Daily Rules, Proposed Rules, and Notices of the Federal Government


[Release No. 34-67760; File Nos. SR-BSECC-2012-01; SR-BX-2012-052; SR-NASDAQ-2012-072; SR-Phlx-2012-95; SR-SCCP-2012-01]

Self-Regulatory Organizations; Boston Stock Exchange Clearing Corporation; NASDAQ OMX BX, Inc.; the NASDAQ Stock Market LLC; NASDAQ OMX PHLX LLC; Stock Clearing Corporation of Philadelphia; Order Approving Proposed Rule Changes With Respect to the Amendment of the By-Laws of The NASDAQ OMX Group, Inc.

On June 20, 2012, the NASDAQ Stock Market LLC ("NASDAQ"), and on July 11, 2012, Boston Stock Exchange Clearing Corporation ("BSECC"), NASDAQ OMX BX, Inc. ("BX"), NASDAQ OMX PHLX LLC ("Phlx"), and the Stock Clearing Corporation of Philadelphia ("SCCP" and, with BSECC, BX, NASDAQ, and Phlx, the "SROs"), filed with the Securities and Exchange Commission ("Commission"), pursuant to Section 19(b)(1)1 of the Securities Exchange Act of 1934 ("Act"),2 and Rule 19b-4 thereunder,3 proposed rule changes with respect to the amendment of the by-laws (the "NASDAQ OMX By-Laws") of The NASDAQ OMX Group, Inc. ("NASDAQ OMX"), the parent company of the SROs. The proposed rule changes were published for comment in theFederal Registeron July 5, 2012, July 19, 2012, and July 27, 2012.4 The Commission received no comment letters on the proposals.
II. Background

NASDAQ OMX is proposing to amend provisions of the NASDAQ OMX By-Laws pertaining to the composition of the Management Compensation Committee of the NASDAQ OMX Board of Directors. Specifically, NASDAQ OMX proposes to amend the compositional requirements of its Management Compensation Committee as set forth in Section 4.13 of the NASDAQ OMX By-Laws to replace a requirement that the committee be composed of a majority of Non-Industry Directors5 with a requirement that thenumber of Non-Industry Directors on the committee equal or exceed the number of Industry Directors. The proposed compositional requirement for the committee with regard to the balance between Industry Directors and Non-Industry Directors would be the same as that already provided for in the NASDAQ OMX By-Laws with respect to the Executive Committee and the Nominating and Governance Committee, as well as the full Board of Directors.

According to the SROs, the proposed changes will provide NASDAQ OMX with a greater flexibility with regard to populating a committee that includes directors with relevant expertise and that is not excessively large in relation to the size of the full Board of Directors, while continuing to ensure that directors associated with Exchange members and other broker-dealers do not exert disproportionate influence of the governance of NASDAQ OMX.6

III. Discussion and Commission Findings

The Commission has reviewed carefully the proposed rule changes and finds that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange or a registered clearing agency.7 In particular, the Commission finds that the proposed rule changes are consistent with Section 6(b) of the Act,8 which, among other things, requires a national securities exchange to be so organized and have the capacity to be able to carry out the purposes of the Act and to enforce compliance by its members and persons associated with its members with the provisions of the Act, the rules and regulations thereunder, and the rules of the exchange, and is designed to prevent fraudulent and manipulative acts and practices, 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. The Commission also finds that the proposed rule changes are consistent with Section 17A of the Act9 because the proposed rule changes will help ensure that BSECC and SCCP are so organized and have the capacity to comply with the provisions of the Act and the rules and regulations thereunder.

The proposed changes to the composition requirement of NASDAQ OMX's Management Compensation Committee are identical to the composition requirements currently in effect for the Executive Committee, Nominating and Governance Committee, and full Board of Directors of NASDAQ OMX.10 Furthermore, the NASDAQ OMX Management Compensation Committee is required to be comprised of Independent Directors (as defined in NASDAQ's rules).11

IV. Conclusion

For the foregoing reasons, the Commission finds that the proposed rule changes areconsistent with the Act and the rules and regulations thereunder applicable to a nationalsecurities exchange and a registered clearing agency.

It is therefore ordered,pursuant to Section 19(b)(2) of the Act12 that the proposed rule changes (SR-BSECC-2012-001; SR-BX-2012-052; SR-NASDAQ-2012-072; SR-Phlx-2012-95; and SR-SCCP-2012-01), are approved.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13

Kevin M. O'Neill, Deputy Secretary.
ACTION: 1317 CFR 200.30-3(a)(12).