[Federal Register Volume 75, Number 40 (Tuesday, March 2, 2010)]
[Notices]
[Pages 9455-9459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4230]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61574; File No. SR-BATS-2010-003]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule Change
To Amend BATS Rule 5.5, Entitled ``Information Barrier Procedures,''
and To Add New BATS Rule 12.13, Entitled ``Trading Ahead of Research
Reports''
February 23, 2010.
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 February 11, 2010, BATS Exchange, Inc. (``BATS'' or the
``Exchange'') 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 BATS. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons and is approving the proposed rule change on an
accelerated basis.
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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 5.5, entitled
``Information Barrier Procedures,'' to modify the Exchange's rule
regarding information barrier procedures required of certain Exchange
Members. The Exchange is also proposing to add new Exchange Rule 12.13,
entitled ``Trading Ahead of Research Reports.''
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 III 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 eliminate the requirements of BATS Rule
5.5 that require a Member \3\ that trades for its own account or that
has a specialist or market maker operation on another market (defined
in BATS Rule 5.5(a) as a ``specialist'') to establish and maintain
certain specifically prescribed information barrier procedures and to
file such procedures with the Exchange. At the same time, the Exchange
proposes to amend BATS Rule 5.5 to more closely mirror the rules of
other self-regulatory organizations that create certain obligations for
all Member firms related to the prevention of the misuse of material,
non-public information. Finally, the Exchange proposes to add new BATS
Rule 12.13, which: (i) Prohibits Members from trading ahead of research
reports, and (ii) requires each Member to establish, maintain and
enforce procedures regarding the flow of information between research
department personnel and trading department personnel.
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\3\ See BATS Rule 1.5(n).
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(i) All Members Must Maintain Policies Concerning the Misuse of
Material Non-Public Information
Presently, the Exchange requires that each Member establish,
maintain and enforce written policies and procedures reasonably
designed to prevent the misuse of material, non-public information,
which includes review of employee and proprietary trading,
memorialization and documentation of
[[Page 9456]]
procedures, substantive supervision of interdepartmental communications
by the Member's compliance department and procedures concerning
proprietary trading when the firm is in possession of material, non-
public information.\4\ The Exchange also has specific rules prohibiting
Members from disadvantaging their customers or other market
participants by improperly capitalizing on the Members' access to or
receipt of material, non-public information. For example, the Exchange
prohibits a Member from trading ahead of its customer's limit
orders.\5\
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\4\ See BATS Rule 5.5(a).
\5\ See BATS Rule 12.6.
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(ii) Proposed Amendments to General Standards and Deletion of Specific
Information Barrier Procedures
As noted above, the Exchange currently maintains a general standard
for all Members to establish, maintain and enforce written policies and
procedures reasonably designed to prevent the misuse of material, non-
public information, including certain specific procedures. The Exchange
also currently requires specific information barrier procedures for
Members that meet the definition in BATS Rule 5.5(a) of a
``specialist'' and requires such firms to file their information
barrier procedures with the Exchange. The Exchange proposes amending
the language that imposes the general standard of preventing the misuse
of material, non-public information and adding additional language to
provide clarity regarding the minimum policies and procedures a Member
must implement to comply with such general standards. As described in
further detail below, the Exchange also proposes deleting the specific
information barrier procedures required to be maintained by Exchange
Members that meet the definition of ``specialist.''
Under the proposal, amended BATS Rule 5.5 would provide flexibility
to a BATS Member to develop and maintain procedures and controls to
prevent the misuse of material, non-public information that are
effective and appropriate to that Member. The Exchange proposes adding
Interpretation and Policy .01 to BATS Rule 5.5 that would provide
examples of conduct that would constitute the misuse of material, non-
public information.\6\ Proposed Interpretation and Policy .02 to BATS
Rule 5.5 would set forth specific policies and procedures that would be
required of Members.\7\ However, as made clear by the proposed
Interpretation and Policy, such policies and procedures would not in
all cases, satisfy the requirements and intent of amended BATS Rule
5.5; the adequacy of each Member's policies and procedures would depend
upon the nature of such Member's business.
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\6\ Such examples include: (a) Trading in any securities issued
by a corporation, or in any related securities or related options or
other derivative securities, while in possession of material, non-
public information concerning that issuer; or (b) Trading in a
security or related options or other derivative securities, while in
possession of material non-public information concerning imminent
transactions in the security or related securities; or (c)
Disclosing to another person or entity any material, non-public
information involving a corporation whose shares are publicly traded
or an imminent transaction in an underlying security or related
securities for the purpose of facilitating the possible misuse of
such material, non-public information.
