Document ID: SEC-2008-1284-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BostonStock Exchange, Inc.
Posted Date: 2008-09-22T04:00Z

[Federal Register: September 22, 2008 (Volume 73, Number 184)]
[Notices]               
[Page 54648-54649]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se08-93]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58547; File No. SR-BSE-2008-45]

 
Self-Regulatory Organizations; Boston Stock Exchange, 
Incorporated; Notice of Filing of Proposed Rule Change To Amend By-Laws

September 15, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 5, 2008, the Boston Stock Exchange (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 Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule 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 its by-laws to make certain changes 
that the Exchange committed to make in SR-BSE-2008-23.\3\ The text of 
the proposed rule change is available from the principal office of the 
Exchange, at the Commission's Public Reference Room, and is also 
available at http://nasdaqtrader.com/Trader.aspx?id=Boston_Stock_
Exchange.
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    \3\ Securities Exchange Act Release No. 58324 (August 7, 2008), 
73 FR 46936 (August 12, 2008); Securities Exchange Act Release No. 
57757 (May 1, 2008), 73 FR 26159 (May 8, 2008) (SR-BSE-2008-23).
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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
    On August 29, 2008, the Exchange was acquired by The NASDAQ OMX 
Group, Inc. (``NASDAQ OMX''). In SR-BSE-2008-23, the Exchange's filing 
seeking approval of this acquisition, the Exchange committed that it 
would, immediately following closing of the acquisition, seek Board of 
Directors and Commission approval for several changes to its By-Laws. 
The changes, which were requested by Commission staff, could not be 
included in SR-BSE-2008-23 because Article XX of the Exchange's former 
Constitution, which was replaced by the new By-Laws at the closing, 
provided that the Exchange's members must approve amendments to the 
Exchange's Constitution. The Exchange's members voted, on December 7, 
2007, to approve the By-Laws as originally submitted in SR-BSE-2008-23, 
and it would have been impracticable and unduly expensive to seek a 
second member vote for approval of these additional changes prior to 
closing. The changes in question are as follows:
     In Article I, the Exchange is amending the definition of 
``Voting Date'' to make it clear that the Exchange Board of Directors 
must annually select a Voting Date for the selection of Member 
Representative Directors, although a vote will actually occur on that 
date only if members have nominated candidates for election other than 
those nominated by the Exchange's Member Nominating Committee. 
Accordingly, the amended definition reads: `` `Voting Date' means the 
date selected by the Board on an annual basis, on which Exchange 
Members may vote with respect to Member Representative Directors in the 
event of a Contested Vote.''

[[Page 54649]]

     In order to limit the influence that a single affiliated 
group of members might exercise over the Exchange, Section 4.4 of the 
By-Laws is being amended to provide that in a contested election for 
Member Representative Directors, an Exchange Member, either alone or 
together with its affiliates, may not cast votes representing more than 
20% of the votes cast for a candidate, and any votes cast by the 
Exchange Member, either alone or together with its affiliates, in 
excess of such 20% limitation shall be disregarded.
     The Exchange is amending Section 4.14 of the By-Laws to 
make it clear that the Exchange's Nominating Committee must nominate 
the person nominated by Boston Options Exchange Regulation LLC's 
Nominating Committee for service on the Exchange Board as a 
representative of participants in the Boston Options Exchange unless 
that person is not eligible for service under Section 4.3 of the By-
Laws (as would be the case, for example, if the nominee was subject to 
a statutory disqualification). Similarly, the Exchange is amending 
Section 3.1 of the By-Laws to make it clear that NASDAQ OMX, as the 
sole stockholder of the Exchange, shall vote for the election of the 
director candidates nominated or voted on through the processes 
established by Article IV of the By-Laws, except in the case of a 
person not eligible for service under Section 4.3 of the By-Laws.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\4\ in general, and with 
Section 6(b)(1) and (b)(5) of the Act,\5\ in particular, in that the 
proposal enables the Exchange to be so organized as to have the 
capacity to be able to carry out the purposes of the Act and to comply 
with and enforce compliance by Exchange Members and persons associated 
with Exchange Members with provisions of the Act, the rules and 
regulations thereunder, and the rules of the Exchange; and is designed 
to prevent fraudulent and manipulative acts and practices, 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.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(1), (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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (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 rule-comments@sec.gov. Please include 
File Number SR-BSE-2008-45 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BSE-2008-45. 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 self-regulatory 
organization. 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-BSE-
2008-45 and should be submitted on or before October 14, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-22014 Filed 9-19-08; 8:45 am]

BILLING CODE 8010-01-P