Federal Register / Vol. 74, No. 132 / Monday, July 13, 2009 / Notices 33495 

6 15 U.S.C. 78s(b)(3)(A). 

7 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. CHX has satisfied this requirement. 

8For 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). 

9See supra note 3. 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59908 

(May 12, 2009), 74 FR 23459 (‘‘Notice’’). 

4See Notice, supra note 3, 74 FR at 23460. 

5 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). 

6 15 U.S.C. 78(b)(1). 

7 15 U.S.C. 78f(b)(5). 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 6 and Rule 19b– 

4(f)(6) 7 thereunder. 

The Exchange has asked the 

Commission to waive the operative 

delay to permit the proposed rule 

change to become operative prior to the 

30th day after filing. The Commission 

has determined that waiving the 30-day 

operative delay of the Exchange’s 

proposal is consistent with the 

protection of investors and the public 

interest.8 The Commission believes that 

the proposed rule change is 

substantially similar to rules adopted by 

other exchanges and does not raise any 

new regulatory issues.9 Therefore, the 

Commission designates the proposal 

operative upon filing. 

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–CHX–2009–09 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–CHX–2009–09. 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 the 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–CHX–2009–09 and should 

be submitted on or before August 3, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–16449 Filed 7–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60247; File No. SR–BX– 

2009–021] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Order 

Approving Proposed Rule Change to 

Amend the Restated Certificate of 

Incorporation and By-Laws of 

NASDAQ OMX BX, Inc. 

July 6, 2009. 

On April 29, 2009, NASDAQ OMX 

BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) pursuant 

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

Exchange Act of 1934 (‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to amend its Restated Certificate 

of Incorporation (‘‘Certificate’’) and bylaws (‘‘By-Laws’’). The proposed rule 

change was published for comment in 

the Federal Register on May 19, 2009.3

The Commission received no comments 

regarding the proposal. This order 

approves the proposed rule change. 

I. Description of the Proposed Rule 

Change 

On August 29, 2008, The NASDAQ 

OMX Group, Inc. (‘‘NASDAQ OMX’’) 

acquired BX. Since then, the boards of 

BX and its parent company, NASDAQ 

OMX, have maintained their own audit 

committee and management 

compensation committee. As more fully 

discussed in the Notice, the Exchange 

states that it has found the work of these 

committees to overlap substantially.4 As 

a result, BX proposes to revise its ByLaws to allow for the elimination of its 

audit and management compensation 

committees. In addition, BX proposes to 

amend its Certificate and By-Laws to 

reflect the name change of The Nasdaq 

Stock Market, Inc. to The NASDAQ 

OMX Group, Inc. II. 

Discussion and Commission Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.5 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

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

national securities exchange to be so 

organized and have the capacity to carry 

out the purposes of the Act and to 

comply, and to enforce compliance by 

its members and persons associated 

with its members, with the provisions of 

the Act. The Commission also finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,7 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 Commission 

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33496 Federal Register / Vol. 74, No. 132 / Monday, July 13, 2009 / Notices 

8Securities Exchange Act Release No. 55293 

(February 14, 2007), 72 FR 8033 (February 22, 2007) 

(SR–NYSE–2006–120). 9The NASDAQ OMX audit committee is 

composed of four or five directors, all of whom 

must be independent under the standards 

established by Section 10A(m) of the Act and the 

listing rules of The NASDAQ Stock Market LLC. All 

committee members must be able to read and 

understand financial statements, and at least one 

member must have past employment experience in 

finance or accounting, requisite professional 

certification in accounting, or any other comparable 

experience or background that results in the 

individual’s financial sophistication. 

10Specifically, BX states that: the NASDAQ OMX 

audit committee has broad authority to review the 

financial information that will be provided to 

shareholders and others, systems of internal 

controls, and audit, financial reporting and legal 

and compliance processes and, because NASDAQ 

OMX’s financial statements are prepared on a 

consolidated basis that includes the financial 

results of NASDAQ OMX’s subsidiaries, including 

BX, the NASDAQ OMX audit committee’s purview 

necessarily includes these subsidiaries. In addition, 

BX states that the NASDAQ OMX audit committee 

currently is charged with providing oversight over 

financial reporting and independent auditor 

selection for NASDAQ OMX and all of its 

subsidiaries, including BX, and the NASDAQ OMX 

audit committee has general responsibility for 

oversight over internal controls and direction and 

oversight over the internal audit function for 

NASDAQ OMX and all of its subsidiaries. See 

Notice, 74 FR at 23460. 

11See Notice, 74 FR at 23460–61. 

12See Notice, 74 FR at 23461. 

13 Id. 

14See BX By-Laws Article I(t). Staff Directors are 

directors of BX that are also serving as officers. 

Because the BX board would not be responsible for 

setting the compensation of any Staff Directors who 

are also officers of NASDAQ OMX, these directors 

would be permitted to participate in discussions 

concerning compensation of BX employees, but BX 

states that they must recuse themselves from a vote 

on the subject to allow the determination to be 

made by directors that are not officers or employees 

of BX. BX also states that, if a Staff Director is not 

also an employee of NASDAQ OMX, that Staff 

Director must also absent himself or herself from 

any deliberations regarding his or her 

compensation. 

