[Federal Register Volume 91, Number 5 (Thursday, January 8, 2026)]
[Notices]
[Pages 737-743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-00114]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104541; File No. SR-IEX-2025-39]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Fee Schedule To Modify the Required Criteria for Certain
Transaction Fee Tiers Applicable to Executions Priced at or Above $1.00
Per Share and To Introduce Two Options for Applying the Incremental Fee
Tiers, in Order To Comply With Amended Rule 610(d) of Regulation NMS
January 5, 2026.
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 December 23, 2025, 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'' \7\) pursuant to IEX
Rule 15.110(a) and (c) to modify the required criteria for certain
transaction fee tiers applicable to executions priced at or above $1.00
per share and to introduce two options for applying the Incremental Fee
tiers, in order to comply with amended Rule 610(d) of Regulation
NMS.\8\ Changes to the Fee Schedule pursuant to this proposal are
effective upon filing,\9\ and will be operative on February 2, 2026.
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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\ See Investors Exchange Fee Schedule, available at https://www.iexexchange.io/resources/trading/fee-schedule.
\8\ 17 CFR 242.610(d).
\9\ 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 https://www.iexexchange.io/resources/regulation/rule-filings
and at the principal office of the Exchange.
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 proposes to modify its Fee Schedule, so that starting
on February 2, 2026,\10\ all transaction fees and rebates will be
determinable at the time of execution, in compliance with Rule 610(d)
of Regulation NMS.\11\ As detailed below, any transaction fees or
rebates that are currently based upon a Member's trading or quoting
activity in the current month will, starting in February 2026, be based
upon that Member's trading or quoting activity in the immediately
preceding month.\12\ Additionally, as discussed below, IEX proposes to
offer Members two options for how the Exchange will calculate a
[[Page 738]]
Member's Incremental Fee Tier based upon the Member's trading activity
in the prior month.
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\10\ See Securities Exchange Act Release No. 104172 (October 31,
2025), 90 FR 51418 (November 17, 2025) (extending the compliance
date for changes to Rule 610(d) to the first business day of
February 2026, i.e. February 2, 2026).
\11\ See 17 CFR 242.610(d) (``Transparency of fees. A national
securities exchange shall not impose, nor permit to be imposed, any
fee or fees, or provide, or permit to be provided, any rebate or
other remuneration, for the execution of an order in an NMS stock
that cannot be determined at the time of execution.'')
\12\ All of the fee changes in this proposal relate to
executions at or above $1.00, because, as described below, the only
incentive fee that applies to executions priced below $1.00 is
already determinable at the time of the execution.
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On September 18, 2024, the Commission adopted a final rule titled
``Regulation NMS: Minimum Pricing Increments, Access Fees, and
Transparency of Better Priced Orders.'' \13\ As part of the NMS
Amendments Final Rule, the Commission amended Rule 610 to add a new
subsection (d) ``Transparency of Fees,'' that:
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\13\ See Securities Exchange Act Release No. 101070 (September
18, 2024), 89 FR 81620 (October 8, 2024) (File No. S7-30-22) (``NMS
Amendments Final Rule'').
prohibits a national securities exchange from imposing, or
permitting to be imposed, any fee or fees, or providing, or
permitting to be provided, any rebate or other remuneration (e.g.,
discounted fees, other credits, or forms of linked pricing) for the
execution of an order in an NMS stock unless such fee, rebate or
other remuneration can be determined by the market participant at
the time of execution. . . . any national securities exchange that
imposes a fee or provides a rebate that is based on a certain volume
threshold, or establishes tier requirements or tiered rates based on
minimum volume thresholds, would be required to set such volume
thresholds or tiers using volume achieved during a stated period
prior to the assessment of the fee or rebate so that market
participants are able to determine what fee or rebate level will be
applied to any submitted order at the time of execution.'' \14\
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\14\ Id., 89 FR at 81663.
The NMS Amendments Final Rule set the compliance date for the
changes to Rule 610(d) as ``the first business day of November 2025,''
which was November 3, 2025.\15\ As noted above, the SEC subsequently
extended the compliance date to February 2, 2026.\16\ Thus, IEX is now
proposing to modify its Fee Schedule so that it will comply with Rule
610(d) of Regulation NMS, as amended, as of February 2, 2026.
