Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend BATS Y-Exchange Rules To Conform to the Current Rules of BATS Exchange, 64767-64769 [2010-26335]
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emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 202 / Wednesday, October 20, 2010 / Notices
Markets, Inc.21 Apparent violations of
any BYX rules by any broker-dealer
subsidiary of BATS Global Markets, Inc.
will be processed by, and enforcement
proceedings in respect thereto will be
conducted by, FINRA.22 The effect of
these provisions is that regulatory
oversight and enforcement
responsibilities for any broker-dealer
subsidiary of BATS Global Markets,
Inc., which is the parent company of
BYX, will be vested with FINRA. These
provisions should help avoid any
potential conflicts of interest that could
arise if BYX was primarily responsible
for regulating any affiliated brokerdealer.
According to the Plan, BYX will
review the Certification at least
annually, or more frequently if required
by changes in either the rules of BYX or
FINRA, and, if necessary, submit to
FINRA an updated list of Common
Rules to add BYX rules not included on
the then-current list of Common Rules
that are substantially similar to FINRA
rules; delete BYX rules included in the
then-current list of Common Rules that
are no longer substantially similar to
FINRA rules; and confirm that the
remaining rules on the list of Common
Rules continue to be BYX rules that are
substantially similar to FINRA rules.23
FINRA will then confirm in writing
whether the rules listed in any updated
list are Common Rules as defined in the
Plan. Under the Plan, BYX will also
provide FINRA with a current list of
Dual Members and shall update the list
no less frequently than once each
quarter.24
The Commission is hereby declaring
effective a plan that, among other
things, allocates regulatory
responsibility to FINRA for the
oversight and enforcement of all BYX
rules that are substantially similar to the
rules of FINRA for Dual Members of
BYX and FINRA. Therefore,
modifications to the Certification need
not be filed with the Commission as an
amendment to the Plan, provided that
the Parties are only adding to, deleting
from, or confirming changes to BYX
rules in the Certification in conformance
with the definition of Common Rules
provided in the Plan. However, should
the Parties decide to add a BYX rule to
the Certification that is not substantially
similar to a FINRA rule; delete a BYX
rule from the Certification that is
substantially similar to a FINRA rule; or
leave on the Certification a BYX rule
that is no longer substantially similar to
21 See
paragraph 2 of the proposed 17d–2 Plan.
paragraph 6 of the proposed 17d–2 Plan.
23 See paragraph 2 of the proposed 17d–2 Plan.
24 See paragraph 3 of the proposed 17d–2 Plan.
22 See
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a FINRA rule, then such a change would
constitute an amendment to the Plan,
which must be filed with the
Commission pursuant to Rule 17d–2
under the Act and noticed for public
comment.25
The Plan also permits BYX and
FINRA to terminate the Plan, subject to
notice.26 The Commission notes,
however, that while the Plan permits
the Parties to terminate the Plan, the
Parties cannot by themselves reallocate
the regulatory responsibilities set forth
in the Plan, since Rule 17d–2 under the
Act requires that any allocation or reallocation of regulatory responsibilities
be filed with the Commission.27
IV. Conclusion
This Order gives effect to the Plan
filed with the Commission in File No.
4–613. The Parties shall notify all
members affected by the Plan of their
rights and obligations under the Plan.
It is therefore ordered, pursuant to
Section 17(d) of the Act, that the Plan
in File No. 4–613, between FINRA and
BYX, filed pursuant to Rule 17d–2
under the Act, is approved and declared
effective.
It is therefore ordered that BYX is
relieved of those responsibilities
allocated to FINRA under the Plan in
File No. 4–613.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–26337 Filed 10–19–10; 8:45 am]
BILLING CODE 8011–01–P
25 The Commission also notes that the addition to
or deletion from the Certification of any federal
securities laws, rules, and regulations for which
FINRA would bear responsibility under the Plan for
examining, and enforcing compliance by, Dual
Members, also would constitute an amendment to
the Plan.
26 See paragraph 12 of the proposed 17d–2 Plan.
27 The Commission notes that paragraph 12 of the
Plan reflects the fact that FINRA’s responsibilities
under the Plan will continue in effect until the
Commission approves any termination of the Plan.
