20854 Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 

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

2 17 CFR 240.19b–4. 

Applicant’s Address: c/o UBS 

Alternative and Quantitative 

Investments LLC, 677 Washington 

BLVD., Stamford, CT 06901. 

Tax Exempt Proceeds Fund Inc. 

[File No. 811–5698] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On December 30, 

2011, applicant made a liquidating 

distribution to its shareholders, based 

on net asset value. Expenses of 

approximately $32,393 incurred in 

connection with the liquidation were 

paid by Reich & Tang Asset 

Management, LLC, applicant’s 

investment adviser. 

Filing Date: The application was filed 

on February 23, 2012. 

BlackRock Short-Term Bond Series, 

Inc. 

[File No. 811–10053] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On July 18, 2011, 

applicant transferred its assets to 

BlackRock Low Duration Bond 

Portfolio, a series of BlackRock Funds II, 

based on net asset value. Of 

approximately $444,386 in expenses 

incurred in connection with the 

reorganization, $292,335 were paid by 

applicant and $152,051 were paid by 

BlackRock Advisors, LLC, applicant’s 

investment adviser. 

Filing Dates: The application was 

filed on December 22, 2011 and 

amended on March 8, 2010. 

Applicant’s Address: 100 Bellevue 

Parkway, Wilmington, DE 19809. 

Cash Assets Trust 

[File No. 811–4066] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On January 5, 

2012, applicant made a final liquidating 

distribution to its shareholders, based 

on net asset value. Expenses of $88,505 

incurred in connection with the 

liquidation were paid by Aquila 

Investment Management LLC, 

applicant’s administrator and Asset 

Management Group of Bank of Hawaii, 

applicant’s investment adviser. 

Filing Dates: The application was 

filed on January 6, 2012 and amended 

on March 16, 2012. 

Applicant’s Address: 380 Madison 

Ave., Suite 2300, New York, NY 10017. 

SunAmerica Focused Alpha Growth 

Fund, Inc. 

[File No. 811–21770] 

SunAmerica Focused Alpha Large-Cap 

Fund, Inc. 

[File No. 811–21805] 

Summary: Each applicant seeks an 

order declaring that it has ceased to be 

an investment company. On January 23, 

2012, applicants transferred their assets 

to corresponding series of SunAmerica 

Specialty Series, based on net asset 

value. Expenses of approximately 

$344,850 and $337,100, respectively, 

incurred in connection with the 

reorganizations were paid by applicants. 

Filing Date: The applications were 

filed March 7, 2012. 

Applicants’ Address: Harborside 

Financial Center, 3200 Plaza 5, Jersey 

City, NJ 07311–4992. 

Munder Series Trust II 

[File No. 811–7897] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On April 8, 2011, 

applicant transferred its assets to 

Munder Series Trust, based on net asset 

value. Expenses of $101,474 incurred in 

connection with the reorganization were 

paid by Munder Capital Management, 

investment adviser to applicant and the 

acquiring fund. 

Filing Dates: The application was 

filed on December 13, 2011, and 

amended on December 14, 2011, and 

March 7, 2012. 

Applicant’s Address: 480 Pierce St., 

Birmingham, MI 48009. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–8262 Filed 4–5–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66713; File No. SR–EDGX– 

2012–08] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Amendments to Rule 2.11 That 

Establish the Authority To Cancel 

Orders and Describe the Operation of 

an Error Account 

April 2, 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 22, 

2012, EDGX Exchange, Inc. (‘‘Exchange’’ 

or ‘‘EDGX’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III 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 proposes to amend 

Rule 2.11 to (1) add a new subparagraph 

(a)(6) that addresses the authority of the 

Exchange and its routing broker-dealer, 

Direct Edge ECN LLC d/b/a DE Route 

(‘‘DE Route’’) to cancel orders if and 

when a systems, technical or 

operational issue (herein, each 

individually referred to as a ‘‘Systems 

Issue,’’ and collectively referred to as 

‘‘Systems Issues’’) occurs, and (2) 

amend subparagraph (a)(4) and add new 

subparagraph (a)(7) to describe the 

operation of an error account for DE 

Route. The text of the proposed rule 

change is available on the Exchange’s 

Web site, at the Exchange’s principal 

office and in the Public Reference Room 

of the Commission. 

