[Federal Register Volume 88, Number 172 (Thursday, September 7, 2023)]
[Notices]
[Page 61657]
[FR Doc No: 2023-19420]

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SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meetings

TIME AND DATE: Notice is hereby given, pursuant to the provisions of
the Government in the Sunshine Act, Public Law 94-409, that the
Securities and Exchange Commission Small Business Capital Formation
Advisory Committee will hold a public meeting on Tuesday, September 19,
2023, at the Commission's headquarters and via videoconference.

PLACE: The meeting will be hybrid, with some Committee members
attending by remote means (videoconference) and others in-person at the
Commission's headquarters, 100 F Street NE, Washington, DC 20549, in
Multi-Purpose Room LL-006. Members of the public may watch the webcast
of the meeting on the Commission's website at www.sec.gov.

STATUS: The meeting will begin at 10:00 a.m. (ET) and will be open to
the public via webcast on the Commission's website at www.sec.gov. This
Sunshine Act notice is being issued because a majority of the
Commission may attend the meeting.

MATTERS TO BE CONSIDERED: The agenda for the meeting includes matters
relating to rules and regulations affecting small and emerging
businesses and their investors under the federal securities laws.

CONTACT PERSON FOR MORE INFORMATION: For further information and to
ascertain what, if any, matters have been added, deleted or postponed;
please contact Vanessa A. Countryman from the Office of the Secretary
at<PHONE_NUMBER>.
    Authority: 5 U.S.C. 552b.

    Dated: September 5, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023-19420 Filed 9-5-23; 4:15 pm]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 69 (Tuesday, April 11, 2023)]
[Rules and Regulations]
[Pages 21470-21472]
[FR Doc No: 2023-07593]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 147

[Docket Number USCG-2021-0476]
RIN 1625-AA00

Safety Zone; Heidelberg Spar Outer Continental Shelf Facility,
Green Canyon Block 860, Gulf of Mexico

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is establishing a safety zone around the
Heidelberg Spar, located in Green Canyon Block 860 on the Outer
Continental Shelf (OCS) in the Gulf of Mexico. The purpose of this rule
is to protect the facility from all vessel traffic operating outside
the normal shipping channels and fairways that are not providing
service to or working with the facility. Establishing a safety zone
around the facility will significantly reduce the threat of allisions,
collisions, security breaches, oil spills, releases of natural gas, and
thereby protect the safety of life, property, and the environment.

DATES: This rule is effective May 11, 2023.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to https://www.regulations.gov, type USCG-
2021-0476 in the search box and click ``Search.'' Next, in the Document
Type column, select ``Supporting & Related Material.''

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email LCDR David Newcomb, District Eight OCS, U.S. Coast Guard;
telephone<PHONE_NUMBER>, [email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
OCS Outer Continental Shelf
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    Anadarko Petroleum Company requested that the Coast Guard establish
a safety zone around its facility. There are safety concerns for both
the personnel aboard the facility and the

environment that arise when a safety zone is not established. In
response, on October 23, 2022, the Coast Guard published a notice of
proposed rulemaking (NPRM) titled Safety Zone; Heidelberg Spar, Outer
Continental Shelf Facility, Green Canyon Block 860, Gulf of Mexico.
There we stated why we issued the NPRM, and invited comments on our
proposed regulatory action related to this safety zone. During this
comment period that ended on November 23, 2022, we received 1 comment.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 14 U.S.C.
85, 43 U.S.C. 1333, Department of Homeland Security Delegation No.
0170.1, and 33 CFR 1.05-1, 147.1, and 147.10, which collectively permit
the establishment of safety zones for facilities located on the OCS for
the purpose of protecting life and property on the facilities, and the
marine environment in the safety zones. The Coast Guard has determined
that a safety zone is necessary to protect the facility from all
vessels operating outside the normal shipping channels and fairways
that are not providing services to or working with the facility.
Navigation in the vicinity of the safety zone consists of large
commercial shipping vessels, fishing vessels, cruise ships, tugs with
tows and the occasional recreational vessel. The deepwater area also
includes an extensive system of fairways. The purpose of the rule is to
significantly reduce the threat of allisions, oil spills, and releases
of natural gas, and thereby protect the safety of life, property, and
the environment.

IV. Discussion of Comments, Changes and the Rule

    As noted above, we received 1 comment on our NPRM published on
November 23, 2022. The commenter asked to specify the horizontal datum
(NAD 27, NAD 83, etc.) for the latitude and longitude position in the
rule. We have done so. In this rule, as in all OCS Safety Zone rules,
we use the NAD 83 horizontal datum.
    This rule established a safety zone on the Outer Continental Shelf
(OCS) in the deepwater area of the Gulf of Mexico at Green Canyon 860.
The area or the safety zone is 500 meters (1640.4 feet) from each point
on the facility, which is located 27[deg]6'41.0394'' N,
90[deg]45'50.3994'' W (NAD 83). The deepwater area is waters of 304.8
meters (1,000 feet) or greater depth extending to the limits of the
Exclusive Economic Zone (EEZ) contiguous to the territorial sea of the
United States and extending to a distance up to 200 nautical miles from
the baseline from which the breadth of the sea is measured. No vessel,
except those attending the facility, or those less than 100 feet in
length and not engaged in towing will be permitted to enter the safety
zone without obtaining permission from Commander, Eighth Coast Guard
District or a designated representative.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive Orders related to rulemaking, and we considered the First
Amendment rights of protestors. Below we summarize our analyses based
on a number of these statutes or executive orders.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This rule has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, this rule has not been reviewed by the Office of
Management and Budget (OMB), and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771.
    This regulatory action determination is based on the location of
the Heidelberg Spar, on the OCS, and its distance from both land and
safety fairways. Vessels traversing waters near the safety zone will be
able to safely travel around the zone using alternate routes.
Exceptions to this rule include vessels measuring less than 100 feet in
length overall and not engaged in towing. The Eighth Coast Guard
District Commander, or a designated representative, will consider
requests to transit through the safety zone on a case-by-case basis.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rulemaking. The Coast Guard certifies under 5
U.S.C. 605(b) that this rule will not have a significant economic
impact on a substantial number of small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule affects your small
business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial

direct effect on one or more Indian tribes, on the relationship between
the Federal Government and Indian tribes, or on the distribution of
power and responsibilities between the Federal Government and Indian
tribes. If you believe this rule has implications for federalism or
Indian tribes, please contact the person listed in the FOR FURTHER
INFORMATION CONTACT section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary
determination that this action is one of a category of actions that do
not individually or cumulatively have a significant effect on the human
environment. This rule involves establishing a safety zone around an
offshore deepwater facility. Normally such actions are categorically
excluded from further review under paragraph 34(g) of Figure 2-1 of
Commandant Instruction M16475.lD. A preliminary environmental analysis
checklist and Categorical Exclusion Determination, prepared and signed
before October 31, 2022, are available in the docket where indicated
under ADDRESSES.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

PART 147--SAFETY ZONES

0
1. The authority citation for part 147 continues to read as follows:

    Authority: 14 U.S.C. 554; 43 U.S.C. 1333; 33 CFR 1.05-1;
Department of Homeland Security Delegation No. 0170.1.

0
2. Add Sec.  147.877 to read as follows:

Sec.  147.877  Safety Zone, Heidelberg Spar, Outer Continental Shelf
Facility, Green Canyon 860.

    (a) Description. The Heidelberg Spar in the deepwater area of the
Gulf of Mexico at Green Canyon. The facility is located at:
27[deg]6'41.0394'' N, 90[deg]45'50.3994'' W (NAD 83) and the area
within 500 meters (1640.4 feet) from each point on the facility
structure's outer edge is a safety zone.
    (b) Regulation. No vessel may enter or remain in this safety zone
except for the following:
    (1) An attending vessel, as defined in Sec.  147.20;
    (2) A vessel under 100 feet in length overall not engaged in
towing; or
    (3) A vessel authorized by the Commander, Eighth Coast Guard
District or a designated representative.
    (c) Requests for permission. Persons or vessels requiring
authorization to enter the safety zone must request permission from the
Commander, Eighth Coast Guard District or a designated representative.
If permission is granted, all persons and vessels shall comply with the
instructions of the Commander or designated representative.

