Federal Register / Vol. 74, No. 128 / Tuesday, July 7, 2009 / Notices 32207 

86 15 U.S.C. 78m and 78o(d). 

87 15 U.S.C. 78e. 

88 15 U.S.C. 78e and 78q–1. 

89 15 U.S.C. 78f and 15 U.S.C. 78o–3. 

90 17 CFR 240.15a–6(b)(3). 

91 15 U.S.C. 78o(a)(1). 

92 15 U.S.C. 78o(b)(4) and 78o(b)(6). 

93For purposes of this exemption, references in 

paragraphs (a)(3)(i) through (iii) and paragraph 

(b)(2) of Rule 15a–6 to major U.S. institutional 

investors shall be deemed to be references to QIBs. 

In addition, for purposes of this exemption, the 

reference in paragraph (a)(3)(iii)(D) to Form BD 

shall be deemed a reference to Form BD–N with 

respect to Notice BDs. 

94Notwithstanding paragraph (a)(3)(ii)(A)(1) of 

the rule, foreign associated persons of the foreign 

broker or dealer may have in-person contacts 

(without the participation of an associated person 

of a registered broker or dealer) during visits to the 

United States with QIBs, so long as the number of 

days on which such in-person contacts occur does 

not exceed 30 per year and the foreign associated 

persons engaged in such in-person contacts do not 

accept orders to effect securities transactions while 

in the United States. See supra note 65. 

95 15 U.S.C. 78mm. 

96 15 U.S.C. 78f(h)(1). 

97 15 U.S.C. 78o–3(a). 

98 15 U.S.C. 78o(a)(2). 

99 17 CFR 240.15a–6(b)(3). 

100 15 U.S.C. 78o(a)(1). 

101 15 U.S.C. 78mm. 

102 17 CFR 240.15a–6(b)(3). 

103 15 U.S.C. 78o(b)(4) and 78o(b)(6). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59858 

(May 4, 2009), 74 FR 22191 (‘‘Notice’’). 

4Amendment No. 1 modified the original rule 

proposal to indicate that the Board of Directors of 

NASDAQ OMX approved the proposed rule change 

on May 28, 2009, in addition to December 17, 2008, 

and to revise the proposed rule change with respect 

to ‘‘Extension of Time Period for Commission 

Action.’’ Because these are technical modifications, 

Continued 

security is required to file reports with 

the Commission pursuant to Section 13 

or Section 15(d) of the Exchange Act; 86

(b) Is a closing transaction to offset a 

position in a contract of sale for future 

delivery that satisfied the conditions in 

paragraph (1)(a) of this order at the time 

such position was opened. 

(2) Is executed on, or subject to the 

rules of, an exchange or contract market 

that has its principal place of business 

outside the U.S., that is regulated as an 

exchange or contract market in a 

country other than the U.S., and that is 

not required to register with the 

Commission under Section 5 of the 

Exchange Act; 87

(3) Is cleared and settled on, and with 

respect to such clearance and settlement 

subject to the rules of, an exchange, 

contract market, or clearing entity that 

is regulated as an exchange, contract 

market, or clearing entity in a country 

other than the U.S. and that is not 

required to register with the 

Commission under Section 5 or Section 

17A of the Exchange Act;88

(4) Is for a security future, that cannot 

be closed or liquidated by effecting an 

offsetting transaction on or through the 

facility of any exchange or association 

registered in the U.S. under Section 6 or 

Section 15A of the Exchange Act,89

respectively; and 

(5) Does not result in such person 

taking physical delivery of the 

underlying security in the U.S. in 

connection with settlement; 