28 17 CFR 200.30–3(a)(34).
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64767
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63097; File No. SR–BYX–
2010–002]
Self-Regulatory Organizations; BATS
Y-Exchange, Inc.; Notice of Filing of
Proposed Rule Change To Amend
BATS Y-Exchange Rules To Conform
to the Current Rules of BATS
Exchange
October 13, 2010.
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
4, 2010, BATS Y-Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) 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 ‘‘noncontroversial’’ 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to amend
BYX Rules 11.9, 11.13, 11.17, and 11.18
in order to bring BYX Rules up to date
with recent changes that have been
made to the rules of the Exchange’s
affiliate, BATS Exchange, Inc. (‘‘BATS
Exchange’’). 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 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
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)(iii).
2 17
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Federal Register / Vol. 75, No. 202 / Wednesday, October 20, 2010 / Notices
the most significant parts of such
statements.
emcdonald on DSK2BSOYB1PROD with NOTICES
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
BYX Rules 11.9, 11.13, 11.17, and 11.18
in order to bring BYX Rules up to date
with the changes that were made to the
rules of BATS Exchange while BYX’s
Form 1 Application to register as a
national security exchange was pending
approval.
Background:
BYX plans to commence operations as
a national securities exchange registered
under Section 6 of the Act 5 on October
15, 2010. As described more fully in
BYX’s Form 1 application,6 the
Exchange is an affiliate of BATS
Exchange: both are wholly owned
subsidiaries of BATS Global Markets,
Inc. (‘‘BGM’’). BYX Rules, in their
current form, were filed as part of
Amendment No. 1 to its Form 1 on July
1, 2010 and, at that time, were nearly
identical to BATS Exchange Rules. In
the time between when BYX was
preparing to file Amendment No. 1 to its
Form 1 and the filing of this proposed
rule change, BATS Exchange has made
several changes to its rule book. Despite
the limited time frame since the
Commission approved BYX to operate
as a national stock exchange, BYX and
BATS Exchange already have many
common members and the Exchange
anticipates that the number of common
members will only continue to grow. In
order to prevent confusion among
common members, to ensure consistent
operation of both BYX and BATS
Exchange, and to bring the Exchange’s
Rules in line with industry standards,
the Exchange proposes to amend BYX
Rules as described below.
Match Trade Prevention:
The Exchange proposes to make a
minor change to its Member Match
Trade Prevention, or MMTP,
functionality, described in BYX Rule
11.9(f) and to rename the functionality
as Match Trade Prevention. Specifically,
the Exchange is proposing to allow
Users to opt-out of the default behavior
of the MMTP Decrement and Cancel
(‘‘MDC’’) modifier to automatically
cancel two orders in their entirety when
the resting order contains an MMTP
5 15
U.S.C. 78f.
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).
6 See
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modifier rather than MDC and is larger
than the incoming order. Also, as
mentioned above, the Exchange also
proposes to rename the functionality as
Match Trade Prevention (‘‘MTP’’). These
changes would make BYX Rule 11.9(f)
consistent with BATS Exchange Rule
11.9(f) and are identical to changes
made by BATS Exchange when
modifying its MMTP rules.7
Routing Strategies:
The Exchange also proposes to amend
Rule 11.13(a), which describes its order
routing processes, to modify the existing
general description of Exchange routing
functionality, to describe available
routing options in greater detail, and to
add certain new routing options.
Specifically, the Exchange is proposing
various modifications to its general
routing standards, which modifications,
the Exchange believes, will help clarify
the rule, including adding a reference to
the ‘‘RECYCLE Option’’ in its rule.
