
[Federal Register Volume 79, Number 77 (Tuesday, April 22, 2014)]
[Notices]
[Pages 22557-22558]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-09078]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71954; File No. SR-CHX-2014-03]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving a Proposed Rule Change To Amend the Bylaws of the 
Exchange Relating to the Nomination and Election of the Vice Chairman

April 16, 2014.

I. Introduction

    On February 28, 2014, Chicago Stock Exchange, Inc. (``Exchange'' or 
``CHX'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposal to amend Article II, Section 5 of the Bylaws of the Exchange 
(``Bylaws'') to change the method by which the Vice Chairman is 
nominated and elected. The proposed rule change was published for 
comment in the Federal Register on March 14, 2014.\3\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 71675 (March 10, 
2014), 79 FR 14550 (March 14, 2014) (``Notice'').
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II. Description of the Proposed Rule Change \4\
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    \4\ A more detailed description of the proposal is contained in 
the Notice. See id.
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    Article II, Section 5(a) of the Bylaws governs the election of the 
Vice Chairman \5\ of the Board of Directors (``Board''). It provides, 
among other things, that Participant Directors \6\ shall elect the Vice 
Chairman by majority vote from among the Participant Directors. By the 
proposed rule change, the Exchange is amending this Bylaws provision 
to: (1) Eliminate the requirement that the Vice Chairman be a 
Participant Director; (2) provide that the Chairman nominate the Vice 
Chairman; and (3) provide that the Vice Chairman be elected by a 
majority vote of the Board of Directors. The Exchange

[[Page 22558]]

also proposes to require that the Chairman provide the name of the 
nominee for Vice Chairman to the Board no less than five business days 
before the election vote.
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    \5\ Article II, Section 5(b) of the Bylaws states that the Vice 
Chairman ``shall perform the functions of the Chairman in his 
absence or inability to act.'' The Vice Chairman may appoint members 
of certain committees and nominate persons to fill vacancies on the 
Board of Directors of the Exchange, among other authority.
    \6\ Article II, Section 2(b) of the Bylaws defines a Participant 
Director as ``a director who is a Participant or an officer, 
managing member or partner of an entity that is a Participant.'' A 
Participant is ``any individual, corporation, partnership or other 
entity that holds a permit issued by the Corporation to trade 
securities on the market operated by the Corporation.''
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's 
proposal is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\7\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(1) of the Act,\8\ which requires that a 
national securities exchange be organized and have the capacity to be 
able to carry out the purposes of the Act and to comply, and to enforce 
compliance by its members and persons associated with its members, with 
of the Act, the rules and regulations thereunder, and the Exchange's 
own rules. Proposed Article II, Section 5(a) of the Bylaws allows the 
Exchange to select its Vice Chairman from a larger pool of individuals, 
which may--and which CHX states will--``result in the position being 
held by the most able and willing candidate.'' \9\
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    \7\ In approving the proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ See Notice, supra note 3, 79 FR at 14550. The Commission 
notes that the Exchange's proposal makes no change to the 
composition provision of Article II, Section 2(b) of the Bylaws, 
which requires a certain proportion of Public and Participant 
Directors on the Board.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-CHX-2014-03) be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).
    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09078 Filed 4-21-14; 8:45 am]
BILLING CODE 8011-01-P


