57172 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 4 17 CFR 240.15c3–1. 

All submissions should refer to File 

Number SR-BATS–2008–004. 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 inspection and copying 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 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 Number SR-BATS– 

2008–004 and should be submitted on 

or before October 22, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22961 Filed 9–30–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58644; File No. SR–BATS– 

2008–005] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend BATS 

Rulebook Chapter XI To Add Four New 

Rules Regarding the Registration and 

Obligations of Market Makers and 

Amend Rule 1.5 To Add Definitions of 

‘‘Market Maker’’ and ‘‘Market Maker 

Authorized Trader’’ 

September 25, 2008. 

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 

September 19, 2008, BATS Exchange, 

Inc. (‘‘BATS’’ or the ‘‘Exchange’’) 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. 

BATS has designated the proposed rule 

change as constituting a noncontroversial rule change under Rule 

19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. 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 to amend 

Chapter XI of the BATS Rulebook to add 

four new rules which would provide for 

the registration and obligations of 

market makers, as well as amending 

Rule 1.5 to add the definitions of 

‘‘Market Maker’’ and ‘‘Market Maker 

Authorized Trader.’’ 

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 purpose of the proposed rule 

change is to provide Members the 

ability to register as Market Makers and 

to provide for the regulation of Market 

Makers. The process for registration as 

a Market Maker is contained in 

Proposed Rule 11.5, which provides that 

applicants must file applications in 

such form as the Exchange may 

prescribe. Applicants will be reviewed 

by the Exchange, which will consider 

factors including the capital, operations, 

personnel, technical resources, and 

disciplinary history of the applicant. 

Each Market Maker must have and 

maintain the minimum net capital of at 

least the amount required by Rule 15c3– 

1 of the Exchange Act.4 Pursuant to the 

Proposed Rule, an applicant’s 

registration as a Market Maker will 

become effective upon receipt by the 

Member of the Exchange’s notice of 

approval of registration. The Proposed 

Rule also provides that the registration 

of a Market Maker may be suspended or 

terminated by the Exchange if the 

Exchange determines that the Market 

Maker substantially or continually 

failed to engage in dealings in 

accordance with Exchange Rules, if the 

Market Maker fails to meet the 

minimum net capital conditions, or the 

Market Maker fails to maintain fair and 

orderly markets. 

Proposed Rule 11.6 provides for the 

registration and obligations of Market 

Maker Authorized Traders (‘‘MMATs’’). 

The Exchange can register a person as 

a MMAT upon receiving an application 

in the form prescribed, and MMATs are 

permitted to enter orders only for the 

account of the Market Maker for which 

they are registered. MMATs may be 

officers, partners, employees or other 

associated persons of Members who are 

registered as Market Makers. To be 

eligible for registration as a MMAT, a 

person must complete the training and 

other programs required by the 

Exchange and successfully complete the 

General Securities Representative 

Examination (Series 7). Market Makers 

must ensure that their MMATs are 

properly qualified to perform market 

making activities. The Exchange may 

suspend or withdraw the registration of 

a MMAT if the Exchange determines 

that the person has caused the Market 

Maker to fail to comply with the 

securities laws or rules of the Exchange, 

if the person fails to perform his or her 

responsibilities properly, or fails to 

maintain fair and orderly markets. If a 

MMAT is suspended, the Market Maker 

may not allow the person to submit 

orders. In addition, the registration of a 

MMAT may be withdrawn upon the 

written request of the Member for which 

the MMAT is registered. 

Proposed Rule 11.7 provides for the 

registration of Market Makers in a 

security. A Market Maker may become 

registered in a newly authorized 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 57173 

5See electronic mail from Anders Franzon, 

Associate General Counsel, BATS Trading, Inc., to 

Sarah Albertson, Attorney, Division of Trading and 

Markets, Commission, dated September 23, 2008. 

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

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

8See NSX Rules 1.5 and 11.5 through 11.8. 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4. 

