NASDAQ LLC, NASDAQ OMX PHLX LLC & NASDAQ OMX BX Corporate Governance Guidelines

The NASDAQ Stock Market LLC (“NASDAQ Exchange”), the NASDAQ OMX PHLX LLC (“PHLX”) and the NASDAQ OMX BX, Inc. (“BX”) (each an “Exchange” and collectively “Exchanges”) Boards of Directors have developed corporate governance policies and practices to help fulfill their responsibilities to members of the Exchanges.  These governance policies and practices are memorialized in these guidelines.

The purpose of these Corporate Governance Guidelines (“Guidelines”) is to assist the Boards in the exercise of their responsibilities and to provide a concise description of the corporate governance obligations, principles and practices of the Boards. The Guidelines, in conjunction with each Exchange’s Certificate of Incorporation or Operating Agreement, By-Laws, Rules and Committee Charters, form the framework for the governance of the Exchanges and help assure that the Boards will have the necessary information, authority and practices in place to review and evaluate  the Exchanges’ business operations and risks, and to make decisions independent of management.

The Boards are committed to upholding the highest legal and ethical conduct in fulfilling their responsibilities.  The Boards expect the Exchanges’ Board members, officers and employees to act ethically at all times.

Since the operations of the Boards are a dynamic process, these Guidelines are reviewed periodically and are subject to such future refinement or changes as the Boards may find necessary or advisable

The Board of each Exchange is vested with all powers necessary for the management and administration of the Exchange’s regulatory and business operations.  The Board has a function independent of management and is not responsible for the day-to-day affairs of the Exchange.  However, it does have the responsibility to oversee management and be informed, investigate and act as necessary to promote the Exchange’s regulatory obligations and business objectives.  As required by applicable law, the commitment of the directors is to the Exchange and includes regulatory obligations.

Each Board reviews reports by management on its performance, its plans and business prospects, as well as issues facing the Exchange during its regularly scheduled meetings and any special meetings. Board members are expected to prepare for, attend and participate in all scheduled Board and applicable Committee meetings.

Board members are expected to comply with the Code of Conduct for the Exchanges’ Boards of Directors (“Board Code”).  The Board Code was adopted by the Boards to reflect a commitment to the highest standards of ethical and business conduct and to comply with the Listing Rules of the NASDAQ Exchange.  Although these Listing Rules are not directly applicable to the Exchanges, which are not themselves public companies, it has been determined by the Boards that compliance with these requirements sets an appropriately high standard of conduct.  Each Board member is expected to become familiar with and abide by the specific ethical standards set forth in the Board Code, as well as any interpretations and procedures issued thereunder.  Board members are encouraged to consult with the NASDAQ OMX Office of General Counsel if there is any doubt as to whether a particular transaction or course of conduct complies with or is subject to the Board Code.

1. Independence of Non-Employee Directors
   
   The Board of the Exchanges’ parent, The NASDAQ OMX Group, Inc. (“NASDAQ OMX”), is comprised of a majority of directors who qualify as independent directors under the NASDAQ Exchange’sListing Rules. NASDAQ OMX’s Audit Committee members have additional independence requirements pursuant to SEC and NASDAQ Exchange Listing Rules. Although the composition of the Board and Committees of the Exchanges are not governed by the same SEC and NASDAQ Exchange Listing Rules as those of NASDAQ OMX, the Exchanges’ By-Laws require them to maintain independent directors and, in doing so, the Exchanges adhere to the same independence standards.
   
   Annually, the Corporate Secretary collects from each current director and director nominee a completed questionnaire and other relevant information to serve as the basis for a determination of the director’s and nominee’s assignment into particular classifications of director based on their employment and affiliations. Board members notify the Corporate Secretary of changes throughout the year to the information contained in the Board questionnaire. In particular, if a Board member changes his or her present job responsibilities, the Board member updates his or her Board questionnaire so that the Exchange may ascertain whether the Board member’s classification has changed. Each director’s relationship with the Exchange is reviewed annually, and only those directors who meet the necessary classification requirements will be considered independent directors.



2. Director Classification
   
   There are three general classifications for directors of the NASDAQ Exchange, PHLX and BX: (1) Industry Director, (2) Non-Industry Director, and (3) Staff Director. Non-Industry Directors are further classified as either Public Directors or Issuer Representatives. In addition, there is a special category of Member Representative Directors, who are elected to represent broker-dealers that are members of the applicable Exchange. In most cases, Member Representative Directors will also be classified as Industry Directors.



