Self-Regulatory Organizations; Investors Exchange LLC; Order Approving Proposed Rule Change To Adopt Rule 14.602 To Describe the Complimentary Products and Services To Be Made Available to All Listed Companies, 48733-48734 [2017-22644]
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Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81872; File No. SR–IEX–
2017–20]
Self-Regulatory Organizations;
Investors Exchange LLC; Order
Approving Proposed Rule Change To
Adopt Rule 14.602 To Describe the
Complimentary Products and Services
To Be Made Available to All Listed
Companies
October 13, 2017.
rmajette on DSKBCKNHB2PROD with NOTICES
I. Introduction
On August 10, 2017, the Investors
Exchange LLC (‘‘IEX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
adopt Rule 14.602 to describe the
complimentary products and services to
be made available to all listed
companies. The proposed rule change
was published for comment in the
Federal Register on August 29, 2017.3
No comment letters were received in
response to the Notice. This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
The Exchange has proposed to adopt
Rule 14.602 to describe the
complimentary products and services
that will be offered to all listed
companies pursuant to a listing program
that the Exchange intends to begin in
2017.4
In particular, the Exchange has
proposed to provide all listed
companies with the same optional
complimentary services through access
to IEX Issuer, a market information
analytics platform consisting of access
to a team of market professionals and
web-based content.5 As described by the
Exchange in its proposal, the team of
market professionals will provide
market intelligence, fundamental and
technical trading analysis, and real-time
market information to all listed
companies.6 The Exchange also stated
that the web-based portion of IEX Issuer
will provide similar information that
will enable all listed companies to
follow their stock’s trading, competitors,
and market activity through an online
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 81469
(August 23, 2017), 82 FR 41077 (‘‘Notice’’).
4 See id. at 41078.
5 See proposed Rule 14.602.
6 See id.
2 17
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15:13 Oct 18, 2017
Jkt 244001
interface.7 Further, IEX noted that IEX
Issuer may, from time to time, provide
information about products and services
from third-party vendors that IEX
determines may be relevant to listed
issuers, without any subsidy or other
involvement by the Exchange for such
products and services.8 The proposed
rule text states that the Exchange will
provide a description of all products
and services available through IEX
Issuer on its Web site.9
The Exchange represented in its
proposal that all issuers listed on the
Exchange will have access to services
through IEX Issuer on the same basis
and that the Exchange will not be
proposing to offer any additional
products and services to listed
companies on a tiered or differentiated
basis.10
III. Discussion and Commission
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of Section 6 of the Act.11
Specifically, the Commission finds that
the proposal is consistent with Sections
6(b)(4) 12 and 6(b)(5) of the Act 13 in
particular, in that the proposed rule is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among Exchange
members, issuers, and other persons
using the Exchange’s facilities, and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. Moreover,
the Commission finds that the proposed
rule change is consistent with Section
6(b)(8) of the Act 14 in that it does not
impose any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
The Commission believes that the
proposed rule change, which would
permit the Exchange to provide
complimentary products and services to
all listed companies through IEX Issuer,
as described above,15 is appropriate and
consistent with the Act. The
7 See
Notice, supra note 3, at 41078.
proposed Rule 14.602. The provision of any
products and services from a third-party vendor
would need to be effected through arrangements
directly between the listed issuer and the thirdparty vendor, without any subsidy or other
involvement by the Exchange. See id.
9 See id.
10 See Notice, supra note 3, at 41078.
11 15 U.S.C. 78f. In approving this proposed rule
change, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
12 15 U.S.C. 78f(b)(4).
13 15 U.S.C. 78f(b)(5).
14 15 U.S.C. 78f(b)(8).
15 See supra notes 5–7 and accompanying text.
8 See
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
48733
Commission believes that by describing
in its Rules the products and services
available to listed companies, the
Exchange is adding greater transparency
to its rules and the fees applicable to
such companies.16 This will help to
ensure that individual listed companies
are not given specially negotiated
packages of products and services to list
or remain listed that would raise unfair
discrimination issues under the Act.
The Commission notes that all listed
companies will receive access to the
same services on the same basis without
any differentiation and the Exchange is
not proposing to offer any additional
products and services to listed
companies on a tiered or differentiated
basis. Accordingly, the Commission
believes that the proposed rule change
is consistent with the requirements of
the Act and, in particular, that the
products and services are equitably
allocated among issuers consistent with
Section 6(b)(4) of the Act, and the rule
does not unfairly discriminate between
issuers consistent with Section 6(b)(5) of
the Act.
