Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Limitation of Liability, 65901-65903 [E8-26278]
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Federal Register / Vol. 73, No. 215 / Wednesday, November 5, 2008 / Notices
appropriate and waived annual fees.5 In
2006, FINRA wrote to the staff again,
this time recommending a two-year
waiver of all fees to continue to reduce
the surplus. The Commission agreed
and issued another order waiving all
IARD fees.6 As a result of these two
waivers, the surplus was reduced from
• million in 2005 to $5 million.
FINRA has again written to
Commission staff, recommending that
the waiver of annual IARD fees and the
waiver of initial IARD filing fees for
SEC-registered advisers be extended for
an additional nine months to July 31,
2009.7 Based on projections of expected
SEC-associated IARD revenues and SECassociated IARD expenses for the next
nine months, the Commission believes
that the current SEC-associated surplus
exceeds the amount needed for
operations and system enhancements
during this period, and accordingly
believes that an extension of the current
waiver of both annual and initial filing
fees through July 31, 2009 is appropriate
in order to continue reducing the SECassociated surplus. This action is
expected to waive approximately $4
million in IARD system fees that SECregistered advisers would incur, and
should reduce the SEC-associated
surplus to approximately $3.7 million.
The fee waiver will apply to all annual
updating amendments filed by SECregistered advisers from November 1,
2008 through July 31, 2009 and to all
initial applications for registration filed
by advisers applying for SEC
registration from November 1, 2008
through July 31, 2009.
It is therefore ordered, pursuant to
sections 204(b) and 206(A) of the
Investment Advisers Act of 1940, that:
For annual updating amendments to
Form ADV filed from November 1, 2008
through July 31, 2009, the fee otherwise
due from SEC-registered advisers is
waived, and for initial applications to
register as an investment adviser with
the SEC filed from November 1, 2008
through July 31, 2009, the fee otherwise
due from the applicant is waived.
By the Commission.
Dated: October 30, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–26307 Filed 11–4–08; 8:45 am]
hsrobinson on PROD1PC76 with NOTICES
BILLING CODE 8011–01–P
5 Approval of Investment Adviser Registration
Depository Filing Fees, Investment Advisers Act
Release No. 2439 (Oct. 7, 2005)
6 Approval of Investment Adviser Registration
Depository Filing Fees, Investment Advisers Act
Release No. 2564 (Oct. 26, 2006).
7 The recommendation to waive fees through July
2009 corresponds to the expiration of the SEC’s
contract with FINRA to operate the IARD.
VerDate Aug<31>2005
17:24 Nov 04, 2008
Jkt 217001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58872; File No. SR–BATS–
2008–008]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Limitation of
Liability
October 28, 2008.
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 October
20, 2008, BATS Exchange, Inc. (‘‘BATS’’
or ‘‘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 non-controversial rule change under
Rule 19b–4(f)(6) under the Act,3 which
renders the proposal effective upon
filing with the Commission. BATS has
requested that the Commission waive
the 5-day notice requirement and the
30-day pre-operative waiting period
contained in Rule 19b–4(f)(6)(iii) under
the Act.4 If such waivers are granted by
the Commission, the Exchange will
implement this rule proposal
immediately upon commencement of its
operations as a national securities
exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to amend
BATS Rule 11.16, entitled
‘‘LIMITATION OF LIABILITY,’’ to
codify that it may provide a form of
compensation for losses sustained in
relation to an Exchange system failure
or a negligent act or omission of an
Exchange employee.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.batstrading.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
4 Id.
2 17
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65901
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 those
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 11.16 to establish a procedure to
compensate Members 5 in relation to
Exchange systems failures or a negligent
act or omission of an Exchange
employee. The Exchange recognizes that
the current industry practice of
exchanges that function as SROs is to
provide a form of compensation for
losses sustained in relation to the use of
the exchanges’ systems, and that some
exchanges also provide a form of
compensation for negligence by the
exchanges’ employees. As such, the
Exchange seeks to amend BATS Rule
11.16 to conform to current industry
practice.