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\15\ See NMS Amendments Final Rule, supra note 13, 89 FR at
81680. At the request of other national securities exchanges, the
Commission stayed the compliance dates of parts of the NMS
Amendments Final Rule, however the Commission did not stay the
effective date of the changes to Reg NMS Rule 610(d), finding ``no
reason to delay the benefits to investors, including the additional
certainty, transparency, and clarity of the exchange fee schedules,
of [ ] amendments to Rule 610(d).'' See In the Matter of the Motion
by Nasdaq, Inc., et al., Securities Exchange Act Release No. 101899,
File No. S7-30-22, at *2 (December 12, 2024) (Order Granting Partial
Stay).
\16\ See supra note 10.
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As reflected in the Transaction Fees section of the Fee Schedule,
IEX currently uses volume-based pricing structures (both rebates and
fees) (collectively ``Fee Tiers'') that are designed to improve market
quality on the Exchange by incentivizing Members to send more displayed
and non-displayed liquidity adding and removing orders to the Exchange.
Several of IEX's Fee Tiers use a Member's ``Average Daily Volume''
(``ADV'') as the primary criteria for evaluating eligibility for the
volume-based fees or rebates. The Fee Schedule defines ADV as ``average
daily volume calculated as the number of shares added or removed (as
applicable) that execute at or above $1.00 per share, per day. ADV is
calculated on a monthly basis.'' \17\ In calculating a Member's ADV,
the numerator is the share volume of applicable transactions (i.e.,
adding, removing, displayed, non-displayed, as applicable) during the
month for which the fee or rebate tier applies. Similarly, the
denominator of a Member's ADV is the total number of eligible trading
days in the month for which the fee or rebate tier applies.
Accordingly, the rebate or fee tiers in the Fee Schedule are currently
determined by the Member's ADV during the same month for which the fees
or rebates apply.
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\17\ See IEX Fee Schedule, Transaction Fees, Definitions.
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To comply with the Rule 610(d) of Regulation NMS, as amended, IEX
is proposing to modify the definition of ADV in its fee schedule to
state that the ADV is calculated ``on a monthly basis, based on trading
activity in the immediately preceding month, unless otherwise indicated
in the Fee Schedule.'' \18\ Consistent with that change, where
appropriate, IEX proposes to modify any references to ADV calculations
in the Fee Schedule that are in the present tense to instead be in the
past tense (e.g., instead of saying ``Member: (1) adds at least
30,000,000 ADV of displayed liquidity; or (2) adds at least 25,000,000
ADV of displayed liquidity and trades at least 30,000,000 non-displayed
ADV'' to qualify for Displayed Liquidity Adding Rebate Tier 7, the Fee
Schedule would now say ``Member: (1) added at least 30,000,000 ADV of
displayed liquidity; or (2) added at least 25,000,000 ADV of displayed
liquidity and traded at least 30,000,000 non-displayed ADV'').
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\18\ As discussed below, the base fee rates will apply to new
members during their first month of membership as no prior month
activity will be available as the basis for volume-based fees or
rebates.
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IEX notes that several of its current transaction fees, including
some rebates, will remain unchanged by this fee filing because they are
already determinable at the time of execution. For example, executions
below $1.00 per share (``sub-dollar trades'') that add displayed volume
receive a rebate of 0.15% of the Total Dollar Value (``TDV'') of the
trade. Because the TDV is known at the time of the execution, the
rebate is also determinable at the time of the execution. For example,
an execution of a displayed order to sell 1,000 shares of a security
for $0.50 per share has a total dollar value of $500, and will earn a
rebate of $0.75 cents for the transaction.
The IEX fees and rebates affected by this fee filing \19\ fall into
three categories: (1) the Displayed Liquidity Adding Rebate Tiers; (2)
the Displayed Liquidity Removing Fee Tiers; and (3) the Incremental Fee
Tiers.
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\19\ The Exchange also offers incentive payments for quoting
activity in certain securities through the Supplemental Market
Quality Program (``SMQ''). The SMQ--which is distinct from the ETP
quoting activity contained in the Displayed Liquidity Adding Rebate
Tiers, described in more detail below--is unaffected by amended Rule
610(d) because the SMQ payments are based on quoting activity rather
than on volume of executions achieved during a certain time period,
and have no effect on transaction fees or rebates. See Rule 610(d)
of Reg NMS (describing its applicability to fees, rebates, or other
remuneration ``for the execution of an order in an NMS stock''); see
also Fee Schedule, Transaction Fees--Supplemental Market Quality
Program.
