Document ID: SEC-2011-1368-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2011-09-12T04:00Z

[Federal Register Volume 76, Number 176 (Monday, September 12, 2011)]
[Notices]
[Pages 56249-56254]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23170]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65266; File No. SR-BATS-2011-032]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing of Proposed Rule Change by BATS Exchange, Inc. To Adopt Rules 
Applicable to Auctions Conducted by the Exchange for Exchange-Listed 
Securities

September 6, 2011.
    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 August 22, 2011, 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 proposes to adopt rules governing auctions conducted 
on the Exchange for securities listed on the Exchange.\3\
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    \3\ The Commission notes that the Exchange separately proposed, 
and the Commission approved, rules for the qualification, listing 
and delisting of companies on the Exchange. See Securities Exchange 
Act Release No. 34-65225 (August 30, 2011), 76 FR 55148 (September 
6, 2011) (SR-BATS-2011-018).
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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.

[[Page 56250]]

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 is proposing to adopt rules to govern auctions 
conducted on the Exchange for securities listed on the Exchange 
(``Exchange Auctions'').
Organization
    The Exchange proposes adoption of definitions to govern Exchange 
Auctions in paragraph (a) of new Rule 11.23. Proposed paragraph (b) of 
Rule 11.23 sets forth the process for conducting an opening auction on 
the Exchange (``Opening Auction'') and determining an official opening 
price for dissemination to the consolidated tape (``BATS Official 
Opening Price''). Proposed paragraph (c) applies to the process for 
conducting a closing auction on the Exchange (``Closing Auction'') and 
determining an official closing price for dissemination to the 
consolidated tape (``BATS Official Closing Price''). Finally, proposed 
paragraph (d) describes the Exchange's process for conducting an 
auction in the event of an initial public offering (``IPO'') or a halt 
of trading in the security (``IPO Auction'' or ``Halt Auction'', 
respectively). Each of the Opening Auction, Closing Auction, IPO 
Auction and Halt Auction operated by BATS will be a single-price Dutch 
auction to match buy and sell orders at the price at which the most 
shares would execute.
BATS Auction Feed
    In addition to the adoption of Rule 11.23, described in greater 
detail below, the Exchange proposes to add new paragraph (i) to Rule 
11.22 to describe a new data feed that will be offered by the Exchange 
in connection with auctions conducted by the Exchange, the ``BATS 
Auction Feed.'' The BATS Auction Feed will be available to Exchange 
data recipients \4\ without charge.
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    \4\ Exchange data recipients include Members of the Exchange as 
well as non-Members that have entered into an agreement with the 
Exchange that permits them to receive Exchange data.
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    The BATS Auction Feed will be available to all Exchange data 
recipients equally, and will offer all firms with uncompressed real-
time data regarding the current status of price and size information 
related to auctions conducted by the Exchange. The Exchange will make 
the BATS Auction Feed available to all market participants via 
subscription through an established connection to the Exchange through 
extranets, direct connection, and Internet-based virtual private 
networks.
    The BATS Auction Feed will contain the following data elements:
     Time stamp. The time of the message.
     Reference Price. The Reference Price will be the price 
within the Reference Price Range that maximizes the number of Eligible 
Auction Order (as defined below) shares associated with the lesser of 
the Reference Buy Shares and the Reference Sell Shares as determined at 
each price level within the Reference Price Range, that minimizes the 
absolute difference between Reference Buy Shares and Reference Sell 
Shares, and minimizes the distance from the Volume Based Tie Breaker 