Pursuant to the proposed amendment
to Rule 11.16, the Exchange would
compensate Members for losses
resulting directly from: (i) The
malfunction of the Exchange’s physical
equipment, devices, and/or
programming, or (ii) the negligent acts
or omissions of the Exchange’s
employees.6 Under this proposed rule
change, for such malfunctions or
negligence, the Exchange would cap its
liability: (i) To a single Member at the
greater of $100,000 or the amount
recovered under any applicable
insurance policy on a single trading day,
(ii) to all Members at the greater of
$250,000 or the amount recovered under
any applicable insurance policy on a
single trading day, and (iii) to all
Members at the greater of $500,000 or
the amount recovered under any
5 A Member is any registered broker or dealer that
has been admitted to membership in the Exchange.
6 The Exchange represents that the determination
as to whether a Member is compensated or not will
be made on an equitable and non-discriminatory
basis without regard to the status of that Member,
e.g., regardless of whether that Member is registered
as a Market Maker with the Exchange.
E:\FR\FM\05NON1.SGM
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65902
Federal Register / Vol. 73, No. 215 / Wednesday, November 5, 2008 / Notices
applicable insurance policy in a single
calendar month.
To the extent that all claims resulting
from systems failures or negligence by
Exchange employees cannot be fully
satisfied because in the aggregate they
exceed the applicable maximum amount
of liability provided for, then the
Exchange proposes to allocate the
maximum amount among all such
claims arising on a single trading day or
during a single calendar month, as
applicable, based on the proportion that
each such claim bears to the sum of all
such claims.
In order for a Member to be eligible
to receive payment, claims must be
made in writing and must be submitted
no later than the opening of trading on
the next business day following the day
on which the use of the Exchange gave
rise to such claims. Once in receipt of
a claim, the Exchange will verify that:
(i) A valid order was accepted into the
Exchange’s systems; and (ii) an
Exchange system failure or a negligent
act or omission of an Exchange
employee occurred during the execution
or handling of that order. If all the
criteria for submitting a claim have been
met, the claim will be qualified for
processing with all other claims at the
end of the calendar month in which the
incident occurred.
2. Statutory Basis
The Exchange believes the 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).7 In particular, for the
reasons described above, the proposed
change 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, by providing more certainty as
to the Exchange’s potential liability
resulting from systems problems and
negligence by Exchange employees.
hsrobinson on PROD1PC76 with NOTICES
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.
7 15
8 15
U.S.C. 78(f)(b).
U.S.C. 78f(b)(5).
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17:24 Nov 04, 2008
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (1) Significantly affect
the protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, 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
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. The Exchange requested
that the Commission waive the 30-day
operative delay. The Commission
believes that waiving the 30-day
operative delay 11 is consistent with the
protection of investors and the public
interest. Given that the Exchange’s
proposed rule change is substantially
similar to the rules of other exchanges
previously approved by the
Commission,12 the proposal does not
appear to present any novel regulatory
issues. Moreover, the proposal would
make more certain the Exchange’s
potential liability for such losses upon
commencement of its operation as an
exchange. Therefore, the Commission
designates the proposal operative upon
filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
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.
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii)
requires a self-regulatory organization to provide
the Commission with 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 Commission
deems this requirement to have been satisfied.
11 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).
12 See NYSE Arca Equities Rule 13.2, NASDAQ
Rule 4626, and ISE Rule 705.
10 17
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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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–BATS–2008–008 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BATS–2008–008. 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 (https://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 inspection and copying 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–2008–008 and
should be submitted on or before
November 26, 2008.
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Federal Register / Vol. 73, No. 215 / Wednesday, November 5, 2008 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–26278 Filed 11–4–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58868; File No. SR–ISE–
2008–79]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Fee Changes
October 28, 2008.
