[Federal Register Volume 89, Number 110 (Thursday, June 6, 2024)]
[Notices]
[Pages 48458-48462]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12365]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100257; File No. SR-IEX-2024-09]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Exchange's Fee Schedule Concerning Transaction Fees and Rebates

May 31, 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 May 20, 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, 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\ the Exchange is filing with the 
Commission a proposed rule change to amend the Exchange's fee schedule 
applicable to Members \6\ (the ``Fee Schedule'') pursuant to IEX Rule 
15.110(a) and (c). Changes to the Fee Schedule pursuant to this 
proposal are effective upon filing,\7\ and will be operative on June 1, 
2024.
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ See IEX Rule 1.160(s).
    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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

[[Page 48459]]

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 modify its Fee Schedule, pursuant to IEX 
Rule 15.110(a) and (c), to modify the transaction fees applicable to 
most \8\ displayed executions of Tape A and C securities.\9\ As 
proposed, the Exchange will increase the rebate paid for executions of 
displayed liquidity adding orders in Tape A and C securities with an 
execution price of $1.00 per share or more from $0.0004 to $0.0014 per 
share, increase the fee for executions of most \10\ displayed liquidity 
removing orders in Tape A or C securities from $0.0010 to $0.0020 per 
share (unless a lower fee applies), and update the fee codes in the Fee 
Schedule to reflect these changes. IEX is not proposing any changes to 
executions that add or remove non-displayed liquidity in Tape A or C 
securities, which will continue to be subject to the same fees 
currently charged for such executions in Tape A and C securities. IEX's 
proposed fee structure for executions of Tape A and C securities is 
less than or in line with other exchanges, but with lower access fees 
and rebates and without the use of any volume-based pricing.\11\
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    \8\ This fee proposal will not change the fees charged or fee 
codes applied for Retail and Retail Liquidity Providing executions 
of Tape A and C securities, which execute for free. Additionally, 
while the fee proposal includes a fee code change for all other 
executions of Tape A and C securities that are priced at less than 
$1.00 per share, the fees charged for such executions will not 
change. Finally, as described infra, certain pegged order types that 
by design are not likely to interact with displayed liquidity will 
not be subject to the increased fees charged for taking displayed 
liquidity in Tape A and C securities.
    \9\ ``Tape A securities'' are securities listed on the New York 
Stock Exchange, and ``Tape C securities'' are securities listed on 
The Nasdaq Stock Market.
    \10\ See supra note 8.
    \11\ See, e.g., MEMX Equities Fee Schedule, (effective May 1, 
2024), available at https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/ (offering rebates for adding 
displayed liquidity of $0.0015 to $0.0033, depending upon trading 
volume, and charging as much as $0.0030 to remove liquidity); Nasdaq 
Equity 7, Section 118(a)(1), available at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Equity%207#section_118_nasdaq_market_center_order_execution_and_routing (offering rebates for adding displayed liquidity of 
$0.0018 to $0.00305, depending upon trading volume, and charging as 
much as $0.0030 to remove displayed liquidity).
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    IEX is making this proposal to incentivize the posting of displayed 
liquidity in Tape A and C securities by increasing the rebate applied 
to those orders, thereby promoting price discovery and market quality 
on the Exchange, which the Exchange believes benefits all Members and 
market participants. The Exchange periodically assesses its fee 
structure. Based upon a recent assessment, the Exchange believes that 
the proposed pricing change would further incentivize Members to submit 
displayed orders in Tape A and C securities priced at or above $1.00 
per share. Further, the Exchange recently instituted identical fee 
changes for Tape B securities to incentivize the posting of displayed 
liquidity in Tape B securities.\12\ IEX is now proposing to make the 
same fee changes for orders that add or remove displayed liquidity in 
Tape A and C securities.
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    \12\ See Securities Exchange Act Release No. 99989 (April 18, 