\7\ The specific policies and procedures required, at a minimum,
would include: (a) All associated persons of the Member must be
advised in writing of the prohibition against the misuse of
material, non-public information; and (b) All associated persons of
the Member must sign attestations affirming their awareness of, and
agreement to abide by the aforementioned prohibitions. These signed
attestations must be maintained for at least three years, the first
two years in an easily accessible place; and (c) Each Member must
receive and retain copies of trade confirmations and monthly account
statements for each account in which an associated person: Has a
direct or indirect financial interest or makes investment decisions.
The activity in such brokerage accounts should be reviewed at least
quarterly by the Member for the purpose of detecting the possible
misuse of material, non-public information; and (d) All associated
persons must disclose to the Member whether they, or any person in
whose account they have a direct or indirect financial interest, or
make investment decisions, are an officer, director or 10%
shareholder in a company whose shares are publicly traded. Any
transaction in the stock (or option thereon) of such company shall
be reviewed to determine whether the transaction may have involved a
misuse of material non-public information.
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The Exchange proposes to eliminate, in their entirety, the
requirements set forth in BATS Rule 5.5 that require certain members to
maintain and file with the Exchange specifically prescribed information
barrier procedures. This proposal is consistent with the change
recently approved by the Commission for NYSE Arca Equities, Inc.
(``NYSE Arca''), which allowed the elimination of a specific
information barrier requirement previously contained in NYSE Arca
rules.\8\ This proposal is also consistent with the approach currently
employed by the Nasdaq Stock Market, L.L.C. (``Nasdaq''), which does
not generally require its members to establish or maintain information
barriers.
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\8\ Securities Exchange Act Release No. 60604 (September 1,
2009), 74 FR 46272 (September 8, 2009) (SR-NYSEArca-2009-78).
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If the deletion of the requirement to maintain and file with the
Exchange certain prescribed information barrier procedures is approved,
the only specific information barrier requirement of the Exchange will
be the requirement described below, under proposed Rule 12.13, to
maintain policies and procedures reasonably designed to restrict or
limit the information flow between those with knowledge of the content
or timing of a research report and trading department personnel.
However, the Exchange does not intend to indicate that information
barriers may not be necessary for Members in other contexts. To the
contrary, information barrier procedures may be a necessary or
effective means to manage conflicts of interest or to prevent
communications of material non-public information between certain
individuals or groups.\9\ Further, as described above, under proposed
Interpretation and Policy .02, the adequacy of each Member's policies
and procedures will depend upon the nature of each Member's business.
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\9\ The Exchange represents that it will issue a Regulatory
Circular to its Members notifying such Members of this proposal and
addressing related regulatory topics. For instance, the Regulatory
Circular will reinforce the requirement that Members of the Exchange
maintain policies and procedures that are reasonably designed to
assure compliance with applicable securities laws, rules,
regulations and statements of policy promulgated thereunder and the
Exchange's rules, including those relating to the misuse of material
non-public information. In addition, the Exchange represents that
the Regulatory Circular will include the following guidance:
``Pursuant to the proposed rule change, Members may utilize a
flexible, principles-based approach to modify their policies and
procedures as appropriate to reflect changes to their business
model, business activities, or to the securities market itself. A
Member should be proactive in assuring that its policies and
procedures reflect the current state of its business and continue to
be reasonably designed to achieve compliance with applicable federal
securities law and regulations, and with applicable Exchange rules.
While information barriers are not specifically required under the
proposal, a Member's business model or business activities may
dictate that an information barrier or a functional separation be
part of the appropriate set of policies and procedures that would be
reasonably designed to achieve compliance with applicable securities
law and regulations, and with applicable Exchange rules.''
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(iii) Proposed Addition of BATS Rule 12.13
In an attempt to achieve additional consistency with certain other
market centers, the Exchange further proposes to add new BATS Rule
12.13, prohibiting Members from establishing, increasing, decreasing or
liquidating an inventory position in a security or a derivative of such
security based on non-public advance knowledge of the content or timing
of a research report in that security. Similar to FINRA Rule 5280 and
NYSE Arca Rule 6.7, the Exchange also proposes to require Members to
establish, maintain and enforce procedures reasonably designed to
restrict or limit the information flow
[[Page 9457]]
between research department personnel and trading department personnel,
so as to prevent trading department personnel from utilizing non-public
advance knowledge of the issuance or content of a research report.
