[Federal Register Volume 78, Number 117 (Tuesday, June 18, 2013)]
[Notices]
[Pages 36621-36625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14450]
[[Page 36621]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69748; File No. SR-BATS-2013-032]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 2.11, Entitled ``BATS Trading, Inc. as Outbound Router''
June 12, 2013.
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 June 3, 2013, 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) 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 filed a proposal to amend Rule 2.11, entitled ``BATS
Trading, Inc. as Outbound Router'', and Rule 21.9, entitled ``Order
Routing'', with respect to the authority of the Exchange or BATS
Trading, Inc. (``BATS Trading'') to cancel orders on the Exchange's
equity securities platform (``BATS Equities'') and equity options
platform (``BATS Options'') when a technical or system issue occurs, as
well as to describe the operation of an error account for BATS Trading.
The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange filed a proposal The Exchange proposes to amend Rule
2.11(a) by amending subparagraph (4) and adding new subparagraphs (6)
and (7) that address the authority of the Exchange or BATS Trading to
cancel orders when a technical or systems issue occurs and to describe
the operation of an error account for BATS Trading as it relates to
BATS Equities.\5\ The Exchange also proposes to amend Rule 21.9 by
adding subparagraphs (g) and (h) that address the authority of the
Exchange or BATS Trading to cancel options orders when a technical or
systems issue occurs and to describe the operation of an error account
for BATS Trading as it relates to BATS Options.
---------------------------------------------------------------------------
\5\ BATS Trading is a facility of the Exchange. Accordingly,
under Rule 2.11, the Exchange is responsible for filing with the
Commission rule changes and fees relating to the functions of BATS
Trading. In addition, the Exchange is using the phrase ``BATS
Trading or the Exchange'' in this rule filing to reflect the fact
that a decision to take action with respect to orders affected by a
technical or systems issue may be made in the capacity of BATS
Trading or the Exchange depending on the circumstances of the issue.
From time to time, the Exchange also uses non-affiliate third-
party broker-dealers to provide outbound routing services (i.e.,
third-party Routing Brokers). In those cases, orders are submitted
to the third-party Routing Broker through BATS Trading, the third-
party Routing Broker routes the orders to the Routing Destination in
its name, and any executions are submitted for clearance and
settlement in the name of BATS Trading so that any resulting
positions are delivered to BATS Trading upon settlement. As
described above, BATS Trading normally arranges for any resulting
securities positions to be delivered to the Member that submitted
the corresponding order to the Exchange. If error positions (as
defined in proposed Rule 2.11(a)(7)) result in connection with the
Exchange's use of a third-party Routing Broker for outbound routing,
and those positions are delivered to BATS Trading through the
clearance and settlement process, BATS Trading would be permitted to
resolve those positions in accordance with proposed Rule
2.11(a)(7)(B)-(E). If the third-party Routing Broker received error
positions in connection with its role as a routing broker for the
Exchange, and the error positions were not delivered to BATS Trading
through the clearance and settlement process, then the third-party
Routing Broker would resolve the error positions itself and BATS
Trading would not be permitted to accept the error positions, as set
forth in proposed Rule 2.11(a)(7)(B).
---------------------------------------------------------------------------
BATS Trading is the approved routing broker of the Exchange for
both BATS Equities and BATS Options, subject to the conditions listed
in Rule 2.11, 2.12, and 21.9. The Exchange relies on BATS Trading to
provide outbound routing services from itself to routing destinations
of BATS Trading (``Routing Destinations''). Additionally, BATS Equities
relies on BATS Trading to provide inbound routing services for BATS Y-
Exchange, Inc. (``BYX'').\6\ When BATS Trading routes orders to a
Routing Destination, it does so by sending a corresponding order in its
own name to the Routing Destination. In the normal course, routed
orders that are executed at Routing Destinations are submitted for
clearance and settlement in the name of BATS Trading, and BATS Trading
arranges for any resulting securities positions to be delivered to the
Member that submitted the corresponding order to the Exchange.
