[Federal Register Volume 82, Number 42 (Monday, March 6, 2017)]
[Notices]
[Pages 12653-12656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04202]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80118; File No. SR-IEX-2017-05]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt 
DEEP, a New Depth of Book Market Data Feed, Rename TOPS Viewer to IEX 
Data Platform, and Include Depth of Book Market Data Therein

February 28, 2017.
    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 February 15, 2017, 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

[[Page 12654]]

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 Securities 
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ 
Investors Exchange LLC (``IEX'' or the ``Exchange'') is filing with the 
Commission a proposed rule change to amend Rule 11.330(a)(3) to adopt a 
new market data product to be known as DEEP, which is an uncompressed 
data feed that provides aggregated depth of book quotations for all 
displayed orders for securities traded on IEX, and execution 
information (i.e., last sale information) for executions on the 
Exchange. Additionally, the Exchange proposes to amend Rule 
11.330(a)(2) in order to change the name of its data feed currently 
known as TOPS Viewer to IEX Data Platform, and to add aggregated depth 
of book quotations for up to ten (10) price levels to the IEX Data 
Platform. The Exchange has designated this proposal as non-
controversial and provided the Commission with the notice required by 
Rule 19b-4(f)(6)(iii) under the Act.\6\
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available at the Exchange's 
Web site 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 [sic] 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 Rule 11.330(a)(3) to describe a new 
market data product to be known as DEEP. Currently, the Exchange offers 
TOPS, an uncompressed data feed that provides aggregated top of book 
quotations for all displayed orders resting on the Order Book and 
execution information (i.e., last sale information) for executions on 
the Exchange. The data disseminated on TOPS is also available via TOPS 
Viewer through the Exchange's public Web site. Both TOPS and TOPS 
Viewer are provided free of charge. Based on informal discussion with 
market participants and other Users, the Exchange has determined that 
there is demand for a depth of book feed offering. Accordingly, the 
Exchange proposes to amend Rule 11.330(a)(3) to offer DEEP. As 
proposed, DEEP will disseminate, on a real-time basis,\7\ aggregated 
depth of book quotations for all displayed orders resting on the Order 
Book at each price level for securities traded on IEX (i.e., displayed 
top of book and full depth of book quotations) and execution 
information (i.e., last sale information) for executions on the 
Exchange. DEEP will be provided free of charge.
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    \7\ Rule 11.510(b)(2) describes the application of the POP to 
outbound communications from the Exchange, which impacts DEEP in the 
same manner as all other data products offered by the Exchange. 
Specifically, as specified therein, the POP ``is designed to provide 
all Participants with an equivalent 350 microseconds of latency from 
the System at the primary data center to the Exchange-provided 
network interface at the IEX POP.''
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    Consistent with IEX's existing approach whereby data disseminated 
on TOPS is also available via TOPS Viewer through the Exchange's public 
Web site, IEX is proposing to continue this paradigm by also providing 
aggregated depth of book quotations for all displayed orders resting on 
the Order Book for up to ten (10) price levels that are disseminated 
through DEEP via the Exchange's public Web site. Accordingly, the 
Exchange proposes to amend Rule 11.330(a)(2) to modify the name of its 
data product currently known as TOPS Viewer, and instead title it the 
IEX Data Platform, to reflect that such platform will provide a suite 
of data that includes data disseminated by TOPS and a subset of data 
disseminated by DEEP.
    As is the case currently with respect to TOPS and TOPS Viewer, the 
aggregated best bid and offer (``BBO'') and last sale information 
disseminated through DEEP and the IEX Data Platform will also be 
reported under the Consolidated Tape Association (``CTA'') Plan or the 
Nasdaq/UTP Plan. The Exchange will release such information to DEEP and 
the IEX Data Platform in compliance with Rule 603(a) of Regulation NMS, 
which requires that exchanges distribute market data on terms that are 
``fair and reasonable'' and ``not unreasonably discriminatory,'' and 
prohibits an exchange from releasing data relating to quotes and trades 
to its customers through proprietary feeds before it sends its quotes 
and trade reports for inclusion in the consolidated feeds.\8\
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    \8\ See Regulation NMS, 70 FR 37496, 37567 (June 29, 2005) 
(adopting release); see also Concept Release, 75 FR at 3601 (January 
21, 2010).
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    The Exchange plans to implement the proposed changes during the 
second quarter of 2017 pending completion of necessary technology 
changes and subject to effectiveness of this proposed rule change. The 
Exchange will announce the implementation date of the proposed changes 
by Trader Alert at least 10 business days in advance of such 
implementation date and within 90 days of effectiveness of this 
proposed rule change.
2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act \9\ in general, and with Section 
6(b)(5) of the Act,\10\ in particular. DEEP will be provided consistent 
with the purposes of Section 6(b)(5) of the Act.\11\ Moreover, the 
proposed rule change is not designed to permit unfair discrimination 
among customers, issuers, and brokers; and is designed to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4), (5).
    \11\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change is designed to promote just and equitable 
principles of trade and remove impediments to and perfect the mechanism 
of a free and open market and a national market system by providing 
quotation and transaction information to market participants. The 
Exchange also believes this proposal is consistent with Section 6(b)(5) 
of the Act because it is designed to protect investors and the public 
interest and promote just and equitable principles of trade by 
providing transparency regarding displayed orders in the IEX System, 
and also provides market participants with the option to receive IEX 
BBO and last sale information otherwise than under the CTA and Nasdaq/
UTP Plans. Further, the proposal would not permit unfair discrimination 
because the information will be available to all market

