81 FR 69159 - Self-Regulatory Organizations; Boston Stock Exchange Clearing Corporation; Notice of Filing of Proposed Rule Change To Amend the By-Laws of Nasdaq, Inc. To Implement Proxy Access
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 193 (October 5, 2016)
Federal Register Volume 81, Issue 193 (October 5, 2016)
| Page Range | 69159-69165 | |
| FR Document | 2016-24004 |
[Federal Register Volume 81, Number 193 (Wednesday, October 5, 2016)] [Notices] [Pages 69159-69165] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-24004] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78982; File No. SR-BSECC-2016-001] Self-Regulatory Organizations; Boston Stock Exchange Clearing Corporation; Notice of Filing of Proposed Rule Change To Amend the By- Laws of Nasdaq, Inc. To Implement Proxy Access September 29, 2016. 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 15, 2016, Boston Stock Exchange Clearing Corporation (``BSECC'') 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 clearing agency. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change BSECC is filing this proposed rule change with respect to amendments of the By-Laws (the ``By-Laws'') of its parent corporation, Nasdaq, Inc. (``Nasdaq'' or the ``Company''), to implement proxy access. The proposed amendments will be implemented on a date designated by the Company following approval by the Commission. The text of the proposed rule change is available on BSECC's Web site at http://nasdaqbx.cchwallstreet.com, at the principal office of BSECC, 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, BSECC 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. BSECC 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 Background At Nasdaq's 2016 annual meeting held on May 5, 2016, Nasdaq's stockholders considered a stockholder proposal submitted under Rule 14a-8 under the Act.\3\ The proposal, which passed with 73.52% of the votes cast, requested that Nasdaq's Board of Directors (the ``Board'') take steps to implement a ``proxy access'' by-law. Proxy access by-laws allow a stockholder, or group of stockholders, who comply with certain requirements, to nominate candidates for service on a board and have those candidates included in a company's proxy materials. Such provisions allow stockholders to nominate candidates without undertaking the expense of a proxy solicitation. --------------------------------------------------------------------------- \3\ See 17 CFR 240.14a-8, which establishes procedures pursuant to which stockholders of a public company may have their proposals placed alongside management's proposals in the company's proxy materials for presentation to a vote at a meeting of stockholders. --------------------------------------------------------------------------- Following the 2016 annual meeting, the Nominating & Governance Committee (the ``Committee'') of the Board and the Board reviewed the voting results on the stockholder proposal and discussed proxy access generally. The Committee ultimately recommended to the Board, and the Board approved, certain changes to Nasdaq's By-Laws to implement proxy access. Nasdaq now proposes to make these changes by adopting new Section 3.6 of the By-Laws and making certain conforming changes to current Sections 3.1, 3.3 and 3.5 of the By-Laws, all of which are described further below. In developing its proposal, Nasdaq has generally tried to balance the relative weight of arguments for and against proxy access provisions. On the one hand, Nasdaq recognizes the significance of this issue to some investors, who see proxy access as an important accountability mechanism that allows them to participate in board elections through the nomination of stockholder candidates that are presented in a company's proxy statement. On the other hand, Nasdaq's proposed proxy access provision includes certain procedural requirements that ensure, among other things, that the Company and its stockholders will have full and accurate information about nominating stockholders and their nominees and that such stockholders and nominees will comply with applicable laws, regulations and other requirements. Proposed Section 3.6(a) of the By-Laws To respond to feedback from its stockholders, Nasdaq proposes to amend its By-Laws to, as set forth in the first sentence of proposed Section 3.6(a), require the Company to include in its proxy statement, its form proxy and any ballot distributed at the stockholder meeting, the name of, and certain Required Information \4\ about, any person nominated for election (the ``Stockholder Nominee'') to the Board by a stockholder or group of stockholders (the ``Eligible Stockholder'') \5\ that satisfies the requirements set forth in the proxy access provision of Nasdaq's By-Laws.\6\ To utilize this provision, the Eligible Stockholder must expressly elect at the time of providing a required notice to the Company of the proxy access nomination (the ``Notice of Proxy Access Nomination'') to have its nominee included in the Company's proxy materials. Stockholders will be eligible to submit proxy access nominations only at annual meetings of stockholders when the Board solicits proxies with respect to the election of directors. --------------------------------------------------------------------------- \4\ The Required Information is the information provided to Nasdaq's Corporate Secretary about the Stockholder Nominee and the Eligible Stockholder that is required to be disclosed in the Company's proxy statement by the regulations promulgated under the Act, and if the Eligible Stockholder so elects, a written statement, not to exceed 500 words, in support of the Stockholder Nominee(s)' candidacy (the ``Statement''). \5\ As used throughout Nasdaq's By-Laws, the term ``Eligible Stockholder'' includes each member of a stockholder group that submits a proxy access nomination to the extent the context requires. \6\ When the Company includes proxy access nominees in the proxy materials, such individuals will be included in addition to any persons nominated for election to the Board or any committee thereof. --------------------------------------------------------------------------- The next two sentences of Section 3.6(a) provide some additional clarification on the term ``Eligible Stockholder.'' First, in calculating the number of stockholders in a group seeking to qualify as an Eligible Stockholder, two or more of the following types of funds shall be counted as one stockholder: (i) Funds under common management and investment control, (ii) funds under common management and funded primarily by the same employer, or (iii) [[Page 69160]] funds that are a ``group of investment companies'' as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended.\7\ Nasdaq views this as a stockholder-friendly provision that will make it easier for such funds to participate in a proxy access nomination since they will not have to comply with the procedural requirements in the proxy access provision multiple times. Second, in the event that the Eligible Stockholder consists of a group of stockholders, any and all requirements and obligations for an individual Eligible Stockholder shall apply to each member of the group, except that the Required Ownership Percentage (discussed further below) shall apply to the ownership of the group in the aggregate. Generally, the applicable requirements and obligations relate to information that each member of the nominating group must provide to Nasdaq about itself, as discussed further below. Nasdaq believes it is reasonable to require each member of the nominating group to provide such information so that both the Company and its stockholders are fully informed about the entire group making the proxy access nomination. --------------------------------------------------------------------------- \7\ See 15 U.S.C. 80a-12(d)(1)(G)(ii), which defines ``group of investment companies'' as any two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment and investor services. --------------------------------------------------------------------------- The final sentence of proposed Section 3.6(a) allows Nasdaq to omit from its proxy materials any information or Statement (or portion thereof) that it, in good faith, believes is untrue in any material respect (or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading) or would violate any applicable law or regulation. This provision allows Nasdaq to comply with Rule 14a-9 under the Act \8\ and to protect its stockholders from information that is materially untrue or that violates any law or regulation. The final sentence of proposed Section 3.6(a) also explicitly allows Nasdaq to solicit against, and include in the proxy statement its own statement relating to, any Stockholder Nominee. This provision merely clarifies that just because Nasdaq must include a proxy access nominee in its proxy materials if the proxy access provisions are satisfied, Nasdaq does not necessarily have to support that nominee. --------------------------------------------------------------------------- \8\ See 17 CFR 240.14a-9, which generally prohibits proxy solicitations that contain any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading. --------------------------------------------------------------------------- Proposed Section 3.6(b) of the By-Laws Proposed Section 3.6(b) of the By-Laws establishes the deadline for a timely Notice of Proxy Access Nomination. Specifically, such a notice must be addressed to, and received by, Nasdaq's Corporate Secretary no earlier than one hundred fifty (150) days and no later than one hundred twenty (120) days before the anniversary of the date that Nasdaq issued its proxy statement for the previous year's annual meeting of stockholders. The Company believes this notice period will provide stockholders an adequate window to submit nominees via proxy access, while also providing the Company adequate time to diligence [sic] a proxy access nominee before including them in the proxy statement for the next annual meeting of stockholders. Proposed Section 3.6(c) of the By-Laws Proposed Section 3.6(c) specifies that the maximum number of Stockholder Nominees nominated by all Eligible Stockholders that will be included in Nasdaq's proxy materials with respect to an annual meeting of stockholders shall not exceed the greater of two and 25% of the total number of directors in office (rounded down to the nearest whole number) as of the last day on which a Notice of Proxy Access Nomination may be delivered pursuant to and in accordance with the proxy access provision of the By-Laws (the ``Final Proxy Access Nomination Date''). In the event that one or more vacancies for any reason occurs after the Final Proxy Access Nomination Date but before the date of the annual meeting and the Board resolves to reduce the size of the Board in connection therewith, the maximum number of Stockholder Nominees included in Nasdaq's proxy materials shall be calculated based on the number of directors in office as so reduced. Any individual nominated by an Eligible Stockholder for inclusion in the proxy materials pursuant to the proxy access provision of the By- Laws whom the Board decides to nominate as a nominee of the Board, and any individual nominated by an Eligible Stockholder for