Additionally, the Exchange is proposing
to amend the Rule to include a
definition of ‘‘System routing table,’’ in
order to reflect the fact that the
Exchange, like other trading venues,
maintains different routing tables for
different routing options and modifies
them on a regular basis to reflect
assessments about the destination
markets. Finally, the Exchange proposes
to add descriptions of the following
routing options: CYCLE, Parallel D,
Parallel 2D, Parallel T, DRT, and
Destination Specific Orders. These
changes would make BYX Rule 11.13
consistent with BATS Exchange Rule
11.13 and are substantively identical to
changes made by BATS Exchange when
modifying its execution and routing
rules.8
Clearly Erroneous Executions:
The Exchange also proposes to amend
its Rule 11.17, entitled Clearly
Erroneous Executions, to provide for
uniform treatment: (1) Of clearly
erroneous execution reviews in MultiStock Events involving twenty or more
securities; and (2) in the event
transactions occur that result in the
issuance of an individual stock trading
pause by the primary market and
subsequent transactions that occur
before the trading pause is in effect on
the Exchange. The Exchange also
proposes additional changes to Rule
11.17 that reduce the ability of the
Exchange to deviate from the objective
standards set forth in the Rule. These
changes would make BYX Rule 11.17
7 Securities Exchange Act Release No. 62102 (May
13, 2010), 75 FR 28670 (May 21, 2010) (SR–BATS–
2010–11).
8 Securities Exchange Act Release No. 61883
(April 9, 2010), 75 FR 20418 (April 19, 2010) (SR–
BATS–2010–007).
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consistent with BATS Exchange Rule
11.17 and are identical to changes made
by BATS Exchange when modifying its
clearly erroneous executions rules.9
Individual Stock Trading Pause:
The Exchange also proposes to amend
its Rule 11.18, which describes BYX’s
procedures for trading halts due to
extraordinary market volatility, on a
pilot basis so that the Exchange may,
from time to time, pause trading in an
individual stock when the primary
listing market for such stock issues a
trading pause in any of the securities
covered by the pilot. The Exchange is
proposing the rule change in order to
recognize what is now a uniform
market-wide trading pause standards for
individual securities in the S&P 500®
Index, the Russell 1000® Index and
specified Exchange Trade Products that
experience rapid price movement.
These changes would make BYX Rule
11.18 consistent with BATS Exchange
Rule 11.18 and are identical to changes
made by BATS Exchange when
modifying its trading halt rule.10
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.11 In particular, the proposed
changes are consistent with Section
6(b)(5) of the Act,12 because they 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.
Specifically, the Exchange believes that
although BYX Rules may, in certain
instances, intentionally differ from
BATS Exchange rules, the proposed
changes will promote uniformity with
BATS Exchange with respect to rules
that are intended to be identical but
were difficult to modify until BYX’s
Form 1 application had been approved.
The Exchange believes that it will
reduce the potential for confusion by its
members that are also members of BATS
Exchange if it commences operations
with only those differences between
BYX and BATS Exchange rules that are
intentional. Furthermore, certain of the
9 Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010) (SR–BATS–2010–016).
10 Securities Exchange Act Release No. 62884
(September 10, 2010), 75 FR 56618 (September 16,
2010) (SR–BATS–2010–018).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 75, No. 202 / Wednesday, October 20, 2010 / Notices
proposed changes will align the
Exchange’s rules with rules of other
market centers that were recently
amended to address the type of sudden
price declines that the market
experienced on the afternoon of May 6,
2010.
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 13 and Rule 19b–4(f)(6)
thereunder.14
The Exchange has requested that the
Commission waive the 30-day operative
delay to permit the Exchange to
commence operations as a national
securities exchange with rules
substantively identical to the equity
trading rules of BATS Exchange. The
Commission finds that waiver of the
operative delay is consistent with the
protection of investors and the public
interest because such waiver will align
the Exchange’s rules with recently
amended rules of BATS Exchange.
Therefore, the Commission designates
the proposal operative upon
commencement of Exchange operation,
which the Exchange anticipates will be
October 15, 2010.15
13 15
U.S.C. 78s(b)(3)(A).
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.
15 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
emcdonald on DSK2BSOYB1PROD with NOTICES
14 17
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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 proposal 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
No. SR–BYX–2010–002 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 No.
SR–BYX–2010–002. 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,16 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 changes 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. Copies of such
filing will also 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
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
16 The text of the proposed rule change is
available on the Commission’s Web site at https://
www.sec.gov/.
PO 00000
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64769
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–BYX–2010–
002 and should be submitted on or
before November 10, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–26335 Filed 10–19–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63101; File No. SR–
NASDAQ–2010–130]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Regarding
Fees for the Clearly Erroneous Module
October 14, 2010.