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Displayed Liquidity Adding Rebate Tiers 20
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\20\ See Fee Schedule, Transaction Fees, Fee Code Combinations
and Associated Fees, fn. 4.
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There are three general ways in which a Member can qualify for one
or more of IEX's Displayed Liquidity Adding Rebate Tiers: (1) through
displayed liquidity adding executions; (2) through non-displayed
executions (adding and removing), and (3) by satisfying quoting
requirements in a minimum amount of ETPs. To the extent these tiers are
based on volume-based transaction activity or quoting activity, the
Exchange's proposed changes would make the reference period used to
determine eligibility the immediately preceding month. The impact of
the proposed changes in this filing on the Displayed Liquidity Adding
Rebate Tiers is discussed below.
Displayed Liquidity Adding Executions
Using Displayed Liquidity Adding Rebate Tier 7 as an example, under
the proposed changes, if a Member either: (1) added at least 30,000,000
ADV of displayed liquidity or (2) added at least 25,000,000 ADV of
displayed liquidity and traded at least 30,000,000 non-displayed ADV in
January 2026, at the end of January 2026 that Member will know that it
has qualified for Tier 7 in both January and February 2026.\21\
[[Page 739]]
Thus, before the start of February, the Member will know that any
displayed liquidity adding trades made on IEX in February 2026 would
receive the applicable rebate of $0.0022 per share. If that same Member
had 29,000,000 ADV of displayed liquidity adding trades in the month of
February 2026, at the end of February the Member would know that it had
qualified for Displayed Liquidity Adding Rebate Tier 6 for the month of
March 2026, because Tier 6 has as one of its eligibility criteria that
the Member added at least 20,000,000 ADV of displayed liquidity and
less than 30,000,000 ADV of displayed liquidity. Thus, at the end of
February, the Member would know that it would be eligible to receive
the applicable rebate of $0.0020 per share for any displayed liquidity
adding trades in March.
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\21\ On September 30, 2025, and October 31, 2025, IEX informed
its Members, via two Trading Alerts, of IEX's general plans for
compliance with amended Reg NMS Rule 610(d)'s fee determinism
requirement. See Trading Alert #2025-031, available at https://iextrading.com/alerts/#/316 and Trading Alert #2025-032, available
at https://iextrading.com/alerts/#/317. And IEX will send a Trading
Alert to all Members providing more detail about these pending
changes to its Fee Schedule in advance of the February 2, 2026,
implementation date of these fees.
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Non-Displayed Executions
Displayed Liquidity Adding Rebate Tiers 2, 3, 5, 6, and 7 all have
eligibility criteria related to a Member's ``non-displayed ADV.'' \22\
For example, a Member that trades at least 15,000,000 non-displayed ADV
qualifies for Displayed Liquidity Adding Rebate Tier 5 (if the Member
traded at least 20,000,000 non-displayed ADV, the Member would qualify
for the next higher rebate tier, Displayed Liquidity Adding Rebate Tier
6). Thus, currently if a Member had 16,000,000 non-displayed ADV in the
month of January 2026, that Member would qualify for Displayed
Liquidity Adding Rebate Tier 5 and receive a rebate of $0.0018 per
share on all of its displayed liquidity adding trades in the month of
January 2026.
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\22\ As set forth in the Fee Schedule, ``non-displayed ADV''
refers to executions with the following Fee Code Combinations: MI,
MIB, TI, TIB, TIY, TIYB, TIR, TLW, TLWB, and MIA.
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Under this proposed fee change, at the end of January, the Member
would know that it qualified for Displayed Liquidity Adding Rebate Tier
5 for the month of February 2026 based upon its non-displayed execution
activity in January 2026, and again the Member would receive a rebate
of $0.0018 per share on all of its displayed liquidity adding trades in
the month of February 2026.
ETP Quoting
Displayed Liquidity Adding Rebate Tiers 3 and 4 also have
eligibility criteria related to the Member's quoting activity in ETPs.
Specifically, a Member may qualify for Displayed Liquidity Adding
Rebate Tier 3 if its ``NBBO Time'' \23\ is at least 50% in at least 250
ETPs and may qualify for Displayed Liquidity Adding Rebate Tier 4 if
its NBBO Time is at least 50% in at least 750 ETPs.
