46256 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3A Member is any registered broker or dealer that 

has been admitted to membership in the Exchange. 

See BATS Rule 1.5(n). 

4Securities Exchange Act Release No. 60364 (July 

22, 2009), 74 FR 37285 (‘‘Notice’’). 

5 In Amendment No. 1, the Exchange replaced the 

bracketed ‘‘[July]’’ with ‘‘[August]’’ in the proposed 

rule text to reflect the fact that the current fee 

schedule is dated August 1, 2009. Because the 

change in Amendment No. 1 is technical in nature, 

it is not subject to notice and comment. 

6The Commission notes that BATS will 

implement the proposed port fees commencing on 

the first day of the month immediately following 

Commission approval of this proposed rule change 

(or on the date of approval, if on the first business 

day of a month). See Notice, supra note 4. 

7Each pair of ports will consist of one port at the 

Exchange’s primary data center and one port at the 

Exchange’s secondary data center. 

8BATS FIX ports are the only ports that may be 

used to send orders and related instructions to the 

Exchange. All other port types, including Multicast 

PITCH and GRP Ports, permit Members and nonmembers to receive information from the Exchange. 

9The Exchange’s proposal to provide certain 

ports free of charge to Multicast PITCH customers 

is designed to encourage use of the Exchange’s 

Multicast PITCH feed because it is a relatively new 

offering by the Exchange and because the Exchange 

believes that the feed is its most efficient feed and 

will reduce infrastructure costs for both the 

Exchange and those who utilize the feed. 

10 In approving this proposed rule change the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

11 15 U.S.C. 78f(b)(4). 

12 15 U.S.C. 78f(b)(4). 

13 15 U.S.C. 78f(b)(8). 

14 17 CFR 242.603(a). 

RECORD ACCESS PROCEDURES: 

Persons wishing to obtain information 

on the procedures for gaining access to 

or contesting the contents of these 

records may contact the FOIA/Privacy 

Act Officer, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–5100. 

CONTESTING RECORD PROCEDURES: 

See Record Access Procedures above. 

RECORD SOURCE CATEGORIES: 

Information is provided by current 

Members and employees of the 

Commission or their designees in 

accordance with the requirements of the 

SEC Ethics Conduct Rules. 

EXEMPTIONS CLAIMED FOR THE SYSTEM: 

None. 

Dated: September 1, 2009. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–21444 Filed 9–4–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60586; File No. SR–BATS– 

2009–026] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Order Approving 

Proposed Rule Change, as Modified by 

Amendment No. 1 Thereto, To Amend 

BATS Fee Schedule to Impose Fees for 

Ports Used for Order Entry and Receipt 

of Market Data 

August 28, 2009. 

On July 21, 2009, BATS Exchange, 

Inc. (‘‘BATS’’ or ‘‘Exchange’’) 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 proposed rule 

change to amend the fee schedule 

applicable to Members 3 and nonmembers of the Exchange with respect 

to ports used to enter orders into 

Exchange systems and to receive data 

from the Exchange. The proposed rule 

change was published for comment in 

the Federal Register on July 28, 2009.4

The Commission received no comments 

regarding the proposal. On August 27, 

2009, the Exchange filed Amendment 

No. 1 to the proposed rule change.5 This 

order grants approval of the proposed 

rule change. 

BATS proposes to begin charging a 

monthly fee for ports used to enter 

orders into the Exchange’s trading 

system and to receive data from the 

Exchange.6 Specifically, the Exchange 

proposes to charge $250.00 per month 

per pair 7 of any port type other than a 

Multicast PITCH Spin Server Port or a 

GRP Port. Thus, the proposed charge 

will apply to all Exchange FIX, 

FIXDROP, DROP, TCP PITCH, TCP 

FAST PITCH, and TOP ports.8 In 

addition, the Exchange proposes to 

provide all Exchange constituents that 

receive the Exchange’s Multicast PITCH 

feed with 12 pairs of Multicast PITCH 

Spin Server Ports free of charge and, if 

such ports are used, one free pair of GRP 

Ports.9 The Exchange proposes to charge 

such customers $250.00 per month per 

additional pair of GRP Ports or 

additional set of 12 pairs of Multicast 

PITCH Spin Server Ports. Any Member 

or non-member that has entered into the 

appropriate agreements with the 

Exchange is permitted to receive 

Multicast PITCH Spin Server Ports and 

GRP Ports from the Exchange. 

The proposed rule change will apply 

to Members that obtain ports for direct 

access to the Exchange, non-member 

service bureaus that act as a conduit for 

orders entered by Exchange Members 

that are their customers, and market 

data recipients. The Exchange states that 

it has previously provided ports free of 

charge to all Members and non-members 

that use such ports for order entry to the 

Exchange or for receipt of market data. 

However, the Exchange states that its 

infrastructure costs have increased over 

time. In addition, the Exchange believes 

that providing ports free of charge has 

not encouraged Members and nonmembers to reserve and maintain ports 

efficiently, but rather, has led to a 

significant number of ports that are 

reserved and enabled by such market 

participants, but are never used or are 

under-used. Accordingly, the Exchange 

believes that the imposition of port fees 

will help the Exchange to continue to 

maintain and improve its infrastructure, 

while also encouraging Exchange 

customers to request and enable only 

the ports that are necessary for their 

operations related to the Exchange. 

