Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend BATS Rules in Connection With the Elimination of a Directed Order Program for BATS Options, 45636-45638 [2011-19236]

Download as PDF 45636 Federal Register / Vol. 76, No. 146 / Friday, July 29, 2011 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of FINRA. 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–FINRA–2010–036 and should be submitted on or before August 19, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.47 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–19193 Filed 7–28–11; 8:45 am] 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 rulecomments@sec.gov. Please include File Number SR–FINRA–2010–036 on the subject line. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64956; File No. SR– NASDAQ–2011–073] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change To Adopt Additional Listing Requirements for Reverse Mergers July 25, 2011. On May 26, 2011, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities and Exchange • Send paper comments in triplicate Commission (‘‘Commission’’), pursuant to Elizabeth M. Murphy, Secretary, to Section 19(b)(1) of the Securities Securities and Exchange Commission, Exchange Act of 1934 (‘‘Act’’),1 and 100 F Street, NE., Washington, DC Rule 19b–4 thereunder,2 a proposed rule 20549–1090. change to adopt additional listing All submissions should refer to File Number SR–FINRA–2010–036. This file requirements for reverse mergers. The proposed rule change was published for number should be included on the subject line if e-mail is used. To help the comment in the Federal Register on June 14, 2011.3 The Commission Commission process and review your received no comments on the proposal. comments more efficiently, please use Section 19(b)(2) of the Act 4 provides only one method. The Commission will that within 45 days of the publication of post all comments on the Commission’s notice of the filing of a proposed rule Internet Web site (http://www.sec.gov/ change, or within such longer period up rules/sro.shtml). Copies of the to 90 days as the Commission may submission, all subsequent designate if it finds such longer period amendments, all written statements to be appropriate and publishes its with respect to the proposed rule reasons for so finding or as to which the change that are filed with the self-regulatory organization consents, Commission, and all written the Commission shall either approve the communications relating to the proposed rule change, disapprove the proposed rule change between the Commission and any person, other than proposed rule change, or institute proceedings to determine whether the those that may be withheld from the public in accordance with the 47 17 CFR 200.30–3(a)(12). provisions of 5 U.S.C. 552, will be 1 15 U.S.C. 78s(b)(1). available for Web site viewing and 2 17 CFR 240.19b–4. printing in the Commission’s Public 3 See Securities Exchange Act Release No. 64633 Reference Room, 100 F Street, NE., (June 8, 2011), 76 FR 34781. 4 15 U.S.C. 78s(b)(2). Washington, DC 20549, on official mstockstill on DSK4VPTVN1PROD with NOTICES Paper Comments VerDate Mar<15>2010 16:17 Jul 28, 2011 Jkt 223001 PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 proposed rule change should be disapproved. The 45th day for this filing is July 29, 2011. The Commission is extending the 45day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period to take action on the proposed rule change so that it has sufficient time to consider the Exchange’s proposal, which would establish additional listing requirements for reverse merger companies, whereby an operating company becomes public by combining with a public shell. Accordingly, pursuant to Section 19(b)(2) of the Act,5 the Commission designates September 12, 2011 as the date by which the Commission should either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File Number SR– NASDAQ–2011–073). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–19231 Filed 7–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64957; File No. SR–BATS– 2011–023] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend BATS Rules in Connection With the Elimination of a Directed Order Program for BATS Options July 25, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 22, 2011, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) 5 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(31). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 6 17 E:\FR\FM\29JYN1.SGM 29JYN1 Federal Register / Vol. 76, No. 146 / Friday, July 29, 2011 / Notices 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 BATS Rule 21.1, entitled ‘‘Definitions,’’ to remove two order types, Market Maker Price Improving Orders and Directed Orders, from the types of approved order types offered by the BATS options market (‘‘BATS Options’’). Through this amendment, the Exchange is eliminating its recently approved rules related to the establishment of a directed order program on a pilot basis for BATS Options.5 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, at http://www.sec.gov, 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 mstockstill on DSK4VPTVN1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange recently received approval to operate a directed order program for BATS Options on a pilot basis.6 The BATS Options directed order program would allow members of BATS Options (‘‘Options Members’’) to direct an order to a particular BATS Options Market Maker for potential execution at a price improved over the existing National Best Bid (‘‘NBB’’) or National Best Offer (‘‘NBO’’). The goal of the directed order program was to 4 17 CFR 240.19b–4(f)(6)(iii). Securities Exchange Act Release No. 64781 (June 30, 2011), 76 FR 39953 (July 7, 2011) (SR– BATS–2011–023). 6 Id. 5 See VerDate Mar<15>2010 16:17 Jul 28, 2011 Jkt 223001 create a competitive structure to enhance aggressive quoting and shift economics associated with nontransparent payment for order flow arrangements to better execution prices for customer orders on the Exchange. While pending, the proposal to operate a directed order program received several comments from competitors of the Exchange and other market participants, some of which raised concerns that the directed order program may foster internalization and a widening of quoted spreads.7 During this time period, the Exchange also discussed the proposal with several Options Members, and the Exchange has continued these discussions following the approval of the proposal. While the Exchange continues to believe that the proposal is consistent with the Act and contains appropriate requirements to incent competitive quotations and further the public price discovery process, based on on-going discussions with Options Members, the Exchange believes there is sufficient reason to withdraw the directed order program and continue analyzing potential refinements that may better achieve the Exchange’s goal. The Exchange notes that it has not yet implemented the directed order program. Based on the foregoing, the Exchange proposes to eliminate the definitions for Market Maker Price Improving Orders and Directed Orders from the types of approved order types offered by the BATS Options pursuant to Rule 21.1. 