Document ID: SEC-2011-0637-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2011-05-06T04:00Z

[Federal Register Volume 76, Number 88 (Friday, May 6, 2011)]
[Notices]
[Pages 26331-26332]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11082]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64376; File No. SR-BATS-2011-013]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend 
the Trading Hours of BATS Options for Certain Products

May 2, 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 April 26, 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 is filing with the Commission a proposal to amend the 
Rules applicable to the BATS options market (``BATS Options'') in order 
to allow certain products to trade on BATS Options until 4:15 p.m. 
Eastern Time.
    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
    BATS Options currently allows trading in options contracts from 
9:30 a.m. to 4 p.m. Eastern Time. The purpose of the proposed rule 
change is to amend BATS Rules in order to allow trading on BATS Options 
to 4:15 p.m. Eastern Time for specified products. Specifically, the 
Exchange proposes to amend Rules 21.2 and 29.10 to extend to 4:15 p.m. 
Eastern Time the trading hours for option contracts on Fund Shares, as 
defined in Rule 19.3(i), option contracts on exchange-traded notes 
including Index-Linked Securities, as defined in Rule 19.3(l), and 
option contracts on broad-based indexes, as defined in Rule 29.1(j). 
The Exchange's rules already permit listing of options on Fund 
Shares,\3\ Index-Linked Securities,\4\ and broad-based indices.\5\ 
However, the Exchange's rules currently require trading in all products 
to end at 4 p.m. Eastern Time, whereas other options exchanges permit 
trading to occur until 4:15 p.m. Eastern Time for the three product 
types specified in this filing.\6\
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    \3\ See BATS Rule 19.3(i), which sets forth the listing criteria 
for Fund Shares.
    \4\ See BATS Rule 19.3(l), which sets forth the listing criteria 
for Index-Linked Securities.
    \5\ Chapter XXIX governs the listing and trading of options on 
an index. In particular, Rule 29.3 sets forth the listing 
requirements for options on broad-based indices.
    \6\ See e.g., Nasdaq Options Market (``NOM'') Chapter VI, Sec. 2 
and NOM Chapter XIV, Sec. 10; see also ISE Rule 700(b)-(d).
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    In addition to the proposed amendments to Rules 21.2(a) and 
29.10(a), for the avoidance of doubt, the Exchange proposes to amend 
its Rule 21.2(b), which states that the hours during which transactions 
in options on individual stocks shall correspond to the normal business 
days and hours for business set forth in the rules of the primary 
market trading the securities underlying such options. As proposed, 
Rule 21.2(b) will make clear that the products specified in Rule 
21.2(a) will be available for trading until 4:15 p.m. Eastern Time, 
notwithstanding any other language in the Rule.
    The Exchange believes the proposed changes are necessary in order 
to ensure consistency in the trading of such products on BATS Options 
and other options exchanges.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules

[[Page 26332]]

and regulations thereunder that are applicable to a national securities 
exchange, and, in particular, with the requirements of Section 6(b) of 
the Act.\7\ In particular, the proposal is consistent with Section 
6(b)(5) of the Act,\8\ 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. In particular, the 
proposed rule change will allow the Exchange to provide a competitive 
marketplace for Exchange Users to trade options on Fund Shares, Index-
Linked Securities and broad-based indices until 4:15 p.m. Eastern Time.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms, does not become operative for 30 days after the 
date of filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest, 
the proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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.\11\ 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 requested that the Commission waive 
the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii),\12\ 
which would make the rule change effective and operative upon filing.
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    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the 
Commission notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied this requirement.
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because the proposed rule change does not raise any novel regulatory 
issues. The proposal is designed to align the Exchange's trading hours 
for options contracts on Fund Shares, exchange-traded notes including 
Index Linked Securities, and broad-based indexes to correspond with the 
trading hours for these products on certain other exchanges.\13\ 
Accordingly, the Commission designates the proposed rule change as 
operative upon filing with the Commission.\14\
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    \13\ See supra note 6.
    \14\ For purposes only of waiving the operative delay for this 
proposal, the Commission has 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.\15\
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    \15\ 15 U.S.C. 78s(b)(3)(C).
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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-2011-013 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-2011-013. 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 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-2011-013 and should be 
submitted on or before May 27, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-11082 Filed 5-5-11; 8:45 am]
BILLING CODE 8011-01-P