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 October
21, 2008, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change, as described
in Items I, II, and III below, which items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The ISE is proposing to amend its
Schedule of Fees to establish fees for
transactions in options on 4 Premium
Products.3 The text of the proposed rule
change is available on the ISE’s Web site
(https://www.ise.com), at the principal
office of the ISE, and at the
Commission’s Public Reference Room.
hsrobinson on PROD1PC76 with NOTICES
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
self-regulatory organization 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 self-regulatory organization has
prepared summaries, set forth in
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Premium Products is defined in the Schedule of
Fees as the products enumerated therein.
1 15
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17:24 Nov 04, 2008
Jkt 217001
sections A, B, and C below, of the most
significant aspects 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 is
proposing to amend its Schedule of Fees
to establish fees for transactions in
options on the iShares Dow Jones U.S.
Medical Devices Index Fund (‘‘IHI’’), the
iShares Dow Jones U.S. Oil & Gas
Exploration & Production Index Fund
(‘‘IEO’’), the iShares Dow Jones U.S.
Regional Banks Index Fund (‘‘IAT’’),4
and the SPDR S&P Oil & Gas
Exploration & Production ETF
(‘‘XOP’’).5 The Exchange represents that
IHI, IEO, IAT, and XOP are eligible for
options trading because they constitute
‘‘Exchange-Traded Fund Shares,’’ as
defined by ISE Rule 502(h).
All of the applicable fees covered by
this filing are identical to fees charged
4 iShares is a registered trademark of Barclays
Global Investors, N.A. (‘‘BGI’’), a wholly owned
subsidiary of Barclays Bank PLC. ‘‘Dow Jones,’’
‘‘Dow Jones U.S. Select Medical Equipment Index,’’
‘‘Dow Jones U.S. Select Oil Exploration &
Production Index,’’ and ‘‘Dow Jones U.S. Select
Regional Banks Index’’ are service marks of Dow
Jones & Company, Inc. (‘‘Dow Jones’’) and have
been licensed for use for certain purposes by BGI.
All other trademarks and service marks are the
property of their respective owners. The iShares
Dow Jones U.S. Medical Devices Index Fund
(‘‘IHI’’), the iShares Dow Jones U.S. Oil & Gas
Exploration & Production Index Fund (‘‘IEO’’), and
the iShares Dow Jones U.S. Regional Banks Index
Fund (‘‘IAT’’) are not sponsored, endorsed, sold, or
promoted by Dow Jones. BGI and Dow Jones have
not licensed or authorized ISE to (i) engage in the
creation, listing, provision of a market for trading,
marketing, and promotion of options on IHI, IEO,
and IAT or (ii) to use and refer to any of their
trademarks or service marks in connection with the
listing, provision of a market for trading, marketing,
and promotion of options on IHI, IEO, and IAT or
with making disclosures concerning options on IHI,
IEO, and IAT under any applicable federal or state
laws, rules or regulations. BGI and Dow Jones do
not sponsor, endorse, or promote such activity by
ISE, and are not affiliated in any manner with ISE.
5 ‘‘Standard & Poor’s,’’ ‘‘S&P,’’ ‘‘S&P 500,’’
‘‘Select Sector SPDR,’’ ‘‘Select Sector SPDRs,’’
and ‘‘the S&P Oil & Gas Exploration & Production
Select Industry Index’’ are trademarks of The
McGraw-Hill Companies, Inc. (‘‘McGraw-Hill’’), and
have been licensed for use by State Street Bank and
Trust Company (‘‘State Street’’) in connection with
the listing and trading of SPDR S&P Oil & Gas
Exploration & Production ETF (‘‘XOP’’). State Street
and Standard & Poor’s, (‘‘S&P’’), a division of
McGraw-Hill, do not sponsor, endorse, or promote
XOP. State Street, McGraw-Hill, and S&P have not
licensed or authorized ISE to (i) engage in the
creation, listing, provision of a market for trading,
marketing, and promotion of options on XOP or (ii)
to use and refer to any of their trademarks or service
marks in connection with the listing, provision of
a market for trading, marketing, and promotion of
options on XOP or with making disclosures
concerning options on XOP under any applicable
federal or state laws, rules or regulations. State
Street, McGraw-Hill, and S&P do not sponsor,
endorse, or promote such activity by ISE and are
not affiliated in any manner with ISE.
