81 FR 69165 - Self-Regulatory Organizations; ISE Gemini, LLC; 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 | 69165-69172 | |
| FR Document | 2016-24003 |
[Federal Register Volume 81, Number 193 (Wednesday, October 5, 2016)] [Notices] [Pages 69165-69172] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-24003] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78981; File No. SR-ISEGemini-2016-10] Self-Regulatory Organizations; ISE Gemini, LLC; 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, ISE Gemini, LLC (``ISE Gemini'') or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule 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 The Exchange 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 the Exchange's Web site at www.ise.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these [[Page 69166]] statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose 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) 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 [[Page 69167]] 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 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 [[Page 69168]] 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 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: [[Page 69169]] [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 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. [[Page 69170]] 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 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 [[Page 69171]] 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 The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\41\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\42\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. --------------------------------------------------------------------------- \41\ 15 U.S.C. 78f(b). \42\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In response to feedback from its investors, Nasdaq is proposing changes to its By-Laws to implement proxy access. The Exchange 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 the Exchange's ultimate parent company, which is beneficial to both investors and the public interest. 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 for the protection of the Company and its investors. Specifically, the procedural requirements will protect investors by stating clearly and explicitly the procedures stockholders must follow in order to submit a proper proxy access nomination. The informational requirements will enhance investor protection 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 enhance investor protection and the public interest 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 the Exchange, the Exchange 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 the Exchange 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: [[Page 69172]] 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-ISEGemini-2016-10 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISEGemini-2016-10. 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 the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR- ISEGemini-2016-10 and should be submitted on or before October 26, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\43\ --------------------------------------------------------------------------- \43\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-24003 Filed 10-4-16; 8:45 am] BILLING CODE 8011-01-P
![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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![Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices 69167
satisfied, Nasdaq does not necessarily inclusion in the proxy materials shall orderly nomination process to avoid the
have to support that nominee. rank such Stockholder Nominees based Company having to make arbitrary
on the order that the Eligible judgments among candidates. Finally,
Proposed Section 3.6(b) of the By-Laws
Stockholder desires such Stockholder the exclusion of further proxy access
Proposed Section 3.6(b) of the By- Nominees to be selected for inclusion in nominees in certain cases will avoid
Laws establishes the deadline for a the proxy statement in the event that the further time and expense to the
timely Notice of Proxy Access total number of Stockholder Nominees Company when the proxy access
Nomination. Specifically, such a notice submitted by Eligible Stockholders nominee has been nominated by the
must be addressed to, and received by, pursuant to the proxy access provision Board, in which case the goal of the
Nasdaq’s Corporate Secretary no earlier exceeds the maximum number of proxy access nomination has been
than one hundred fifty (150) days and nominees allowed. In the event that the achieved, or in certain cases when the
no later than one hundred twenty (120) number of Stockholder Nominees Eligible Stockholder or Stockholder
days before the anniversary of the date submitted by Eligible Stockholders Nominee is at fault.
