[Federal Register Volume 89, Number 18 (Friday, January 26, 2024)]
[Notices]
[Pages 5283-5285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01512]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99411; File No. SR-IEX-2024-03]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Clarify 
Two Aspects of its Recent Post Only Filing and to Correct One 
Nonsubstantive Typographical Error Introduced in the Post Only Filing

January 22, 2024.
    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 January 16, 2024, 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 Exchange. 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 the 
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 ``Exchange'') is filing with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change to clarify two aspects of its recent Post Only Filing \6\ and to 
correct one nonsubstantive typographical error introduced in the Post 
Only Filing. 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 Securities Exchange Act Release No. 98988 (November 20, 
2023), 88 FR 82926 (November 27, 2023) (SR-IEX-2023-13) (``Post Only 
Filing'').
    \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 
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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange recently filed a rule change to introduce a Post Only 
\9\ order parameter instruction and a related Trade Now \10\ order 
instruction.\11\ The Post Only Filing was effective on filing, and IEX 
expects to implement the new functionality in February 2024.\12\ IEX 
will issue a Trading Alert at least ten (10) days in advance of the 
implementation date.\13\
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    \9\ See IEX Rule 11.190(b)(20).
    \10\ See IEX Rule 11.190(b)(21).
    \11\ See supra note 6.
    \12\ See IEX Trading Alert # 2024-002, available at https://iextrading.com/alerts/#/238.
    \13\ See supra note 6.
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    The Exchange is making this filing to clarify two aspects of the 
Post Only Filing and to correct one nonsubstantive typographical error 
introduced in the Post Only Filing. First, IEX proposes to amend IEX 
Rule 11.190(a)(1)(H), which currently states that a non-displayed limit 
order ``May include a Trade Now instruction. . .,'' to replace the word

[[Page 5284]]