3. Size and Composition Requirements
   
   The size of each Board would be determinedby the NASDAQ OMX Board. Each Board is required to achieve a balance of director classifications (i.e., Industry versus Non-Industry, or a majority of Public Directors) as specified more precisely in its respective By-Laws. The appropriate body periodically reviews and evaluates the appropriate size of each Board.



4. Non-Executive Chairman
   
   Each Board is led by a Non-Executive Chairman. Annually the Board elects a Non-Executive Chairman. The Non-Executive Chairman’s duties are as follows: presides at all meetings of the Board and shareholders; leads the Chairman Session and Executive Sessions at the Board meetings; reviews and approves the meeting agendas to assure there is sufficient time for discussion of all agenda items; and has the authority to call meetings of the independent directors.



5. Board Member Annual Election/Board Terms/Retirement Age
   
   Each director is subject to election on an annual basis. There are no term limits for serving on the Board and no mandatory retirement age.



6. Change in Job Responsibility
   
   A Board member who experiences a significant change of circumstances in his/her principal business or profession that could diminish his/her effectiveness as a Board member, is expected to offer his/her resignation to the Chairman of the Board. The Corporate Governance Committee shall assess the appropriateness of the Board member resignation and recommend to the Board the action to be taken with respect to the resignation.



7. Other Board Memberships
   
   Board members may serve on boards or committees of other organizations, except to the extent limited by the Code of Conduct for the Board.



8. Director Compensation
   
   Annually, senior management reviews the status of Board compensation in relation to comparable organizations and provides recommendations to the Board regarding director compensation. Any changes in compensation are reviewed and approved by the Board.

1. Board Election Process
   
   Directors of the NASDAQ Exchange, PHLX and BX Boards, other than Member Representative Directors, are elected by NASDAQ OMX, from those persons nominated by the applicable Exchange's Nominating Committee, which has the authority to identify and nominate candidates for vacancies on the Board of Directors. Nominating Committee members are appointed annually by the Exchange Board and may be removed by majority vote of the Board.
   
   NASDAQ Exchange, PHLX and BX Member Representative Directors are elected from those persons properly nominated to stand for election. Each Exchange's By-Laws delegate the nomination process to the applicable Member Nominating Committee, which has the authority to identify and nominate candidates for Member Representative vacancies on the Exchange Board of Directors. Member Nominating Committee members must be employed by a member firm, are appointed annually by the Board, and may be removed by majority vote of the Board.
   
   Under certain circumstances, Exchange members may also nominate Member Representative Directors candidates. If such alternative candidates are nominated, the Member Representative Directors are selected by direct election by Exchange members; otherwise, the candidates nominated by the Member Nominating Committee are automatically selected.



2. Board Membership Criteria
   
   The Nominating Committees review the skills and characteristics required of Board members in light of the current composition of the Boards. Nominees for directors shall be considered on the basis of, among other things, knowledge, experience, skills, expertise, integrity, diversity, analytical ability, understanding of the securities industry, all in the context of the perceived needs of the Boards. Nominees should also be willing to devote adequate time and effort to Board responsibilities.
   
   The Nominating Committees shall be responsible for assessing the appropriate balance of criteria of the Boards.



3. Nomination of New Directors
   
   The Nominating Committees generate a list of possible candidates for nomination to the Board. The Nominating Committees consider possible candidates suggested by Board and Committee members, industry groups, shareholders, senior management, or individuals personally known to the members. In addition to submitting suggested nominees to the Nominating Committees, a member of the Exchange may nominate a person for election as a Member Representative Director through the annual balloting process, provided the member follows the procedures specified in the Exchange's By-Laws.



4. Board Vacancies
   
   If a Board has a vacancy due to death, disability, disqualification, removal, or resignation, the Board shall fill the vacancy by electing by majority vote a replacement director from a list of nominees provided by the appropriate Nominating Committee. No replacement is required for vacancies if the remaining term is less than six months.