that Nasdaq issued its proxy statement exceeds the maximum number of
for the previous year’s annual meeting Proposed Section 3.6(d) of the By-Laws
nominees allowed, the highest ranking
of stockholders. The Company believes Stockholder Nominee who meets the Proposed Section 3.6(d) clarifies, for
this notice period will provide requirements of the proxy access the avoidance of doubt, how
stockholders an adequate window to provision of the By-Laws from each ‘‘ownership’’ will be defined for
submit nominees via proxy access, Eligible Stockholder will be selected for purposes of meeting the Required
while also providing the Company inclusion in the proxy materials until Ownership Percentage (discussed
adequate time to diligence [sic] a proxy the maximum number is reached, going further below). Specifically, an Eligible
access nominee before including them in order of the amount (largest to Stockholder shall be deemed to ‘‘own’’
in the proxy statement for the next smallest) of shares of Nasdaq’s only those outstanding shares of
annual meeting of stockholders. outstanding common stock each Eligible Nasdaq’s common stock as to which the
Proposed Section 3.6(c) of the By-Laws Stockholder disclosed as owned in its stockholder possesses both: (i) The full
respective Notice of Proxy Access voting and investment rights pertaining
Proposed Section 3.6(c) specifies that to the shares; and (ii) the full economic
the maximum number of Stockholder Nomination submitted to Nasdaq. If the
maximum number is not reached after interest in (including the opportunity
Nominees nominated by all Eligible for profit from and risk of loss on) such
Stockholders that will be included in the highest ranking Stockholder
Nominee who meets the requirements of shares; provided that the number of
Nasdaq’s proxy materials with respect to shares calculated in accordance with
an annual meeting of stockholders shall the proxy access provision of the By-
Laws from each Eligible Stockholder has clauses (i) and (ii) shall not include any
not exceed the greater of two and 25% shares:
of the total number of directors in office been selected, this process will continue
as many times as necessary, following • Sold by such stockholder or any of
(rounded down to the nearest whole its affiliates in any transaction that has
number) as of the last day on which a the same order each time, until the
maximum number is reached. Following not been settled or closed, including any
Notice of Proxy Access Nomination may short sale;
such determination, if any Stockholder
be delivered pursuant to and in • borrowed by such stockholder or
accordance with the proxy access Nominee who satisfies the eligibility
any of its affiliates for any purposes or
provision of the By-Laws (the ‘‘Final requirements thereafter is nominated by
purchased by such stockholder or any of
Proxy Access Nomination Date’’). In the the Board, or is not included in the
its affiliates pursuant to an agreement to
event that one or more vacancies for any proxy materials or is not submitted for
resell; or
reason occurs after the Final Proxy election as a director, in either case, as • subject to any option, warrant,
Access Nomination Date but before the a result of the Eligible Stockholder forward contract, swap, contract of sale,
date of the annual meeting and the becoming ineligible or withdrawing its other derivative or similar agreement
Board resolves to reduce the size of the nomination, the Stockholder Nominee entered into by such stockholder or any
Board in connection therewith, the becoming unwilling or unable to serve of its affiliates, whether any such
maximum number of Stockholder on the Board or the Eligible Stockholder instrument or agreement is to be settled
Nominees included in Nasdaq’s proxy or the Stockholder Nominee failing to with shares or with cash based on the
materials shall be calculated based on comply with the proxy access provision notional amount or value of shares of
the number of directors in office as so of the By-Laws, no other nominee or Nasdaq’s outstanding common stock, in
reduced. Any individual nominated by nominees shall be included in the proxy any such case which instrument or
an Eligible Stockholder for inclusion in materials or otherwise submitted for agreement has, or is intended to have,
the proxy materials pursuant to the director election in substitution thereof. or if exercised by either party would
proxy access provision of the By-Laws The Company believes it is reasonable have, the purpose or effect of:
whom the Board decides to nominate as to limit the Board seats available to Æ Reducing in any manner, to any
a nominee of the Board, and any proxy access nominees, to establish extent or at any time in the future, such
individual nominated by an Eligible procedures for selecting candidates if stockholder’s or its affiliates’ full right
Stockholder for inclusion in the proxy the nominee limit is exceeded and to to vote or direct the voting of any such
materials pursuant to the proxy access exclude further proxy access nominees shares; and/or
provision but whose nomination is in the cases set forth above. The Æ hedging, offsetting or altering to
asabaliauskas on DSK3SPTVN1PROD with NOTICES
subsequently withdrawn, shall be limitation on Board seats available to any degree any gain or loss realized or
counted as one of the Stockholder proxy access nominees ensures that realizable from maintaining the full
Nominees for purposes of determining proxy access cannot be used to take over economic ownership of such shares by
when the maximum number of the entire Board, which is not the stated such stockholder or its affiliates.
