
[Federal Register Volume 75, Number 242 (Friday, December 17, 2010)]
[Notices]
[Pages 79060-79061]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31684]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63532; File No. SR-NYSE-2010-77]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change, as Modified by Amendment No. 1, by New York Stock Exchange LLC 
in Connection with the Proposal of NYSE Euronext to Eliminate the 
Requirement of an 80% Supermajority Vote to Amend or Repeal Section 3.1 
of its Bylaws

December 13, 2010.
    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 November 30, 2010, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
and II below, which Items have been prepared by the self-regulatory 
organization. On December 3, 2010, the Exchange filed Amendment No. 1 
to the proposed rule change. 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 text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and the Exchange's website at www.nyse.com.
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    \4\ The NYSE, a New York limited liability company, is an 
indirect wholly-owned subsidiary of NYSE Euronext.
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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 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.

[[Page 79061]]

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \5\ of the 
Act, in general, and furthers the objectives of Section 6(b)(5) \6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 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

    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 self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the 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 rule-comments@sec.gov. Please include 
File Number SR-NYSE-2010-77 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-NYSE-2010-77. 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-NYSE-2010-77 and should be submitted on 
or before January 7, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31684 Filed 12-16-10; 8:45 am]
BILLING CODE 8011-01-P