B. Conditional Exemptions From 

Section 15(a)(1) of the Exchange Act 

and Certain Other Requirements 

For the reasons stated in, and by, this 

order, the Commission is exempting 

foreign brokers or dealers (as defined in 

Rule 15a–6(b)(3) under the Exchange 

Act) 90 that induce or attempt to induce 

the purchase or sale of any foreign 

security futures by a QIB that is subject 

to the exemption from Section 6(h)(1) of 

the Exchange Act, from the registration 

requirements of Section 15(a)(1) of the 

Exchange Act 91 and the reporting and 

other requirements of the Exchange Act 

(other than Sections 15(b)(4) and 

15(b)(6)),92 and the rules and regulations 

thereunder, that apply specifically to a 

broker or dealer whether or not 

registered with the Commission; 

provided that the foreign broker or 

dealer and the registered broker or 

dealer (as defined in Rule 15a–6(b)(5) 

under the Exchange Act), through which 

any resulting transactions with QIBs are 

effected, comply with the requirements 

of paragraphs (a)(3)(i) through (iii) 93 of 

Rule 15a–6 under the Exchange Act, 

except as otherwise provided below.94 If 

the registered broker or dealer through 

which any resulting transactions with 

QIBs are effected is a broker or dealer 

registered with the Commission 

pursuant to Section 15(b)(11) of the 

Exchange Act (‘‘Notice BD’’), then: 

(1) In lieu of the requirement in 

paragraph (a)(3)(iii)(A)(5) of Rule 15a–6, 

the Notice BD shall be responsible for 

complying with Rule 1.17 under the 

Commodity Exchange Act (‘‘CEA’’) (17 

CFR 1.17) with respect to the 

transactions; and 

(2) In lieu of the requirement in 

paragraph (a)(3)(iii)(A)(6) of Rule 15a–6, 

the Notice BD shall be responsible for 

receiving, delivering, and safeguarding 

funds and securities in connection with 

transactions on behalf of the QIB in 

compliance with the segregation 

requirements of the CEA and the 

regulations thereunder. 

Accordingly, 

It is hereby ordered, pursuant to 

Section 36 of the Exchange Act,95 that 

certain persons are exempt from the 

provisions of Section 6(h)(1) of the 

Exchange Act 96 that prohibit persons 

from effecting transactions in security 

futures products that are not listed on a 

national securities exchange or a 

national securities association registered 

pursuant to Section 15A(a) of the 

Exchange Act,97 subject to the 

conditions set forth above. 

It is hereby further ordered, pursuant 

to Section 15(a)(2) of the Exchange 

Act,98 that a foreign broker or dealer as 

defined in Rule 15a–6(b)(3) 99 is exempt, 

with respect only to the activities 

described above in Section V.B. of this 

order, from the registration 

requirements of Section 15(a)(1) of the 

Exchange Act, subject to the conditions 

set forth above.100

It is hereby further ordered, pursuant 

to Section 36 of the Exchange Act,101

that a foreign broker or dealer as defined 

in Rule 15a-6(b)(3) 102 is exempt, with 

respect only to the activities described 

above in Section V.B. of this order, from 

the reporting and other requirements of 

the Exchange Act (other than Sections 

15(b)(4) and 15(b)(6)),103 and the rules 

and regulations thereunder, that apply 

specifically to a broker or dealer 

whether or not registered with the 

Commission, subject to the conditions 

set forth above. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–15890 Filed 7–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60183; File No. SR– 

NASDAQ–2009–039] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Approving Proposed Rule Change, as 

Modified by Amendment No. 1 Thereto, 

to Amend the By-Laws of The NASDAQ 

OMX Group, Inc. 

June 26, 2009. 

On April 27, 2009, The NASDAQ 

Stock Market LLC (‘‘NASDAQ 

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 amend the ByLaws of The NASDAQ OMX Group, Inc. 

(‘‘NASDAQ OMX’’). The proposed rule 

change was published for comment in 

the Federal Register on May 12, 2009.3

On June 2, 2009, the NASDAQ 

Exchange filed Amendment No. 1 to the 

proposed rule change.4 The Commission 

32208 Federal Register / Vol. 74, No. 128 / Tuesday, July 7, 2009 / Notices 

the Commission is not publishing Amendment No. 

