[Federal Register Volume 76, Number 179 (Thursday, September 15, 2011)]
[Notices]
[Pages 57092-57093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-23606]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65307; File No. SR-BATS-2011-034]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Offer a 
Bulk-Quoting Interface To All Users of BATS Options

September 9, 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 September 2, 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 Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it 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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal for the BATS Options Market (``BATS 
Options'') to extend the availability of a recently introduced bulk-
quoting interface for BATS Options Market Makers \5\ to all Users \6\ 
of BATS Options.
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    \5\ As defined in BATS Rule 16.1(a)(37), an ``Options Market 
Maker'' is a member of BATS Options registered with the Exchange for 
the purpose of making markets in options contracts traded on the 
Exchange and that is vested with the rights and responsibilities 
specified in Chapter XXII of the Exchange's Rules.
    \6\ As defined in BATS Rule 16.1(a)(62), a ``User'' on BATS 
Options is either a member of BATS Options (``Options Member'') or a 
sponsored participant who is authorized to obtain access to the 
Exchange's system pursuant to BATS Rule 11.3 (``Sponsored 
Participant'').
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    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 Exchange currently offers an order-based interface for entering 
orders into the BATS Options trading platform. The Exchange also 
recently proposed modification to its systems to permit BATS Options 
Market Makers to utilize a bulk-quoting interface to enter orders into 
BATS Options.\7\ The Exchange proposes to modify this interface to 
permit all Options Users to use this interface to provide one or more 
quotations on BATS Options. Prior to releasing bulk-quoting for Options 
Market Makers, the only interface for order entry to BATS Options has 
been an order-based interface. Through this order-based interface, a 
User seeking to enter a two-sided quotation must enter both a buy and a 
sell order. The Exchange proposes to make the bulk-quoting interface 
available to all Users

[[Page 57093]]

of BATS Options rather than limiting bulk-quoting to Options Market 
Makers.
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    \7\ See Securities Exchange Act Release No. 65133 (August 15, 
2011), 76 FR 52032 (August 19, 2011) (SR-BATS-2011-029).
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    The proposed bulk-quoting market making interface will be used by 
Users to submit and update their quotations in the marketplace much 
like the current order-based interface is used by such Users today. The 
bulk-quoting interface, however, allows Users to provide both a bid and 
an offer in one message. In addition, the bulk-quoting interface allows 
Users to bundle several quote updates into one bulk message. This is a 
useful feature for Users that provide quotations in many different 
options.
    BATS Options does not require any Users to register as Options 
Market Makers in order to participate on BATS Options, nor does BATS 
Options limit the ability to post liquidity on both sides of the market 
to Options Market Makers. In fact, there are several Users that provide 
significant liquidity to BATS Options but are not registered as Options 
Market Makers. Some of these Users are registered on other options 
exchanges as market makers and others are not. Due to the enhanced 
liquidity and efficiencies the interface can provide, the Exchange 
believes that the bulk-quoting functionality should be available to all 
Users, not only Options Market Makers.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \9\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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. 
The Exchange believes this proposal is in keeping with those principles 
by protecting investors and the public interest, as well as promoting 
just and equitable principles of trade, by making available on an equal 
basis a new market making interface option for all Users of BATS 
Options, which will help to enhance market liquidity for investors.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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, if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written 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.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. Waiver of the 30-day operative delay would allow the Exchange 
to immediately offer the interface to all Users without undue delay. 
The Exchange notes that the proposed rule change does not require any 
significant system change as the functionality is already available to 
BATS Options Market Makers. The Commission believes that waiving 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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    \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-2011-034 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-2011-034. 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 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 
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-2011-034 and should be submitted on or before October 6, 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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23606 Filed 9-14-11; 8:45 am]
BILLING CODE 8011-01-P