(as defined below).
     Reference Price Range. The Reference Price Range will be 
the range from the best bid on the BATS Book (the ``ZBB'') to the best 
offer on the BATS Book (the ``ZBO'') for a particular security. In the 
event that there is either no ZBB or ZBO for the security, the national 
best bid or offer (``NBBO'') will be used if there is at least one 
limit order on either the Continuous Book or the Auction Book. In the 
event that there is also either no national best bid (``NBB'') or 
national best offer (``NBO'') for the security or no limit orders on 
the Continuous Book and Auction Book, the price of the ``Final Last 
Sale Eligible Trade'' (as defined below) will be used.
     Indicative Price. The Indicative Price will be the price 
at which the most shares from the Auction Book \5\ and the Continuous 
Book \6\ would match.
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    \5\ The term ``Auction Book'' refers to the book of Eligible 
Auction Orders available on the BATS Book.
    \6\ The term ``Continuous Book'' refers to all orders available 
on the Exchange that are not Eligible Auction Orders.
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     Auction Only Price. The Auction Only Price will be the 
price at which the most shares from the Auction Book would match. In 
the event of a volume based tie at multiple price levels, the Opening 
Auction price will be the price closest to the Volume Based Tie 
Breaker.
     Reference Buy Shares. Reference Buy Shares will be the 
total number of shares associated with buy-side Eligible Auction Orders 
that are priced equal to or greater than the Reference Price.
     Reference Sell Shares. Reference Sell Shares will be the 
total number of shares associated with sell-side Eligible Auction 
Orders that are priced equal to or less than the Reference Price.
    For purposes of the BATS Auction Feed, and the auction processes of 
the Exchange generally, the term ``Final Last Sale Eligible Trade'' 
shall mean the last trade occurring during Regular Trading Hours on the 
Exchange if the trade was executed within the last one second prior to 
either the Closing Auction or, for Halt Auctions, trading in the 
security being halted. Where the trade was not executed within the last 
one second, the last trade reported to the consolidated tape received 
by BATS during Regular Trading Hours and, where applicable, prior to 
trading in the security being halted will be used. If there is no 
qualifying trade for the current day, the BATS Official Closing Price 
(as defined below) from the previous trading day will be used.
    By making the BATS Pricing Feed data available, the Exchange 
enhances market transparency and fosters competition among orders and 
markets. At this time, the Exchange does not have plans to charge any 
fee associated with the receipt of the BATS Auction Feed.\7\ Should the 
Exchange determine to charge fees associated with the BATS Auction 
Feed, the Exchange will submit a proposed rule change to the Commission 
in order to implement those fees.
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    \7\ The Exchange does not charge directly for the majority of 
the data feeds that it offers, nor will the Exchange charge for the 
BATS Auction Feed. The Exchange notes that it does charge for ports 
used for receipt of data from the Exchange in order to offset 
certain infrastructure costs. These fees apply to ports associated 
with receipt of all of the Data Feeds except for Multicast PITCH, 
recipients of which are provided with 12 pairs of the requisite 
ports free of charge. See Securities Exchange Act Release No. 60586 
(August 28, 2009), 74 FR 46256 (September 8, 2009) (SR-BATS-2009-
026) (order approving proposal to impose fees for ports used for 
order entry and receipt of market data); see also Securities 
Exchange Act Release No. 63857 (February 7, 2011), 76 FR 7891 
(February 11, 2011) (SR-BATS-2011-004) (notice of filing and 
immediate effectiveness of proposed rule change related to BATS 
Exchange fees, including modification of port fees).
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Order Types To Participate in Auctions
    The Exchange proposes to offer the following order types in 
connection with BATS Opening Auctions:

