[Federal Register Volume 75, Number 99 (Monday, May 24, 2010)]
[Notices]
[Pages 28834-28836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12412]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62121; File No. SR-BATS-2010-014]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing of Proposed Rule Change To Amend BATS Rule 11.18, Entitled 
``Trading Halts Due to Extraordinary Market Volatility''

May 19, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the

[[Page 28835]]

``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 18, 2010, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend BATS Rule 11.18, entitled 
``Trading Halts Due to Extraordinary Market Volatility.''
    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 primary listing markets for U.S. stocks are in the process of 
amending their rules so that they may, from time to time, issue a 
trading pause for an individual security if the price of such security 
moves 10% or more from a sale in a preceding five-minute period. The 
Exchange is proposing the rule change described below in consultation 
with other markets and Commission staff to provide for uniform market-
wide trading pause standards for individual securities in the S&P 
500[supreg] Index that experience rapid price movement, as set forth 
below. The Exchange is not currently the primary listing market for any 
securities, and thus, will not be issuing any trading pauses pursuant 
to its rules.
    The Exchange proposes to add a new paragraph to BATS Rule 11.18 to 
allow the Exchange to pause trading in an individual stock when the 
primary listing market for such stock issues a trading pause in any 
Circuit Breaker Securities, as defined below and in proposed 
Interpretation and Policy .05 of Rule 11.18. If, however, trading has 
not resumed on the primary listing market and ten minutes have passed 
since the individual stock trading pause message has been received from 
the responsible single plan processor, the Exchange may resume trading 
in such stock.
    The proposed rule would apply to trading pauses issued by primary 
listing markets in ``Circuit Breaker Securities'', as defined in 
proposed Interpretation and Policy .05. Specifically, on a pilot basis, 
set to end on December 10, 2010, Circuit Breaker Securities would mean 
the securities included in the S&P 500[supreg] Index.
    In addition to adding a new paragraph to Rule 11.18 as paragraph 
(d), and renaming existing paragraph (d) as paragraph (e), the Exchange 
has also proposed minor changes to Rule 11.18. To make clear that the 
existing trading halt described in Rule 11.18 applies to all stocks 
traded on the Exchange, the Exchange has added the word ``all'' to the 
text of paragraphs (a) and (b) of Rule 11.18. Finally, the Exchange has 
proposed certain minor changes to the references in its rules, 
specifically: (1) Deleting references to the number of the Rule to 
avoid inaccurate cross-references in the event there are other changes 
to the Exchange's Rules; and (2) renaming sections .01 to .04 and 
proposed section .05 of the Rule as ``Interpretations and Policies'' 
rather than ``Commentary'' to be consistent with the rest of the 
Exchange's rules.
2. Statutory Basis
    Approval of the rule change proposed in this submission 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\ In particular, the proposed change is consistent with 
Section 6(b)(5) of the Act,\4\ because it would promote just and 
equitable principles of trade, remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, protect investors and the public interest. The proposed 
rule change is also designed to support the principles of Section 
11A(a)(1) \5\ of the Act in that it seeks to assure fair competition 
among brokers and dealers and among exchange markets. The Exchange 
believes that the proposed rule meets these requirements in that it 
promotes transparency and uniformity across markets concerning 
decisions to pause trading in a security when there are significant 
price movements.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
    \5\ 15 U.S.C. 78k-1(a)(1).
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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

    Within 35 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 the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.\6\
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    \6\ The Commission notes that the Exchange has requested 
accelerated approval of the filing.
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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 Exchange Act. Comments may be submitted 
by any of the following methods:

Electronic Comments

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#6b191e070e46080406060e051f182b180e08450c041d"><span class="__cf_email__" data-cfemail="8cfef9e0e9a1efe3e1e1e9e2f8ffccffe9efa2ebe3fa">[email protected]</span></a>. Please include 
File Number SR-BATS-2010-014 on the subject line.

[[Page 28836]]

Paper Comments

    <bullet> 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-2010-014. 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 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-BATS-2010-014 and should be 
submitted on or before June 3, 2010.\7\
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    \7\ The Commission believes that a 10-day comment period is 
reasonable, given the urgency of the matter. It will provide 
adequate time for comment.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12412 Filed 5-21-10; 8:45 am]
BILLING CODE 8010-01-P


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