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65903
by the Exchange for all other Premium
Products. Specifically, the Exchange is
proposing to adopt an execution fee for
all transactions in options on IHI, IEO,
IAT, and XOP.6 The amount of the
execution fee for products covered by
this filing shall be $0.18 per contract for
all Public Customer Orders 7 and $0.20
per contract for all Firm Proprietary
orders. The amount of the execution fee
for all ISE Market Maker transactions
shall be equal to the execution fee
currently charged by the Exchange for
ISE Market Maker transactions in equity
options.8 Finally, the amount of the
execution fee for all non-ISE Market
Maker transactions shall be $0.45 per
contract.9 Further, since options on IHI,
IEO, IAT, and XOP are multiply-listed,
the Exchange’s Payment for Order Flow
fee shall apply to all these products. The
Exchange believes the proposed rule
change will further the Exchange’s goal
of introducing new products to the
marketplace that are competitively
priced.
2. Basis—The Exchange believes that
the proposed rule change is consistent
with the objectives of Section 6 of the
Act,10 in general, and furthers the
objectives of Section 6(b)(4),11 in
particular, in that it is designed to
provide for the equitable allocation of
reasonable dues, fees and other charges
among its members and other persons
using its facilities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
6 These fees will be charged only to Exchange
members. Under a pilot program that is set to expire
on July 31, 2009, these fees will also be charged to
Linkage Principal Orders (‘‘Linkage P Orders’’) and
Linkage Principal Acting as Agent Orders (‘‘Linkage
P/A Orders’’). The amount of the execution fee
charged by the Exchange for Linkage P Orders and
Linkage P/A Orders is $0.24 per contract side and
$0.15 per contract side, respectively. See Securities
Exchange Act Release No. 58143 (July 11, 2008), 73
FR 41388 (July 18, 2008) (SR–ISE–2008–52).
7 Public Customer Order is defined in Exchange
Rule 100(a)(39) as an order for the account of a
Public Customer. Public Customer is defined in
Exchange Rule 100(a)(38) as a person or entity that
is not a broker or dealer in securities.
8 The Exchange applies a sliding scale, between
$0.01 and $0.18 per contract side, based on the
number of contracts an ISE market maker trades in
a month.
9 The amount of the execution fee for non-ISE
Market Maker transactions executed in the
Exchange’s Facilitation and Solicitation
Mechanisms is $0.19 per contract.
10 15 U.S.C. 78f.
11 15 U.S.C. 78f(b)(4).
E:\FR\FM\05NON1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 215 (Wednesday, November 5, 2008)]
[Notices]
[Pages 65901-65903]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26278]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58872; File No. SR-BATS-2008-008]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Limitation of Liability
October 28, 2008.
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 October 20, 2008, BATS Exchange, Inc. (``BATS'' or ``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 non-controversial rule change under Rule
19b-4(f)(6) under the Act,\3\ which renders the proposal effective upon
filing with the Commission. BATS has requested that the Commission
waive the 5-day notice requirement and the 30-day pre-operative waiting
period contained in Rule 19b-4(f)(6)(iii) under the Act.\4\ If such
waivers are granted by the Commission, the Exchange will implement this
rule proposal immediately upon commencement of its operations as a
national securities exchange. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
\4\ Id.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend BATS Rule 11.16, entitled
``LIMITATION OF LIABILITY,'' to codify that it may provide a form of
compensation for losses sustained in relation to an Exchange system
failure or a negligent act or omission of an Exchange employee.