[[Page 56251]]

     A ``Market-On-Open'' or ``MOO'' order, which will be a 
BATS market order that is designated for execution only in the Opening 
Auction;
     A ``Limit-On-Open'' or ``LOO'' order, which will be a BATS 
limit order that is designated for execution only in the Opening 
Auction; and
     A ``Late-Limit-On-Open'' or ``LLOO'' order, which will be 
a BATS limit order that is designated for execution only in the Opening 
Auction. To the extent a LLOO bid or offer received by the Exchange has 
a limit price that is more aggressive than the ZBB or ZBO, the price of 
such bid or offer is adjusted to be equal to the ZBB or ZBO, 
respectively, at the time of receipt by the Exchange. Where the ZBB or 
ZBO becomes more aggressive, the limit price of the LLOO bid or offer 
will be adjusted to the more aggressive price, only to the extent that 
the more aggressive price is not more aggressive than the original User 
\8\ entered limit price. The limit price will never be adjusted to a 
less aggressive price. In the event that there is no best bid or offer 
on the Exchange (``ZBBO''), the NBBO will be used to constrain the 
limit price. If there is also no NBBO, the LLOO will assume its entered 
limit price.
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    \8\ A ``User'' is defined in BATS Rule 1.5(cc) as any member or 
sponsored participant of the Exchange who is authorized to obtain 
access to the System.
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    The Exchange proposes to offer the following order types in 
connection with BATS Closing Auctions, each of which mirrors an order 
type available for the Opening Auction:
     A ``Market-On-Close'' or ``MOC'' order, which will be a 
BATS market order that is designated for execution only in the Closing 
Auction;
     A ``Limit-On-Close'' or ``LOC'' order, which will be a 
BATS limit order that is designated for execution only in the Closing 
Auction;
     A ``Late-Limit-On-Close'' or ``LLOC'', which will be a 
BATS limit order that is designated for execution only in the Closing 
Auction. To the extent a LLOC bid or offer received by the Exchange has 
a limit price that is more aggressive than the ZBB or ZBO, the price of 
such bid or offer is adjusted to be equal to the ZBB or ZBO, 
respectively, at the time of receipt by the Exchange. Where the ZBB or 
ZBO becomes more aggressive, the limit price of the LLOC bid or offer 
will be adjusted to the more aggressive price, only to the extent that 
the more aggressive price is not more aggressive than the original User 
entered limit price. The limit price will never be adjusted to a less 
aggressive price. In the event that there is no ZBBO, the NBBO will be 
used to constrain the limit price. If there is also no NBBO, the LLOC 
will assume its entered limit price.
    In addition to the order types described above, the Exchange 
proposes to offer a ``Regular Hours Only'' or ``RHO'' order, which will 
be a BATS order that is designated for execution only during Regular 
Trading Hours,\9\ which includes the Opening Auction, the Closing 
Auction, and IPO/Halt Auctions. A RHO order, if not executed in an 
applicable auction can be executed within a BATS Auction or on the 
Exchange's book outside of a BATS Auction but will not be subject to 
execution outside of Regular Trading Hours.
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    \9\ As defined in Rule 1.5(w), ``Regular Trading Hours'' is the 
time between 9:30 a.m. and 4 p.m. Eastern Time.
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Opening Auction
Order Entry and Cancellation Before Opening Auction
    As proposed, the Exchange will allow Users to submit orders to the 
Exchange starting at 8 a.m., the beginning of the Pre-Opening 
Session.\10\ Any Eligible Auction Orders (as defined below) designated 
for the Opening Auction will be queued until 9:30 a.m. at which time 
