Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Program Relating to Clearly Erroneous Transactions, 50524-50525 [2011-20700]

Download as PDF 50524 Federal Register / Vol. 76, No. 157 / Monday, August 15, 2011 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65078; File No. SR–CHX– 2011–24] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Program Relating to Clearly Erroneous Transactions August 9, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 2 thereunder, notice is hereby given that on August 8, 2011, the Chicago Stock Exchange, Inc. (‘‘CHX’’ 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 CHX. CHX has filed this proposal pursuant to Exchange Act Rule 19b–4(f)(6) 3 which is effective upon filing with the Commission. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CHX proposes to amend its rules to extend the pilot program relating to clearly erroneous transactions. The text of this proposed rule change is available on the Exchange’s Web site at (https:// www.chx.com) and in 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 CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item IV below. The CHX 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 the Statutory Basis for, the Proposed Rule Change srobinson on DSK4SPTVN1PROD with NOTICES 1. Purpose In September, 2010, CHX obtained Commission approval of a filing amending its rules relating to clearly erroneous transactions on a pilot basis 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 VerDate Mar<15>2010 16:05 Aug 12, 2011 Jkt 223001 until December 10, 2010.4 This program was subsequently extended until April 11, 2011 5 and then extended again until August 11, 2011.6 The proposed rule change merely extends the duration of the pilot program to January 31, 2011. Extending the pilot in this manner will allow the Commission more time to consider the impact of the pilot program. 2. Statutory Basis 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.7 In particular, the proposed change is consistent with Section 6(b)(5) of the Act,8 because it would promote just and equitable principles of trade, remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, protect investors and the public interest. The proposed rule change is also designed to support the principles of Section 11A(a)(1) 9 of the Act in that it seeks to assure fair competition among brokers and dealers and among exchange markets. The Exchange believes that the proposed rule meets these requirements in that it promotes transparency and uniformity across markets concerning reviews of potentially clearly erroneous executions in various contexts, including reviews in the context of a Multi-Stock Event involving twenty or more securities and reviews resulting from a Trigger Trade and any executions occurring immediately after a Trigger Trade but before a trading pause is in effect on the Exchange. Further, the Exchange believes that the proposed changes enhance the objectivity of decisions made by the Exchange with respect to clearly erroneous executions. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 4 See Securities Exchange Act Release No. 34– 62886 (September 10, 2010), 75 FR 56613 September 16, 2010) approving SR–CHX–2010–13. 5 See Securities Exchange Act Release No. 34– 63487 (December 9, 2010), 75 FR 78279 December 15, 2010) regarding SR–CHX–2010–23. 6 See Securities Exchange Act Release No. 64228 (April 7, 2011), 75 FR 20792 April 13, 2011) regarding SR–CHX–2011–06. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78k–1(a)(1). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6)(iii) thereunder.11 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the pilot program to continue uninterrupted and help ensure uniformity among the national securities exchanges and FINRA with respect to the treatment of clearly erroneous transactions.12 Accordingly, the Commission waives the 30-day operative delay requirement and designates the proposed rule change as operative upon filing with the Commission. 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 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6)(iii) requires that a self-regulatory organization 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 filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission notes that the Exchange has satisfied this requirement. 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). 