Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices 25787 

6Changes to Exhibit A are not required to be filed 

with the Commission. See Securities Exchange Act 

Release No. 57118 (January 9, 2008) 73 FR 2970 

(January 16, 2008) (File No. SR–OCC–2007–19). 

7 15 U.S.C. 78s(b)(3)(A)(i). 

8 17 CFR 240.19b–4(f)(1). 

9 17 CFR 200.30–3(a)(12). 

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). 

Diamonds Trust (‘‘DIA’’), as eligible 

contracts, but the filing did not 

specifically certify them as such. 

As noted in SR–OCC–2008–03, OCC 

had not included security futures on 

ETFs based on broad-based stock 

indices as eligible contracts in the OCC– 

CME cross-margining program because 

it was awaiting the issuance of an order 

by the Commodity Futures Trading 

Commission (‘‘CFTC’’) providing relief 

from certain provisions of Section 4d(a) 

of the Commodity Exchange Act. The 

CFTC staff recently contacted OCC and 

CME to request that each organization 

separately file with the CFTC rule 

changes certifying futures on SPY and 

DIA as eligible cross-margining 

contracts in connection with the 

issuance of the order.6 Although OCC 

functions as an SEC-registered clearing 

agency in connection with the OCC– 

CME cross-margin program, the CFTC 

made the request of OCC in its capacity 

as a CFTC-registered derivatives 

clearing organization. In response, OCC 

is submitting this filing to certify that 

futures on SPY and DIA will be eligible 

contracts for the OCC–CME crossmargining program upon issuance of the 

CFTC order and has attached as Exhibit 

5A to the filing of proposed rule change 

a current Exhibit A to the OCC–CME 

XM Agreement. 

The proposed change is consistent 

with Section 17A of the Act because it 

enhances the utility of an existing crossmargining program by permitting the 

inclusion of contracts that did not exist 

at the time the program was originally 

implemented. Cross-margining reduces 

systemic risk while providing lower 

margin costs to participants. Therefore, 

expanding the positions that may be 

included in cross-margining is 

beneficial to the clearing system and its 

participants. The proposed rule change 

is not inconsistent with the existing 

rules of OCC, including any other rules 

proposed to be amended. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC does not believe that the 

proposed rule change would impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants, or Others 

Written comments were not and are 

not intended to be solicited with respect 

to the proposed rule change, and none 

have been received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(i) of the Act 7 and Rule 19b– 

4(f)(1) 8 thereunder because the proposal 

constitutes an interpretation with 

respect to the meaning, administration, 

or enforcement of an existing rule of 

OCC. At any time within sixty days of 

the filing of such 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. 

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 

Number SR–OCC–2009–09 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–OCC–2009–09. 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, 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 OCC. 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–OCC–2009–09 and should 

be submitted on or before June 19, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12514 Filed 5–28–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59963; File No. SR–BATS– 

2009–012] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend BATS Rules 

To Offer an After Hours Trading 

Session 

May 21, 2009. 

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 May 20, 

2009, BATS Exchange, Inc. (‘‘BATS’’ or 

the ‘‘Exchange’’) 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 ‘‘noncontroversial’’ 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. 

mstockstill on PROD1PC66 with NOTICES

25788 Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices 

5As defined in current BATS Rule 1.5(v), which 

the Exchange proposes to re-number as BATS Rule 

1.5(w). 6As defined in BATS Rule 14.1(c). 

7See, e.g., NASDAQ Rule 4631, NYSE Arca 

Equities Rule 7.34(e), and ISE Rule 2102, 

Interpretation and Policy .04 and .05. 

8See, e.g., NYSE Arca Equities Rule 7.34(a)(4); 

ISE Rule 2102(e). 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

BATS Rules in order to begin offering a 

trading session after the close of Regular 

Trading Hours 5 (the ‘‘After Hours 

Trading Session’’) that will last from 4 

to 5 p.m. Eastern Time. 

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 currently allows 

trading during a Pre-Opening Session 

that lasts from 8 a.m. to 9:30 a.m. 

Eastern Time, with Regular Trading 

Hours lasting from 9:30 a.m. to 4 p.m. 

Eastern Time. The purpose of the 

proposed rule change is to amend BATS 

Rules in order to allow trading on the 

Exchange during an After Hours Trading 

Session that will last from 4 to 5 p.m. 

Eastern Time. Thus, in addition to 

adding a definition to BATS Rule 1.5 for 

the ‘‘After Hours Trading Session,’’ the 

Exchange has proposed to add a 

reference to the After Hours Trading 

Session to Exchange Rules that address 

trading outside of Regular Trading 

Hours (currently only through the PreOpening Session). The Exchange has 

also proposed modifications to the 

Time-in-Force section of BATS Rule 

11.9 to indicate that a Good ’til Day 

Order, for which a User must indicate 

an expiration time, can last until the 

close of the After Hours Trading 

Session, and to add a new Time-inForce parameter called a Good ’til 

Extended Day Order (‘‘GTX’’). As 

defined in proposed BATS Rule 

11.9(c)(5), a limit order with a Time-inForce of GTX will be cancelled by the 

close of the After Hours Trading 

Session, if not executed earlier. 

Market Makers registered with the 

Exchange are required to satisfy certain 

obligations, including the requirement 

to maintain continuous two-sided 

quotations in securities in which they 

are registered. Pursuant to BATS Rule 

11.8(b), a Market Maker’s obligations 

apply during Regular Trading Hours on 

days that the Exchange is open for 

business. The Exchange has proposed 

language to clarify that to the extent a 

Market Maker chooses to act as a Market 

Maker outside of Regular Trading 

Hours, such Market Maker must 

comply, while its quotes are open, with 

all applicable Exchange Rules. 