Stockholder Nominees has been purpose of proxy access campaigns. The Further, a stockholder shall ‘‘own’’
reached. procedures for selecting candidates if shares held in the name of a nominee
Any Eligible Stockholder submitting the nominee limit is exceeded establish or other intermediary so long as the
more than one Stockholder Nominee for clear and rational guidelines for an stockholder retains the right to instruct
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![69168 Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices
how the shares are voted with respect to annual meeting and must continue to control of Nasdaq, and does not
the election of directors and possesses own the Required Shares through the presently have such intent; 14
the full economic interest in the shares. meeting date. Æ presently intends to maintain
A stockholder’s ownership of shares Proposed Section 3.6(e) also sets forth qualifying ownership of the Required
shall be deemed to continue during any the information that an Eligible Shares through the date of the annual
period in which the stockholder has Stockholder must provide to Nasdaq’s meeting; 15
delegated any voting power by means of Æ has not nominated and will not
Corporate Secretary in writing within
a proxy, power of attorney or other nominate for election any individual as
the deadline discussed above in order to
instrument or arrangement which is a director at the annual meeting, other
make a proxy access nomination. This
revocable at any time by the than its Stockholder Nominee(s); 16
information includes: Æ has not engaged and will not
stockholder. A stockholder’s ownership
• One or more written statements engage in, and has not and will not be
of shares shall be deemed to continue
from the record holder of the shares a participant in another person’s,
during any period in which the
(and from each intermediary through ‘‘solicitation’’ within the meaning of
stockholder has loaned such shares
which the shares are or have been held Rule 14a–1(l) under the Act in support
provided that the stockholder has the
during the Minimum Holding Period) of the election of any individual as a
power to recall such loaned shares on
verifying that, as of a date within seven director at the annual meeting, other
three (3) business days’ notice, has
calendar days prior to the date the than its Stockholder Nominee(s) or a
recalled such loaned shares as of the
Notice of Proxy Access Nomination is nominee of the Board; 17
date of the Notice of Proxy Access
delivered to, or mailed to and received Æ agrees to comply with all
Nomination and holds such shares
by, Nasdaq’s Corporate Secretary, the applicable laws and regulations with
through the date of the annual meeting.
Eligible Stockholder owns, and has respect to any solicitation in connection
The terms ‘‘owned,’’ ‘‘owning’’ and
owned continuously for the Minimum with the meeting or applicable to the
other variations of the word ‘‘own’’ shall
Holding Period, the Required Shares, filing and use, if any, of soliciting
have correlative meanings. Whether
and the Eligible Stockholder’s material; 18
outstanding shares of Nasdaq’s common Æ will provide facts, statements and
agreement to provide, within five (5)
stock are ‘‘owned’’ for these purposes other information in all
business days after the record date for
shall be determined by the Board or any communications with Nasdaq and its
the annual meeting, written statements
committee thereof, in each case, in its stockholders that are or will be true and
from the record holder and
sole discretion. For purposes of the correct in all material respects and do
intermediaries verifying the Eligible
proxy access provision of the By-Laws, not and will not omit to state a material
Stockholder’s continuous ownership of
the term ‘‘affiliate’’ or ‘‘affiliates’’ shall fact necessary in order to make the
the Required Shares through the record
have the meaning ascribed thereto statements made, in light of the
date; 10
under the rules and regulations of the circumstances under which they were
Act.9 An Eligible Stockholder shall • a copy of the Schedule 14N that has
made, not misleading; 19 and
include in its Notice of Proxy Access been filed with the SEC as required by Æ as to any two or more funds whose
Nomination the number of shares it is Rule 14a–18 under the Act; 11 shares are aggregated to count as one
deemed to own for the purposes of the • the information, representations stockholder for the purpose of
proxy access provision of the By-Laws. and agreements with respect to the constituting an Eligible Stockholder,
Eligible Stockholder that are the same as within five business days after the date
Proposed Section 3.6(e) of the By-Laws
those that would be required to be set of the Notice of Proxy Access
The first paragraph of proposed forth in a stockholder’s notice of Nomination, will provide to Nasdaq
Section 3.6(e) establishes certain nomination with respect to a ‘‘Proposing documentation reasonably satisfactory
requirements for an Eligible Stockholder Person’’ pursuant to Section 3.1(b)(i) to Nasdaq that demonstrates that the
to make a proxy access nomination. and Section 3.1(b)(iii) of the By-Laws; 12 funds satisfy the requirements in the By-
Specifically, an Eligible Stockholder • the consent of each Stockholder Laws, which were discussed above, for
must have owned (defined as discussed Nominee to being named in the proxy the funds to qualify as one Eligible
above) 3% or more (the ‘‘Required statement as a nominee and to serving Stockholder; 20
Ownership Percentage’’) of Nasdaq’s as a director if elected; 13 • a representation as to the Eligible
outstanding common stock (the Stockholder’s intentions with respect to
‘‘Required Shares’’) continuously for 3 • a representation that the Eligible
maintaining qualifying ownership of the
years (the ‘‘Minimum Holding Period’’) Stockholder: Required Shares for at least one year
as of both the date the Notice of Proxy Æ Acquired the Required Shares in following the annual meeting; 21
Access Nomination is received by the ordinary course of business and not • an undertaking that the Eligible
Nasdaq’s Corporate Secretary and the with the intent to change or influence Stockholder agrees to:
record date for determining the
stockholders entitled to vote at the 10 See proposed Section 3.6(e)(i) of the By-Laws. 14 See proposed Section 3.6(e)(v)(A) of the By-
