[Federal Register: August 18, 2010 (Volume 75, Number 159)]
[Notices]
[Page 51145-51147]
[DOCID:fr18au10-171]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62713; File No. SR-BATS-2010-021]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
BATS Rule 23.1, Entitled ``Exercise of Options Contracts''

August 12, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 3, 2010, 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange is proposing to amend BATS 23.1, entitled ``Exercise
of Options Contracts,'' in order to extend the cut-off time to submit
contrary exercise advices.
    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 the Commission's Public Reference Room, and on the
Commission's Web site at http://www.sec.gov.

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 purpose of the proposed rule change is to amend Rule 23.1 to
extend the cut-off time to submit contrary exercise advices (each a
``Contrary Exercise Advice'', or, ``CEA'') \5\ to the Exchange. The
Exchange also proposes to make certain non-substantive changes to
reorganize the text of Rule 23.1 to more clearly present the existing
requirements and to eliminate duplicative language.\6\
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    \5\ Contrary Exercise Advices are also referred to as Expiring
Exercise Declarations (``EED'') in the OCC rules.
    \6\ The Exchange proposes to reorganize the current rule text so
that the requirement that exercise decisions must be made by 5:30
p.m. Eastern Time is specified in paragraph (c), while the
requirements pertaining to submitting CEA instructions are contained
in new paragraph (d). The language in new paragraph (d) is comprised
of language moved from paragraph (b)(2) and paragraph (c) of the
current rule. The Exchange also proposes to eliminate Interpretation
and Policy .03 to Rule 23.1 because it is duplicative of the
language contained in paragraph (c) of the current rule and
paragraph (d)(iii) in the proposal.
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    The Options Clearing Corporation (``OCC'') has an established
procedure, under OCC Rule 805, that provides for the automatic exercise
of certain options that are in-the-money by a specified amount known as
``Exercise-by-Exception'' or ``Ex-by-Ex.'' Under the Ex-by-Ex process,
options holders holding option contracts that are in-the-money by a
requisite amount and who wish to have their contracts automatically
exercised need take no further action. However, under OCC Rule 805,
option holders who do not want their options automatically exercised or
who want their options to be exercised under different parameters than
that of the Ex-by-Ex procedures must instruct OCC of their ``contrary
intention.''
    In addition to the OCC requirement, option holders must file a CEA
with the Exchange in accordance with Exchange Rule 23.1. Rule 23.1 is
designed, in part, to deter individuals from taking improper advantage
of late breaking news by requiring evidence of an option holder's
timely decision to exercise or not exercise expiring equity options.
Members satisfy this evidentiary requirement by electronically
submitting the CEA to the Exchange through OCC's electronic
communications system or any other means prescribed by the Exchange.
The submission of the CEA allows the Exchange to satisfy its regulatory
obligation to verify that the decision to make a contrary exercise was
made timely and in accordance with Rule 23.1.
    Currently under Rule 23.1, option holders have until 5:30 p.m.\7\
on the day prior to expiration to make a final decision to exercise or
not exercise an expiring option that would otherwise either expire or
be automatically exercised. An Exchange member may

