52032 Federal Register / Vol. 76, No. 161 / Friday, August 19, 2011 / Notices 

15 15 U.S.C. 78f. 

16 15 U.S.C. 78f(b)(5). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3As defined in Rule 16.1(a)(37), a ‘‘Market 

Maker’’ on BATS Options is a member of BATS 

Options registered with the Exchange for the 

purpose of making markets in options contracts 

traded on the Exchange and that is vested with the 

rights and responsibilities specified in Chapter XXII 

of the Exchange’s Rules. 

NOS, as well as demonstrated that NOS 

cannot use any information advantage it 

may have because of its affiliation with 

the Exchange. Since the Exchange has 

met all the above-listed conditions, it 

now seeks permanent approval of the 

Phlx and NOS inbound routing 

relationship. The Exchange will 

continue to comply with the conditions 

1–4 stated above. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,15

in general, and with Section 6(b)(5) of 

the Act,16 in particular, in that the 

proposal 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 regulating, clearing, settling, 

processing information with respect to, 

and 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. 

Specifically, the proposed rule change 

will allow the Exchange to continue 

receiving inbound routes of certain 

orders from NOS in a manner consistent 

with prior approvals and established 

protections. The Exchange believes that 

having met the commitments 

established during the pilot program 

demonstrates that the Exchange has 

mechanisms that protect the 

independence of the Exchange’s 

regulatory responsibility with respect to 

NOS, as well as demonstrate that NOS 

cannot use any information advantage it 

may have because of its affiliation with 

the Exchange. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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 Exchange consents, 

the Commission will: 

A. By order approve or disapprove 

such 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 rulecomments@sec.gov. Please include File 

Number SR–Phlx–2011–111 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–Phlx–2011–111. 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, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such 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 

publicly available. All submissions 

should refer to File Number SR–Phlx– 

2011–111 and should be submitted on 

or before September 9, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21174 Filed 8–18–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65133; File No. SR–BATS– 

2011–029] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Offer a Bulk-Quoting 

Interface 

August 15, 2011. 

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 9, 

2011, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. 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 

The Exchange is proposing related to 

the BATS Options Market (‘‘BATS 

Options’’) to introduce a bulk-quoting 

interface for BATS Options Market 

Makers 3 that will help them meet their 

obligations as market makers and to 


jlentini on DSK4TPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 161 / Friday, August 19, 2011 / Notices 52033 

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

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

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6). 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6)(iii). 

10For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

provide liquidity to the market in an 

efficient manner. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.com, at the 

principal office of the Exchange, 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 

Exchange 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 these 

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 Exchange currently offers an 

order-based market making interface for 

the BATS Options trading platform. 

Market Makers use this interface to 

provide a two-sided quotation on BATS 

Options. Since it is an order-based 

interface, a two-sided quotation requires 

the entry of both a buy and a sell order. 

As part of several technological 

enhancements the Exchange plans to 

implement on BATS Options, the 

Exchange proposes to introduce a bulkquoting interface for market makers in 

order to offer an additional market 

making interface choice to BATS 

Options Market Makers. The proposed 

bulk-quoting market making interface 

will be used by Market Makers to 

submit and update their quotations in 

the marketplace much like the current 

order-based interface is used today. The 

bulk-quoting interface, however, allows 

Market Makers to provide both a bid 

and an offer in one message. In addition, 

the bulk-quoting interface allows Market 

Makers to bundle several quote updates 

into one bulk message. This is a useful 

feature for Market Makers that provide 

quotations in many different options. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 4 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 5

in particular, in that it is 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. The 

Exchange believes this proposal is in 

keeping with those principles by 

protecting investors and the public 

interest, as well as promoting just and 

equitable principles of trade, through 

the addition of a new market making 

interface option for BATS Options 

Market Makers, which by aiding Market 

Makers in their market making activities 

will help to enhance market liquidity 

for investors. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 6 and Rule 19b– 

4(f)(6) thereunder.7

A proposed rule change filed under 

Rule 19b–4(f)(6) 8 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),9 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. The Exchange 

notes that the proposed rule change is 

a non-controversial system change and 

would not affect the execution of trades. 

The Exchange also notes that prompt 

implementation would extend the 

benefits and new features to BATS 

Options Market Makers more quickly. 

For these reasons, the Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest, and designates the proposed 

rule change to be operative upon filing 

with the Commission.10

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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 rulecomments@sec.gov. Please include File 

No. SR–BATS–2011–029 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 No. 

SR–BATS–2011–029. 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 changes between the 


jlentini on DSK4TPTVN1PROD with NOTICES
52034 Federal Register / Vol. 76, No. 161 / Friday, August 19, 2011 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 64470 

(May 11, 2011), 76 FR 28493 (‘‘Notice’’). 

4The Funds have filed a registration statement on 

Form S–3 under the Securities Act of 1933. See 

Post-Effective Amendment No. 4 dated April 13, 

2011 (File No. 333–163511) to the Trust’s 

Registration Statement on Form S–3 (‘‘Registration 

Statement’’). 

5Standard & Poor’s Financial Services LLC, the 

index sponsor with respect to the Indexes, is not a 

broker-dealer and has implemented procedures 

designed to prevent the use and dissemination of 

material, non-public information regarding the 

Indexes. 

6The term ‘‘under normal conditions’’ includes, 

but is not limited to, the absence of extreme 

volatility or trading halts in the futures markets or 

the financial markets generally; operational issues 

causing dissemination of inaccurate market 

information; or force majeure type events such as 

systems failure, natural or man-made disaster, act 

of God, armed conflict, act of terrorism, riot or labor 

disruption or any similar intervening circumstance. 