---------------------------------------------------------------------------
\6\ The Exchange has authority to receive inbound routes of
equities orders by BATS Trading from BYX. See Securities Exchange
Act Release No. 66808 (April 13, 2012), 77 FR 23294 (April 18, 2012)
(SR-BATS-2012-013).
---------------------------------------------------------------------------
Examples of Situations That May Lead to Cancelled Orders
A technical or systems issue may arise at BATS Trading, a Routing
Destination, or the Exchange that may cause the Exchange or BATS
Trading to take steps to cancel orders if the Exchange or BATS Trading
determines that such action is necessary to maintain a fair and orderly
market. The examples set forth below describe some of the situations in
which the Exchange or BATS Trading may decide to cancel orders.\7\
---------------------------------------------------------------------------
\7\ The examples described in this filing are not intended to be
comprehensive or exclusive. Rule 2.11 and 21.9, as proposed, would
provide general authority for the Exchange or BATS Trading to cancel
orders in order to maintain fair and orderly markets when technical
and systems issues occur and would also set forth the manner in
which error positions may be handled by the Exchange or BATS
Trading. The proposed rule change is not limited to addressing order
cancellation or error positions resulting only from the specific
examples described in this filing.
Example 1. If BATS Trading or a Routing Destination experiences
a technical or systems issue that results in BATS Trading not
receiving responses to immediate or cancel (``IOC'') orders that it
sent to the Routing Destination and that issue is not resolved in a
timely manner, BATS Trading or the Exchange would seek to cancel the
routed orders affected by the issue.\8\ For
[[Page 36622]]
instance, if BATS Trading experiences a connectivity issue affecting
the manner in which it sends or receives order messages to or from
Routing Destinations, it may be unable to receive timely execution
or cancellation reports from the Routing Destinations, and BATS
Trading or the Exchange may consequently seek to cancel the affected
routed orders. Once the decision is made to cancel those routed
orders, any cancellation that a Member submitted to the Exchange on
its initial order during such a situation would be honored.\9\
---------------------------------------------------------------------------
\8\ In a normal situation (i.e., one in which a technical or
systems issue does not occur), BATS Trading should receive an
immediate response to an IOC order from a Routing Destination and
would pass the resulting fill or cancellation on to the Member.
After submitting an order that is routed to a Routing Destination,
if a Member sends an instruction to cancel that order, the
cancellation is held by the Exchange until a response is received
from the Routing Destination. For instance, if the Routing
Destination executes that order, the execution would be passed on to
the Member and the cancellation instruction would be disregarded.
\9\ If a Member did not submit a cancellation to the Exchange,
however, that initial order would remain ``live'' and thus be
eligible for execution or posting on the Exchange, and neither the
Exchange nor BATS Trading would treat any execution of that initial
order or any subsequent routed order related to that initial order
as an error.
---------------------------------------------------------------------------
Example 2. If the Exchange experiences a systems issue, the
Exchange may take steps to cancel all outstanding orders affected by
that issue and notify affected Members of the cancellations. In
those cases, the Exchange would seek to cancel any routed orders
related to the Members' initial orders.
Examples of Situations That May Lead to Error Positions
In some instances, the technical or systems issue at BATS Trading,
a Routing Destination, the Exchange, or a non-affiliate third party
Routing Broker may also result in BATS Trading acquiring an error
position that it must resolve. The examples set forth below describe
some of the circumstances in which error positions may arise.
Example A. Error positions may result from routed orders that
the Exchange or BATS Trading attempts to cancel but that are
executed before the Routing Destination receives the cancellation
message or that are executed because the Routing Destination is
unable to process the cancellation message. Using the situation
described in Example 1 above, assume that the Exchange seeks to
cancel orders routed to a Routing Destination because it is not
receiving timely execution or cancellation reports from the Routing
Destination. In such a situation, BATS Trading may still receive
executions from the Routing Destination after connectivity is
restored, which it would not then allocate to Members because of the
earlier decision to cancel the affected routed orders. Instead, BATS
Trading would post those positions into its error account and
resolve the positions in the manner described below.