    Dated: April 4, 2023.
Richard Timme,
RADM, U.S. Coast Guard, Commander, Coast Guard District Eight.
[FR Doc. 2023-07593 Filed 4-10-23; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: December 8, 2009 (Volume 74, Number 234)]
[Notices]
[Page 64788-64797]
[DOCID:fr08de09-116]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61097; File No. SR-BATS-2009-031]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing of Proposed Rule Change To Establish Rules Governing the Trading
of Options on the BATS Options Exchange

December 2, 2009.
    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 November 10, 2009, BATS Exchange, Inc. (``Exchange'' or
``BATS'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change to adopt rules to govern the
trading of options on the Exchange (referred to herein as ``BATS
Options Exchange'' or ``BATS Options'') as described in Items I, II,
and III below, which Items have been prepared by the Exchange (the
``Trading Rules Proposal''). 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to adopt rules to govern the trading of
options on the Exchange. The Exchange represents that the BATS Options
Exchange will operate a fully automated, price/time priority execution
system built on the core functionality of the Exchange's approved
equities platform, meaning that the Exchange will operate its options
market much as it operates its cash equities market today.
    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. The text of
Exhibit 5 of the proposed rule change is also available on the
Commission's Web site at http: //www.sec.gov/rules/sro.shtml.

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 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 Exchange is proposing to adopt a series of rules in connection
with BATS Options, which will be a facility of the Exchange. BATS
Options will operate an electronic trading system developed to trade
options (``System'') that will provide for the electronic display and
execution of orders in price/time priority without regard to the status
of the entities that are entering orders. All Exchange Members will be
eligible to participate in BATS Options provided that the Exchange
specifically authorizes them to trade in the System. The System will
provide a routing service for orders when trading interest is not
present on BATS Options, and will comply with the obligations of the
Options Order Protection and Locked/Crossed Market Plan.

BATS Options Members

    The Exchange will authorize any Exchange Member who meets certain
enumerated qualification requirements to obtain access to BATS Options
(any such Member, an ``Options Member'').
    There will be two types of Options Members, Options Order Entry
Firms (``OEFs'') and Options Market Makers. OEFs will be those Options
Members representing orders as agent on BATS Options and non-market
maker participants conducting proprietary trading as principal. Options
Market Makers are Options Members registered with the Exchange as
Options Market Makers and registered with BATS Options in an options
series listed on BATS Options. To become an Options Market Maker, an
Options Member is required to register by filing a written application.
Such registration will consist of at least one series and may include
all series traded on the Exchange. The Exchange will not place any
limit on the number of entities that may become Options Market Makers.
    The Exchange will not list an options series for trading unless at
least one Options Market Maker is registered in the options series. In
addition, before the Exchange opens trading for any additional series
of an options class, it would require at least one Options

Market Maker to be registered for trading that particular series.
    BATS Options Market Makers will be required to electronically
engage in a course of dealing to enhance liquidity available on BATS
Options and to assist in the maintenance of fair and orderly markets.
Among other things, an Options Market Maker would have to satisfy the
following responsibilities and duties during trading: (1) On a daily
basis maintain a two-sided market on a continuous basis in at least 75%
of the options series in which it is registered;\\ (2) enter a size of
at least one contract for its best bid and its best offer; and (3)
maintain minimum net capital in accordance with Commission and the
Exchange rules. Substantial or continued failure by an Options Market
Maker to meet any of its obligations and duties, will subject the
Options Market Maker to disciplinary action, suspension, or revocation
of the Options Market Maker's registration in one or more options
series.
    Options Market Makers receive certain benefits for carrying out
their duties. For example, a lender may extend credit to a broker-
dealer without regard to the restrictions in Regulation T of the Board
of Governors of the Federal Reserve System if the credit is to be used
to finance the broker-dealer's activities as a specialist or market
maker on a national securities exchange. Thus, an Options Market Maker
has a corresponding obligation to hold itself out as willing to buy and
sell options for its own account on a regular or continuous basis to
justify this favorable treatment.\3\
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    \3\ Boston Options Exchange (``BOX'') and the NASDAQ Options
Market (``NOM'') have market maker obligations comparable to those
proposed for BATS Options.
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    Every Options Member shall at all times maintain membership in
another registered options exchange that is not registered solely under
Section 6(g) of the Securities Exchange Act of 1934 or in FINRA. OEF's
that transact business with customers must at all times be members of
FINRA. Pursuant to proposed BATS Rule 17.2(g), every Options Member
will be required to have at least one registered Options Principal who
satisfies the criteria of that Rule, including the satisfaction of a
proper qualification examination. An OEF may only transact business
with Public Customers if such Options Member also is an Options Member
of another registered national securities exchange or association with
which the Exchange has entered into an agreement under Rule 17d-2 under
the Exchange Act pursuant to which such other exchange or association
shall be the designated options examining authority for the OEF.
    As provided in BATS Rule 16.2, existing Exchange Rules applicable
to the BATS equity market contained in Chapters I through XV of the
Exchange Rules will apply to Options Members unless a specific Exchange
Rule applicable to the options market (Chapters XVI through XXIX of the
Exchange Rules) governs or unless the context otherwise requires.
Options Members can therefore provide sponsored access to the BATS
Options Exchange to a nonmember (``Sponsored Participant'') pursuant to
Rule 11.3 of the Exchange Rules.

Execution System

    The Exchange's options trading system will leverage the Exchange's
current state of the art technology, including its customer
connectivity, messaging protocols, quotation and execution engine,
order router, data feeds, and network infrastructure. This approach
minimizes the technical effort required for existing Exchange Members
to begin trading options on the BATS Options Exchange. As a result, the
BATS Options Exchange will closely resemble the Exchange's equities
market, but will differ from most existing options exchanges by, most
prominently, offering true price/time priority across all participants
rather than differentiating between participant/trading interest.
    Like the Exchange system for equities, all trading interest entered
into the System will be automatically executable. Orders entered into
the System will be displayed anonymously. The System will offer fully
anonymous trading, however, options trades are not currently anonymous
through settlement. The Exchange will become an exchange member of the
Options Clearing Corporation (``OCC''). The System will be linked to
OCC for the Exchange to transmit locked-in trades for clearance and
settlement.
    Hours of Operation. The options trading system will operate between
the hours of 9:30 a.m. Eastern Time and 4 p.m. Eastern Time, with all
orders being available for execution during that time frame.
    Minimum Quotation and Trading Increments. The Exchange is proposing
to apply the following quotation increments: (1) If the options series
is trading at less than $3.00, five (5) cents; (2) if the options
series is trading at $3.00 or higher, ten (10) cents; and (3) if the
options series is trading pursuant to the Penny Pilot program one (1)
cent if the options series is trading at less than $3.00, five (5)
cents if the options series is trading at $3.00 or higher, except for
QQQQs where the minimum quoting increment will be one cent for all
series. In addition, the Exchange is proposing that the minimum trading
increment for options contracts traded on BATS Options will be one (1)
cent for all series.
    Penny Pilot Program. Upon initial operation of BATS Options the
Exchange proposes to commence trading, pursuant to the Penny Pilot
Program (the ``Penny Pilot''), all classes that are, on that date,
traded by other options exchanges pursuant to the Penny Pilot, which is
scheduled to expire on December 31, 2010. Following the commencement of
operations and trading of classes traded by other options exchanges
pursuant to the Penny Pilot at that time, the Exchange proposes to
expand the classes subject to the Penny Pilot on a quarterly basis, 75
classes at a time through August 2010. For instance, if BATS Options
commences operations on February 16, 2010, then the Exchange will trade
all classes trading pursuant to the Penny Pilot on other options
exchanges as of that date and will add 75 classes in May 2010 and 75
additional classes in August 2010. In order to reduce operational
confusion and provide for appropriate time to update databases, the
Exchange proposes to add the eligible issues to the Penny Pilot
effective for trading on the Monday ten days after Expiration Friday.
Thus, as applicable, the quarterly additions would be effective on
February 1, 2010; May 3, 2010; and August 2, 2010. For purposes of
identifying the issues to be added per quarter, the Exchange shall use
data from the prior six calendar months preceding the implementation
month, except that the month immediately preceding their addition to
the Penny Pilot would not be utilized for purposes of the analysis. The
new classes added by the Exchange on a quarterly basis will represent
the 75 most actively traded multiply listed options classes based on
national average daily volume for the six months prior to selection,
closing under $200 per share on the Expiration Friday prior to
expansion, except that the month immediately preceding their addition
to the Penny Pilot will not be used for the purpose of the six month
analysis.\4\ The Exchange will specify which options trade in the Penny
Pilot, and in what increments, in Information Circulars filed with the
Commission pursuant to