11 17 E:\FR\FM\15AUN1.SGM 15AUN1 Federal Register / Vol. 76, No. 157 / Monday, August 15, 2011 / Notices change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CHX–2011–24 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65076; File No. SR–BATS– 2011–024] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc. August 9, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 • Send paper comments in triplicate notice is hereby given that, on July 29, to Elizabeth M. Murphy, Secretary, 2011, BATS Exchange, Inc. (the Securities and Exchange Commission, ‘‘Exchange’’ or ‘‘BATS’’) filed with the 100 F Street, NE., Washington, DC Securities and Exchange Commission 20549–1090. (‘‘Commission’’) the proposed rule All submissions should refer to File change as described in Items I, II, and Number SR–CHX–2011–24. This file III below, which Items have been number should be included on the prepared by the Exchange. The subject line if e-mail is used. To help the Exchange has designated the proposed Commission process and review your rule change as one establishing or comments more efficiently, please use changing a member due, fee, or other only one method. The Commission will charge imposed by the Exchange under post all comments on the Commission’s Section 19(b)(3)(A)(ii) of the Act 3 and Internet Web site (https://www.sec.gov/ Rule 19b–4(f)(2) thereunder,4 which rules/sro.shtml). Copies of the renders the proposed rule change submission, all subsequent effective upon filing with the amendments, all written statements Commission. The Commission is with respect to the proposed rule publishing this notice to solicit change that are filed with the comments on the proposed rule change Commission, and all written from interested persons. communications relating to the proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the The Exchange proposes [sic] amend provisions of 5 U.S.C. 552, will be the fee schedule applicable to available for Web site viewing and Members 5 and non-members of the printing in the Commission’s Public Exchange pursuant to BATS Rules Reference Room, 100 F Street, NE., 15.1(a) and (c). While changes to the fee Washington, DC 20549, on official schedule pursuant to this proposal will business days between the hours of 10 be effective upon filing, the changes will a.m. and 3 p.m. Copies of such filing become operative on August 1, 2011. also will be available for inspection and The text of the proposed rule change copying at the principal office of the is available at the Exchange’s Web site Exchange. All comments received will at https://www.batstrading.com, at the be posted without change; the principal office of the Exchange, at the Commission does not edit personal Commission’s Public Reference Room, identifying information from and on the Commission’s Web site at submissions. You should submit only https://www.sec.gov. information that you wish to make II. Self-Regulatory Organization’s publicly available. All submissions Statement of the Purpose of, and should refer to File Number SR–CHX– 2011–24 and should be submitted on or Statutory Basis for, the Proposed Rule Change before September 6, 2011. srobinson on DSK4SPTVN1PROD with NOTICES Paper Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–20700 Filed 8–12–11; 8:45 am] BILLING CODE 8011–01–P 13 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:05 Aug 12, 2011 Jkt 223001 In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 A Member is any registered broker or dealer that has been admitted to membership in the Exchange. 2 17 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 50525 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 proposes to modify the ‘‘Options Pricing’’ section of its fee schedule to: (i) Increase the fees applicable to removing liquidity from the BATS options market (‘‘BATS Options’’); (ii) decrease the rebates applicable to adding liquidity to BATS Options; (iii) decrease the rebates paid, subject to average daily volume requirements, for orders that set either the national best bid (the ‘‘NBB’’) or the national best offer (the ‘‘NBO’’); (iv) adopt a program to incentivize sustained, aggressive quoting in certain specified options series (the ‘‘Quoting Incentive Program’’ or ‘‘QIP’’); and (v) adopt a change to the standard routing fee for the CYCLE, RECYCLE, Parallel D, Parallel 2D, and Destination Specific routing strategies 6 charged for routing Customer 7 orders to certain markets. (i) Increase to Liquidity Removal Fees The Exchange currently charges standard fees of $0.30 per contract for Customer orders and $0.40 per contract for Firm and Market Maker 8 orders that remove liquidity from BATS Options. The Exchange proposes to increase this fee to $0.32 per contract for Customer orders and $0.42 per contract for Firm and Market Maker orders that remove liquidity from BATS Options, subject to potential reduction for any Member with an ADV of 0.30% or more of average TCV on BATS Options, as described below. The Exchange currently maintains a tiered pricing structure through which Members can realize lower liquidity removal fees if such Members have an 6 As defined in BATS Rules 21.1(d)(7) and 21.9(a)(2). 7 As defined on the Exchange’s fee schedule, a ‘‘Customer’’ order is any transaction identified by a Member for clearing in the Customer range at the Options Clearing Corporation (‘‘OCC’’). 8 As set forth on the Exchange’s fee schedule, and consistent with the definition of a Customer order, classification as Firm and Market Maker orders depends on the identification by a Member of the applicable clearing range at the OCC. E:\FR\FM\15AUN1.SGM 15AUN1