``May'' with ``Will'' to reflect that all non-displayed limit orders 
will include a Trade Now instruction. This proposed change is 
consistent with the Post Only Filing, which states that ``non-displayed 
limit orders (including non-displayed portions of reserve orders and 
non-displayed Discretionary Limit orders) would always include a Trade 
Now order instruction. . . .'' \14\ The proposed change is also 
consistent with provisions in IEX Rules 11.190(b)(2)(J) and 
11.190(b)(7)(F)(xi),\15\ which provide that non-displayed portions of 
reserve orders and Discretionary Limit orders, respectively, ``will 
include a Trade Now instruction. . . .'' IEX thus proposes to specify 
that all non-displayed limit orders will always include a Trade Now 
instruction.
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    \14\ See Post Only Filing, 88 FR 82926, 82927.
    \15\ As described below, IEX Rule 11.190(b)(7)(F)(xi) was 
erroneously numbered 11.190(b)(7)(F)(ix); this rule filing corrects 
the numbering of the subparagraph.
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    Second, IEX proposes to clarify that regular limit orders with the 
Post Only order instruction are eligible to trade in the Pre-Market 
Hours \16\ and Post-Market Hours \17\, depending upon their order's 
Time-in-Force (``TIF'').\18\ IEX's Post Only order instruction may only 
be applied to limit orders with a TIF of DAY, GTX, SYS, or GTT.\19\ 
However, although the Post Only Filing states that ``Post Only orders 
must have a [TIF] of DAY, GTX, SYS, or GTT because they will only trade 
during Regular Market Hours'',\20\ regular limit orders with the Post 
Only order instruction and a TIF of GTT or SYS can also trade during 
the Pre-Market and Post-Market Hours, while regular limit orders with 
the Post Only order instruction and a TIF of GTX can also trade during 
the Post-Market Hours. Accordingly, IEX proposes to clarify in this 
rule change proposal that the phrase ``because they will only trade 
during Regular Market Hours'' in the Post Only Filing was inaccurately 
underinclusive, and the TIFs apply as set forth in IEX Rule 
11.190(b)(20).
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    \16\ See IEX Rule 1.160(z).
    \17\ See IEX Rule 1.160(aa).
    \18\ See IEX Rule 11.190(c).
    \19\ See IEX Rule 11.190(b)(20)(E).
    \20\ See Post Only Filing, 88 FR 82926, 82927.
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    Finally, IEX proposes to amend IEX Rule 11.190(b)(7)(F) to correct 
a nonsubstantive typographical error introduced in the Post Only 
Filing. Specifically, the Post Only Filing added two new subparagraphs 
to IEX Rule 11.190(b)(7)(F), which it labeled ``(x)'' and ``(ix).'' IEX 
proposes to modify the label on the second new subparagraph to change 
it from (``ix'') to instead be (``xi''), which is the next sequential 
number.\21\
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    \21\ This rule change will not impact the pre-existing IEX Rule 
11.190(b)(7)(F)(ix), which will continue to read ``Discretionary 
Limit orders are subject to the Price Sliding provisions of IEX Rule 
11.190(h).''
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\22\ in general, and furthers the 
objectives of section 6(b)(5),\23\ in particular, in that it would 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system because it is designed to enforce 
compliance by the Exchange's Members \24\ and the public with the 
provisions of the rules of the Exchange. In particular, the Exchange 
believes that the proposed rule change will provide greater clarity to 
Members and the public regarding the Exchange's rules by clarifying 
that: (i) all non-displayed limit orders will always include a Trade 
Now instruction; (ii) regular displayed limit orders with a Post Only 
order instruction may trade in the Pre-Market and Post-Market Hours if 
permitted by their TIFs; and (iii) the newly-added subparagraph (ix) of 
IEX Rule 11.190(b)(7)(F) should be renumbered to be subparagraph (xi).
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    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
    \24\ See IEX Rule 1.160(s).
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    This rule filing does not propose any substantive changes to the 
functionality of the Post Only and Trade Now order instructions, but 
rather simply clarifies the functionality introduced in the Post Only 
Filing and removes the inconsistencies described in the Purpose 
section. Therefore, the Exchange does not believe that these proposed 
changes raise any new or novel issues not already considered by the 
Commission. IEX also believes that the proposed rule change is 
nondiscriminatory since all Members are eligible to enter orders with 
Post Only and/or Trade Now instructions, and these changes will provide 
the same additional clarity to all Members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. As described in the Purpose 
and Statutory Basis sections, this rule filing merely proposes to 
clarify which orders will always include a Trade Now instruction and 
the trading hours during which Post Only orders can trade, as well as 
to correct one nonsubstantive typographical error introduced in the 
Post Only Filing. This proposal would not make any substantive changes 
to the IEX's new Post Only and Trade Now functionality and is not 
designed to address any competitive issues. Because the proposal does 
not substantively modify system functionality or processes on the 
Exchange, the proposed changes will not impose any burden on 
competition.

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) of the Act \25\ and Rule 19b-
4(f)(6) thereunder.\26\
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    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \27\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \28\ permits the 
Commission to 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 proposed rule change may be operative concurrent with IEX's planned 
implementation of the Post Only Filing in February 2024. The Exchange 
states that the proposal clarifies the applicable trading sessions and 
Trade Now functionality as it applies to the Post Only order type and 
corrects one nonsubstantive typographical error concerning subparagraph 
numbering in the rule text. Additionally, the Exchange states that 
waiver of the operative delay

[[Page 5285]]

would allow these clarifying changes to take effect concurrent with the 
implementation of the Post Only and Trade Now functionality, which will 
benefit all market participants who submit either Post Only or Trade 
Now-eligible orders to the Exchange. Because the proposal raises no 
novel regulatory issues and makes only clarifying changes, the 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposal as operative upon filing.\29\
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    \27\ 17 CFR 240.19b-4(f)(6).
    \28\ 17 CFR 240.19b-4(f)(6)(iii).
    \29\ For purposes only of waiving the 30-day operative delay, 
the Commission also has 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-IEX-2024-03 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-2024-03. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-IEX-2024-03 and should be 
submitted on or before February 16, 2024.
    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-01512 Filed 1-25-24; 8:45 am]
BILLING CODE 8011-01-P