Document ID: SEC-2010-1618-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2010-10-22T04:00Z

[Federal Register: October 22, 2010 (Volume 75, Number 204)]
[Notices]               
[Page 65393-65395]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc10-132]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63122; File No. SR-BATS-2010-028]

 
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposal To Make Clean Up Changes 
by Amending Certain Rules

October 18, 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 October 6, 2010, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') 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 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend BATS Rule 2.3 to clarify that a 
broker or dealer must be a member of another national securities 
exchange or association other than BATS Y-Exchange, Inc. (``BYX'') in 
order to become or remain a Member of the Exchange, to remove the text 
of Rule 2.4 because the waive-in period for the Exchange has expired, 
and to make a technical correction to BATS Rule 14.5. 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

[[Page 65394]]

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 proposes to amend BATS Rule 2.3 to clarify that a 
broker or dealer be a member of another national securities exchange or 
association other than or in addition to the Exchange's affiliate, BYX, 
in order to become or remain a Member of the Exchange. The Exchange 
also proposes to remove the text of BATS Rule 2.4 because the rule has 
become obsolete as the period for submission of a waive-in membership 
application has expired. Lastly, the Exchange proposes to make a 
technical correction to BATS Rule 14.5(c) to replace a reference to 
``Commodity-Based Trust Shares'' with ``Currency Trust Shares''.

Amend Rule 2.3 To Reflect Existence of BATS Y-Exchange

    The Exchange requires all of its Members to be a member of at least 
one other national securities association or national securities 
exchange. The proposed change would make clear that this requirement is 
not satisfied simply by joining the Exchange's affiliated exchange, 
BYX. Rather, as the proposed language indicates, each Member that is a 
registered broker or dealer must be a member of another registered 
national securities exchange or association other than or in addition 
to BYX.

Deletion of Obsolete Rule--BATS Rule 2.4

    As approved by the Commission as part of the Exchange's Form 1 
application, BATS Rules include provisions that permitted current or 
former subscribers to the electronic communications network formerly 
operated by BATS Trading, Inc. to apply to become a Member of the 
Exchange by submitting a ``waive-in application'' within ninety (90) 
days of approval of the Form 1 by the Commission. The Commission 
approved the Exchange's Form 1 application on August 18, 2008, meaning 
that waive-in membership applications must have been received by the 
Exchange on or prior to November 16, 2008. Accordingly, BATS Rule 2.4 
is obsolete, and thus, the Exchange proposes to delete such rule.

Correct Improper Term in BATS Rule 14.5(c)

    Lastly, the Exchange proposes to correct language in BATS Rule 
14.5(c) to replace an incorrect reference to ``Commodity-Based Trust 
Shares'' with ``Currency Trust Shares''.
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.\5\ Specifically, the 
Exchange believes that the proposed changes are consistent with Section 
6(b)(5) of the Act,\6\ because they 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.
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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

    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 \7\ and Rule 19b-
4(f)(6)(iii) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange requests that the Commission waive 
the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii),\9\ 
which would make the rule change effective and operative upon filing. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\10\ Such waiver will result in immediate improvement to the 
Exchange's rules by clarifying vague language, removing inoperative 
language, and correcting a technical inaccuracy. The Commission 
believes such improvements should be implemented immediately, rather 
than delayed for 30 days. Additionally, the proposed rule change does 
not raise any new regulatory issues. For these reasons, the Commission 
designates the proposed rule change as operative upon filing.
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    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 rule-comments@sec.gov. Please include 
File Number SR-BATS-2010-028 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BATS-2010-028. 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

[[Page 65395]]

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 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-BATS-2010-028 and should be submitted on 
or before November 12, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-26677 Filed 10-21-10; 8:45 am]
BILLING CODE 8011-01-P