Document ID: SEC-2010-1177-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2010-08-04T04:00Z

[Federal Register: August 4, 2010 (Volume 75, Number 149)]
[Notices]               
[Page 47043-47045]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au10-100]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62595; File No. SR-BATS-2010-019]

 
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Add 
Seventy-Five Options Classes to the Penny Pilot Program

July 29, 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 July 26, 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 filing with the Commission a proposal for the BATS 
Exchange Options Market (``BATS Options'') to designate seventy-five 
options classes to be added to the Penny Pilot Program (``Penny 
Pilot'') on August 2, 2010. The Exchange is not proposing to amend any 
rule text, but simply administering or enforcing an existing rule.\3\
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    \3\ See Rule 21.5 regarding the Penny Pilot.
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    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 this filing is to identify the next seventy-five 
options classes to be added to the Penny Pilot effective August 2, 
2010. In the Exchange's filing to adopt rules to govern BATS 
Options,\4\ the Exchange proposed commencing operations for BATS 
Options by trading all options classes that were, as of such date, 
traded by other options exchanges pursuant to the Penny Pilot and then 
expanding the Penny Pilot on a quarterly basis, 75 classes at a time, 
through August 2010. Each such quarterly expansion would be of the 
seventy-five most actively traded multiply listed options classes based 
on the national average daily volume (``ADV'') for the six months prior 
to selection, closing under $200 per share on the Expiration Friday 
prior to expansion, except that the month immediately preceding the 
addition of options to the Penny Pilot would not be used for the 
purpose of the six month analysis. Index option products would be 
included in the quarterly expansions if the underlying index levels 
were under 200.
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    \4\ See Securities Exchange Act Release No. 61097 (December 2, 
2009), 74 FR 64788 (December 8, 2009) (SR-BATS-2009-031) (Notice of 
Filing of Proposed Rule Change to Establish Rules Governing the 
Trading of Options on the BATS Options Exchange).
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    The Exchange is identifying, in the chart below, seventy-five 
options classes that it will add to the Penny Pilot on August 2, 2010, 
based on ADVs for the six months ending June 30, 2010.

--------------------------------------------------------------------------------------------------------------------------------------------------------
           Nat'l ranking                   Symbol               Security name            Nat'l ranking           Symbol              Security name
--------------------------------------------------------------------------------------------------------------------------------------------------------
199...............................  MBI.................  MBIA Inc.................  316.................  CB                  Chubb Corp
205...............................  MA..................  Mastercard Inc...........  320.................  ADM                 Archer-Daniels-Midland Co
224...............................  ATPG................  ATP Oil & Gas Corp/United  322.................  HSY                 Hershey Co/The
                                                           States.
226...............................  YUM.................  Yum! Brands Inc..........  323.................  TXT                 Textron Inc
232...............................  RCL.................  Royal Caribbean Cruises    324.................  GGP                 General Growth Properties
                                                           Ltd.                                                                 Inc

[[Page 47044]]