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 

self-regulatory organization has 

prepared summaries, set forth in 

Sections A, B and C below, of the most 

significant aspects 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 proposes to amend 

Rule 2.11 by adding subparagraph (a)(6) 

to address the authority of the Exchange 

and DE Route to cancel orders when a 

Systems Issue occurs, and by amending 

subparagraph (a)(4) and adding 

subparagraph (a)(7) to describe the 

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Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 20855 

3 DE Route is a facility of the Exchange. 

Accordingly, under Exchange Rule 2.11(a)(1), the 

Exchange is responsible for filing with the 

Commission rule changes and fees relating to DE 

Route’s outbound router function. In addition, 

EDGX is using the phrase ‘‘the Exchange or DE 

Route’’ in this rule filing to reflect the fact that a 

decision to cancel orders affected by Systems Issue 

may be made by the Exchange or DE Route 

depending on where those orders are located at the 

time of that decision. 

4See Securities Exchange Act Release No. 61698 

(March 12, 2010), 75 FR 13151 (March 18, 2010). 

5As defined in EDGX Rule 2.11(a) and Rule 

600(b)(78) of Regulation NMS under the Securities 

Exchange Act of 1934 (the ‘‘Act’’), 17 CFR 

242.600(b)(78). 

6See Release No. 61698 at n. 4. See also 

Securities Exchange Act Release No. 64361 (April 

28, 2011), 76 FR 25388 (May 4, 2011) (SR–EDGX– 

2011–12); see also SR–EDGX–2012–09 (March 16, 

2012) (pending filing to extend the pilot period 

through June 30, 2013). 

7The examples described in this filing are not 

intended to be exclusive. Proposed subparagraph 

(a)(6) of EDGX Rule 2.11 would provide general 

authority for the Exchange or DE Route to cancel 

orders in order to maintain fair and orderly markets 

when Systems Issues are occurring, and proposed 

subparagraph (a)(7) of Rule 2.11 would set forth the 

manner in which an error position may be handled 

by DE Route. The proposed rule changes are not 

limited to addressing order cancellation or an error 

position resulting only from the specific examples 

described in this filing. 

8 In a normal situation (i.e., one in which a 

Systems Issue does not exist), DE Route should 

receive an immediate response to an IOC order from 

a Trading Center, and would pass the resulting fill 

or cancellation on to the Member. After submitting 

an order that is routed to a Trading Center, if a 

Member sends an instruction to cancel that order, 

the cancellation is held by the Exchange until a 

response is received from the Trading Center. For 

instance, if the Trading Center executes that order, 

the execution would be passed on to the Member 

and the cancellation instruction would be 

disregarded. 

9 If a Member did not submit a cancellation to the 

Exchange, however, that initial order would remain 

‘‘live’’ and thus be eligible for execution or posting 

on the Exchange, and neither the Exchange nor DE 

Route would treat any execution of that initial order 

or any subsequent routed order related to that 

initial order as an error position. 

10See, e.g., Nasdaq Rule 4627 (stating that all 

members must honor trades); BATS Rule 11.15(b); 

and NSX Rule 11.17(b) (both stating that 

transactions are locked-in and automatically 

processed for clearance and settlement). 11This discussion of potential scenarios that 

could lead to an error position is not intended to 

be an exhaustive list of all scenarios, but rather is 

just illustrative. The Exchange cannot anticipate 

every scenario, but does acknowledge that the types 

of error positions that might warrant use by DE 

Route of an error account would be limited to those 

arising from Systems Issues, as defined herein, 

which resulted in erroneous executions occurring 

on one or more Trading Centers. 