inclusion in the proxy materials pursuant to the proxy access provision but whose nomination is subsequently withdrawn, shall be counted as one of the Stockholder Nominees for purposes of determining when the maximum number of Stockholder Nominees has been reached. Any Eligible Stockholder submitting more than one Stockholder Nominee for inclusion in the proxy materials shall rank such Stockholder Nominees based on the order that the Eligible Stockholder desires such Stockholder Nominees to be selected for inclusion in the proxy statement in the event that the total number of Stockholder Nominees submitted by Eligible Stockholders pursuant to the proxy access provision exceeds the maximum number of nominees allowed. In the event that the number of Stockholder Nominees submitted by Eligible Stockholders exceeds the maximum number of nominees allowed, the highest ranking Stockholder Nominee who meets the requirements of the proxy access provision of the By-Laws from each Eligible Stockholder will be selected for inclusion in the proxy materials until the maximum number is reached, going in order of the amount (largest to smallest) of shares of Nasdaq's outstanding common stock each Eligible Stockholder disclosed as owned in its respective Notice of Proxy Access Nomination submitted to Nasdaq. If the maximum number is not reached after the highest ranking Stockholder Nominee who meets the requirements of the proxy access provision of the By-Laws from each Eligible Stockholder has been selected, this process will continue as many times as necessary, following the same order each time, until the maximum number is reached. Following such determination, if any Stockholder Nominee who satisfies the eligibility requirements thereafter is nominated by the Board, or is not included in the proxy materials or is not submitted for election as a director, in either case, as a result of the Eligible Stockholder becoming ineligible or withdrawing its nomination, the Stockholder Nominee becoming unwilling or unable to serve on the Board or the Eligible Stockholder or the Stockholder Nominee failing to comply with the proxy access provision of the By-Laws, no other nominee or nominees shall be included in the proxy materials or otherwise submitted for director election in substitution thereof. The Company believes it is reasonable to limit the Board seats available to proxy access nominees, to establish procedures for selecting candidates if the nominee limit is exceeded and to exclude further proxy access nominees in the cases set forth above. The limitation on Board seats available to proxy access nominees ensures that proxy access cannot be used to take over the entire Board, which is not the stated purpose of proxy access campaigns. The procedures for selecting candidates if the nominee limit is exceeded establish clear and rational guidelines for an [[Page 69161]] orderly nomination process to avoid the Company having to make arbitrary judgments among candidates. Finally, the exclusion of further proxy access nominees in certain cases will avoid further time and expense to the Company when the proxy access nominee has been nominated by the Board, in which case the goal of the proxy access nomination has been achieved, or in certain cases when the Eligible Stockholder or Stockholder Nominee is at fault. Proposed Section 3.6(d) of the By-Laws Proposed Section 3.6(d) clarifies, for the avoidance of doubt, how ``ownership'' will be defined for purposes of meeting the Required Ownership Percentage (discussed further below). Specifically, an Eligible Stockholder shall be deemed to ``own'' only those outstanding shares of Nasdaq's common stock as to which the stockholder possesses both: (i) The full voting and investment rights pertaining to the shares; and (ii) the full economic interest in (including the opportunity for profit from and risk of loss on) such shares; provided that the number of shares calculated in accordance with clauses (i) and (ii) shall not include any shares:Sold by such stockholder or any of its affiliates in any transaction that has not been settled or closed, including any short sale; borrowed by such stockholder or any of its affiliates for any purposes or purchased by such stockholder or any of its affiliates pursuant to an agreement to resell; or subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by such stockholder or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of shares of Nasdaq's outstanding common stock, in any such case which instrument or agreement has, or is intended to have, or if exercised by either party would have, the purpose or effect of: [cir] reducing in any manner, to any extent or at any time in the future, such stockholder's or its affiliates' full right to vote or direct the voting of any such shares; and/or [cir] hedging, offsetting or altering to any degree any gain or loss realized or realizable from maintaining the full economic ownership of such shares by such stockholder or its affiliates. Further, a stockholder shall ``own'' shares held in the name of a nominee or other intermediary so long as the stockholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A stockholder's ownership of shares shall be deemed to continue during any period in which the stockholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement which is revocable at any time by the stockholder. A stockholder's ownership of shares shall be deemed to continue during any period in which the stockholder has loaned such shares provided that the stockholder has the power to recall such loaned shares on three (3) business days' notice, has recalled such loaned shares as of the date of the Notice of Proxy Access Nomination and holds such shares through the date of the annual meeting. The terms ``owned,'' ``owning'' and other variations of the word ``own'' shall have correlative meanings. Whether outstanding shares of Nasdaq's common stock are ``owned'' for these purposes shall be determined by the Board or any committee thereof, in each case, in its sole discretion. For purposes of the proxy access provision of the By-Laws, the term ``affiliate'' or ``affiliates'' shall have the meaning ascribed thereto under the rules and regulations of the Act.\9\ An Eligible Stockholder shall include in its Notice of Proxy Access Nomination the number of shares it is deemed to own for the purposes of the proxy access provision of the By-Laws. --------------------------------------------------------------------------- \9\ Pursuant to Rule 12b-2 under the Act, ``[a]n `affiliate' of, or a person `affiliated' with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.'' 17 CFR 240.12b-2. Further, ``[t]he term `control' (including the terms `controlling,' `controlled by' and `under common control with') means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.'' 17 CFR 240.12b-2. --------------------------------------------------------------------------- Proposed Section 3.6(e) of the By-Laws The first paragraph of proposed Section 3.6(e) establishes certain requirements for an Eligible Stockholder to make a proxy access nomination. Specifically, an Eligible Stockholder must have owned (defined as discussed above) 3% or more (the ``Required Ownership Percentage'') of Nasdaq's outstanding common stock (the ``Required Shares'') continuously for 3 years (the ``Minimum Holding Period'') as of both the date the Notice of Proxy Access Nomination is received by Nasdaq's Corporate Secretary and the record date for determining the stockholders entitled to vote at the annual meeting and must continue to own the Required Shares through the meeting date. Proposed Section 3.6(e) also sets forth the information that an Eligible Stockholder must provide to Nasdaq's Corporate Secretary in writing within the deadline discussed above in order to make a proxy access nomination. This information includes: One or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the Minimum Holding Period) verifying that, as of a date within seven calendar days prior to the date the Notice of Proxy Access Nomination is delivered to, or mailed to and received by, Nasdaq's Corporate Secretary, the Eligible Stockholder owns, and has owned continuously for the Minimum Holding Period, the Required Shares, and the Eligible Stockholder's agreement to provide, within five (5) business days after the record date for the annual meeting, written statements from the record holder and intermediaries verifying the Eligible Stockholder's continuous ownership of the Required Shares through the record date; \10\ --------------------------------------------------------------------------- \10\ See proposed Section 3.6(e)(i) of the By-Laws. --------------------------------------------------------------------------- a copy of the Schedule 14N that has been filed with the SEC as required by Rule 14a-18 under the Act; \11\ --------------------------------------------------------------------------- \11\ See proposed Section 3.6(e)(ii) of the By-Laws; see also 17 CFR 240.14n-101 and 17 CFR 240.14a-18, which generally require a Nominating Stockholder to provide notice to the Company of its intent to submit a proxy access nomination on a Schedule 14N and file that notice, including the required disclosure, with the Commission on the date first transmitted to the Company. --------------------------------------------------------------------------- the information, representations and agreements with respect to the Eligible Stockholder that are the same as those that would be required to be set forth in a stockholder's notice of nomination with respect to a ``Proposing Person'' pursuant to Section 3.1(b)(i) and Section 3.1(b)(iii) of the By-Laws; \12\ --------------------------------------------------------------------------- \12\ See proposed Section 3.6(e)(iii) of the By-Laws; see also Sections 3.1(b)(i) and 3.1(b)(iii) of the By-Laws, which constitute part of Nasdaq's ``advance notice'' provision under which a ``Proposing Person'' may, among other things, nominate a person for election to the Board. --------------------------------------------------------------------------- the consent of each Stockholder Nominee to being named in the proxy statement as a nominee and to serving as a director if elected; \13\ --------------------------------------------------------------------------- \13\ See proposed Section 3.6(e)(iv) of the By-Laws. --------------------------------------------------------------------------- a representation that the Eligible Stockholder: [cir] acquired the Required Shares in the ordinary course of business and not with the intent to change or influence [[Page 69162]] control of Nasdaq, and does not presently have such intent; \14\ --------------------------------------------------------------------------- \14\ See proposed Section 3.6(e)(v)(A) of the By-Laws. --------------------------------------------------------------------------- [cir] presently intends to maintain qualifying ownership of the Required Shares through the date of the annual meeting; \15\ --------------------------------------------------------------------------- \15\ See proposed Section 3.6(e)(v)(B) of the By-Laws. --------------------------------------------------------------------------- [cir] has not nominated and will not nominate