2024), 89 FR 31231 (April 24, 2024) (SR-IEX-2024-06) (``Tape B Fee 
Filing'').
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Fee Schedule Changes
    IEX proposes to increase the rebate it pays for adding displayed 
liquidity in Tape A and C securities from $0.0004 per share to $0.0014 
per share for executions priced at or above $1.00 per share. Consistent 
with the higher rebate IEX will pay for adding displayed liquidity in 
Tape A and C securities, IEX proposes to increase the fee for removing 
displayed liquidity in Tape A and C securities from $0.0010 per share 
to $0.0020 per share.
    ``Sub-dollar'' \13\ executions of Tape A and C securities that add 
displayed liquidity will continue to execute for free. Sub-dollar 
executions of Tape A and C securities that remove displayed liquidity 
will continue to be charged 0.09% of the Total Dollar Value (``TDV'') 
of the execution.
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    \13\ ``Sub-dollar'' refers to orders or executions priced at 
less than $1.00 per share.
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    IEX does not propose to change the fee ($0.0010 per share) 
currently applicable to Discretionary Peg (``D-Peg''),\14\ Fixed 
Midpoint Peg (``FM-Peg''),\15\ Midpoint Peg (``M-Peg),\16\ or Primary 
Peg (``P-Peg'') \17\ orders that remove displayed liquidity in Tape A 
or C securities. IEX notes that each of these four order types is 
designed to execute within the spread (i.e., at a price between the 
NBBO \18\). IEX understands that Members and other market participants 
typically use these order types with the expectation that they will 
either add or remove non-displayed liquidity, and that they will not 
execute against displayed liquidity. However, these four order types 
may execute against displayed orders in certain ``edge case'' 
scenarios, such as when a resting D-Peg order is invited to Recheck the 
Order Book \19\ and matches with a displayed odd lot order, or when an 
incoming M-Peg order matches with a displayed order standing its ground 
in a locked or crossed market. Currently, in these circumstances, the 
non-displayed pegged order is charged the same fee (i.e., $0.0010 per 
share) as if it traded with a non-displayed order (Fee Code Combination 
TL). To provide greater fee determinism to its Members and consistent 
with current practice, IEX proposes to continue charging $0.0010 per 
share for D-Peg, FM-Peg, M-Peg, and P-Peg orders that remove displayed 
liquidity in a Tape A or C security in one of the above-listed 
circumstances.
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    \14\ See IEX Rule 11.190(b)(10).
    \15\ See IEX Rule 11.190(b)(19).
    \16\ See IEX Rule 11.190(b)(9).
    \17\ See IEX Rule 11.190(b)(8).
    \18\ See IEX Rule 1.160(u).
    \19\ See IEX Rule 11.230(a)(4)(D).
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    Notwithstanding this exception, if an incoming Post Only \20\ order 
for a Tape A or C security executes against a resting M-Peg or FM-Peg 
order with the Trade Now \21\ instruction, IEX proposes to charge the 
M-Peg or FM-Peg order a fee of $0.0020 per share, not the $0.0010 per 
share fee that would otherwise apply had the M-Peg or FM-Peg order 
executed against a displayed order for a Tape A or C security. IEX is 
proposing to make this distinction because Members that include a Trade 
Now instruction on their M-Peg or FM-Peg orders have thereby specified 
their willingness to match with incoming Post Only orders, and thus 
indicated their willingness to pay the $0.0020 per share fee IEX will 
charge for taking displayed liquidity in Tape A and C securities.
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    \20\ See IEX Rule 11.190(b)(20).
    \21\ When an incoming Post Only order matches a resting order 
with a Trade Now instruction, the resting order converts into an 
executable order that removes liquidity against the incoming Post 
Only order, and the incoming Post Only order becomes the liquidity 
adding order. See IEX Rule 11.190(b)(21). A Trade Now instruction 
cannot be added to a D-Peg or P-Peg order. See IEX Rules 
11.190(b)(8) and 11.190(b)(10).
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    IEX is not proposing to change the fees charged or fee codes 
applied to Retail \22\ or Retail Liquidity Provider \23\ orders that 
execute in Tape A or C securities. Thus, a Retail order that takes 
liquidity from a non-displayed order in a Tape A or C security will be 
assigned Fee Code Combination TIR (free execution), and the non-
displayed order will be assigned Fee Code Combination MI (fee of 
$0.0010 per share). Relatedly,