conditions under which DE Route may 

maintain and use an error account.3

DE Route is the approved outbound 

router of EDGX,4 subject to the 

conditions listed in Rule 2.11. EDGX 

relies on DE Route to provide outbound 

routing services from EDGX to external 

market centers (each, a ‘‘Trading 

Center’’ 5). The Exchange has also been 

approved to receive inbound routes of 

equities orders by DE Route from EDGA 

Exchange, Inc. for a pilot period ending 

on June 30, 2012.6 When DE Route 

routes orders to a Trading Center, it 

does so by sending a corresponding 

order in its own name to the Trading 

Center. From time to time, the Exchange 

and DE Route encounter situations in 

which it becomes necessary to cancel 

orders and resolve an error position.7

Circumstances That Could Lead to 

Cancelled Orders 

A Systems Issue may arise at DE 

Route, a Trading Center or the Exchange 

that may cause the Exchange or DE 

Route to take steps to cancel orders if 

the Exchange or DE Route determines 

that such action is necessary to maintain 

a fair and orderly market. The examples 

set forth below describe some of the 

circumstances in which the Exchange or 

DE Route may decide to cancel orders. 

Example 1. If DE Route or a Trading Center 

experiences a Systems Issue that results in 

DE Route not receiving responses to 

immediate or cancel (‘‘IOC’’) orders that it 

sent to the Trading Center, and that issue is 

not resolved in a timely manner, DE Route 

may need to cancel the routed orders affected 

by the issue.8 For instance, if DE Route 

experiences a connectivity issue affecting the 

manner in which it sends or receives order 

messages to or from Trading Centers, it may 

be unable to receive timely execution or 

cancellation reports from the Trading 

Centers, and DE Route may consequently 

seek to cancel the affected routed orders. 

Once a decision is made to cancel those 

routed orders, any cancellation that a 

Member submitted to the Exchange on its 

initial order during such a situation would be 

honored.9

Example 2. If the Exchange experiences a 

Systems Issue, the Exchange may take steps 

to cancel all outstanding orders affected by 

that issue and notify affected Members of the 

cancellations. In those cases, the Exchange 

would seek to cancel, via DE Route, any 

routed orders related to the Members’ initial 

orders. 

Circumstances That Could Lead to an 

Error Position 

An error position can arise out of 

Systems Issues experienced by DE 

Route, the Exchange or a Trading 

Center. Connectivity and order 

processing related issues are the most 

common types of Systems Issues that DE 

Route would expect could result in an 

error position. Connectivity issues, for 

example, would entail problems with 

the manner in which DE Route sends or 

receives order, execution and 

cancellation messages to or from other 

Trading Centers. Connectivity issues 

could arise either from DE Route’s 

systems or from the Trading Center’s 

systems. For example, if DE Route’s 

connection to a Trading Center is 

interrupted after delivering an order, DE 

Route may be unable to receive a timely 

execution report from the Trading 

Center, and as a consequence may 

cancel the Member’s order. But DE 

Route may later discover after the 

connection was restored that the order 

was actually executed by the Trading 

Center, resulting in an error position. 

Similarly, if the Trading Center 

attempted to cancel all open orders that 

it had previously accepted due to a 

Systems Issue, but either transmitted 

cancellations on orders that had 

previously been executed, or 

subsequently submitted executions of 

the orders to The Depository Trust 

Clearing Corporation (‘‘DTCC’’) for 

clearance and settlement, an error 

position would result. 

An error position might also result if 

DE Route failed to process order 

messages correctly. For example, if DE 

Route’s connection to the Exchange is 

temporarily interrupted and DE Route 

were to erroneously re-route orders that 

had previously been executed after the 

connection was restored, DE Route will 

have received executions of orders 

where there were effectively no 

corresponding orders on the Exchange. 