Example B. Error positions may result from an order processing
issue at a Routing Destination. For instance, if a Routing
Destination experienced a systems problem that affects its order
processing, it may transmit back a message purporting to cancel a
routed order, but then subsequently submit an execution of that same
order (i.e., a locked-in trade) to The Depository Trust & Clearing
Corporation (``DTCC'') for clearance and settlement. In such a
situation, the Exchange would not then allocate the execution to the
Member because of the earlier cancellation message from the Routing
Destination. Instead, BATS Trading would post those positions into
its error account and resolve the positions in the manner described
below.
Example C. Error positions may result if BATS Trading receives
an execution report from a Routing Destination but does not receive
clearing instructions for the execution from the Routing
Destination. For instance, assume that a Member sends the Exchange
an order to buy 100 shares of ABC stock, which causes BATS Trading
to send an order to a Routing Destination that is subsequently
executed, cleared, and closed out by that Routing Destination, and
the execution is ultimately communicated back to that Member. On the
next trading day (T+1), if the Routing Destination does not provide
clearing instructions for that execution, BATS Trading would still
be responsible for settling that Member's purchase, but would be
left with a short position in its error account.\10\ BATS Trading
would resolve the position in the manner described below.
---------------------------------------------------------------------------
\10\ To the extent that BATS Trading incurred a loss in covering
its positions, short or long, it would submit reimbursement claim to
that Routing Destination.
---------------------------------------------------------------------------
Example D. Error positions may result from a technical or
systems issue that causes orders to be executed in the name of BATS
Trading that are not related to BATS Trading's function as the
Exchange's routing broker and are not related to any corresponding
orders of Members. As a result, BATS Trading would not be able to
assign any positions resulting from such an issue to Members.
Instead, BATS Trading would post those positions into its error
account and resolve the positions in the manner described below.
Example E. Error positions may result from a technical or
systems issue at the Exchange through which the Exchange does not
receive sufficient notice that a Member that has executed trades on
the Exchange has lost the ability to clear trades through DTCC, as
well as where the Exchange received notice of such Member's loss of
ability to clear trades through DTCC, but, because of a technical or
systems issue at the Exchange, the Exchange was unable to react to
such notice in a timely manner. In such a situation, the Exchange
would not have valid clearing information, which would prevent the
trade from being automatically processed for clearance and
settlement on a locked-in basis. Accordingly, BATS Trading would
assume that Member's side of the trades so that the counterparties
can settle the trades. BATS Trading would post those positions into
its error account and resolve the positions in the manner described
below.
Example F. Error positions may result from a technical or
systems issue at the Exchange that does not involve routing of
orders through BATS Trading. For example, a situation may arise in
which a posted order was validly cancelled, but the system
erroneously matched that order with an order that was seeking to
access it. In such a situation, BATS Trading would have to assume
the side of the trade opposite the order seeking to access the
cancelled order. BATS Trading would post the position in its error
account and resolve the position in the manner described below.
In each of the circumstances described above, it is possible that
neither the Exchange nor BATS Trading may learn about an error position
until T+1, either: (1) During the clearing process when a Routing
Destination has submitted to DTCC a transaction for clearance and
settlement for which BATS Trading never received an execution
confirmation; or (2) when a Routing Destination does not recognize a
transaction submitted by BATS Trading to DTCC for clearance and
settlement. Moreover, the affected Members' trades may not be nullified
absent express authority under BATS rules.\11\
---------------------------------------------------------------------------
\11\ See, e.g., Rule 11.17 (regarding clearly erroneous
executions).