for election any individual as a director at the annual meeting, other than its Stockholder Nominee(s); \16\ --------------------------------------------------------------------------- \16\ See proposed Section 3.6(e)(v)(C) of the By-Laws. --------------------------------------------------------------------------- [cir] has not engaged and will not engage in, and has not and will not be a participant in another person's, ``solicitation'' within the meaning of Rule 14a-1(l) under the Act in support of the election of any individual as a director at the annual meeting, other than its Stockholder Nominee(s) or a nominee of the Board; \17\ --------------------------------------------------------------------------- \17\ See proposed Section 3.6(e)(v)(D) of the By-Laws; see also 17 CFR 240.14a-1(l), which defines the related terms ``solicit'' and ``solicitation.'' --------------------------------------------------------------------------- [cir] agrees to comply with all applicable laws and regulations with respect to any solicitation in connection with the meeting or applicable to the filing and use, if any, of soliciting material; \18\ --------------------------------------------------------------------------- \18\ See proposed Section 3.6(e)(v)(E) of the By-Laws. --------------------------------------------------------------------------- [cir] will provide facts, statements and other information in all communications with Nasdaq and its stockholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; \19\ and --------------------------------------------------------------------------- \19\ See proposed Section 3.6(e)(v)(F) of the By-Laws. --------------------------------------------------------------------------- [cir] as to any two or more funds whose shares are aggregated to count as one stockholder for the purpose of constituting an Eligible Stockholder, within five business days after the date of the Notice of Proxy Access Nomination, will provide to Nasdaq documentation reasonably satisfactory to Nasdaq that demonstrates that the funds satisfy the requirements in the By-Laws, which were discussed above, for the funds to qualify as one Eligible Stockholder; \20\ --------------------------------------------------------------------------- \20\ See proposed Section 3.6(e)(v)(G) of the By-Laws. --------------------------------------------------------------------------- a representation as to the Eligible Stockholder's intentions with respect to maintaining qualifying ownership of the Required Shares for at least one year following the annual meeting; \21\ --------------------------------------------------------------------------- \21\ See proposed Section 3.6(e)(vi) of the By-Laws. --------------------------------------------------------------------------- an undertaking that the Eligible Stockholder agrees to: [cir] assume all liability stemming from any legal or regulatory violation arising out of the Eligible Stockholder's communications with Nasdaq's stockholders or out of the information that the Eligible Stockholder provided to Nasdaq; \22\ --------------------------------------------------------------------------- \22\ See proposed Section 3.6(e)(vii)(A) of the By-Laws. --------------------------------------------------------------------------- [cir] indemnify and hold harmless Nasdaq and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against Nasdaq or any of its directors, officers or employees arising out of any nomination submitted by the Eligible Stockholder pursuant to the proxy access provision; \23\ and --------------------------------------------------------------------------- \23\ See proposed Section 3.6(e)(vii)(B) of the By-Laws. --------------------------------------------------------------------------- [cir] file with the SEC any solicitation or other communication with Nasdaq's stockholders relating to the meeting at which the Stockholder Nominee will be nominated, regardless of whether any such filing is required under Regulation 14A of the Act or whether any exemption from filing is available thereunder; \24\ and --------------------------------------------------------------------------- \24\ See proposed Section 3.6(e)(vii)(C) of the By-Laws; see also 17 CFR 240.14a-1-14b-2, which governs solicitations of proxies. --------------------------------------------------------------------------- in the case of a nomination by a group of stockholders that together is an Eligible Stockholder, the designation by all group members of one group member that is authorized to act on behalf of all such members with respect to the nomination and matters related thereto, including withdrawal of the nomination.\25\ --------------------------------------------------------------------------- \25\ See proposed Section 3.6(e)(viii) of the By-Laws. --------------------------------------------------------------------------- In proposing the Required Ownership Percentage and the Minimum Holding Period, Nasdaq seeks to ensure that the Eligible Stockholder has had a sufficient stake in the Company for a sufficient amount of time and is not pursuing a short-term agenda. In proposing the informational requirements for the Eligible Stockholder, Nasdaq's goal is to gather sufficient information about the Eligible Stockholder for both itself and its stockholders. Among other things, this information will ensure that Nasdaq is able to comply with its disclosure and other requirements under applicable law and that Nasdaq, its Board and its stockholders are able to assess the proxy access nomination adequately. Proposed Section 3.6(f) of the By-Laws Proposed Section 3.6(f) establishes the information the Stockholder Nominee must deliver to Nasdaq's Corporate Secretary within the time period specified for delivering the Notice of Proxy Access Nomination. This information includes: the information required with respect to persons whom a stockholder proposes to nominate for election or reelection as a director by Section 3.1(b)(i) of the By-Laws \26\ including, but not limited to, the signed questionnaire, representation and agreement required by Section 3.1(b)(i)(D) of the By-Laws; \27\ and --------------------------------------------------------------------------- \26\ Section 3.1(b)(i) of the By-Laws describes the information that a proposing stockholder must provide about an individual the stockholder proposes to nominate for election or reelection as a director pursuant to the ``advance notice'' provision of the By- Laws. \27\ Section 3.1(b)(i)(D) of the By-Laws requires a completed and signed questionnaire, representation and agreement, each containing certain information, from each individual proposed to be nominated for election or reelection as a director pursuant to the ``advance notice'' provision of the By-Laws. --------------------------------------------------------------------------- a written representation and agreement that such person: [cir] will act as a representative of all of Nasdaq's stockholders while serving as a director; and [cir] will provide facts, statements and other information in all communications with Nasdaq and its stockholders that are or will be true and correct in all material respects (and shall not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading). In addition, at the request of Nasdaq, the Stockholder Nominee(s) must submit all completed and signed questionnaires required of Nasdaq's directors and officers. Nasdaq may request such additional information as necessary to (y) permit the Board to determine if each Stockholder Nominee satisfies the requirements of the proxy access provision of the By-Laws or if each Stockholder Nominee is independent under the listing standards of The NASDAQ Stock Market, any applicable rules of the SEC and any publicly disclosed standards used by the Board in determining and disclosing the independence of Nasdaq's directors \28\ and/or (z) permit Nasdaq's [[Page 69163]] Corporate Secretary to determine the classification of such nominee as an Industry, Non-Industry, Issuer or Public Director, if applicable, in order to make the certification referenced in Section 4.13(h)(iii) of the By-Laws.\29\ --------------------------------------------------------------------------- \28\ Currently, the independence of Nasdaq's directors is determined pursuant to the definition of ``Independent Director'' in Listing Rule 5605(a)(2) of The NASDAQ Stock Market, under which certain categories of individuals cannot be deemed independent and with respect to other individuals, the Board must make an affirmative determination that such individual has no relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Other independence standards under the SEC rules and the Listing Rules of The NASDAQ Stock Market apply to members of certain of the Board's committees. As detailed below, the Commission notes that, while additional, more stringent independence standards may be adopted by the Board in the future, as of the date of this Notice no such standards have been adopted by the Board. \29\ Section 4.13(h)(iii) of the By-Laws requires Nasdaq's Corporate Secretary to collect from each nominee for director such information as is reasonably necessary to serve as the basis for a determination of the nominee's classification as an Industry, Non- Industry, Issuer, or Public Director, if applicable, and to certify to the Committee each nominee's classification, if applicable. Detailed definitions of the terms ``Industry Director,'' ``Non- Industry Director,'' ``Issuer Director'' and ``Public Director'' are included in Article I of the By-Laws. --------------------------------------------------------------------------- Like the informational requirements for an Eligible Stockholder, which are set forth above, the informational requirements for the Stockholder Nominee ensure that both Nasdaq and its stockholders will have sufficient information about the Stockholder Nominee. Among other things, this information will ensure that Nasdaq is able to comply with its disclosure and other requirements under applicable law and that Nasdaq, its Board and its stockholders are able to assess the proxy access nomination adequately. Proposed Section 3.6(g) of the By-Laws Pursuant to proposed Section 3.6(g), each Eligible Stockholder or Stockholder Nominee must promptly notify Nasdaq's Corporate Secretary of any information or communications provided by the Eligible Stockholder or Stockholder Nominee to Nasdaq or its stockholders that ceases to be true and correct in all material respects or omits a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading and of the information that is required to correct any such defect. This provision further states that providing any such notification shall not be deemed to cure any defect or, with respect to any defect that Nasdaq determines is material, limit Nasdaq's rights to omit a Stockholder Nominee from its proxy materials. This provision is intended to protect Nasdaq's stockholders by requiring an Eligible Stockholder or Stockholder Nominee to give Nasdaq notice of information previously provided that is materially untrue. Nasdaq may then decide what action to take with respect to such defect, which may include, with respect to a material defect, omitting the relevant Stockholder Nominee from