Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend Pilot Program Related to Clearly Erroneous Execution Reviews, 50795-50796 [2011-20711]
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Federal Register / Vol. 76, No. 158 / Tuesday, August 16, 2011 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65077; File No. SR–BYX–
2011–017]
Self-Regulatory Organizations; BATS
Y–Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend Pilot Program
Related to Clearly Erroneous
Execution Reviews
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
notice is hereby given that on August 8,
2011, 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 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 filing with the
Commission a proposal to extend a pilot
program related to Rule 11.17, entitled
‘‘Clearly Erroneous Executions.’’
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.
emcdonald on DSK2BSOYB1PROD with NOTICES
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to extend
the effectiveness of the Exchange’s
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Mar<15>2010
18:07 Aug 15, 2011
Jkt 223001
current rule applicable to Clearly
Erroneous Executions, Rule 11.17. The
rule, explained in further detail below,
is currently operating as a pilot program
set to expire on the earlier of August 11,
2011 or the date on which a limit up/
limit down mechanism to address
extraordinary market volatility, if
adopted, applies.3 The Exchange
proposes to extend the pilot program to
January 31, 2012.
On October 4, 2010, the Exchange
filed an immediately effective filing to
adopt various rule changes to bring BYX
Rules up to date with the changes that
had been made to the rules of BATS
Exchange, Inc., the Exchange’s affiliate,
while BYX’s Form 1 Application to
register as a national security exchange
was pending approval. Such changes
included changes to the Exchange’s
Rule 11.17, on a pilot basis, 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.4 The Exchange also
adopted additional changes to Rule
11.17 that reduced the ability of the
Exchange to deviate from the objective
standards set forth in Rule 11.17.5 The
Exchange believes the benefits to market
participants from the more objective
clearly erroneous executions rule
should be approved to continue on a
pilot basis.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with the
requirements of the Act and the rules
and regulations thereunder that are
applicable to a national securities
exchange, and, in particular, with the
requirements of Section 6(b) of the Act.6
In particular, the proposal is consistent
with Section 6(b)(5) of the Act,7 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. The
Exchange believes that the pilot
program promotes just and equitable
principles of trade in that it promotes
3 Securities Exchange Act Release No. 64236
(April 7, 2011), 76 FR 20739 (April 13, 2011) (SR–
BYX–2011–006).
4 Securities Exchange Act Release No. 63097
(October 13, 2010), 75 FR 64767 (October 20, 2010)
(SR–BYX–2010–002).
5 Id.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
50795
transparency and uniformity across
markets concerning review of
transactions as clearly erroneous.
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, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6)(iii) thereunder.9 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.10 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
8 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.
10 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).
9 17
E:\FR\FM\16AUN1.SGM
16AUN1
50796
Federal Register / Vol. 76, No. 158 / Tuesday, August 16, 2011 / Notices
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
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–20711 Filed 8–15–11; 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–BYX–2011–017 on the
subject line.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65086; File No. SR–FINRA–
2011–036]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Increase the Position
Limit for Options on the Standard and
Poor’s Depositary Receipts Trust
August 10, 2011.
emcdonald on DSK2BSOYB1PROD with NOTICES
Paper Comments
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
• Send paper comments in triplicate
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
to Elizabeth M. Murphy, Secretary,
notice is hereby given that, on July 29,
Securities and Exchange Commission,
2011, the Financial Industry Regulatory
100 F Street, NE., Washington, DC
Authority, Inc. (‘‘FINRA’’) filed with the
20549–1090.
Securities and Exchange Commission
All submissions should refer to File
(‘‘SEC’’ or ‘‘Commission’’) the proposed
Number SR–BYX–2011–017. This file
rule change as described in Items I and
number should be included on the
II below, which Items have been
subject line if e-mail is used. To help the prepared by FINRA. FINRA has
Commission process and review your
designated the proposed rule change as
comments more efficiently, please use
constituting a ‘‘non-controversial’’ rule
only one method. The Commission will change under paragraph (f)(6) of Rule
post all comments on the Commission’s 19b-4 under the Act,3 which renders the
Internet website (https://www.sec.gov/
proposal effective upon receipt of this
rules/sro.shtml). Copies of the
filing by the Commission. The
submission, all subsequent
Commission is publishing this notice to
amendments, all written statements
solicit comments on the proposed rule
with respect to the proposed rule
change from interested persons.
change that are filed with the
I. Self-Regulatory Organization’s
Commission, and all written
Statement of the Terms of the Substance
communications relating to the
of the Proposed Rule Change
proposed rule change between the
Commission and any person, other than
FINRA is proposing to amend FINRA
those that may be withheld from the
Rule 2360 (Options), Supplementary
public in accordance with the
Material .03 to increase the position
provisions of 5 U.S.C. 552, will be
limit for options on the Standard and
Poor’s Depositary Receipts Trust
available for website viewing and
(‘‘SPY’’).
printing in the Commission’s Public
The text of the proposed rule change
Reference Room, 100 F Street, NE.,
is available on FINRA’s Web site at
Washington, DC 20549, on official
https://www.finra.org, at the principal
business days between the hours of 10
office of FINRA and at the
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and Commission’s Public Reference Room.
copying at the principal office of the
II. Self-Regulatory Organization’s
Exchange. All comments received will
Statement of the Purpose of, and
be posted without change; the
Statutory Basis for, the Proposed Rule
Commission does not edit personal
Change
identifying information from
In its filing with the Commission,
submissions. You should submit only
FINRA included statements concerning
information that you wish to make
publicly available. All submissions
should refer to File Number SR–BYX–
2011–017 and should be submitted on
or before September 6, 2011.