11 17 CFR 240.19b–4(f)(6)(iii). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

security or in a security already 

admitted to dealings on the Exchange by 

filing a security registration form with 

the Exchange. In considering the 

approval of the registration of the 

Market Maker in a security, the 

Exchange may consider the financial 

resources available to the Market Maker, 

the Market Maker’s experience in 

making markets, the Market Maker’s 

operational capability, the maintenance 

and enhancement of competition among 

Market Makers in each security in 

which they are registered, the existence 

of clearing arrangements for the Market 

Maker’s transactions, and the character 

of the market for the security. The 

Proposed Rule also provides that a 

Market Maker may voluntarily terminate 

its registration in a security by 

providing the Exchange with a written 

notice of such termination. The 

Exchange may require a certain 

minimum prior notice period for such 

termination and may place other 

conditions on withdrawal and reregistration following withdrawal. The 

Exchange may suspend or terminate any 

registration of a Market Maker in a 

security whenever it determines that the 

Market Maker has not met any of its 

obligations or has failed to maintain fair 

and orderly markets. 

Finally, Proposed Rule 11.8 sets out 

the obligations of Market Makers. In 

general, Market Makers must engage in 

a course of dealings for their own 

account to assist in the maintenance, 

insofar as reasonably practicable, of fair 

and orderly markets on the Exchange. 

The responsibilities of Market Makers 

include, among other things, 

maintaining continuous limit orders to 

buy and to sell for round lots in those 

securities in which the Market Maker is 

registered to trade. Market Makers will 

be responsible for the acts and 

omissions of its MMATs. If the 

Exchange finds any substantial or 

continued failure by a Market Maker to 

engage in a course of dealing as 

specified in this Rule, such Market 

Maker will be subject to disciplinary 

action or suspension or revocation of its 

registration. A Market Maker may apply 

to withdraw temporarily from its Market 

Maker status in the securities for which 

it is registered and must base this 

request on demonstrated legal or 

regulatory requirements that necessitate 

its temporary withdrawal.5

These proposed rules will benefit all 

Exchange participants, because Market 

Makers will assist in the maintenance of 

fair and orderly markets, provide 

additional liquidity to the Exchange, 

and assist in preventing excess 

volatility. 

2. Statutory Basis 

The Exchange believes the 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).6 In particular, the 

proposed changes are consistent with 

Section 6(b)(5) of the Act,7 because they 

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 by creating greater liquidity in 

the Exchange market. 

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 

No written comments were solicited 

or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rules are based on the 

approved rules of another selfregulatory organization.8 In addition, 

the Exchange believes that the proposed 

rules will benefit all Exchange 

participants, because Market Makers 

will assist in the maintenance of fair 

and orderly markets, provide additional 

liquidity to the Exchange, and assist in 

preventing excess volatility. 

Accordingly, the Exchange has 

designated this rule filing as noncontroversial under Section 19(b)(3)(A) 

of the Act 9 and paragraph (f)(6) of Rule 

19b–4 thereunder.10 In accordance with 

Rule 19b–4(f)(6)(iii),11 the Exchange 

submitted written notice of its 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. 

Because the foregoing proposed rule 

change is non-controversial and 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 12 and Rule 19b– 

4(f)(6) thereunder.13

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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. 

III. 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–BATS–2008–005 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BATS–2008–005. 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 inspection and copying in 

the Commission’s Public Reference 


jlentini on PROD1PC65 with NOTICES
57174 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 

14 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. 58176 

(July 16, 2008), 73 FR 42844 (July 23, 2008) (SR– 

FINRA–2008–021) (‘‘Release No. 34–58176’’). 

4See Securities Exchange Act Release No. 58206 

(July 22, 2008), 73 FR 43808 (July 28, 2008) (SR– 

FINRA–2008–022). 

5See Securities Exchange Act Release No. 58095 

(July 3, 2008), 73 FR 39751 (July 10, 2008) (SR– 

FINRA–2008–028). 

6See Securities Exchange Act Release No. 58245 

(July 29, 2008), 73 FR 46106 (August 7, 2008) (SR– 

FINRA–2008–026). 