Rule 19b-4 under the Exchange Act and distributed to Members. The
Exchange represents that it has the necessary system capacity to
support any additional series listed as part of the Penny Pilot.
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    \4\ Index products would be included in the expansion if the
underlying index level was under 200.
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    The Exchange agrees to submit semi-annual reports to the Commission
that will include sample data and written analysis of information
collected from April 1 through September 30, and from October 1 through
March 31, for each year, for first the 63 classes traded pursuant to
the Penny Pilot by other options exchanges (the ``Initial Classes''),
and the ten most active and twenty least active options classes added
to the Penny Pilot with each quarterly expansion, commencing with the
expansion that occurred on November 2, 2009. As the Penny Pilot matures
and expands, the Exchange believes that this proposed sampling approach
provides an appropriate means by which to monitor and assess the Penny
Pilot's impact. The Exchange will also identify, for comparison
purposes, a control group consisting of the ten least active options
classes from the Initial Classes. This report will include, but is not
limited to: (1) Data and written analysis on the number of quotations
generated for options included in the report; (2) an assessment of the
quotation spreads for the options included in the report; (3) an
assessment of the impact of the Penny Pilot on the capacity of the
Exchange's automated systems; (4) data reflecting the size and depth of
markets; and (5) any capacity problems or other problems that arose
related to the operation of the Penny Pilot and how the Exchange
addressed them.
    Additionally, the Exchange proposes that any Penny Pilot issues
that have been delisted may be replaced on a semi-annual basis by the
next most actively traded multiply listed options classes that are not
yet included in the Penny Pilot, based on trading activity in the
previous six months. The replacement issues, as applicable, would be
added to the Penny Pilot Program on the second trading day following
January 1, 2010 and July 1, 2010. The Exchange will employ the same
parameters to prospective replacement issues as approved and applicable
under the Penny Pilot Program, including excluding high-priced
underlying securities. The replacement issues will be announced in
Information Circulars distributed to Members.
    Order Types. The proposed System will make available to Options
Members Reserve Orders, Limit Orders, Minimum Quantity Orders,
Discretionary Orders, Market Orders, Price Improving Orders,
Destination Specific Orders, BATS Only Orders, BATS Post Only Orders,
Partial Post Only at Limit Orders, Intermarket Sweep Orders, and
Directed Intermarket Sweep Orders, with characteristics and
functionality similar to what is currently approved for use in the
Exchange's equities trading facility or on other options exchanges.
    ``Reserve Orders'' are limit orders that have both a displayed size
as well as an additional non-displayed amount. Both the displayed and
non-displayed portions of the Reserve Order are available for potential
execution against incoming orders. If the displayed portion of a
Reserve Order is fully executed, the System will replenish the display
portion from reserve up to the size of the original display amount. A
new timestamp is created for the replenished portion of the order each
time it is replenished from reserve, while the reserve portion retains
the timestamp of its original entry.
    ``Limit Orders'' are orders to buy or sell an option at a specified
price or better. A limit order is marketable when, for a limit order to
buy, at the time it is entered into the System, the order is priced at
the current inside offer or higher, or for a limit order to sell, at
the time it is entered into the System, the order is priced at the
inside bid or lower.
    ``Minimum Quantity Orders'' are orders that require that a
specified minimum quantity of contracts be obtained, or the order is
cancelled. Minimum Quantity Orders may only be entered with a time-in-
force designation of Immediate or Cancel.
    ``Discretionary Orders'' are orders that have a displayed price and
size, as well as a non-displayed discretionary price range, at which
the entering party, if necessary, is also willing to buy or sell. The
non-displayed trading interest is not entered into the BATS Options
Book but is, along with the displayed size, converted to an IOC buy
(sell) order priced at the highest (lowest) price in the discretionary
price range when displayed contracts become available on the opposite
side of the market or an execution takes place at any price within the
discretionary price range. The generation of this IOC order is
triggered by the automatic cancellation of the displayed contracts
portion of the Discretionary Order. If more than one Discretionary
Order is available for conversion to an IOC order, the System will
convert and process all such orders in the same priority in which such
Discretionary Orders were entered. If an IOC order is not executed in
full, the unexecuted portion of the order is automatically re-posted
and displayed in the BATS Options Book with a new time stamp, at its
original displayed price, and with its non-displayed discretionary
price range.
    ``Market Orders'' are orders to buy or sell at the best price
available at the time of execution.
    ``Price Improving Orders'' are orders to buy or sell an option at a
specified price at an increment smaller than the minimum price
variation in the security. Price Improving Orders may be entered in
increments as small as (1) one cent. Price Improving Orders that are
available for display shall be displayed at the minimum price variation
in that security and shall be rounded up for sell orders and rounded
down for buy orders. Unless a User has entered instructions not to do
so, Price Improving Orders will be subject to the ``displayed price
sliding process.'' Pursuant to the displayed price sliding process, a
Price Improving Order that after rounding to the minimum price
variation, or any other order to be displayed on the BATS Book that at
the time of entry, would lock or cross a Protected Quotation
(collectively, ``the original locking price''): (A) Such order will be
displayed by the System at one minimum price variation below the
current NBO (for bids) or to one minimum price variation above the
current NBB (for offers); and (B) in the event the NBBO changes such
that the order at the original locking price would not lock or cross a
Protected Quotation, the order will receive a new timestamp, and will
be displayed at the original locking price.
    ``Destination Specific Orders'' are market or limit orders that
instruct the System to route the order to a specified away trading
center, after exposing the order to the BATS Options Book. Destination
Specific Orders that are not executed in full after routing away are
processed by the Exchange as described in Rules 21.8 and 21.9.
    ``BATS Only Orders'' are orders that are to be ranked and executed
on the Exchange pursuant to Rule 21.8 (Order Display and Book
Processing) or cancelled, as appropriate, without routing away to
another trading center. A BATS Only Order that, at the time of entry,
would cross a Protected Quotation will be repriced to the locking price
and ranked at such price in the BATS Options Book. A BATS Only Order
will be subject to the displayed price sliding process unless a User
has entered instructions not to use the displayed price sliding process
as set forth in Rule 21.1(d)(6).
    ``BATS Post Only Orders'' are orders that are to be ranked and
executed on

