Document ID: SEC-2010-1455-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Y-Exchange, Inc.
Posted Date: 2010-09-23T04:00Z

[Federal Register: September 23, 2010 (Volume 75, Number 184)]
[Notices]               
[Page 58011-58012]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23se10-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62924; File No. 10-198]

 
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing of Proposed Minor Rule Violation Plan

September 16, 2010.
    Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby 
given that on September 10, 2010, the BATS Y-Exchange, Inc. (``BATS Y-
Exchange'' or ``Exchange''), filed with the Securities and Exchange 
Commission (the ``Commission'') copies of a proposed minor rule 
violations plan with sanctions not exceeding $2,500 which would not be 
subject to the provisions of Rule 19d-1(c)(1) of the Act \3\ requiring 
that a self-regulatory organization promptly file notice with the 
Commission of any final disciplinary action taken with respect to any 
person or organization.\4\ In accordance with Rule 19d-1(c)(2) under 
the Act, the Exchange proposed to designate certain specified rule 
violations as minor rule violations, and requests that it be relieved 
of the reporting requirements regarding such violations, provided it 
gives notice of such violations to the Commission on a quarterly basis.
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    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ 17 CFR 240.19d-1(c)(1).
    \4\ The Commission adopted amendments to paragraph (c) of Rule 
19d-1 to allow self-regulatory organizations (``SROs'') to submit 
for Commission approval plans for the abbreviated reporting of minor 
disciplinary infractions. See Securities Exchange Act Release No. 
21013 (June 1, 1984), 49 FR 23828 (June 8, 1984). Any disciplinary 
action taken by an SRO against any person for violation of a rule of 
the SRO which has been designated as a minor rule violation pursuant 
to such a plan filed with the Commission shall not be considered 
``final'' for purposes of Section 19(d)(1) of the Act if the 
sanction imposed consists of a fine not exceeding $2,500 and the 
sanctioned person has not sought an adjudication, including a 
hearing, or otherwise exhausted his administrative remedies.
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    BATS Y-Exchange proposes to include in its proposed MRVP the 
policies and procedures currently included in BATS Y-Exchange Rule 8.15 
(``Imposition of Fines for Minor Violation(s) of Rules'').\5\
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    \5\ On August 13, 2010, the Exchange's application for 
registration as a national securities exchange, including the rules 
governing the BATS Y-Exchange, was approved. See Securities Exchange 
Act Release No. 62716 (August 13, 2010), 75 FR 51295 (August 19, 
2010) (File No. 10-198).
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    According to the Exchange's proposed MRVP, under Rule 8.15, the 
Exchange may impose a fine (not to exceed $2,500) on a member or an 
associated person with respect to any rule listed in Rule 8.15.01. The 
Exchange shall serve the person against whom a fine is imposed with a 
written statement setting forth the rule or rules violated, the act or 
omission constituting each such violation, the fine imposed, and the 
date by which such determination becomes final or by which such 
determination must be contested. If the person against whom the fine is 
imposed pays the fine, such payment shall be deemed to be a waiver of 
such person's right to a disciplinary proceeding and any review of the 
matter

[[Page 58012]]

under BATS Y-Exchange rules. Any person against whom a fine is imposed 
may contest the Exchange's determination by filing with the Exchange a 
written response, at which point the matter shall become a disciplinary 
proceeding.
    Under Rule 8.15.01, violations of the following rules would be 
appropriate for disposition under the minor rule violations plan: Rule 
4.2 and Interpretations, thereunder, requiring the submission of 
responses to Exchange requests for trading data within specified time 
period; Rule 4.2 and Interpretations thereunder related to the 
requirement to furnish Exchange-related order, market and transaction 
data, as well as financial or regulatory records and information; Rule 
11.8(a)(1) requirement for Market Makers to maintain continuous two-
sided limit orders; Rule 11.19 requirement to identify short sale 
orders as such; and Rule 11.20 requirement to comply with locked and 
crossed market rules.
    BATS Y-Exchange proposed to include the rule violations listed in 
Rule 8.15.01 in its minor rule violation plan. Upon approval of the 
plan, the Exchange will provide the Commission a quarterly report of 
actions taken on minor rule violations under the plan. The quarterly 
report will include: The Exchange's internal file number for the case, 
the name of the individual and/or organization, the nature of the 
violation, the specific rule provision violated, the sanction imposed, 
the number of times the rule violation has occurred, and the date of 
disposition.\6\
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    \6\ BATS Y-Exchange attached a sample form of the quarterly 
report with its submission to the Commission.
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I. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning BATS Y-Exchange's proposed Minor Rule Violation 
Plan, including whether the proposed plan 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. 10-198 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. 10-198. 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 MRVP that are filed with the 
Commission, and all written communications relating to the proposed 
Minor MRVP 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 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. 10-198 and should be submitted on or before 
October 14, 2010.

II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and 
Timing for Commission Action

    Pursuant to Section 19d-1 of the Act and Rule 19d-1(c)(2) 
thereunder,\7\ after October 14, 2010, the Commission may, by order, 
declare BATS Y-Exchange's proposed MRVP effective if the plan is 
consistent with the public interest, the protection of investors, or 
otherwise in furtherance of the purposes of the Act. The Commission in 
its order may restrict the categories of violations to be designated as 
minor rule violations and may impose any other terms or conditions to 
the proposed MRVP, File No. 10-198, and to the period of its 
effectiveness which the Commission deems necessary or appropriate in 
the public interest, for the protection of investors or otherwise in 
furtherance of the purposes of this Act.
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    \7\ 15 U.S.C. 78s(d)(1); 17 CFR 240.19d-1(c)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(44).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-23765 Filed 9-22-10; 8:45 am]
BILLING CODE 8010-01-P