its proxy materials. Proposed Section 3.6(h) of the By-Laws Proposed Section 3.6(h) provides that Nasdaq shall not be required to include a Stockholder Nominee in its proxy materials for any meeting of stockholders under certain circumstances. In these situations, the proxy access nomination shall be disregarded and no vote on such Stockholder Nominee will occur, even if Nasdaq has received proxies in respect of the vote. These circumstances occur when the Stockholder Nominee: Has been nominated by an Eligible Stockholder who has engaged in or is currently engaged in, or has been or is a participant in another person's, ``solicitation'' within the meaning of Rule 14a- 1(l) under the Act in support of the election of any individual as a director at the annual meeting other than its Stockholder Nominee(s) or a nominee of the Board; \30\ --------------------------------------------------------------------------- \30\ See proposed Section 3.6(h)(i) of the By-Laws; see also 17 CFR 240.14a-1(l), which defines the related terms ``solicit'' and ``solicitation.'' --------------------------------------------------------------------------- is not independent under the listing standards of The NASDAQ Stock Market, any applicable rules of the SEC and any publicly disclosed standards used by the Board in determining and disclosing independence of Nasdaq's directors, in each case as determined by the Board in its sole discretion; \31\ --------------------------------------------------------------------------- \31\ See proposed Section 3.6(h)(ii) of the By-Laws; see also footnote 28, supra. The Commission notes that, while additional, more stringent independence standards may be adopted by the Board in the future, as of the date of this Notice no such standards have been adopted by the Board. The Commission further notes that, according to Nasdaq, should the Board decide to adopt additional, more stringent standards than those required under Nasdaq listing standards and any requirements under Commission rules, all director nominees would be evaluated against these standards--not just those shareholder candidates nominated under the provisions of proposed Section 3.6. --------------------------------------------------------------------------- would, if elected as a member of the Board, cause Nasdaq to be in violation of the By-Laws (including but not limited to the compositional requirements of the Board set forth in Section 4.3 of the By-Laws), its Amended and Restated Certificate of Incorporation, the rules and listing standards of The NASDAQ Stock Market, or any applicable state or federal law, rule or regulation; \32\ --------------------------------------------------------------------------- \32\ See proposed Section 3.6(h)(iii) of the By-Laws; see also Section 4.3 of the By-Laws, which provides that the number of Non- Industry Directors on the Board must equal or exceed the number of Industry Directors. In addition, the Board must include at least two Public Directors and may include at least one, but no more than two, Issuer Directors. Finally, the Board shall include no more than one Staff Director, unless the Board consists of ten or more directors, in which case, the Board shall include no more than two Staff Directors. Detailed definitions of the terms ``Non-Industry Director,'' ``Industry Director,'' ``Public Director,'' ``Issuer Director'' and ``Staff Director'' are included in Article I of the By-Laws. --------------------------------------------------------------------------- is or has been, within the past three (3) years, an officer or director of a competitor, as defined for purposes of Section 8 of the Clayton Antitrust Act of 1914; \33\ --------------------------------------------------------------------------- \33\ See proposed Section 3.6(h)(iv) of the By-Laws; see also 15 U.S.C. 19(a)(1), which generally provides that ``[n]o person shall, at the same time, serve as a director or officer in any two corporations'' that are ``competitors'' such that ``the elimination of competition by agreement between them would constitute a violation of any of the antitrust laws.'' --------------------------------------------------------------------------- is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past ten (10) years; \34\ --------------------------------------------------------------------------- \34\ See proposed Section 3.6(h)(v) of the By-Laws. --------------------------------------------------------------------------- is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended; \35\ --------------------------------------------------------------------------- \35\ See proposed Section 3.6(h)(vi) of the By-Laws; see also 17 CFR 230.506(d), which generally disqualifies offerings involving certain felons and other bad actors from relying on the ``safe harbor'' in Rule 506 of Regulation D from registration under the Securities Act of 1933, as amended. --------------------------------------------------------------------------- is subject to ``statutory disqualification'' under Section 3(a)(39) of the Act; \36\ --------------------------------------------------------------------------- \36\ See proposed Section 3.6(h)(vii) of the By-Laws; see also 15 U.S.C. 78c(a)(39), which disqualifies certain categories of individuals who generally have engaged in misconduct from membership or participation in, or association with a member of, a self- regulatory organization. --------------------------------------------------------------------------- has, or the applicable Eligible Stockholder has, provided information to Nasdaq in respect of the proxy access nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, as determined by the Board or any committee thereof, in each case, in its sole discretion; \37\ or --------------------------------------------------------------------------- \37\ See proposed Section 3.6(h)(viii) of the By-Laws. --------------------------------------------------------------------------- breaches or fails, or the applicable Eligible Stockholder breaches or fails, to comply with its obligations pursuant to the By- Laws, including, but not limited to, the proxy access provisions and any agreement, representation or undertaking required by the proxy access provisions.\38\ --------------------------------------------------------------------------- \38\ See proposed Section 3.6(h)(ix) of the By-Laws. --------------------------------------------------------------------------- Nasdaq believes these provisions will protect the Company and its stockholders by allowing it to exclude certain categories of objectionable Stockholder Nominees from the proxy statement. Proposed Section 3.6(i) of the By-Laws Under proposed Section 3.6(i), the Board or the chairman of the meeting of [[Page 69164]] stockholders shall declare a proxy access nomination invalid, and such nomination shall be disregarded even if proxies in respect of such nomination have been received by the Company, if: the Stockholder Nominee(s) and/or the applicable Eligible Stockholder have breached its or their obligations under the proxy access provision of the By-Laws, as determined by the Board or the chairman of the meeting of stockholders, in each case, in its or his sole discretion; or the Eligible Stockholder (or a qualified representative thereof) does not appear at the meeting of stockholders to present the proxy access nomination. Nasdaq believes this provision protects the Company and its stockholders by providing the Board or the chairman of the stockholder meeting limited authority to disqualify a proxy access nominee when that nominee or the sponsoring stockholder(s) have breached an obligation under the proxy access provision, including the obligation to appear at the stockholder meeting to present the proxy access nomination. Proposed Section 3.6(j) of the By-Laws Proposed Section 3.6(j) states that the following Stockholder Nominees who are included in the Company's proxy materials for a particular annual meeting of stockholders will be ineligible to be a Stockholder Nominee for the next two annual meetings: a Stockholder Nominee who withdraws from or becomes ineligible or unavailable for election at the annual meeting; or a Stockholder Nominee who does not receive at least 25% of the votes cast in favor of such Stockholder Nominee's election. This provision will save the Company and its stockholders the time and expense of analyzing and addressing subsequent proxy access nominations regarding individuals who were included in the proxy materials for a particular annual meeting but ultimately did not stand for election or receive a substantial amount of votes. After the next two annual meetings, these Stockholder Nominees would again be eligible for nomination through the proxy access provisions of the By-Laws. Proposed Section 3.6(k) of the By-Laws In case there are matters involving a proxy access nomination that are open to interpretation, proposed Section 3.6(k) states that the Board (or any other person or body authorized by the Board) shall have exclusive power and authority to interpret the proxy access provisions of the By-Laws and make all determinations deemed necessary or advisable as to any person, facts or circumstances. In addition, all actions, interpretations and determinations of the Board (or any person or body authorized by the Board) with respect to the proxy access provisions shall be final, conclusive and binding on the Company, the stockholders and all other parties. While Nasdaq has attempted to implement a clear, detailed and thorough proxy access provision, there may be matters about future proxy access nominations that are open to interpretation. In these cases, Nasdaq believes it is reasonable and necessary to designate an arbiter to make final decisions on these points and that the Board is best-suited to act as that arbiter. Proposed Section 3.6(l) of the By-Laws Proposed Section 3.6(l) prohibits a stockholder from joining more than one group of stockholders to become an Eligible Stockholder for purposes of submitting a proxy access nomination for each annual meeting of stockholders. Nasdaq analogizes this provision to Article IV, Paragraph C(1) of its Amended and Restated Certificate of Incorporation, under which each holder of Nasdaq's common stock shall be entitled to one vote per share on all matters presented to the stockholders for a vote. Similar to that provision, Nasdaq believes it is reasonable for each share to count only once in submitting a proxy access nomination. Proposed Section 3.6(m) of the By-Laws For the avoidance of doubt, proposed Section 3.6(m) states that the proxy access provisions outlined in Section 3.6 of the By-Laws shall be the exclusive means for stockholders to include nominees in the Company's proxy materials. Stockholders may, of course, continue to propose nominees to the Committee and Board through other means, but the Committee and Board will have final authority to determine whether to include those nominees in the Company's proxy materials. Revisions to Other Sections of the By-Laws Nasdaq also proposes to make conforming changes to Sections 3.1(a), 3.3(a), 3.3(c) and 3.5 of the By-Laws to provide clarifications and prevent confusion. Specifically, current Section 3.1(a) enumerates the methods by which nominations