Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Certain Auction Rules Governing the Pricing of Non-Displayed Orders Resting on the Continuous Book for the Opening and Closing Auctions, 9781-9786 [2018-04559]
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Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
pricing out of the Initiating Participant’s
complete control. The proposal is
structured to offer the same
enhancement to all market participants
and would not impose a competitive
burden on any participant. The
Exchange notes that it operates in a
highly competitive market in which
market participants can readily direct
order flow to competing venues who
offer similar functionality. The
Exchange believes the proposed rule
change is pro-competitive because it
would enable the Exchange to provide
market participants with functionality
that is similar to that of other options
exchanges. The Exchange notes that not
having the Complex CUBE Auction at
the Exchange places the Exchange at a
`
competitive disadvantage vis-a-vis other
exchanges that offer similar price
improvement mechanisms.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or up to 90 days (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEAMER–2018–05. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEAMER–2018–05 and
should be submitted on or before March
28, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.68
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018–04625 Filed 3–6–18; 8:45 am]
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Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEAMER–2018–05 on the subject
line.
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82799; File No. SR–IEX–
2018–03]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Certain Auction Rules Governing the
Pricing of Non-Displayed Orders
Resting on the Continuous Book for
the Opening and Closing Auctions
March 1, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on February
16, 2018, Investors Exchange LLC
(‘‘IEX’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
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 Securities Exchange
Act of 1934 (‘‘Act’’),4 and Rule 19b–4
thereunder,5 Investors Exchange LLC
(‘‘IEX’’ or ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
to amend Rules 11.350(a)(2) and
11.350(a)(30) to properly reflect the
manner in which the Exchange will
handle non-displayed orders resting on
the Continuous Book 6 within the
Reference Price Range 7 in crossed and
one-sided markets 8 in the Opening and
Closing Auctions,9 and resolve a
conflict with the Exchange’s existing
rules regarding the pricing of such
orders. The Exchange has designated
this rule change as ‘‘non-controversial’’
under Section 19(b)(3)(A) of the Act 10
and provided the Commission with the
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(1).
5 17 CRF 240.19b–4.
6 See Rule 11.350(a)(4).
7 See Rule 11.350(a)(30).
8 A crossed market refers to a scenario in which
the protected national best bid (‘‘Protected NBB’’)
is greater than the protected national best offer
(‘‘Protected NBO’’). A one-sided market refers to a
scenario in which there is only a Protected NBB or
Protected NBO. See Rule 1.160(bb).
9 See Rules 11.350(c) and (d), respectively.
10 15 U.S.C. 78s(b)(3)(A).
2 15
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Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
notice required by Rule 19b–4(f)(6)
thereunder.11
The text of the proposed rule change
is available at the Exchange’s website at
www.iextrading.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of
and basis for the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statement 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 purpose of this proposed rule
change is to amend Rules 11.350(a)(2)
and 11.350(a)(30) to properly reflect the
manner in which the Exchange will
handle non-displayed orders resting on
the Continuous Book within the
Reference Price Range in crossed and
one-sided markets in the Opening and
Closing Auctions, and resolve a conflict
with the Exchange’s existing rules
regarding the pricing of such orders.
On August 4, 2017, the Commission
approved a proposed rule change filed
by the Exchange to adopt rules
governing auctions in IEX-listed
securities, including Opening and
Closing Auction processes that establish
IEX Official Opening and Closing Prices
for each trading day.12 The Exchange
intends to launch a listings program for
corporate issuers in 2018. IEX Rule
11.350 is applicable to auctions in IEXlisted securities.
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IEX Opening Auction
Pursuant to Rule 11.350(c)(1), Users
may submit orders eligible for execution
in the Opening Auction 13 at the
beginning of the Pre-Market Session,14
which begins at 8:00 a.m.15 Any orders
designated for the Opening Auction
11 17
CFR 240.19b–4.
Securities Exchange Act Release No. 81316
(August 4, 2017), 82 FR 37474 (August 10, 2017).
See also Rules 11.350(a)(12) and (10), respectively.
13 See Rule 11.350(c).
14 See Rule 1.160(z).
15 All times are in Eastern Time.
12 See
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Book 16 will be queued until 9:30 a.m.
at which time they will be eligible to be
executed in the Opening Auction. In
addition to orders on the Opening
Auction Book, limit orders on the
Continuous Book with a time-in-force of
SYS or GTT are eligible to execute in
the Opening Auction (‘‘Pre-market
Continuous Book’’).17 The Exchange
does not place any restrictions on the
entry of orders to the Pre-market
Continuous Book to avoid unnecessary
disruptions to continuous trading.