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
7, 2010, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’), 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 NASDAQ. 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 the Substance
of the Proposed Rule Change
NASDAQ proposes to establish fees
for the Clearly Erroneous Module. The
text of the proposed rule change is
below. Proposed new language is
underlined.
7024. Clearly Erroneous Module
[Reserved]
The Clearly Erroneous Module, which
provides real-time clearly erroneous
surveillance alerts and reports, is
available to subscribers for a fee of $400
per MPID, per month for the first 15
MPIDs subscribed, and for a fee of $100
per MPID, per month for each MPID
subscribed in excess of 15.
*
*
*
*
*
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 75, Number 202 (Wednesday, October 20, 2010)]
[Notices]
[Pages 64767-64769]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-26335]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63097; File No. SR-BYX-2010-002]
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing of Proposed Rule Change To Amend BATS Y-Exchange Rules To
Conform to the Current Rules of BATS Exchange
October 13, 2010.
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 4, 2010, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend BYX Rules 11.9, 11.13, 11.17,
and 11.18 in order to bring BYX Rules up to date with recent changes
that have been made to the rules of the Exchange's affiliate, BATS
Exchange, Inc. (``BATS Exchange''). 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 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
[[Page 64768]]
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 BYX Rules 11.9, 11.13, 11.17, and
11.18 in order to bring BYX Rules up to date with the changes that were
made to the rules of BATS Exchange while BYX's Form 1 Application to
register as a national security exchange was pending approval.
Background:
BYX plans to commence operations as a national securities exchange
registered under Section 6 of the Act \5\ on October 15, 2010. As
described more fully in BYX's Form 1 application,\6\ the Exchange is an
affiliate of BATS Exchange: both are wholly owned subsidiaries of BATS
Global Markets, Inc. (``BGM''). BYX Rules, in their current form, were
filed as part of Amendment No. 1 to its Form 1 on July 1, 2010 and, at
that time, were nearly identical to BATS Exchange Rules. In the time
between when BYX was preparing to file Amendment No. 1 to its Form 1
and the filing of this proposed rule change, BATS Exchange has made
several changes to its rule book. Despite the limited time frame since
the Commission approved BYX to operate as a national stock exchange,
BYX and BATS Exchange already have many common members and the Exchange
anticipates that the number of common members will only continue to
grow. In order to prevent confusion among common members, to ensure
consistent operation of both BYX and BATS Exchange, and to bring the
Exchange's Rules in line with industry standards, the Exchange proposes
to amend BYX Rules as described below.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f.
\6\ 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).
---------------------------------------------------------------------------
Match Trade Prevention:
The Exchange proposes to make a minor change to its Member Match
Trade Prevention, or MMTP, functionality, described in BYX Rule 11.9(f)
and to rename the functionality as Match Trade Prevention.
Specifically, the Exchange is proposing to allow Users to opt-out of
the default behavior of the MMTP Decrement and Cancel (``MDC'')
modifier to automatically cancel two orders in their entirety when the
resting order contains an MMTP modifier rather than MDC and is larger
than the incoming order. Also, as mentioned above, the Exchange also
proposes to rename the functionality as Match Trade Prevention
(``MTP''). These changes would make BYX Rule 11.9(f) consistent with
BATS Exchange Rule 11.9(f) and are identical to changes made by BATS
Exchange when modifying its MMTP rules.\7\
---------------------------------------------------------------------------
\7\ Securities Exchange Act Release No. 62102 (May 13, 2010), 75
FR 28670 (May 21, 2010) (SR-BATS-2010-11).
---------------------------------------------------------------------------
Routing Strategies:
The Exchange also proposes to amend Rule 11.13(a), which describes
its order routing processes, to modify the existing general description
of Exchange routing functionality, to describe available routing
options in greater detail, and to add certain new routing options.