11 See proposed Section 3.6(e)(ii) of the By-Laws; Laws.
15 See proposed Section 3.6(e)(v)(B) of the By-
9 Pursuant to Rule 12b–2 under the Act, ‘‘[a]n see also 17 CFR 240.14n–101 and 17 CFR 240.14a–
18, which generally require a Nominating Laws.
‘affiliate’ of, or a person ‘affiliated’ with, a specified 16 See proposed Section 3.6(e)(v)(C) of the By-
person, is a person that directly, or indirectly Stockholder to provide notice to the Company of its
intent to submit a proxy access nomination on a Laws.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
through one or more intermediaries, controls, or is
Schedule 14N and file that notice, including the 17 See proposed Section 3.6(e)(v)(D) of the By-
controlled by, or is under common control with, the
person specified.’’ 17 CFR 240.12b–2. Further, required disclosure, with the Commission on the Laws; see also 17 CFR 240.14a–1(l), which defines
‘‘[t]he term ‘control’ (including the terms date first transmitted to the Company. the related terms ‘‘solicit’’ and ‘‘solicitation.’’
12 See proposed Section 3.6(e)(iii) of the By-Laws; 18 See proposed Section 3.6(e)(v)(E) of the By-
‘controlling,’ ‘controlled by’ and ‘under common
control with’) means the possession, direct or see also Sections 3.1(b)(i) and 3.1(b)(iii) of the By- Laws.
Laws, which constitute part of Nasdaq’s ‘‘advance 19 See proposed Section 3.6(e)(v)(F) of the By-
indirect, of the power to direct or cause the
direction of the management and policies of a notice’’ provision under which a ‘‘Proposing Laws.
person, whether through the ownership of voting Person’’ may, among other things, nominate a 20 See proposed Section 3.6(e)(v)(G) of the By-
securities, by contract, or otherwise.’’ 17 CFR person for election to the Board. Laws.
240.12b–2. 13 See proposed Section 3.6(e)(iv) of the By-Laws. 21 See proposed Section 3.6(e)(vi) of the By-Laws.
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![69170 Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices
Proposed Section 3.6(h) of the By-Laws • is or has been, within the past three stockholders shall declare a proxy
Proposed Section 3.6(h) provides that (3) years, an officer or director of a access nomination invalid, and such
Nasdaq shall not be required to include competitor, as defined for purposes of nomination shall be disregarded even if
a Stockholder Nominee in its proxy Section 8 of the Clayton Antitrust Act of proxies in respect of such nomination
materials for any meeting of 1914; 33 have been received by the Company, if:
stockholders under certain • is a named subject of a pending • The Stockholder Nominee(s) and/or
criminal proceeding (excluding traffic the applicable Eligible Stockholder have
circumstances. In these situations, the
violations and other minor offenses) or breached its or their obligations under
proxy access nomination shall be
has been convicted in such a criminal the proxy access provision of the By-
disregarded and no vote on such
proceeding within the past ten (10) Laws, as determined by the Board or the
Stockholder Nominee will occur, even if
years; 34 chairman of the meeting of
Nasdaq has received proxies in respect • is subject to any order of the type
of the vote. These circumstances occur stockholders, in each case, in its or his
specified in Rule 506(d) of Regulation D sole discretion; or
when the Stockholder Nominee:
• Has been nominated by an Eligible
promulgated under the Securities Act of • the Eligible Stockholder (or a
1933, as amended; 35 qualified representative thereof) does
Stockholder who has engaged in or is • is subject to ‘‘statutory
currently engaged in, or has been or is not appear at the meeting of
disqualification’’ under Section 3(a)(39) stockholders to present the proxy access
a participant in another person’s, of the Act; 36
‘‘solicitation’’ within the meaning of nomination.