of persons for election to the Board may be made at an annual meeting of stockholders; Nasdaq proposes to add proxy access nominations to the list of methods. Current Section 3.3(a) specifies that, among other things, only such persons who are nominated in accordance with the procedures set forth in Article III of the By- Laws \39\ shall be eligible to be elected at an annual or special meeting of Nasdaq's stockholders to serve as directors; for the avoidance of doubt, Nasdaq proposes to clarify that the reference to Article III includes the proxy access provision in Section 3.6 of the By-Laws with respect to director nominations in connection with annual meetings. Current Section 3.3(c) states, among other things, that compliance with Section 3.1(a)(iii) and (b) \40\ shall be the exclusive means for a stockholder to make a director nomination; Nasdaq proposes to add proxy access as an additional means for a stockholder to make a director nomination. Finally, current Section 3.5 requires Nasdaq's director nominees to submit to Nasdaq's Corporate Secretary a questionnaire, representation and agreement within certain time periods; Nasdaq proposes to clarify that proxy access nominees must submit these materials within the time periods prescribed for delivery of a Notice of Proxy Access Nomination, as described above. --------------------------------------------------------------------------- \39\ Article III of the By-Laws relates to stockholder meetings. \40\ As part of Nasdaq's ``advance notice'' provision, Sections 3.1(a)(iii) and (b) of the By-Laws describe certain procedures that a stockholder must follow to, among other things, nominate a person for election to the Board. --------------------------------------------------------------------------- 2. Statutory Basis BSECC believes that its proposal is consistent with Section 17A(b)(3)(C) of the Act,\41\ in that it assures a fair representation of shareholders and participants in the selection of directors and administration of its affairs. While the proposal relates to the organizational documents of the Company, rather than BSECC, BSECC is indirectly owned by the Company, and therefore, the Company's stockholders have an indirect stake in BSECC. In addition, the participants in BSECC, to the extent any exist, could purchase stock in the Company in the open market, just like any other stockholder. --------------------------------------------------------------------------- \41\ 15 U.S.C. 78q-1(b)(3)(C). --------------------------------------------------------------------------- In response to feedback from its investors, Nasdaq is proposing changes to its By-Laws to implement proxy access. BSECC believes that, by permitting an Eligible Stockholder of Nasdaq that meets the stated requirements to nominate directors and have its nominees included in Nasdaq's annual meeting proxy statement, the proposed rule change strengthens the corporate governance of BSECC's ultimate parent company, which assures a fair representation of shareholders and [[Page 69165]] participants in the selection of directors and administration of its affairs. In drafting its proxy access provision, Nasdaq has attempted to strike an appropriate balance between responding to investor feedback and including certain procedural and informational requirements to again assure a fair representation of shareholders and participants in the selection of directors and administration of its affairs. Specifically, the procedural requirements will achieve this objective by stating clearly and explicitly the procedures stockholders must follow in order to submit a proper proxy access nomination. The informational requirements will achieve this objective by ensuring, among other things, that the Company and its stockholders have full and accurate information about nominating stockholders and their nominees and that such stockholders and nominees comply with applicable laws, regulations and other requirements. Finally, the remaining changes are clarifying in nature, and they assure fair representation by preventing confusion with respect to the operation of the By-Law provisions. B. Self-Regulatory Organization's Statement on Burden on Competition Because the proposed rule change relates to the governance of the Company and not to the operations of BSECC, BSECC 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 Within 45 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 BSECC consents, the Commission shall: (a) By order approve or disapprove 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 email to [email protected]. Please include File Number SR-BSECC-2016-001 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR-BSECC-2016-001. This file number should be included on the subject line if email 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 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of BSECC. 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-BSECC-2016-001 and should be submitted on or before October 26, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\42\ --------------------------------------------------------------------------- \42\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-24004 Filed 10-4-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices 69159
For the Commission, by the Division of rule change. The text of these statements includes certain procedural
Trading and Markets, pursuant to delegated may be examined at the places specified requirements that ensure, among other
authority.43 in Item IV below. BSECC has prepared things, that the Company and its
Robert W. Errett, summaries, set forth in sections A, B, stockholders will have full and accurate
Deputy Secretary. and C below, of the most significant information about nominating
[FR Doc. 2016–24008 Filed 10–4–16; 8:45 am] aspects of such statements. stockholders and their nominees and
BILLING CODE 8011–01–P that such stockholders and nominees
A. Self-Regulatory Organization’s
will comply with applicable laws,
Statement of the Purpose of, and
regulations and other requirements.
Statutory Basis for, the Proposed Rule
SECURITIES AND EXCHANGE
Change Proposed Section 3.6(a) of the By-Laws
COMMISSION
1. Purpose To respond to feedback from its
[Release No. 34–78982; File No. SR– stockholders, Nasdaq proposes to
BSECC–2016–001] Background amend its By-Laws to, as set forth in the
At Nasdaq’s 2016 annual meeting first sentence of proposed Section 3.6(a),
Self-Regulatory Organizations; Boston
held on May 5, 2016, Nasdaq’s require the Company to include in its
Stock Exchange Clearing Corporation;
stockholders considered a stockholder proxy statement, its form proxy and any
Notice of Filing of Proposed Rule
proposal submitted under Rule 14a–8 ballot distributed at the stockholder
Change To Amend the By-Laws of
under the Act.3 The proposal, which meeting, the name of, and certain
Nasdaq, Inc. To Implement Proxy
passed with 73.52% of the votes cast, Required Information 4 about, any
Access
requested that Nasdaq’s Board of person nominated for election (the
September 29, 2016. Directors (the ‘‘Board’’) take steps to ‘‘Stockholder Nominee’’) to the Board
Pursuant to Section 19(b)(1) of the implement a ‘‘proxy access’’ by-law. by a stockholder or group of
Securities Exchange Act of 1934 Proxy access by-laws allow a stockholders (the ‘‘Eligible
(‘‘Act’’) 1, and Rule 19b–4 thereunder,2 stockholder, or group of stockholders, Stockholder’’) 5 that satisfies the
notice is hereby given that on who comply with certain requirements, requirements set forth in the proxy
September 15, 2016, Boston Stock to nominate candidates for service on a access provision of Nasdaq’s By-Laws.6
Exchange Clearing Corporation board and have those candidates To utilize this provision, the Eligible
(‘‘BSECC’’) filed with the Securities and included in a company’s proxy Stockholder must expressly elect at the
Exchange Commission (‘‘Commission’’) materials. Such provisions allow time of providing a required notice to
the proposed rule change as described stockholders to nominate candidates the Company of the proxy access
in Items I, II, and III below, which Items without undertaking the expense of a nomination (the ‘‘Notice of Proxy
have been prepared by the clearing proxy solicitation. Access Nomination’’) to have its
agency. The Commission is publishing Following the 2016 annual meeting, nominee included in the Company’s
this notice to solicit comments on the the Nominating & Governance proxy materials. Stockholders will be
proposed rule change from interested Committee (the ‘‘Committee’’) of the eligible to submit proxy access
persons. Board and the Board reviewed the nominations only at annual meetings of
voting results on the stockholder stockholders when the Board solicits
I. Self-Regulatory Organization’s proposal and discussed proxy access proxies with respect to the election of
Statement of the Terms of Substance of generally. The Committee ultimately directors.
the Proposed Rule Change recommended to the Board, and the The next two sentences of Section
BSECC is filing this proposed rule Board approved, certain changes to 3.6(a) provide some additional
change with respect to amendments of Nasdaq’s By-Laws to implement proxy clarification on the term ‘‘Eligible
the By-Laws (the ‘‘By-Laws’’) of its access. Nasdaq now proposes to make Stockholder.’’ First, in calculating the
parent corporation, Nasdaq, Inc. these changes by adopting new Section number of stockholders in a group
(‘‘Nasdaq’’ or the ‘‘Company’’), to 3.6 of the By-Laws and making certain seeking to qualify as an Eligible
implement proxy access. The proposed conforming changes to current Sections Stockholder, two or more of the
amendments will be implemented on a 3.1, 3.3 and 3.5 of the By-Laws, all of following types of funds shall be
date designated by the Company which are described further below. counted as one stockholder: (i) Funds
following approval by the Commission. In developing its proposal, Nasdaq under common management and
The text of the proposed rule change is has generally tried to balance the investment control, (ii) funds under
available on BSECC’s Web site at http:// relative weight of arguments for and common management and funded
nasdaqbx.cchwallstreet.com, at the against proxy access provisions. On the primarily by the same employer, or (iii)
principal office of BSECC, and at the one hand, Nasdaq recognizes the
Commission’s Public Reference Room. significance of this issue to some 4 The Required Information is the information
investors, who see proxy access as an provided to Nasdaq’s Corporate Secretary about the
II. Self-Regulatory Organization’s important accountability mechanism Stockholder Nominee and the Eligible Stockholder
Statement of the Purpose of, and that is required to be disclosed in the Company’s
that allows them to participate in board proxy statement by the regulations promulgated
Statutory Basis for, the Proposed Rule elections through the nomination of under the Act, and if the Eligible Stockholder so
Change stockholder candidates that are elects, a written statement, not to exceed 500 words,
presented in a company’s proxy in support of the Stockholder Nominee(s)’
asabaliauskas on DSK3SPTVN1PROD with NOTICES
In its filing with the Commission, candidacy (the ‘‘Statement’’).