1 for comment. 

5Although there is a reference in the Notice to a 

proposed amendment to the Certificate of 

Incorporation of NASDAQ OMX (‘‘NASDAQ OMX 

Certificate’’), this proposal does not in fact amend 

the NASDAQ OMX Certificate. The Exchange 

recently amended the NASDAQ OMX Certificate 

pursuant to a separate filing with the Commission. 

See Securities Exchange Act Release No. 59460 

(February 26, 2009), 74 FR 9841 (March 6, 2009). 

6 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

7 15 U.S.C. 78(b)(1). 

8 15 U.S.C. 78f(b)(5). 

9See NASDAQ Exchange Rule 5605(a)(2). Rule 

5605(a)(2) was formerly designated Rule 

4200(a)(15). See Securities Exchange Act Release 

No. 59663 (March 31, 2009), 74 FR 15552 (April 6, 

2009) (SR–NASDAQ–2009–018). 

10See NASDAQ OMX By-laws, Article I (j), (m), 

and (n) for the definitions of Industry Director, NonIndustry Director, and Public Director, respectively. 

11 Id. 

12See NASDAQ Exchange Rule 5605(a)(2). 15 

U.S.C. 78j–1(m). 

received no comments regarding the 

proposal. This order approves the 

proposed rule change. 

I. Description of the Proposal 

As provided in Article XI of the 

NASDAQ OMX By-Laws, proposed 

amendments to the By-Laws are to be 

reviewed by the Board of Directors of 

each self-regulatory subsidiary of 

NASDAQ OMX, and if any such 

proposed amendment must, under 

Section 19 of the Act and the rules 

promulgated thereunder, be filed with, 

or filed with and approved by, the 

Commission before such amendment 

may be effective, then such amendment 

shall not be effective until filed with, or 

filed with and approved by, the 

Commission, as the case may be. 

Consistent with such requirement, the 

NASDAQ Exchange has filed proposed 

amendments to the NASDAQ OMX ByLaws.5 As described more fully in the 

Notice, the NASDAQ Exchange 

proposed the following amendments to 

the By-Laws. 

1. Amend Article I to reflect the 

recent name changes of the Philadelphia 

Stock Exchange and the Boston Stock 

Exchange to NASDAQ OMX PHLX, Inc. 

and NASDAQ OMX BX, Inc., 

respectively; 

2. Amend Article III to require a 

stockholder making a proposal to 

supply more complete information 

about the stockholder’s background. 

3. Amend Article IV to state that both 

the NASDAQ OMX Audit and 

Management Compensation Committees 

shall be composed of independent 

directors within the meaning of the 

rules of the NASDAQ Exchange that 

govern NASDAQ OMX’s listing (and, in 

the case of the Audit Committee, 

Section 10A of the Act). 

4. Amend Article IV to revise the 

compositional requirements of the 

NASDAQ OMX Nominating Committee. 

5. Amend Article VIII to: (a) Require 

NASDAQ OMX to provide 

indemnification against liability, 

advancement of expenses, and the 

power to purchase and maintain 

insurance on behalf of persons serving 

as a director, officer, or employee of any 

wholly owned subsidiary of NASDAQ 

OMX to the same extent as 

indemnification, advancement of 

expenses, and the power to maintain 

insurance is provided for directors, 

officers, or employees of NASDAQ 

OMX; (b) extend the discretionary 

authority of NASDAQ OMX under 

Section 8.1(c) of the By-Laws to provide 

indemnification to persons serving as an 

agent of NASDAQ OMX to persons 

serving as an agent of any wholly owned 

subsidiary of NASDAQ OMX; and (c) 

clarify that any repeal, modification or 

amendment of, or adoption of any 

provision inconsistent with, the 

indemnification and advancement of 

expenses provided for in Article VIII 

will not adversely affect the right of any 

person covered by the provision if the 

act or omission that any proceeding 

arises out of or is related to had 

occurred prior to the time for the repeal, 

amendment, adoption or modification. 