they will be eligible to be executed in the Opening Auction. An 
Eligible Auction Order, as proposed, would include any MOO, LOO, LLOO, 
MOC, LOC, or LLOC order that is entered in compliance with its 
respective cutoff for an Opening or Closing Auction, any RHO order 
prior to the Opening Auction, and any limit or market order not 
designated to exclusively participate in the Opening or Closing Auction 
entered during the Quote-Only Period of an IPO or Halt Auction.
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    \10\ As defined in Rule 1.5(r), the ``Pre-Opening Session'' is 
the time between 8 a.m. and 9:30 a.m. Eastern Time.
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    Users will also be allowed to submit LOO and MOO orders until 9:28 
a.m., at which point any additional LOO and MOO orders submitted to the 
Exchange will be rejected. RHO market orders will also be rejected 
between 9:28 a.m. and 9:30 a.m. Users may submit LLOO orders between 
9:28 a.m. and 9:30 a.m. Any LLOO orders submitted before 9:28 a.m. or 
after 9:30 a.m. will be rejected. RHO limit orders submitted between 
9:28 a.m. and 9:30 a.m. will be treated as LLOO orders until the 
Opening Auction has concluded. Eligible Auction Orders designated for 
the Opening Auction may not be cancelled or modified between 9:28 a.m. 
and 9:30 a.m. Orders eligible for execution in the Pre-Opening Session 
may be cancelled or modified at any time prior to execution.
Opening Auction Process for BATS Listed Securities
    The Exchange will conduct an Opening Auction for all BATS listed 
securities. Beginning at 9:28 a.m. and updated every five seconds 
thereafter, the Reference Price, Indicative Price, Auction Only Price, 
Reference Buy Shares, and Reference Sell Shares associated with the 
Opening Auction will be disseminated via electronic means.
    Auctions operated by the Exchange will utilize both a Collar Price 
Range and a Volume Based Tie Breaker in certain situations. The Collar 
Price Range will be the range from 10% of the Volume Based Tie Breaker 
below the ZBB to 10% of the Volume Based Tie Breaker above the ZBO. In 
the event that there is either no ZBB or ZBO for the security, the 
Collar Price Range will be the range from 10% of the Volume Based Tie 
Breaker below the NBB to 10% of the Volume Based Tie Breaker above the 
NBO if there is at least one limit order on either the Continuous Book 
or the Auction Book. In the event that there is also either no NBB or 
NBO for the security or no limit orders on the Continuous Book and the 
Auction Book, the range from 10% above and below the price of the Final 
Last Sale Eligible Trade will be used. The term Volume Based Tie 
Breaker will mean the midpoint of the ZBBO for a particular security. 
In the event that there is either no ZBB or ZBO for the security, the 
NBBO will be used if there is at least one limit order on either the 
Continuous Book or the Auction Book. In the event that there is also 
either no NBB or NBO for the security or no limit orders on the 
Continuous Book and the Auction Book, the price of the Final Last Sale 
Eligible Trade will be used.
    The Opening Auction price will be established by determining the 
price level within the Collar Price Range that maximizes the number of 
shares executed between the Continuous Book and Auction Book in the 
Opening Auction. In the event of a volume based tie at multiple price 
levels, the Opening Auction price will be the price closest to the 
Volume Based Tie Breaker. In the event that at the time of the Opening 
Auction there are no limit orders on both the Continuous Book and the 
Auction Book, the Opening Auction will occur at the price of the Final 
Last Sale Eligible Trade. The Opening Auction price will be the BATS 
Official Opening Price. In the event that there is no Opening Auction 
for an issue, the BATS Official Opening Price will be the price

