific to the 

limited liability company form. To the 

extent that a transferee complies with 

Section 29–4, the additional language 

provides that they will automatically be 

admitted to the LLC. 

IV. Other Provisions of the Certificate of 

Incorporation 

There are two other Articles of the 

Certificate of Incorporation of NASDAQ 

OMX PHLX, Inc. which are reflected in 

the By-Laws of the Exchange. Article 

SEVENTH is set forth in By-Law Article 

XXVIII, Section 28–13 and titled Action 

Without a Meeting. Also, Article 

EIGHTH of the Certificate of 

Incorporation is set forth in By-Law 

Article XXVIII, Section 28–1 and titled 

Place of Stockholder Meetings. The LLC 

Agreement and attached By-Laws 

provide the Board the ability to amend 

documents as set forth in By-Law 

Article XXII, Section 22–1, 

Amendments to By-Laws as well as 

Section 27 of the LLC Agreement. 

The Exchange intends for this 

proposal to be operative upon filing 

with the State of Delaware. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 23 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 24

in particular, in that it is designed 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, by 

streamlining all subsidiary selfregulatory organizations of NASDAQ 

OMX Group to conform the corporate 

documents and provide clarity to its 

members. The proposed amendments 

will not impact the rights of members or 

the sole shareholder, both of which will 

continue to be entitled to all rights and 

privileges that exist under the governing 

documents of NASDAQ OMX PHLX, 

Inc.25

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 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 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to 


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54210 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Notices 

26 15 U.S.C. 78s(b)(3)(A)(ii). 

27 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

the Commission written notice of its intent to file 

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. 

28 17 CFR 240.19b–4(f)(6). 

29 17 CFR 240.19b–4(f)(6)(iii). 

30For 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). 

31See SR–PHLX–2010–104 at Item 7. 

32See supra note 4 and accompanying text, and 

discussion in Section II.A.1. 33 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. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 62341 

(June 21, 2010), 75 FR 36756 (June 28, 2010). 

6FINRA submitted through the Commission’s 

Electronic Form 19b–4 Filing System an extension 

of time period for Commission action through 

August 16, 2010. 

7See Securities Exchange Act Release No. 62729 

(August 16, 2010), 75 FR 52384 (August 25, 2010). 

19(b)(3)(A)(ii) of the Act 26 and Rule 

19b–4(f)(6) 27 thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 28 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),29 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest.30 The 

Exchange represents that the proposal 

‘‘does not impact either the members of 

NASDAQ OMX PHLX, Inc. or the 

public’’ and only ‘‘impacts the 

administrative functions of the 

Exchange.’’ 31 Additionally, the 

Commission notes that the Exchange 

represents that the proposed Certificate 

of Formation, LLC Agreement, and ByLaws reflect all of the current rights and 

obligations of the members and owners 

of the Exchange, and that the proposed 

LLC Agreement is consistent in form 

and scope with the limited liability 

company agreement of another selfregulatory organization previously 

approved by the Commission.32

Accordingly, the Commission waives 

the 30-day operative delay requirement 

and designates the proposed rule change 

to be operative on September 1, 2010. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend 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–Phlx–2010–104 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–Phlx–2010–104. 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 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 Number SR–Phlx– 

2010–104 and should be submitted on 

or before September 24, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–22023 Filed 9–2–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62798; File No. SR–FINRA– 

2010–032] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Designation 

of a Longer Period for Commission 

Action on Proposed Rule Change 

Relating to Clearly Erroneous 

Transactions 

August 30, 2010. 

On June 17, 2010, the Financial 

Industry Regulatory Authority, Inc. 

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

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change to amend its rules 

to set forth clearer standards and curtail 

its discretion with respect to breaking 

erroneous trades. 

Section 19(b)(2) of the Act 4 provides 

that within thirty-five days of the 

publication of notice of the filing of a 

proposed rule change, or within such 

longer period as the Commission may 

designate up to ninety days of such date 

if it finds such longer period to be 

appropriate and publishes its reasons 

for so finding, the Commission shall 

either approve the proposed rule change 

or institute proceedings to determine 

whether the proposed rule change 

should be disapproved. The 35th day for 

this filing was August 2, 2010.5 The 

Commission had received an extension 

of time from FINRA until August 16, 

2010.6 The Commission extended this 

time period until August 30, 2010.7 The 

Commission is again extending this time 

period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider this proposed rule change, 

relating to the amendment of clearly 

erroneous execution rules to provide 

greater transparency and certainty to the 

process of breaking trades, and the 

comment letters that have been 

submitted in connection with the filing. 


srobinson on DSKHWCL6B1PROD with NOTICES