Pursuant to proposed Rule
11.350(c)(2), beginning at the Opening
Auction Lock-in Time 18 and updated
every one second thereafter, the
Exchange will disseminate IEX Auction
Information 19 via electronic means. The
Exchange will attempt to conduct an
Opening Auction for all IEX-listed
securities at the start of Regular Market
Hours 20 (i.e., 9:30 a.m.) in accordance
with the clearing price determination
process set forth in Rule 11.350(c)(2)(B).
All orders eligible for execution in the
Opening Auction (i.e., orders on the
Opening Auction Book and orders on
the Pre-Market Continuous Book that
are not Auction Ineligible Orders 21) are
Auction Eligible Orders.22 Auction
Eligible Orders will be ranked and
maintained in accordance with IEX
auction priority, pursuant to Rule
11.350(b). Moreover, pursuant to Rule
11.350(a)(2), non-displayed buy (sell)
orders on the Pre-Market Continuous
Book with a resting price (as defined in
Rule 11.350(b)(1)(A)(i)) within the
Reference Price Range will be priced at
the Protected NBB (NBO) for the
purpose of determining the clearing
price,23 but will be ranked and eligible
for execution in the Opening Auction
match at the order’s resting price.24
16 Pursuant to Rule 11.350(a)(1)(A), orders on the
Opening Auction Book would include MOO orders,
LOO orders, market orders with a time-in-force of
DAY, and limit orders with a time-in-force of DAY
or GTX. See Rules 11.350(a)(25), 11.350(a)(21),
11.190(a)(2)(E)(iii), and 11.190(a)(1)(E)(iii) and (v),
respectively.
17 See Rule 11.190(a)(1)(E)(iv) and (vi).
18 See Rule 11.350(a)(22).
19 See Rule 11.350(a)(9).
20 See Rule 1.160(gg).
21 See Rule 11.350(a)(3).
22 See Rule 11.350(a)(2).
23 Note, non-displayed buy (sell) orders on the
Continuous Book with a resting price (as defined in
Rule 11.350(b)(1)(A)(i)) within the Reference Price
Range will be priced at the Protected NBB (NBO)
for the purpose of determining the clearing price
and the Indicative Clearing Price disseminated in
IEX Auction Information as set forth in Rule
11.350(a)(9)(E).
24 The Exchange notes that in the case of an IPO,
Halt, or Volatility Auction, there is no continuous
trading and therefore no Continuous Book.
Accordingly, there would be no non-displayed
interest on the Continuous Book to which this
functionality would apply.
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Thus, non-displayed orders will
influence the Opening Auction clearing
price if such price is at or outside the
Reference Price Range, but not if the
clearing price is within the Reference
Price Range.
IEX Closing Auction
Similar to the Opening Auction,
pursuant to Rule 11.350(d)(1), the
Exchange allows Users to submit orders
eligible for execution in the Closing
Auction 25 at the beginning of the PreMarket Session, which begins at 8:00
a.m. Any orders designated for the
Closing Auction Book 26 are queued
until 4:00 p.m. (or such earlier time as
the Regular Market Session 27 ends on
days that IEX is subject to an early
closing) at which time they will be
eligible to be executed in the Closing
Auction. In addition to orders on the
Closing Auction Book, all limit and
pegged orders resting on the Continuous
Book with a time-in-force of DAY, GTX,
GTT, or SYS are eligible for execution
in the Closing Auction, (‘‘RegularMarket Continuous Book’’).28 Similar to
the Opening Auction, the Exchange
does not place any restrictions on the
entry of orders to the Regular-Market
Continuous Book to avoid unnecessary
disruptions to continuous trading.
Pursuant to Rule 11.350(d)(2)(A),
beginning at the Closing Auction Lockin Time 29 and updated every one
second thereafter, the Exchange will
disseminate IEX Auction Information
via electronic means. The Exchange will
attempt to conduct a Closing Auction
for all IEX-listed securities at 4:00 p.m.,
or such earlier time as the Regular
Market Session ends on days that IEX is
subject to an early closing, in
accordance with the clearing price
determination process set forth in Rule
11.350(d)(2)(B). All orders eligible for
execution in the Closing Auction (i.e.,
orders on the Closing Auction Book and
orders on the Regular-Market
Continuous Book) are Auction Eligible
Orders. Auction Eligible Orders will be
ranked in accordance with IEX Auction
Priority set forth in Rule 11.350(b).
Moreover, pursuant to Rule 11.350(a)(2),
25 See
Rule 11.350(d).
to Rule 11.350(a)(1)(B), orders on the
Closing Auction Book would include MOC orders
and LOC orders. See Rules 11.350(a)(24), and
11.350(a)(20).
27 See Rule 1.160(gg).
28 The following types of orders are not eligible
for execution in the Closing Auction: market orders
(except MOC orders) and orders with a time-inforce of IOC or FOK, because Market orders entered
during the Regular Market Session and orders
marked IOC or FOK do not rest on the Continuous
Book, and therefore are not eligible for the Closing
Auction.