[[Page 56252]]

of the Final Last Sale Eligible Trade, which will be the previous BATS 
Official Closing Price.
    MOO and market RHO orders have priority over all other Opening 
Auction Eligible Orders. To the extent there is executable contra side 
interest, such MOO and market RHO orders will execute at the BATS 
Official Opening Price in accordance with time priority. After the 
execution of all MOO and market RHO orders, the remaining orders priced 
at or more aggressively than the BATS Official Opening Price on the 
Auction Book and the Continuous Book will be executed on the basis of 
price priority. Equally priced trading interest shall execute in time 
priority in the following order: (i) The displayed portion of limit 
orders, LOO orders, LLOO orders, and limit RHO orders (all such orders 
to have equal priority after execution of all MOO and market RHO 
orders); (ii) non-displayed orders; and (iii) the reserve portion of 
Limit Orders.
Transition to Regular Trading Hours
    Limit order shares on the Continuous Book that are not executed in 
the Opening Auction will remain on the Continuous Book during Regular 
Trading Hours, subject to the User's instructions. RHO order shares 
that are not executed in the Opening Auction will be added to the 
Continuous Book at the conclusion of the Opening Auction, subject to 
the User's instructions. LOO, LLOO, and MOO orders that are not 
executed in the Opening Auction will be cancelled immediately at the 
conclusion of the Opening Auction.
Closing Auction
Order Entry and Cancellation Before Closing Auction
    As proposed, Users may submit orders to the Exchange starting at 8 
a.m., the beginning of the Pre-Opening Session. Any Eligible Auction 
Orders designated for the Closing Auction will be queued until 4 p.m. 
at which time they will be eligible to be executed in the Closing 
Auction. Users may submit LOC and MOC orders until 3:55 p.m., at which 
point any additional LOC and MOC orders submitted will be rejected. 
Unlike in the Opening Auction, User submitted Market RHO orders will be 
accepted immediately prior to the Closing Auction. Users may submit 
LLOC orders between 3:55 p.m. and 4 p.m. Any LLOC orders submitted 
before 3:55 p.m. or after 4 p.m. will be rejected.
    Eligible Auction Orders designated for the Closing Auction may not 
be cancelled between 3:55 p.m. and 4 p.m. Orders eligible for execution 
during Regular Trading Hours may be cancelled at any time prior to 
execution.
Closing Auction Process for BATS Listed Securities
    The Exchange will conduct a Closing Auction for all BATS listed 
securities. Beginning at 3:55 p.m. and updated every five seconds 
thereafter, the Reference Price, Indicative Price, Auction Only Price, 
Reference Buy Shares, and Reference Sell Shares associated with the 
Closing Auction will be disseminated via electronic means. The Closing 
Auction price will be established by determining the price level within 
the Collar Price Range that maximizes the number of shares executed 
between the Continuous Book and Auction Book in the Closing Auction. In 
the event of a volume based tie at multiple price levels, the Closing 
Auction price will be the price closest to the Volume Based Tie 
Breaker. In the event that at the time of the Closing Auction there are 
no limit orders on both the Continuous Book and the Auction Book, the 
Closing Auction will occur at the price of the Final Last Sale Eligible 
Trade. The Closing Auction price will be the BATS Official Closing 
Price. In the event that there is no Closing Auction for an issue, the 
BATS Official Closing Price will be the price of the Final Last Sale 
Eligible Trade.
    MOC orders have priority over all other Closing Auction Eligible 
Orders. To the extent there is executable contra side interest, such 
MOC orders will be executed at the BATS Official Closing Price 
according to time priority. After the execution of all MOC orders, the 
remaining orders priced at or more aggressively than the BATS Official 
Closing Price on the Auction Book and the Continuous Book will be 
executed on the basis of price priority. Equally priced trading 
interest shall execute in time priority in the following order: (i) The 
displayed portion of limit orders, LOC orders, LLOC orders, and limit 
RHO orders (all such orders to have equal priority after execution of 
all MOC orders); (ii) non-displayed orders; and (iii) the reserve 
portion of Limit Orders.
Transition to After Hours Trading Session
    Limit Order shares on the Continuous Book that are not executed in 
the Closing Auction will remain on the Continuous Book during the After 
Hours Trading Session, subject to the User's instructions. RHO order 
shares not executed in the Closing Auction will be cancelled at the 
conclusion of the Closing Auction. LOC, LLOC, and MOC orders that are 
not executed in the Closing Auction will be cancelled immediately at 
the conclusion of the Closing Auction.
IPO and Halt Auctions
    For trading in a BATS listed security in an IPO or following a 
trading halt in that security, the Exchange will conduct an IPO or Halt 
Auction, as described below.
Order Entry and Cancellation Before an IPO or Halt Auction
    The Quote-Only Period is a period of time prior to an IPO or Halt 
Auction during which the Exchange will permit Users to submit orders 
but the Exchange will not execute any transactions in the applicable 
security (i.e., there are no Continuous Book executions occurring while 
orders are collected). The Quote-Only Period with respect to a Halt 
Auction shall commence five (5) minutes prior to such Halt Auction. The 
Quote-Only Period with respect to an IPO Auction shall commence fifteen 
(15) minutes plus a short random period prior to such IPO Auction. The 
Exchange has proposed a short random period of time prior to an IPO 
Auction to provide a protective mechanism against potential 
manipulation of the IPO price through orders entered for participation 
in the IPO Auction but then withdrawn immediately prior to the 
commencement of the auction process. There are no IPO or Halt Auction 
specific order types. Any Eligible Auction Orders associated with an 
IPO or Halt Auction will be queued until the end of the Quote-Only 
Period at which time they will be eligible to be executed in the 
associated auction. All orders associated with IPO or Halt Auctions 
must be received prior to the end of the Quote-Only Period in order to 
participate in the auction.
    Eligible Auction Orders associated with an IPO or Halt Auction may 
be cancelled at any time prior to execution.
IPO and Halt Auction Process
    Coinciding with the beginning of the quotation only period for a 
security and updated every five seconds thereafter, the Reference 
Price, Indicative Price, Auction Only Price, Reference Buy Shares, and 
Reference Sell Shares associated with the Halt Auction will be 
disseminated via electronic means.
    The Quote-Only Period may be extended where: (i) There are 
unmatched market orders on the Auction Book associated with the 
auction; (ii) in an IPO Auction, the underwriter requests an extension; 
or (iii) where the Indicative Price moves the greater of 10% or fifty 
(50) cents in the fifteen (15) seconds prior to the