[[Page 48460]]

a Retail order that takes liquidity from a displayed odd lot order in a 
Tape A or C security will be assigned Fee Code Combination TLR (free 
execution), and the displayed odd lot order will be assigned Fee Code 
Combination ML (rebate of $0.0014 per share).
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    \22\ See IEX Rule 11.190(b)(15).
    \23\ See IEX Rule 11.190(b)(14). Retail Liquidity Provider 
orders can only match with Retail orders and will always be assigned 
Fee Code Combination MIA (free execution), irrespective of if the 
execution is a Tape A or C security.
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    IEX also proposes to modify Fee Code Modifier ``K'' to reflect the 
proposed fee changes. Currently, Fee Code Modifier K is only included 
on execution reports for D-Peg, FM-Peg, M-Peg, or P-Peg orders that 
remove displayed liquidity in a Tape B security in the circumstances 
discussed above. With this proposed fee change, Fee Code Modifier K 
would apply to any D-Peg, FM-Peg, M-Peg, or P-Peg order that removes 
displayed liquidity (including orders for Tape A and C securities). 
Therefore, IEX proposes to remove the words ``(Tape B)'' from the 
description of Fee Code K.
    To reflect the above-described fee changes, IEX proposes to make 
the following changes to its Fee Schedule:
     Modify Fee Code Combination ML (Adds displayed liquidity) 
to reflect the new rebate of $0.0014 per share for adding displayed 
liquidity in Tape A and C securities (an increase from the current 
rebate of $0.0004 per share).
     Modify Fee Code Combination MLY (Post Only order adds 
liquidity against resting non-displayed order) to reflect the new 
rebate of $0.0014 per share for adding displayed liquidity in Tape A 
and C securities (an increase from the current rebate of $0.0004 per 
share).
     Modify Fee Code Combination TL (Removes displayed 
liquidity) to reflect the new fee of $0.0020 per share for removing 
displayed liquidity in Tape A and C securities (an increase from the 
current fee of $0.0010 per share).
     Modify Fee Code Combination TLY (Post Only order removes 
displayed liquidity) to reflect the new fee of $0.0020 per share for 
removing displayed liquidity in Tape A and C securities (an increase 
from the current fee of $0.0010 per share).
     Modify Fee Code Combination TLW (Resting non-displayed 
order removes liquidity against incoming Post Only order) to reflect 
the new fee of $0.0020 per share for removing displayed liquidity in 
Tape A and C securities (an increase from the current fee of $0.0010 
per share).
     Introduce new Fee Code Combination TLK with the 
description ``Discretionary Peg, Fixed Midpoint Peg, Midpoint Peg, or 
Primary Peg order removes displayed liquidity.'' These executions of 
Tape A and C securities would be charged a fee of $0.0010 per share for 
executions at or above $1.00 and 0.09% of TDV for sub-dollar 
executions, which are the same fees charged for TLBK, the Fee Code 
Combination that applies to D-Peg, FM-Peg, M-Peg, and P-Peg orders that 
take displayed liquidity in Tape B securities. In addition, and as 
described below, TLK will be modified by footnote 3 to the Fee Code 
Combinations and Associated Fees table.
    IEX also proposes to modify footnote 3 to reflect the updated 
circumstances in which Fee Code Modifier ``K'' would apply. Currently, 
footnote 3 reads in full:

    TLBK will not apply to Midpoint Peg and Fixed Midpoint Peg 
orders with Trade Now functionality enabled that take liquidity from 
an incoming Post Only order for a Tape B security; such executions 
will be assigned Fee Code Combination TLWB.

    With the introduction of Fee Code Combination TLK, IEX proposes to 
modify footnote 3 to reflect that neither Fee Code Combination TLBK nor 
TLK would apply to any M-Peg and FM-Peg orders with Trade Now 
functionality enabled that take liquidity from an incoming Post Only 
order, and that such orders would be assigned Fee Code Combinations 
TLWB and TLW, respectively. As discussed above, these executions would 
incur a fee of $0.0020 per share for taking displayed liquidity in Tape 
A, B, and C securities. IEX therefore proposes to modify footnote 3, so 
that it reads as follows:

    TLBK and TLK will not apply to Midpoint Peg and Fixed Midpoint 
Peg orders with Trade Now functionality enabled that take liquidity 
from an incoming Post Only order; such executions will be assigned 
Fee Code Combinations TLWB and TLW, respectively.
2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6(b) \24\ of the Act in general and furthers the 
objectives of Sections 6(b)(4) \25\ of the Act, 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 
its facilities. The Exchange believes that the proposed fee change is 
reasonable, fair and equitable, and non-discriminatory.
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    \24\ 15 U.S.C. 78f.
    \25\ 15 U.S.C. 78f(b)(4).
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    IEX has concluded that, in the context of current regulatory 
requirements governing access fees and rebates, it is not able to 
sufficiently compete with other exchanges for order flow in Tape A and 
C securities without offering higher rebate incentives. As discussed in 
the Purpose section, the Exchange recently instituted identical fee 
changes for Tape B securities to incentivize the posting of displayed 
liquidity in Tape B securities.\26\ Based upon the Tape B fee changes 
and informal discussions with market participants, IEX believes that 
Members and other market participants may be more willing to send 
displayed orders in Tape A and C securities to IEX if the proposed fee 
structure was adopted.
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    \26\ See supra note 12.
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    Accordingly, IEX has designed the proposed access fee and rebate to 
attract and incentivize displayed orders in Tape A and C securities as 
well as order flow seeking to trade with such displayed orders. 
Moreover, increases in displayed liquidity of Tape A and C securities 
would contribute to the public price discovery process which would 
benefit all market participants and protect investors and the public 
interest.
    As it has stated repeatedly, IEX believes that the existing access 
fee level of $0.0030 per share set by Rule 610 of Regulation NMS \27\ 
heavily affects the way that exchanges compete for order flow and has 
led to various market distortions and inefficiencies. It has also 
created a collective action problem that substantially hinders the 
ability of exchanges to compete by offering better execution quality 
and without relying on high access fees and correspondingly high 
rebates. The Commission can resolve this problem and help to promote 
more displayed liquidity by adjusting the access fee cap to $0.0010 per 
share, a level consistent with other market-based trading cost measures 
and one favored by a broad spectrum of market participants and 
virtually all institutional investors that have commented on this 
issue.\28\ IEX hopes to be able to further adjust its transaction 
prices in the near future to reflect a market-wide adoption of lower 
access fees as a result of this critically-needed reform.
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    \27\ 17 CFR 242.610.
    \28\ See IEX comment letters on S7-30-22, Regulation NMS: 
Minimum Pricing Increments, Access Fees, and Transparency of Better-
Priced Orders: https://www.sec.gov/comments/s7-30-22/s73022-20160364-328968.pdf; https://www.sec.gov/comments/s7-30-22/s73022-276579-672162.pdf; https://www.sec.gov/comments/s7-30-22/s73022-434239-1076742.pdf.
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    Accordingly, IEX has designed this proposed rebate to attract and 
incentivize displayed order flow in Tape A and C securities as well as 
order flow seeking to trade with displayed order flow in Tape A and C 
securities. Moreover, increases in displayed liquidity of Tape A and C 
securities would contribute to the public price discovery process which 
would benefit

[[Page 48461]]