238...............................  BPOP................  Popular Inc..............  325.................  NOV                 National Oilwell Varco
                                                                                                                                Inc
248...............................  EK..................  Eastman Kodak Co.........  326.................  TWX                 Time Warner Inc
252...............................  CNX.................  Consol Energy Inc........  327.................  XOP                 SPDR S&P Oil & Gas
                                                                                                                                Exploration & Production
                                                                                                                                ETF
260...............................  DCTH................  Delcath Systems Inc......  328.................  MYL                 Mylan Inc/PA
274...............................  MTG.................  MGIC Investment Corp.....  329.................  TSO                 Tesoro Corp
277...............................  PXP.................  Plains Exploration &       330.................  CI                  CIGNA Corp
                                                           Production Co.
278...............................  GPS.................  Gap Inc/The..............  331.................  ESI                 ITT Educational Services
                                                                                                                                Inc
280...............................  TSL.................  Trina Solar Ltd..........  332.................  NKE                 NIKE Inc
282...............................  EWW.................  iShares MSCI Mexico        335.................  FIS                 Fidelity National
                                                           Investable Market Index                                              Information Services Inc
                                                           Fund.
283...............................  CRM.................  Salesforce.com Inc.......  336.................  SUN                 Sunoco Inc
286...............................  SWN.................  Southwestern Energy Co...  338.................  BBBY                Bed Bath & Beyond Inc
287...............................  HBAN................  Huntington Bancshares Inc/ 340.................  APWR                A-Power Energy Generation
                                                           OH.                                                                  Systems Ltd
288...............................  EOG.................  EOG Resources Inc........  341.................  FWLT                Foster Wheeler AG
290...............................  APA.................  Apache Corp..............  342.................  LNC                 Lincoln National Corp
291...............................  VVUS................  Vivus Inc................  343.................  RSH                 RadioShack Corp
292...............................  JDSU................  JDS Uniphase Corp........  344.................  TYC                 Tyco International Ltd
293...............................  ACI.................  Arch Coal Inc............  345.................  CL                  Colgate-Palmolive Co
294...............................  NE..................  Noble Corp...............  346.................  FXP                 ProShares UltraShort FTSE/
                                                                                                                                Xinhua China 25
296...............................  BAX.................  Baxter International Inc.  347.................  NTAP                NetApp Inc
297...............................  ADSK................  Autodesk Inc.............  348.................  SO                  Southern Co
299...............................  KRE.................  SPDR KBW Regional Banking  349.................  PHM                 Pulte Group Inc
                                                           ETF.
300...............................  XL..................  XL Group Plc.............  350.................  HOT                 Starwood Hotels & Resorts
                                                                                                                                Worldwide Inc
302...............................  WLT.................  Walter Energy Inc........  351.................  QLD                 ProShares Ultra QQQ
303...............................  IBN.................  ICICI Bank Ltd...........  352.................  VRSN                VeriSign Inc
305...............................  EWY.................  iShares MSCI South Korea   353.................  PCL                 Plum Creek Timber Co Inc
                                                           Index Fund.
306...............................  WHR.................  Whirlpool Corp...........  354.................  NBR                 Nabors Industries Ltd
307...............................  BHI.................  Baker Hughes Inc.........  355.................  ESRX                Express Scripts Inc
308...............................  KMP.................  Kinder Morgan Energy       356.................  ACAS                American Capital Ltd
                                                           Partners LP.
309...............................  MRO.................  Marathon Oil Corp........  357.................  XLNX                Xilinx Inc
310...............................  AGO.................  Assured Guaranty Ltd.....  358.................  DO                  Diamond Offshore Drilling
                                                                                                                                Inc
311...............................  GIS.................  General Mills Inc........  359.................  CMA                 Comerica Inc
312...............................  ANR.................  Alpha Natural Resources    360.................  KEY                 KeyCorp
                                                           Inc.
314...............................  GENZ................  Genzyme Corp.............  ....................  ..................  .........................
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2. Statutory Basis
    The Exchange believes that its 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) of the Act.\5\ In particular, the 
Exchange believes that the proposal is consistent with Section 6(b)(5) 
of the Act,\6\ 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, by identifying the 
options classes to be added to the Penny Pilot in a manner consistent 
with prior approvals and filings.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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

    Pursuant to Section 19(b)(3)(A)(i) of the Act \7\ and paragraph 
(f)(1) of Rule 19b-4 thereunder,\8\ the Exchange has designated this 
proposal as one constituting a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(i).
    \8\ 17 CFR 240.19b-4(f)(1).
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    At any time within the 60-day period beginning on the date 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 proposal 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 rule-comments@sec.gov. Please include 
File No. SR-BATS-2010-019 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-2010-019. This file 
number should be included on the subject line if e-mail is used. To 
help the

[[Page 47045]]

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 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 No. SR-BATS-2010-019 and should be submitted on or 
before August 25, 2010.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19221 Filed 8-3-10; 8:45 am]
BILLING CODE 8010-01-P