Document ID: SEC-2010-0700-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2010-05-11T04:00Z

[Federal Register: May 11, 2010 (Volume 75, Number 90)]
[Notices]               
[Page 26301-26303]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11my10-136]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62033; File No. SR-BATS-2010-009]

 
 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

May 4, 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 April 30, 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, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 May 3, 2010.\3\ The Exchange is not proposing to amend any 
rule text, but simply administering or enforcing an existing rule.\4\
---------------------------------------------------------------------------

    \3\ The rules of BATS Options, including rules applicable to 
BATS Options' participation in the Penny Pilot, were approved on 
January 26, 2010. See Securities Exchange Act Release No. 61419 
(January 26, 2010), 75 FR 5157 (February 1, 2010) (SR-BATS-2009-
031). BATS Options commenced operations on February 26, 2010. This 
proposal represents the first expansion of classes subject to the 
Penny Pilot since BATS Options commenced operations.
    \4\ See Rule 21.5 regarding the Penny Pilot.
---------------------------------------------------------------------------

    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 May 3, 2010. 
In the Exchange's filing to adopt rules to govern BATS Options,\5\ 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.
---------------------------------------------------------------------------

    \5\ 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.
---------------------------------------------------------------------------

    The Exchange is identifying, in the chart below, seventy-five 
options classes that it will add to the Penny Pilot on May 3, 2010, 
based on ADVs for the six months ending March 31, 2010.

--------------------------------------------------------------------------------------------------------------------------------------------------------
          Nat'l ranking                   Symbol               Security name            Nat'l ranking            Symbol               Security name
--------------------------------------------------------------------------------------------------------------------------------------------------------
153..............................  XLV.................  Health Care Select Sector  247.................  JCP.................  JC Penney Co Inc.
                                                          SPDR Fund.
155..............................  CIEN................  Ciena Corp...............  248.................  ACL.................  Alcon Inc.
157..............................  AMLN................  Amylin Pharmaceuticals     249.................  STP.................  Suntech Power Holdings
                                                          Inc.                                                                   Co Ltd.
158..............................  CTIC................  Cell Therapeutics Inc....  250.................  TLB.................  Talbots Inc.
159..............................  MDT.................  Medtronic Inc............  251.................  SYMC................  Symantec Corp.
162..............................  TIVO................  TiVo Inc.................  253.................  AMED................  Amedisys Inc.
163..............................  MNKD................  MannKind Corp............  255.................  TM..................  Toyota Motor Corp.
171..............................  MDVN................  Medivation Inc...........  257.................  HK..................  Petrohawk Energy Corp.
176..............................  BRKB................  Berkshire Hathaway Inc...  258.................  ENER................  Energy Conversion
                                                                                                                                 Devices Inc.
178..............................  APOL................  Apollo Group Inc.........  259.................  STT.................  State Street Corp.
181..............................  BSX.................  Boston Scientific Corp...  260.................  BHP.................  BHP Billiton Ltd.
185..............................  XLY.................  Consumer Discretionary     261.................  NFLX................  NetFlix Inc.
                                                          Sel. Sec. SPDR Fund.
188..............................  CLF.................  Cliffs Natural Resources   262.................  LDK.................  LDK Solar Co Ltd.
                                                          Inc.
190..............................  ZION................  Zions Bancorporation.....  263.................  SPG.................  Simon Property Group
                                                                                                                                 Inc.
194..............................  IOC.................  InterOil Corp............  264.................  TIF.................  Tiffany & Co.

[[Page 26302]]

197..............................  ITMN................  InterMune Inc............  265.................  BUCY................  Bucyrus International
                                                                                                                                 Inc.
204..............................  GME.................  GameStop Corp............  266.................  WAG.................  Walgreen Co.
209..............................  XLK.................  Technology Select Sector   268.................  IP..................  International Paper Co.
                                                          SPDR Fund.
210..............................  AKS.................  AK Steel Holding Corp....  271.................  XME.................  SPDR S&P Metals & Mining
                                                                                                                                 ETF.
212..............................  GRMN................  Garmin Ltd...............  272.................  KGC.................  Kinross Gold Corp.
213..............................  MRVL................  Marvell Technology Group   273.................  EP..................  El Paso Corp.
                                                          Ltd.
215..............................  XLP.................  Consumer Staples Select    274.................  SEED................  Origin Agritech Ltd.
                                                          Sector SPDR Fund.
216..............................  UNP.................  Union Pacific Corp.......  275.................  WIN.................  Windstream Corp.
220..............................  DTV.................  DIRECTV..................  279.................  DHI.................  DR Horton Inc.
223..............................  WMB.................  Williams Cos Inc/The.....  280.................  ADBE................  Adobe Systems Inc.
225..............................  MEE.................  Massey Energy Co.........  281.................  PCX.................  Patriot Coal Corp.
227..............................  CELG................  Celgene Corp.............  282.................  SPWR A..............  SunPower Corp.
229..............................  GMCR................  Green Mountain Coffee      284.................  LCC.................  US Airways Group Inc.
                                                          Roasters Inc.
231..............................  WDC.................  Western Digital Corp.....  285.................  PRU.................  Prudential Financial
                                                                                                                                 Inc.
234..............................  DAL.................  Delta Air Lines Inc......  286.................  LEN.................  Lennar Corp.
235..............................  FXE.................  CurrencyShares Euro Trust  287.................  EWT.................  iShares MSCI Taiwan
                                                                                                                                 Index Fund.
237..............................  COST................  Costco Wholesale Corp....  288.................  KBH.................  KB Home.
239..............................  MJN.................  Mead Johnson Nutrition Co  289.................  CREE................  Cree Inc.
240..............................  ALL.................  Allstate Corp/The........  290.................  SIRI................  Sirius XM Radio Inc.
241..............................  SII.................  Smith International Inc..  291.................  MMR.................  McMoRan Exploration Co.
242..............................  RTN.................  Raytheon Co..............  292.................  CENX................  Century Aluminum Co.
243..............................  DVN.................  Devon Energy Corp........  293.................  GFI.................  Gold Fields Ltd.
244..............................  MT..................  ArcelorMittal............  ....................  ....................  ........................
--------------------------------------------------------------------------------------------------------------------------------------------------------

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.\6\ In particular, the 
Exchange believes that the proposal is consistent with Section 6(b)(5) 
of the Act,\7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

(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 \8\ and paragraph 
(f)(1) of Rule 19b-4 thereunder,\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(i).
    \9\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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-2010-009 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-2010-009. 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 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

[[Page 26303]]

available publicly. All submissions should refer to File No. SR-BATS-
2010-009 and should be submitted on or before June 1, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-11095 Filed 5-10-10; 8:45 am]
BILLING CODE 8010-01-P