Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Certain Market Maker Quoting Violations Punishable Under Its Minor Rule Violation Plan, 74540-74541 [E8-28959]

Download as PDF 74540 Federal Register / Vol. 73, No. 236 / Monday, December 8, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59029; File No. SR–BATS– 2008–011] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Certain Market Maker Quoting Violations Punishable Under Its Minor Rule Violation Plan December 1, 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 November 25, 2008, 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 ‘‘noncontroversial’’ under Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to amend BATS Rule 8.15.01, entitled ‘‘List of Exchange Rule Violations and Recommended Fine Schedule Pursuant to Rule 8.15’’ to expand the list of violations eligible for disposition under the Exchange’s Minor Rule Violation Plan (‘‘MRVP’’) by adding Rule 11.8(a)(1). 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. mstockstill on PROD1PC66 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 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 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 purpose of the proposed rule change is to amend Rule 8.15, entitled ‘‘Imposition of Fines for Minor Violation(s) of Rules’’ to add Rule 11.8(a)(1) to the list of rules which would be appropriate for disposition under the Exchange’s MRVP. The proposed addition of Rule 11.8(a)(1), which provides that a Market Maker must maintain continuous limit orders to buy and sell for round lots in those securities in which the Market Maker is registered to trade, would allow the Exchange to impose a $100 per violation fine for each violation of this rule. By promptly imposing a meaningful financial penalty for such violations, the MRVP focuses on correcting conduct before it gives rise to more serious enforcement action. The MRVP provides a reasonable means of addressing rule violations that do not necessarily rise to the level of requiring formal disciplinary proceedings, while also providing a greater flexibility in handling certain violations. Adopting a provision that would allow the Exchange to sanction violators under the MRVP by no means minimizes the importance of compliance with Exchange Rule 11.8. The Exchange believes that the violation of any of its rules is a serious matter. The addition of a sanction under the MRVP simply serves to add an additional method for disciplining violators of Exchange Rule 11.8. The Exchange will continue to conduct surveillance with due diligence and make its determination, on a case by case basis, whether a violation of Exchange Rule 11.8 should be subject to formal disciplinary proceedings. 2. Statutory Basis The approval of 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.5 In particular, the proposed change is consistent with Section 6(b)(5) of the Act,6 because it 2 17 VerDate Aug<31>2005 16:32 Dec 05, 2008 5 15 6 15 Jkt 217001 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00089 Fmt 4703 Sfmt 4703 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 giving the Exchange the ability to promptly impose a meaningful financial penalty for such violations before there is a need for more serious enforcement action. 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: (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 7 and Rule 19b– 4(f)(6) thereunder.8 BATS has asked the Commission to waive the 30-day operative delay. The Commission hereby grants the Exchange’s request and believes that such waiver is consistent with the protection of investors and the public interest. The proposed rule change is based on the rules of other exchanges that were previously approved by the Commission,9 and does not raise any novel or significant regulatory issues. The proposed rule change will provide the Exchange with a reasonable means of addressing rule violations that do not necessarily rise to the level of requiring formal disciplinary proceedings. For these reasons, the Commission 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). The Commission notes taht BATS has satisfied the five-day pre-filing notice requirement. 9 See, e.g., Securities Exchange Act Release No. 41366 (May 4, 1999), 64 FR 25939 (May 13, 1999) (SR–CSE–99–04); Securities Exchange Act Release No. 57697 (April 22, 2008), 73 FR 23287 (April 29, 2008) (SR–NYSEArca–12008–32). 8 17 E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 73, No. 236 / Monday, December 8, 2008 / Notices designates the proposed rule change as operative upon filing.10 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: mstockstill on PROD1PC66 with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml ); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–BATS–2008–011 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–2008–011. 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 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 will also be available for inspection and copying at the principal office of the self-regulatory 10 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s effect on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 16:32 Dec 05, 2008 Jkt 217001 organization. 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– 2008–011 and should be submitted on or before December 29, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Acting Secretary. [FR Doc. E8–28959 Filed 12–5–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59032; File No. SR–CBOE– 2008–121] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Temporary Membership Status and Interim Trading Permit Access Fees December 1, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on November 28, 2008, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) 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 CBOE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to adjust (i) the monthly access fee for persons granted temporary CBOE membership status (‘‘Temporary Members’’) pursuant to Interpretation and Policy .02 under CBOE Rule 3.19 (‘‘Rule 3.19.02’’) and (ii) the monthly access fee for Interim Trading Permit (‘‘ITP’’) holders under CBOE Rule 3.27. The text of the proposed rule change is available on the Exchange’s Web site (http:// www.cboe.org/Legal/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. 11 17 1 15 PO 00000 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). Frm 00090 Fmt 4703 Sfmt 4703 74541 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE 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 CBOE has prepared summaries, set forth in 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 current access fee for Temporary Members under Rule 3.19.02 2 and the current access fee for ITP holders under Rule 3.27 3 are both $9,937 per month. Both access fees are currently set at the indicative lease rate (as defined below) for November 2008. The Exchange proposes to adjust both access fees effective at the beginning of December 2008 to be equal to the indicative lease rate for December 2008 (which is $9,500). Specifically, the Exchange proposes to revise both the Temporary Member access fee and the ITP access fee to be $9,500 per month commencing on December 1, 2008. The indicative lease rate is defined under Rule 3.27(b) as the highest clearing firm floating monthly rate 4 of the CBOE Clearing Members that assist in facilitating at least 10% of the CBOE transferable membership leases.5 The Exchange determined the indicative lease rate for December 2008 by polling each of these Clearing Members and obtaining the clearing firm floating monthly rate designated by each of these Clearing Members for that month. The Exchange used the same process to set the proposed Temporary Member 2 See Securities Exchange Act Release No. 56458 (September 18, 2007), 72 FR 54309 (September 24, 2007) (SR–CBOE–2007–107) for a description of the Temporary Membership status under Rule 3.19.02. 3 See Securities Exchange Act Release No. 58178 (July 17, 2008), 73 FR 42634 (July 22, 2008) (SR– CBOE–2008–40) for a description of the Interim Trading Permits under Rule 3.27. 4 Rule 3.27(b) defines the clearing firm floating monthly rate as the floating monthly rate that a Clearing Member designates, in connection with transferable membership leases that the Clearing Member assisted in facilitating, for leases that utilize that monthly rate. 5 The concepts of an indicative lease rate and of a clearing firm floating month rate were previously utilized in the CBOE rule filings that set and adjusted the Temporary Member access fee. Both concepts are also codified in Rule 3.27(b) in relation to ITPs. E:\FR\FM\08DEN1.SGM 08DEN1

