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Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Seventy-Five Options Classes to the Penny Pilot Program

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Start Preamble July 29, 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 July 26, 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange is filing with the Commission a proposal for the BATS Exchange Options Market (“BATS Options”) to designate seventy-five options classes to be added to the Penny Pilot Program (“Penny Pilot”) on August 2, 2010. The Exchange is not proposing to amend any rule text, but simply administering or enforcing an existing rule.[3]

The text of the proposed rule change is available at the Exchange's Web site at, at the principal office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

The purpose of this filing is to identify the next seventy-five options classes to be added to the Penny Pilot effective August 2, 2010. In the Exchange's filing to adopt rules to govern BATS Options,[4] the Exchange proposed commencing operations for BATS Options by trading all options classes that were, as of such date, traded by other options exchanges pursuant to the Penny Pilot and then expanding the Penny Pilot on a quarterly basis, 75 classes at a time, through August 2010. Each such quarterly expansion would be of the seventy-five most actively traded multiply listed options classes based on the national average daily volume (“ADV”) 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 the addition of options to the Penny Pilot would not be used for the purpose of the six month analysis. Index option products would be included in the quarterly expansions if the underlying index levels were under 200.

The Exchange is identifying, in the chart below, seventy-five options classes that it will add to the Penny Pilot on August 2, 2010, based on ADVs for the six months ending June 30, 2010.

Nat'l rankingSymbolSecurity nameNat'l rankingSymbolSecurity name
199MBIMBIA Inc316CBChubb Corp
205MAMastercard Inc320ADMArcher-Daniels-Midland Co
224ATPGATP Oil & Gas Corp/United States322HSYHershey Co/The
226YUMYum! Brands Inc323TXTTextron Inc
232RCLRoyal Caribbean Cruises Ltd324GGPGeneral Growth Properties Inc
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238BPOPPopular Inc325NOVNational Oilwell Varco Inc
248EKEastman Kodak Co326TWXTime Warner Inc
252CNXConsol Energy Inc327XOPSPDR S&P Oil & Gas Exploration & Production ETF
260DCTHDelcath Systems Inc328MYLMylan Inc/PA
274MTGMGIC Investment Corp329TSOTesoro Corp
277PXPPlains Exploration & Production Co330CICIGNA Corp
278GPSGap Inc/The331ESIITT Educational Services Inc
280TSLTrina Solar Ltd332NKENIKE Inc
282EWWiShares MSCI Mexico Investable Market Index Fund335FISFidelity National Information Services Inc Inc336SUNSunoco Inc
286SWNSouthwestern Energy Co338BBBYBed Bath & Beyond Inc
287HBANHuntington Bancshares Inc/OH340APWRA-Power Energy Generation Systems Ltd
288EOGEOG Resources Inc341FWLTFoster Wheeler AG
290APAApache Corp342LNCLincoln National Corp
291VVUSVivus Inc343RSHRadioShack Corp
292JDSUJDS Uniphase Corp344TYCTyco International Ltd
293ACIArch Coal Inc345CLColgate-Palmolive Co
294NENoble Corp346FXPProShares UltraShort FTSE/Xinhua China 25
296BAXBaxter International Inc347NTAPNetApp Inc
297ADSKAutodesk Inc348SOSouthern Co
299KRESPDR KBW Regional Banking ETF349PHMPulte Group Inc
300XLXL Group Plc350HOTStarwood Hotels & Resorts Worldwide Inc
302WLTWalter Energy Inc351QLDProShares Ultra QQQ
303IBNICICI Bank Ltd352VRSNVeriSign Inc
305EWYiShares MSCI South Korea Index Fund353PCLPlum Creek Timber Co Inc
306WHRWhirlpool Corp354NBRNabors Industries Ltd
307BHIBaker Hughes Inc355ESRXExpress Scripts Inc
308KMPKinder Morgan Energy Partners LP356ACASAmerican Capital Ltd
309MROMarathon Oil Corp357XLNXXilinx Inc
310AGOAssured Guaranty Ltd358DODiamond Offshore Drilling Inc
311GISGeneral Mills Inc359CMAComerica Inc
312ANRAlpha Natural Resources Inc360KEYKeyCorp
314GENZGenzyme Corp

2. Statutory Basis

The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.[5] In particular, the Exchange believes that the proposal is consistent with Section 6(b)(5) of the Act,[6] 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, by identifying the options classes to be added to the Penny Pilot in a manner consistent with prior approvals and filings.

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

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

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

The Exchange has neither solicited nor received written comments on the proposed rule change.

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

Pursuant to Section 19(b)(3)(A)(i) of the Act [7] and paragraph (f)(1) of Rule 19b-4 thereunder,[8] the Exchange has designated this proposal as one constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule.

At any time within the 60-day period beginning on the date 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 proposal is consistent with the Act. Comments may be submitted by any of the following methods:

Electronic Comments

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 No. SR-BATS-2010-019. This file number should be included on the subject line if e-mail is used. To help the Start Printed Page 47045Commission 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 (​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 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 No. SR-BATS-2010-019 and should be submitted on or before August 25, 2010.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble


3.  See Rule 21.5 regarding the Penny Pilot.

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4.  See Securities Exchange Act Release No. 61097 (December 2, 2009), 74 FR 64788 (December 8, 2009) (SR-BATS-2009-031) (Notice of Filing of Proposed Rule Change to Establish Rules Governing the Trading of Options on the BATS Options Exchange).

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7.  15 U.S.C. 78s(b)(3)(A)(i).

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[FR Doc. 2010-19221 Filed 8-3-10; 8:45 am]