29 See Rule 11.350(a)(22).
26 Pursuant
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non-displayed buy (sell) orders on the
Regular-Market Continuous Book with a
resting price (as defined in Rule
11.350(b)(1)(A)(i)) within the Reference
Price Range will be priced at the
Protected NBB (NBO) for the purpose of
determining the clearing price,30 but
will be ranked and eligible for execution
in the Closing Auction match at the
order’s resting price. Thus, as with the
Opening Auction, non-displayed orders
resting on the Regular-Market
Continuous Book will influence the
Closing Auction clearing price if such
price is at or outside the Reference Price
Range, but not if the clearing price is
within the Reference Price Range.
As described in the rule filing
proposing rules governing auctions in
IEX-listed securities,31 the Exchange’s
handling of non-displayed interest on
the Continuous Book resting within the
Reference Price Range in the Opening
and Closing Auction is designed to
protect the anonymity of resting nondisplayed interest on the Continuous
Book during the dissemination of IEX
Auction Information. Specifically, the
Exchange believes that without such
treatment, information leakage would
occur if the Indicative Clearing Price is
closer to the midpoint of the NBBO than
the Reference Price 32 that is
disseminated via IEX Auction
Information. This would indicate that
there is non-displayed interest resting
on the Continuous Book for at least the
size of the imbalance and priced at least
as aggressively as the Reference Price.
Reference Price Range
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For the Opening or Closing Auction,
the Reference Price Range is defined in
Rule 11.350(a)(30) as the prices between
and including the Protected NBB and
Protected NBO, if the Protected NBBO is
valid. The Protected NBBO is valid
when there is both a Protected NBB and
Protected NBO in the security (i.e., the
market is not one-sided or zero-sided),
the Protected NBBO is not crossed, and
the midpoint of the Protected NBBO is
less than or equal to the Maximum
Percentage 33 away from both the
Protected NBB and Protected NBO. The
30 Note, non-displayed buy (sell) orders on the
Continuous Book with a resting price (as defined in
proposed Rule 11.350(b)(1)(A)(i)) within the
Reference Price Range will be priced at the
Protected NBB (NBO) for the purpose of
determining the clearing price and the Indicative
Clearing Price disseminated in IEX Auction
Information as set forth in Rule 11.350(a)(9)(E).
31 See Securities Exchange Act Release No. 80583
(May 3, 2017), 82 FR 21634 (May 9, 2017). See also
supra note 12.
32 See Rule 11.350(a)(9)(A).
33 See Rule 11.350(a)(26).
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Maximum Percentage values set forth in
Rule 11.350(a)(26) are as follows:
• 5% if the Protected Midpoint
Price 34 is less than or equal to $25.00;
• 2.5% if the Protected Midpoint
Price is greater than $25.00 but less than
or equal to $50.00; or
• 1.5% if the Protected Midpoint
Price is greater than $50.00.
In the event that the Protected NBBO
is not valid, the Reference Price Range
will be equal to the IEX best bid and
offer (‘‘IEX BBO’’), if the IEX BBO is
valid. The IEX BBO is valid where there
is both an IEX best bid and IEX best
offer in the security (i.e., the IEX BBO
is not one-sided or zero-sided), and the
midpoint of the IEX BBO is less than or
equal to the Maximum Percentage away
from both the IEX best bid and the IEX
best offer. Where the IEX BBO is not
valid, the Reference Price Range is set
to the higher (lower) price of the Final
Consolidated Last Sale Eligible Trade,35
or the Protected NBB (NBO), if not
crossed, or the IEX best bid (offer).
Proposed Changes
During development and testing of the
functionality for Opening and Closing
Auctions the Exchange identified that in
crossed markets, Rule 11.350(a)(2) does
not properly reflect the Exchange’s
planned handling of non-displayed
orders resting on the Continuous Book
within the Reference Price Range, and
conflicts with the Exchange’s existing
rules regarding the pricing of orders.
Specifically, Rule 11.350(a)(2) states in
relevant part that non-displayed buy
(sell) orders on the Continuous Book
will be priced to the Protected NBB
(NBO) for the purposes of determining
the clearing price. However, as
discussed above, the Reference Price
Range is generally—but not always—
equal to the Protected NBBO.36
Therefore, when the Reference Price
Range does not equal the Protected
NBBO, pricing non-displayed buy (sell)
orders to the Protected NBB (NBO) may
34 Id.
35 See Rule 11.350(a)(6), which defines the Final
Consolidated Last Sale Eligible Trade as the last
trade prior to the end of Regular Market Hours, or
where applicable, prior to trading in the security
being halted or paused, that is last sale eligible and
reported to the Consolidated Tape, rounded to the
nearest MPV or Midpoint Price calculated by the
System, whichever is closer. If no such transaction
was executed in accordance with the preceding
sentence, then the Final Consolidated Last Sale
Eligible Trade will be the previous official closing
price.
