[Federal Register Volume 84, Number 228 (Tuesday, November 26, 2019)]
[Notices]
[Pages 65204-65206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25588]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87578; File No. SR-IEX-2019-12]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Table in Rule 11.410(a) To Update the Market Data Source That the
Exchange Will Use To Determine the Top of Book Quotation for NYSE
Chicago, Inc. and To Amend Rules 2.220(a)(7) and 11.410(a) To Reflect
the Name Change of Chicago Stock Exchange, Inc. to NYSE Chicago, Inc.
November 20, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on November 15, 2019, the Investors Exchange LLC (``IEX''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II 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 a
proposed rule change to amend the table in Rule 11.410(a) to update the
market data source that the Exchange will use to determine the Top of
Book \6\ quotation for NYSE Chicago, Inc. (``XCHI'') and to amend Rules
2.220(a)(7) and 11.410(a) to reflect the name change of Chicago Stock
Exchange, Inc. to NYSE Chicago, Inc. The Exchange has designated this
rule change as ``non-controversial'' under Section 19(b)(3)(A) of the
Act \7\ and provided the Commission with the notice required by Rule
19b-4(f)(6) thereunder.\8\
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ See IEX Rule 11.410(a)(1).
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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 statement 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 proposes to amend the table in IEX Rule 11.410(a) to
update the market data source that the Exchange will use to determine
the Top of Book quotation for NYSE Chicago, Inc. (``XCHI'') and to
amend IEX Rules 2.220(a)(7) and 11.410(a) to reflect the name change of
Chicago Stock Exchange, Inc to NYSE Chicago, Inc.
Specifically, the Exchange proposes to amend and update the table
in Rule 11.410(a) specifying the primary and secondary sources for XCHI
as a result of XCHI's establishment of NYSE Chicago BBO, NYSE Chicago
Trades and NYSE Chicago Integrated Feed (``NYSE Chicago Market Data
Feeds'' or ``direct feeds'').\9\ As specified in Rule 11.410(a)(2), the
Exchange uses market data from each away trading center that produces a
Protected Quotation \10\ to determine its Top of Book quotation, as
well as the NBBO \11\ for certain reporting, regulatory and compliance
systems within IEX. As proposed, the Exchange will use securities
information processor (``SIP'') data, i.e., CQS SIP data for securities
reported under the Consolidated Quotation Services and Consolidated
Tape Association plans and UQDF SIP data for securities reported under
the Nasdaq Unlisted Trading Privileges national market system plan, to
determine XCHI Top of Book quotes. No secondary source is proposed to
be specified as SIP data will be used exclusively. While the Exchange
uses proprietary market data feeds to determine the Protected
Quotations of all but one of the other away markets,\12\ as specified
in Rule 11.410, it has determined to utilize the SIP quote feeds for
XCHI because the Exchange is in the process of implementing technology
changes to support use of the NYSE Chicago Market Data Feeds. Once
these changes are complete, IEX will file a rule change under Section
19(b) of the Act and Rule 19b-4 thereunder to amend relevant portions
of Rule 11.410 once these steps are complete, to again specify that the
Exchange will use XCHI's direct feeds as the primary source of XCHI's
Protected Quotations.\13\ The Exchange notes that it is not necessary
to utilize the XCHI direct feed in order to determine XCHI Top of Book
quotes and thereby enable the Exchange to comply with applicable
requirements of Regulation NMS with respect to its Top of Book quotes.
The Exchange also notes that other exchanges also use SIP market data
feeds to determine Top of Book quotes for some away markets, including
XCHI, pursuant to effective rule filings.\14\
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\9\ See Securities Exchange Act Release No. 87389 (October 23,
2019), 84 FR 57904 (October 29, 2019) (SR-NYSECHX-2019-15).
\10\ See IEX Rule 1.160(bb).
\11\ See IEX Rule 1.160(u).
\12\ The Exchange uses CQS/UQDF SIP data as the exclusive source
of market data for NYSE National (XCIS). See IEX Rule 11.410(a).
\13\ See supra note 5[sic].
\14\ See, e.g., Nasdaq Stock Market Rule 4759(a).
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The Exchange is also proposing a conforming change to Rule
11.410(a)(2) to reflect that, as proposed, the Exchange will not use
proprietary market data feeds as the primary source
[[Page 65205]]
from which it will determine Top of Book quotations for XCHI.
Finally, the Exchange proposes to amend Rules 2.220(a)(7) and
11.410(a) to reflect the name change of XCHI from Chicago Stock
Exchange, Inc. to NYSE Chicago, Inc.\15\ IEX Rule 2.220(a)(7) lists the
away trading centers that IEX Services LLC (``IEX Services'') routes to
as outbound router for the Exchange. Rule 11.410(a), as discussed
above, specifies the market data sources for each away trading center
that the Exchange uses for necessary price reference points.
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\15\ See Securities Exchange Act Release No. 84494 (October 26,
2018), 83 FR 54953 (November 1, 2018) (SR-NYSECHX-2018-05).
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The Exchange is not proposing any other changes to Rule 11.410 with
respect to its use of market data feeds and calculations of necessary
price reference points. The proposed change merely specifies the market
data feeds that the Exchange will use to determine XCHI Top of Book
quotes, and does not alter the manner in which orders are handled or
routed by the Exchange.
2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \16\ of the Act in general, and furthers the
objectives of Section 6(b)(5) of the Act \17\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, 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.
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\16\ 15 U.S.C. 78f.
\17\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change removes
impediments to and perfects the mechanism of a free and open market and
protects investors and the public interest because it provides
transparency with respect to the sources of market data that it will
use to determine XCHI Top of Book quotes. For the reasons discussed in
the Purpose section, the Exchange believes that use of SIP market data
will enable it to determine XCHI Top of Book quotes and comply with
applicable requirements of Regulation NMS. In addition, and as further
noted in the Purpose section, other exchanges use SIP market data to
determine Top of Book quotes for some away markets, including NYSE
National, Inc., so the proposed change does not raise any new or novel
issues not already considered by the Commission.
The Exchange also believes it is consistent with the Act to make a
conforming change to Rule 11.410(a)(2) so that provision is consistent
with the table in Rule 11.410(a).
Further, the Exchange believes it is consistent with the Act to
update the referenced rules to reflect the name change of XCHI so that
IEX's rules accurately specify away markets referenced, as well as to
avoid any potential confusion on the part of market participants. As
noted in the Purpose section, the proposed changes are nonsubstantive
and do not alter the manner in which orders are handled or routed by
the Exchange.
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 Exchange believes that the
proposed update does not impact competition in any respect since its
purpose is to enhance transparency and with respect to the operation of
the Exchange and its use of market data feeds, and to update an away
market name.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\19\
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\18\ 15 U.S.C. 78s(b)(3)(A)(iii).
\19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative upon filing. The Exchange noted in its filing that
other exchanges use SIP market data to determine Top of Book quotes for
some away markets, including NYSE National, Inc., so the proposed
change does not raise any new or novel issues. For these reasons, the
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The Commission hereby designates the proposed rule change to be
operative upon filing.\22\
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\20\ Id.
\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 to
determine whether the proposed rule change should be approved or
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 email to [email protected]. Please include
File Number SR-IEX-2019-12 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-2019-12. This file
number should be included in the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use
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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 Section, 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 will also be available for inspection
and copying at the IEX's principal office and on its internet website
at www.iextrading.com. 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-2019-12
and should be submitted on or before December 17, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25588 Filed 11-25-19; 8:45 am]
BILLING CODE 8011-01-P