• has, or the applicable Eligible Nasdaq believes this provision
Rule 14a–1(l) under the Act in support Stockholder has, provided information protects the Company and its
of the election of any individual as a to Nasdaq in respect of the proxy access stockholders by providing the Board or
director at the annual meeting other nomination that was untrue in any the chairman of the stockholder meeting
than its Stockholder Nominee(s) or a material respect or omitted to state a limited authority to disqualify a proxy
nominee of the Board; 30 material fact necessary in order to make
• is not independent under the listing access nominee when that nominee or
the statements made, in light of the the sponsoring stockholder(s) have
standards of The NASDAQ Stock circumstances under which they were
Market, any applicable rules of the SEC breached an obligation under the proxy
made, not misleading, as determined by access provision, including the
and any publicly disclosed standards the Board or any committee thereof, in
used by the Board in determining and obligation to appear at the stockholder
each case, in its sole discretion; 37 or meeting to present the proxy access
disclosing independence of Nasdaq’s • breaches or fails, or the applicable nomination.
directors, in each case as determined by Eligible Stockholder breaches or fails, to
the Board in its sole discretion; 31 comply with its obligations pursuant to Proposed Section 3.6(j) of the By-Laws
• would, if elected as a member of the the By-Laws, including, but not limited Proposed Section 3.6(j) states that the
Board, cause Nasdaq to be in violation to, the proxy access provisions and any following Stockholder Nominees who
of the By-Laws (including but not agreement, representation or are included in the Company’s proxy
limited to the compositional undertaking required by the proxy materials for a particular annual
requirements of the Board set forth in access provisions.38 meeting of stockholders will be
Section 4.3 of the By-Laws), its Nasdaq believes these provisions will ineligible to be a Stockholder Nominee
Amended and Restated Certificate of protect the Company and its for the next two annual meetings:
Incorporation, the rules and listing stockholders by allowing it to exclude • A Stockholder Nominee who
standards of The NASDAQ Stock certain categories of objectionable withdraws from or becomes ineligible or
Market, or any applicable state or Stockholder Nominees from the proxy unavailable for election at the annual
federal law, rule or regulation; 32 statement. meeting; or
30 See proposed Section 3.6(h)(i) of the By-Laws; Proposed Section 3.6(i) of the By-Laws • a Stockholder Nominee who does
see also 17 CFR 240.14a–1(l), which defines the
not receive at least 25% of the votes cast
Under proposed Section 3.6(i), the
related terms ‘‘solicit’’ and ‘‘solicitation.’’ in favor of such Stockholder Nominee’s
Board or the chairman of the meeting of
31 See proposed Section 3.6(h)(ii) of the By-Laws; election.
see also footnote 28, supra. The Commission notes This provision will save the Company
that, while additional, more stringent independence ‘‘Staff Director’’ are included in Article I of the By-
Laws. and its stockholders the time and
standards may be adopted by the Board in the
future, as of the date of this Notice no such 33 See proposed Section 3.6(h)(iv) of the By-Laws; expense of analyzing and addressing
standards have been adopted by the Board. The see also 15 U.S.C. 19(a)(1), which generally subsequent proxy access nominations
Commission further notes that, according to provides that ‘‘[n]o person shall, at the same time, regarding individuals who were
Nasdaq, should the Board decide to adopt serve as a director or officer in any two
corporations’’ that are ‘‘competitors’’ such that ‘‘the included in the proxy materials for a
additional, more stringent standards than those
required under Nasdaq listing standards and any elimination of competition by agreement between particular annual meeting but ultimately
requirements under Commission rules, all director them would constitute a violation of any of the did not stand for election or receive a
nominees would be evaluated against these antitrust laws.’’ substantial amount of votes. After the