As described above, the Exchange will
provide all of the products and services
and will separately provide information
about additional products and services
available from third-party vendors that
IEX determines may be relevant to listed
issuers. As noted by the Exchange in its
proposal, listed companies may elect to
purchase products and services from
other vendors, or not to use any such
products and services, rather than
accepting the products and services
offered by the Exchange.17 The
Exchange stated that the provision of
any products and services from a thirdparty vendor would need to be effected
through arrangements directly between
the listed issuer and the third-party
vendor, without any subsidy or other
involvement by the Exchange.18 The
Exchange further stated that it does not
have exclusive arrangements with thirdparty vendors with respect to any
optional access to discounted products
and services from third-party vendors.19
The Exchange has represented that
listed companies will not be required to
accept any discounted products and
16 The Commission views complimentary
products and services provided by exchanges to
listed companies as a discount on the ultimate
listing fees paid by such companies. See, e.g.,
Securities Exchange Act Release Nos. 65127
(August 12, 2011), 76 FR 51449 (August 18, 2011)
(order approving SR–NYSE–2011–20) and 65963
(December 15, 2011), 76 FR 79262 (December 21,
2011) (order approving SR–NASDAQ–2011–122).
17 See Notice, supra note 3, at 41079.
18 This representation is also specifically set forth
in the proposed rule text.
19 See Notice, supra note 3, at 41079.
E:\FR\FM\19OCN1.SGM
19OCN1
48734
Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices
services as a condition to listing.20 The
Commission believes that these
representations should additionally
help to ensure that individual listed
companies are not given specially
negotiated deals, through Exchange
subsidized discounts on products and
services from third-party vendors, to list
or remain listed that would raise unfair
discrimination issues under the Act .
The Commission believes that the
Exchange is responding to competitive
pressures in the market for listings in
making this proposal. Specifically, the
Exchange stated in its proposal that it
expects to face competition as a new
entrant in the market for exchange
listings and that it believes the
complimentary products and services
that it offers to listed companies will
facilitate its ability to attract and retain
listings.21 In particular, the Exchange
states that it expects to face significant
competition from the New York Stock
Exchange (‘‘NYSE’’) and the Nasdaq
Stock Market LLC (‘‘Nasdaq’’) for
listings, both of which offer
complimentary products and services to
listed companies.22 Accordingly, the
Commission believes that the proposed
rule reflects the current competitive
environment for exchange listings
among national securities exchanges,
and is appropriate and consistent with
Section 6(b)(8) of the Act.23
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,24 that the
proposed rule change (SR–IEX–2017–
20), be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Eduardo A. Aleman,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81871; File No. SR–DTC–
2017–018]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
DTC Distributions Guide Relating to
Announcements and Tax Treatment of
Certain Corporate Action Events and
To Amend the DTC Fee Schedule
October 13, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
2, 2017, The Depository Trust Company
(‘‘DTC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which Items
have been prepared by the clearing
agency. DTC filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rules 19b–4(f)(2) and
(f)(4) thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change 5 would (i)
revise the Distributions Guide to (A)
enhance the DTC Announcements
feature (‘‘Announcements’’) within the
DTC Distributions Service
(‘‘Distributions Service’’) 6 by adding
new corporate action events that do not
involve the payment of funds or
distribution of Securities through DTC,
but which may result in a taxable event
for holders (‘‘Tax Event’’), as a type of
distribution covered by Announcements
(‘‘Distribution Event’’) 7 and (B) make
[FR Doc. 2017–22644 Filed 10–18–17; 8:45 am]
1 15
BILLING CODE 8011–01–P
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2) and (f)(4).
5 Each capitalized term not otherwise defined
herein has its respective meaning as set forth in the
Rules, By-Laws and Organization Certificate of DTC
(the ‘‘DTC Rules’’), available at https://
www.dtcc.com/legal/rules-and-procedures.aspx and
the DTC Distributions Service Guide (‘‘Distributions
Guide’’), available at https://www.dtcc.com/∼/
media/Files/Downloads/legal/service-guides/
Service%20Guide%20Distributions.pdf.
6 The Distributions Service includes DTC’s
announcement, collection, allocation and reporting
of dividend, interest and certain principal payments
on behalf of Participants holding Securities at DTC.
See Distributions Guide, supra note 1 at 9.
7 Distribution Events covered by Announcements
include cash dividends, interest, principal, capital
gains, sale of rights on American depositary
receipts, return of capital, dividend with option,
rmajette on DSKBCKNHB2PROD with NOTICES
2 17
20 See
id.
id. at 41078.
22 See id. See also Section 907.00 of the NYSE
Listed Company Manual and Nasdaq Rule IM–
5900–7.
23 15 U.S.C. 78f(b)(8).