The text of the proposed rule change is available at the Exchange's
Web site at https://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 those 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 11.16 to establish a procedure
to compensate Members \5\ in relation to Exchange systems failures or a
negligent act or omission of an Exchange employee. The Exchange
recognizes that the current industry practice of exchanges that
function as SROs is to provide a form of compensation for losses
sustained in relation to the use of the exchanges' systems, and that
some exchanges also provide a form of compensation for negligence by
the exchanges' employees. As such, the Exchange seeks to amend BATS
Rule 11.16 to conform to current industry practice.
---------------------------------------------------------------------------
\5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
---------------------------------------------------------------------------
Pursuant to the proposed amendment to Rule 11.16, the Exchange
would compensate Members for losses resulting directly from: (i) The
malfunction of the Exchange's physical equipment, devices, and/or
programming, or (ii) the negligent acts or omissions of the Exchange's
employees.\6\ Under this proposed rule change, for such malfunctions or
negligence, the Exchange would cap its liability: (i) To a single
Member at the greater of $100,000 or the amount recovered under any
applicable insurance policy on a single trading day, (ii) to all
Members at the greater of $250,000 or the amount recovered under any
applicable insurance policy on a single trading day, and (iii) to all
Members at the greater of $500,000 or the amount recovered under any
[[Page 65902]]
applicable insurance policy in a single calendar month.
---------------------------------------------------------------------------
\6\ The Exchange represents that the determination as to whether
a Member is compensated or not will be made on an equitable and non-
discriminatory basis without regard to the status of that Member,
e.g., regardless of whether that Member is registered as a Market
Maker with the Exchange.
---------------------------------------------------------------------------
To the extent that all claims resulting from systems failures or
negligence by Exchange employees cannot be fully satisfied because in
the aggregate they exceed the applicable maximum amount of liability
provided for, then the Exchange proposes to allocate the maximum amount
among all such claims arising on a single trading day or during a
single calendar month, as applicable, based on the proportion that each
such claim bears to the sum of all such claims.
In order for a Member to be eligible to receive payment, claims
must be made in writing and must be submitted no later than the opening
of trading on the next business day following the day on which the use
of the Exchange gave rise to such claims. Once in receipt of a claim,
the Exchange will verify that: (i) A valid order was accepted into the
Exchange's systems; and (ii) an Exchange system failure or a negligent
act or omission of an Exchange employee occurred during the execution
or handling of that order. If all the criteria for submitting a claim
have been met, the claim will be qualified for processing with all
other claims at the end of the calendar month in which the incident
occurred.
2. Statutory Basis
The Exchange believes the 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).\7\ In particular, for the
reasons described above, the proposed change 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, by providing more
certainty as to the Exchange's potential liability resulting from
systems problems and negligence by Exchange employees.
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\7\ 15 U.S.C. 78(f)(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
No written comments were solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, 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). Rule 19b-4(f)(6)(iii) requires a
self-regulatory organization to provide the Commission with 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
Commission deems this requirement to have been satisfied.
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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. The Exchange
requested that the Commission waive the 30-day operative delay. The
Commission believes that waiving the 30-day operative delay \11\ is
consistent with the protection of investors and the public interest.
Given that the Exchange's proposed rule change is substantially similar
to the rules of other exchanges previously approved by the
Commission,\12\ the proposal does not appear to present any novel
regulatory issues. Moreover, the proposal would make more certain the
Exchange's potential liability for such losses upon commencement of its
operation as an exchange. Therefore, the Commission designates the
proposal operative upon filing.
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\11\ 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).
\12\ See NYSE Arca Equities Rule 13.2, NASDAQ Rule 4626, and ISE
Rule 705.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-BATS-2008-008 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BATS-2008-008. 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 (https://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 inspection and
copying 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-2008-008 and should be
submitted on or before November 26, 2008.
[[Page 65903]]
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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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-26278 Filed 11-4-08; 8:45 am]
BILLING CODE 8011-01-P