34 See proposed Section 3.6(h)(v) of the By-Laws.
standards—not just those shareholder candidates next two annual meetings, these
35 See proposed Section 3.6(h)(vi) of the By-Laws;
nominated under the provisions of proposed
Section 3.6. see also 17 CFR 230.506(d), which generally Stockholder Nominees would again be
32 See proposed Section 3.6(h)(iii) of the By-Laws; disqualifies offerings involving certain felons and eligible for nomination through the
see also Section 4.3 of the By-Laws, which provides other bad actors from relying on the ‘‘safe harbor’’ proxy access provisions of the By-Laws.
in Rule 506 of Regulation D from registration under
asabaliauskas on DSK3SPTVN1PROD with NOTICES
that the number of Non-Industry Directors on the
Board must equal or exceed the number of Industry the Securities Act of 1933, as amended. Proposed Section 3.6(k) of the By-Laws
36 See proposed Section 3.6(h)(vii) of the By-
Directors. In addition, the Board must include at
least two Public Directors and may include at least Laws; see also 15 U.S.C. 78c(a)(39), which In case there are matters involving a
one, but no more than two, Issuer Directors. Finally, disqualifies certain categories of individuals who proxy access nomination that are open
the Board shall include no more than one Staff generally have engaged in misconduct from to interpretation, proposed Section
Director, unless the Board consists of ten or more membership or participation in, or association with
a member of, a self-regulatory organization.
3.6(k) states that the Board (or any other
directors, in which case, the Board shall include no
more than two Staff Directors. Detailed definitions 37 See proposed Section 3.6(h)(viii) of the By- person or body authorized by the Board)
of the terms ‘‘Non-Industry Director,’’ ‘‘Industry Laws. shall have exclusive power and
Director,’’ ‘‘Public Director,’’ ‘‘Issuer Director’’ and 38 See proposed Section 3.6(h)(ix) of the By-Laws. authority to interpret the proxy access
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![69172 Federal Register / Vol. 81, No. 193 / Wednesday, October 5, 2016 / Notices
Electronic Comments SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
COMMISSION Statement of the Purpose of, and
• Use the Commission’s Internet Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ Change
[Release No. 34–78988; File No. SR–
rules/sro.shtml); or
BatsEDGX–2016–41] 1. Purpose
• Send an email to rule-comments@
sec.gov. Please include File Number SR– Self-Regulatory Organizations; Bats Overview
ISEGemini–2016–10 on the subject line. EDGX Exchange, Inc.; Notice of Filing The purpose of the proposed rule
of a Proposed Rule Change Related to change is to establish a price
Paper Comments
the Exchange’s Equity Options improvement auction, the Bats Auction
• Send paper comments in triplicate Platform To Adopt a Price Mechanism (‘‘BAM’’, ‘‘BAM Auction’’,
to Secretary, Securities and Exchange Improvement Auction, the Bats or ‘‘Auction’’) on the Exchange. BAM
Commission, 100 F Street NE., Auction Mechanism includes functionality in which a
Washington, DC 20549–1090. Member (an ‘‘Initiating Member’’) may
September 29, 2016. electronically submit for execution an
All submissions should refer to File Pursuant to Section 19(b)(1) of the order it represents as agent on behalf of
Number SR–ISEGemini–2016–10. This Securities Exchange Act of 1934 a Priority Customer,3 broker dealer, or
file number should be included on the (‘‘Act’’) 1, and Rule 19b–4 thereunder,2 any other person or entity (‘‘Agency
subject line if email is used. To help the notice is hereby given that on Order’’) against principal interest or
Commission process and review your September 16, 2016, Bats EDGX against any other order it represents as
comments more efficiently, please use agent (an ‘‘Initiating Order’’) provided it
Exchange, Inc. (the ‘‘Exchange’’ or
only one method. The Commission will submits the Agency Order for electronic
‘‘EDGX’’) filed with the Securities and
post all comments on the Commission’s execution into the BAM Auction
Exchange Commission (‘‘Commission’’) pursuant to the proposed Rule. For
Internet Web site (http://www.sec.gov/ the proposed rule change as described
rules/sro.shtml). Copies of the purposes of this filing and the proposed
in Items I, II, and III below, which Items Rule, the term ‘‘NBBO’’ shall mean the
submission, all subsequent have been prepared by the Exchange.