24 15 U.S.C. 78s(b)(2).
25 17 CFR 200.30–3(a)(12).
21 See
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15:13 Oct 18, 2017
Jkt 244001
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
technical and conforming changes
relating to U.S. tax withholding and
information reporting performed by
DTC with respect to Tax Events; and (ii)
add a fee relating to the announcement
of Tax Events (‘‘New Fee’’) to the DTC
Fee Schedule (‘‘Fee Schedule’’),8 as
discussed below.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The proposed rule change would (i)
revise the Distributions Guide to (A)
enhance Announcements by adding Tax
Events as a Distribution Event and (B)
make technical and conforming changes
relating to U.S. tax withholding and
information reporting performed by
DTC with respect to Tax Events; and (ii)
add the New Fee to the Fee Schedule,
as discussed below.
A. Distributions Service
Announcements Feature
The Distributions Service includes the
announcement, collection, allocation
and reporting by DTC, on behalf of its
Participants, of dividend, interest and
principal payments for Eligible
Securities held by Participants at DTC.
This centralized processing provides
efficiency for Participants for their
receipt of (i) payment information and
(ii) payments on Distribution Events,
from multiple issuers and agents.9 In
this regard, Announcements provides
Participants with information pertaining
to their record date (‘‘Record Date’’) 10
positions for Distribution Events.11 This
stock splits, stock dividends, automatic dividend
reinvestments, spinoffs, rights distributions, pay in
kind, and liquidation. Distributions Guide, supra
note 1 at 12.
8 Available at https://www.dtcc.comn/media/Files/
Downloads/legal/fee-guides/dtcfeeguide.pdf?la=en.
9 See Distributions Guide, supra note 5 at 9.
10 The Record Date is the date set by an issuer of
a security by which an investor must own the
security in order to be eligible to receive an
upcoming distribution.
11 See Distributions Guide, supra note 5 at 11–13.
E:\FR\FM\19OCN1.SGM
19OCN1
]]>Agencies
[Federal Register Volume 82, Number 201 (Thursday, October 19, 2017)]
[Notices]
[Pages 48733-48734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22644]
[[Page 48733]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81872; File No. SR-IEX-2017-20]
Self-Regulatory Organizations; Investors Exchange LLC; Order
Approving Proposed Rule Change To Adopt Rule 14.602 To Describe the
Complimentary Products and Services To Be Made Available to All Listed
Companies
October 13, 2017.
I. Introduction
On August 10, 2017, the Investors Exchange LLC (``IEX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt Rule 14.602 to describe the complimentary
products and services to be made available to all listed companies. The
proposed rule change was published for comment in the Federal Register
on August 29, 2017.\3\ No comment letters were received in response to
the Notice. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 81469 (August 23,
2017), 82 FR 41077 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange has proposed to adopt Rule 14.602 to describe the
complimentary products and services that will be offered to all listed
companies pursuant to a listing program that the Exchange intends to
begin in 2017.\4\
---------------------------------------------------------------------------
\4\ See id. at 41078.
---------------------------------------------------------------------------
In particular, the Exchange has proposed to provide all listed
companies with the same optional complimentary services through access
to IEX Issuer, a market information analytics platform consisting of
access to a team of market professionals and web-based content.\5\ As
described by the Exchange in its proposal, the team of market
professionals will provide market intelligence, fundamental and
technical trading analysis, and real-time market information to all
listed companies.\6\ The Exchange also stated that the web-based
portion of IEX Issuer will provide similar information that will enable
all listed companies to follow their stock's trading, competitors, and
market activity through an online interface.\7\ Further, IEX noted that
IEX Issuer may, from time to time, provide information about products
and services from third-party vendors that IEX determines may be
relevant to listed issuers, without any subsidy or other involvement by
the Exchange for such products and services.\8\ The proposed rule text
states that the Exchange will provide a description of all products and
services available through IEX Issuer on its Web site.\9\
---------------------------------------------------------------------------
\5\ See proposed Rule 14.602.
\6\ See id.
\7\ See Notice, supra note 3, at 41078.
\8\ See proposed Rule 14.602. The provision of any products and
services from a third-party vendor would need to be effected through
arrangements directly between the listed issuer and the third-party
vendor, without any subsidy or other involvement by the Exchange.
See id.
\9\ See id.