6. Amend Article IX to revise the 

language of the provisions dealing with 

capital stock to reflect possible 

participation in the Direct Registration 

System (‘‘DRS’’). 

7. Amend Article XII to conform 

certain provisions applicable to 

NASDAQ OMX’s directors, officers, 

employees, and/or agents more closely 

to corresponding provisions in the 

Amended and Restated By-Laws of 

NYSE Euronext (‘‘NYSE Euronext ByLaws’’). 

II. Discussion and Commission’s 

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.6 In particular, for 

the reasons discussed below, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(1) of the Act,7 which requires a 

national securities exchange to be so 

organized and have the capacity to carry 

out the purposes of the Act and to 

enforce compliance by its members and 

persons associated with its members 

with the provisions of the Act, and 

Section 6(b)(5) of the Act,8 in that it is 

designed, among other things, 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. 

The NASDAQ Exchange proposes to 

revise the structure of the NASDAQ 

OMX Nominating Committee. Currently, 

the NASDAQ OMX Nominating 

Committee is required to be composed 

solely of persons who are not directors, 

or who are directors not standing for reelection. Under the amended By-Laws, 

the NASDAQ OMX Nominating 

Committee would be composed of four 

or five directors, all of whom must be 

independent within the meaning of the 

rules of the NASDAQ Exchange.9

Further, the number of Non-Industry 

Directors (i.e., Directors without 

material ties to the securities industry) 

must equal or exceed the number of 

Industry Directors, and at least two 

members of the committee must be 

Public Directors (i.e., directors who 

have no material business relationship 

with a broker or dealer, NASDAQ OMX 

or its affiliates, or FINRA).10

The Commission believes that it is 

appropriate for NASDAQ OMX to revise 

the composition of its Nominating 

Committee so that it is composed 

exclusively of directors that would be 

considered independent within the 

meaning of the listing rules of the 

NASDAQ Exchange,11 to provide for a 

compositional balance between Industry 

Directors, Non-Industry Directors, and 

to specify that at least two Nominating 

Committee members must be Public 

Directors. The Commission further 

believes that it is appropriate for the ByLaws to be amended to specify that the 

NASDAQ OMX Management 

Compensation Committee and the Audit 

Committee must be composed 

exclusively of independent director 

members within the meaning of the 

listing rules of the NASDAQ Exchange 

(and, in the case of the Audit 

Committee, Section 10A of the Act).12

The NASDAQ Exchange has represented 

that NASDAQ OMX adheres to the 

director independence requirements in 

the NASDAQ Exchange’s listing rules 

and, in the case the of the Audit 

Committee) Section 10A of the Act, but 

believed that such requirements should 

be set forth expressly in the By-Laws. 

Currently, NASDAQ OMX directors, 

officers, and employees, as well as 

Federal Register / Vol. 74, No. 128 / Tuesday, July 7, 2009 / Notices 32209 

13See NYSE Euronext Bylaws, Article III, Section 

9.3; NYSE Euronext Bylaws, Article VII, Section 

7.1. See also Securities Exchange Act Release No. 

55293 (February 14, 2007), 72 FR 8033 (February 

22, 2007) (SR–NYSE–2006–120). 

14 15 U.S.C. 78s(b)(2). 

15 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. 78f(b). 

5 15 U.S.C. 78f(b)(4). 

agents, are required by the By-Laws to 

give due regard to the preservation of 

the independence of each self-regulatory 

subsidiary of NASDAQ OMX, not to 

take any actions that would interfere 

with each self-regulatory subsidiary’s 

regulatory functions, to cooperate with 

the Commission, to consent to U.S. 

jurisdiction, and to consent in writing to 

the applicability of these provisions. As 

more fully described in the Notice, the 

proposed rule change would conform 

Article XII of the By-Laws more closely 

to corresponding provisions in the 

NYSE Euronext By-Laws, which the 

Commission previously approved.13

III. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–NASDAQ– 

2009–039) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–15899 Filed 7–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60184; File No. SR– 

NYSEArca–2009–52] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To Amend the Schedule 

of Fees and Charges for Exchange 

Services 

June 29, 2009. 