BSECC included statements concerning statement. On the other hand, Nasdaq’s 5 As used throughout Nasdaq’s By-Laws, the term
the purpose of and basis for the proposed proxy access provision ‘‘Eligible Stockholder’’ includes each member of a
proposed rule change and discussed any stockholder group that submits a proxy access
3 See 17 CFR 240.14a–8, which establishes nomination to the extent the context requires.
comments it received on the proposed
procedures pursuant to which stockholders of a 6 When the Company includes proxy access
public company may have their proposals placed nominees in the proxy materials, such individuals
43 17 CFR 200.30–3(a)(12). alongside management’s proposals in the will be included in addition to any persons
1 15 U.S.C. 78s(b)(1). company’s proxy materials for presentation to a nominated for election to the Board or any
2 17 CFR 240.19b–4. vote at a meeting of stockholders. committee thereof.
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funds that are a ‘‘group of investment satisfied, Nasdaq does not necessarily inclusion in the proxy materials shall
companies’’ as such term is defined in have to support that nominee. rank such Stockholder Nominees based
Section 12(d)(1)(G)(ii) of the Investment on the order that the Eligible
Proposed Section 3.6(b) of the By-Laws
Company Act of 1940, as amended.7 Stockholder desires such Stockholder
Nasdaq views this as a stockholder- Proposed Section 3.6(b) of the By- Nominees to be selected for inclusion in
friendly provision that will make it Laws establishes the deadline for a the proxy statement in the event that the
easier for such funds to participate in a timely Notice of Proxy Access total number of Stockholder Nominees
proxy access nomination since they will Nomination. Specifically, such a notice submitted by Eligible Stockholders
not have to comply with the procedural must be addressed to, and received by, pursuant to the proxy access provision
requirements in the proxy access Nasdaq’s Corporate Secretary no earlier exceeds the maximum number of
provision multiple times. Second, in the than one hundred fifty (150) days and nominees allowed. In the event that the
event that the Eligible Stockholder no later than one hundred twenty (120) number of Stockholder Nominees
consists of a group of stockholders, any days before the anniversary of the date submitted by Eligible Stockholders
and all requirements and obligations for that Nasdaq issued its proxy statement exceeds the maximum number of
an individual Eligible Stockholder shall for the previous year’s annual meeting nominees allowed, the highest ranking
apply to each member of the group, of stockholders. The Company believes Stockholder Nominee who meets the
except that the Required Ownership this notice period will provide requirements of the proxy access
Percentage (discussed further below) stockholders an adequate window to provision of the By-Laws from each
shall apply to the ownership of the submit nominees via proxy access, Eligible Stockholder will be selected for
group in the aggregate. Generally, the while also providing the Company inclusion in the proxy materials until
applicable requirements and obligations adequate time to diligence [sic] a proxy the maximum number is reached, going
access nominee before including them in order of the amount (largest to
relate to information that each member
in the proxy statement for the next smallest) of shares of Nasdaq’s
of the nominating group must provide to
annual meeting of stockholders. outstanding common stock each Eligible
Nasdaq about itself, as discussed further
below. Nasdaq believes it is reasonable Proposed Section 3.6(c) of the By-Laws Stockholder disclosed as owned in its
to require each member of the Proposed Section 3.6(c) specifies that respective Notice of Proxy Access
nominating group to provide such the maximum number of Stockholder Nomination submitted to Nasdaq. If the
information so that both the Company Nominees nominated by all Eligible maximum number is not reached after
and its stockholders are fully informed Stockholders that will be included in the highest ranking Stockholder
about the entire group making the proxy Nasdaq’s proxy materials with respect to Nominee who meets the requirements of
access nomination. an annual meeting of stockholders shall the proxy access provision of the By-
The final sentence of proposed not exceed the greater of two and 25% Laws from each Eligible Stockholder has
Section 3.6(a) allows Nasdaq to omit of the total number of directors in office been selected, this process will continue
from its proxy materials any information (rounded down to the nearest whole as many times as necessary, following
or Statement (or portion thereof) that it, number) as of the last day on which a the same order each time, until the
in good faith, believes is untrue in any Notice of Proxy Access Nomination may maximum number is reached. Following
material respect (or omits to state a be delivered pursuant to and in such determination, if any Stockholder
material fact necessary in order to make accordance with the proxy access Nominee who satisfies the eligibility
the statements made, in light of the provision of the By-Laws (the ‘‘Final requirements thereafter is nominated by
circumstances under which they are Proxy Access Nomination Date’’). In the the Board, or is not included in the
made, not misleading) or would violate event that one or more vacancies for any proxy materials or is not submitted for
any applicable law or regulation. This reason occurs after the Final Proxy election as a director, in either case, as
provision allows Nasdaq to comply with Access Nomination Date but before the a result of the Eligible Stockholder
Rule 14a–9 under the Act 8 and to date of the annual meeting and the becoming ineligible or withdrawing its
protect its stockholders from Board resolves to reduce the size of the nomination, the Stockholder Nominee
information that is materially untrue or Board in connection therewith, the becoming unwilling or unable to serve
that violates any law or regulation. The maximum number of Stockholder on the Board or the Eligible Stockholder
final sentence of proposed Section 3.6(a) Nominees included in Nasdaq’s proxy or the Stockholder Nominee failing to
also explicitly allows Nasdaq to solicit materials shall be calculated based on comply with the proxy access provision
against, and include in the proxy the number of directors in office as so of the By-Laws, no other nominee or
statement its own statement relating to, reduced. Any individual nominated by nominees shall be included in the proxy
any Stockholder Nominee. This an Eligible Stockholder for inclusion in materials or otherwise submitted for
provision merely clarifies that just the proxy materials pursuant to the director election in substitution thereof.
because Nasdaq must include a proxy proxy access provision of the By-Laws The Company believes it is reasonable
access nominee in its proxy materials if whom the Board decides to nominate as to limit the Board seats available to
the proxy access provisions are a nominee of the Board, and any proxy access nominees, to establish
individual nominated by an Eligible procedures for selecting candidates if
7 See 15 U.S.C. 80a–12(d)(1)(G)(ii), which defines Stockholder for inclusion in the proxy the nominee limit is exceeded and to
‘‘group of investment companies’’ as any two or materials pursuant to the proxy access exclude further proxy access nominees
more registered investment companies that hold provision but whose nomination is in the cases set forth above. The
asabaliauskas on DSK3SPTVN1PROD with NOTICES
themselves out to investors as related companies for limitation on Board seats available to
purposes of investment and investor services.
subsequently withdrawn, shall be
8 See 17 CFR 240.14a–9, which generally counted as one of the Stockholder proxy access nominees ensures that
prohibits proxy solicitations that contain any Nominees for purposes of determining proxy access cannot be used to take over
statement which, at the time and in the light of the when the maximum number of the entire Board, which is not the stated
circumstances under which it is made, is false or Stockholder Nominees has been purpose of proxy access campaigns. The
misleading with respect to any material fact, or
which omits to state any material fact necessary in reached. procedures for selecting candidates if
order to make the statements therein not false or Any Eligible Stockholder submitting the nominee limit is exceeded establish
misleading. more than one Stockholder Nominee for clear and rational guidelines for an
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orderly nomination process to avoid the how the shares are voted with respect to annual meeting and must continue to
Company having to make arbitrary the election of directors and possesses own the Required Shares through the
judgments among candidates. Finally, the full economic interest in the shares. meeting date.
the exclusion of further proxy access A stockholder’s ownership of shares Proposed Section 3.6(e) also sets forth
nominees in certain cases will avoid shall be deemed to continue during any the information that an Eligible
further time and expense to the period in which the stockholder has Stockholder must provide to Nasdaq’s
Company when the proxy access delegated any voting power by means of Corporate Secretary in writing within
nominee has been nominated by the a proxy, power of attorney or other the deadline discussed above in order to
Board, in which case the goal of the instrument or arrangement which is make a proxy access nomination. This
proxy access nomination has been revocable at any time by the information includes:
achieved, or in certain cases when the stockholder. A stockholder’s ownership
Eligible Stockholder or Stockholder • One or more written statements
of shares shall be deemed to continue
Nominee is at fault. from the record holder of the shares
during any period in which the
(and from each intermediary through
Proposed Section 3.6(d) of the By-Laws stockholder has loaned such shares
which the shares are or have been held
provided that the stockholder has the
Proposed Section 3.6(d) clarifies, for during the Minimum Holding Period)
power to recall such loaned shares on
the avoidance of doubt, how verifying that, as of a date within seven
three (3) business days’ notice, has
‘‘ownership’’ will be defined for calendar days prior to the date the
recalled such loaned shares as of the
purposes of meeting the Required Notice of Proxy Access Nomination is
date of the Notice of Proxy Access
Ownership Percentage (discussed delivered to, or mailed to and received
Nomination and holds such shares
further below). Specifically, an Eligible by, Nasdaq’s Corporate Secretary, the
through the date of the annual meeting.