36 For example, when the Protected NBBO is
crossed, the Reference Price Range would be equal
to the IEX BBO (assuming it was valid). In addition,
when the Protected NBBO is one-sided (and
therefore the IEX BBO is also necessarily onesided), the Reference Price Range would be equal
to the higher (lower) of the Final Consolidated Last
Sale Eligible Trade, or the Protected NBB (NBO).
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result in such orders being priced
beyond a User’s defined limit price, or
the Midpoint Price Constraint as set
forth in Exchange Rule 11.190(h)(2) and
11.190(h)(3)(D)(i).
For example, if the Protected NBBO is
$10.15 x $10.09 (crossed), and the IEX
BBO is $10.05 x $10.10, the Reference
Price Range would be equal to the IEX
BBO. However, pursuant to current Rule
11.350(a)(2), non-displayed orders to
buy resting at their limit price on the
Continuous Book between $10.05 and
$10.09 would be priced to the Protected
NBB of $10.15 for purposes of
determining the clearing price, which is
more aggressive than their User defined
limit prices, as well as the Midpoint
Price Constraint of $10.09 (pursuant to
Rule 11.190(h)(3)(D)(i)).
Thus, the Exchange proposes to
amend Rule 11.350(a)(2) to clarify that
for Opening and Closing Auctions, nondisplayed buy (sell) orders on the
Continuous Book with a resting price
within the Reference Price Range will be
priced at the lower (upper) threshold of
the Reference Price Range. As a result,
when the Reference Price Range does
not equal the Protected NBBO (e.g.,
when the Protected NBBO is crossed),
non-displayed buy (sell) orders on the
Continuous Book with a resting price
within the Reference Price Range will be
adjusted to less aggressive prices,
consistent with the User defined limit
price, if any, as well as the Midpoint
Price Constraint.37
In addition to the clarification above,
the Exchange further identified that
Rule 11.350(a)(2) does not explicitly
reflect the Exchange’s handling of nondisplayed orders resting on the
Continuous Book within the Reference
Price Range in one-sided markets.
Specifically, as described above, Rule
11.350(a)(2) states in relevant part that
non-displayed buy (sell) orders resting
on the Continuous Book within the
Reference Price Range will be priced to
the Protected NBB (NBO) for the
purposes of determining the clearing
price. However, when there is no valid
Protected NBBO or IEX BBO, and thus
the Reference Price Range is a single
price (e.g., when the Reference Price
Range is equal to the Final Consolidated
37 Modifying the example above under the
proposed Rule, if the Protected NBBO is $10.15 x
$10.09 (crossed), and the IEX BBO is $10.05 x
$10.10, the Reference Price Range would be equal
to the IEX BBO. Pursuant to proposed Rule
11.350(a)(2), non-displayed orders to buy resting at
their limit price on the Continuous Book between
$10.05 and $10.09 would be priced to the IEX best
bid of $10.05 for purposes of determining the
clearing price, which is consistent with User
defined limit prices, as well as the Midpoint Price
Constraint of $10.09 (pursuant to Rule
11.190(h)(3)(D)(i)).
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Last Sale Eligible Trade), the Exchange’s
rules do not explicitly identify that nondisplayed buy (sell) orders on the
Continuous Book resting with a price
above (below) the Reference Price Range
will be priced equal to the Reference
Price Range for purposes of determining
the clearing price.
As discussed above, the treatment of
non-displayed interest on the
Continuous Book resting within the
Reference Price Range is generally
designed to protect the anonymity of
resting non-displayed interest on the
Continuous Book during the
dissemination of IEX Auction
Information. Accordingly, the
Exchange’s proposed handling of nondisplayed interest on the Continuous
Book when the Reference Price Range is
a single price (i.e., when in a one-sided
market the Reference Price Range is
equal to either the Final Consolidated
Last Sale Eligible Trade, Protected NBB,
Protected NBO, IEX best bid, or IEX best
offer) is designed with the same goal of
avoiding unnecessary information
leakage.