[[Page 56253]]

auction. The Exchange will typically extend the Quote-Only Period in 
five minute intervals, however, reserves the right to vary this 
interval and/or continue to extend the Quote-Only Period depending on 
the nature and magnitude of the reason for the extension.
    Orders will be executed at the price that maximizes the number of 
shares executed in the auction. In the event of a volume based tie at 
multiple price levels, the price level closest to the issuing price 
will be used for IPO Auctions and the price level closest to the Final 
Last Sale Eligible Trade will be used for Halt Auctions. In the event 
that there are no limit orders among the Eligible Auction Orders for a 
Halt Auction, the Halt Auction will occur at the price of the Final 
Last Sale Eligible Trade. In the event that there are no limit orders 
among the Eligible Auction Orders for an IPO Auction, the IPO Auction 
will occur at the issuing price. The IPO Auction price will be BATS 
Official IPO Opening Price.
    If any orders are not executed in their entirety during the IPO or 
Halt Auction, then the remaining shares from such orders shall be 
executed in accordance with BATS Rule 11.13 after the completion of the 
Halt Auction. After the completion of the IPO or Halt Auction, the 
Exchange will open for trading in the security in accordance with 
Chapter 11 of BATS Rules.
    Whenever, in the judgment of the Exchange, the interests of a fair 
and orderly market so require, the Exchange may adjust the timing of or 
suspend the auctions set forth in this Rule with prior notice to 
Members. For purposes of Rule 611(b)(3) of Regulation NMS, orders 
executed pursuant to the Opening Auction, Closing Auction, and Halt 
Auction may trade-through any other Trading Center's Manual or 
Protected Quotations if the transaction that constituted the trade-
through was a single-priced opening, reopening, or closing transaction 
by the trading center.
    The Exchange also proposes language for Rule 11.23 to make clear 
that all references including a.m. and p.m. times shall refer to times 
in Eastern Time.
2. Statutory Basis
    Approval of the rule changes 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.\11\ In particular, the proposed change is consistent with 
Section 6(b)(5) of the Act,\12\ 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 Exchange 
believes that operation of an Exchange Auction for securities listed on 
the Exchange will assist in the price discovery process and help to 
ensure a fair and orderly market for securities listed on the Exchange.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    For the reasons described above, the Exchange's proposal is also 
integral to its adoption of rules applicable to the qualification, 
listing and delisting of companies on the Exchange.\13\ The Exchange's 
proposal to operate as a primary listings market, including the 
adoption of rules to conduct Exchange Auctions, comes at a time when 
there are two dominant primary listing venues, the New York Stock 
Exchange LLC (``NYSE'') and the NASDAQ Stock Market LLC (``Nasdaq''). 
The Exchange believes that the proposed change would increase 
competition by providing an alternative to Nasdaq and NYSE for a 
company seeking to list its securities and for such securities to be 
traded in an orderly fashion at the open and close of trading, as well 
as in the context of an IPO or halted trading in the security. 
Accordingly, the Exchange believes that the proposal will allow the 
Exchange to provide companies with another option for raising capital 
in the public markets, thereby promoting the aforementioned principles 
discussed in Section 6(b)(5) of the Act.\14\ For the reasons described 
above, the proposed rule change is also designed to support the 
principles of Section 11A(a)(1) \15\ of the Act in that it seeks to 
assure fair competition among brokers and dealers and among exchange 
markets.
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    \13\ See supra note 3.
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 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 Changes and Timing for 
Commission Action

    Within 45 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 Exchange consents, the Commission will: (a) By order approve 
or disapprove such proposed rule change, or (b) institute proceedings 
to determine whether the proposed rule change should be disapproved.

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-2011-032 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-2011-032. 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 changes 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

[[Page 56254]]

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-2011-032 and should be submitted on or before October 3, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23170 Filed 9-9-11; 8:45 am]
BILLING CODE P