Trading outside of Regular Trading 

Hours involves potential risks, 

including the possibility of less 

information regarding indicative values, 

lower liquidity, higher volatility, 

changing prices, unlinked markets with 

the possibility of trade-throughs, and 

wider spreads. Moreover, trades 

executed during extended hours 

sessions may receive executions at 

inferior prices when compared to the 

high/low of the day. Exchange Rule 

14.1(c)(2) presently requires the 

Exchange to distribute an information 

circular to its Members in connection 

with any UTP Derivative Security 6

traded on the Exchange that includes a 

section advising the Member of the risks 

of trading such security during the PreOpening Session. The Exchange has 

proposed to amend BATS Rule 14.1 to 

also include reference to the After Hours 

Trading Session in paragraph (c)(2), and 

thus, will provide information to its 

Members regarding trading of any UTP 

Derivative Security during the After 

Hours Trading Session in future 

information circulars. 

In addition, and in light of the risks 

described above, the Exchange has 

proposed adding new BATS Rule 3.21 

that will require Exchange Members that 

execute trades on behalf of customers 

during either extended hours session 

offered by the Exchange to provide such 

customers with notice regarding the 

risks of trading during extended hours. 

In order to reduce additional 

compliance burdens with respect to this 

disclosure requirement, the Exchange 

has based BATS Rule 3.21 on the rules 

of other self-regulatory organizations,7

and thus, believes that many or all 

Exchange Members to which proposed 

BATS Rule 3.21 will apply are already 

required to provide such disclosures to 

their customers. 

The information circular requirement 

applicable to the Exchange and the 

customer disclosure requirement 

applicable to Members, along with all 

other equity rules and trading 

surveillance that currently apply to 

trading on the Exchange during the PreOpening Session and Regular Trading 

Hours will apply to the After Hours 

Trading Session. As it currently does 

with trades executed during the PreOpening Session, the Exchange will 

designate all trades executed during the 

After Hours Trading Session 

appropriately when reporting such 

trades through any consolidated 

transaction reporting system. 

The Exchange has also proposed 

adding new Interpretation and Policy 

.01 to BATS Rule 14.1, which explains 

the circumstances under which the 

Exchange will halt trading during the 

Pre-Opening and After Hours Trading 

Sessions. Specifically, as permitted 

pursuant to the rules of other national 

securities exchanges,8 the Exchange 

may continue trading of a UTP 

Derivative Security (as defined in BATS 

Rule 14.1(c)) during the Pre-Opening 

Session if that security commenced 

trading during that session 

notwithstanding an interruption in the 

calculation or wide dissemination of the 

Intraday Indicative Value (‘‘IIV’’) or 

value of the underlying index, as 

applicable. If the IIV or value of an 

underlying index for a UTP Derivative 

Security is not calculated or available 

after the close of Regular Trading Hours 

on the Exchange, the Exchange will only 

trade that UTP Derivative Security to 

the extent the listing market traded the 

security until the close of its regular 

trading session without a halt. If the IIV 

or value of an underlying index for a 

UTP Derivative Security is still 

unavailable or is not being calculated as 

of the beginning of the Pre-Opening 

Session on the next business day, the 

Exchange will not commence trading of 

that security during the Pre-Opening 

Session, and will resume trading of the 

UTP Derivative Security only if the IIV 

or value of an underlying index for that 

UTP Derivative Security is again being 

calculated or widely disseminated, or if 

the listing market resumes trading. 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices 25789 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission 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 of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this notice 

requirement. 14 Id. 15See supra note 7. 16See SR–BATS–2009–012, Item 7. 17 Id. 18For the 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). 19 17 CFR 200.30–3(a)(12). 

In addition to the proposed changes 

described above, the Exchange is 

proposing to make certain nonsubstantive changes to Interpretation 

and Policy .01 of Exchange Rule 8.15 to 

update and correct cross-references to 

other Exchange Rules. 

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.9

Specifically, the proposed change is 

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

Act,10 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. In particular, the proposed rule 

change will allow the Exchange to 

provide a competitive marketplace for 

Exchange Users to trade securities until 

5 p.m. Eastern Time. 

B. Self-Regulatory Organization’s 

Statement of 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 rule change 

does not: (1) Significantly affect the 

protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 11 and Rule 19b– 

4(f)(6) thereunder.12

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.13 However, Rule 19b– 

4(f)(6)(iii) 14 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission notes that 

BATS’ proposal is substantially similar 

to the rules of other national securities 

exchanges and does not raise any new 

substantive issues.15 BATS expects to 

have operational and technological 

changes in place to support the 

proposed rule change on May 26, 

2009.16 In addition, BATS states that the 

proposal does not require significant 

programming efforts by BATS Users or 

other market participants that would 

necessitate a delay.17 Based on the 

foregoing, the Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest and 

hereby designates the proposal 

operative upon filing.18

At any time within 60 days of the 

filing of such 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. 

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–2009–012 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 No. 

SR–BATS–2009–012. 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, 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–2009–012 and should be 

submitted on or before June 19, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12445 Filed 5–28–09; 8:45 am] 

BILLING CODE 8010–01–P 

mstockstill on PROD1PC66 with NOTICES