[Federal Register Volume 76, Number 35 (Tuesday, February 22, 2011)]
[Notices]
[Pages 9841-9842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-3826]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63916; File No. SR-BATS-2011-005]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
BATS Rule 11.13, Entitled ``Order Execution''
February 15, 2011.
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 14, 2011, 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 the Exchange. BATS has
designated the proposed rule change as constituting a rule change under
Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal effective
upon filing with the Commission. 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.
\3\ 17 CFR 240.19b-4(f)(6).
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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 11.13, entitled ``Order
Execution,'' to modify the description of the SLIM routing strategy
offered by the Exchange. The Exchange proposes to implement the
proposed rule change on February 25, 2011, or as soon thereafter as
practicable.
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 Exchange proposes to amend Rule 11.13, which describes its
order routing processes, to modify the description of the SLIM routing
strategy offered by the Exchange.
Currently, various routing strategies are available through BATS,
including the SLIM routing strategy. As described in Rule
11.13(a)(3)(H), SLIM is a routing option under which an order will
check the System for available shares, will be routed to BATS Y-
Exchange, Inc. (``BYX''),\4\ and then will be sent to destinations on
the System routing table. The Exchange currently allows a User \5\ to
designate whether an order routed through the TRIM routing strategy
should check the Exchange's order book before routing away. This
optional initial check of the Exchange's order book is not currently
available for SLIM, but rather SLIM routed orders always check the
Exchange's order book before routing away. The Exchange
[[Page 9842]]
proposes to modify the description of SLIM to provide Users with two
distinct SLIM routing options. The first SLIM routing option will be to
check the System for available shares and then route to destinations on
the System routing table. The second SLIM routing option will first
route to the Exchange's affiliate, BATS Y-Exchange, Inc., return to the
Exchange and check the System for available shares, and then route to
destinations on the System routing table.
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\4\ BYX is a registered national securities exchange and
affiliate of the Exchange. See Securities Exchange Act Release No.
34-62716 (August 13, 2010), 75 FR 51295 (August 19, 2010) (order
approving application of BATS Y-Exchange, Inc. for registration as a
national securities exchange). BYX commenced operations on October
15, 2010.
\5\ As defined in Rule 1.5(cc), the term ``User'' means any
Member or Sponsored Participant who is authorized to obtain access
to the System pursuant to BATS Rule 11.3.
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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.\6\ Specifically, the
proposed change is consistent with Section 6(b)(5) of the Act,\7\
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 modify the SLIM routing strategy will provide
market participants with greater flexibility in routing orders
consistent with Regulation NMS without developing complicated order
routing strategies on their own.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
BATS has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \10\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \11\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. BATS requests that the
Commission waive the 30-day operative delay in order to immediately
offer Exchange Users an additional option in use of the SLIM routing
strategy, and believes that proposed change to the SLIM routing
strategy will benefit market participants and their customers by
allowing them greater flexibility in their efforts to fill orders and
minimize trading costs. The Exchange also believes that a delay to the
implementation date would put the Exchange at a competitive
disadvantage to other markets that already offer a similar option. The
Commission believes that accelerating the 30-day operative delay \12\
is consistent with the protection of investors and the public interest
and designates the proposal operative upon filing.
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ For purposes only of waiving the 30-day operative delay,
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.
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 [email protected]. Please include
File Number SR-BATS-2011-005 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-2011-005. 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 publicly available. All
submissions should refer to File Number SR-BATS-2011-005 and should be
submitted on or before March 15, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-3826 Filed 2-18-11; 8:45 am]
BILLING CODE 8011-01-P