Agencies

[Federal Register Volume 73, Number 236 (Monday, December 8, 2008)]
[Notices]
[Pages 74540-74541]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-28959]



[[Page 74540]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59029; File No. SR-BATS-2008-011]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Make 
Certain Market Maker Quoting Violations Punishable Under Its Minor Rule 
Violation Plan

December 1, 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 November 25, 2008, 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 ``non-controversial'' under 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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 is proposing to amend BATS Rule 8.15.01, entitled 
``List of Exchange Rule Violations and Recommended Fine Schedule 
Pursuant to Rule 8.15'' to expand the list of violations eligible for 
disposition under the Exchange's Minor Rule Violation Plan (``MRVP'') 
by adding Rule 11.8(a)(1).
    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 purpose of the proposed rule change is to amend Rule 8.15, 
entitled ``Imposition of Fines for Minor Violation(s) of Rules'' to add 
Rule 11.8(a)(1) to the list of rules which would be appropriate for 
disposition under the Exchange's MRVP. The proposed addition of Rule 
11.8(a)(1), which provides that a Market Maker must maintain continuous 
limit orders to buy and sell for round lots in those securities in 
which the Market Maker is registered to trade, would allow the Exchange 
to impose a $100 per violation fine for each violation of this rule. By 
promptly imposing a meaningful financial penalty for such violations, 
the MRVP focuses on correcting conduct before it gives rise to more 
serious enforcement action. The MRVP provides a reasonable means of 
addressing rule violations that do not necessarily rise to the level of 
requiring formal disciplinary proceedings, while also providing a 
greater flexibility in handling certain violations. Adopting a 
provision that would allow the Exchange to sanction violators under the 
MRVP by no means minimizes the importance of compliance with Exchange 
Rule 11.8. The Exchange believes that the violation of any of its rules 
is a serious matter. The addition of a sanction under the MRVP simply 
serves to add an additional method for disciplining violators of 
Exchange Rule 11.8. The Exchange will continue to conduct surveillance 
with due diligence and make its determination, on a case by case basis, 
whether a violation of Exchange Rule 11.8 should be subject to formal 
disciplinary proceedings.
2. Statutory Basis
    The approval of 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.\5\ In particular, the proposed change 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, and, 
in general, protect investors and the public interest, by giving the 
Exchange the ability to promptly impose a meaningful financial penalty 
for such violations before there is a need for more serious enforcement 
action.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 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: (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 \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). The Commission notes taht BATS has 
satisfied the five-day pre-filing notice requirement.
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    BATS has asked the Commission to waive the 30-day operative delay. 
The Commission hereby grants the Exchange's request and believes that 
such waiver is consistent with the protection of investors and the 
public interest. The proposed rule change is based on the rules of 
other exchanges that were previously approved by the Commission,\9\ and 
does not raise any novel or significant regulatory issues. The proposed 
rule change will provide the Exchange with a reasonable means of 
addressing rule violations that do not necessarily rise to the level of 
requiring formal disciplinary proceedings. For these reasons, the 
Commission

[[Page 74541]]

designates the proposed rule change as operative upon filing.\10\
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    \9\ See, e.g., Securities Exchange Act Release No. 41366 (May 4, 
1999), 64 FR 25939 (May 13, 1999) (SR-CSE-99-04); Securities 
Exchange Act Release No. 57697 (April 22, 2008), 73 FR 23287 (April 
29, 2008) (SR-NYSEArca-12008-32).
    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's effect on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 (http://
www.sec.gov/rules/sro.shtml ); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-BATS-2008-011 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-2008-011. 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 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 will also be available for inspection and 
copying at the principal office of the self-regulatory organization. 
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-2008-011 
and should be submitted on or before December 29, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-28959 Filed 12-5-08; 8:45 am]
BILLING CODE 8011-01-P