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\23\ The Fee Schedule defines ``NBBO Time'' as the Member's
``Percent Time at NBB'' plus the Member's ``Percent Time at NBO.''
``Percent Time at NBB (NBO)'' is defined as the aggregate of the
percentage of time during Regular Market Hours where a Member has a
displayed order of at least one round lot at the NBB (NBO). For
example, for a particular security, if a Member's Percent Time at
NBB is 25% and Percent Time at NBO is 15%, its NBBO Time would be
40%. Alternatively, if a Member's Percent Time at NBB is 20% and
concurrently, the Member's Percent Time at NBO is also 20%, then
that Member's NBBO Time would be 40%.
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Currently, for the month of January 2026, a Member with an NBBO
Time of at least 50% in at least 250 (but less than 750) ETPs would
qualify for Displayed Liquidity Adding Rebate Tier 3 and receive a
rebate of $0.0014 per share for all displayed liquidity adding
executions priced at or above $1.00.
Because amended Rule 610(d) requires that transaction fees and
rebates must be determinable at the time of the execution, IEX proposes
to modify the definitions of Percent Time at NBB, Percent Time at NBO,
and NBBO Time to reflect that when these terms are applied to any
transaction fees or rebates, they will be calculated using the Member's
quoting activity for the immediately preceding month.\24\
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\24\ IEX also proposes to amend the definitions of these terms
to clarify that these terms continue to refer to quoting activity
for the current month when they are applied to the SMQ Program, an
incentive payment for quoting in certain stocks that has no effect
on transaction fees and rebates. See supra note 19.
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Thus, as proposed, the above Member with an NBBO Time of at least
50% in at least 250 (but less than 750) ETPs in the month of January
2026 would know, at the end of October [sic], that it had qualified for
Displayed Liquidity Adding Rebate Tier 3 for the month of February
2026, and would receive a rebate of $0.0014 per share for all displayed
liquidity adding executions priced at or above $1.00 during February
2026. If that Member had an NBBO Time of at least 50% in at least 750
ETPs in the month of February 2026, the Member would know, at the end
of February, that it had qualified for Displayed Liquidity Adding
Rebate Tier 4 for the month of March 2026, and receive a rebate of
$0.0016 per share for all displayed liquidity adding executions during
March 2026.
Displayed Liquidity Removing Fee Tiers
IEX also has two fee tiers for Displayed Liquidity Removing orders.
Currently, a Member that adds less than 25,000 ADV of displayed
liquidity pays a fee of $0.0030 for all displayed liquidity removing
orders, while a Member that adds at least 25,000 ADV of displayed
liquidity pays a fee of $0.0022 for all displayed liquidity removing
executions.
Thus, a Member that adds less than 25,000 ADV of displayed
liquidity in January 2026 will be charged $0.0030 per share for all
executions that remove displayed liquidity. Under this proposed fee
change, at the end of January 2026 that same Member will know that it
will be charged $0.0030 per share for all executions that remove
displayed liquidity in the month of February 2026, based on its January
displayed liquidity adding orders. Similarly, under the proposed fee
change, if the Member adds at least 25,000 ADV of displayed liquidity
in the month of February 2026, then at the end of the month it will
know that it will be charged $0.0022 per share for all displayed
liquidity removing executions in the next month, March 2026.
Incremental Fee Tiers
IEX's Incremental Fee Tiers \25\ are a volume-based fee incentive
designed to incentivize Members to increase their non-displayed volume
on the Exchange. Currently, Members who increase their non-displayed
volume from August 2025 (``the Baseline Month'' \26\) by at least
10,000,000 non-displayed shares per day qualify for a reduced fee of
$0.0001 per share for certain executions of non-displayed orders.\27\
Specifically, to qualify for the reduced fee (i.e., Incremental Fee
Tier 2), a Member must have an ``Incremental non-displayed ADV'' \28\
that is at least 10,000,000 greater than its ``Baseline non-displayed
ADV.'' \29\ Once a Member's Incremental non-displayed ADV is at least
10,000,000 greater than its Baseline non-displayed ADV, the Member is
charged
[[Page 740]]
the reduced fee of $0.0001 per share for the applicable non-displayed
executions.
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\25\ See Footnote 6 to the Transaction Fees section of the Fee
Schedule.
\26\ As noted in the Fee Schedule, the criteria to qualify for
the Incremental Fee Tier will expire no later than February 28,
2026.
