Document ID: SEC-2011-0205-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2011-02-14T05:00Z

[Federal Register Volume 76, Number 30 (Monday, February 14, 2011)]
[Notices]
[Pages 8386-8388]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-3177]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63855; File No. SR-NYSE-2011-02]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending the Forms of Broker Letters Set Forth in Exchange Rule 451 and 
Sections 905.02 and 905.03 of the Exchange's Listed Company Manual

February 7, 2011.
    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 January 26, 2011, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission (the 
``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Exchange Rule 451 and Sections 
905.02 and 905.03 of the Exchange's Listed Company Manual (the 
``Manual'') to amend the forms of letters contained in those rules to 
reflect the recent amendments to the Exchange's broker voting rules in 
relation to executive compensation proposals. The text of the proposed 
rule change is available at the Exchange, the Commission's Public 
Reference Room, and http://www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange recently amended Exchange Rule 452 and Section 402.08 
of the Manual to provide that brokers which are record holders of 
shares held in client accounts will no longer be permitted to vote 
those shares on matters relating to executive compensation.\3\ This 
amendment was made in accordance with the requirements of Section 957 
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the 
``Dodd-Frank Act'').
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    \3\ See Securities Exchange Act Release No. 62874 (September 9, 
2011) 75 FR 56152 (September 15, 2011) (SR-NYSE-2011-59).
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    Supplementary Material .20 to Exchange Rule 451 and Sections 
905.01, 905.02 and 905.03 contain specimens of letters containing the 
information and instructions required pursuant to the proxy rules to be 
given by NYSE member organizations to clients where the member 
organization is the record holder of shares beneficially owned by those 
clients in the circumstances where a broker (i) may vote on all 
proposals without voting instructions (Section 905.01), (ii) may not 
vote on any proposals without instructions (Section 905.02), and (iii) 
may vote on certain but not all proposals without instructions (Section 
905.03). These letters are shown as examples and not as prescribed 
forms. Member organizations are permitted to adapt the

[[Page 8387]]

form of these letters for their own purposes provided all of the 
required information and instructions are clearly enumerated in letters 
to clients.
    The Exchange is concerned that many shareholders receiving proxy 
materials from their brokers for meetings scheduled after effectiveness 
of the amendments to the NYSE broker voting rules in relation to 
executive compensation proposals will not be aware of those amendments 
and may therefore assume that the broker as record holder will vote 
their shares on such proposals if they do not return voting 
instructions to their broker. The NYSE believes it is important for as 
many shares as possible to be voted on such proposals and, therefore, 
believes it is important to educate retail investors with respect to 
the implications of their failure to return voting instructions under 
the amended rules. Consequently, the Exchange proposes to amend the 
forms of letters provided for use in connection with meetings where the 
broker may vote on none of the proposals before the meeting and 
meetings where the broker may vote on some but not all of the proposals 
before the meeting. The proposed amendments will insert language in 
those forms to alert beneficial holders that brokers will no longer be 
able to vote uninstructed shares on executive compensation matters. To 
limit the length of the letters, the Exchange proposes to modify 
language previously added with respect to the fact that brokers could 
no longer vote uninstructed shares on the election of directors for 
meetings scheduled after January 1, 2010.\4\ References to the new 
treatment of executive compensation proposals and director elections 
will be combined.
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    \4\ See Securities Exchange Act Release No. 61046 (November 20, 
2009), 74 FR 62849 (December 1, 2009) (SR-NYSE-2009-114).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \5\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\6\ in particular in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, 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, 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers. The Exchange believes that the proposed 
amendments are consistent with the investor protection objectives of 
the Act in that their sole purpose is to explain to shareholders the 
implications of failing to provide voting instructions to their 
brokers, thereby enabling them to make a more informed decision with 
respect to the exercise of their voting rights.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the 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 solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, provided that the self-regulatory 
organization has given 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,\7\ the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Exchange Act \8\ and 
Rule 19b-4(f)(6) thereunder.\9\
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    \7\ The Commission notes that the Exchange has satisfied the 
five-day pre-filing requirement.
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
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 rule-comments@sec.gov. Please include 
File Number SR-NYSE-2011-02 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-NYSE-2011-02. 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 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-NYSE-2011-02 and should be 
submitted on or before March 7, 2011.

[[Page 8388]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-3177 Filed 2-11-11; 8:45 am]
BILLING CODE 8011-01-P