Stockholder shall be deemed to ‘‘own’’ Eligible Stockholder owns, and has
The terms ‘‘owned,’’ ‘‘owning’’ and
only those outstanding shares of owned continuously for the Minimum
other variations of the word ‘‘own’’ shall
Nasdaq’s common stock as to which the Holding Period, the Required Shares,
have correlative meanings. Whether
stockholder possesses both: (i) The full and the Eligible Stockholder’s
outstanding shares of Nasdaq’s common
voting and investment rights pertaining agreement to provide, within five (5)
stock are ‘‘owned’’ for these purposes
to the shares; and (ii) the full economic business days after the record date for
shall be determined by the Board or any
interest in (including the opportunity the annual meeting, written statements
committee thereof, in each case, in its
for profit from and risk of loss on) such from the record holder and
sole discretion. For purposes of the
shares; provided that the number of intermediaries verifying the Eligible
proxy access provision of the By-Laws,
shares calculated in accordance with Stockholder’s continuous ownership of
the term ‘‘affiliate’’ or ‘‘affiliates’’ shall
clauses (i) and (ii) shall not include any the Required Shares through the record
have the meaning ascribed thereto
shares: date; 10
under the rules and regulations of the
• Sold by such stockholder or any of Act.9 An Eligible Stockholder shall • a copy of the Schedule 14N that has
its affiliates in any transaction that has include in its Notice of Proxy Access been filed with the SEC as required by
not been settled or closed, including any Nomination the number of shares it is Rule 14a–18 under the Act; 11
short sale; deemed to own for the purposes of the • the information, representations
• borrowed by such stockholder or
proxy access provision of the By-Laws. and agreements with respect to the
any of its affiliates for any purposes or
Eligible Stockholder that are the same as
purchased by such stockholder or any of Proposed Section 3.6(e) of the By-Laws
those that would be required to be set
its affiliates pursuant to an agreement to The first paragraph of proposed forth in a stockholder’s notice of
resell; or Section 3.6(e) establishes certain
• subject to any option, warrant, nomination with respect to a ‘‘Proposing
requirements for an Eligible Stockholder Person’’ pursuant to Section 3.1(b)(i)
forward contract, swap, contract of sale,
to make a proxy access nomination. and Section 3.1(b)(iii) of the By-Laws; 12
other derivative or similar agreement
Specifically, an Eligible Stockholder • the consent of each Stockholder
entered into by such stockholder or any
must have owned (defined as discussed Nominee to being named in the proxy
of its affiliates, whether any such
above) 3% or more (the ‘‘Required statement as a nominee and to serving
instrument or agreement is to be settled
Ownership Percentage’’) of Nasdaq’s as a director if elected; 13
with shares or with cash based on the
outstanding common stock (the
notional amount or value of shares of
‘‘Required Shares’’) continuously for 3 • a representation that the Eligible
Nasdaq’s outstanding common stock, in Stockholder:
years (the ‘‘Minimum Holding Period’’)
any such case which instrument or Æ acquired the Required Shares in the
as of both the date the Notice of Proxy
agreement has, or is intended to have, ordinary course of business and not
Access Nomination is received by
or if exercised by either party would with the intent to change or influence
Nasdaq’s Corporate Secretary and the
have, the purpose or effect of:
record date for determining the
Æ reducing in any manner, to any
stockholders entitled to vote at the 10 See proposed Section 3.6(e)(i) of the By-Laws.
extent or at any time in the future, such 11 See proposed Section 3.6(e)(ii) of the By-Laws;
stockholder’s or its affiliates’ full right 9 Pursuant to Rule 12b–2 under the Act, ‘‘[a]n see also 17 CFR 240.14n–101 and 17 CFR 240.14a–
to vote or direct the voting of any such ‘affiliate’ of, or a person ‘affiliated’ with, a specified 18, which generally require a Nominating
shares; and/or person, is a person that directly, or indirectly Stockholder to provide notice to the Company of its
Æ hedging, offsetting or altering to intent to submit a proxy access nomination on a
asabaliauskas on DSK3SPTVN1PROD with NOTICES
through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Schedule 14N and file that notice, including the
any degree any gain or loss realized or required disclosure, with the Commission on the
person specified.’’ 17 CFR 240.12b–2. Further,
realizable from maintaining the full ‘‘[t]he term ‘control’ (including the terms date first transmitted to the Company.
economic ownership of such shares by ‘controlling,’ ‘controlled by’ and ‘under common 12 See proposed Section 3.6(e)(iii) of the By-Laws;
such stockholder or its affiliates. control with’) means the possession, direct or see also Sections 3.1(b)(i) and 3.1(b)(iii) of the By-
Further, a stockholder shall ‘‘own’’ indirect, of the power to direct or cause the Laws, which constitute part of Nasdaq’s ‘‘advance
direction of the management and policies of a notice’’ provision under which a ‘‘Proposing
shares held in the name of a nominee person, whether through the ownership of voting Person’’ may, among other things, nominate a
or other intermediary so long as the securities, by contract, or otherwise.’’ 17 CFR person for election to the Board.
stockholder retains the right to instruct 240.12b–2. 13 See proposed Section 3.6(e)(iv) of the By-Laws.
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![Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices 69163
Corporate Secretary to determine the Proposed Section 3.6(h) of the By-Laws • is or has been, within the past three
classification of such nominee as an Proposed Section 3.6(h) provides that (3) years, an officer or director of a
Industry, Non-Industry, Issuer or Public Nasdaq shall not be required to include competitor, as defined for purposes of
Director, if applicable, in order to make a Stockholder Nominee in its proxy Section 8 of the Clayton Antitrust Act of
the certification referenced in Section materials for any meeting of 1914; 33
4.13(h)(iii) of the By-Laws.29 stockholders under certain • is a named subject of a pending
Like the informational requirements criminal proceeding (excluding traffic
circumstances. In these situations, the
for an Eligible Stockholder, which are violations and other minor offenses) or
proxy access nomination shall be
set forth above, the informational has been convicted in such a criminal
disregarded and no vote on such
requirements for the Stockholder proceeding within the past ten (10)
Stockholder Nominee will occur, even if
Nominee ensure that both Nasdaq and years; 34
Nasdaq has received proxies in respect • is subject to any order of the type
its stockholders will have sufficient
of the vote. These circumstances occur specified in Rule 506(d) of Regulation D
information about the Stockholder
when the Stockholder Nominee: promulgated under the Securities Act of
Nominee. Among other things, this • Has been nominated by an Eligible
information will ensure that Nasdaq is 1933, as amended; 35
Stockholder who has engaged in or is • is subject to ‘‘statutory
able to comply with its disclosure and
currently engaged in, or has been or is disqualification’’ under Section 3(a)(39)
other requirements under applicable
a participant in another person’s, of the Act; 36
law and that Nasdaq, its Board and its
‘‘solicitation’’ within the meaning of • has, or the applicable Eligible
stockholders are able to assess the proxy
Rule 14a–1(l) under the Act in support Stockholder has, provided information
access nomination adequately.
of the election of any individual as a to Nasdaq in respect of the proxy access
Proposed Section 3.6(g) of the By-Laws director at the annual meeting other nomination that was untrue in any
Pursuant to proposed Section 3.6(g), than its Stockholder Nominee(s) or a material respect or omitted to state a
each Eligible Stockholder or nominee of the Board; 30 material fact necessary in order to make
Stockholder Nominee must promptly • is not independent under the listing the statements made, in light of the
notify Nasdaq’s Corporate Secretary of standards of The NASDAQ Stock circumstances under which they were
any information or communications Market, any applicable rules of the SEC made, not misleading, as determined by
provided by the Eligible Stockholder or and any publicly disclosed standards the Board or any committee thereof, in
Stockholder Nominee to Nasdaq or its used by the Board in determining and each case, in its sole discretion; 37 or
stockholders that ceases to be true and disclosing independence of Nasdaq’s • breaches or fails, or the applicable
correct in all material respects or omits directors, in each case as determined by Eligible Stockholder breaches or fails, to
a material fact necessary to make the the Board in its sole discretion; 31 comply with its obligations pursuant to
statements made, in light of the • would, if elected as a member of the the By-Laws, including, but not limited
circumstances under which they were Board, cause Nasdaq to be in violation to, the proxy access provisions and any
made, not misleading and of the of the By-Laws (including but not agreement, representation or
information that is required to correct limited to the compositional undertaking required by the proxy
any such defect. This provision further requirements of the Board set forth in access provisions.38
states that providing any such Section 4.3 of the By-Laws), its Nasdaq believes these provisions will
notification shall not be deemed to cure Amended and Restated Certificate of protect the Company and its
any defect or, with respect to any defect Incorporation, the rules and listing stockholders by allowing it to exclude
that Nasdaq determines is material, standards of The NASDAQ Stock certain categories of objectionable
limit Nasdaq’s rights to omit a Market, or any applicable state or Stockholder Nominees from the proxy
Stockholder Nominee from its proxy federal law, rule or regulation; 32 statement.
materials. This provision is intended to Proposed Section 3.6(i) of the By-Laws
30 See proposed Section 3.6(h)(i) of the By-Laws;
protect Nasdaq’s stockholders by
see also 17 CFR 240.14a–1(l), which defines the Under proposed Section 3.6(i), the
requiring an Eligible Stockholder or related terms ‘‘solicit’’ and ‘‘solicitation.’’
