Document ID: SEC-2011-0716-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2011-05-18T04:00Z

[Federal Register Volume 76, Number 96 (Wednesday, May 18, 2011)]
[Notices]
[Pages 28830-28834]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64475; File No. SR-BATS-2011-015]

 Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing of Proposed Rule Change by BATS Exchange, Inc. To Amend BATS 
Rule 11.9, Entitled ``Orders and Modifiers'' and BATS Rule 11.13, 
Entitled ``Order Execution''

May 12, 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 May 9, 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 amend BATS Rule 11.9, entitled ``Orders 
and Modifiers'' and BATS Rule 11.13, entitled ``Order Execution.''
    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.

[[Page 28831]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
Background
    The Exchange proposes a change to its order handling procedures to 
allow both Non-Displayed Orders \3\ and orders subject to price sliding 
that are not executable at their most aggressive price to be executed 
at one-half minimum price variation less aggressive than that price. 
The reference to the most ``aggressive'' price, as used in this filing, 
means for bids the highest price the User is willing to pay, and for 
offers the lowest price at which the User is willing to sell. The 
Exchange believes that the proposed change to its order handling 
procedures will allow for tighter spreads on the Exchange and will 
provide both sides of a given transaction with price improvement not 
otherwise available without such change.
---------------------------------------------------------------------------

    \3\ As defined in Rule 11.9(c)(11), a Non-Displayed Order is ``a 
market or limit order that is not displayed on the Exchange.''
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    In addition to the proposed changes to its order handling 
procedures, the Exchange proposes to modify the Exchange's rules to 
make clear that an order subject to ``NMS price sliding'' (as described 
below) can be ranked at the same price as an order displayed on the 
other side of the BATS Book,\4\ although temporarily not executable at 
that price and displayed at one minimum price variation less aggressive 
than its price. For bids, this means that a price slid order is 
displayed at one minimum price variation less than the current national 
best offer (``NBO''), and for offers, this means that a price slid 
order is displayed at one minimum price variation more than the current 
national best bid (``NBB'').
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    \4\ As defined in Rule 1.5(e), the BATS Book is ``the System's 
electronic file of orders.''
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    Both of the scenarios described below, (1) Non-Displayed Orders 
posted opposite-side, same priced displayed orders, and (2) orders 
subject to price sliding that are ranked at a price equal to an 
opposite-side displayed order, can occur when an order on either side 
of the market is a BATS Post Only Order. As defined in Rule 11.9(c)(6), 
a BATS Post Only Order is ``[a]n order that is to be ranked and 
executed on the Exchange pursuant to Rule 11.12 and Rule 11.13(a)(1) or 
cancelled, as appropriate, without routing away to another trading 
center except that the order will not remove liquidity from the BATS 
Book.'' Accordingly, a BATS Post Only Order does not remove liquidity, 
but posts to the BATS Book to the extent permissible.
    The Exchange's allowance of Non-Displayed Orders or ranking of 
price slid orders at the locking price is not inconsistent with the 
locked markets provision of Regulation NMS,\5\ which applies to 
quotations that are displayed at prices that lock other protected 
quotations. In the case of a Non-Displayed Order, such an order can 
rest at a locking price because the Non-Displayed Order is not 
displayed. Similarly, although ranked at the locking price, a price 
slid order is expressly displayed at one minimum price variation above 
(below) the NBB (NBO).
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    \5\ Rule 610(d) of Regulation NMS requires policies and 
procedures to avoid the display of quotations that lock or cross 
protected quotations. 17 CFR 242.610(d).
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Non-Displayed Orders
    Consistent with the Exchange's rule regarding priority of orders, 
Rule 11.12, certain Non-Displayed Orders cannot be executed by the 
Exchange pursuant to Rule 11.13 when such orders would be executed at 
prices equal to displayed orders on the opposite side of the market 
(the ``locking price''). Specifically, if incoming orders were allowed 
to execute against the resting Non-Displayed Order at the locking 
price, such orders would receive a priority advantage over the resting, 
displayed order at the locking price; accordingly, such executions at 
the locking price are disallowed. The Exchange proposes to modify its 
handling of Non-Displayed Orders to optimize available liquidity for 
incoming orders and to provide price improvement for market 
participants, as further described below.
    Below are examples describing the Exchange's current handling of 
Non-Displayed Orders, followed by examples describing the Exchange's 
proposed order handling procedures.
    Example 1: Two Penny Spread--Current Handling:
    Assume the Exchange has a posted and displayed bid to buy 100 
shares of a security priced at $10.10 per share, a resting Non-
Displayed Order bid to buy 100 shares of a security priced at $10.12 
per share, and a posted and displayed offer to sell 100 shares also at 
$10.12 per share. Assume the national best bid or offer (``NBBO'') is 
also $10.10 by $10.12. The BATS Book in this situation can be depicted 
as follows, with ``ND'' identifying the Non-Displayed Order:

------------------------------------------------------------------------
                                              Bids                Offers
------------------------------------------------------------------------
BATS...............................   $10.12 (ND)            x    $10.12
                                     $10.10
------------------------------------------------------------------------

If an incoming Immediate-or-Cancel (``IOC'') \6\ offer to sell 100 
shares at $10.11 is entered into the BATS Book, such order will be 
cancelled back to the User entering such order even though the resting 
Non-Displayed Order at $10.12 is willing to buy at a price better than 
the limit price of the offer.\7\ Such cancellation will occur because 
an execution at the Non-Displayed Order's price of $10.12 would violate 
the Exchange's priority rule by giving the later arriving offer an 
execution ahead of the displayed offer at $10.12. If the incoming order 
was not an IOC, and thus, was eligible for posting, then the offer 
would be posted to the BATS Book at $10.11; the Non-Displayed bid would 
still remain on the BATS Book unexecuted. If instead the incoming offer 
was priced at $10.12 (which is the full price of the resting and 
displayed $10.12 offer), then, depending on the User's instructions, 
such offer would either cancel or post to the BATS Book behind the 
original offer in priority.
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    \6\ As defined in Rule 11.9(b)(1), an IOC Order is a ``limit 
order that is to be executed in whole or in part as soon as such 
order is received, and the portion not so executed is to be treated 
as cancelled.''
    \7\ Because the example assumes an NBBO of $10.10 (bid) by 
$10.12 (offer), the Exchange would not route an offer at $10.11 away 
from the Exchange even if it was eligible for routing, as there is 
no displayed liquidity to which the Exchange can route. If another 
market center did have a posted $10.11 bid, a $10.11 offer eligible 
for routing would route to that away market center.
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    Example 2: One Penny Spread--Current Handling:
    As a second example, assume the Exchange has a posted and displayed 
bid to buy 100 shares of a security priced at $10.10 per share, a 
resting Non-Displayed Order bid to buy 100 shares of a security priced 
at $10.11 per share, and a posted and displayed offer to sell 100 
shares also at $10.11 per share. Assume the NBBO is also $10.10 by 
$10.11. The BATS Book in this situation can be depicted as follows, 
with ``ND'' identifying the Non-Displayed Order:

------------------------------------------------------------------------
                                              Bids                Offers
------------------------------------------------------------------------
BATS...............................  $10.11 (ND)             x    $10.11
                                     $10.10
------------------------------------------------------------------------

If an incoming IOC offer to sell 100 shares at $10.10 is entered into 
the BATS Book, such order will be executed against the bid at $10.10 
even though the resting Non-Displayed Order is willing to buy at the 
higher price of

[[Page 28832]]

$10.11. As in the example above, the Exchange cannot execute the 
incoming order against the Non-Displayed Order because an execution at 
the Non-Displayed Order's price of $10.11 would violate the Exchange's 
priority rule by giving the later arriving offer an execution ahead of 
the displayed offer at $10.11. Also as in the example above, an offer 
at the price of the resting and displayed offer would, subject to the 
User's instructions, either cancel or post to the BATS Book behind the 
original offer in priority.
    Under the scenarios described above, in order to honor its priority 
rule, the Exchange is rejecting orders that are otherwise marketable 
against liquidity available on the BATS Book or is executing incoming 
orders at prices worse than if it executed such orders against Non-
Displayed Orders that are resting but not executable at their limit 
price. In order to execute such otherwise marketable orders consistent 
with the Exchange's priority rule, the Exchange proposes to execute a 
resting Non-Displayed Order at, in the case of a Non-Displayed bid, 
one-half minimum price variation less than the locking price, and, in 
the case of a Non-Displayed offer, at one-half minimum price variation 
more than the locking price, in the event that an order submitted to 
the Exchange on the side opposite such a Non-Displayed Order is a 
market order or limit order priced more aggressively than the locking 
price. For bids or offers under $1.00 per share, Non-Displayed Orders 
priced at the locking price will not be executed by the Exchange.\8\
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    \8\ With respect to securities priced below $1.00 per share, the 
Exchange does not believe that the proposed functionality is 
necessary for such securities given the ability to quote in sub-
pennies. Further, market participants might have system limitations 
that would not recognize executions in any increment finer than 
$0.0001.
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    Example 3: Two Penny Spread--Proposed Handling:
    To demonstrate the proposed functionality as compared to the first 
example above, again assume the Exchange has a posted and displayed bid 
to buy 100 shares of a security priced at $10.10 per share, a resting 
Non-Displayed Order bid to buy 100 shares of a security priced at 
$10.12 per share, and a posted and displayed offer to sell 100 shares 
also at $10.12 per share. Assume the NBBO is also $10.10 by $10.12. The 
BATS Book in this situation can be depicted as follows, with ``ND'' 
identifying the Non-Displayed Order:

------------------------------------------------------------------------
                                              Bids                Offers
------------------------------------------------------------------------
BATS...............................  $10.12 (ND)             x    $10.12
                                     $10.10
------------------------------------------------------------------------

If an incoming offer to sell 100 shares at $10.11 is entered into the 
BATS Book, the resting Non-Displayed Order at the locking price will be 
executed against the incoming offer at $10.115 per share, thus 
providing the resting Non-Displayed bid a half-penny of price 
improvement from its limit price of $10.12 and the incoming offer a 
half-penny of price improvement from its limit price of $10.11. If an 
incoming offer to sell 100 shares, priced instead at $10.10, is entered 
into the BATS Book, the resting Non-Displayed Order at the locking 
price will be executed against the incoming offer at $10.115 per share, 
thus providing the resting Non-Displayed bid a half-penny of price 
improvement from its limit price of $10.12 and the incoming offer a 
full penny and a half of price improvement from its limit price of 
$10.10. The result would be the same for an incoming market order to 
sell or any other incoming limit order offer priced at $10.11 or below, 
which would execute against the Non-Displayed bid at a price of $10.115 
per share. An offer at the full price of the resting and displayed 
$10.12 offer would not execute against the resting Non-Displayed bid, 
as such execution would still violate the original offer's priority. 
Instead, depending on the entering User's instructions, a later 
arriving offer at $10.12 would either cancel or post to the BATS Book 
behind the original offer in priority.
    Example 4: One Penny Spread--Proposed Handling:
    To demonstrate the proposed functionality as compared to the second 
example above, again assume the Exchange has a posted and displayed bid 
to buy 100 shares of a security priced at $10.10 per share, a resting 
Non-Displayed Order bid to buy 100 shares of a security priced at 
$10.11 per share, and a posted and displayed offer to sell 100 shares 
also at $10.11 per share. Assume the NBBO is also $10.10 by $10.11. The 
BATS Book in this situation can be depicted as follows, with ``ND'' 
identifying the Non-Displayed Order:

------------------------------------------------------------------------
                                              Bids                Offers
------------------------------------------------------------------------
BATS...............................  $10.11 (ND)             x    $10.11
                                     $10.10
------------------------------------------------------------------------

If an incoming offer to sell 100 shares at $10.10 is entered into the 
BATS Book, the resting Non-Displayed Order at the locking price will be 
executed at $10.105 per share, thus providing the resting Non-Displayed 
bid a half-penny of price improvement from its limit price of $10.11 
and the incoming offer a half-penny of price improvement from its limit 
price of $10.10. The result would be the same for an incoming market 
order to sell or any other incoming limit order offer priced at $10.10 
or below, which would execute against the Non-Displayed bid at a price 
of $10.105 per share. As above, an offer at the full price of the 
resting and displayed $10.11 offer would not execute against the 
resting Non-Displayed bid, but would instead either cancel or post to 
the BATS Book behind the original $10.11 offer in priority.
Orders Subject to Price Sliding
    The Exchange also proposes to make clear in its rules, both through 
amending Rule 11.9 and through the proposed language for Rule 11.13, 
that an order subject to NMS price sliding can be ranked at a price 
that is locking an order displayed on the other side of the Exchange. 
In addition, the Exchange proposes to apply the proposed order handling 
procedures for Non-Displayed Orders that are otherwise non-executable 
to orders that are resting with a ranked price opposite a displayed 
order on the BATS Book.
Example 5: NMS Price Sliding
    As an example of NMS price sliding generally, assume the NBB is 
$10.10 per share, and the Exchange's best bid is $10.09. Assume the NBO 
is $10.11 per share, and the Exchange has a displayed offer at that 
price.