the Exchange pursuant to Rule 21.8 or cancelled, as appropriate,
without routing away to another trading center except that the order
will not remove liquidity from the BATS Options Book. A BATS Post Only
Order will be subject to the displayed price sliding process unless a
User has entered instructions not to use the displayed price sliding
process as set forth in Rule 21.1(d)(6).
    ``Partial Post Only at Limit Orders'' are orders that are to be
ranked and executed on the Exchange pursuant to Rule 21.8 or cancelled,
as appropriate, without routing away to another trading center except
that the order will only remove liquidity from the BATS Options Book
under the following circumstances: (a) A Partial Post Only at Limit
Order will remove liquidity from the BATS Options Book up to the full
size of the order if, at the time of receipt, it can be executed at
prices better than its limit price (i.e., price improvement); (b)
regardless of any liquidity removed from the BATS Options Book under
the circumstances described in paragraph (a) above, a User may enter a
Partial Post Only at Limit Order instructing the Exchange to also
remove liquidity from the BATS Options Book at the order's limit price
up to a designated percentage of the remaining size of the order after
any execution pursuant to paragraph (A) above (``Maximum Remove
Percentage'') if, after removing such liquidity at the order's limit
price, the remainder of such order can then post to the BATS Options
Book. If no Maximum Remove Percentage is entered, such order will only
remove liquidity to the extent such order will obtain price improvement
as described in paragraph (A) above. A Partial Post Only at Limit Order
will be subject to the displayed price sliding process unless a User
has entered instructions not to use the displayed price sliding process
as set forth in Rule 21.1(d)(6).
    ``Intermarket Sweep Orders'' or ``ISO'' are orders that shall have
the meaning provided in Rule 27.1, which relates to intermarket
trading. Such orders may be executed at one or multiple price levels in
the System without regard to Protected Quotations at other options
exchanges (i.e., may trade through such quotations). The Exchange
relies on the marking of an order by a User as an ISO order when
handling such order, and thus, it is the entering Options Member's
responsibility, not the Exchange's responsibility, to comply with the
requirements relating to ISOs. ISOs are not eligible for routing
pursuant to Rule 21.9.
    ``Directed Intermarket Sweep Orders'' or ``Directed ISOs'' are ISOs
entered by a User that bypass the System and are immediately routed by
the Exchange to another options exchange specified by the User for
execution. It is the entering Member's responsibility, not the
Exchange's responsibility, to comply with the requirements relating to
Intermarket Sweep Orders.
    Time in Force Designations. Options Members entering orders into
the System may designate such orders to remain in force and available
for display and/or potential execution for varying periods of time.
Unless cancelled earlier, once these time periods expire, the order (or
the unexecuted portion thereof) is returned to the entering party.
    ``Good Til Day or ``GTD'' shall mean, for orders so designated,
that if after entry into the System, the order is not fully executed,
the order (or the unexecuted portion thereof) shall remain available
for potential display and/or execution for the amount of time during
such trading day specified by the entering User unless canceled by the
entering party.
    ``Immediate Or Cancel'' or ``IOC'' shall mean, for an order so
designated, a limit order that is to be executed in whole or in part as
soon as such order is received, and the portion not so executed is
cancelled.
    ``DAY'' shall mean, for an order so designated, a limit order to
buy or sell which, if not executed expires at market close.
    ``WAIT'' shall mean for orders so designated, that upon entry into
the System, the order is held for one second without processing for
potential display and/or execution. After one second, the order is
processed for potential display and/or execution in accordance with all
order entry instructions as determined by the entering party. This
modifier is designed to enhance compliance with the order exposure
requirement set forth in Rule 22.12 (Order Exposure Requirements). Rule
22.12 would prohibit Options Members from executing as principal on
BATS Options orders they represent as agent unless (i) agency orders
are first exposed on BATS Options for at least one (1) second or (ii)
the Options Member has been bidding or offering on BATS Options for at
least one (1) second prior to receiving an agency order that is
executable against such bid or offer.
    One Second Exposure Period. As noted above, proposed Rule 22.12
would require Options Members to expose their customers' orders on the
Exchange for at least one second under certain circumstances. During
this one second exposure period, other Options Members will be able to
enter orders to trade against the exposed order. In adopting a one-
second order exposure period, the Exchange is proposing a requirement
that is consistent with the Rules of other options exchanges.\5\ Thus,
the exposure period will allow Options Members that are members of
other options exchanges to comply with Rule 22.12 without programming
separate time parameters into their systems for order entry or
compliance purposes. The Exchange believes that market participants are
sufficiently automated that a one second exposure period allows an
adequate time for market participants to electronically respond to an
order. Also, it is possible that market participants might wait until
the end of the exposure period, no matter how long, before responding.
Thus, the Exchange believes that any longer than one second would not
further the protection of investors or market participants, but rather,
would potentially increase market risk to investors and other market
participants by creating a longer period of time for the exposed order
to be subject to market risk.
---------------------------------------------------------------------------

    \5\ See, e.g., CBOE Rules 6.45A, 6.45B, 6.74A and 6.74B; ISE
Rule 717(d); NOM Chapter VII, Sec. 12.
---------------------------------------------------------------------------

    The Exchange's trading system for BATS Options is identical to the
trading system currently used for equities trading on the Exchange
today. The Exchange has had ample experience with that trading system
to believe that one second is an adequate exposure period.\6\ Further,
the Exchange believes that many of its current Members will be Options
Members and that such current Members have demonstrated an ability to
respond to orders in a timely fashion.
---------------------------------------------------------------------------

    \6\ For instance, for approximately three months in 2009, the
Exchange offered functionality that exposed marketable orders to
Exchange Members prior to routing, canceling or posting the order to
the Exchange's order book. See Release No. 34-60040 (June 3, 2009),
74 FR 27577 (June 10, 2009). Pursuant to that functionality, orders
were exposed to Exchange Members for a variable period of time up to
500 milliseconds. In the Exchange's experience, Exchange Members
were able to and frequently did respond to such exposed orders.
---------------------------------------------------------------------------

    Member Match Trade Prevention Modifiers. As with its equities
market, the Exchange will allow Options Members to use Member Match
Trade Prevention (``MMTP'') Modifiers. Any incoming order designated
with an MMTP modifier will be prevented from executing against a
resting opposite side order also designated with an MMTP modifier and
originating from the same market participant identifier (``MPID''),
Exchange Member identifier or Exchange Sponsored Participant
identifier.
    Market Opening Procedures. The System shall open options, other
than