The Commission has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.10

Specifically, the Commission finds that 

the proposal is consistent with Section 

6(b)(4) of the Act,11 which requires the 

equitable allocation of reasonable dues, 

fees, and other charges among Exchange 

Members and other persons using the 

Exchange’s facilities, and Section 6(b)(5) 

of the Act,12 which requires, among 

other things, that the rules of a national 

securities exchange be designed 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, and 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. The 

Commission also finds that the 

proposed rule change is consistent with 

Section 6(b)(8) of the Act,13 which 

requires that the rules of an exchange 

not impose a burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Finally, the 

Commission finds that the proposed 

rule change is consistent with Rule 

603(a) of Regulation NMS,14 which 

requires an exclusive processor that 

distributes information with respect to 

quotations for or transactions in an NMS 

stock to do so on terms that are fair and 

reasonable and not unreasonably 

discriminatory. 

The Commission believes that the 

proposed port fees are equitably 

allocated among Members and nonmembers and do not unfairly or 

unreasonably discriminate between 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 46257 

15See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

16See, e.g., Rule 7015 of The NASDAQ Stock 

Market LLC (‘‘NASDAQ’’) (setting forth, among 

other fees for access services, port fees charged to 

members and non-members used to enter orders 

into NASDAQ trading systems). See also Securities 

Exchange Act Release Nos. 60546 (August 20, 

2009), 74 FR 43184 (August 26, 2009) (SR– 

NASDAQ–2009–058) (increasing the monthly fee 

for each port used to enter orders in NASDAQ 

trading systems from $400 per month to $500 per 

month); 59337 (February 2, 2009), 74 FR 6441 

(February 9, 2009) (SR–BX–2009–004) (establishing 

fees for ports used by members to enter orders); 

59615 (March 20, 2009), 74 FR 14604 (March 31, 

2009) (SR–BX–2009–005) (establishing, among 

other fees, port fees for accessing market data). 

17 15 U.S.C. 78s(b)(2). 

18 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5 15 U.S.C. 78s(b)(1). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

customers, issuers, brokers, or dealers 

because the proposed port fees do not 

distinguish among the type of 

participant but rather are the same for 

all members and non-members. The 

Commission also believes that BATS 

was subject to significant competitive 

pressure to act equitably, fairly, and 

reasonably in setting the port fees, in 

light of the highly competitive nature of 

the market for execution and routing 

services.15 The Commission further 

notes that the Exchange’s proposed port 

fees are consistent with similar port fees 

charged by other exchanges.16

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,17 that the 

proposed rule change (SR–BATS–2009– 

026), as modified by Amendment No. 1 

thereto, be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21455 Filed 9–4–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60585; File No. SR–CBOE– 

2009–053] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Permit FLEX Options 

on Securities Eligible for Non-FLEX 

Options Trading and on Corporate 

Debt Securities 

August 28, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 

19, 2009, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 Exchange. The Exchange filed the 

proposal as ‘‘non-controversial’’ 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder, which renders it effective 

upon filing.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CBOE is proposing to amend certain 

CBOE rules to (1) permit the Exchange 

to list Flexible Exchange Options 

(‘‘FLEX Options’’) on securities that are 

eligible for Non-FLEX options trading, 

even if the Exchange does not list NonFLEX options on such securities, and (2) 

designate Corporate Debt Security 

Options as eligible for FLEX Options 

trading. The text of the rule proposal is 

available on the Exchange’s website 

(http://www.cboe.org/legal), at the 

Exchange’s Office of the Secretary and 

at the Commission’s Public Reference 

Room. 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The first change being proposed by 

this filing is to permit CBOE to list 

FLEX Options on securities that are 

eligible for Non-FLEX options trading, 

even if the Exchange does not list NonFLEX options on such securities. 

Currently, CBOE’s rules only permit 

FLEX Options on those securities on 

which the Exchange lists and trades 

Non-FLEX options. For various reasons, 

exchange traded options are not listed 

on every NMS stock, index or other 

products approved for options trading. 

The Exchange recognizes that market 

participants may want access to options 

on such securities, in addition to the 

certainty and safeguards of a regulated 

and standardized marketplace. As an 

alternative to the over-the-counter 

marketplace, CBOE proposes to increase 

the spectrum of products that are 

eligible for FLEX Options trading, even 

if the Exchange does not list Non-FLEX 

options on such securities. In order to 

effect this change, the Exchange is 

proposing to amend its Flexible 

Exchange Options rules and other 

product rules (e.g., Range Options, 

binary options, Credit Options) that 

currently designate such products as 

eligible for FLEX Options trading to 

permit FLEX Options trading even if 

Non-FLEX options on such securities 

are not traded. 

The second change being proposed by 

this filing is to designate Corporate Debt 

Security Options as eligible for FLEX 

Option trading. To effect this change, 

the Exchange is proposing to adopt new 

rule 28.17, which is similar to other 

FLEX Option designation rules for other 

products that have stand alone chapters 

(e.g., Range Options, binary options, 

Credit Options). The Exchange would 

like to offer FLEX Option trading on 

Corporate Debt Security Options as an 

alternative to similar products trading in 

the over-the-counter marketplace. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 5 and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.6

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 7 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Exchange believes 

that the FLEX Option changes proposed 

in this rule filing will provide market 

investors with additional means to 

manage their risk exposures and carry 


jlentini on DSKJ8SOYB1PROD with NOTICES