In this case, the executions would not 

necessarily be nullified since DE Route 

is a regular member of other Trading 

Centers and is therefore subject to those 

venues’ policies for honoring trades.10

A Systems Issue experienced by the 

Exchange could also result in an error 

position relating to a routed order. For 

example, if an order were routed from 

the Exchange to a Trading Center by DE 

Route, and then due to a Systems Issue 

the Exchange would not accept the 

resulting execution of the order (but 

rather transmitted a cancellation to the 

Member instead), an error position 

would result. Another example might be 

where a Systems Issue experienced by 

the Exchange automatically changed the 

number of shares associated with all 

orders from one or more Members, or all 

orders in one or more symbols (in either 

case resulting in overfills), or changed 

the symbol on one or more orders 

(resulting in executions in the wrong 

stocks), where such orders were routed 

by DE Route to a Trading Center for 

execution.11

Assignment Methodology 

Regardless of how an error position 

arose, DE Route would not typically 

learn about an error position until the 

next business day following the trade 

date, usually (but not exclusively) 

during the clearing process when a 

Trading Center has submitted to DTCC 

a transaction for clearance and 

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20856 Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 

12Such a situation may not cause the Exchange 

to declare self-help against the Trading Center 

pursuant to Rule 611 of Regulation NMS under the 

Act. If the Exchange or DE Route determines to 

cancel orders routed to a Trading Center under 

proposed subparagraph (a)(6), but does not declare 

self-help against that Trading Center, the Exchange 

would continue to be subject to the order protection 

requirements of Rule 611 with respect to that 

Trading Center. 

13See examples listed under the section entitled 

‘‘Assignment Methodology,’’ supra. 

14Specifically, the Exchange believes that the 

likelihood of erroneous executions failing to settle 

within the normal clearance and settlement cycle 

would increase the closer in time to the settlement 

date that the error position was assigned to a 

Member. 

settlement of which DE Route had not 

received an execution confirmation. 

Nonetheless, if DE Route reasonably 

determines that it has accurate and 

sufficient information, and a sufficient 

amount of time, it will assign the full 

amount of the resulting error position to 

one or more Members. For example, if 

Member A placed an order to buy 100 

shares of symbol XYZ, and a Systems 

Issue caused DE Route to route an order 

for the wrong number of shares (e.g., 

1000 shares), or route an order for the 

correct number of shares but in the 

wrong symbol (e.g., symbol XYY instead 

of XYZ), then, in either situation, DE 

Route would assign to Member A the 

full amount of the resulting error 

position (in the above examples, 1000 

shares of XYZ, of which 900 shares 

would be the error position, or 100 

shares of XYY, respectively). Under 

these circumstances, because the error 

position would have been caused by an 

Exchange or DE Route’s Systems Issue, 

Member A would be permitted to 

submit a claim for reimbursement 

pursuant to EDGX Rule 11.12 to the 

extent that Member A incurred a loss 

after trading out of the error position. 

The foregoing assignment 

methodology is designed to ensure that 

an error position is assigned to Members 

in a non-discriminatory manner. Thus, 

if DE Route reasonably concludes that it 

is unable to trace each erroneous 

execution comprising an error position 

back to one or more Members’ orders, 

then DE Route will assume the entire 

amount of the error position in the error 

account. Moreover, if DE Route 

reasonably concludes, due to the 

number of erroneous executions and/or 

the number of Members potentially 

impacted, that it would not be able to 

trace each erroneous execution 

comprising an error position back to 

such Members in a timely manner 

(which will be defined to mean by the 

first business day following the trade 

date on which the error position was 

established, or ‘‘T+1’’), then DE Route 

will assume the entire amount of the 

error position in the error account. 

When an error position is acquired into 

DE Route’s error account, it will then be 

liquidated as soon as practicable 

pursuant to proposed paragraph (a)(7) of 

Rule 2.11. 

Proposed Changes to Exchange Rule 

2.11 

The Exchange proposes to amend 

EDGX Rule 2.11 to amend subparagraph 

(a)(4) and add new subparagraphs (a)(6) 

and (a)(7) to address the cancellation of 

orders due to Systems Issues and the 

use of an error account by DE Route, 

respectively. 