index options, for trading based on the first transaction after 9:30
a.m. Eastern Time in the securities underlying the options as reported
on the first print disseminated pursuant to an effective national
market system plan. With respect to index options, the System shall
open such options for trading at 9:30 a.m. Eastern Time. Because the
exchange does not propose to adopt an opening cross or similar process,
the opening trade that occurs on the Exchange will be a trade in the
ordinary course of dealings on the Exchange. Accordingly, the System
will ensure that the opening trade in an options series will not trade
through a Protected Quotation (as defined in Rule 27.2) at another
options exchange, consistent with the general standard regarding trade
throughs articulated in proposed Rule 21.6(e).
    Order Display/Matching System. The System will be based upon
functionality currently approved for use in the Exchange's equities
trading system. Specifically, the System will allow Options Members to
enter market orders and priced limit orders to buy and sell BATS
Options-listed options. The orders will be designated for display
(price and size) on an anonymous basis in the order display service of
the System.
    Routing. The BATS Options Exchange will support orders that are
designated to be routed to the National Best Bid and Offer (``NBBO'')
as well as orders that will execute only within BATS Options. Orders
that are designated to execute at the NBBO will be routed to other
options markets to be executed when the Exchange is not at the NBBO
consistent with the Options Order Protection and Locked/Crossed Market
Plan. Subject to the exceptions contained in proposed Rule 27.2(b), the
System will ensure that an order will not be executed at a price that
trades through another options exchange. An order that is designated by
an Options Member as routable will be routed in compliance with
applicable Trade-Through restrictions. Any order entered with a price
that would lock or cross a Protected Quotation that is not eligible for
either routing or the displayed price sliding process as defined in
proposed Rule 21.1(d)(6) will be cancelled.
    BATS Options shall route orders in options via BATS Trading, Inc.
(``BATS Trading''), which serves as the Outbound Router of the
Exchange, as defined in Rule 2.11 (BATS Trading, Inc.). The function of
the Outbound Router will be to route orders in options listed and open
for trading on BATS Options to other options exchanges pursuant to BATS
Options rules solely on behalf of BATS Options. The Outbound Router is
subject to regulation as a facility of the Exchange, including the
requirement to file proposed rule changes under Section 19 of the Act.
Use of BATS Trading or Routing Services (as described below) to route
orders to other market centers is optional. Parties that do not desire
to use BATS Trading or other Routing Services provided by the Exchange
must designate orders as not available for routing.
    In the event the Exchange is not able to provide order routing
services through its affiliated broker-dealer, the Exchange will route
orders to other options exchanges in conjunction with one or more
routing brokers that are not affiliated with the Exchange (``Routing
Services'').
    Book Processing. The System, like the equities facility, shall
execute trading interest within the System in price/time priority,
meaning it will execute all trading interest at the best price level
within the System before executing trading interest at the next best
price. Trading interest will be executed in the order set forth below,
with the order clearly established as the first entered into the System
within such category at each price level having priority up to the
number of contracts specified in the order. At each price level between
displayed trading interest, orders will be executed in the following
priority: (a) Price Improving Orders and orders subject to displayed
price sliding and then (b) discretionary portion of discretionary
orders as set forth in Rule 21.1(d)(4). At each price level that has
displayed trading interest, orders will be executed in the following
priority: (a) Orders that are displayed within the System, then (b) the
Non-Displayed portion of Reserve Orders, and then the (c) discretionary
portion of discretionary orders as set forth in Rule 21.1(d)(4). Any
order entered with a price that would lock or cross a Protected
Quotation that is not eligible for either routing or the displayed
price sliding process as defined in Rule 21.1(d)(6) will be cancelled.
    Data Feed. The System will include a proprietary data feed which
will display without attribution to Members' MPIDs Displayed Orders on
both the bid and offer side of the market for price levels then within
BATS Options using the minimum price variation applicable to that
security.
    $1 Strike Program. Pursuant to proposed Rule 19.6, Supplementary
Material .02, the interval between strike prices of series of options
on individual stocks may be $1.00 or greater (``$1 Strike Prices'')
provided the strike price is $50 or less, but not less than $1. The
listing of $1 strike prices shall be limited to option classes
overlying no more than fifty-five (55) individual stocks (the ``$1
Strike Price Program'') as specifically designated by BATS Options.
BATS Options may list $1 Strike Prices on any other option classes if
those classes are specifically designated by other national securities
exchanges that employ a similar $1 Strike Price Program under their
respective rules.
    To be eligible for inclusion into the $1 Strike Price Program, an
underlying security must close below $50 in the primary market on the
previous trading day. After a security is added to the $1 Strike Price
Program, BATS Options may list $1 Strike Prices from $1 to $50 that are
no more than $5 from the closing price of the underlying on the
preceding day. For example, if the underlying security closes at $13,
BATS Options may list strike prices from $8 to $18. BATS Options may
not list series with $1 intervals within $0.50 of an existing $2.50
strike price (e.g., $12.50, $17.50) in the same series. Additionally,
for an option class selected for the $1 Strike Price Program, BATS
Options may not list $1 Strike Prices on any series having greater than
nine (9) months until expiration. A security shall remain in the $ 1
Strike Price Program until otherwise designated by BATS Options.
    For options classes selected to participate in the $1 Strike
Program, the Exchange will, on a monthly basis, review series that were
originally listed under the $1 Strike Program with strike prices that
are more than $5 from the current value of an options class and delist
those series with no open interest in both the put and the call series
having a: (1) Strike higher than the highest strike price with open
interest in the put and/or call series for a given expiration month;
and (2) strike lower than the lowest strike price with open interest in
the put and/or call series for a given expiration month. If the
Exchange identifies series for delisting pursuant to this policy, the
Exchange shall notify other options exchanges with similar delisting
policies regarding the eligible series for delisting, and shall work
jointly with such other exchanges to develop a uniform list of series
to be delisted so as to ensure uniform series delisting of multiply
listed options classes.
    Notwithstanding the above delisting policy, the Exchange may grant
member requests to add strikes and/or maintain strikes in series of
options classes traded pursuant to the $1 Strike Program that are
eligible for delisting.

    With regard to the impact on system capacity, the Exchange has
analyzed its capacity and represents that it and the Options Price
Reporting Authority have the necessary systems capacity to handle the
additional traffic associated with the listing and trading of option
series that may be listed and traded in $1 strikes.
    In addition to $1 strikes as proposed above, the Exchange proposes
to offer options trading on series of options with $2.50 strike price
intervals, consistent with other options exchanges.

Options Order Protection and Locked/Crossed Market Plan Rules

    The Exchange will participate in the recently-approved Options
Order Protection and Locked/Crossed Market Plan (``New Plan''), and
therefore will be required to comply with the obligations of
Participants under the New Plan. The Exchange proposes to adopt rules
relating to the New Plan that are substantially similar to the rules in
place on or proposed by all of the options exchanges that are
Participants to the New Plan.
    The New Plan replaced the Plan for the Purpose of Creating and
Operating an Intermarket Option Linkage (``Old Plan''). The Old Plan
required its participant exchanges to operate a stand-alone system or
``Linkage'' for sending order-flow between exchanges to limit trade-
throughs, and the Linkage was operated by the Options Clearing
Corporation (``OCC''). The New Plan essentially applies the Regulation
NMS price-protection provisions to the options markets. Similar to
Regulation NMS, the New Plan requires the New Plan Participants to
adopt rules ``reasonably designed to prevent Trade-Throughs,'' while
exempting Intermarket Sweep Orders (``ISOs'') from that prohibition.
The New Plan's proposed definition of an ISO is essentially the same as
under Regulation NMS. The remaining exceptions to the trade-through
prohibition, discussed more specifically below, either track those
under Regulation NMS or correspond to unique aspects of the options
market, or both.
    The Rules in Chapter XXVII conform to the requirements of the New
Plan. Rule 27.1 sets forth the defined terms for use under the New
Plan. Rule 27.2 prohibits trade-throughs and exempts ISOs from that
prohibition. Rule 27.2 also contains additional exceptions to the
trade-through prohibition that track the exceptions under Regulation
NMS or correspond to unique aspects of the BATS Options Exchange, or
both.
    Rule 27.3 sets forth the general prohibition against locking/
crossing other eligible exchanges as well as several exceptions that
permit locked markets in limited circumstances; such exceptions have
been approved by the Commission for inclusion in the rules of other
options exchanges. Specifically, the exceptions to the general
prohibition on locking and crossing occur when (1) the locking or
crossing quotation was displayed at a time when the Exchange was
experiencing a failure, material delay, or malfunction of its systems
or equipment; (2) the locking or crossing quotation was displayed at a
time when there is a Crossed Market; or (3) the Member simultaneously
routed an ISO to execute against the full displayed size of any locked
or crossed Protected Bid or Protected Offer.
    Rule 27.4 provides that the Exchange will continue to accept
Principal Acting as Agent (``P/A'') and Principal Orders from options
exchanges that continue to use such orders to address trade-throughs
via the Linkage for a temporary period.