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 7 See e.g., Letters to Elizabeth M. Murphy, Secretary, Commission, from Thomas F. Price, Managing Director, Securities Industry and Financial Markets Association, dated June 30, 2011; Christopher Nagy, Managing Director Order Strategy, TD Ameritrade, dated June 30, 2011; Jennifer M. Lamie, Assistant General Counsel, Legal Division, Chicago Board Options Exchange, dated June 29, 2011; Tom Wittman, The NASDAQ OMX PHLX, Inc. and The NASDAQ Options Market, dated June 24, 2011; Janet L. McGinness, SVP & Corporate Secretary, Legal & Government Affairs, NYSE Euronext, dated June 17, 2011; Michael J. Simon, Secretary, International Securities Exchange, LLC, dated June 17, 2011; Anthony D. McCormick, Chief Executive Officer, BOX Options Exchange Group, LLC, dated June 13, 2011; John C. Nagel, Managing Director and General Counsel, Asset Management and Markets, Citadel LLC, dated April 25, 2011; Andrew Stevens, Legal Counsel, IMC Chicago, LLC d/b/a IMC Financial Markets, dated April 21, 2011. The Exchange also notes that other options exchanges filed with the Commission a joint petition related to the directed order program following the approval of the directed order program. PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 45637 requirements of Section 6(b) of the Act.8 Specifically, the proposed change is consistent with Section 6(b)(5) of the Act,9 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. The Exchange believes that elimination of the directed order program will provide the Exchange and the options industry as a whole with additional time to evaluate the potential benefits of a program such as the directed order program. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change imposes any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) Impose any significant burden on competition; and (iii) Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6) thereunder.11 The Exchange has requested that the Commission waive the 30-day operative delay. The Commission has determined that waiving the 30-day operative delay of the Exchange’s proposal is consistent with the protection of investors and the public interest because the Exchange would like additional time to consider potential refinements to the directed 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the self-regulatory organization to submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. BATS is deemed to have satisfied this requirement. 9 15 E:\FR\FM\29JYN1.SGM 29JYN1 45638 Federal Register / Vol. 76, No. 146 / Friday, July 29, 2011 / Notices order program and the directed order program has not been implemented.12 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 summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–BATS–2011–023 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BATS–2011–023. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BATS–2011–023 and should be submitted on or before August 19, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–19236 Filed 7–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64955; File No. SR–FICC– 2011–05] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Amend the Rules Regarding the GCF Repo Service To Adopt Changes Recommended by the Tri-Party Repo Infrastructure Reform Task Force July 25, 2011. 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 July 12, 2011, the Fixed Income Clearing Corporation (‘‘FICC’’) 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 primarily by FICC. 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 purpose of the proposed rule change is to amend the rules regarding the GCF Repo service to adopt changes recommended by the Tri-Party Repo Infrastructure Reform Task Force (‘‘TPR’’). Because the GCF Repo service operates as a tri-party mechanism, FICC has been requested to incorporate changes to the GCF Repo service to align the service with the other changes recommended by the TPR for the overall tri-party repo market. 12 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Mar<15>2010 16:17 Jul 28, 2011 Jkt 223001 PO 00000 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Frm 00135 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change (i) FICC is proposing to make certain changes to its GCF Repo® 4 service in order to comply with the recommendations made by the TPR, an industry group formed and sponsored by the Federal Reserve Bank of New York.5 Because the GCF Repo service operates as a tri-party repo mechanism, FICC has been requested to incorporate changes to the GCF Repo service to align the service with the other TPR recommended changes for the overall tri-party repo market. FICC is proposing to initially implement the changes described herein in a pilot program (‘‘Pilot Program’’). FICC proposes to run the Pilot Program for one year starting from the date on which the Commission approves this proposed rule change filing. If FICC decides to extend the Pilot Program or to implement the changes in the Pilot Program permanently, FICC shall submit a proposed rule change filing to the Commission for that purpose. Background: Description of the GCF Repo Service and History (1) Creation of the GCF Repo Service The GCF Repo service allows GSD dealer members to trade general 3 The Commission has modified the text of the summaries prepared by FICC. 4 GCF Repo is a registered trademark of FICC/ DTCC. 5 The main purpose of the TPR is to develop recommendations to address the risk presented by tri-party repo transactions due to the current morning reversal or ‘‘unwind’’ process and to move to a process by which tri-party repo transactions are collateralized all day. Currently, tri-party repo transactions unwind in the morning between 7 and 8 a.m. EST. The GSD Schedule of GCF Timeframes provides that the unwind of GCF Repo transactions (both overnight and term) must be accomplished by 7:30 a.m. The TPR has mandated that the collateral used in tri-party repo and GCF Repo transactions be ‘‘locked up’’ until 3:30 p.m. EST. This would serve to reduce the intraday exposure to the dealers that the clearing banks currently face with the start of daily unwind. E:\FR\FM\29JYN1.SGM 29JYN1

