[Federal Register Volume 76, Number 40 (Tuesday, March 1, 2011)]
[Notices]
[Pages 11305-11307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4427]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63943; File No. SR-NYSEAMEX-2011-06]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change in Connection With
the Proposal of NYSE Euronext To Eliminate the Requirement of an 80
percent Supermajority Vote To Amend or Repeal Section 3.1 of Its Bylaws
February 22, 2011.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on February 11, 2011, NYSE Amex LLC (the ``Exchange'' or
``NYSE Amex'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is submitting this rule filing in connection with the
proposal of its ultimate parent, NYSE Euronext (the
``Corporation''),\4\ to amend its bylaws (the ``Bylaws'') to eliminate
the requirement that the affirmative vote of the holders of not less
than 80% of the votes entitled to be cast by the holders of the
outstanding capital stock of the Corporation entitled to vote generally
in the election of directors is necessary for the stockholders to amend
or repeal Article III, Section 3.1 of the Bylaws. The proposed rule
change is identical to a rule change filed by the New York Stock
Exchange LLC (``NYSE'') that was recently approved by the
Commission.\5\ The text of the proposed rule change is available at the
Exchange, the Commission's Public Reference Room, and the Exchange's
Web site at http://www.nyse.com.
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\4\ NYSE Amex, a Delaware limited liability company, is an
indirect wholly-owned subsidiary of NYSE Euronext.
\5\ Securities Exchange Act Release No. 63792 (January 28, 2011)
(File No. SR-NYSE-2010-77).
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is submitting this rule filing in connection with the
proposal of the Corporation, which is the ultimate
[[Page 11306]]
parent company of the Exchange, to amend its Bylaws to eliminate the
requirement that the affirmative vote of the holders of not less than
80% of the votes entitled to be cast by the holders of the outstanding
capital stock of the Corporation entitled to vote generally in the
election of directors is necessary for the stockholders to amend or
repeal Article III, Section 3.1 of the Bylaws relating to the general
powers of the Board of Directors of the Corporation (``Board'').
Section 3.1 also provides that the number of Directors on the Board
shall be fixed and changed from time to time exclusively by the Board
pursuant to a resolution adopted by two-thirds of the directors then in
office. Elimination of this 80% ``supermajority'' voting provision as
it relates to Section 3.1 will have the effect that only a majority of
the same number of votes entitled to be cast will be required to amend
or repeal this section of the Bylaws.
Background
In connection with its 2010 Annual Meeting, the Corporation
received a stockholder proposal to eliminate the supermajority voting
requirements necessary to amend certain provisions of the Corporation's
certificate of incorporation (``Certificate'') and Bylaws. Following
receipt of that proposal, the Corporation began discussions with its
regulators regarding the possibility of amending its Certificate and
Bylaws to implement the proposal. While recognizing the interest of
stockholders in simple majority voting to amend these basic governing
documents, the Corporation was also cognizant of the fact that, at the
time of the merger between Euronext and NYSE Group that created the
Corporation, both European and U.S. regulators were concerned about
insuring a balance of U.S. and European perspectives in the governance
of the newly formed entity. The regulators and the respective boards of
directors viewed the combination of Euronext and NYSE Group as a
``merger of equals,'' and balanced representation between American and
European representatives on the Board was the primary means by which
the principle of equality was to be implemented. The regulatory
authorities approved supermajority voting to amend the governance
provisions in the Certificate and Bylaws considered to be most
important in maintaining this balance.
Following further discussions between the Corporation and its
regulators, the regulators have indicated that they would not oppose a
change to a simple majority provision for certain of the provisions
currently subject to an 80% voting requirement, including Article III,
Section 3.1 of the Bylaws. Section 3.1 reads as follows:
``General Powers. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors. The
number of directors on the Board of Directors shall be fixed and
changed from time to time exclusively by the Board of Directors
pursuant to a resolution adopted by two-thirds of the directors then in
office. In addition to the powers and authorities expressly conferred
upon them by these Bylaws, the Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these
Bylaws required to be exercised or done by the stockholders. A director
need not be a stockholder.''
The purpose of this proposed rule change is to implement the
decision of the Board to remove the 80% supermajority voting
requirement with respect to the aforementioned Bylaw provision.
As noted above, the proposed rule change is identical to a rule
change filed by the NYSE (the ``NYSE Rule Change'') that was recently
approved by the Commission.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \6\ of the
Securities Exchange Act of 1934 (the ``Act''), in general, and furthers
the objectives of Section 6(b)(5) \7\ in particular in that it is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest. More specifically, the
Exchange believes that the proposed rule change will permit the
Corporation to respond to the stockholder proposal submitted to it
while also ensuring ongoing regulatory comfort concerning balanced
representation in the governance of the Corporation which will thereby
contribute to perfecting the mechanism of a free and open market and a
national market system, consistent with the protection of investors and
the public interest.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) by its terms, become
operative prior to 30 days from the date on which it was filed, or such
shorter time as the Commission may designate, if consistent with the
protection of investors and the public interest, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
and Rule 19b-4(f)(6)(iii) thereunder.
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\8\ s15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 11307]]
including whether the proposed rule change is consistent with the Act.
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NYSEAMEX-2011-06 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAMEX-2011-06. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEAMEX-2011-06 and should be submitted on or before
March 22, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4427 Filed 2-28-11; 8:45 am]
BILLING CODE 8011-01-P