------------------------------------------------------------------------
                                                     Bid          Offer
------------------------------------------------------------------------
National best....................................   $10.10   x    $10.11
BATS best........................................   $10.09   x    $10.11
------------------------------------------------------------------------

    Next, assume the Exchange received an incoming BATS Post Only Order 
bid to buy at $10.11. The BATS Post Only Order would not remove the 
posted offer on the BATS Book at $10.11, and could not post as a bid at 
that price because it would lock the NBO. Such bid, assuming price 
sliding is enabled,\9\ would instead be ranked at $10.11 and displayed 
by BATS as a bid at $10.10. The Result would be depicted as follows:
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    \9\ As set forth in Rule 11.9(c)(6), BATS Post Only Orders are 
subject to the price sliding process by default, but User can opt-
out of price sliding.

------------------------------------------------------------------------
                                                  Bid            Offer
------------------------------------------------------------------------
National best................................     $10.10   x      $10.11

[[Page 28833]]

 
BATS best....................................    *$10.10   x      $10.11
------------------------------------------------------------------------
* Ranked at 10.11, but price slid and displayed at $10.10.

    The BATS displayed $10.10 bid, ranked at $10.11, is not executable 
at $10.11 because any incoming order that would execute against it at 
the locking price would receive a priority advantage over the displayed 
offer at $10.11. Nonetheless, the best bid on the BATS Book is a buyer 
willing to pay up to $10.11. The Exchange proposes to modify its order 
handling procedures for orders subject to price sliding that are ranked 
at a price opposite an order displayed by the Exchange consistent with 
the modification described above for Non-Displayed Orders. 
Specifically, in the event an order submitted to the Exchange on the 
side opposite such a price slid order is a market order or a limit 
order priced more aggressively than the locking price, the Exchange 
will execute the resting order subject to price sliding at, in the case 
of a resting bid, one-half minimum price variation less than the 
locking price, and, in the case of a resting offer, at one-half minimum 
price variation more than the locking price. For bids or offers under 
$1.00 per share, resting orders subject to price sliding ranked at the 
locking price will not be executed by the Exchange.
Additional Discussion
    Under all of the scenarios described above, the Non-Displayed Order 
or order subject to price sliding is priced at the very inside of the 
market but is temporarily un-executable at its full limit price due to 
the Exchange's priority rule and order handling procedures. The 
proposed change will provide incoming orders with price improvement 
against such aggressively priced, resting orders. The Exchange notes 
that by permitting a Member's Non-Displayed Order to rest at a locking 
price on the other side of a displayed order, the Exchange is incenting 
Member's to post aggressively priced liquidity, rather than 
discouraging such liquidity by leaving it unexecuted. Incoming orders 
executing against aggressively priced Non-Displayed Orders and price 
slid orders will derive an obvious benefit from the price improvement 
received. In addition, if the BATS Book changes so that such orders are 
no longer resting or ranked opposite a displayed order, then such 
orders will again be executable at their full limit price, and in the 
case of price slid orders, will be displayed at that price.
    The Exchange is proposing a solution to address specific conditions 
that are a current, natural consequence of other order handling 
procedures of the Exchange. The Exchange believes that such specific 
circumstances, without modification, will continue to result in fewer 
executions or executions with less price improvement than the Exchange 
could otherwise facilitate. The Exchange will conduct surveillance to 
ensure that Users are not intentionally seeking to create an internally 
locked Book for the purpose of obtaining an execution at one-half 
minimum price variation. As such, the Exchange proposes to add 
Interpretation and Policy .01 to Rule 11.13 to state that the Exchange 
will consider it inconsistent with just and equitable principles of 
trade to engage in a pattern or practice of using Non-Displayed Orders 
or orders subject to price sliding solely for the purpose of executing 
such orders at one-half minimum price variation from the locking price. 
Evidence of such behavior may include, but is not limited to, a User's 
pattern of entering orders at a price that would lock or be ranked at 
the price of a displayed quotation and cancelling orders when they no 
longer lock the displayed quotation.
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.\10\ Specifically, the 
proposed change is consistent with Section 6(b)(5) of the Act,\11\ 
because it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to, and perfect 
the mechanism of, a free and open market and a national market system. 
The proposed change to execute marketable orders that are currently not 
executed under specific scenarios that can occur will only serve to 
improve execution quality for participants sending orders to the 
Exchange. Further, the proposed change will help to provide price 
improvement to market participants, again, in scenarios that at times, 
such participants are not even receiving executions from the Exchange 
or are receiving less price improvement than is currently available. 
Thus, the Exchange believes that its proposed order handling process in 
the scenario described in this filing will benefit market participants 
and their customers by allowing them greater flexibility in their 
efforts to fill orders and minimize trading costs.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange notes that the specific scenarios for which the 
Exchange is proposing an improved order handling process are possible 
due to the existence of orders that by definition will not remove 
liquidity from the BATS Book, BATS Post Only Orders. The Exchange 
believes that BATS Post Only Orders are consistent with the Act, 
particularly, Section 6(b)(5) of the Act,\12\ because they help to 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and to remove impediments to, 
and perfect the mechanism of, a free and open market and a national 
market system. BATS Post Only Orders allow Users to post aggressively 
priced liquidity, as such Users have certainty as to the fee or rebate 
they will receive from the Exchange if their order is executed. Without 
such ability, the Exchange believes that certain Users would simply 
post less aggressively priced liquidity, and prices available for 
market participants, including retail investors, would deteriorate. 
Accordingly, the Exchange believes that BATS Post Only Orders enhance 
the liquidity available to all market participants by allowing market 
makers and other liquidity providers to add liquidity to the Exchange 
at or near the inside of the market.
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    \12\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change is also consistent with Rule 612 of 
Regulation NMS.\13\ Rule 612 generally prohibits a national securities 
exchange from displaying, ranking or accepting a bid, offer or order in 
any NMS stock priced in an increment smaller than $0.01 if such bid, 
offer or order is priced at $1.00 per share or greater. Commission 
Staff has specifically interpreted Rule 612 to allow a market center to 
provide sub-penny price improvement, compared to the NBBO in an NMS 
stock for which sub-penny quotations are prohibited by the Rule, 
provided that the execution does not result from an order, quotation, 
or indication of interest that was itself priced in an impermissible 
sub-penny increment.\14\ The staff also indicated that this 
interpretation may not apply when