Room, 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– 

2008–005 and should be submitted on 

or before October 22, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23041 Filed 9–30–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58643; File Nos. SR– 

FINRA–2008–021; SR–FINRA–2008–022; 

SR–FINRA–2008–026; SR–FINRA–2008–028 

and SR–FINRA–2008–029] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change, as Modified by 

Amendment No. 1, Relating to the 

Adoption of NASD Rules 4000 Through 

10000 Series and the 12000 Through 

14000 Series as FINRA Rules in the 

New Consolidated FINRA Rulebook; 

Order Approving Proposed Rule 

Change Relating to the Membership 

Waive-In Process for Certain New York 

Stock Exchange Members; Order 

Approving Proposed Rule Change, as 

Modified by Amendment No. 1, To 

Adopt the FINRA Rule 0100 Series 

(General Standards) in the 

Consolidated FINRA Rulebook; Order 

Approving Proposed Rule Change To 

Adopt FINRA Rule 2010 (Standards of 

Commercial Honor and Principles of 

Trade), FINRA Rule 2020 (Use of 

Manipulative, Deceptive or Other 

Fraudulent Devices), and FINRA Rule 

5150 (Fairness Opinions) in the 

Consolidated FINRA Rulebook; and 

Order Approving Proposed Rule 

Change, as Modified by Amendment 

No. 1, To Repeal NASD Rule 1130 and 

Incorporated Rules 405A, 440F, 440G 

and 447 as Part of the Process of 

Developing the Consolidated FINRA 

Rulebook 

September 25, 2008. 

I. Introduction 

On May 23, 2008, the Financial 

Industry Regulatory Authority, Inc 

(‘‘FINRA’’) (f/k/a National Association 

of Securities Dealers, Inc. (‘‘NASD’’)), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’ or 

‘‘Exchange’’), 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 

adopt the following NASD rules (which 

are part of the existing FINRA rulebook) 

as FINRA rules into a new consolidated 

rulebook (‘‘Consolidated FINRA 

Rulebook’’): The 4000 through 10000 

Series and the 12000 through 14000 

Series (collectively, the ‘‘Marketplace 

and Procedural Rules Proposal’’). The 

Marketplace and Procedural Rules 

Proposal, as modified by Amendment 

No. 1, was published for comment in 

the Federal Register on July 23, 2008.3

The Commission received no comments 

on the Marketplace and Procedural 

Rules Proposal. This order approves the 

Marketplace and Procedural Rules 

Proposal, as modified by Amendment 

No. 1. 

On May 23, 2008, FINRA filed with 

the Commission, pursuant to Section 

19(b)(1) of the Act and Rule 19b–4 

thereunder, a proposed rule change 

relating to the membership waive-in 

process for certain New York Stock 

Exchange LLC (‘‘NYSE’’) members 

(‘‘Waive-In Firms Proposal’’). The 

Waive-In Firms Proposal was published 

for comment in the Federal Register on 

July 28, 2008.4 The Commission 

received no comments on the Waive-In 

Firms Proposal. This order approves the 

Waive-In Firms Proposal. 

On June 13, 2008, FINRA filed with 

the Commission, pursuant to Section 

19(b)(1) of the Act and Rule 19b–4 

thereunder, a proposed rule change to 

adopt FINRA Rule 2010 (Standards of 

Commercial Honor and Principles of 

Trade), FINRA Rule 2020 (Use of 

Manipulative, Deceptive or Other 

Fraudulent Devices), and FINRA Rule 

5150 (Fairness Opinions) in the 

Consolidated FINRA Rulebook 

(collectively, the ‘‘Ethical Conduct and 

Fairness Opinion Rules Proposal’’). The 

Ethical Conduct and Fairness Opinion 

Rules Proposal was published for 

comment in the Federal Register on July 

10, 2008.5 The Commission received no 

comments on this proposed rule change. 

This order approves the Ethical Conduct 

and Fairness Opinion Rules Proposal. 

On June 16, 2008, FINRA filed with 

the Commission, pursuant to Section 

19(b)(1) of the Act and Rule 19b–4 

thereunder, a proposed rule change to 

adopt the FINRA Rule 0100 Series 

(General Standards) in the Consolidated 

FINRA Rulebook (‘‘General Standards 

Proposal’’). The General Standards 

Proposal, as modified by Amendment 

No. 1, was published for comment in 

the Federal Register on August 7, 2008.6

The Commission received no comments 

on the General Standards Proposal. This 

order approves the General Standards 

Proposal as modified by Amendment 

No. 1. 


jlentini on PROD1PC65 with NOTICES