(iv) Members Retain Responsibility for Compliance
By prohibiting the misuse of material, non-public information, the
Exchange believes it has appropriately defined the behavior that its
participants must avoid. However, the Exchange also believes that
prescribing the form that these policies and procedures must take is
unnecessarily burdensome. By defining certain prohibited behavior
(e.g., BATS Rule 12.6) the Exchange has placed its participants on
notice as to their specific compliance burdens with respect to
preventing the misuse of material, non-public information. Further,
BATS Rule 5.1 requires each Member to establish, maintain and enforce
written procedures that enable such Member to supervise the activities
of associated persons of the Member and to assure their compliance with
applicable securities laws and regulations, and with BATS Rules.
Pursuant to this proposed rule change, Members may utilize a flexible,
principles-based approach to modify their policies and procedures as
appropriate to reflect changes to their business model, business
activities, or to the securities market itself. A Member should be
proactive in assuring that its policies and procedures reflect the
current state of its business and continue to be reasonably designed to
achieve compliance with applicable federal securities law and
regulations, and with applicable Exchange rules. In addition, in the
context of approving a similar proposal by NYSE Arca, the Commission
stated that, ``while information barriers are not specifically required
under the proposal, a [firm's] business model or business activities
may dictate that an information barrier or a functional separation be
part of the appropriate set of policies and procedures that would be
reasonably designed to achieve compliance with applicable securities
law and regulations, and with applicable Exchange rules.'' \10\
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\10\ See Securities Exchange Act Release No. 60604 (September 1,
2009), 74 FR at 46275 (September 8, 2009) (SR-NYSEArca-2009-78).
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(v) Comparison to Framework Employed by Nasdaq and NYSE Arca
By amending its rules in accordance with this proposal, the
Exchange reinforces a regulatory structure that clearly identifies
prohibited conduct (e.g., misuse of material, non-public information)
without further requiring Members to establish and maintain specific
compliance mechanisms (e.g., information barriers). For example, Nasdaq
prohibits the misuse of material, non-public information but does not
generally require that its members establish and maintain information
barriers,\11\ and NYSE Arca recently eliminated a requirement
applicable to NYSE Arca market makers specifically requiring
information barriers. In conjunction with such amendment, NYSE Arca
adopted NYSE Arca Rule 6.7, a rule that the Exchange has mirrored with
its proposal of BATS Rule 12.13. Finally, similar to BATS Rule 5.1,
Nasdaq Rule 3010 and NYSE Arca Rule 6.18 require the members of Nasdaq
and NYSE Arca, respectively, to establish and maintain systems to
supervise the activities of associated persons that are reasonably
designed to achieve compliance with applicable federal securities laws
and regulations, and the applicable rules of the exchange.
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\11\ See Nasdaq Rules 2110-2, 2110-3, and 2110-4.
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The Exchange believes that the approach proposed herein is
consistent with Nasdaq and NYSE Arca's respective structures. First,
like Nasdaq and NYSE Arca, market makers registered with BATS and other
firms that are Members of BATS that trade for their own accounts do not
have any advantages regarding relevant trading information provided by
the Exchange, either at, or prior to, the point of execution vis-
[agrave]-vis other market participants. Second, BATS has similar
requirements to Nasdaq and NYSE Arca concerning the maintenance of a
supervisory system and written supervisory procedures. The Exchange
notes that FINRA and BATS have previously acknowledged, pursuant to the
provisions of Rule 17d-2 under the Securities Exchange Act of 1934
(``17d-2 Agreement''), that, collectively, BATS Rules 5.1, 5.2, 5.3 and
5.4 are substantially similar to FINRA's NASD Rule 3010, which Nasdaq
and NYSE Arca rules incorporate by reference. For instance, BATS Rule
5.4 is similar to Rule 3010(c), which requires each FINRA member to
conduct an annual review of the businesses in which it engages and to
conduct annual office inspections including the ``periodic examination
of customer accounts to detect and prevent irregularities or abuses.''
Although the Exchange has not incorporated Rule 3010(c) into its Rules
by reference, Rule 3010(c) would apply to all broker-dealers that
engage in a customer business, because such firms are required to be
members of FINRA.\12\ Also, although not as detailed as Rule 3010(c)
with respect to the requirements of the inspection, BATS Rule 5.4 is
nearly identical in that it requires BATS Members to ``review the
activities of each office, which shall include the periodic examination
of customer accounts to detect and prevent irregularities or abuses.''