all market participants and protect investors and the public interest.
    The Exchange believes that the proposed fee structure for providing 
and removing displayed liquidity in Tape A and C securities is 
reasonable and consistent with the Act. Specifically, the Exchange 
believes that for securities that trade at or above $1.00 per share, it 
is reasonable to provide an increased rebate of $0.0014 per share for 
providing displayed liquidity in Tape A and C securities and to 
increase the fee for removing displayed liquidity in Tape A and C 
securities from $0.0010 per share to $0.0020 per share, which is 
designed to keep IEX's displayed trading prices for Tape A and C 
securities competitive with those of other exchanges.\29\ In this 
regard, IEX notes that while many competing exchanges pay rebates to 
provide displayed liquidity in Tape A and C securities that are 
substantially higher than those proposed, others charge fees to provide 
displayed liquidity for Tape A and C securities that trade at or above 
$1.00 per share.\30\ Further, IEX notes that for securities that trade 
at or above $1.00 per share, many competing exchanges charge 
substantially higher fees to remove displayed liquidity than those 
charged by IEX.\31\ And, as discussed in the Purpose section, this fee 
proposal is identical to a recent fee change IEX made specifically for 
Tape B securities.\32\ Consequently, IEX believes that the proposed fee 
structure for providing and removing displayed liquidity in Tape A and 
C securities is within the range charged by competing exchanges and 
does not raise any new or novel issues not already considered by the 
Commission in the context of other exchanges' fees.
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    \29\ As discussed in the Purpose section, IEX's proposed rebate 
of $0.0014 per share for displayed liquidity adding orders in Tape A 
and C securities priced at $1.00 or more is below the rebate ranges 
of $0.0015 to $0.0035 [sic] per share and $0.0018 to $0.00305 per 
share paid by MEMX and Nasdaq, respectively, for displayed liquidity 
adding orders. And IEX's proposed fee of $0.0020 per share for 
removing displayed liquidity in Tape B securities priced at $1.00 or 
more is also below the $0.0030 per share fee charged by both MEMX 
and Nasdaq for displayed liquidity removing orders. See supra note 
11.
    \30\ See e.g., Nasdaq BX Equity 7 Section 118(a) ($0.0020 fee 
per share to add displayed liquidity in Tape A and C securities 
priced at or above $1.00 per share), available at https://listingcenter.nasdaq.com/rulebook/bx/rules/BX%20Equity%207; Cboe BYX 
Equities Fee Schedule ($0.0020 fee per share to add displayed 
liquidity in Tape A and C securities priced at or above $1.00 per 
share, available at https://www.cboe.com/us/equities/membership/fee_schedule/byx/; Cboe EDGA Equities Fee Schedule ($0.0030 fee per 
share to add displayed liquidity in Tape A and C securities priced 
at or above $1.00 per share, available at https://www.cboe.com/us/equities/membership/fee_schedule/edga/.
    \31\ See e.g., Cboe BZX Equities Fee Schedule ($0.0030 fee per 
share to remove displayed liquidity in Tape A and C securities 
priced at or above $1.00 per share), available at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/; MIAX 
Pearl Equities Exchange Fee Schedule ($0.00295 fee per share to 
remove displayed liquidity in in Tape A and C securities priced at 
or above $1.00 per share), available at https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Equities_Fee_Schedule_05012024.pdf; MEMX Fee Schedule 
($0.0030 fee per share to remove displayed liquidity in in Tape B 
securities priced at or above $1.00 per share), available at https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/; Nasdaq Equity 7 Section 118(a) (up to $0.0030 fee per 
share to remove displayed liquidity in in Tape A and C securities 
priced at or above $1.00 per share), available at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/nasdaq-equity-7; New 
York Stock Exchange Price List 2024 ($0.00275 fee per share to 
remove displayed liquidity in in Tape A and C securities priced at 
or above $1.00 per share), available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
    \32\ See supra note 12.
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    Further, IEX believes that it is reasonable and consistent with the 
Act not to modify the fees charged to D-Peg, FM-Peg, M-Peg, and P-Peg 
orders that remove displayed liquidity (except for M-Peg and FM-Peg 
orders with a Trade Now instruction that remove displayed liquidity 
from an incoming Post Only order). As discussed in the Purpose section, 
these four order types are designed to interact with non-displayed 
liquidity, but in unexpected circumstances can trade with displayed 
liquidity. IEX understands that, in general, Members seek fee 
determinism, i.e., the ability to know in advance the transaction fees 
that will apply to particular orders at the time they send the orders, 
and a lack thereof could operate to disincentive order flow. 
Consequently, IEX believes it is fair and equitable to continue 
charging $0.0010 per share for displayed liquidity removing executions 
of these four order types to avoid this impact. Further, IEX notes that 
any Member can submit a D-Peg, FM-Peg, M-Peg, or P-Peg order, and 
therefore this fee will apply equally to all Members.
    However, if an incoming Post Only order for a Tape A or C security 
executes against a resting M-Peg or FM-Peg order with the Trade Now 
instruction, IEX proposes to charge the M-Peg or FM-Peg order a fee of 
$0.0020 per share, not the $0.0010 per share fee that would otherwise 
apply had the M-Peg or FM-Peg order executed against a displayed order 
for a Tape A or C security, as described in the preceding paragraph. 
IEX is proposing to make this distinction because the Member who 
included a Trade Now instruction on its M-Peg or FM-Peg order specified 
its willingness to match with incoming Post Only orders, and thus 
indicated its willingness to pay the $0.0020 per share fee IEX will 
charge for taking displayed liquidity in Tape A and C securities.
    Correspondingly, IEX believes that it is reasonable and consistent 
with the Act to modify the fees charged to M-Peg and FM-Peg orders with 
a Trade Now instruction that remove displayed liquidity from an 
incoming Post Only order in a Tape A or C security. As discussed in the 
Purpose section, the Member who included a Trade Now instruction on its 
M-Peg or FM-Peg order specified its willingness to match with incoming 
Post Only orders, and thus indicated its willingness to pay the $0.0020 
per share fee IEX will charge for taking displayed liquidity in Tape A 
and C securities.
    The Exchange also believes that it is reasonable and consistent 
with the Act not to modify its displayed fees for sub-dollar 
executions. The Exchange believes that the existing fee structure for 
such executions continues to be reasonably designed to incentivize 
displayed order flow (and orders seeking to trade with displayed order 
flow) in such securities.
    Further, IEX believes that it is reasonable and consistent with the 
Act not to change the fees applicable to the execution of Retail orders 
that remove liquidity, which will continue to execute for free. In this 
regard, the Exchange believes that the existing fee structure continues 
to be reasonably designed to incentivize the entry of Retail orders and 
Retail Liquidity Provider orders, and notes that the Commission, in 
approving IEX's Retail Price Improvement Program, acknowledged the 
value of exchanges' offering incentives to attract both retail investor 
orders and orders specifically designated to execute only with retail 
orders.\33\
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    \33\ See Securities Exchange Act Release No. 86619 (August 9, 
2019), 84 FR 41769, 41771 (August 15, 2019) (SR-IEX-2019-05).
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    The Exchange further believes that the proposed fee change is 
consistent with the Act's requirement that the Exchange provide for an 
equitable allocation of fees that is also not unfairly discriminatory.
    First, the fees for adding and removing displayed liquidity in Tape 
A and C securities will apply on a per share basis in an equal and 
nondiscriminatory manner to all Members, without regard to the volume 
of orders submitted by a Member or other factors.
    Second, because the fees would apply on a flat, per share basis--
like IEX's existing fees--they will continue to be fully deterministic, 
in that a Member

