16110 Federal Register / Vol. 77, No. 53 / Monday, March 19, 2012 / Notices 

13 15 U.S.C. 78s(b)(3)(A). 14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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 after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 13 and Rule 19b– 

4(f)(6) 14 thereunder. 

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 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 email to rulecomments@sec.gov. Please include File 

Number SR–Phlx–2012–32 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–2012–32. This file 

number should be included on the 

subject line if email 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 such filing also will be 

available for inspection and copying at 

the principal offices 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–Phlx–2012–32, and should 

be submitted on or before April 9, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6498 Filed 3–16–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66580; File No. SR–BATS– 

2012–012] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Modify Exchange Rule 

14.3, Entitled ‘‘General Procedures and 

Prerequisites for Initial and Continued 

Listing on the Exchange’’ 

March 13, 2012. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on March 8, 

2012, 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 filing with the 

Commission a proposal to amend Rule 

14.3, entitled ‘‘General Procedures and 

Prerequisites for Initial and Continued 

Listing on the Exchange’’ to include 

additional requirements for the listing of 

securities that are issued by the 

Exchange or any of its affiliates. 

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 is proposing a rule 

change to adopt a new Rule 14.3(e) that 

would impose additional reporting 

requirements on the Exchange should 

the Exchange or an affiliate of the 

Exchange list a security on the Exchange 

(collectively, the ‘‘BATS Affiliates’’). In 

the event that a BATS Affiliate seeks to 

list a security on the Exchange (the 

‘‘Affiliate Security’’), the proposed rule 

change would require that prior to the 

initial listing of the Affiliate Security on 

the Exchange, Exchange personnel 

determine that such security satisfies 

the Exchange’s rules for listing, and 

such finding must be approved by the 

Regulatory Oversight Committee of the 

Exchange’s Board of Directors. The 

proposed rule change would also 

require the Exchange to prepare a 


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Federal Register / Vol. 77, No. 53 / Monday, March 19, 2012 / Notices 16111 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(5). 

quarterly report for the Regulatory 

Oversight Committee of the Exchange’s 

Board of Directors detailing: (1) The 

Exchange’s monitoring of the Affiliate 

Security’s compliance with the 

Exchange’s listing standards, including 

the Affiliate Security’s compliance with 

the Exchange’s minimum share price 

requirement and the Affiliate Security’s 

compliance with each of the 

quantitative continued listing 

requirements; and (2) the Exchange’s 

monitoring of the trading of the Affiliate 

Security, including summaries of all 

related surveillance alerts, complaints, 

regulatory referrals, trades cancelled or 

adjusted pursuant to Rule 11.17, 

investigations, examinations, formal and 

informal disciplinary actions, exception 

reports and trading data used to ensure 

the Affiliate Security’s compliance with 

the Exchange’s listing and trading rules. 

The Exchange would be required to 

promptly furnish a copy of this 

quarterly report to the Commission. 

To the extent the Exchange uses 

Exchange staff to conduct surveillance 

of trading activity on the Exchange, 

which it does today, the Exchange 

would be required to engage an 

independent third party once a year to 

review and prepare a report regarding 

surveillance of the Affiliate Security and 

promptly forward to the Regulatory 

Oversight Committee of the Exchange’s 

Board of Directors and the Commission 

a copy of the report prepared by the 

independent third party. In connection 

with the engagement of this third party, 

the Exchange would look for 

appropriate subject-matter expertise and 

would consider engaging appropriately 

qualified entities such as independent 

accounting firms, law firms, consulting 

firms or other self-regulatory 

organizations. The Exchange would also 

be required to commission an annual 

review and report by an independent 

accounting firm of the compliance of the 

Affiliate Security with the Exchange’s 

listing requirements. The Exchange 

would be required to promptly furnish 

a copy of this annual report to the 

Regulatory Oversight Committee of the 

Exchange’s Board of Directors and the 

Commission. 

In the event that the Exchange 

determines that the BATS Affiliate is 

not in compliance with any of the 

Exchange’s listing standards, the rule 

would require the Exchange to notify 

the issuer of such non-compliance 

promptly and request a plan of 

compliance. The Exchange would be 

required to file a report with the 

Commission within five business days 

of providing such notice to the issuer of 

its non-compliance. The required report 

would identify the date of the noncompliance, type of non-compliance, 

and any other material information 

conveyed to the issuer in the notice of 

non-compliance. Within five business 

days of receipt of a plan of compliance 

from the issuer, the Exchange would be 

again required to notify the Commission 

of such receipt, whether the plan of 

compliance was accepted by the 

Exchange or what other action was 

taken with respect to the plan and the 

time period provided to regain 

compliance with the Exchange’s listing 

standards, if any. 

The Exchange is proposing to exclude 

from the definition of Rule 14.3(e)— 

solely for purposes of this rule— 

securities that meet the definition of 

‘‘Portfolio Depository Receipts’’ and 

‘‘Index Fund Shares’’ under Rules 

14.11(b)(1)(A) and 14.11(c)(1)(A), 

respectively. These securities, 

commonly referred to as ‘‘exchange 

traded funds’’ or ‘‘ETFs,’’ are issued by 

investment companies registered under 

the Investment Company Act of 1940 

and are based on an index or portfolio 

of securities. An ETF is designed to 

provide investment results that 

correspond generally to the price and 

yield performance of the underlying 

index or portfolio of securities. The 

Exchange believes that such securities 

do not present the same concerns as 

other securities, even if issued by a 

BATS Affiliate. ETFs, which do not 

represent investments in an individual 

company, are already exempt from a 

number of listing standards including 

corporate governance rules standards, 

such as the requirement to have a board 

of directors comprised of a majority of 

independent directors and to have a 

code of conduct applicable to all 

employees and directors. The Exchange 

does not believe that the additional 

reporting requirements in the proposed 

rule change would provide any value in 

this context because ETFs would not 

constitute an investment in a BATS 

Affiliate. Further, these issuers are 

already subject to a comprehensive 

scheme of regulation pursuant to the 

Investment Company Act of 1940. 

