[Federal Register Volume 76, Number 237 (Friday, December 9, 2011)]
[Notices]
[Page 77038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-31600]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65884; File No. SR-SCCP-2011-03]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Order Approving Proposed Rule Change With Respect to an 
Amendment to the By-Laws of The NASDAQ OMX Group, Inc.

December 5, 2011.

I. Introduction

    On October 11, 2011, Stock Clearing Corporation of Philadelphia 
(``SCCP'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change SR-SCCP-2011-03 pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ 
and Rule 19b-4 \2\ thereunder. The proposed rule change was published 
for comment in the Federal Register on October 28, 2011.\3\ The 
Commission received no comment letters regarding the proposal. For the 
reasons discussed below, the Commission is granting approval of the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-65614 (October 24, 
2011), 76 FR 67009 (October 28, 2011). In its filing with the 
Commission, SCCP included statements concerning the purpose of and 
basis for the proposed rule change. The text of these statements is 
incorporated into the discussion of the proposed rule change in 
Section II below.
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II. Description

    The rule change will permit an amendment to the by-laws of SCCP's 
parent corporation, The NASDAQ OMX Group, Inc. (``NASDAQ OMX''). NASDAQ 
OMX is seeking to amend provisions of its by-laws pertaining to the 
composition of committees of the NASDAQ OMX Board of Directors. First, 
NASDAQ OMX is amending the compositional requirements of its Audit 
Committee in Section 4.13(g) to provide that the committee shall 
include three or more directors. Currently, the provision provides that 
the Audit Committee shall be composed of either four or five directors. 
Second, NASDAQ OMX is proposing to amend the compositional requirements 
of the Nominating & Governance Committee in Section 4.13(h) to replace 
a requirement that the committee comprise four or five members with a 
requirement to include two or more members. Third, NASDAQ OMX proposes 
to delete a paragraph of the by-laws (Section 4.13(k)) that pertains to 
the qualifications of committee members who are not directors. Finally, 
NASDAQ OMX is correcting a typographical error in the numbering of the 
provisions of Section 4.13(h) of the by-laws.

III. Discussion

    Section 19(b)(2)(B) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization.\4\ In particular, Section 17A(b)(3)(A) \5\ of the Act 
requires, among other things, that the clearing agency be so organized 
and have the capacity to facilitate the prompt and accurate clearance 
and settlement of securities transactions, to safeguard the securities 
and funds which are in the custody or control of such clearing agency 
or for which it is responsible, and to comply with the provisions of 
the Act and the rules and regulations thereunder.
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    \4\ 15 U.S.C. 78s(b)(2)(B).
    \5\ 15 U.S.C. 78q-1(b)(3)(A).
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    The proposed change would allow the NASDAQ OMX Board of Directors 
(``Board'') to determine the size of its Audit Committee, so long as 
the Audit Committee includes at least three directors, as well as the 
size of its Nominating & Governance Committee, so long as the 
Nominating & Governance Committee includes at least two directors. The 
proposal is intended to provide greater flexibility to the NASDAQ OMX 
Board to determine the appropriate size for these committees. The 
proposal does not change any other compositional requirements of either 
the Audit Committee or the Nominating & Governance Committee, including 
independence requirements. Moreover, the Commission notes that the 
proposal does not alter the application of Section 10A of the Exchange 
Act \6\ and Rule 10A-3 thereunder \7\ to the NASDAQ OMX Audit 
Committee.
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    \6\ 15 U.S.C. 78j-1.
    \7\ 17 CFR 240.10A-3.
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    The proposal also deletes an obsolete section from, and corrects a 
typographical error in, the NASDAQ OMX by-laws, which are clarifying 
revisions. For the foregoing reasons, the Commission believes that the 
proposed rule change is consistent with the Act. The proposal also 
deletes an obsolete section from, and corrects a typographical error 
in, the NASDAQ OMX by-laws, which are clarifying revisions.

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act and the 
rules and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) \8\ of the 
Act, that the proposed rule change (File No. SR-SCCP-2011-03) be, and 
hereby is, approved.\9\
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31600 Filed 12-8-11; 8:45 am]
BILLING CODE 8011-01-P