[[Page 48462]]

will be able to determine the Exchange fees for each execution in a 
Tape A or C security. IEX believes this aspect of its fee proposal will 
assist all Members in making decisions about routing of orders without 
the uncertainties associated with volume tiers or other requirements 
that cannot be determined at the time of the trade. IEX notes that 
applying fees in this way is consistent with the purpose of the 
Commission's proposal to require that exchange fees be set in a manner 
such that the amount of a fee or rebate related to each trade is 
determinable at the time of the trade.\34\
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    \34\ See Securities Exchange Act Release No. 96494 (December 14, 
2022), 87 FR 80266, 80292-93 (December 29, 2022) (File No. S7-30-
22).
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    Finally, as discussed above, to the extent that the current 
regulatory structure effectively compels exchanges to offer financial 
inducements to compete with other exchanges to obtain liquidity, the 
proposed change is intended to increase IEX's ability to compete within 
the existing regulatory structure pending changes to that structure, 
and incentivize greater liquidity, which will benefit all market 
participants by increasing price discovery and price formation (on IEX 
and market-wide) as well as market quality and execution opportunities.

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

    IEX believes that the proposed rule change will not result in any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that the proposed rule change will impose any burden on intermarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. To the contrary, the proposed fee change is 
designed to enhance IEX's competitiveness with other venues, as 
described in the Statutory Basis section. In this context, the Exchange 
does not believe that the proposed fees would burden competition among 
competing venues or their participants. Moreover, as noted in the 
Statutory Basis section, the Exchange believes that the proposed 
changes do not raise any new or novel issues not already considered by 
the Commission.
    The Exchange believes that the proposed rule change will not impose 
any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because, while 
different fees are assessed in some circumstances, these different fees 
are not based on the type of Member entering the orders that match or 
on the volume of orders submitted by a Member but on the type of order 
entered or if the security at issue is a Tape A or C security, and all 
Members can submit any type of order for any type of security and will 
be subject to the same fee for that type of order and security. IEX 
believes that applying a flat, per share fee or rebate for each type of 
order avoids imposing a burden on competition by ensuring that 
individual Members do not gain a competitive advantage over other 
Members based solely on their size or volume of orders they are able to 
submit to the Exchange.

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) \35\ of the Act.
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    \35\ 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) \36\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \36\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-IEX-2024-09 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-2024-09. 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-2024-09 and should be 
submitted on or before June 27, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
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    \37\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12365 Filed 6-5-24; 8:45 am]
BILLING CODE 8011-01-P