[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