\27\ The fee codes to which the Incremental Fee Tiers apply are
``MI'' (Adds non-displayed liquidity); ``MIB'' (Adds non-displayed
liquidity in Tape B securities); ``TIY'' (Post Only order removes
non-displayed liquidity); ``TIYB'' (Post Only order removes non-
displayed liquidity in Tape B securities); ``TI'' (Removes non-
displayed liquidity); and ``TIB'' (Removes non-displayed liquidity
in Tape B securities).
\28\ ``Incremental non-displayed ADV'' means executions with any
of the Fee Code Combinations MI, MIB, TI, TIB, TIY, or TIYB that
exceed the Baseline non-displayed ADV.
\29\ ``Baseline non-displayed ADV'' means executions with any of
the Fee Code Combinations MI, MIB, TI, TIB, TIY, or TIYB in August
2025.
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The reduced fee of $0.0001 per share for Incremental Fee eligible
ADV in excess of the Baseline non-displayed ADV is capped at a Member's
Baseline non-displayed ADV, and any additional volume is charged the
regular fee of $0.0010 per share for either adding or removing non-
displayed liquidity.
By way of example, currently if a Member's Baseline non-displayed
ADV is 20,000,000, and its Incremental Fee eligible ADV \30\ for
January 2026 is 30,000,000, then the Member's Incremental non-displayed
ADV would be 10,000,000 for January 2026. For that month, the Member
would pay the reduced $0.0001 fee for 10,000,000 of its Incremental Fee
eligible executions and would pay the regular fee of $0.0010 for
20,000,000 of its Incremental Fee eligible executions. If the Member's
Incremental Fee eligible ADV for January 2026 was 40,000,000, then the
Member's Incremental non-displayed ADV would be 20,000,000 for January
2026. For that month, the Member would pay the reduced $0.0001 fee for
20,000,000 of its Incremental Fee eligible executions and would pay the
regular fee of $0.0010 for 20,000,000 of its Incremental Fee eligible
executions.
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\30\ IEX proposes to introduce a new defined term, ``Incremental
Fee eligible ADV'' to the Definitions subsection of the Transaction
Fees section of the IEX Fee Schedule. IEX proposes to define the
term as ``executions with any of the Fee Code Combinations MI, MIB,
TI, TIB, TIY, or TIYB.'' IEX also proposes to modify the definition
of ``Baseline non-displayed ADV'' to replace ``executions with any
of the Fee Code Combinations MI, MIB, TI, TIB, TIY, or TIYB'' with
``executions of Incremental Fee eligible ADV.''
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IEX proposes to modify the definition of Incremental non-displayed
ADV so that starting on February 2, 2026, it will refer to ``executions
in the immediately preceding month of Incremental Fee eligible ADV that
exceed the Baseline non-displayed ADV'' (emphasis added). Thus,
starting with the month of February, Members will know that they
qualified for Incremental Fee Tier 2 in that month if they exceeded
their Baseline non-displayed ADV by at least 10,000,000 in the
immediately preceding month.
Referring to the same example above, at the end of January, the
Member would know that for February 2026, the Member qualified for
Incremental Fee Tier 2 based upon its January trading activity. As
described above, starting in February 2026, Members will need to be
able to determine the fees charged for an execution at the time of the
execution. To satisfy the requirements of Rule 610(d) of Regulation
NMS, and as noted above, IEX proposes to offer Members two options for
how the Exchange will charge for Incremental Fee eligible executions
for a given month, both of which will allow Members to determine the
fees at the time of applicable executions.
Proposed Changes
A. Explanatory Bullets
IEX proposes to add the following explanatory bullets to the
beginning of the Incremental Fee Tiers section of the Fee Schedule
(above the existing table listing the two Incremental Fee Tiers):
IEX's Incremental Fee Tiers provide Members an opportunity
to pay a reduced fee of $0.0001 per share (the ``Incremental Fee'') for
Incremental Fee eligible ADV in the current month.
[cir] A Member qualifies for the Incremental Fee (i.e., Incremental
Fee Tier 2) in the current month if its Incremental non-displayed ADV
exceeded its Baseline non-displayed ADV by at least 10,000,000.
[cir] Incremental Fee eligible ADV that does not qualify for
Incremental Fee Tier 2 is charged the base rate of $0.0010 per share.