---------------------------------------------------------------------------
BATS Equities--Proposed Amendments to Rule 2.11
The Exchange proposes to amend Rule 2.11(a) to add new paragraphs
(6) and (7) and to add certain language to Rule 2.11(a)(4).
Specifically, the Exchange proposes to amend Rule 2.11(a)(4) to state
that BATS Trading may employ an error account in compliance with
proposed paragraph (a)(7). Under paragraph (6) of the proposed rule,
the Exchange or BATS Trading would be expressly authorized to cancel
orders as may be necessary to maintain fair and orderly markets if a
technical or systems issue occurred at the Exchange, BATS Trading, or a
Routing Destination.\12\ The Exchange or BATS Trading would be required
to provide notice of the cancellation to affected Members as soon as is
practicable.
---------------------------------------------------------------------------
\12\ Such a situation may not cause the Exchange to declare
self-help against the routing destination pursuant to Rule 611 of
Regulation NMS. If the Exchange or BATS Trading determines to cancel
orders routed to a routing destination under proposed Rule
2.11(a)(7), but does not declare self-help against that routing
destination, the Exchange would continue to be subject to the trade-
through requirements in Rule 611 with respect to that routing
destination.
---------------------------------------------------------------------------
Paragraph (a)(7)(A) of the proposed rule would permit BATS Trading
to maintain an error account for the purpose of addressing positions
that are the result of an execution or executions that are not clearly
erroneous \13\ under
[[Page 36623]]
Rule 11.17 and result from a technical or systems issue at BATS
Trading, the Exchange, a Routing Destination, or a non-affiliate third-
party Routing Broker that affects one or more orders (``Error
Positions''). By definition, an Error Position would not include any
position that results from an order submitted by a Member to the
Exchange that is executed on the Exchange and automatically processed
for clearance and settlement on a locked-in basis. Under paragraph
(a)(7)(B) of the proposed rule, BATS Trading also would not be
permitted to accept any positions in its error account from an account
of a Member and could not permit any Member to transfer any positions
from the Member's account to BATS Trading's error account under the
proposed rule.\14\ However, under paragraph (a)(7)(C) of the proposed
rule, if a technical or systems issue results in the Exchange not
having valid clearing instructions for a Member to a trade, BATS
Trading may assume that Member's side of the trade so that the trade
can be processed for clearing and settlement on a locked-in basis.\15\
---------------------------------------------------------------------------
\13\ As defined in Rule 11.17(a), a transaction executed on the
Exchange is ``clearly erroneous'' when there is an obvious error in
any term, such as price, number of shares or other unit of trading,
or identification of the security.
\14\ The purpose of this provision is to clarify that BATS
Trading may address error positions under the proposed rule that are
caused by a technical or systems issue, but that BATS Trading may
not accept from a Member positions that are delivered to the Member
through the clearance and settlement process, even if those
positions may have been related to a technical or systems issue at
BATS Trading, the Exchange, a Routing Destination of BATS Trading,
or a non-affiliate third-party Routing Broker. This provision would
not apply, however, to situations like the one described in Example
C in which BATS Trading incurred a short position to settle a
Member's purchase, as the Member did not yet have a position in its
account as a result of the purchase at the time of BATS Trading's
action (i.e., BATS Trading's action was necessary for the purchase
to settle into the Member's account). Similarly, the provision would
not apply to situations like the one described in Example F, where a
system issue caused one Member to receive an execution for which
there was not an available contra-party, in which case action by
BATS Trading would be necessary for the position to settle into that
Member's account. Moreover, to the extent a Member receives locked-
in positions in connection with a technical or systems issue, that
Member may seek to rely on BATS Rule 11.16 if it experiences a loss.
That rule provides Members with the ability to file claims against
the Exchange for ``losses resulting directly from the malfunction of
the Exchange's physical equipment, devices and/or programming or the
negligent acts or omissions of its employees.''
\15\ See Example E above.