[[Page 28834]]

unconditional price improvement guarantees are involved.\15\
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    \13\ 17 CFR 242.612.
    \14\ See Division of Market Regulation: Responses to Frequently 
Asked Questions (``FAQs'') concerning Rule 612 (Minimum Pricing 
Increment) of Regulation NMS, Question 13 (Oct. 21, 2005).
    \15\ Id.
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    The proposed rule change does exactly what the response to Question 
13 of the FAQs allows. The Exchange will provide price improvement in a 
sub-penny increment only when circumstances dictate, i.e., only: (1) 
When a Non-Displayed Order is resting on the opposite side of the 
market from a displayed order at the locking price, or (2) when an 
order subject to price sliding is ranked at a price opposite a 
displayed order.
    All orders and quotations in these scenarios are accepted, 
displayed and/or ranked in a permissible penny increment price and are 
only executed in a sub-penny increment under certain limited 
circumstances--if the displayed order opposite the resting Non-
Displayed Order or price slid order is cancelled or executed, then the 
Non-Displayed order or price slide order is again available at its full 
limit price.\16\ There are also no unconditional price improvement 
guarantees involved.
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    \16\ The Exchange notes that permitting an execution in a sub-
penny increment under certain limited circumstances, while never 
ranking the applicable orders at such sub-penny increments, has 
already been implemented by multiple exchanges, including the 
Exchange, in the form of mid-point orders. See BATS Rule 11.9(c)(9) 
(``Mid-Point Peg Orders''); see also, NASDAQ Rule 4751(f)(4) 
(``Midpoint Peg'' orders); NYSE Arca Equities Rule 7.31(h)(5) 
(``Mid-Point Passive Liquidity Orders''); EDGX Rule 11.5(c)(7) 
(``Mid-Point Match Orders''). The order types listed above are not 
displayed but can execute at the mid-point of the NBBO, including in 
penny-wide markets.
---------------------------------------------------------------------------

    The Exchange notes that this proposal does not propose any new 
policies or provisions that are unique or unproven, as the Exchange and 
multiple other exchanges allow orders to execute at half-penny 
prices.\17\ The Exchange does not believe that there is anything novel 
or controversial about executing marketable orders in a fully 
transparent manner that is consistent with its other pre-existing 
rules, and under the proposed functionality, both sides to each 
transaction executed will receive at least one half penny price 
improvement on their orders. As stated above, Commission Staff has also 
publicly interpreted Rule 612 as allowing sub-penny executions due to 
price improvement, and arguably has encouraged such executions by 
stating that `` * * * sub-penny executions due to price improvement are 
generally beneficial to retail investors.'' \18\
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    \17\ See id.
    \18\ See Exchange Act Release No. 34-54714 at 4 (November 6, 
2006), 71 FR 66352 (November 14, 2006).
---------------------------------------------------------------------------

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the 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 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-2011-015 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 Number SR-BATS-2011-015. 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 website 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-2011-015 and should be 
submitted on or before June 8, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-12132 Filed 5-17-11; 8:45 am]
BILLING CODE 8011-01-P