Securities Traded on BATS Options

    General Listing Standards. The Exchange proposes to adopt listing
standards for Options traded on BATS Options (Chapter XIX) as well as
for Index Options (Chapter XXIX) that are identical to the approved
rules of other options exchanges.\7\ The Exchange will join the Options
Listings Procedures Plan and will list and trade options already listed
on other options exchanges. The Exchange will gradually phase-in its
trading of options, beginning with a selection of actively traded
options. At least initially, the Exchange does not plan to develop new
options products or listing standards.
---------------------------------------------------------------------------

    \7\ See Rules of NOM, Chapters IV and XIV and the Rules of BOX,
Chapters IV and XIV.
---------------------------------------------------------------------------

    Quarterly Options Series Program. Pursuant to proposed Rule
29.11(g) the Exchange may list and trade options series that expire at
the close of business on the last business day of a calendar quarter
(``Quarterly Options Series''). The Exchange may list Quarterly Options
Series for up to five (5) currently listed options classes that are
either options on exchange traded funds (``ETF'') or index options. In
addition, the Exchange may also list Quarterly Options Series on any
options classes that are selected by other securities exchanges that
employ a similar program under their respective rules.
    The Exchange may list series that expire at the end of the next
consecutive four (4) calendar quarters, as well as the fourth quarter
of the next calendar year. For example, if the Exchange is trading
Quarterly Options Series in the month of May 2010, it may list series
that expire at the end of the second, third, and fourth quarters of
2010, as well as the first and fourth quarters of 2011. Following the
second quarter 2010 expiration, the Exchange could add series that
expire at the end of the second quarter of 2011.
    For each class of ETF options selected for the Quarterly Options
Series program, the Exchange may list strike prices within $5 from the
previous day's closing price of the underlying security at the time of
initial listing. Subsequently, the Exchange may list up to 60
additional strike prices that are within thirty percent (30%) of the
previous day's close, or more than 30% away from the previous day's
close provided demonstrated customer interest exists for such
series.\5\ [sic]
    The Exchange has also proposed a delisting policy with respect to
Quarterly Options Series in ETF options. On a monthly basis, the
Exchange will review series that are outside of a range of five (5)
strikes above and five (5) strikes below the current price of the ETF,
and delist series with no open interest in both the call and the put
series having a (1) strike higher than the highest price with open
interest in the put and/or call series for a given expiration month;
and (2) strike lower than the lowest strike price with open interest in
the put and/or the call series for a given expiration month.
Notwithstanding the delisting policy, customer requests to add strikes
and/or maintain strikes in Quarterly Options Series eligible for
delisting shall be granted.
    The Exchange also may list Quarterly Option Series based on an
underlying index pursuant to similar provisions in Rule 29.11. There
are two noteworthy distinctions between the rules for listing Quarterly
Options Series based on an ETF versus Quarterly Options Series based on
an index. First, whereas the initial listing of Quarterly Options
Series based on an underlying ETF is restricted to strike prices within
$5 from the previous day's closing price of the underlying security,
the initial listing of strikes for Quarterly Options Series based on an
underlying index is restricted to: (i) A price that is within thirty
percent (30%) of the previous day's close, and (ii) no more than five
strikes above and five strikes below the value of the underlying index.
Second, whereas the Exchange may list up to 60 additional strike prices
for each Quarterly Options Series based on an ETF, there is no firm cap
on the additional listing of strikes for Quarterly Options Series based
on an underlying index; rather, additional strike prices

may be listed provided the new listings do not result in more than five
strike prices on the same side of the underlying index value as the new
listings.
    The interval between strike prices on Quarterly Options Series
shall be the same as the interval for strike prices for series in that
same options class that expire in accordance with the normal monthly
expiration cycle.
    With regard to the impact on system capacity, the Exchange has
analyzed its capacity and represents that it and the Options Price
Reporting Authority have the necessary systems capacity to handle the
additional traffic associated with the listing and trading of options
series pursuant to the above-described Quarterly Options Series
program.

Conduct and Operational Rules for Options Members

    BATS proposes to adopt rules that are substantially similar to the
approved rules of other options exchanges. Thus, BATS proposes to adopt
rules that are substantially similar to the rules of NOM regarding:
exercises and deliveries (Chapter XXIII); records, reports and audits
(Chapter XXIV); and minor rule violations (Chapter XXV).
    BATS proposes to adopt rules that are similar to the rules of NOM,
with certain proposed changes and omissions, regarding: doing business
with the public (Chapter XXVI); and margin (Chapter XXVIII). For
example, with respect to its rules applicable to doing business with
the public, contained in proposed Chapter XXVI, BATS has not proposed
rules consistent with certain NOM rules to the extent the Exchange
believes such requirements are contained in other sections of the
Exchange's existing Rules or that such requirements are not consistent
with the Exchange's existing regulatory structure. For example, the
Exchange has consolidated applicable rules requiring options principal
registration into proposed BATS Rule 17.2(g) because, as proposed,
Options Principal registration is not limited to personnel associated
with Options Members that do business with the public. Similarly, the
Exchange intends to require Authorized Traders of Options Members to
comply with existing Exchange registration requirements applicable to
all Authorized Traders.\8\ Accordingly, the Exchange has omitted
specific rules applicable to registration of representatives. As
another example, the Exchange has not proposed addition of a fidelity
bond requirement to its doing business with the public rules for BATS
Options, but rather, as noted below, has proposed addition of a
fidelity bond rule (Rule 2.12) to its general membership rules. With
respect to its proposed margin rules, contained in proposed Chapter
XXVIII, the Exchange has not proposed adoption of a rule applicable to
joint back office arrangements because proposed Rule 28.3 requires
Options Members to comply with either the margin rules of the New York
Stock Exchange or the Chicago Board Options Exchange, and both
exchanges have rules that address joint back office requirements. Thus,
although the Exchange has proposed rules that differ in certain
instances from the rules of NOM, the Exchange does not believe that
such differences create any material regulatory gaps between the rules
applicable to Exchange Options Members and members of other options
exchanges.
---------------------------------------------------------------------------

    \8\ See BATS Rule 2.5, Interpretation and Policy .01 and BATS
Rule 11.4.
---------------------------------------------------------------------------

    BATS further proposes to adopt Business Conduct Rules (Chapter
XVIII) that are consistent with the NOM and BOX Business Conduct Rules,
with certain exceptions.\9\ Specifically, with respect to Position
Limits (Rule 18.7) and Exercise Limits (Rule 18.9), the Exchange is
proposing to apply the limits established pursuant to the rules of the
Chicago Board Options Exchange (``CBOE''), although the Exchange will
establish such limits for products not traded on the CBOE. By expressly
incorporating an already-approved limit, the Exchange will ensure that
an appropriate limit is in place at all times without the need to
continually adjust its rule manually or to disrupt the operations of
its Members. With respect to financial and operational rules, the
Exchange proposes to adopt rules similar to those of existing options
exchanges regarding: exercises and deliveries, margin, net capital, and
books and records.
---------------------------------------------------------------------------

    \9\ See Rules of NOM, Chapter III and BOX, Chapter III.
---------------------------------------------------------------------------

National Market System

    The BATS Options Exchange will operate as a full and equal
participant in the national market system for options trading
established under Section 11A of the Exchange Act, just as its equities
market participates today. The BATS Options Exchange will become a
member of the Options Price Reporting Authority (``OPRA''), the Options
Linkage Authority (``OLA''), the Options Regulatory Surveillance
Authority (``ORSA''), and the Options Listing Procedures Plan
(``OLPP'').
    The Exchange expects to participate in those plans on the same
terms currently applicable to current members of those plans, and it
expects little or no plan impact due to the fact that the Exchange's
market will operate on price/time priority. The Exchange has contacted
the leadership of each options-related national market system plan to
begin the membership process.