Agencies

[Federal Register Volume 76, Number 157 (Monday, August 15, 2011)]
[Notices]
[Pages 50524-50525]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20700]



[[Page 50524]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65078; File No. SR-CHX-2011-24]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Extend the Pilot Program Relating to Clearly Erroneous Transactions

August 9, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August 8, 2011, the Chicago Stock Exchange, Inc. (``CHX'' 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 CHX. CHX has filed this 
proposal pursuant to Exchange Act Rule 19b-4(f)(6) \3\ which is 
effective upon filing with the Commission.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 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

    CHX proposes to amend its rules to extend the pilot program 
relating to clearly erroneous transactions. The text of this proposed 
rule change is available on the Exchange's Web site at (https://www.chx.com) and in 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 CHX included statements 
concerning the purpose of and basis for the proposed rule changes and 
discussed any comments it received regarding the proposal. The text of 
these statements may be examined at the places specified in Item IV 
below. The CHX 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In September, 2010, CHX obtained Commission approval of a filing 
amending its rules relating to clearly erroneous transactions on a 
pilot basis until December 10, 2010.\4\ This program was subsequently 
extended until April 11, 2011 \5\ and then extended again until August 
11, 2011.\6\ The proposed rule change merely extends the duration of 
the pilot program to January 31, 2011. Extending the pilot in this 
manner will allow the Commission more time to consider the impact of 
the pilot program.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 34-62886 (September 
10, 2010), 75 FR 56613 September 16, 2010) approving SR-CHX-2010-13.
    \5\ See Securities Exchange Act Release No. 34-63487 (December 
9, 2010), 75 FR 78279 December 15, 2010) regarding SR-CHX-2010-23.
    \6\ See Securities Exchange Act Release No. 64228 (April 7, 
2011), 75 FR 20792 April 13, 2011) regarding SR-CHX-2011-06.
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2. Statutory Basis
    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.\7\ In particular, the proposed change is consistent with 
Section 6(b)(5) of the Act,\8\ because it would promote just and 
equitable principles of trade, remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, protect investors and the public interest. The proposed 
rule change is also designed to support the principles of Section 
11A(a)(1) \9\ of the Act in that it seeks to assure fair competition 
among brokers and dealers and among exchange markets. The Exchange 
believes that the proposed rule meets these requirements in that it 
promotes transparency and uniformity across markets concerning reviews 
of potentially clearly erroneous executions in various contexts, 
including reviews in the context of a Multi-Stock Event involving 
twenty or more securities and reviews resulting from a Trigger Trade 
and any executions occurring immediately after a Trigger Trade but 
before a trading pause is in effect on the Exchange. Further, the 
Exchange believes that the proposed changes enhance the objectivity of 
decisions made by the Exchange with respect to clearly erroneous 
executions.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78k-1(a)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

    No written comments were either 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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\ The Exchange has asked the Commission to 
waive the 30-day operative delay so that the proposal may become 
operative immediately upon filing. The Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest because such waiver will allow the 
pilot program to continue uninterrupted and help ensure uniformity 
among the national securities exchanges and FINRA with respect to the 
treatment of clearly erroneous transactions.\12\ Accordingly, the 
Commission waives the 30-day operative delay requirement and designates 
the proposed rule change as operative upon filing with the Commission.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization 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 filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Commission notes that the Exchange has satisfied 
this requirement.
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule

[[Page 50525]]

change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CHX-2011-24 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-CHX-2011-24. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of 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 publicly available. All 
submissions should refer to File Number SR-CHX-2011-24 and should be 
submitted on or before September 6, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20700 Filed 8-12-11; 8:45 am]
BILLING CODE 8011-01-P
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