[Federal Register Volume 85, Number 29 (Wednesday, February 12, 2020)]
[Notices]
[Pages 8084-8085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02749]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88134; File No. SR-IEX-2020-02]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Related to
Fees Pursuant to Rule 15.110
February 6, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on February 4, 2020, the Investors Exchange LLC (``IEX'' or the
``Exchange'') 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 self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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
Pursuant to the provisions of Section 19(b)(1) under the Act,\4\
and Rule 19b-4 thereunder,\5\ IEX is filing with the Commission
proposed changes to eliminate the IEX Enhanced Market Maker (``IEMM'')
program set forth in IEX Rule 11.170 and make conforming changes to its
Fee Schedule, pursuant to IEX Rule 15.110(a) and (c), to eliminate the
IEMM fee discounts.
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
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The text of the proposed rule change is available at the Exchange's
website at www.iextrading.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 the
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 self-regulatory organization
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to eliminate the IEX Enhanced Market
Maker (``IEMM'') program set forth in IEX Rule 11.170 and to make
conforming changes to its Fee Schedule, pursuant to IEX Rule 15.110(a)
and (c), to eliminate the IEMM fee discounts.
Background
IEX launched the IEMM program on February 1, 2018.\6\ The IEMM
program provides a fee discount to incentivize Members \7\ to quote at
and/or near the NBBO \8\ in IEX Listed Securities \9\ for a significant
portion of the day. As specified in IEX Rule 11.170, a Member
registered as an IEX Market Maker pursuant to Rule 11.150 in all
securities listed on IEX \10\ may be designated as an IEMM by meeting
the monthly quoting criteria for the Inside Tier, the Depth Tier, or
both.\11\ Members designated as IEMMs qualify for a lower per-share
rate charged for both displayed and non-displayed executions subject to
either the Reduced or Standard Match Fees on the Exchange in securities
priced at or above $1.00, as set forth in IEX Rule 11.170(a)(3) and the
IEX Fee Schedule.
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\6\ See Securities Exchange Act Release No. 82636 (February 6,
2018), 83 FR 6059 (February 12, 2018) (SR-IEX-2018-02).
\7\ See IEX Rule 1.160(s).
\8\ The term ``NBBO'' means the national best bid or offer, as
set forth in Rule 600(b) of Regulation NMS under the Act, determined
as set forth in IEX Rule 11.410(b). See IEX Rule 1.160(u).
\9\ See IEX Rule 14.002(19).
\10\ Supplementary Material .01 to Rule 11.170 provides a
limited exception to the requirement that a Member must be a
registered IEX Market Maker in all securities listed on IEX if (i) a
Member does not act as a market maker in one or more IEX-listed
securities on any other national securities exchange, and (ii) the
Market Maker provides documentation, satisfactory to IEX Regulation,
substantiating that such Member is unable to act as a market maker
in one or more particular securities listed on IEX (a) in order to
comply with specified legal or regulatory requirements, or (b)
operational restrictions not exceeding 90 calendar days from the
date the security first lists on the Exchange.
\11\ See IEX Rule 11.170.
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There are no longer any IEX Listed Securities, and it is thus not
possible for any Member to qualify for designation as an IEMM and the
applicable transaction fee discount.\12\ Therefore, the Exchange is
proposing to eliminate the IEMM program and delete IEX Rule 11.170
(designating it as ``Reserved'') and remove all references to the IEMM
fee discounts from the IEX Fee Schedule. IEX believes this proposed
rule change will eliminate any possible confusion about whether Members
can qualify for the IEMM discounts.
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\12\ IEX announced its listing business exit on September 23,
2019, which was effective on October 7, 2019. See IEX Trading Alert
#2019-029 available at: https://iextrading.com/alerts/#/85.
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2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) of the Act \13\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\14\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees and other charges among its Members
and other persons using the Exchange's facilities; and to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(4)-(5).
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The Exchange believes that the proposed rule change is consistent
with these principles because it will remove obsolete rule text and fee
provisions, thereby avoiding any potential confusion among Members. As
noted in the Purpose section, there are no longer any IEX Listed
Securities, and it is thus not possible for any Member to qualify for
designation as an IEMM and the applicable transaction fee discount. The
Exchange further believes that the proposed rule change is reasonable,
equitable, and not unfairly discriminatory because the changes will
apply equally to all Members.
B. Self-Regulatory Organization's Statement on Burden on Competition
IEX 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 proposed rule change is not
designed to address any competitive issues but simply to remove
obsolete rule text and fee provisions to avoid any potential confusion
among Members.
[[Page 8085]]
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) \15\ of the Act.
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-IEX-2020-02 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-IEX-2020-02. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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 website 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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-IEX-2020-02 and should be submitted on
or before March 4, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-02749 Filed 2-11-20; 8:45 am]
BILLING CODE 8011-01-P