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 June 10, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘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 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 

NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

‘‘Exchange’’) [sic], through its wholly 

owned subsidiary NYSE Arca Equities, 

Inc. (‘‘NYSE Arca Equities’’), is 

proposing to amend its Schedule of Fees 

and Charges for Exchange Services 

(‘‘Fee Schedule’’) to revise the Listing 

Fees applicable to Derivative Securities 

Products under NYSE Arca Rules 

5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 

8.203, 8.204, 8.300, 8.500 and 8.600 on 

NYSE Arca, LLC (‘‘NYSE Arca 

Marketplace’’), the equities facility of 

NYSE Arca Equities. The revised Fee 

Schedule is attached as Exhibit 5 [sic]. 

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 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 

of those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NYSE Arca has determined to amend 

the Exchange’s Fee Schedule to revise 

the Listing Fee applicable to Derivative 

Securities Products listed on the NYSE 

Arca Marketplace under Rules 5.2(j)(3) 

(Investment Company Units), 8.100 

(Portfolio Depositary Receipts), 8.200 

(Trust Issued Receipts), 8.201 

(Commodity-Based Trust Shares), 8.202 

(Currency Trust Shares), 8.203 

(Commodity Index Trust Shares), 8.204 

(Commodity Futures Trust Shares), 

8.300 (Partnership Units), 8.500 (Trust 

Units), and 8.600 (Managed Fund 

Shares). Specifically, the Exchange 

proposes to add a new provision to the 

Fee Schedule which states that in the 

case where a sponsor, managing owner, 

general partner or equivalent 

(collectively, the ‘‘Sponsor’’) is listing a 

new Derivative Securities Product on 

the Exchange for the first time, the 

Sponsor will be charged a one time 

consultation fee in the amount of 

$20,000. 

Under the current Fee Schedule for 

Derivative Securities Products, the 

Listing Fee is $5,000 and the Annual 

Fees range between $2,000 and $25,000 

depending on the number of shares 

outstanding for each issue. The current 

Listing and Annual Fees applicable to 

Derivative Securities Products will 

remain unchanged and be applicable to 

all Sponsors of Derivative Securities 

Products. The proposed consulting 

charge would apply to all new Sponsors 

listing for the first time, a new 

Derivative Securities Product. 

Therefore, existing issuers, issuing a 

new Derivative Securities Product 

would not be charged the proposed 

consulting fee. 

The Exchange believes that the 

imposition of this proposed one time 

consulting charge to new Sponsors of 

new Derivative Securities Products is 

necessary in order to adequately 

compensate the Exchange for all of the 

additional Exchange resources 

dedicated to such new Sponsors, such 

as the additional legal and business 

resources required to properly advise 

novice Sponsors through the listing 

process. The Exchange dedicates 

extensive time and resources to new 

Sponsors in the way of conference calls, 

meetings, correspondences, etc., to 

educate such new Sponsors about the 

listing and approval process, a process 

that veteran Sponsors are already 

familiar with. The Exchange notes that 

the proposed new Sponsor Fee is 

substantially below the initial listing fee 

for issuers of traditional equity 

securities, e.g., common stock. The 

Exchange further believes that the 

proposed consulting fee will enable the 

Exchange to continue to provide new 

issuers with the level of service 

necessary to successfully navigate an 

initial launch of a Derivative Securities 

Product. 

2. Statutory Basis 

NYSE Arca believes that the proposal 

is consistent with Section 6(b) 4 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) [sic], in general, and Section 

6(b)(4) 5 of the Act, in particular, in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among its issuers and other 

persons using its facilities. The 

Exchange believes that the proposal is