---------------------------------------------------------------------------
The Exchange represented in its proposal that all issuers listed on
the Exchange will have access to services through IEX Issuer on the
same basis and that the Exchange will not be proposing to offer any
additional products and services to listed companies on a tiered or
differentiated basis.\10\
---------------------------------------------------------------------------
\10\ See Notice, supra note 3, at 41078.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act.\11\ Specifically, the Commission finds that the proposal is
consistent with Sections 6(b)(4) \12\ and 6(b)(5) of the Act \13\ in
particular, in that the proposed rule is designed to provide for the
equitable allocation of reasonable dues, fees, and other charges among
Exchange members, issuers, and other persons using the Exchange's
facilities, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. Moreover, the Commission finds
that the proposed rule change is consistent with Section 6(b)(8) of the
Act \14\ in that it does not impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f. In approving this proposed rule change, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(4).
\13\ 15 U.S.C. 78f(b)(5).
\14\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Commission believes that the proposed rule change, which would
permit the Exchange to provide complimentary products and services to
all listed companies through IEX Issuer, as described above,\15\ is
appropriate and consistent with the Act. The Commission believes that
by describing in its Rules the products and services available to
listed companies, the Exchange is adding greater transparency to its
rules and the fees applicable to such companies.\16\ This will help to
ensure that individual listed companies are not given specially
negotiated packages of products and services to list or remain listed
that would raise unfair discrimination issues under the Act.
---------------------------------------------------------------------------
\15\ See supra notes 5-7 and accompanying text.
\16\ The Commission views complimentary products and services
provided by exchanges to listed companies as a discount on the
ultimate listing fees paid by such companies. See, e.g., Securities
Exchange Act Release Nos. 65127 (August 12, 2011), 76 FR 51449
(August 18, 2011) (order approving SR-NYSE-2011-20) and 65963
(December 15, 2011), 76 FR 79262 (December 21, 2011) (order
approving SR-NASDAQ-2011-122).
---------------------------------------------------------------------------
The Commission notes that all listed companies will receive access
to the same services on the same basis without any differentiation and
the Exchange is not proposing to offer any additional products and
services to listed companies on a tiered or differentiated basis.
Accordingly, the Commission believes that the proposed rule change is
consistent with the requirements of the Act and, in particular, that
the products and services are equitably allocated among issuers
consistent with Section 6(b)(4) of the Act, and the rule does not
unfairly discriminate between issuers consistent with Section 6(b)(5)
of the Act.
As described above, the Exchange will provide all of the products
and services and will separately provide information about additional
products and services available from third-party vendors that IEX
determines may be relevant to listed issuers. As noted by the Exchange
in its proposal, listed companies may elect to purchase products and
services from other vendors, or not to use any such products and
services, rather than accepting the products and services offered by
the Exchange.\17\ The Exchange stated that the provision of any
products and services from a third-party vendor would need to be
effected through arrangements directly between the listed issuer and
the third-party vendor, without any subsidy or other involvement by the
Exchange.\18\ The Exchange further stated that it does not have
exclusive arrangements with third-party vendors with respect to any
optional access to discounted products and services from third-party
vendors.\19\ The Exchange has represented that listed companies will
not be required to accept any discounted products and
[[Page 48734]]
services as a condition to listing.\20\ The Commission believes that
these representations should additionally help to ensure that
individual listed companies are not given specially negotiated deals,
through Exchange subsidized discounts on products and services from
third-party vendors, to list or remain listed that would raise unfair
discrimination issues under the Act .
---------------------------------------------------------------------------
\17\ See Notice, supra note 3, at 41079.
\18\ This representation is also specifically set forth in the
proposed rule text.
\19\ See Notice, supra note 3, at 41079.
\20\ See id.
---------------------------------------------------------------------------
The Commission believes that the Exchange is responding to
competitive pressures in the market for listings in making this
proposal. Specifically, the Exchange stated in its proposal that it
expects to face competition as a new entrant in the market for exchange
listings and that it believes the complimentary products and services
that it offers to listed companies will facilitate its ability to
attract and retain listings.\21\ In particular, the Exchange states
that it expects to face significant competition from the New York Stock
Exchange (``NYSE'') and the Nasdaq Stock Market LLC (``Nasdaq'') for
listings, both of which offer complimentary products and services to
listed companies.\22\ Accordingly, the Commission believes that the
proposed rule reflects the current competitive environment for exchange
listings among national securities exchanges, and is appropriate and
consistent with Section 6(b)(8) of the Act.\23\
---------------------------------------------------------------------------
\21\ See id. at 41078.
\22\ See id. See also Section 907.00 of the NYSE Listed Company
Manual and Nasdaq Rule IM-5900-7.
\23\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\24\ that the proposed rule change (SR-IEX-2017-20), be, and hereby
is, approved.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
---------------------------------------------------------------------------
\25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22644 Filed 10-18-17; 8:45 am]
BILLING CODE 8011-01-P