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\12\ See 15 U.S.C. 78o(b)(8); see also 17 CFR 240.15b9-1(a).
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Based on the foregoing, it is appropriate for the Exchange to
establish a similar approach with respect to information barriers
employed by Nasdaq and NYSE Arca.\13\
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\13\ BATS notes that its current examination procedure regarding
its review for appropriate supervisory systems and procedures will
remain in place.
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(vi) Conclusion: Flexibility and Accountability
Eliminating substantial portions of BATS Rule 5.5, and adding to
the general standards set forth therein to prohibit the misuse of
material, non-public information, as proposed by this filing, offers
Exchange participants both certainty and flexibility. BATS Members are
on notice as to their obligations to maintain and enforce written
policies and procedures reasonably designed to prevent the misuse of
material, non-public information. Like Nasdaq and NYSE Arca
participants, BATS Members will now be afforded the same flexibility to
maintain compliance mechanisms of their own design. The Exchange
believes that this approach fosters a fair and orderly marketplace
without being overly burdensome upon its Members.
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.\14\ Specifically, the
proposed change is consistent with Section 6(b)(5) of the Act,\15\
because it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, and
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system. Eliminating portions of BATS Rule
5.5 that prescribe specific procedures and information barriers that
must be maintained by certain Member firms,
[[Page 9458]]
while establishing more clarity regarding the minimum procedures that
must be maintained by any Member, consistent with other self-regulatory
organizations, should eliminate unnecessary regulatory burdens while at
the same time retaining an appropriate mechanism designed to ensure
that material, non-public information continues to be protected. In
particular, the proposed rule change will reduce the burdens on certain
Members that are currently required to maintain, and file with the
Exchange, specified information barriers. The Exchange believes that
the proposed changes will make compliance obligations with respect to
prevention of the misuse of material, non-public information more clear
to Exchange Members. The amended rule structure will be more consistent
with that of other exchanges and will nonetheless continue to ensure
protection of investors through existing regulations relevant to misuse
of material, non-public information that apply to Exchange Members
through the applicability and enforcement of relevant provisions of the
Act, including Section 15(f); \16\ rules imposed by other self-
regulatory organizations; a joint industry effort to surveil for
potential insider trading violations through a Rule 17d-2 Agreement\17\
and Regulatory Services Agreements between all self-regulatory
organizations that trade equity securities; and through the Exchange's
examination program.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
\16\ 15 U.S.C. 78o(f).
\17\ See Securities Exchange Act Release 58806 (October 17,
2008), 73 FR 63216 (October 23, 2008); Securities Exchange Act
Release No. 58536 (September 12, 2008), 73 FR 54646 (September 22,
2008).
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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. 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 [email protected]. Please include
File Number SR-BATS-2010-003 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BATS-2010-003. 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 such filing also will be available for
inspection and copying at the principal office of BATS. 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 publicly available. All
submissions should refer to File Number SR-BATS-2010-003 and should be
submitted on or before March 23, 2010.
IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\18\ The Commission believes that the proposal is consistent
with Section 6(b)(5) \19\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
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\18\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\19\ 15 U.S.C. 78f(b)(5).
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The Exchange is proposing to amend BATS Rule 5.5 to replace the
specifically prescribed information barrier requirement with a more
principles-based approach that would permit a Member to develop and
apply its own policies and procedures to, among other things, prohibit
the misuse of material nonpublic information. BATS Rule 5.5 addresses
concerns arising from the potential for the sharing of material non-
public information between a Member's market making activities and
other business activities of the Member or its affiliates. For
instance, one such concern is that the Member or affiliate engaging in
other business activities might use non-public information that was
acquired by the Member through its role as a market maker. Another
concern is that the Member might use material non-public information
received from the entity engaging in other business activities, such as
trading based on a change in the firm's buy or sell recommendation.\20\
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\20\ See Securities Exchange Act Release No. 58328 (August 7,
2008), 73 FR 48260 (August 18, 2008) (SR-NYSE-2008-45) (articulating
concerns in the context of approving changes to NYSE Rule 98).
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While amended BATS Rule 5.5 will no longer specify policies and
procedures a Member must establish, the proposal will require that the
policies and procedures be reasonably designed to ensure compliance
with applicable Federal securities law and regulations, and with
Exchange rules. The Commission believes that, with adequate oversight
by the Exchange of its members, elimination of prescriptive information
barrier requirements should not reduce the effectiveness of BATS rules
requiring Members to establish and maintain systems to supervise the
activities of Members, and written procedures that are reasonably
designed to comply with applicable securities laws and Exchange rules,
including the prohibition on misuse of material nonpublic information.
