[Federal Register Volume 89, Number 57 (Friday, March 22, 2024)]
[Notices]
[Pages 20525-20527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06069]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99757; File No. SR-IEX-2024-05]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX 
Rule 6.210 (Ex-Dividend or Ex-Right Dates)

March 18, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on March 13, 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 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\ 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,\3\ 
and Rule 19b-4 thereunder,\4\ IEX is filing with the Commission a 
proposed rule change to amend IEX Rule 6.210 (Ex-Dividend or Ex-Right 
Dates) to conform it to the Commission's amendment to Rule 15c6-1(a) of 
the Act \5\ to shorten the standard settlement cycle for most broker-
dealer transactions. 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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    \3\ 15 U.S.C. 78s(b)(1).
    \4\ 17 CFR 240.19b-4.
    \5\ See Securities Exchange Act Release No. 96930, Investment 
Advisers Act Release No. 6239 (February 15, 2023), 88 FR 13872 
(March 6, 2023) (``T+1 Adopting Release'').
    \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 
website at www.iextrading.com, at the principal office of the Exchange, 
and at the Commission's Public Reference Room.

[[Page 20526]]

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
    Effective May 28, 2024, the standard settlement cycle for most 
broker-dealer transactions will be shortened from two business days 
after the trade date (``T+2'') to one business day after the trade date 
(``T+1'').\7\ To reflect this shortened settlement cycle, IEX proposes 
to amend IEX Rule 6.120 (Ex-Dividend or Ex-Right Dates).
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    \7\ See T+1 Adopting Release, 88 FR 13872, 13916 (amending Rule 
15c6-1(a) under the Act to require settlement no later than T+1 
starting on May 28, 2024).
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    IEX Rule 6.120 currently provides that transactions in securities 
traded ``regular'' shall be ``ex-dividend'' or ``ex-rights'' as the 
case may be, on the first business day preceding the record date fixed 
by the company or the date of the closing of the transfer books.\8\ It 
also provides that if the record date or closing of transfer books 
occurs on a day other than a business day, the transaction will be ex-
dividend or ex-rights on the second preceding business day.\9\
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    \8\ See IEX Rule 6.210.
    \9\ Id.
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    The Exchange proposes to amend IEX Rule 6.120 to shorten the time 
frames by one business day. With this change, the ex-dividend or ex-
right date would be the same business day as the record date, if the 
record date occurs on a business day, or the first business day 
preceding the record date if the record date occurs on a day other than 
a business day. IEX notes that this rule change is substantively 
identical to a recent Nasdaq Phlx LLC (``Nasdaq Phlx'') rule change 
that amended Nasdaq Phlx Equity 11, Section 6 (Ex-dividend, Ex-
rights).\10\
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    \10\ See Securities Exchange Act Release No. 98955 (November 15, 
2023), 88 FR 81161 (November 21, 2023) (SR-Phlx-2023-49).
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Implementation
    The Exchange proposes to implement this proposed rule change on 
Tuesday, May 28, 2024, the compliance date specified in the 
Commission's amendment to Rule 15c6-1(a) of the Act,\11\ or such later 
date as may be announced by the Commission, so that the operative date 
coincides with implementation of the T+1 standard settlement cycle 
industry change. IEX will announce the operative date of the proposed 
rule change in a trader alert.
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    \11\ See supra note 8.
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2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\12\ in general and furthers the 
objectives of Section 6(b)(5) \13\ of the Act 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. The proposed rule change seeks to conform IEX's rules 
with the adopted Commission rule amendment to shorten the standard 
settlement cycle for most broker-dealer transactions from T+2 to 
T+1.\14\ The proposal is consistent with the Commission's amendment to 
Rule 15c6-1(a) of the Act to require standard settlement no later than 
T+1. This proposal will provide IEX Members \15\ with regulatory 
certainty as to the settlement cycle that will be utilized to settle 
transactions executed on the Exchange.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ See supra note 6.
    \15\ See IEX Rule 1.160(s).
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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, as amended. The proposed rule 
change is not designed to address any competitive issues but rather to 
provide for the appropriate determination and dissemination of ex-
dates, to provide certainty as to which security holder will receive 
the corporate action consideration. The Exchange also believes that the 
proposed rule change will serve to promote clarity and consistency, as 
noted in the Statutory Basis section, thereby reducing burdens on 
competition and facilitating investor protection.

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 and Rule 
19b-4(f)(6) thereunder.
    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.

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-2024-05 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-2024-05. 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

[[Page 20527]]

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-2024-05 and should be submitted on 
or before April 12, 2024.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06069 Filed 3-21-24; 8:45 am]
BILLING CODE 8011-01-P