5. Composition Requirements of Nominating Committee
   
   As set forth in the By-Laws the Exchange Nominating Committee must have no fewer than six and no more than nine members. Non-Industry members must equal or exceed the number of Industry members. If the Nominating Committee has six members, at least two shall be Public Committee members. If the Nominating Committee has seven or more members, at least three shall be Public Committee members. No more than three of the Nominating Committee members and no more than two Industry Committee members may be current members of the Board. A Nominating Committee member may not simultaneously serve on the Nominating Committee and the Board, unless such member is in his or her final year of service on the Board, and following that year that member may not stand for election to the Board until such time as he or she is no longer a member of the Nominating Committee. Each member of the Nominating Committee must satisfy independent director standards under the NASDAQ Exchange's Listing Rules. No officer or employee of an Exchange can serve as a member of the Nominating Committee in any voting or non-voting capacity.
   
   The Member Nominating Committees consists of no fewer than three and no more than six members. All members of a Member Nominating Committee must be associated persons of a member of the applicable Exchange.

1. Board Responsibilities and Functions
   
   Board members are responsible for the oversight of management and must exercise their business judgment on an informed basis, in good faith, and with the honest belief that the action taken will serve the best interests of the Exchange and its members. Board members are also responsible for ensuring that the Company comply with self-regulatory obligations to protect investors, maintain fair and orderly markets, and advance the public interest. Board members are expected to:
   • attend Board and Committee Meetings;
   • participate effectively in all Board and Committee deliberations;
   • observe strict confidentiality of all matters presented to the Board or their appropriate Committees;
   • raise possible conflict of interest issues to the appropriate staff for prompt resolution;
   • further the Exchange’s mission and stated positions in outside forums consistent with the applicable confidentiality duties; and
   • act in the best interests of the Exchange, consistent with their fiduciary duty.
2. Board Code of Conduct
   
   As previously mentioned herein, Board members are expected to comply with the Board Code.



3. Board Interaction With Investors, Analysts, Press and Customers
   
   If public comment from the Board is appropriate, these comments should, in most circumstances, come from the Chairman or Chief Executive Officer (“CEO”). Board members should not disclose Board information with the public and should observe the confidentiality guidelines set in place, including NASDAQ OMX’s Public Disclosure Policy designed to ensure compliance with Regulation FD. Sensitive, non-public policy and proprietary information should not to be disclosed to the media. These types of information may include financial information, proposed mergers and acquisitions, and other significant changes in assets, changes in directors or senior management, events regarding NASDAQ OMX’s securities, investigations in progress, deliberations and contemplated actions of the Board, and information on new products, customer relations and systems developments. If the media contacts a Board member, in most circumstances, the Board member should refer the inquiry to NASDAQ OMX Corporate Communications Department.



4. Assessing the Board’s Performance
   
   Annually, the Board performs a self-assessment. The self-assessment is led by the Board Chair. The results of the assessment are used to determine if the committees are functioning effectively and in determining the characteristics and skills required of prospective Board nominees.
   
   The Board discusses the assessment results and approves an annual action plan to address improvements.



5. Formal Evaluation of the Board Members
   
   The Non-Executive Chairman of the Board is responsible for overseeing the annual director evaluation. As part of the annual process of determining director representation on the corporate committees, the Non-Executive Chairman solicits input from each committee chair and Board members on the effectiveness of the committee, the committee chair and the individual directors.
   
   Annually the Board, with input from all directors, reviews the effectiveness of the Non-Executive Chair.



6. Periodic Review of Board and Management Powers
   
   The Board periodically reviews the allocation of powers between management and the Board, and determines whether these grants of authority are consistent with the changing needs of the business.

Board meetings are scheduled in advance, although special meeting may be called as necessary. The meetings are usually held at NASDAQ OMX headquarters in New York, New York, but may occasionally be held at another facility in the United States or abroad.

A. Meeting Order and Agenda

The Chairman establishes the rules of order and procedure of the Board meeting to ensure the meeting is conducted in an orderly fashion. The Chairman also controls the order of issues to be presented to the Board. The Chairman retains the right, if necessary, to rule out of order any remarks or discussion.

The Board is responsible for the Board meeting agenda. Board members are urged to make suggestions for agenda items or meeting materials to the Chairman and Chief Executive Officer. The Chairman and Chief Executive Officer establish an agenda for the Board meetings to be held during the year.

B. Attendance and Participation

Board members should attend and participate regularly in Board and Committee meetings consistent with the general fiduciary standards and governance needs of NASDAQ OMX. Pursuant to the SEC Proxy Rules, Board members who attend less than 75% of the NASDAQ OMX's Board meetings and applicable committee meetings will be noted in the annual proxy. Each director is invited and strongly encouraged to attend the Annual Meeting of Shareholders.

