[Federal Register Volume 73, Number 93 (Tuesday, May 13, 2008)]
[Notices]
[Pages 27583-27585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10595]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57782; File No. SR-BSECC-2008-01]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Boston Stock Exchange Clearing Corporation Relating to
Amendment of Its Articles of Organization and By-Laws in Connection
With the Planned Acquisition by The NASDAQ OMX Group, Inc.
May 6, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 24, 2008, the Boston Stock Exchange Clearing Corporation
(``BSECC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
BSECC proposes to amend its Articles of Organization and its By-
Laws to reflect the planned acquisition of BSECC by The NASDAQ OMX
Group, Inc. (``NASDAQ OMX'') and to update the By-Laws in certain other
respects.\3\ The text of the proposed rule change is available from the
principal office of BSECC, at http://www.bostonstock.com/BSECC/Pending/BSECC-2008-01.pdf, and at the Commission's Public Reference Room.
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\3\ BSECC is currently organized under the laws of the
Commonwealth of Massachusetts. The Articles of Organization of a
Massachusetts corporation are comparable to the Certificate of
Incorporation of a Delaware corporation.
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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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
The Merger
On October 2, 2007, Boston Stock Exchange, Inc. (``BSE''),
announced that it had entered into an agreement with The Nasdaq Stock
Market, Inc. (now NASDAQ OMX) pursuant to which NASDAQ OMX would
acquire all of the outstanding membership interests in BSE and BSE
would be merged with and into Yellow Merger Corporation, a Delaware
corporation and wholly owned subsidiary of NASDAQ OMX, with BSE
surviving the merger. As a result of the merger, BSE would become a
Delaware stock corporation with 100% of its outstanding stock owned by
NASDAQ OMX. BSECC is now and following the merger will continue to be a
wholly owned subsidiary of BSE. BSECC proposes to adopt (1) Articles of
Amendment to its Articles of Organization, and (2) amendments to its
By-Laws for the purpose of reflecting its acquisition by NASDAQ OMX and
of modernizing its governance documents.
[[Page 27584]]
BSECC's Articles of Organization
In order to amend its Articles of Organization, BSECC would adopt
Articles of Amendment that would amend its existing Articles of
Organization as follows:
1. Amend Article III to provide that the total number of shares of
each class of stock that BSECC is authorized to issue is 150 shares of
common stock. This amendment reflects a reduction in the total
authorized share capital of BSECC from 1000 shares of common stock to
the 150 shares of Common Stock currently held by BSE. Thus, following
the amendment, all of the authorized shares of common stock of BSECC
would be outstanding and would be owned by BSE;
2. Amend Article V to provide that BSE may not transfer or assign
any shares of stock of BSECC unless such transfer or assignment has
been filed with and approved by the Commission under Section 19 of the
Act;\4\ and
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\4\ 15 U.S.C. 78s.
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3. Adopt new Article VI to provide that in accordance with modern
practice for Massachusetts corporations, directors of BSECC are not
personally liable to it for breaches of fiduciary duty except for
breaches involving (i) a breach of the duty of loyalty, (ii) acts or
omissions not in good faith or that involve intentional misconduct or
knowing violation of law, (iii) distributions of assets that would
render BSECC insolvent, or (iv) any transaction from which the director
derived an improper personal benefit.
BSECC's By-Laws
BSECC proposes several changes to its By-Laws, which are primarily
for the purpose of updating the By-Laws in accordance with modern
corporate practice for Massachusetts corporations. The amendments
proposed are:
1. Eliminate the offices of ``clerk'' and ``vice-chairman'' from
BSECC and delete references to those offices from the By-Laws;
2. Clarify the time periods allowed or required for notice to
stockholders of meetings, the permissible duration of stockholder
proxies, and the setting of a record date in accordance with modern
Massachusetts law and remove a provision allowing close of the transfer
books of BSECC that is no longer consistent with Massachusetts law; \5\
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\5\ This change would not limit the effectiveness of the change
to the Articles of Organization requiring Commission approval of
transfers of BSECC's stock.
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3. Provide that stockholders, as well as directors, may fill
vacancies on the Board, in accordance with Massachusetts law;
4. Clarify that directors of BSECC who also serve on BSE's Board of
Directors must tender resignations from BSECC's Board if they cease to
be directors of BSE;
5. Clarify the requirements for action by the Board of Directors
and the stockholders to be taken without a meeting;
6. Establish that the officers of BSECC are all appointed by and
subject to removal by its Board of Directors;
7. Adopt modern provisions stipulating the conditions under which
BSECC may indemnify its officers and directors and the scope of such
indemnification;
8. Stipulate that the By-Laws may be amended only upon approval by
the Commission and in accordance with the rules of BSECC;\6\ and
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\6\ Rule XII of BSECC, required notice to clearing members of
amendments to the By-Laws.
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9. Clarify the meaning of several provisions in accordance with
modern Massachusetts law and correct several typographical errors.
BSECC believes that the proposed rule change is consistent with the
provisions of Section 17A of the Act \7\ in general and with Section
17A(b)(3)(A) and (C) of the Act \8\ in particular in that it is
designed to ensure that BSECC is so organized and has the capacity to
be able to facilitate the prompt and accurate clearance and settlement
of securities transactions and to assure a fair representation of
BSECC's members in the selection of its directors and the
administration of its affairs.
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\7\ 15 U.S.C. 78q-1.
\8\ 15 U.S.C. 78q-1(b)(3)(A) and (C).
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B. Self-Regulatory Organization's Statement on Burden on Competition
BSECC does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
BSECC has neither solicited nor received comments on the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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 ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which BSECC consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form http://www.sec.gov/rules.sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-BSECC-2008-01 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BSECC-2008-01. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of BSECC. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File
[[Page 27585]]
Number SR-BSECC-2008-01 and should be submitted on or before June 3,
2008.
For the Commission by the Division of Trading and Markets
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E8-10595 Filed 5-12-08; 8:45 am]
BILLING CODE 8010-01-P