Regulation

    The Exchange will leverage many of the structures it established to
operate a national securities exchange in compliance with Section 6 of
the Exchange Act. As described in more detail below, there will be
three elements of that regulation: (1) The Exchange will join the
existing options industry agreements pursuant to Section 17(d) of the
Exchange Act, as it did with respect to equities, (2) the Exchange's
Regulatory Services Agreement with FINRA will govern many aspects of
the regulation and discipline of Members that participate in options
trading, just as it does for equities regulation, and (3) the Exchange
will perform options listing regulation, as well as authorize Options
Members to trade on BATS Options, and conduct surveillance of options
trading as it does today for equities. Section 17(d) of the Exchange
Act and the related Exchange Act rules permit SROs to allocate certain
regulatory responsibilities to avoid duplicative oversight and
regulation. Under Exchange Act Rule 17d-1, the SEC designates one SRO
to be the Designated Examining Authority, or DEA, for each broker-
dealer that is a member of more than one SRO. The DEA is responsible
for the financial aspects of that broker-dealer's regulatory oversight.
Because BATS Options Members also must be members of at least one other
SRO, the Exchange would generally not be designated as the DEA for any
of its members.
    Rule 17d-2 under the Act permits SROs to file with the Commission
plans under which the SROs allocate among each other the responsibility
to receive regulatory reports from, and examine and enforce compliance
with specified provisions of the Act and rules thereunder and SRO rules
by, firms that are members of more than one SRO (``common members'').
If such a plan is declared effective by the Commission, an SRO that is
a party to the plan is relieved of regulatory responsibility as to any
common member for whom responsibility is allocated under the plan to
another SRO.
    All of the options exchanges, FINRA, and NYSE have entered into the
Options Sales Practices Agreement, a Rule 17d-2 agreement. Under this
Agreement, the examining SROs will examine firms that

are common members of the Exchange and the particular examining SRO for
compliance with certain provisions of the Act, certain of the rules and
regulations adopted thereunder, certain examining SRO rules, and
certain BATS Options Rules. In addition, BATS Options Rules contemplate
participation in this Agreement by requiring that any Options Member
also be a member of at least one of the examining SROs.
    For those regulatory responsibilities that fall outside the scope
of any Rule 17d-2 agreements, the Exchange will retain full regulatory
responsibility under the Exchange Act. However, the Exchange has
entered into a Regulatory Services Agreement with FINRA, pursuant to
which FINRA personnel operate as agents for the Exchange in performing
certain of these functions. As is the case with the BATS equities
market, the Exchange will supervise FINRA and continue to bear ultimate
regulatory responsibility for the BATS Options Exchange.
    Consistent with the Exchange's existing regulatory structure, the
Exchange's Chief Regulatory Officer shall have general supervision of
the regulatory operations of BATS Options, including responsibility for
overseeing the surveillance, examination, and enforcement functions and
for administering all regulatory services agreements applicable to BATS
Options. Similarly, the Exchange's existing Regulatory Oversight
Committee will be responsible for overseeing the adequacy and
effectiveness of Exchange's regulatory and self-regulatory organization
responsibilities, including those applicable to BATS Options.
    Finally, as it does with equities, the Exchange will perform
automated surveillance of trading on BATS Options for the purpose of
maintaining a fair and orderly market at all times. As it does with its
equities trading, the Exchange will monitor BATS Options to identify
unusual trading patterns and determine whether particular trading
activity requires further regulatory investigation by FINRA.
    In addition, the Exchange will oversee the process for determining
and implementing trade halts, identifying and responding to unusual
market conditions, and administering the Exchange's process for
identifying and remediating ``obvious errors'' by and among its Options
Members. BATS proposed rules (Chapter XX) regarding halts, unusual
market conditions, extraordinary market volatility, obvious errors, and
audit trail are closely modeled on the approved rules of NOM and
BOX.\10\
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    \10\ See Rules of NOM, Chapter V, and BOX, Chapter V.
---------------------------------------------------------------------------

Minor Rule Violation Plan

    The Exchange's disciplinary rules, including Exchange Rules
applicable to ``minor rule violations,'' are set forth in Chapter VIII
of the Exchange's current Rules. Such disciplinary rules will apply to
Options Members and their associated persons.
    The Commission approved the BATS Exchange's Minor Rule Violation
Plan (``MRVP'') in 2008.\11\ The Exchange's MRVP specifies those
uncontested minor rule violations with sanctions not exceeding $2,500
that would not be subject to the provisions of Rule 19d-1(c)(1) under
the Act \12\ requiring that an SRO promptly file notice with the
Commission of any final disciplinary action taken with respect to any
person or organization.\13\ The Exchange's MRVP includes the policies
and procedures included in Exchange Rule 8.15 (Imposition of Fines for
Minor Violation(s) of Rules) and in Rule 8.15, Interpretations and
Policy .01.
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    \11\ See Release No. 34-58807 (October 17, 2008), 73 FR 63219
(October 23, 2008) (File No. 4-568) (``MRVP Order'').
    \12\ 17 CFR 240.19d-1(c)(1).
    \13\ The Commission adopted amendments to paragraph (c) of Rule
19d-1 to allow SROs to submit for Commission approval plans for the
abbreviated reporting of minor disciplinary infractions. See Release
No. 34-21013 (June 1, 1984), 49 FR 23828 (June 8, 1984). Any
disciplinary action taken by an SRO against any person for violation
of a rule of the SRO which has been designated as a minor rule
violation pursuant to such a plan filed with and declared effective
by the Commission will not be considered ``final'' for purposes of
Section 19(d)(1) of the Act if the sanction imposed consists of a
fine not exceeding $2,500 and the sanctioned person has not sought
an adjudication, including a hearing, or otherwise exhausted his
administrative remedies.
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    The Exchange proposes to amend its MRVP and Rule 8.15,
Interpretation and Policy .01 to include proposed Rule 25.3 (Penalty
for Minor Rule Violations).\14\ The rules included in proposed Rule
25.3 as appropriate for disposition under the Exchange's MRVP are: (a)
Position Limit violations for both customer accounts as well as the
accounts of Options Members that are Exchange Members; (b) Order Entry
violations regarding restrictions on orders entered by Market Makers,
and (c) Continuous Quote violations regarding Market Maker continuous
bids and offers. The rules included in Rule 25.3 are the same as the
rules included in the MRVPs of other options exchanges.\15\
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    \14\ In the MRVP Order, the Commission noted that the Exchange
proposed that any amendments to Rule 8.15.01 made pursuant to a rule
filing submitted under Rule 19b-4 of the Act would automatically be
deemed a request by the Exchange for Commission approval of a
modification to its MRVP. See MRVP Order, supra note 11, at note 6.
    \15\ See, e.g., NOM, Chapter X, Section 7, and BOX, Chapter X,
Section 2.
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    Upon implementation of this proposal, the Exchange will include the
enumerated options trading rule violations in the Exchange's standard
quarterly report of actions taken on minor rule violations under the
MRVP. The quarterly report includes: The Exchange's internal file
number for the case, the name of the individual and/or organization,
the nature of the violation, the specific rule provision violated, the
sanction imposed, the number of times the rule violation has occurred,
and the date of disposition.
    The Exchange's MRVP, as proposed to be amended, is consistent with
Sections 6(b)(1), 6(b)(5) and 6(b)(6) of the Act, which require, in
part, that an exchange have the capacity to enforce compliance with,
and provide appropriate discipline for, violations of the rules of the
Commission and of the exchange.\16\ In addition, because amended Rule
8.15 will offer procedural rights to a person sanctioned for a
violation listed in proposed Rule 25.3, the Exchange will provide a
fair procedure for the disciplining of members and associated persons,
consistent with Section 6(b)(7) of the Act.\17\
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    \16\ 15 U.S.C. 78f(b)(1), 78f(b)(5) and 78f(b)(6).
    \17\ 15 U.S.C. 78f(b)(7).
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    This proposal to include the rules listed in Rule 25.3 in the
Exchange's MRVP is consistent with the public interest, the protection
of investors, or otherwise in furtherance of the purposes of the Act,
as required by Rule 19d-1(c)(2) under the Act,\18\ because it should
strengthen the Exchange's ability to carry out its oversight and
enforcement responsibilities as an SRO in cases where full disciplinary
proceedings are unsuitable in view of the minor nature of the
particular violation. In requesting the proposed change to the MRVP,
the Exchange in no way minimizes the importance of compliance with
Exchange Rules and all other rules subject to the imposition of fines
under the MRVP. However, the MRVP provides a reasonable means of
addressing rule violations that do not rise to the level of requiring
formal disciplinary proceedings, while providing greater flexibility in
handling certain violations. The Exchange will continue to conduct
surveillance with due diligence and make a determination based on its
findings, on a case-by-case basis, whether a fine of more or less than
the recommended amount is

appropriate for a violation under the MRVP or whether a violation
requires a formal disciplinary action.
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    \18\ 17 CFR 240.19d-1(c)(2).
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Amendments to Existing BATS Exchange Rules