15BOXR is the subsidiary of BX that has been 

delegated responsibility to regulate the market 

operated by Boston Options Exchange Group LLC 

(‘‘BOX’’), an options exchange that is a facility of 

BX but in which neither BX nor any of its affiliates 

has a financial interest. Section 17 of the By-Laws 

of BOXR (which are part of its Limited Liability 

Company Agreement) provides that the 

compensation of BOXR’s officers shall be 

determined by the BOXR Board. Because of BOXR’s 

special status as a regulatory subsidiary, this 

provision will remain operative following the 

implementation of the rule change proposed by this 

filing. The Commission notes that, under the ByLaws, BX’s regulatory oversight committee must be 

informed about the compensation and promotion or 

termination of the BX chief regulatory officer and 

the reasons therefor, to allow it to provide oversight 

over decisions affecting this key officer. See BX ByLaws Section 4.13(e). 

16See supra note 8. 

17 15 U.S.C. 78s(b)(2). 

18 17 CFR 200.30–3(a)(12). 

previously approved a structure in 

which certain committees of the board 

of directors of NYSE Euronext, 

including the audit and compensation 

committees, were authorized to perform 

functions for various subsidiaries, 

including the New York Stock 

Exchange, LLC (‘‘NYSE’’).8

The BX Audit Committee. Currently, 

the BX audit committee is primarily 

charged with: (1) Overseeing BX’s 

financial reporting process; (2) 

overseeing the systems of internal 

controls established by management and 

the BX board, as well as the legal and 

compliance process; (3) selection and 

evaluation of independent auditors; and 

(4) direction and oversight of the 

internal audit function. BX states that 

the NASDAQ OMX audit committee 9

will assume the duties currently 

performed by the BX audit committee 

once that committee is eliminated. The 

Exchange states that the responsibilities 

of BX’s audit committee are fully 

duplicated by the responsibilities of the 

NASDAQ OMX audit committee.10 In 

addition, BX states that its regulatory 

oversight committee has broad authority 

to oversee the adequacy and 

effectiveness of BX’s regulatory and selfregulatory organization responsibilities, 

and therefore is able to maintain 

oversight over internal controls in 

tandem with the NASDAQ OMX audit 

committee. Further, BX states that the 

practice of NASDAQ OMX’s Internal 

Audit Department (‘‘Department’’),11

which performs internal audit functions 

for all NASDAQ OMX subsidiaries, is to 

report to the BX regulatory oversight 

committee on all internal audit matters 

relating to BX, which will be formally 

reflected in the Department’s written 

procedures. BX also represents that, to 

ensure that the BX board retains 

authority to direct the Department’s 

activities with respect to BX, the 

Department’s written procedures will be 

amended to stipulate that the BX 

regulatory oversight committee may, at 

any time, direct the Department to 

conduct an audit of a matter of concern 

to it and report the results of the audit 

both to the BX regulatory oversight 

committee and the NASDAQ OMX audit 

committee.12

BX Management Compensation 

Committee. BX also proposes to 

eliminate its compensation committee, 

and to prescribe that the functions of 

that committee be performed by the 

NASDAQ OMX compensation 

committee or the full BX board, when 

required. The NASDAQ OMX By-Laws 

provide that its compensation 

committee considers and recommends 

compensation policies, programs, and 

practices for employees of NASDAQ 

OMX. According to BX, many 

employees performing work for BX are 

also employees of NASDAQ OMX, and 

certain senior officers of BX are also 

officers of NASDAQ OMX and other 

NASDAQ OMX subsidiaries because 

their responsibilities relate to multiple 

entities within the NASDAQ OMX 

corporate structure.13 As a result, 

NASDAQ OMX establishes 

compensation and compensation policy 

for these employees. 

To the extent that policies, programs, 

and practices must be established for 

any BX officers or employees who are 

not also NASDAQ OMX officers or 

employees, BX states that the BX Board 

will perform such actions without the 

use of a compensation committee, 

subject to recusal by Staff Directors,14

unless the persons in question are also 

employees of Boston Options Exchange 

Regulation LLC (‘‘BOXR’’).15

The Commission notes that the 

proposed elimination of the BX audit 

and management compensation 

committees is comparable to a structure 

for the NYSE that the Commission 

previously considered and approved.16

The Commission finds that the 

proposed elimination of the BX’s audit 

and management compensation 

committees is consistent with the 

Exchange Act. 

II. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–BX–2009– 

021) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–16450 Filed 7–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60196; File No. SR–DTC– 

2006–16] 

Self-Regulatory Organizations; The 

Depository Trust Company; Order 

Granting Approval of a Proposed Rule 

Change as Amended Relating to FAST 

and DRS Limited Participant 

Requirements for Transfer Agents 

June 30, 2009. 

I. Introduction 

On October 12, 2006, The Depository 

Trust Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) proposed rule change 

SR–DTC–2006–16 pursuant to Section 

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

mstockstill on DSKH9S0YB1PROD with NOTICES