---------------------------------------------------------------------------
Under paragraph (a)(7)(D), in connection with a particular
technical or systems issue, BATS Trading or the Exchange would be
permitted to either (i) assign all resulting Error Positions to
Members; or (ii) have all resulting Error Positions liquidated, as
described below. Any determination to assign or liquidate Error
Positions, as well as any resulting assignments, would be required to
be made in a nondiscriminatory fashion.
BATS Trading or the Exchange would be required to assign all Error
Positions resulting from a particular technical or systems issue to the
applicable Members affected by that technical or systems issue if BATS
Trading or the Exchange: (i) Determines that it has accurate and
sufficient information (including valid clearing information) to assign
the positions to all of the applicable Members affected by that
technical or systems issue; (ii) determines that it has sufficient time
pursuant to normal clearance and settlement deadlines to evaluate the
information necessary to assign the positions to all of the applicable
Members affected by that technical or systems issue; and (iii) does not
determine to cancel all orders affected by that technical or systems
issue.
For example, a technical or systems issue of limited scope or
duration may occur at a Routing Destination and the resulting trades
may be submitted for clearance and settlement by such Routing
Destination to DTCC. If there were a small number of trades, there may
be sufficient time to match positions with Member orders and avoid
using the error account.
There may be scenarios, however, where BATS Trading determines that
it is unable to assign all Error Positions resulting from a particular
technical or systems issue to all of the affected Members, or
determines to cancel all affected routed orders. For example, in some
cases, the volume of questionable executions and positions resulting
from a technical or systems issue might be such that the research
necessary to determine which Members to assign those executions to
could be expected to extend past the normal settlement cycle for such
executions. Furthermore, if a Routing Destination experiences a
technical or systems issue after BATS Trading has transmitted IOC
orders to it that prevents BATS Trading from receiving responses to
those orders, BATS Trading or the Exchange may determine to cancel all
routed orders affected by that issue. In such a situation, BATS Trading
or the Exchange would not pass on to the Members any executions on the
routed orders received from the Routing Destination.
Proposed Rule 2.11(a)(7)(D) would require BATS Trading to liquidate
Error Positions as soon as practicable.\16\ In liquidating Error
Positions, BATS Trading would be required to provide complete time and
price discretion for the trading to liquidate the Error Positions to a
third-party broker-dealer and could not attempt to exercise any
influence or control over the timing or methods of trading to liquidate
the Error Positions.\17\ BATS Trading also would be required to
establish and enforce policies and procedures reasonably designed to
restrict the flow of confidential and proprietary information between
the third-party broker-dealer and BATS Trading/the Exchange associated
with the liquidation of the Error Positions.
---------------------------------------------------------------------------
\16\ If BATS Trading determines in connection with a particular
technical or systems issue that some error positions can be assigned
to some affected Members, but other error positions cannot be
assigned, BATS Trading would be required under the proposed rule to
liquidate all such error positions (including those positions that
could be assigned to the affected Members).
\17\ This provision is not intended to preclude BATS Trading
from providing the third-party broker with standing instructions
with respect to the manner in which it should handle all error
account transactions. For example, BATS Trading might instruct the
broker to treat all orders as ``not held'' and to attempt to
minimize any market impact on the price of the stock being traded.
---------------------------------------------------------------------------
Under proposed paragraph (a)(7)(E), BATS Trading and the Exchange
would be required to make and keep records to document all
determinations to treat positions as Error Positions and all
determinations for the assignment of Error Positions to Members or the
liquidation of Error Positions, as well as records associated with the
liquidation of Error Positions through the third-party broker-dealer.
BATS Options--Proposed Amendments to Rule 21.9
In order to maintain consistency between analogous services offered
by BATS Equities and BATS Options, the Exchange proposes to modify the
rules of BATS Options to conform with the changes described above
related to the cancellation of orders and the management of the BATS
Trading error account as it relates to BATS Equities. Accordingly, the
exchange proposes to add paragraphs (g) to Rule 21.9.