Specifically, amended BATS Rule 5.5 will require Members to
establish,
[[Page 9459]]
maintain and enforce written procedures reasonably designed to prevent
the misuse of material non-public information by the Member or persons
associated with the Member. The misuse of material non-public
information includes trading in a security or related securities or
options or other derivative securities, while in possession of material
non-public information concerning the issuer, or while in possession of
material non-public information concerning imminent transactions in the
security or related securities.\21\ The Exchange also proposes to add
BATS Rule 12.13, which will prohibit a Member from establishing,
increasing, decreasing or liquidating an inventory position in a
security or derivative of that security based on advance non-public
knowledge of the content or timing of a research report concerning that
security.
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\21\ See BATS Rule 5.5, Commentary .01.
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Further, BATS Rules 5.1, 5.2, 5.3 and 5.4, which relate to a
Member's responsibilities or obligations related to conduct or
supervision, will continue to apply. For example, BATS Rule 5.1
requires BATS Members to ``establish, maintain and enforce written
procedures which will enable it to supervise properly the activities of
associated persons of the Member and to assure their compliance with
applicable securities laws, rules, regulations and statements of policy
promulgated thereunder, with the rules of the designated self-
regulatory organization, where appropriate, and with Exchange Rules.''
In addition, BATS Rule 5.4 requires BATS Members to ``review the
activities of each office, which shall include the periodic examination
of customer accounts to detect and prevent irregularities or abuses.''
These rules thus provide additional clarification that the supervisory
systems and internal inspections of Members must be reasonably designed
to achieve compliance with applicable securities laws and regulations
and with applicable BATS rules, including those relating to the misuse
of material non-public information.
Pursuant to this proposal rule change, Members may utilize the
flexible, principles-based approach to modify their policies and
procedures as appropriate to reflect changes to their business model,
business activities, or to the securities market itself. A Member
should be proactive in assuring that its policies and procedures
reflect the current state of its business and continue to be reasonably
designed to achieve compliance with applicable federal securities law
and regulations, and with applicable Exchange rules. In addition, the
Commission notes that, while information barriers are not specifically
required under the proposal, a Member's business model or business
activities may dictate that an information barrier or a functional
separation be part of the appropriate set of policies and procedures
that would be reasonably designed to achieve compliance with applicable
securities law and regulations, and with applicable Exchange rules. In
this regard, the Exchange included in Interpretation and Policy .02 to
amended BATS Rule 5.5 a statement that the adequacy of each Member's
policies and procedures relating to the misuse of material non-public
information will depend upon the nature of such Member's business.
The Commission believes that the regulatory approach in this
proposed rule change is substantially similar to the regulatory
approach of Nasdaq and NYSE Arca. In particular, the BATS approach,
like the Nasdaq and NYSE Arca approach, (i) enumerates the conduct that
is prohibited by its members, including the potential misuse of
material non-public information and (ii) provides for the policies and
procedures that must be reasonably designed to ensure compliance with
the same. In addition, the Commission notes that the Exchange has
represented that its current examination procedure for the review of
appropriate supervisory systems and procedures will remain in place.
The Commission also finds good cause, pursuant to Section 19(b)(2)
of the Act,\22\ for approving the proposed rule change prior to the
30th day after the date of publication of notice in the Federal
Register. Although this proposed rule change does not require that
Members maintain specifically-prescribed information barriers, it will
continue to mandate that Members establish and maintain a set of
policies and procedures reasonably designed to achieve compliance with
applicable securities law and regulations, and with applicable Exchange
rules. As such, the Exchange is adopting an approach that is
substantially similar to the approach currently employed by Nasdaq and
NYSE Arca.\23\
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\22\ 15 U.S.C. 78s(b)(2).
\23\ See Securities Exchange Act Release No. 53128 (Jan. 13,
2006), 71 FR 3550 (January 23, 2006) (adopting Nasdaq IM-2110-2; IM-
2110-3; IM-2110-4, and Rule 3010); 60604 (September 1, 2009), 74 FR
46272 (September 8, 2009) (SR-NYSEArca-2009-78).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\24\ that the proposed rule change (SR-BATS-2010-003) be, and it
hereby is, approved on an accelerated basis.
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\24\ 15 U.S.C. 78s(b)(2).
\25\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4230 Filed 3-1-10; 8:45 am]
BILLING CODE 8011-01-P