Document ID: SEC-2008-1267-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2008-09-17T04:00Z

[Federal Register: September 17, 2008 (Volume 73, Number 181)]
[Notices]               
[Page 53910-53911]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17se08-144]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58521; File No. SR-BATS-2008-002]

 
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing of Proposed Rule Change To Amend BATS Rule 11.5, entitled 
``Orders and Modifiers,'' To Provide for a New Order Type--Modified 
Directed Intermarket Sweep Order

 September 11, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 8, 2008, BATS Exchange, Inc. (``BATS'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III 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 proposing to amend BATS Rule 11.5, entitled 
``Orders and Modifiers,'' to provide for a new order type, a Modified 
Directed Intermarket Sweep Order (``Modified Directed ISO'').
    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 the proposed rule change is to provide an additional 
order type to Users of the Exchange. The proposed new order type is a 
``Modified Directed Intermarket Sweep Order'' (``Modified Directed 
ISO''). A Modified Directed ISO is an order that bypasses the System 
and is immediately routed by the Exchange as an IOC ISO to an away 
trading center specified by the User for execution, provided that the 
away trading center must be displaying a Protected Quotation, as that 
term is defined in the Exchange's rules. If the ISO is not executed in 
its entirety at the away trading center, the Modified Directed ISO 
returns to the Exchange as an IOC ISO and any portion not executed at 
the Exchange will be cancelled back to the User. It is the entering 
Member's responsibility, not the Exchange's responsibility, to comply 
with the requirements of Regulation NMS relating to Intermarket Sweep 
Orders.
    The Exchange believes that Modified Directed ISO's will enhance 
order execution opportunities for Exchange Users by allowing such Users 
to route ISOs to a specified trading center, and if not executed in 
whole or in part at such trading center, to have their orders filled as 
ISOs on the BATS book if there is available liquidity at the Exchange 
to fill the order. Accordingly, the addition of a Modified Directed ISO 
order type to BATS Rule 11.5 promotes just and equitable principles of 
trade, removes impediments to, and perfects the mechanism of, a free 
and open market and a national market system.
2. Statutory Basis
    The Exchange believes the 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).\3\ In particular, for the 
reasons described above, the proposed change is consistent with Section 
6(b)(5) of the Act, 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.
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    \3\ 15 U.S.C. 78(f)(b).
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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

    No written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 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 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

[[Page 53911]]

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-2008-002 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-BATS-2008-002. 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, 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-2008-002 and should be submitted on or before 
October 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-21708 Filed 9-16-08; 8:45 am]

BILLING CODE 8010-01-P