Specifically, under proposed 

subparagraph (a)(6), the Exchange or DE 

Route would be expressly authorized to 

cancel orders as may be necessary to 

maintain fair and orderly markets if a 

Systems Issue occurred at the Exchange, 

DE Route or a Trading Center.12 The 

Exchange or DE Route would be 

required to provide notice of the 

cancellation to affected Members as 

soon as practicable. 

Under amended subparagraph (a)(4) 

and new subparagraph (a)(7), DE Route 

would be authorized, when providing 

routing services to the Exchange, to 

maintain an error account for the 

purpose of liquidating an error position 

acquired as a result of Systems Issues 

experienced either by DE Route itself, 

the Exchange or at a Trading Center, as 

described above. The rule amendments 

provide that DE Route would only 

assume an error position in the error 

account under documented 

circumstances when the error position 

could not fairly and practicably be 

assigned to one or more Members. 

With proposed new subparagraph 

(a)(7) of Rule 2.11, the Exchange is 

proposing that DE Route would consider 

the following factors in determining 

whether the entire amount of an error 

position can be fairly and practicably 

assigned to one or more Members: (i) 

Whether DE Route has accurate and 

sufficient information to trace each 

erroneous execution comprising an error 

position back to one or more Members’ 

orders; and (ii) whether DE Route is able 

to review available information in order 

to assign the entire amount of an error 

position to all affected Members by the 

first business day following the trade 

date on which the error position was 

created (considering, among other 

factors, the size of the error position and 

the total number of Members potentially 

impacted). If as a result of the foregoing, 

DE Route reasonably concludes that the 

entire amount of an error position can 

be assigned to one or more Members in 

a timely and non-discriminatory 

manner, the entire amount of the error 

position will accordingly be assigned to 

such Members.13 An example of this 

might be where a Systems Issue of 

limited scope or duration occurred at a 

Trading Center, and the resulting trades 

submitted for clearance and settlement 

by such Trading Center to DTCC, 

coupled with the number of Member 

orders transmitted during that same 

time period or possessing similar, 

traceable characteristics, are adequately 

manageable so as to allow a sufficient 

amount of time to match the error 

position with Members’ orders in a nondiscriminatory fashion. 

There may be scenarios, however, in 

which the entire amount of a particular 

error position resulting from a Systems 

Issue cannot be assigned to Members, or 

cannot be assigned to Members in a 

non-discriminatory manner. For 

example, in the event that there is 

insufficient and/or inaccurate 

information, or the routed order that led 

to an erroneous execution could not be 

attributed to a Member’s order, then DE 

Route would not be able to trace 

erroneous executions back to a 

Member’s order. Also, if the information 

available would enable tracing of some, 

but not all, of the erroneous executions 

comprising an error position to 

Members, then the Exchange believes 

that assigning only a portion of an error 

position to Members might unfairly 

discriminate against those Members. In 

these circumstances, therefore, DE 

Route may reasonably conclude, 

pursuant to the factors set forth in 

proposed Rule 2.11(a)(7), that it cannot 

assign the entire amount of an error 

position to one or more Members, or 

cannot assign it in a non-discriminatory 

manner, and must instead acquire the 

entire amount of the error position into 

the error account. 

There may also be scenarios in which 

the entire amount of a particular error 

position resulting from a Systems Issue 

cannot practicably be assigned to 

Members in a timely manner. For 

example, the number of erroneous 

executions comprising an error position, 

and/or the number of Members 

potentially impacted, could be such that 

the research necessary to trace all of the 

erroneous executions comprising the 

error position back to particular 

Members’ orders could reasonably be 

expected to extend beyond T+1. The 

Exchange believes that assigning an 

error position to a Member beyond T+1 

significantly increases the potential for 

disruptions in the normal clearance and 

settlement process,14 and also could 

result in adverse regulatory 

consequences for affected Members 

(e.g., their compliance with Rule 15c3– 

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Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 20857 

15 15 U.S.C. 78f. 