7To the extent practicable, the Funds will invest 

in swaps cleared through the facilities of a 

centralized clearing house. 

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, 100 F Street, NE., 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

will also 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 No. SR–BATS– 

2011–029 and should be submitted on 

or before September 9, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21171 Filed 8–18–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65134; File No. SR– 

NYSEArca–2011–23] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

Proposed Rule Change To List and 

Trade Shares of ProShares Short VIX 

Short-Term Futures ETF, ProShares 

Short VIX Mid-Term Futures ETF, 

ProShares Ultra VIX Short-Term 

Futures ETF, ProShares Ultra VIX MidTerm Futures ETF, ProShares 

UltraShort VIX Short-Term Futures 

ETF, and ProShares UltraShort VIX 

Mid-Term Futures ETF Under NYSE 

Arca Equities Rule 8.200, Commentary 

.02 

August 15, 2011. 

I. Introduction 

On April 28, 2011, NYSE Arca, Inc. 

(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 list and trade shares 

(‘‘Shares’’) of ProShares Short VIX 

Short-Term Futures ETF, ProShares 

Short VIX Mid-Term Futures ETF 

(‘‘Short Funds’’), ProShares Ultra VIX 

Short-Term Futures ETF, ProShares 

Ultra VIX Mid-Term Futures ETF 

(‘‘Ultra Funds’’), ProShares UltraShort 

VIX Short-Term Futures ETF, and 

ProShares UltraShort VIX Mid-Term 

Futures ETF (‘‘UltraShort Funds’’ and, 

together with the Short Funds and Ultra 

Funds, the ‘‘Funds’’) under NYSE Arca 

Equities Rule 8.200, Commentary .02. 

The proposed rule change was 

published in the Federal Register on 

May 17, 2011.3 The Commission 

received no comments on the proposal. 

On July 1, 2011, the Exchange submitted 

a request to extend the Commission’s 

action date for the proposed rule change 

to August 15, 2011. This order grants 

approval of the proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade the Shares pursuant to NYSE Arca 

Equities Rule 8.200, Commentary .02, 

which permits the trading of Trust 

Issued Receipts. ProShare Capital 

Management LLC (‘‘Sponsor’’), a 

Maryland limited liability company, 

serves as the Sponsor of ProShares Trust 

II (‘‘Trust’’) and is a commodity pool 

operator and commodity trading 

advisor.4 Brown Brothers Harriman & 

Co. serves as the administrator 

(‘‘Administrator’’), custodian, and 

transfer agent of the Funds and their 

respective Shares. SEI Investments 

Distribution Co. serves as Distributor of 

the Shares. Wilmington Trust Company, 

a Delaware banking corporation, is the 

sole trustee of the Trust. 

The Funds seek, on a daily basis, to 

provide investment results (before fees 

and expenses) that correspond to the 

inverse of the daily performance, a 

multiple of the daily performance, or an 

inverse multiple of the daily 

performance of a benchmark that seeks 

to offer exposure to market volatility 

through publicly traded futures markets. 

The benchmark for ProShares Short VIX 

Short-Term Futures ETF, ProShares 

Ultra VIX Short-Term Futures ETF, and 

ProShares UltraShort VIX Short-Term 

Futures ETF is the S&P 500 VIX ShortTerm Futures Index, and the benchmark 

for ProShares Short VIX Mid-Term 

Futures ETF, ProShares Ultra VIX MidTerm Futures ETF, and ProShares 

UltraShort VIX Mid-Term Futures ETF 

is the S&P 500 VIX Mid-Term Futures 

Index (each, an ‘‘Index,’’ and, 

collectively, the ‘‘Indexes’’).5 The Funds 

will take long (in the case of the Ultra 

Funds) and short (in the case of the 

Short and UltraShort Funds) positions 

in futures contracts based on the 

Chicago Board Options Exchange 

(‘‘CBOE’’) Volatility Index (‘‘VIX’’) and, 

under limited circumstances, swap 

agreements (as described below), to 

pursue their respective investment 

objectives. Each Fund also may invest in 

cash or cash equivalents such as U.S. 

Treasury securities or other high credit 

quality short-term fixed-income, or 

similar securities that may serve as 

collateral for the futures contracts and 

swap agreements. 

Specifically, each Fund seeks to 

achieve its investment objective by 

investing under normal market 

conditions 6 in VIX futures contracts 

traded on the CBOE Futures Exchange 

(‘‘CFE’’) (‘‘VIX Futures Contracts’’) such 

that each Fund has exposure intended 

to approximate the inverse of the daily 

performance, a multiple of the daily 

performance, or an inverse multiple of 

the daily performance of its respective 

Index at the time of the net asset value 

(‘‘NAV’’) calculation. In the event 

position accountability rules are 

reached with respect to VIX Futures 

Contracts, the Sponsor may, in its 

commercially reasonable judgment, 

cause such Fund to obtain exposure 

through swaps referencing the relevant 

Index or particular VIX Futures 

Contracts, or invest in other futures 

contracts or swaps not based on the 

particular VIX Futures Contracts if such 

instruments tend to exhibit trading 

prices or returns that correlate with the 

Indexes or any VIX Futures Contract 

and will further the investment 

objective of such Fund.7 The Funds may 

also invest in swaps if the market for a 

specific futures contract experiences 

emergencies or disruptions that prevent 

a Fund from obtaining the appropriate 

amount of investment exposure to the 


jlentini on DSK4TPTVN1PROD with NOTICES