Agencies

[Federal Register Volume 76, Number 146 (Friday, July 29, 2011)]
[Notices]
[Pages 45636-45638]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19236]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64957; File No. SR-BATS-2011-023]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
BATS Rules in Connection With the Elimination of a Directed Order 
Program for BATS Options

July 25, 2011.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 22, 2011, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii)

[[Page 45637]]

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 BATS Rule 21.1, entitled 
``Definitions,'' to remove two order types, Market Maker Price 
Improving Orders and Directed Orders, from the types of approved order 
types offered by the BATS options market (``BATS Options''). Through 
this amendment, the Exchange is eliminating its recently approved rules 
related to the establishment of a directed order program on a pilot 
basis for BATS Options.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 64781 (June 30, 
2011), 76 FR 39953 (July 7, 2011) (SR-BATS-2011-023).
---------------------------------------------------------------------------

    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, at http://www.sec.gov, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange recently received approval to operate a directed order 
program for BATS Options on a pilot basis.\6\ The BATS Options directed 
order program would allow members of BATS Options (``Options Members'') 
to direct an order to a particular BATS Options Market Maker for 
potential execution at a price improved over the existing National Best 
Bid (``NBB'') or National Best Offer (``NBO''). The goal of the 
directed order program was to create a competitive structure to enhance 
aggressive quoting and shift economics associated with non-transparent 
payment for order flow arrangements to better execution prices for 
customer orders on the Exchange. While pending, the proposal to operate 
a directed order program received several comments from competitors of 
the Exchange and other market participants, some of which raised 
concerns that the directed order program may foster internalization and 
a widening of quoted spreads.\7\ During this time period, the Exchange 
also discussed the proposal with several Options Members, and the 
Exchange has continued these discussions following the approval of the 
proposal. While the Exchange continues to believe that the proposal is 
consistent with the Act and contains appropriate requirements to incent 
competitive quotations and further the public price discovery process, 
based on on-going discussions with Options Members, the Exchange 
believes there is sufficient reason to withdraw the directed order 
program and continue analyzing potential refinements that may better 
achieve the Exchange's goal. The Exchange notes that it has not yet 
implemented the directed order program.
---------------------------------------------------------------------------

    \6\ Id.
    \7\ See e.g., Letters to Elizabeth M. Murphy, Secretary, 
Commission, from Thomas F. Price, Managing Director, Securities 
Industry and Financial Markets Association, dated June 30, 2011; 
Christopher Nagy, Managing Director Order Strategy, TD Ameritrade, 
dated June 30, 2011; Jennifer M. Lamie, Assistant General Counsel, 
Legal Division, Chicago Board Options Exchange, dated June 29, 2011; 
Tom Wittman, The NASDAQ OMX PHLX, Inc. and The NASDAQ Options 
Market, dated June 24, 2011; Janet L. McGinness, SVP & Corporate 
Secretary, Legal & Government Affairs, NYSE Euronext, dated June 17, 
2011; Michael J. Simon, Secretary, International Securities 
Exchange, LLC, dated June 17, 2011; Anthony D. McCormick, Chief 
Executive Officer, BOX Options Exchange Group, LLC, dated June 13, 
2011; John C. Nagel, Managing Director and General Counsel, Asset 
Management and Markets, Citadel LLC, dated April 25, 2011; Andrew 
Stevens, Legal Counsel, IMC Chicago, LLC d/b/a IMC Financial 
Markets, dated April 21, 2011. The Exchange also notes that other 
options exchanges filed with the Commission a joint petition related 
to the directed order program following the approval of the directed 
order program.
---------------------------------------------------------------------------

    Based on the foregoing, the Exchange proposes to eliminate the 
definitions for Market Maker Price Improving Orders and Directed Orders 
from the types of approved order types offered by the BATS Options 
pursuant to Rule 21.1.
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.\8\ Specifically, the 
proposed change is consistent with Section 6(b)(5) of the Act,\9\ 
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. The Exchange believes that elimination of the 
directed order program will provide the Exchange and the options 
industry as a whole with additional time to evaluate the potential 
benefits of a program such as the directed order program.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change imposes 
any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \10\ 
and Rule 19b-4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. BATS is deemed to have satisfied this requirement.
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission has determined that waiving the 30-day 
operative delay of the Exchange's proposal is consistent with the 
protection of investors and the public interest because the Exchange 
would like additional time to consider potential refinements to the 
directed

[[Page 45638]]

order program and the directed order program has not been 
implemented.\12\ Therefore, the Commission designates the proposal 
operative upon filing.
---------------------------------------------------------------------------

    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-BATS-2011-023 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2011-023. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also 
will be available for inspection and copying at the principal office of 
the Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
BATS-2011-023 and should be submitted on or before August 19, 2011.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-19236 Filed 7-28-11; 8:45 am]
BILLING CODE 8011-01-P