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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62033; File No. SR-BATS-2010-009]

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

May 4, 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 April 30, 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, II and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

1

15 U.S.C. 78s(b)(1).

2

17 CFR 240.19b-4.

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

The Exchange is filing with the Commission a proposal 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 May 3, 2010.

3

The Exchange is not proposing to amend any rule text, but simply administering or enforcing an existing rule.

4

3

The rules of BATS Options, including rules applicable to BATS Options' participation in the Penny Pilot, were approved on January 26, 2010.

See

Securities Exchange Act Release No. 61419 (January 26, 2010), 75 FR 5157 (February 1, 2010) (SR-BATS-2009-031). BATS Options commenced operations on February 26, 2010. This proposal represents the first expansion of classes subject to the Penny Pilot since BATS Options commenced operations.

4

See

Rule 21.5 regarding the Penny Pilot.

The text of the proposed rule change is available at the Exchange's Web site at

http://www.batstrading.com,

at the principal office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose

The purpose of this filing is to identify the next seventy-five options classes to be added to the Penny Pilot effective May 3, 2010. In the Exchange's filing to adopt rules to govern BATS Options,

5

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.

5

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.

The Exchange is identifying, in the chart below, seventy-five options classes that it will add to the Penny Pilot on May 3, 2010, based on ADVs for the six months ending March 31, 2010.

Nat'l ranking

Symbol

Security name

Nat'l ranking

Symbol

Security name

153

XLV

Health Care Select Sector SPDR Fund

247

JCP

JC Penney Co Inc.

155

CIEN

Ciena Corp

248

ACL

Alcon Inc.

157

AMLN

Amylin Pharmaceuticals Inc

249

STP

Suntech Power Holdings Co Ltd.

158

CTIC

Cell Therapeutics Inc

250

TLB

Talbots Inc.

159

MDT

Medtronic Inc

251

SYMC

Symantec Corp.

162

TIVO

TiVo Inc

253

AMED

Amedisys Inc.

163

MNKD

MannKind Corp

255

TM

Toyota Motor Corp.

171

MDVN

Medivation Inc

257

HK

Petrohawk Energy Corp.

176

BRKB

Berkshire Hathaway Inc

258

ENER

Energy Conversion Devices Inc.

178

APOL

Apollo Group Inc

259

STT

State Street Corp.

181

BSX

Boston Scientific Corp

260

BHP

BHP Billiton Ltd.

185

XLY

Consumer Discretionary Sel. Sec. SPDR Fund

261

NFLX

NetFlix Inc.

188

CLF

Cliffs Natural Resources Inc

262

LDK

LDK Solar Co Ltd.

190

ZION

Zions Bancorporation

263

SPG

Simon Property Group Inc.

194

IOC

InterOil Corp

264

TIF

Tiffany & Co.

197

ITMN

InterMune Inc

265

BUCY

Bucyrus International Inc.

204

GME

GameStop Corp

266

WAG

Walgreen Co.

209

XLK

Technology Select Sector SPDR Fund

268

IP

International Paper Co.

210

AKS

AK Steel Holding Corp

271

XME

SPDR S&P Metals & Mining ETF.

212

GRMN

Garmin Ltd

272

KGC

Kinross Gold Corp.

213

MRVL

Marvell Technology Group Ltd

273

EP

El Paso Corp.

215

XLP

Consumer Staples Select Sector SPDR Fund

274

SEED

Origin Agritech Ltd.

216

UNP

Union Pacific Corp

275

WIN

Windstream Corp.

220

DTV

DIRECTV

279

DHI

DR Horton Inc.

223

WMB

Williams Cos Inc/The

280

ADBE

Adobe Systems Inc.

225

MEE

Massey Energy Co

281

PCX

Patriot Coal Corp.

227

CELG

Celgene Corp

282

SPWR A

SunPower Corp.

229

GMCR

Green Mountain Coffee Roasters Inc

284

LCC

US Airways Group Inc.

231

WDC

Western Digital Corp

285

PRU

Prudential Financial Inc.

234

DAL

Delta Air Lines Inc

286

LEN

Lennar Corp.

235

FXE

CurrencyShares Euro Trust

287

EWT

iShares MSCI Taiwan Index Fund.

237

COST

Costco Wholesale Corp

288

KBH

KB Home.

239

MJN

Mead Johnson Nutrition Co

289

CREE

Cree Inc.

240

ALL

Allstate Corp/The

290

SIRI

Sirius XM Radio Inc.

241

SII

Smith International Inc

291

MMR

McMoRan Exploration Co.

242

RTN

Raytheon Co

292

CENX

Century Aluminum Co.

243

DVN

Devon Energy Corp

293

GFI

Gold Fields Ltd.

244

MT

ArcelorMittal

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.

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In particular, the Exchange believes that the proposal is consistent with Section 6(b)(5) of the Act,

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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.

6

15 U.S.C. 78f(b).

7

15 U.S.C. 78f(b)(5).

(B) Self-Regulatory Organization's Statement on Burden on Competition

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

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

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

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

Pursuant to Section 19(b)(3)(A)(i) of the Act

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and paragraph (f)(1) of Rule 19b-4 thereunder,

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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.

8

15 U.S.C. 78s(b)(3)(A)(i).

9

17 CFR 240.19b-4(f)(1).

At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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

• Use the Commission's Internet comment form (

http://www.sec.gov/rules/sro.shtml

); or

• Send an e-mail to

rule-comments@sec.gov.

Please include File No. SR-BATS-2010-009 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 No. SR-BATS-2010-009. 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 changes 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-2010-009 and should be submitted on or before June 1, 2010.

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

10

10

17 CFR 200.30-3(a)(12).

Florence E. Harmon,

Deputy Secretary.

[FR Doc. 2010-11095 Filed 5-10-10; 8:45 am]

BILLING CODE 8010-01-P