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

1 under the Act). In these 

circumstances, therefore, DE Route may 

reasonably conclude, pursuant to the 

factors set forth in proposed Rule 

2.11(a)(7), that it is not practicable to 

assign the entire amount of an error 

position to one or more Members by 

T+1, and must instead acquire the entire 

amount of the error position into the 

error account. 

DE Route would be required to 

document the factors considered in 

determining to assume an error position 

in the error account. Similarly, if DE 

Route determined that an error position 

could be assigned to a particular 

Member in a timely fashion, then DE 

Route would be required to document 

the rationale for the assignment to that 

Member. The assignment of any error 

position to any one or more Members 

would be required to be done in a nondiscriminatory fashion; this includes, 

for example, that the entire amount of 

an error position must be assigned to all 

Members to which such position could 

reasonably be attributed. If time would 

not permit a full analysis of all Members 

to which a position could be attributed, 

then DE Route would not assign any 

portion of the error position to 

Members, but would rather have to 

assume the error position in its error 

account. Documentation reflecting 

assignment of an error position to one 

or more Members shall reflect such 

methodology. 

Proposed subparagraph (a)(7) would 

further describe the manner in which 

DE Route would liquidate an error 

position from the error account. When, 

as and if DE Route determined to book 

an error position to its error account, DE 

Route would be required to liquidate 

such error position as soon as 

practicable in a manner that would 

effectively confer investment discretion 

over the error position to a third-party 

broker-dealer. Specifically, DE Route 

would be required to: (i) Provide 

complete time and price discretion to 

the third-party broker-dealer in the 

liquidation of the error position, 

including that it would not be permitted 

to exercise any influence or control over 

the timing or methods of trading; and 

(ii) establish and implement written 

policies and procedures in accordance 

with paragraph (a)(7) that are reasonably 

designed to restrict the flow of any 

confidential and proprietary 

information associated with the 

liquidation of an error position between 

the Exchange and DE Route, on one 

hand, and the third-party broker-dealer, 

on the other. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,15

in general, and furthers the objectives of 

Section 6(b)(5),16 in particular, as 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 

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, and is not designed to 

permit unfair discrimination between 

customers, brokers or dealers. The 

Exchange believes that this proposal is 

in keeping with those principles since 

the Exchange’s and DE Route’s ability to 

cancel orders as a result of a Systems 

Issue and to maintain an error account 

facilitates the smooth and efficient 

operations of the market. Specifically, 

the Exchange believes that allowing the 

Exchange or DE Route to cancel orders 

as a result of a Systems Issue would 

allow the Exchange to maintain fair and 

orderly markets. Moreover, the 

Exchange believes that allowing DE 

Route to assume a bona fide error 

position in an error account, and to 

liquidate the error position subject to 

the conditions set forth in the proposed 

amendments to Rule 2.11, would be the 

least disruptive means to correct the 

error position, except where it is 

practicable for DE Route to assign an 

error position to one or more Members 

of the Exchange. The proposed 

amendments are designed to ensure full 

trade certainty for market participants 

and avoid disrupting the clearance and 

settlement process. The proposed 

amendments are also designed to 

provide a consistent methodology for 

handling an error position in a manner 

that does not discriminate among 

Members. Finally, the proposed 

amendments are also consistent with 

Section 6 insofar as they would require 

DE Route to establish controls that are 

reasonably designed to restrict the flow 

of any confidential information 

associated with the liquidation of an 

error position between the Exchange 

and DE Route, on one hand, and the 

third-party broker-dealer, on the other. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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 self-regulatory 

organization 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 email to rulecomments@sec.gov. Please include File 

Number SR–EDGX–2012–08 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–EDGX–2012–08. 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 

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20858 Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 

17 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. 65646 

(October 27, 2011), 76 FR 67783 (November 2, 2011) 

(SR–BATS–2011–033). 