not accept CEA instructions from its customer or non customer accounts
after 5:30 p.m. However, the current rule gives Exchange members an
additional one hour, up to 6:30 p.m., to submit these CEA instructions
to the Exchange where such member uses an electronic submission
process.\8\
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    \7\ All referenced times are Eastern Time.
    \8\ If members do not employ an electronic submission procedure,
they are required to submit CEAs for non-customer accounts by the
5:30 p.m. deadline. This deadline for manual submission is required
in order to prevent firms from improperly extending the 5:30 p.m.
deadline to exercise or not exercise an option. This requirement is
based on the difficulty in monitoring a manual procedure that has
different times for deciding whether or not to exercise the option
and for the submission of the CEA.
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    The current process allowing members an additional one hour after
the decision making cut off time of 5:30 p.m. to submit a CEA to the
various options exchanges was approved by the Commission in 2003.\9\
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    \9\ See Securities Exchange Act Release No. 47885 (May 16,
2003), 68 FR 28309 (May 23, 2003) (SR-AMEX-2001-92); Securities
Exchange Act Release No. 48505 (September 17, 2003), 68 FR 55680
(September 26, 2003) (SR-ISE-2003-20); Securities Exchange Act
Release No. 48640 (October 16, 2003), 68 FR 60757 (October 23, 2003)
(SR-PCX-2003-47); and Securities Exchange Act Release No. 48639
(October 16, 2003), 68 FR 60767 (October 23, 2003) (SR-Phlx-2003-
65).
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    The Exchange proposes to extend the current 6:30 p.m. deadline for
submitting CEA instructions to the Exchange by one additional hour, up
to 7:30 p.m. The Exchange believes that this proposed rule change is
necessary to maintain consistency with the rules of other exchanges
that have recently, or are in the process of, amending their rules. The
Exchange understands that such amendments are intended to address
concerns expressed by members of various options exchanges that, given
the decrease in the Ex-by-Ex threshold and the increase in trading, the
existing deadline for submitting CEAs under existing rules is
problematic for timely back-office processing. The proposed additional
one hour will address this concern by further enabling firms to more
timely manage, process, and submit the instructions to the Exchange.
The Exchange also proposes to modify the language in paragraph (g) of
the current rule (new paragraph (h)), which allows a member up to 2
hours and 30 minutes to submit a CEA to the Exchange in the event of a
modified close of trading on the day of expiration, by removing the two
hour and thirty minute restriction and allowing a member to submit a
CEA to the Exchange in the event of a modified close of trading of up
to the proposed 7:30 p.m. deadline. This will make consistent the
submission deadline for both regular and modified close expiration
days. Moreover, this will provide uniformity with submission deadlines
for both regular and modified close expiration days which will remove
any possibility for error when determining what the submission deadline
is on any modified close expiration day.
    In addition to the changes described above, the Exchange proposes
to add language to Rule 23.1(c) to require that with respect to
Quarterly Options Series the 5:30 p.m. Eastern Time deadline applies on
the expiration date rather than on the business day immediately prior
to the expiration date. Standard options contracts expire on the third
Saturday of the applicable expiration month; because the Exchange
desires to have all submissions occur on business days rather than
weekend days, the Exchange requires Options Members to follow the
Contrary Exercise Advice process by no later than 5:30 on the business
day immediately prior to expiration for standard options contracts. In
contrast, Quarterly Options Series expire on a fixed day that is never
a weekend day, specifically the last business day of each calendar
quarter, and thus, the Exchange believes it appropriate to require
Contrary Exercise Advice filings on the expiration date for any
Quarterly Options Series.\10\
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    \10\ See BATS Rule 19.6, Interpretation and Policy .04.
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    It is important to note that this proposed submission deadline does
not change the substantive requirement that option holders make a final
decision by 5:30 p.m. The Exchange will continue to enforce the 5:30
p.m. decision making requirement, while also allowing additional time
to process and submit the CEA instructions. This proposal seeks to
increase that additional submission time by one hour, and the Exchange
believes that this proposal will be beneficial to the marketplace,
particularly as it concerns back-office processing. The initiative to
address Exchange member concerns is industry-wide, a rule change
regarding this matter has already been approved,\11\ and the Exchange
anticipates that other options exchanges will also propose a one hour
extension for which they will accept a CEA. This proposed additional
processing time and Exchange submission deadline will not conflict with
OCC submission rules or cause any OCC processing issues.
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    \11\ See Securities Exchange Act Release No. 61710 (March 15,
2010), 75 FR 13636 (March 22, 2010) (SR-ISE-2010-02) (order
approving proposed rule change submitted by ISE relating to the cut-
off time for submitting contrary exercise advices).
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    If the operative date of this proposed rule change is more than 5
business days prior to the date of the next expiration Friday, i.e.,
the third Friday of the month (``Expiration Friday''),\12\ the Exchange
will implement the rule change so as to be effective for that
Expiration Friday. If the operative date of this proposed rule change
is 5 business days or less prior to the date of the next Expiration
Friday, the Exchange will implement the rule change so as to be
effective for the following Expiration Friday. The Exchange will notify
Members of the implementation date of the rule change via a Regulatory
Circular.
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    \12\ For example, Expiration Friday for August 2010 options will
be August 20, 2010; Expiration Friday for September options will be
September 17, 2010.
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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.\13\ In particular, the proposed change is consistent with
Section 6(b)(5) of the Act,\14\ 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. Specifically,
the Exchange believes that the proposed amendment will foster
coordination with back office personnel engaged in processing
information and is consistent with the facilitating of transactions in
securities as set forth in Section 6(b)(5) in that it, by providing
Exchange Members an additional hour within which to complete the
necessary processing of CEAs, will thereby decrease Exchange Members'
burden of processing an increasing number of contrary exercise advices
and enable them to more easily manage and process these instructions.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

C. Self-Regulatory Organization's Statement on Comments Regarding 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 \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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.
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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
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<EMAIL_ADDRESS>Please include
File Number SR-BATS-2010-021 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-2010-021. 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, 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-BATS-2010-021 and should be
submitted on or before September 8, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-20468 Filed 8-17-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register: October 21, 2008 (Volume 73, Number 204)]
[Notices]
[Page 62584-62586]
[DOCID:fr21oc08-126]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Approval of Noise Compatibility Program for McCarran
International Airport, Las Vegas, NV

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice.