    In addition to the Rules proposed above, the Exchange proposes to
amend certain of its existing rules in order to provide clarity
regarding certain regulatory processes already utilized by the
Exchange. Specifically, the Exchange proposes to add Interpretations
and Policies .03 and .04 to Rule 2.5, which state that associated
persons must register and terminate registration via standard industry
forms, Forms U4 and U5, respectively. Such forms must be filed through
the Central Registration Depositary (``CRD''). In addition, the
Exchange currently requires applicants for membership in the Exchange
to file information regarding their executive officers, directors,
principal shareholders and general partners. The Exchange proposes to
add Rule 2.6(g) in order to codify this application requirement and to
require applicants approved as Members to keep such information current
with the Exchange.
    The Exchange also proposes to adopt new Rules 2.12 and 3.22,
related to fidelity bonds and gratuities, respectively, to achieve more
consistency with the regulatory structure of other exchanges. Proposed
Rule 2.12 is based on NASDAQ Rule 3020, and proposed Rule 3.22 is
identical to ISE Rule 406. Finally, in order to accommodate potential
exemption requests pursuant to the proposed fidelity bond rule, Rule
2.12, the Exchange proposes adoption of Rule 1.6, which will provide a
framework for requests for exemptions.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of the Act,\19\ in general and with Section 6(b)(5)
of the Act,\20\ in particular, in that it is designed to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and 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 are not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers, or to regulate by virtue of any authority conferred by this
title matters not related to the purposes of this title or the
administration of the exchange.
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    \19\ 15 U.S.C. 78a et seq.
    \20\ 15 U.S.C. 78f(b)(5).
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    The BATS Options Exchange will benefit individual investors,
options trading firms, and the options market generally. The entry of
an innovative, low-cost competitor such as BATS Options will promote
competition, spurring existing markets to improve their own execution
systems and reduce trading costs. BATS Options will differentiate its
market by offering executions in price/time priority, a feature that
should increase order interaction and yield better executions. The
execution system of the BATS Options Exchange will be designed to quote
in penny increments where consistent with the Commission's penny pilot
program for options, advancing the Commission's efforts to move the
industry to penny quoting in an orderly fashion and helping to narrow
spreads, reduce payment for order flow, and enhance price competition.

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
operates in an intensely competitive global marketplace for transaction
services. Relying on its array of services and benefits, the Exchange
competes for the privilege of providing market services to broker-
dealers. The Exchange's ability to compete in this environment is based
in large part on the quality of its trading systems, the overall
quality of its market and its attractiveness to the largest number of
investors, as measured by speed, likelihood and cost of executions, as
well as spreads, fairness, and transparency.
    BATS Options will incorporate the best functional elements from the
Exchange's equity market. The proposed rule change will reduce overall
trading costs and increase price competition, both pro-competitive
developments, and will promote further initiative and innovation among
market centers and market participants.

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

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (1) By order approve such proposed rule change, or
    (2) Institute proceedings to determine whether the proposed rule
change should be 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-BATS-2009-031 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-2009-031. 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 inspection and
copying 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 the filing will also
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-2009-031 and should be submitted on or before December 29, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-29203 Filed 12-7-09; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: January 26, 2010 (Volume 75, Number 16)]
[Notices]
[Page 4057]
[DOCID:fr26ja10-41]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 405-090; Project No. 1881-056]

Exelon Generation Company, LLC; PPL Holtwood, LLC; Notice of
Application for Amendment of License and Soliciting Comments, Motions
To Intervene, and Protests

January 19, 2010.
    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection:
    a. Application Type: Amendment of License.
    b. Project Nos.: 405-090 and 1881-056.
    c. Date Filed: July 16, 2009 for P-405-090 and October 28, 2009 for
P-1881-056.
    d. Applicant: Exelon Generation Company, LLC (Exelon), of Harford
and Cecil counties in, MD and PPL Holtwood, LLC (PPL), of Lancaster and
York Counties, PA.
    e. Name of Project: Conowingo Project (P-405) and Holtwood Project
(P-1881).
    f. Location: The two projects are located on the Susquehanna River
in Lancaster and York Counties, PA and Harford and Cecil Counties, MD.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791a-825r.
    h. Applicant Contact: A. Karen Hill, Vice President, Exelon
Corporation, 101 Constitution Ave., NW., Washington, DC 20001;
telephone<PHONE_NUMBER>. Dennis J. Murphy, Vice President & Chief
Operating Officer, PPL Holtwood, LLC, Two North Ninth Street (GENPL6),
Allentown, Pennsylvania 18101; telephone<PHONE_NUMBER>.
    i. FERC Contact: Anthony DeLuca, telephone<PHONE_NUMBER>, and e-
mail address<EMAIL_ADDRESS>    j. Deadline for filing comments, motions to intervene, and
protests: February 19, 2010. 30 days from the issuance of this notice.
    Comments, protests, and interventions may be filed electronically
via the Internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and
the instructions on the Commission's Web site (http://www.ferc.gov)
under the ``e-filing'' link. The Commission strongly encourages
electronic filings.
    All documents (original and eight copies) filed by paper should be
sent to: Secretary, Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426. Please include the projects numbers
(P-405-090 and P-1881-056) on any comments or motions filed.
    The Commission's Rules of Practice and Procedure require all
interveners filing documents with the Commission to serve a copy of
that document on each person whose name appears on the official service
list for the project. Further, if an intervener files comments or
documents with the Commission relating to the merits of an issue that
may affect the responsibilities of a particular resource agency, they
must also serve a copy of the document on that resource agency. A copy
of any motion to intervene must also be served upon each representative
of the Applicant specified in the particular application.
    k. Description of Request: Amendment to Projects' Boundaries: (1)
Exelon and PPL propose removing areas within their projects' boundaries
that unnecessarily overlap. (2) Exelon requests removing other lands
from its Conowingo project boundary that serve no project purpose and
adding a shoreline buffer strip and a small area inundated by Conowingo
Pond.
    l. Locations of the Application: A copy of the application is
available for inspection and reproduction at the Commission's Public
Reference Room, located at 888 First Street, NE., Room 2A, Washington,
DC 20426, or by calling<PHONE_NUMBER>. This filing may also be viewed
on the Commission's Web site at http://www.ferc.gov using the
``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. You may also
register online at http://www.ferc.gov/docs-filing/esubscription.asp to
be notified via e-mail of new filings and issuances related to this or
other pending projects. For assistance, call 1-866-208-3372 or e-mail
<EMAIL_ADDRESS>for TTY, call<PHONE_NUMBER>. A copy is
also available for inspection and reproduction at the address in item
(h) above.
    m. Individuals desiring to be included on the Commission's mailing
list should so indicate by writing to the Secretary of the Commission.
    n. Comments, Protests, or Motions to Intervene: Anyone may submit
comments, a protest, or a motion to intervene in accordance with the
requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211,
.214. In determining the appropriate action to take, the Commission
will consider all protests or other comments filed, but only those who
file a motion to intervene in accordance with the Commission's Rules
may become a party to the proceeding. Any comments, protests, or
motions to intervene must be received on or before the specified
comment date for the particular application.
    o. Any filings must bear in all capital letters the title
``COMMENTS'', ``PROTEST'', or ``MOTION TO INTERVENE'', as applicable,
and the Project Number of the particular application to which the
filing refers.
    p. Agency Comments: Federal, State, and local agencies are invited
to file comments on the described application. A copy of the
application may be obtained by agencies directly from the Applicant. If
an agency does not file comments within the time specified for filing
comments, it will be presumed to have no comments. One copy of an
agency's comments must also be sent to the Applicant's representatives.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-1394 Filed 1-25-10; 8:45 am]
BILLING CODE 6717-01-P