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 the 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 

available publicly. All submissions 

should refer to File Number SR–EDGX– 

2012–08 and should be submitted on or 

before April 27, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–8271 Filed 4–5–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66723; File No. SR–BATS– 

2012–014] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Certificate 

of Incorporation of BATS Global 

Markets, Inc. 

April 3, 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 19, 

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 the 

certificate of incorporation of BATS 

Global Markets, Inc. (the 

‘‘Corporation’’). 

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 

On May 13, 2011, the Corporation, the 

sole stockholder of the Exchange, filed 

a registration statement on Form S–1 

with the Commission seeking to register 

shares of Class A common stock and to 

conduct an initial public offering of 

those shares, which will be listed for 

trading on the Exchange (the ‘‘IPO’’). In 

connection with its IPO, the Corporation 

intends to amend and restate its 

certificate of incorporation (the ‘‘New 

Certificate of Incorporation’’). The 

Exchange previously received 

Commission approval of certain 

substantive amendments to the 

certificate of incorporation of the 

Corporation that comprise changes 

included in the New Certificate of 

Incorporation.3 Since that date, the 

Corporation has determined it to be 

necessary to further amend its certificate 

of incorporation to achieve the final, 

pre-IPO version of the New Certificate of 

Incorporation. These additional 

amendments will be achieved through 

the filing with the State of Delaware of 

an Amended and Restated Certificate of 

Incorporation as well as a certificate of 

amendment to the Amended and 

Restated Certificate of Incorporation. 

The additional amendments are 

described in further detail below. 

First, to avoid confusion in the 

numbering of its certificate of 

incorporation, rather than re-naming the 

New Certificate of Incorporation the 

‘‘Third Amended and Restated 

Certificate of Incorporation,’’ the 

Corporation intends to simply name the 

New Certificate of Incorporation the 

‘‘Amended and Restated Certificate of 

Incorporation.’’ Accordingly, the 

Exchange proposes to change certain 

references throughout the New 

Certificate of Incorporation to delete all 

references to the ‘‘Second’’ and ‘‘Third’’ 

Amended and Restated Certificate of 

Incorporation. 

Second, the Exchange, on behalf of 

the Corporation, proposes changes to 

the New Certificate of Incorporation in 

connection with a 4.75-for-1 reverse 

stock split (the ‘‘Reverse Stock Split’’) of 

the outstanding shares of common stock 

of the Corporation (‘‘Common Stock’’). 

Accordingly, the number of authorized 

shares of the Corporation’s, both in the 

aggregate and as set forth by class, as 

codified in Section 4.01 of the New 

Certificate of Incorporation, will be 

adjusted. The Corporation also plans to 

adjust the preferred stock of the 

Corporation consistent with the Reverse 

Stock Split. In light of the Reverse Stock 

Split, the proposed amendment also 

recalculates the share holding threshold 

below which a holder of Class B shares 

loses the right to hold Class B shares, 

resulting in those shares automatically 

converting into Class A shares, as set 

forth in Section 4.04(c)(v)(B) of the New 

Certificate of Incorporation. The par 

value of the Corporation’s Common 

Stock will remain $0.01 per share. 

Finally, the Exchange, on behalf of the 

Corporation, proposes to correct certain 

cross-referencing errors in Sections 

5.01(c) and 5.01(d) of the certificate of 

incorporation. 

The purpose of this rule filing is to 

permit the Corporation, the sole 

stockholder of the Exchange, to adopt 

the New Certificate of Incorporation, as 

modified by this proposal. The changes 

described herein relate to the certificate 

of incorporation of the Corporation 

only, not to the governance of the 

Exchange. The Exchange will continue 

to be governed by its existing certificate 

of incorporation and by-laws. The stock 

in, and voting power of, the Exchange 

will continue to be directly and solely 

held solely by the Corporation. The 

governance of the Exchange will 

mstockstill on DSK4VPTVN1PROD with NOTICES