For example, if the Final Consolidated
Last Sale Eligible Trade is $10.20, the
Protected NBBO is $10.15 x $10.09
(crossed), and the IEX BBO is $10.05 x
$10.50 (beyond the Maximum
Percentage), both the Protected NBBO
and IEX BBO would be invalid. Thus,
pursuant to Rule 11.350(a)(30), the
Reference Price Range would be equal to
the Final Consolidated Last Sale Eligible
Trade of $10.20, which is higher than
the IEX best bid, ($10.05) and lower
than the IEX best offer ($10.50).38
Assuming IEX has non-displayed sell
orders resting at a price more aggressive
than the Reference Price Range between
$10.15 and $10.19, such orders would
be priced to $10.20 for purposes of
determining the clearing price. Pricing
such sell orders more passively to
$10.20 for purposes of determining the
clearing price would prevent such
interest from pushing the Indicative
Clearing Price 39 lower than the
Reference Price, while the Auction Book
Clearing Price 40 remains above the
Reference Price. Ordinarily, one would
expect the Reference Price to be more
aggressive than both the Indicative
Clearing Price and the Auction Book
Clearing Price. However, in this
example, because the Indicative
Clearing Price is more aggressive than
38 Note, the Exchange evaluates the Final Last
Sale Eligible Trade against the IEX BBO (even
though it is beyond the Maximum Percentage)
because the Protected NBBO is crossed, and
therefore does not accurately reflect the market for
the security.
39 See Rule 11.350(a)(9)(E).
40 See Rule 11.350(a)(9)(F).
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both the Reference Price and the
Auction Book Clearing Price, IEX
Auction Information would have
signaled the presence, size, and side of
the non-displayed orders resting on the
Continuous Book between $10.15 and
$10.19. However, because current Rule
11.350(a)(2) only addresses orders
resting within the Reference Price
Range, and the Reference Price Range in
the example above is a single price, Rule
11.350(a)(2) does not specify how nondisplayed buy (sell) orders on the
Continuous Book resting with a price
above (below) the Reference Price Range
will be priced. Accordingly, the
Exchange proposes to clarify that such
order will be priced equal to the
Reference Price Range for the purpose of
determining the clearing price.
Furthermore, the Exchange is
proposing to make a change to the
language in Rule 11.350(a)(30)(C) in
order to more clearly describe the
method of calculating the Reference
Price Range when both the Protected
NBBO and IEX BBO are not valid. The
fundamental purpose of existing Rule
11.350(a)(30)(C) is to constrain the
Reference Price Range to prices that
reflect the broader market for the
security. With regard to the pricing of
non-displayed buy (sell) orders resting
on the Continuous Book, the upper
(lower) threshold of the Reference Price
Range is utilized as a passive
benchmark to which such buy (sell)
orders will be effectively pegged for
purposes of determining the clearing
price, in order to avoid information
leakage as discussed above. Thus, as
described above, the Reference Price
Range is generally the Protected NBBO,
or alternatively the IEX BBO, when such
prices are valid. However, in the event
both the Protected NBBO and IEX BBO
are not valid, the Exchange determines
what price—between the Final
Consolidated Last Sale Eligible Trade,
and the available Protected NBB and/or
NBO, or IEX best bid and/or offer—best
reflects the market for the security.
Current Rule 11.350(a)(30), however,
pre-supposes that when evaluating
subsection (C), the market is necessarily
one-sided, and thus does not account for
when the market is two-sided (i.e., when
there is both a Protected NBB and
Protected NBO, and/or both an IEX best
bid and best offer, neither of which are
valid). Accordingly, the Exchange is
proposing to amend Rule
11.350(a)(30)(C) to more clearly describe
the method of determining the
Reference Price Range when neither the
Protected NBBO nor IEX BBO are valid
and the market is one-sided.
Additionally, the Exchange proposes to
re-letter current sub-paragraph (D) of
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Rule 11.350(a)(30) as new sub-paragraph
(E), and insert a new sub-paragraph (D)
to clearly describe the method of
determining the Reference Price Range
when neither the Protected NBBO nor
IEX BBO are valid and the market is
two-sided.
Specifically, proposed Rule
11.350(a)(30)(C) clarifies that if there is
neither a Valid Protected NBBO nor a
Valid IEX BBO, and the market is onesided, the Reference Price Range is
equal to the price of the Final
Consolidated Last Sale Eligible Trade,
unless such price is:
• Lower than the Protected NBB, in
which case the Reference Price Range
shall be the price of the Protected NBB;
or
• Higher than the Protected NBO, in
which case the Reference Price Range
shall be equal to the price of the
Protected NBO.
Moreover, proposed Rule
11.350(a)(30)(D) clarifies that if there is
neither a Valid Protected NBBO nor a
Valid IEX BBO and the market is twosided, the Reference Price Range is
equal to the price of the Final
Consolidated Last Sale Eligible Trade,
unless:
• The Protected NBBO is not crossed
and the price of the Final Consolidated
Last Sale Eligible Trade is either:
Æ Lower than the Protected NBB, in
which case the Reference Price Range
shall be equal to the price of the
Protected NBB; or
Æ Higher than the Protected NBO, in
which case the Reference Price Range
shall be equal to the price of the
Protected NBO.