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SUMMARY: The Federal Aviation Administration (FAA) announces its
findings on the noise compatibility program submitted by Clark County,
Nevada under the provisions of 49 U.S.C. (the Aviation Safety and Noise
Abatement Act, hereinafter referred to as ``the Act'') and 14 CFR Part
150. These findings are made in recognition of the description of
Federal and nonfederal responsibilities in Senate Report No. 96-52
(1980). On July 10, 2007 (72 FR 40357), the FAA determined that the
noise exposure maps submitted by Clark County under Part 150 were in
compliance with applicable requirements. On September 18, 2008, the FAA
approved the McCarran International Airport noise compatibility
program. All of the recommendations of the program were approved. One
Noise Abatement Measure relating to new or revised flight procedures
for noise abatement was proposed by the airport operator.

DATES: Effective Date: The effective date of the FAA's approval of the
McCarran International Airport noise compatibility program is September
18, 2008.

FOR FURTHER INFORMATION CONTACT: David B. Kessler, AICP, Regional
Environmental Protection Specialist, Federal Aviation Administration,
Western Pacific Region, Mailing address: P.O. Box 92007, Los Angeles,
CA 90009-2007. Street Address: 15000 Aviation Boulevard, Hawthorne,
California 90261. Telephone 310/725-3615. Documents reflecting this FM
action may be reviewed at this same location.

SUPPLEMENTARY INFORMATION: This notice announces that the FAA has given
its overall approval to the Noise Compatibility Program for McCarran
International Airport, effective September 18, 2008.
    Under section 47504 of the Act, an airport operator who has
previously submitted a noise exposure map may submit to the FAA a noise
compatibility program which sets forth the measures taken or proposed
by the airport operator for the reduction of existing non-compatible
land uses and prevention of additional non-compatible land uses within
the area covered by the Noise Exposure Maps. The Act requires such
programs to be developed in consultation with interested and affected
parties including local communities, government agencies, airport
users, and FAA personnel.
    Each airport noise compatibility program developed in accordance
with Federal Aviation Regulations (FAR) Part 150 is a local program,
not a Federal program. The FAA does not substitute its judgment for
that of the airport proprietor with respect to which measures should be
recommended for action. The FAA's approval or disapproval of 14 CFR
Part 150 program recommendations is measured according to the standards
expressed in Part 150 and the Act and is limited to the following
determinations:

    a. The Noise Compatibility Program was developed in accordance with
the provisions and procedures of FAR Part 150;
    b. Program measures are reasonably consistent with achieving the
goals of reducing existing non-compatible land uses around the airport
and preventing the introduction of additional non-compatible land uses;
    c. Program measures would not create an undue burden on interstate
or foreign commerce, unjustly discriminate against types or classes of
aeronautical uses, violate the terms of airport grant agreements, or
intrude into areas preempted by the Federal Government; and
    d. Program measures relating to the use of flight procedures can be
implemented within the period covered by the program without derogating
safety, adversely affecting the efficient use and management of the
navigable airspace and air traffic control systems, or adversely
affecting other powers and responsibilities of the Administrator
prescribed by law.
    Specific limitations with respect to FAA's approval of an airport
noise compatibility program are delineated in FAR Part 150, section
150.5. Approval is not a determination concerning the acceptability of
land uses under Federal, state, or local law. Approval does not by
itself constitute an FAA implementing action. A request for Federal
action or approval to implement specific noise compatibility measures
may be required, and an FAA decision on the request may require an
environmental assessment of the proposed action. Approval does not
constitute a commitment by the FAA to financially assist in the
implementation of the program nor a determination that all measures
covered by the program are eligible for grant-in-aid funding from the
FAA under the Airport and Airway Improvement Act of 1982, as amended.
Where Federal funding is sought, requests for project grants must be
submitted to the FAA Airports District Office in Burlingame,
California.
    The Clark County submitted to the FAA on January 17, 2007, the
Noise Exposure Maps, descriptions, and other documentation produced
during the noise compatibility planning study conducted from October
2002 through June 2006. The McCarran International Airport Noise
Exposure Maps were determined by FAA to be in compliance with
applicable requirements on July 10, 2007. Notice of this determination
was published in the Federal Register on July 24, 2007 (72 FR 40357).
    The McCarran International Airport study contains a proposed noise
compatibility program comprised of actions designed for phased
implementation by airport management and adjacent jurisdictions (from
2004 to beyond the year 2009). It was requested that the FAA evaluate
and approve this material as a Noise Compatibility Program as described
in 49 U.S.C. 47504 of the Act.
    The FAA has formally received the noise compatibility program for
LAS, effective on June 9, 2008. The FAA began its review of the program
on June 9, 2008, and was required by a provision of the Act to approve
or disapprove the program within 180 days (other than the use of new or
modified flight procedures for noise control). Failure to approve or
disapprove such program within the 180-day period shall be deemed to be
an approval of such program.
    The submitted program contained 22 proposed actions for noise
abatement and noise mitigation on and off the airport. The FAA
completed its review and determined that the procedural and substantive
requirements of the Act and FAR Part 150 have been satisfied. The
overall program was approved, by the Manager of the Airports Division,
Western-Pacific Region, effective September 18, 2008.
    Outright approval was granted for eleven (11) of the 13 noise
abatement measures. FAA approved all nine (9) noise mitigation
measures. Two Noise Abatement Measures were disapproved.
    The approved noise abatement measures included: Maintain and
clarify the existing informal preferential runway use program:
Encourage the use of existing noise abatement flight tracks to ensure
that aircraft fly over historic flight corridors: Continue to use
designated engine run-up areas at the airport for maintenance purposes:
Continue to support the use of general aviation reliever airports in
the Clark County Airport System: Continue the biannual noise monitoring
program for fixed-wing aircraft and annual noise monitoring for
helicopter tour traffic: Conduct a study to determine if the use of
advanced navigational technologies could enable pilots to follow more
predictable and precise flight tracks, thereby minimizing over flights
and noise in areas developed with noise-sensitive land uses: Conduct a
study to determine the feasibility and noise reduction benefits of
establishing continuous descent approach (CDA) procedures at the
airport: Conduct a study of the ``distant'' noise abatement departure
profile (NADP) as described in FAA Advisory Circular 91-53A, Noise
Abatement Departure Profiles, to determine the potential for reducing
aircraft noise exposure in the airport environs: Continue to encourage
airlines to use quieter aircraft and establish a recognition program
for airlines that adhere to the principles of the Department of
Aviation's ``fly quiet and safely'' program; Continue to support
legislation that establishes quieter engine standards for all aircraft
types; Continue to pursue the construction of a Southern Nevada
Regional Heliport; Expand the public information program related to the
NCP for LAS and publish a ``fly quietly and safely'' program brochure.
    Approved noise mitigation measures include: Establish a voluntary
program to acquire properties developed with airport-incompatible land
uses that will be exposed to aircraft noise of DNL 70 dB and higher
based on the 2011 noise exposure map; Establish a voluntary program to
acquire properties developed with airport-incompatible land uses that
will be exposed to aircraft noise of DNL 65-70 dB based on the 2011
noise exposure map and adjacent properties, as appropriate, to prevent
neighborhood abandonment; Establish a voluntary sound insulation and/or
transaction assistance program for properties developed with airport-
incompatible land uses that will be exposed to aircraft noise DNL 65 to
DNL 70 based on the 2011 noise exposure map; Continue to work with the
Clark County Department of Comprehensive Planning, the City of
Henderson Community Development Department, the University of Nevada,
Las Vegas (UNLV), and other appropriate agencies to amend land use and/
or master plans to discourage the introduction of noise-sensitive and
otherwise incompatible land uses in areas exposed to aircraft noise of
DNL 60 and higher; Continue to support redevelopment in areas exposed
to aircraft noise of DNL 65 and higher that are transitioning from
noise sensitive land uses to airport-compatible land uses; Update the
Airport Environs Overlay District (AEOD) map to reflect changes in
aircraft noise patterns that have occurred since the AEOD was last
updated, and add a new AE-60 subdistrict; Revisit land use
compatibility requirements codified in the AEOD ordinance and update
sections of the ordinance, as necessary, to include a new AE-60
subdistrict and to reflect sound attenuation requirements recently
adopted as part of the MUOD ordinance; Continue to actively support
enforcement of the AEOD through ongoing review of development
applications and condition airport related issues as appropriate;
Pursue the establishment of airport

noise disclosure requirements at the local or state level.
    FAA disapproved the following two Noise Abatement measures:
Continue to support legislation that establishes quieter engine
standards for all aircraft types: Request that FAA increase the length
of the final straight-in approach segment for arrivals on Runways 1 L,
1 R, 7L and 7R during visual meteorological conditions (VMC).
    These determinations are set forth, in detail, in the Record of
Approval signed by the Manager of the Airports Division, Western-
Pacific Region, on September 18, 2008. The Record of Approval, as well
as other evaluation materials and the documents comprising the
submittal, are available for review at the FAA office listed above and
at the administrative offices of the Clark County Department of
Aviation. The Record of Approval will be available on-line at: http://
www.faa.gov/airports_airtraffic/airports/environmental/airport_noise/
part_150/states/ .

    Issued in Hawthorne, California, on September 29, 2008.
Mark A. McClardy,
Manager, Airports Division, Western-Pacific Region, AWP-600.
 [FR Doc. E8-24817 Filed 10-20-08; 8:45 am]

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