VerDate Mar<15>2010
18:07 Aug 15, 2011
Jkt 223001
11 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
1 15
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
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. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend FINRA Rule 2360,
Supplementary Material .03 to increase
the position limit applicable to options
on the Standard and Poor’s Depositary
Receipts Trust, which trade under the
symbol SPY, from 300,000 to 900,000
contracts 4 to conform to a recent rule
change by other self-regulatory
organizations 5 as well as [sic] the
reasons discussed below.
Currently, SPY options have a
position limit of only 300,000 contracts
on the same side of the market while
Power Shares QQQ Trust, based on the
Nasdaq 100 Index® (‘‘QQQ’’) options,
which are comparable to SPY options
but have lesser volume,6 have a position
limit of 900,000 contracts on the same
side of the market. Given the high
volume and continuous demand for
trading SPY options, FINRA believes
that the current position limit of
300,000 contracts is inadequate, and
that such options should, like options
on QQQ, have a position limit of
900,000 contracts.
The position limit on SPY options has
remained flat for more than five years,
4 The exercise limits on SPY options set forth in
FINRA Rule 2360(b)(4), which is not amended by
this filing, but which incorporate by reference
options position limits, would correspondingly
increase to 900,000 contracts.
5 See Securities Exchange Act Release No. 64695
(June 17, 2011) 76 FR 36942 (June 23, 2011) (SEC
order approving File No. SR–Phlx–2011–58);
Securities Exchange Act Release No. 64760 (June
28, 2011) 76 FR 39143 (July 5, 2011) (Notice of
Filing and Immediate Effectiveness of File No. SR–
ISE–2011–34); Securities Exchange Act Release No.
64928 (July 20, 2011) (File No. SR–CBOE–2011–
065); Securities Exchange Act Release No. 64966
(July 26, 2011) (File No. SR–NYSEAmex–2011–50);
and Securities Exchange Act Release No. 64945
(July 21, 2011) (File No. SR–NYSEArca–2011–47).
6 For example, options on SPYs, the most actively
traded options in the U.S. in terms of volume,
traded a total of 33,341,698 contracts across all
exchanges from March 1, 2011 through March 16,
2011. In contrast, over the same time period options
on the QQQ traded a total of 8,730,718 contracts
(less than 26.2% of the volume of options on SPYs).
In addition, for 2010, options on SPY had an
average daily trading volume of 3.63 million
contracts, while options on QQQs had an average
daily trading volume of 963,502. See supra note 5
PHLX rule filing, at 36942.
E:\FR\FM\16AUN1.SGM
16AUN1
]]>Agencies
[Federal Register Volume 76, Number 158 (Tuesday, August 16, 2011)]
[Notices]
[Pages 50795-50796]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20711]
[[Page 50795]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65077; File No. SR-BYX-2011-017]
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend
Pilot Program Related to Clearly Erroneous Execution Reviews
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\ notice is hereby given
that on August 8, 2011, 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
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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Commission a proposal to extend a
pilot program related to Rule 11.17, entitled ``Clearly Erroneous
Executions.''
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 the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to extend the effectiveness of the
Exchange's current rule applicable to Clearly Erroneous Executions,
Rule 11.17. The rule, explained in further detail below, is currently
operating as a pilot program set to expire on the earlier of August 11,
2011 or the date on which a limit up/limit down mechanism to address
extraordinary market volatility, if adopted, applies.\3\ The Exchange
proposes to extend the pilot program to January 31, 2012.
---------------------------------------------------------------------------
\3\ Securities Exchange Act Release No. 64236 (April 7, 2011),
76 FR 20739 (April 13, 2011) (SR-BYX-2011-006).
---------------------------------------------------------------------------
On October 4, 2010, the Exchange filed an immediately effective
filing to adopt various rule changes to bring BYX Rules up to date with
the changes that had been made to the rules of BATS Exchange, Inc., the
Exchange's affiliate, while BYX's Form 1 Application to register as a
national security exchange was pending approval. Such changes included
changes to the Exchange's Rule 11.17, on a pilot basis, 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.\4\ The
Exchange also adopted additional changes to Rule 11.17 that reduced the
ability of the Exchange to deviate from the objective standards set
forth in Rule 11.17.\5\ The Exchange believes the benefits to market
participants from the more objective clearly erroneous executions rule
should be approved to continue on a pilot basis.
---------------------------------------------------------------------------
\4\ Securities Exchange Act Release No. 63097 (October 13,
2010), 75 FR 64767 (October 20, 2010) (SR-BYX-2010-002).
\5\ Id.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\6\ In particular, the
proposal is consistent with Section 6(b)(5) of the Act,\7\ 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. The Exchange believes that the pilot
program promotes just and equitable principles of trade in that it
promotes transparency and uniformity across markets concerning review
of transactions as clearly erroneous.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6)(iii) thereunder.\9\ 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.\10\ Accordingly, the
Commission waives the 30-day operative delay requirement and designates
the proposed rule change as operative upon filing with the Commission.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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.
\10\ 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
[[Page 50796]]
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-BYX-2011-017 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-BYX-2011-017. 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 website (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 website 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-BYX-2011-017 and should be submitted on
or before September 6, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20711 Filed 8-15-11; 8:45 am]
BILLING CODE 8011-01-P