• The Protected NBBO is crossed and
the price of the Final Consolidated Last
Sale Eligible Trade is either:
Æ Lower than the IEX best bid, in
which case the Reference Price Range
shall be equal to the price of the IEX
best bid; or
• Higher than the IEX best offer, in
which case the Reference Price Range
shall be equal to the price of the IEX
best offer.
The Exchange believes the proposed
modifications to Rule 11.350(a)(30) are
designed to avoid any potential
confusion regarding the Exchange’s
determination of the Reference Price
Range, and therefore further clarifies the
Exchange’s handling of non-displayed
interest resting on the Continuous Book
within the Reference Price Range
pursuant to Rule 11.350(a)(2).
Lastly, as announced in IEX Trading
Alerts #2017–015 and #2017–046, the
Exchange intends to become a primary
listing exchange and support its first
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IEX-listed security in 2018.41 In
addition, as part of the listings
initiative, the Exchange is providing a
series of industry wide weekend tests
for the Exchange and its Members to
exercise the various technology changes
required to support IEX Auctions and
listings functionality.42 Accordingly, the
Exchange is proposing to clarify its
handling of non-displayed orders
resting on the Continuous Book within
the Reference Price Range in advance of
the industry wide testing period in
order to avoid potential confusion, and
allow Members and other market
participants time to develop, test, and
deploy any necessary changes to
support such handling.
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2. Statutory Basis
IEX believes that the proposed rule
change is consistent with the provisions
of Section 6(b) 43 of the Act in general,
and furthers the objectives of Section
6(b)(5) of the Act 44 in particular, in that
it is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
The Exchange believes that the
proposed rule changes regarding the
handling of non-displayed orders
resting on the Continuous Book within
the Reference Price Range, as well as
non-displayed buy (sell) orders on the
Continuous Book resting with a price
above (below) the Reference Price Range
in one-sided markets, are consistent
with the protection of investors and the
public interest in that they do not
substantially alter the substantive
functionality governing the pricing of
such orders for the Opening and Closing
Auction. Specifically, as discussed
41 See IEX Trading Alert #2017–015 (Listings
Specifications, Testing Opportunities, and
Timelines), May 31, 2017. See also IEX Trading
Alert #2017–046 (IEX Listings Timeline Update),
originally published on Monday, October 30, 2017,
and re-published on Tuesday, October 31, 2017.
42 See, e.g., IEX Trading Alert #2017–028 (First
Listings Functionality Industry Test on Saturday,
August 26), August 17, 2017; IEX Trading Alert
#2017–037 (Second Listings Functionality Industry
Test on Saturday, September 9), September 7, 2017;
IEX Trading Alert #2017–039 (Third Listings
Functionality Industry Test on Saturday, September
23), September 18, 2017; IEX Trading Alert #2017–
040 (Rescheduled 4th Listing Functionality
Industry Test), September 29, 2017; IEX Trading
Alert #2017–046 (IEX Listings Timeline Update),
originally published on Monday, October 30, 2017,
and re-published on Tuesday, October 31, 2017;
and IEX Trading Alert #2017–047 (Fourth Listings
Functionality Industry Test on Saturday, November
4), October 31, 2017.
43 15 U.S.C. 78f.
44 15 U.S.C. 78f(b)(5).
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17:30 Mar 06, 2018
Jkt 244001
above, the proposed rules are designed
to achieve the Exchange’s existing
objective of preserving the anonymity of
non-displayed orders resting on the
Continuous Book, and resolve an
inconsistency between the handling of
such orders and the Exchanges existing
rules regarding pricing constraints (i.e.,
any User defined limit price, and the
Midpoint Price Constraint).
Furthermore, the Exchange believes
the proposed rule changes are consistent
with the protection of investors and the
public interest in that they are designed
to avoid any potential confusion
regarding the Exchange’s handling of
orders for Opening and Closing
Auctions as IEX continues industrywide testing to exercise the technology
changes being made by the Exchange
and its Members to support IEX as a
primary listing exchange. Additionally,
the Exchange believes the proposed
change to rule 11.350(a)(30)(C) to more
clearly describe the method of
calculating the Reference Price Range is
consistent with the Act and the
protection of investors and the public
interest, because as described above, it
is designed to make IEX’s rules more
complete, and descriptive of the
System’s functionality to avoid any
potential confusion among Members
and market participants regarding such
functionality. Furthermore, the
Exchange believes that by enhancing the
clarity regarding the method of deriving
the Reference Price Range, the proposed
rule change compliments the rule
changes regarding the pricing of nondisplayed orders resting on the
Continuous Book within the Reference
Price Range.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
IEX does not believe that the
proposed rule changes will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
correction does not impact inter-market
competition in any respect since it is
designed to achieve the Exchange’s
existing design objective of preserving
the anonymity of non-displayed orders
resting on the Continuous Book, and
resolve an inconsistency between the
handling of such orders and the
Exchanges [sic] existing rules regarding
pricing constraints (i.e., any User
defined limit price, and the Midpoint
Price Constraint), without substantially
altering the substantive functionality
governing the pricing of such orders for
the Opening and Closing Auction. Thus,
the Exchange believes there are no new
inter-market competitive burdens
PO 00000
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Fmt 4703
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9785
imposed as a result of the proposed rule
changes.