[cir] The current month's Incremental Fee eligible ADV will
determine the Member's qualification for Incremental Fee Tier 2 for the
next month.
IEX offers Members two options for calculating trading
fees for the Incremental Fee Tier, each of which achieves fee
determinism.
[cir] Members shall notify IEX of which Incremental Fee option the
Member wants applied to its Incremental Fee eligible ADV, in such
manner as specified by the Exchange, in advance of the beginning of a
new calendar month. If the Member does not select an option (and has
not previously selected an option), the default option for calculating
the Member's Incremental Fee will be Option 1.
These bullets provide an overview of the two Incremental Fee
options and inform Members that they can qualify for Incremental Fee
Tier 2 in the current month if their Incremental non-displayed ADV in
the prior month exceeded their Baseline non-displayed ADV by at least
10,000,000. Additionally, the explanatory bullets note that Incremental
Fee eligible ADV that does not qualify for Incremental Fee Tier 2 is
charged the base rate of $0.0010 per share.
B. Changes to Incremental Fee Tier Table
IEX also proposes to make the following changes to the Incremental
Fee Tier table:
Add as a title for the table: ``Incremental Fee Tier Fee
Calculation Table (used by both Options 1 and 2)'';
Revise the language in the ``Required Criteria'' cells to
change ``is'' to ``was'', because Incremental non-displayed ADV has
been redefined to be based on the prior month's activity;
Remove the second and third sentences in ``footnote a'' to
the table, because they no longer reflect the manner in which
Incremental Fees are calculated.
C. Option 1
Under Option 1, a Member's Incremental Fee eligible ADV in the
current month will incur a fee representing a blended average rate of
their fee-eligible activity in the prior month (starting in February
2026).\31\
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\31\ For example, if a Member's Baseline non-displayed ADV is
20,000,000, and its Incremental Fee eligible ADV for January 2026 is
30,000,000 (i.e., an Incremental non-displayed ADV of 10,000,000),
the Member's blended rate for February would be $0.0007 per share
(because 20,000,000 would be charged $0.0010 and 10,000,000 would be
charged $0.0001).
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To effect these changes, IEX proposes to add a section describing
``Incremental Fee Tier Option 1'' immediately following the Incremental
Fee Tier Calculation Table. Under the section header, IEX proposes to
add the following text:
For Option 1, IEX will apply the Incremental Fee Tier
Calculation Table to the Member's Incremental Fee eligible ADV in the
prior month to calculate the blended rate based on the fees charged to
the Member for its prior month activity (rounded to five decimal
places). The blended rate will be applied to all Incremental Fee
eligible ADV in the current month.
The following examples demonstrate how this fee is
determinable at the time of execution (in the examples, millions are
abbreviated as ``mm'', e.g., ``20,000,000'' is written as ``20mm''):
In order to demonstrate how the fee works, IEX proposes to include
this set of examples, with three explanatory footnotes, under the text
described above:
[[Page 741]]
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Aug. 2025 vol.
(baseline non- Jan. 2026 Feb. 2026 Mar. 2026
Ex. displayed ADV) ADV * (mm) ADV * (mm) ADV * (mm) January fees February fees March fees
(mm)
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1........ 20 30 35 25
$0.0007/share $0.0007/share $0.00061/
**. **. share.***
2........ 20 40 25 35
$0.00055/share. $0.00055/share. $0.0010/share.
3........ 20 40 50 10
$0.00055/share. $0.00055/share. $0.00064/
share.
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\*\ Incremental Fee eligible ADV.
** A Member with a Baseline non-displayed ADV of 20,000,000 that has Incremental Fee eligible ADV of 30,000,000
in January will pay $0.0007 for all Incremental Fee eligible ADV in both January and February, because that is
the blended average of the Member's January trading fees ($0.0010/share fee for 20,000,000 and $0.0001/share
fee for 10,000,000).
*** A Member with a Baseline non-displayed ADV of 20,000,000 that has an Incremental Fee eligible ADV of
30,000,000 in January and 35,000,000 in February will pay $0.00061 for all Incremental Fee eligible ADV in
March, because that is the blended average of the Member's February trading fees ($0.0010/share fee for
20,000,000 and $0.0001/share fee for 15,000,000). Since the prior month's blended rate is used, the fact that
the Member's March 2026 volumes did not exceed the baseline would not be taken into account until April 2026
billing.