Specifically, the Exchange is proposing various modifications to its
general routing standards, which modifications, the Exchange believes,
will help clarify the rule, including adding a reference to the
``RECYCLE Option'' in its rule. Additionally, the Exchange is proposing
to amend the Rule to include a definition of ``System routing table,''
in order to reflect the fact that the Exchange, like other trading
venues, maintains different routing tables for different routing
options and modifies them on a regular basis to reflect assessments
about the destination markets. Finally, the Exchange proposes to add
descriptions of the following routing options: CYCLE, Parallel D,
Parallel 2D, Parallel T, DRT, and Destination Specific Orders. These
changes would make BYX Rule 11.13 consistent with BATS Exchange Rule
11.13 and are substantively identical to changes made by BATS Exchange
when modifying its execution and routing rules.\8\
---------------------------------------------------------------------------
\8\ Securities Exchange Act Release No. 61883 (April 9, 2010),
75 FR 20418 (April 19, 2010) (SR-BATS-2010-007).
---------------------------------------------------------------------------
Clearly Erroneous Executions:
The Exchange also proposes to amend its Rule 11.17, entitled
Clearly Erroneous Executions, to provide for uniform treatment: (1) Of
clearly erroneous execution reviews in Multi-Stock Events involving
twenty or more securities; and (2) in the event transactions occur that
result in the issuance of an individual stock trading pause by the
primary market and subsequent transactions that occur before the
trading pause is in effect on the Exchange. The Exchange also proposes
additional changes to Rule 11.17 that reduce the ability of the
Exchange to deviate from the objective standards set forth in the Rule.
These changes would make BYX Rule 11.17 consistent with BATS Exchange
Rule 11.17 and are identical to changes made by BATS Exchange when
modifying its clearly erroneous executions rules.\9\
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\9\ Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-BATS-2010-016).
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Individual Stock Trading Pause:
The Exchange also proposes to amend its Rule 11.18, which describes
BYX's procedures for trading halts due to extraordinary market
volatility, on a pilot basis so that the Exchange may, from time to
time, pause trading in an individual stock when the primary listing
market for such stock issues a trading pause in any of the securities
covered by the pilot. The Exchange is proposing the rule change in
order to recognize what is now a uniform market-wide trading pause
standards for individual securities in the S&P 500[reg] Index, the
Russell 1000[reg] Index and specified Exchange Trade Products that
experience rapid price movement. These changes would make BYX Rule
11.18 consistent with BATS Exchange Rule 11.18 and are identical to
changes made by BATS Exchange when modifying its trading halt rule.\10\
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\10\ Securities Exchange Act Release No. 62884 (September 10,
2010), 75 FR 56618 (September 16, 2010) (SR-BATS-2010-018).
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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.\11\ In particular,
the proposed changes are consistent with Section 6(b)(5) of the
Act,\12\ because they 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. Specifically, the Exchange believes
that although BYX Rules may, in certain instances, intentionally differ
from BATS Exchange rules, the proposed changes will promote uniformity
with BATS Exchange with respect to rules that are intended to be
identical but were difficult to modify until BYX's Form 1 application
had been approved. The Exchange believes that it will reduce the
potential for confusion by its members that are also members of BATS
Exchange if it commences operations with only those differences between
BYX and BATS Exchange rules that are intentional. Furthermore, certain
of the
[[Page 64769]]
proposed changes will align the Exchange's rules with rules of other
market centers that were recently amended to address the type of sudden
price declines that the market experienced on the afternoon of May 6,
2010.
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\11\ 15 U.S.C. 78f(b).
\12\ 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 \13\
and Rule 19b-4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 requested that the Commission waive the 30-day
operative delay to permit the Exchange to commence operations as a
national securities exchange with rules substantively identical to the
equity trading rules of BATS Exchange. The Commission finds that waiver
of the operative delay is consistent with the protection of investors
and the public interest because such waiver will align the Exchange's
rules with recently amended rules of BATS Exchange. Therefore, the
Commission designates the proposal operative upon commencement of
Exchange operation, which the Exchange anticipates will be October 15,
2010.\15\
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\15\ 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 proposal 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 No. SR-BYX-2010-002 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 No. SR-BYX-2010-002. 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,\16\ 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 changes 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. Copies of such filing will also 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 No. SR-BYX-
2010-002 and should be submitted on or before November 10, 2010.
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\16\ The text of the proposed rule change is available on the
Commission's Web site at https://www.sec.gov/.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-26335 Filed 10-19-10; 8:45 am]
BILLING CODE 8011-01-P