The listing of securities of a BATS 

Affiliate could potentially create a 

conflict of interest between the 

Exchange’s self regulatory responsibility 

to vigorously oversee the listing and 

trading of the stock on its market, and 

its own commercial or economic 

interests. Such ‘‘self-listing’’ may raise 

questions as to the Exchange’s ability to 

independently and effectively enforce 

its rules against an affiliate or the 

operator/owner of its facility. In 

addition, such listing has the potential 

to exacerbate possible conflicts that may 

arise when the Exchange oversees 

competitors that may also be listed on 

the Exchange. The Exchange believes 

that the proposed rule change, by 

requiring heightened reporting by the 

Exchange to the Commission with 

respect to the Exchange’s oversight of 

the listing and trading on the Exchange 

of the securities of any BATS Affiliate, 

will help protect against any concern 

that the Exchange will not effectively 

enforce its rules with respect to the 

listing and trading of these securities. In 

addition, the requirement that an 

independent accounting firm review 

such issuer’s compliance with the 

Exchange’s listing standards adds a 

degree of independent oversight to the 

Exchange’s regulation of the listing of 

these securities, which should help 

mitigate against any potential or actual 

conflicts of interest. The Exchange also 

believes that the additional 

requirements contained in the proposed 

rule change would provide additional 

assurance that any Affiliate Securities 

listed on the Exchange by a BATS 

Affiliate comply with the Exchange’s 

listing standards on an on-going basis. 

Finally, the Exchange believes that the 

proposed rule change would eliminate 

any perception of a potential conflict of 

interest if a BATS Affiliate seeks to list 

a security on the Exchange. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with the 

requirements of the Act and the rules 

and regulations thereunder that are 

applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b) of the Act.3

Specifically, the proposed change is 

consistent with Section 6(b)(5) of the 

Act,4 because 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, 

and to remove impediments to, and 

perfect the mechanism of, a free and 

open market and a national market 

system. Specifically, the Exchange 

believes that the proposed rule change, 

by requiring heightened reporting by the 

Exchange to the Commission with 

respect to oversight of the listing and 

trading on the Exchange of Affiliate 

Securities, will help protect against 

concerns that the Exchange will not 

effectively enforce its rules with respect 

to the listing and trading of these 

securities. In addition, the requirement 

that an independent accounting firm 

review such issuer’s compliance with 


emcdonald on DSK29S0YB1PROD with NOTICES
16112 Federal Register / Vol. 77, No. 53 / Monday, March 19, 2012 / Notices 

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

7See SR–BATS–2012–012, Item 7. 

8See id. See also Securities Exchange Act Release 

Nos. 53382 (February 27, 2006), 71 FR 11251 

(March 6, 2006) (SR–NYSE–77) and 55293 

(February 14, 2007), 72 FR 8033 (February 22, 2007) 

(SR–NYSE–2006–120). 

9For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 10 17 CFR 200.30–3(a)(12). 

the Exchange’s listing standards adds a 

degree of independent oversight to the 

Exchange’s regulation of the listing of 

these securities, which may mitigate any 

potential or actual conflicts of interest. 

Further, the additional requirements 

contained in the proposed rule change 

would help to provide additional 

assurance that any Affiliate Securities 

listed on the Exchange by a BATS 

Affiliate comply with the Exchange’s 

listing standards both upon the initial 

listing of the BATS Affiliate and on an 

on-going basis. The Exchange believes 

that the proposed rule change would 

eliminate any perception of a potential 

conflict of interest if a BATS Affiliate 

seeks to list a security on the Exchange. 

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 Changes and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not 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 5 and Rule 19b– 

4(f)(6) thereunder.6

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Exchange believes that the 

proposed rule change is consistent with 

the protection of investors and the 

public interest because it would permit 

the Exchange to immediately implement 

the proposed rule change in the event 

an Affiliate seeks to list on the 

Exchange.7 The Commission believes 

that waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver would allow the 

Exchange to implement protections 

against potential conflicts of interest 

that may arise from listing an Affiliate 

security on the Exchange without undue 

delay. The Commission notes that the 

proposed rule change is based on and 

similar to New York Stock Exchange 

Rule 497.8 Therefore, the Commission 

designates the proposal operative upon 

filing.9

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. 

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 email to rulecomments@sec.gov. Please include File 

Number SR–BATS–2012–012 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–BATS–2012–012. This file 

number should be included on the 

subject line if email 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–BATS– 

2012–012 and should be submitted on 

or before April 9, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6495 Filed 3–16–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

Eugene Science, Inc., Order of 

Suspension of Trading 

March 15, 2012. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Eugene 

Science, Inc. because it has not filed any 

periodic reports since the period ended 

June 30, 2008. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

company. Therefore, it is ordered, 

pursuant to Section 12(k) of the 

Securities Exchange Act of 1934, that 

trading in the securities of the abovelisted company is suspended for the 

period from 9:30 a.m. EDT on March 15, 

2012, through 11:59 p.m. EDT on March 

28, 2012. 


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