D. Option 2
Under proposed Option 2, Incremental Fees are calculated based on
total shares traded in the current month, not a blended rate of the
prior month's Incremental Fee eligible ADV (like in Option 1). Thus,
Option 2 introduces the following terms:
[cir] ``Baseline non-displayed TAV'' is calculated by multiplying
the Baseline non-displayed ADV times the number of trading days in the
current month.
[cir] ``Incremental Fee eligible TAV'' is calculated by multiplying
the current month's Incremental Fee eligible ADV times the number of
trading days in the current month.
[cir] ``Incremental non-displayed TAV'' is the amount by which the
current month's Incremental Fee eligible TAV exceeds the Baseline non-
displayed TAV. If the Baseline non-displayed TAV is greater than the
Incremental Fee eligible TAV, this value is 0. If this value exceeds
the Baseline non-displayed TAV, the number of shares eligible for the
reduced Incremental Fee is capped at Baseline non-displayed TAV.
In order to demonstrate how Option 2 works and how the fee is
determinable at the time of execution, IEX proposes to include in the
Fee Schedule this set of examples under the text described above, and
text explaining that in the examples, millions are abbreviated as
``mm'', e.g., ``20,000,000'' is written as ``20mm'':
----------------------------------------------------------------------------------------------------------------
February 2026 (19 trading days)
Aug. Jan. --------------------------------------------------------------
2025 2026 Total February 2026 fees
ADV * ADV * ADV * volume ** Baseline volume *** Incremental volume
(mm) (mm) (mm) (mm) ****
----------------------------------------------------------------------------------------------------------------
1........... 20 30 35 665 380mm.............. 285mm.............. $0.0010/
share on first
380mm shares.
$0.0001/
share on
remaining 285mm
shares.
2........... 20 40 25 475 380mm.............. 95mm............... $0.0010/
share on first
380mm shares.
$0.0001/
share on
remaining 95mm
shares.
3........... 20 40 50 950 380mm.............. 570mm (only 380mm $0.0010/
eligible for share on first
$0.0001 fee). 380mm shares.
$0.0001/
share on next
380mm shares.
$0.0010/
share on
remaining 190mm
shares.
----------------------------------------------------------------------------------------------------------------
March 2026 (22 trading days)
Aug. Feb. --------------------------------------------------------------
2025 2026 Total March 2026 fees
ADV * ADV * ADV * volume ** Baseline volume *** Incremental volume
(mm) (mm) (mm) (mm) ****
----------------------------------------------------------------------------------------------------------------
1........... 20 35 25 550 440mm.............. 110mm.............. $0.0010/
share on first
440mm shares.
$0.0001/
share on
remaining 110mm
shares.
2........... 20 25 35 770 N/A (Feb 2026 ADV N/A................ $0.0010/
did not exceed Aug share on all
2025 ADV by at 770mm shares.
least 10mm).
3........... 20 50 10 220 440mm.............. 0 (Baseline Vol. > $0.0010/
Total Vol.). share on all
220mm shares.
----------------------------------------------------------------------------------------------------------------
* Incremental Fee eligible ADV.
** Incremental Fee eligible TAV.
*** Baseline non-displayed TAV.
**** Incremental non-displayed TAV.
[[Page 742]]
As shown in the above examples, the fees for Incremental Fee
eligible executions under Option 2 will change during the month in
which they are billed, but in a manner in which the fees for any
executions are determinable at the time of the execution. IEX
introduced the Incremental Fee Tiers in September 2025,\32\ and based
upon the past several months of trading activity, believes that its
Members' trading systems are be able to accommodate such pricing,
recognizing when their Incremental Fee eligible executions have crossed
the first threshold that qualifies the next executions for the $0.0001
per share discounted fee, as well as if they reached the cap on the
executions eligible for the discounted fee, meaning any additional
Incremental Fee eligible executions for that month will be charged
$0.0010 per share. Additionally, upon request, IEX will provide a tally
of month-to-date executions to any Member that qualified for the
Incremental Fee based upon its prior month activity, in order to
facilitate the Member's ability to know the fee charged at the time of
execution. Further, IEX will continue to bill Members at the end of the
month, and the total amount billed will reflect this pricing.
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\32\ See Trading Alert # 2025-024, available at https://iextrading.com/alerts/#/308.