Stockholder Nominee to give Nasdaq 31 See proposed Section 3.6(h)(ii) of the By-Laws;
Board or the chairman of the meeting of
notice of information previously see also footnote 28, supra. The Commission notes
that, while additional, more stringent independence ‘‘Staff Director’’ are included in Article I of the By-
provided that is materially untrue. Laws.
standards may be adopted by the Board in the
Nasdaq may then decide what action to future, as of the date of this Notice no such 33 See proposed Section 3.6(h)(iv) of the By-Laws;
take with respect to such defect, which standards have been adopted by the Board. The see also 15 U.S.C. 19(a)(1), which generally
may include, with respect to a material Commission further notes that, according to provides that ‘‘[n]o person shall, at the same time,
serve as a director or officer in any two
defect, omitting the relevant Nasdaq, should the Board decide to adopt
corporations’’ that are ‘‘competitors’’ such that ‘‘the
Stockholder Nominee from its proxy additional, more stringent standards than those
required under Nasdaq listing standards and any elimination of competition by agreement between
materials. requirements under Commission rules, all director them would constitute a violation of any of the
nominees would be evaluated against these antitrust laws.’’
34 See proposed Section 3.6(h)(v) of the By-Laws.
Commission notes that, while additional, more standards—not just those shareholder candidates
35 See proposed Section 3.6(h)(vi) of the By-Laws;
stringent independence standards may be adopted nominated under the provisions of proposed
by the Board in the future, as of the date of this Section 3.6. see also 17 CFR 230.506(d), which generally
Notice no such standards have been adopted by the 32 See proposed Section 3.6(h)(iii) of the By-Laws; disqualifies offerings involving certain felons and
Board. see also Section 4.3 of the By-Laws, which provides other bad actors from relying on the ‘‘safe harbor’’
in Rule 506 of Regulation D from registration under
asabaliauskas on DSK3SPTVN1PROD with NOTICES
29 Section 4.13(h)(iii) of the By-Laws requires that the number of Non-Industry Directors on the
Nasdaq’s Corporate Secretary to collect from each Board must equal or exceed the number of Industry the Securities Act of 1933, as amended.
36 See proposed Section 3.6(h)(vii) of the By-
nominee for director such information as is Directors. In addition, the Board must include at
reasonably necessary to serve as the basis for a least two Public Directors and may include at least Laws; see also 15 U.S.C. 78c(a)(39), which
determination of the nominee’s classification as an one, but no more than two, Issuer Directors. Finally, disqualifies certain categories of individuals who
Industry, Non-Industry, Issuer, or Public Director, if the Board shall include no more than one Staff generally have engaged in misconduct from
applicable, and to certify to the Committee each Director, unless the Board consists of ten or more membership or participation in, or association with
nominee’s classification, if applicable. Detailed directors, in which case, the Board shall include no a member of, a self-regulatory organization.
37 See proposed Section 3.6(h)(viii) of the By-
definitions of the terms ‘‘Industry Director,’’ ‘‘Non- more than two Staff Directors. Detailed definitions
Industry Director,’’ ‘‘Issuer Director’’ and ‘‘Public of the terms ‘‘Non-Industry Director,’’ ‘‘Industry Laws.
Director’’ are included in Article I of the By-Laws. Director,’’ ‘‘Public Director,’’ ‘‘Issuer Director’’ and 38 See proposed Section 3.6(h)(ix) of the By-Laws.
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![Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices 69165
participants in the selection of directors IV. Solicitation of Comments For the Commission, by the Division of
and administration of its affairs. Trading and Markets, pursuant to delegated
Interested persons are invited to authority.42
In drafting its proxy access provision, submit written data, views and Robert W. Errett,
Nasdaq has attempted to strike an arguments concerning the foregoing, Deputy Secretary.
appropriate balance between responding
including whether the proposed rule [FR Doc. 2016–24004 Filed 10–4–16; 8:45 am]
to investor feedback and including
change is consistent with the Act. BILLING CODE 8011–01–P
certain procedural and informational
Comments may be submitted by any of
requirements to again assure a fair
the following methods:
representation of shareholders and
SECURITIES AND EXCHANGE
participants in the selection of directors Electronic Comments COMMISSION
and administration of its affairs.
Specifically, the procedural • Use the Commission’s Internet [Release No. 34–78981; File No. SR–
requirements will achieve this objective comment form (http://www.sec.gov/ ISEGemini–2016–10]
by stating clearly and explicitly the rules/sro.shtml); or
Self-Regulatory Organizations; ISE
procedures stockholders must follow in • Send an email to rule-comments@ Gemini, LLC; Notice of Filing of
order to submit a proper proxy access sec.gov. Please include File Number SR– Proposed Rule Change To Amend the
nomination. The informational BSECC–2016–001 on the subject line. By-Laws of Nasdaq, Inc. To Implement
requirements will achieve this objective
Paper Comments Proxy Access
by ensuring, among other things, that
the Company and its stockholders have • Send paper comments in triplicate September 29, 2016.
full and accurate information about to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) of the
nominating stockholders and their Securities Exchange Act of 1934
Commission, 100 F Street NE.,
nominees and that such stockholders (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Washington, DC 20549.
and nominees comply with applicable notice is hereby given that on
laws, regulations and other All submissions should refer to File September 15, 2016, ISE Gemini, LLC
requirements. Number SR–BSECC–2016–001. This file (‘‘ISE Gemini’’) or ‘‘Exchange’’) filed
Finally, the remaining changes are number should be included on the with the Securities and Exchange
clarifying in nature, and they assure fair subject line if email is used. To help the Commission (‘‘SEC’’ or ‘‘Commission’’)
representation by preventing confusion Commission process and review your the proposed rule change as described
with respect to the operation of the By- comments more efficiently, please use in Items I, II, and III, below, which Items
Law provisions. only one method. The Commission will have been prepared by the Exchange.
post all comments on the Commission’s The Commission is publishing this
B. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/ notice to solicit comments on the
Statement on Burden on Competition rules/sro.shtml). Copies of the proposed rule change from interested
submission, all subsequent persons.
Because the proposed rule change
relates to the governance of the amendments, all written statements I. Self-Regulatory Organization’s
Company and not to the operations of with respect to the proposed rule Statement of the Terms of Substance of
BSECC, BSECC does not believe that the change that are filed with the the Proposed Rule Change
proposed rule change will impose any Commission, and all written The Exchange is filing this proposed
burden on competition not necessary or communications relating to the rule change with respect to amendments
appropriate in furtherance of the proposed rule change between the of the By-Laws (the ‘‘By-Laws’’) of its
purposes of the Act. Commission and any person, other than parent corporation, Nasdaq, Inc.
those that may be withheld from the (‘‘Nasdaq’’ or the ‘‘Company’’), to
C. Self-Regulatory Organization’s public in accordance with the
Statement on Comments on the implement proxy access. The proposed
provisions of 5 U.S.C. 552, will be amendments will be implemented on a
Proposed Rule Change Received From
available for Web site viewing and date designated by the Company
Members, Participants, or Others
printing in the Commission’s Public following approval by the Commission.
No written comments were either Reference Room, 100 F Street NE., The text of the proposed rule change is
solicited or received. Washington, DC 20549 on official available on the Exchange’s Web site at
business days between the hours of www.ise.com, at the principal office of
III. Date of Effectiveness of the 10:00 a.m. and 3:00 p.m. Copies of the the Exchange, and at the Commission’s
Proposed Rule Change, and Timing for filing also will be available for Public Reference Room.
Commission Action
inspection and copying at the principal II. Self-Regulatory Organization’s
Within 45 days of the date of office of BSECC. All comments received Statement of the Purpose of, and
publication of this notice in the Federal will be posted without change; the Statutory Basis for, the Proposed Rule
Register or within such longer period (i) Commission does not edit personal Change
as the Commission may designate up to identifying information from
In its filing with the Commission, the
90 days of such date if it finds such submissions. You should submit only
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Exchange included statements
longer period to be appropriate and information that you wish to make concerning the purpose of and basis for
publishes its reasons for so finding or available publicly. All submissions the proposed rule change and discussed
(ii) as to which BSECC consents, the should refer to File Number SR–BSECC– any comments it received on the
Commission shall: (a) By order approve 2016–001 and should be submitted on proposed rule change. The text of these
or disapprove such proposed rule or before October 26, 2016.
change, or (b) institute proceedings to 42 17 CFR 200.30–3(a)(12).
determine whether the proposed rule 1 15 U.S.C. 78s(b)(1).
change should be disapproved. 2 17 CFR 240.19b–4.
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Document Created: 2016-10-05 03:29:16
Document Modified: 2016-10-05 03:29:16
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 69159 |
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