Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices 57097 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Securities Exchange Act Release No. 34– 

62716 (August 13, 2010), 75 FR 51295 (August 19, 

2010) (order approving application of BATS Y– 

Exchange, Inc. for registration as a national 

securities exchange). 

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 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–Phlx–2010–121 and should 

be submitted on or before October 8, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23261 Filed 9–16–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62901; File No. SR–BATS– 

2010–024] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt BATS Rule 

2.12, Entitled ‘‘BATS Trading, Inc. as 

Inbound Router’’ and To Make Related 

Changes 

September 13, 2010. 

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 

September 9, 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 

Exchange has designated this proposal 

as a ‘‘non-controversial’’ proposed rule 

change pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it 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 proposes to adopt new 

BATS Rule 2.12, entitled ‘‘BATS 

Trading, Inc. as Inbound Router’’ and to 

make other related changes. 

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 August 13, 2010, the Commission 

approved the application of BATS Y– 

Exchange, Inc. (‘‘BYX’’), an affiliate of 

the Exchange, to register as a national 

securities exchange.5 Included in the 

approved rules of BYX is BYX Rule 

2.12, which governs the routing of 

orders by BYX’s (and the Exchange’s) 

affiliated broker-dealer, BATS Trading, 

Inc. (‘‘BATS Trading’’) to BYX as 

inbound router in its capacity as a 

routing facility of the Exchange. The 

Exchange is proposing to adopt the 

same inbound routing rule, also 

numbered Rule 2.12, which will govern 

BATS Trading’s status as an inbound 

router that sends orders to the Exchange 

in its capacity as a routing facility of 

BYX. Pursuant to proposed Rule 2.12, 

BATS Trading’s inbound routing 

services from BYX to the Exchange 

would be subject to the following 

conditions and limitations: 

(1) The Exchange must enter into (1) 

a plan pursuant to Rule 17d–2 under the 

Act with a non-affiliated self-regulatory 

organization (‘‘SRO’’) to relieve the 

Exchange of regulatory responsibilities 

for BATS Trading with respect to rules 

that are common rules between the 

Exchange and the non-affiliated SRO, 

and (2) a regulatory services contract 

(‘‘Regulatory Contract’’) with a nonaffiliated SRO to perform regulatory 

responsibilities for BATS Trading for 

unique Exchange rules. 

(2) The Regulatory Contract must 

require the Exchange to provide the 

non-affiliated SRO with information, in 

an easily accessible manner, regarding 

all exception reports, alerts, complaints, 

trading errors, cancellations, 

investigations, and enforcement matters 

(collectively ‘‘Exceptions’’) in which 

BATS Trading is identified as a 

participant that has potentially violated 

Exchange or Commission Rules, and 

requires that FINRA provide a report, at 

least quarterly, to the Exchange 

quantifying all Exceptions in which 

BATS Trading is identified as a 

participant that has potentially violated 

Exchange or Commission rules. 

(3) The Exchange, on behalf of its 

parent company, BATS Global Markets, 

Inc., must establish and maintain 

procedures and internal controls 

reasonably designed to ensure that 

BATS Trading does not develop or 

implement changes to its system based 

on non-public information obtained as a 

result of its affiliation with the 

Exchange, until such information is 

available generally to similarly situated 

members of the Exchange. 

The Exchange has proposed adoption 

of new Rule 2.12 on a pilot basis. The 

Exchange requests that this pilot period 

run concurrently with the twelve month 

period for BYX’s receipt of inbound 

routes from the Exchange, which is set 

to expire one year after the 

commencement of operations by BYX. 

BYX currently plans to commence 

operations on October 15, 2010. 

In addition to the adoption of an 

inbound routing rule, the Exchange 

proposes minor modifications to its 

existing rule applicable to BATS 

Trading’s status as an outbound router. 

Specifically, Rule 2.11 currently states 

that BATS Trading will not engage in 

any business other than its outbound 

router function and any other activities 

it may engage in as approved by the 

Commission. The Exchange proposes to 

add acting as inbound router to the list 

of activities in which BATS Trading 

will engage. 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
57098 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices 

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

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

8 15 U.S.C. 78s(b)(3)(A). 

9 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. 10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In addition to FLEX Options, FLEX currency 

options are also traded on the Exchange. These 

flexible index, equity, and currency options provide 

investors the ability to customize basic option 

features including size, expiration date, exercise 

style, and certain exercise prices; and may have 

expiration dates within five years. See Rule 1079. 

FLEX currency options traded on the Exchange are 

also known as FLEX World Currency Options 

(‘‘WCO’’) or Foreign Currency Options (‘‘FCO’’). The 

new pilot program proposed in this filing does not 

encompass currency options. 

Finally, due to the adoption of Rule 

2.12, the Exchange proposes to renumber existing Rule 2.12 as 2.13. 

2. Statutory Basis 

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.6

In particular, the proposed change is 

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

Act,7 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, by implementing a rule to 

allow BATS Trading, Inc. to route 

orders to the Exchange in its capacity as 

an order routing facility of BYX. 

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 8 and Rule 19b– 

4(f)(6)(iii) thereunder.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 e-mail to rulecomments@sec.gov. Please include File 

No. SR–BATS–2010–024 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–2010–024. 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 BATS. 

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–2010–024 and should be 

submitted on or before October 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23299 Filed 9–16–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62900; File No. SR–Phlx– 

2010–123] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Establish a 

New FLEX Options Pilot Program 

September 13, 2010. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on 

September 2, 2010, NASDAQ OMX 

PHLX LLC (‘‘Phlx’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (the ‘‘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 replace the 

150 contract FLEX minimum value pilot 

program with a new pilot program that 

eliminates minimum value sizes for 

equity-traded FLEX index options and 

FLEX equity options (together known as 

‘‘FLEX Options’’).3 The text of the 

proposed rule change is available on the 

Exchange’s Web site at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1