C. Selection of Agenda Items and Board Meeting Materials

The Chairman, with input from the CEO, Board members and Corporate Secretary, will establish an agenda for each Board meeting. Board members are urged to suggest agenda items or pre-meeting materials that may be of interest to the entire Board. Information important to the business matters at the Board meeting is distributed in advance of the Board meeting. As a general rule, materials are distributed in advance so that the Board meeting time may be focused on discussions and analysis, rather than an exchange of information. Confidential matters may be discussed at the Board meeting without materials being distributed in advance of the meeting.

D. Board Presentations by Managers

Board meetings routinely include presentations by senior executives and managers to who can either provide additional insight to the Board on topics being discussed, and/or who management believes have future potential and should be given exposure to the Board. Senior executives in the top management positions attend each Board meeting.

E. Stockholder Communication with Directors

Stockholders may communicate to the NASDAQ OMX Board by sending correspondence to the Corporate Secretary. The Corporate Secretary will forward all correspondence to the appropriate Board member.

In accordance with SEC Rules and the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures for the treatment of concerns relating to accounting, internal controls or auditing matters. These matters are immediately brought to the attention of NASDAQ OMX's internal audit department and Office of General Counsel.

F. Chairman and Executive Sessions of Board

The Chairman and the independent directors meet in a separate meeting with the CEO and Corporate Secretary ("Chairman's Sessions") at every regularly scheduled Board meeting.

The independent directors meet in a separate closed session ("Executive Sessions") at every Board meeting.

The Chairman is responsible for chairing the Chairman's Sessions and the Executive Sessions and reporting to the CEO and Corporate Secretary any actions taken during an Executive Sessions.

G. Committees of the Board

Committees are appointed by the Board to facilitate and assist in the execution of the Board's responsibilities. NASDAQ OMX's Board Committees include, at a minimum, Audit, Executive, Finance, Nominating & Governance, and Management Compensation Committees. The Board may add new committees or remove existing committees as it deems it advisable in the fulfillment of its responsibilities. Each independent Board member generally serves on more than one committee.

Each committee will perform its duties as assigned by the Board in compliance with the By-Laws and the Committee Charters. The Committee Charters of the Audit, Executive, Finance, Nominating & Governance and Management Compensation Committees are located on the NASDAQ OMX website at www.nasdaqomx.com.

H. Assignment and Rotation of Committee Members

The Nominating & Governance Committee reviews and recommends to the Board for approval the Chair and the members of the Board Committees on an annual basis. Board members may indicate their Committee preference; however, the selection process will be subject to the compositional requirements for the Committees and to the Board's view as to the most appropriate persons to serve on the Committee, taking into account all factors that it deems relevant including any independence and other criteria required by securities law or the Board of Directors. The Board is responsible for the appointment of committee members and committee chairpersons according to criteria that it determines to be in the best interest of NASDAQ OMX and its stockholders.

The Audit, Nominating & Governance, and the Management Compensation Committees consist solely of independent Board members.

I. Operation of Committees

The Committee Chairman establishes the rules of order and procedure of the meeting to ensure the meeting is conducted in an orderly fashion. The Committee Chairman controls the meeting agenda and the order of issues to be presented to the Board. The Committee Chairman retains the right, if necessary, to rule out of order any remarks or discussion that does not comply with Committee procedures. The Committee Chairman may make additional meeting rules as appropriate or advisable.

J. Selection of Committee Agenda and Committee Materials

The Committee is responsible for the Committee meeting agenda. Committee members are urged to make suggestions for agenda items or meeting materials to the Committee Chairman, Chief Executive Officer and Corporate Secretary.

The Chairman of the Committee, with input from the Chairman, CEO, Corporate Secretary, or staff liaison, will establish a meeting agenda for each Committee. Information important to the business matters at the Committee meeting is distributed in advance of the meeting. As a general rule, materials are distributed in advance so that the Committee meeting time may be focused on discussions and analysis, rather than an exchange of information. Confidential matters may be discussed at the Committee meeting without materials being distributed in advance of the meeting.

K. Executive Sessions of Committees

The Committee Chairman has separate meetings for the independent members ("Executive Sessions") at every regularly scheduled Committee meeting. In addition to Executive Sessions, the Audit Committee and any other committees as deemed necessary, may have separate meetings with management, the independent auditors, and other third parties.