In addition, the Exchange does not
believe that the proposed changes will
have any impact on intra-market
competition. Specifically, as discussed
above, the proposed rule changes do not
substantively alter the functionality
governing the Opening and Closing
Auctions, and instead are designed to
achieve the Exchange’s existing design
objective of preserving the anonymity of
non-displayed orders resting on the
Continuous Book, and resolve an
inconsistency between the handling of
such orders and the Exchanges [sic]
existing rules regarding pricing
constraints (i.e., any User defined limit
price, and the Midpoint Price
Constraint). Furthermore, the Exchange
believes the proposed rule changes are
designed to make IEX’s rules more
complete, and descriptive of the
System’s functionality to avoid any
potential confusion among Members
and market participants regarding such
functionality, to the benefit of all market
participants. Lastly, the Exchange notes
that the proposed changes will apply to
all Members on a fair and equal basis.
Accordingly, the Exchange believes
there are no new intra-market
competitive burdens imposed as a result
of the proposed rule changes.
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 Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 45 and Rule 19b–
4(f)(6) thereunder.46 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b–
4(f)(6) thereunder.47
45 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
47 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory organization to give the Commission
written notice of its intent to file the proposed rule
change at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
46 17
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Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
A proposed rule change filed under
Rule 19b–4(f)(6) 48 normally does not
become operative for 30 days after the
date of the filing. However, pursuant to
Rule 19b–4(f)(6)(iii),49 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. In
its filing with the Commission, IEX has
asked the Commission to waive the 30day operative delay so that the proposal
may become operative immediately
upon filing. As noted above, IEX states
that the proposed changes do not
substantially alter the functionality
governing the pricing of non-displayed
orders in the Opening and Closing
Auctions and are designed to achieve
IEX’s objective of preserving the
anonymity of non-displayed orders
resting on the Continuous Book. In
addition, IEX notes that the proposed
changes also resolve an inconsistency
between the handling of non-displayed
orders and the Exchange’s existing
pricing constraints. IEX states that the
waiver of the operative delay will allow
IEX to implement the proposed changes
while the Exchange continues industrywide testing of the technology changes
that IEX and its Members are making to
support the Exchange as a listings
market. IEX notes that the proposed
clarifications regarding the handling of
non-displayed orders will provide
Members and other market participants
with time to develop, test, and deploy
any changes necessary to support the
handling of non-displayed orders. The
Commission believes that waiver of the
30-day operative delay is consistent
with the protection of investors and the
public interest because the proposed
changes to the operation of the Opening
and Closing Auctions, and in particular
the treatment of non-displayed orders
resting on the Continuous Book in a
manner that preserves the anonymity of
those orders, are consistent with the
Commission’s prior approval of IEX’s
auctions rules and do not raise new or
novel regulatory issues.50 In addition,
waiver of the operative delay will
provide IEX and its Members with time
to incorporate the revised functionality
into their testing as they continue to
prepare for IEX’s functioning as a
listings market, which, among other
things, will require IEX to conduct
Opening and Closing Auctions of IEXlisted securities. Therefore, the
Commission designates the proposed
rule change operative upon filing.51
48 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
50 See supra note 12.
51 For purposes only of waiving the operative
delay, the Commission has considered the proposed
At any time within 60 days of the
filing of such 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) 52 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
IEX–2018–03 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–IEX–2018–03. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–IEX–2018–03, and should
be submitted on or before March 28,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.53
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–04559 Filed 3–6–18; 8:45 am]
BILLING CODE P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82798; File No. SR–ICC–
2018–003]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of Filing of
Proposed Rule Change, SecurityBased Swap Submission, or Advance
Notice Relating to the ICC Operational
Risk Management Framework
March 1, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934,1 and
Rule 19b-4 thereunder,2 notice is hereby
given that on February 23, 2018, ICE
Clear Credit LLC (‘‘ICC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change, security-based swap
submission, or advance notice as
described in Items I, II and III below,
which Items have been prepared by ICC.
The Commission is publishing this
notice to solicit comments on the
proposed rule change, security-based
swap submission, or advance notice
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change, Security-Based Swap
Submission, or Advance Notice
The principal purpose of the
proposed rule change is to update ICC’s
Operational Risk Management
Framework. These revisions do not
require any changes to the ICC Clearing
Rules.