---------------------------------------------------------------------------
The Exchange is not proposing to change the amounts of any rebates
or fees specified in the transaction fee tiers, nor the fees applicable
to executions below $1.00 per share. The Exchange is also not proposing
to make any changes to the fees applicable to the execution of Retail
orders that add or remove displayed or non-displayed liquidity.
The Exchange plans to implement the proposed fee change on February
2, 2026, subject to the filing and effectiveness of this proposed rule
change.
2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \33\ of the Act in general, and furthers the
objectives of Section 6(b)(4) \34\ 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.
---------------------------------------------------------------------------
\33\ 15 U.S.C. 78f.
\34\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
As described in the Purpose section, all of these proposed fee
changes are being made in response to the amendments to Rule 610(d) of
Regulation NMS, which the Commission has determined have a compliance
date of February 2, 2026. As noted by the Commission in the NMS
Amendments Final Rule, these proposed fee changes are designed to make
the Exchange's transaction fees and rebates determinable at the time of
the execution and thereby protect investors through more fee
transparency, as required by the Act.
Further, IEX believes that the proposed introduction of two options
for applying the Incremental Fee in a deterministic manner is
consistent with Rule 610(d) of Regulation NMS, as well as the
provisions of Section 6(b) \35\ of the Act in general, and furthers the
objectives of Section6(b)(4) \36\ 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. First, as discussed in the Purpose section, Members
applying either option will be able to determine the fee for any
executions at the time of the execution. Second, the Exchange
understands that different firms, using different trading strategies,
might prefer one of the Incremental Fee options over the other. And
third, Members will always be free to change the Incremental Fee option
applied to their Incremental Fee eligible executions before the
beginning of trading in the next month. For these reasons, the Exchange
believes that the proposed fee change is reasonable, fair and
equitable, and non-discriminatory. Additionally, IEX believes that
setting a fixed decimal point to which blended rate fees will be
rounded, and communicating that decimal point to Members, is consistent
with the Act in that it supports each Member's ability to determine the
exact fee charged for any execution at the time of the transaction.
This transparency around how the average blended rates will be applied
to a Member's activity will allow Members to more precisely calculate
their blended rate fees, thereby ensuring equitable allocation of fees
while reducing the potential for confusion about the fees that IEX will
charge under Incremental Fee Tier Option 1.
---------------------------------------------------------------------------
\35\ 15 U.S.C. 78f.
\36\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
Accordingly, IEX has designed the proposed changes to its Fee
Schedule to allow for a continued transparent and equitable
distribution of its fees that is consistent with the goals and
requirements of the NMS Amendments Final Rule. IEX notes that all other
national securities exchanges that offer transaction fee incentives
based upon a Member's trading or quoting activity will be similarly
changing their fee schedules to comply with the February 2, 2026
compliance deadline.
As discussed above, IEX does not believe that any aspect of this
proposal raises new or novel issues not already considered by the
Commission.
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. Because these changes are being
made in response to a regulatory requirement set forth by the
Commission, these changes are not designed to serve any competitive
purpose, let alone create any burden on competition. Rather, they are
designed to ensure that the Commission's requirements for exchange
transaction fees apply on the Exchange just as they do on any other
national securities exchange. Thus, the Exchange does not believe that
the proposed rule change will impose any burden on intermarket
competition, let alone a burden on intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
Moreover, as noted in the Statutory Basis section, the Exchange does
not believe that the proposed changes raise any new or novel issues not
already considered by the Commission.
The Exchange does not believe that the proposed rule change will
impose any burden on intramarket competition because these changes are
being made in response to a Commission rule and will apply equally to
all Members of the Exchange.
The Exchange further notes that the proposed rule change is
designed to align the Exchange's Fee Schedule with amended Rule 610(d)
by providing certainty as to the Exchange's transaction fees at the
time of execution. The Exchange also notes that all Industry Members
that offer tiered fees and rebates based on trading volume in NMS
Securities will be required to comply with amended Rule 610(d). To the
extent that competing exchanges are proposing or will propose similar
amendments to their Fee Schedules, this proposed rule change does not
impose a burden on competition.
[[Page 743]]
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) \37\ of the Act.
---------------------------------------------------------------------------
\37\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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) \38\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\38\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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-2025-39 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-2025-39. 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 filing 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-2025-39 and should be submitted on
or before January 29, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
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\39\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-00114 Filed 1-7-26; 8:45 am]
BILLING CODE 8011-01-P