[Federal Register Volume 76, Number 199 (Friday, October 14, 2011)]
[Notices]
[Pages 63977-63979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26529]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65516; File No. SR-BATS-2011-040]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Extend 
the Pilot Period of the Inbound Router, as Described in Rule 2.12

October 7, 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 29, 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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[[Page 63978]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed with the Commission a proposal to extend the 
pilot program so that the Exchange can receive inbound routes of 
equities orders through BATS Trading, Inc. (``BATS Trading''), the 
Exchange's routing broker-dealer, from BATS Y-Exchange, Inc. (``BYX'').
    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
    Currently, BATS Trading is the approved outbound order routing 
facility of BYX.\3\ The Exchange, through BATS Trading, has also been 
authorized to receive inbound routes of equities orders by BATS Trading 
from BYX.\4\ The Exchange's authority to receive inbound routes of 
equities orders by BATS Trading from BYX is subject to a pilot period 
of twelve months, ending October 15, 2011. The Exchange hereby seeks to 
extend the previously approved pilot period (with the attendant 
obligations and conditions) for an additional six months, through April 
15, 2012. This is reflected in the proposed amendment to BATS Rule 
2.12(b).
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    \3\ See Securities Exchange Act Release No. 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).
    \4\ See Securities Exchange Act Release No. 62901 (September 13, 
2010), 75 FR 57097 (September 17, 2010) (SR-BATS-2010-024) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt BATS Rule 2.12, Entitled ``BATS Trading, Inc. as Inbound 
Router'' and To Make Related Changes) (the ``Inbound Router 
Notice'').
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2. Statutory Basis
    The Exchange believes that its proposal 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.\5\ In particular, the 
proposal is consistent with Section 6(b)(5) of the Act,\6\ 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    Specifically, the proposed rule change will allow the Exchange to 
continue receiving inbound routes of equities orders from BATS Trading 
acting in its capacity as a facility of BYX, in a manner consistent 
with prior approvals and established protections. The Exchange believes 
that extending the previously approved pilot period for six months will 
permit both the Exchange and the Commission to further assess the 
impact of the Exchange's authority to receive direct inbound routes of 
equities orders via BATS Trading, including the attendant obligations 
and conditions.\7\
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    \7\ The Exchange plans to submit a proposal prior to the 
expiration of the new pilot period to make permanent the Exchange's 
authority to receive direct inbound routes of equities orders via 
BATS Trading.
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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 significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not 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)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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 requested that the Commission waive the 30-day 
operative delay. The Exchange believes that the proposed rule change is 
consistent with the protection of investors and the public interest 
because it would permit the Exchange to continue receiving inbound 
routes of equities orders from BATS Trading, in a manner consistent 
with prior approvals and established protections.\10\ The Commission 
believes that waiver of the operative delay is consistent with the 
protection of investors and the public interest because such waiver 
would allow the pilot period to be extended without undue delay through 
April 15, 2011 while the Exchange's proposal to make the pilot 
permanent is under consideration.\11\ Therefore, the Commission 
designates the proposal operative upon filing.\12\
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    \10\ See SR-BATS-2011-040, Item 7.
    \11\ See supra note 7.
    \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-2011-040 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary,

[[Page 63979]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-1090.

All submissions should refer to File Number SR-BATS-2011-040. 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-2011-040 and should be 
submitted on or before November 4, 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. 2011-26529 Filed 10-13-11; 8:45 am]
BILLING CODE 8011-01-P