[[Page 12655]]

participants and market data vendors on an equivalent basis, and 
without charge. In addition, any market participant that wishes to 
receive IEX BBO and last sale information via the CTA and Nasdaq/UTP 
Plans will still be able to do so.
    The Exchange also believes that the proposed rule change is 
consistent with Section 11(A) of the Act \12\ in that it supports (1) 
fair competition among brokers and dealers, among exchange markets, and 
between exchange markets and markets other than exchange markets and 
(2) the availability to brokers, dealers, and investors of information 
with respect to quotations for and transactions in securities. 
Furthermore, the proposed rule change is consistent with Rule 603 of 
Regulation NMS,\13\ which provides that any national securities 
exchange which distributes information with respect to quotations for 
or transactions in an NMS stock do so on terms that are fair and 
reasonable and not unreasonably discriminatory. As noted above, the 
Exchange will provide DEEP to Members and other recipients of Exchange 
data on terms that are fair and reasonable and not unreasonably 
discriminatory in that DEEP will be provided free of charge. 
Furthermore, DEEP would be accessed and subscribed to on a voluntary 
basis, in that neither the Exchange nor market data distributors are 
required by any rule or regulation to make this data available. 
Accordingly, distributors and subscribers can discontinue their use at 
any time and for any reason.
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    \12\ 15 U.S.C. 78k-1.
    \13\ See 17 CFR 242.603.
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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 is not proposing 
to charge a fee for DEEP or the IEX Data Platform, and will make both 
available to market participants on a fair and impartial basis, and on 
terms that are not unreasonably discriminatory. In addition, the 
Exchange believes that providing aggregated depth of book quotations as 
described above is designed to remove impediments to and perfect the 
mechanism of a free and open market and a national market system by 
providing investors with alternative market data, as well as to compete 
with other exchanges that offer similar market data products, such as 
those currently offered by the New York Stock Exchange, Inc. 
(``NYSE''), the Nasdaq Stock Market LLC (``Nasdaq''), and BZX Exchange, 
Inc. (``Bats'').\14\
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    \14\ See, e.g., Nasdaq Rule 7023(a)(1)(C), which describes the 
Nasdaq TotalView as a depth-of-book data feed that includes all 
orders and quotes from all Nasdaq members displayed in the Nasdaq 
Market Center as well as the aggregate size of such orders and 
quotes at each price level in the execution functionality of the 
Nasdaq Market Center; See also NYSE OpenBook Aggregated, available 
at http://www.nyxdata.com/nysedata/Default.aspx?tabid=1421, which 
provides a real-time view of the NYSE limit order book including the 
aggregated size at each price level; See Bats Rule 11.22(a) and 
11.22(c), which describe the Bats TCP Depth and Multicast Depth 
feeds as an uncompressed data feed that offers depth of book 
quotations and execution information based on equity orders entered 
into the System; See also Bats Rule 11.22(m), which describes the 
BZX Summary Depth feed as a data feed that offers aggregated two-
sided quotations for all displayed orders entered into the System 
for up to five (5) price levels.
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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 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) \15\ of the Act and Rule 19b-4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of 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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    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) \17\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \17\ 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-2017-05 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-2017-05. 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 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 Web site viewing and 
printing in the Commission's Public Reference Section, 100 F Street 
NE., Washington, DC 20549-1090, 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 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-IEX-
2017-05 and should be submitted on or before March 27, 2017.


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04202 Filed 3-3-17; 8:45 am]
 BILLING CODE 8011-01-P