As proposed, Rule 21.9(g)(1) and (2) are identical to the
description set forth in proposed Rule 2.11(a)(6) and (7) and described
above with the exception of minor references necessary due to the
difference between rules applicable to BATS Equities and BATS Options.
2. Statutory Basis
The Exchange believes that the proposed rule change 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
[[Page 36624]]
requirements of Section 6 of the Act.\18\ Specifically, the Exchange
believes that the proposed rule change is consistent with Section
6(b)(5) of the Act,\19\ in that it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest, and it is not designed to permit unfair discrimination
among customers, brokers, or dealers. The Exchange believes that this
proposal is in keeping with those principles since BATS Trading's or
the Exchange's ability to cancel orders during a technical and systems
issue and to maintain an error account facilitates the smooth and
efficient operation of the market. Specifically, the Exchange believes
that allowing BATS Trading or the Exchange to cancel orders during a
technical or systems issue would allow the Exchange to maintain fair
and orderly markets. Moreover, the Exchange believes that allowing BATS
Trading to assume Error Positions in an error account and to liquidate
those positions, subject to the conditions set forth in the proposed
amendments to Rule 2.11 and 21.9, would be the least disruptive means
to correct these errors, except in cases where BATS Trading can assign
all such Error Positions to all affected Members of the Exchange.
Overall, the proposed amendments are designed to ensure full trade
certainty for market participants and to avoid disrupting the clearance
and settlement process. The proposed amendments are also designed to
provide a consistent methodology for handling Error Positions in a
manner that does not discriminate among Members. The proposed
amendments are also consistent with Section 6 of the Act insofar as
they would require BATS Trading to establish controls to restrict the
flow of any confidential information between the third-party broker and
BATS Trading/the Exchange associated with the liquidation of Error
Positions.
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78f.
\19\ 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 will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the proposed
amendment will align the Exchange's rules with other competing market
centers. Specifically, the rule change proposed herein is substantially
similar to the rules of other exchanges, including NASDAQ Stock Market
LLC (``Nasdaq'') Rule 4758(d), Nasdaq Options Market (``NOM'') Chapter
VI, Section 11(g), NYSE Arca Equities, Inc. (``Arca'') Rule 7.45(d)(2),
and EDGX Exchange, Inc. (``EDGX'') Rule 2.11(a).
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 after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-4(f)(6)
\21\ thereunder.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
---------------------------------------------------------------------------
The Exchange has asked the Commission to waive the 30-day operative
delay. The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest.
Such waiver would allow the Exchange, without delay, to implement the
proposed rule change, which is designed to provide a consistent
methodology for handling Error Positions in a manner that does not
discriminate among Members. The Commission also notes that the proposed
rule change is based on, and substantially similar to, rules of NYSE
Arca, Inc.,\22\ EDGX Exchange, Inc,\23\ and NASDAQ Stock Market
LLC,\24\ which the Commission previously approved. Accordingly, the
Commission designates the proposal operative upon filing.\25\
---------------------------------------------------------------------------
\22\ See Securities Exchange Act Release No. 66963 (May 10,
2012), 77 FR 28919 (May 16, 2012) (SR-NYSEArca-2012-22).
\23\ See Securities Exchange Act Release No. 67010 (May 17,
2012), 77 FR 30564 (May 23, 2012) (SR-EDGX-2012-08).
\24\ See Securities Exchange Act Release No. 67281 (June 27,
2012), 77 FR 39543 (July 3, 2012) (SR-NASDAQ-2012-057).
\25\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
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 email to [email protected]. Please include
File Number SR-BATS-2013-032 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-2013-032. This file
number should be included on the subject line if email 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, 100 F Street NE.,
[[Page 36625]]
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the 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-2013-032 and should be
submitted on or before July 9, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
---------------------------------------------------------------------------
\26\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14450 Filed 6-17-13; 8:45 am]
BILLING CODE 8011-01-P