amendments, all written statements national best bid or national best offer
The Commission is publishing this at the particular point in time applicable
with respect to the proposed rule notice to solicit comments on the
change that are filed with the to the reference and the term ‘‘Initial
proposed rule change from interested NBBO’’ shall mean the national best bid
Commission, and all written persons.
communications relating to the or national best offer at the time an
I. Self-Regulatory Organization’s Auction is initiated.
proposed rule change between the
The Exchange believes that the BAM
Commission and any person, other than Statement of the Terms of Substance of
Auction, as proposed herein, will
those that may be withheld from the the Proposed Rule Change
encourage participants on EDGX
public in accordance with the Options to quote or display orders at the
provisions of 5 U.S.C. 552, will be The Exchange filed a proposal for the
Exchange’s equity options platform NBBO with additional size and thereby
available for Web site viewing and result in tighter and deeper markets,
printing in the Commission’s Public (‘‘EDGX Options’’) to adopt a price
improvement auction, the Bats Auction resulting in more liquidity on EDGX
Reference Room, 100 F Street NE., Options. Specifically, by offering all
Washington, DC 20549, on official Mechanism, as further discussed below.
EDGX Options participants (‘‘Users’’)
business days between the hours of The text of the proposed rule change the ability to receive priority in the
10:00 a.m. and 3:00 p.m. Copies of the is available at the Exchange’s Web site proposed allocation during the BAM
filing also will be available for at www.batstrading.com, at the Auction up to the size of their quote, an
inspection and copying at the principal principal office of the Exchange, and at EDGX User will be encouraged to
office of the Exchange. All comments the Commission’s Public Reference maintain quotes or orders with
received will be posted without change; Room. additional size outside of the BAM
the Commission does not edit personal Auction at the best and most aggressive
II. Self-Regulatory Organization’s
identifying information from prices. The Exchange believes that this
Statement of the Purpose of, and
submissions. You should submit only incentive may result in a narrowing of
Statutory Basis for, the Proposed Rule quotes and thus further enhance EDGX’s
information that you wish to make Change
available publicly. All submissions market quality. Within the BAM
should refer to File Number SR– In its filing with the Commission, the Auction, EDGX believes that the rules
ISEGemini–2016–10 and should be Exchange included statements that are proposed will encourage EDGX
submitted on or before October 26, concerning the purpose of and basis for Users to compete vigorously to provide
2016. the opportunity for price improvement
the proposed rule change and discussed
in a competitive auction process.
For the Commission, by the Division of any comments it received on the
Trading and Markets, pursuant to delegated proposed rule change. The text of these 3 The term ‘‘Priority Customer’’ means any person
authority.43 statements may be examined at the
asabaliauskas on DSK3SPTVN1PROD with NOTICES
or entity that is not: (A) a broker or dealer in
Robert W. Errett, places specified in Item IV below. The securities; or (B) a Professional. The term ‘‘Priority
Exchange has prepared summaries, set Customer Order’’ means an order for the account of
Deputy Secretary. a Priority Customer. See Rule 16.1(a)(45). A
forth in Sections A, B, and C below, of ‘‘Professional’’ is any person or entity that: (A) is
[FR Doc. 2016–24003 Filed 10–4–16; 8:45 am]
the most significant parts of such not a broker or dealer in securities; and (B) places
BILLING CODE 8011–01–P
statements. more than 390 orders in listed options per day on
average during a calendar month for its own
beneficial account(s). All Professional orders shall
1 15 U.S.C. 78s(b)(1). be appropriately marked by Options Members. See
43 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. Rule 16.1(a)(46).
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Document Created: 2016-10-05 03:29:22
Document Modified: 2016-10-05 03:29:22
| 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 69165 |
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