49 17
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17:30 Mar 06, 2018
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rule’s impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
52 15 U.S.C. 78s(b)(2)(B).
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53 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 83, Number 45 (Wednesday, March 7, 2018)]
[Notices]
[Pages 9781-9786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04559]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82799; File No. SR-IEX-2018-03]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Certain Auction Rules Governing the Pricing of Non-Displayed Orders
Resting on the Continuous Book for the Opening and Closing Auctions
March 1, 2018.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on February 16, 2018, Investors Exchange LLC (``IEX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 Securities
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\
Investors Exchange LLC (``IEX'' or ``Exchange'') is filing with the
Securities and Exchange Commission (``Commission'') a proposed rule
change to amend Rules 11.350(a)(2) and 11.350(a)(30) to properly
reflect the manner in which the Exchange will handle non-displayed
orders resting on the Continuous Book \6\ within the Reference Price
Range \7\ in crossed and one-sided markets \8\ in the Opening and
Closing Auctions,\9\ and resolve a conflict with the Exchange's
existing rules regarding the pricing of such orders. The Exchange has
designated this rule change as ``non-controversial'' under Section
19(b)(3)(A) of the Act \10\ and provided the Commission with the
[[Page 9782]]
notice required by Rule 19b-4(f)(6) thereunder.\11\
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CRF 240.19b-4.
\6\ See Rule 11.350(a)(4).
\7\ See Rule 11.350(a)(30).
\8\ A crossed market refers to a scenario in which the protected
national best bid (``Protected NBB'') is greater than the protected
national best offer (``Protected NBO''). A one-sided market refers
to a scenario in which there is only a Protected NBB or Protected
NBO. See Rule 1.160(bb).
\9\ See Rules 11.350(c) and (d), respectively.
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The text of the proposed rule change is available at the Exchange's
website at www.iextrading.com, at the principal office of the Exchange,
and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statement 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 purpose of this proposed rule change is to amend Rules
11.350(a)(2) and 11.350(a)(30) to properly reflect the manner in which
the Exchange will handle non-displayed orders resting on the Continuous
Book within the Reference Price Range in crossed and one-sided markets
in the Opening and Closing Auctions, and resolve a conflict with the
Exchange's existing rules regarding the pricing of such orders.
On August 4, 2017, the Commission approved a proposed rule change
filed by the Exchange to adopt rules governing auctions in IEX-listed
securities, including Opening and Closing Auction processes that
establish IEX Official Opening and Closing Prices for each trading
day.\12\ The Exchange intends to launch a listings program for
corporate issuers in 2018. IEX Rule 11.350 is applicable to auctions in
IEX-listed securities.
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 81316 (August 4,
2017), 82 FR 37474 (August 10, 2017). See also Rules 11.350(a)(12)
and (10), respectively.
---------------------------------------------------------------------------
IEX Opening Auction
Pursuant to Rule 11.350(c)(1), Users may submit orders eligible for
execution in the Opening Auction \13\ at the beginning of the Pre-
Market Session,\14\ which begins at 8:00 a.m.\15\ Any orders designated
for the Opening Auction Book \16\ will be queued until 9:30 a.m. at
which time they will be eligible to be executed in the Opening Auction.
In addition to orders on the Opening Auction Book, limit orders on the
Continuous Book with a time-in-force of SYS or GTT are eligible to
execute in the Opening Auction (``Pre-market Continuous Book'').\17\
The Exchange does not place any restrictions on the entry of orders to
the Pre-market Continuous Book to avoid unnecessary disruptions to
continuous trading.
---------------------------------------------------------------------------
\13\ See Rule 11.350(c).
\14\ See Rule 1.160(z).
\15\ All times are in Eastern Time.
\16\ Pursuant to Rule 11.350(a)(1)(A), orders on the Opening
Auction Book would include MOO orders, LOO orders, market orders
with a time-in-force of DAY, and limit orders with a time-in-force
of DAY or GTX. See Rules 11.350(a)(25), 11.350(a)(21),
11.190(a)(2)(E)(iii), and 11.190(a)(1)(E)(iii) and (v),
respectively.
\17\ See Rule 11.190(a)(1)(E)(iv) and (vi).
---------------------------------------------------------------------------
Pursuant to proposed Rule 11.350(c)(2), beginning at the Opening
Auction Lock-in Time \18\ and updated every one second thereafter, the
Exchange will disseminate IEX Auction Information \19\ via electronic
means. The Exchange will attempt to conduct an Opening Auction for all
IEX-listed securities at the start of Regular Market Hours \20\ (i.e.,
9:30 a.m.) in accordance with the clearing price determination process
set forth in Rule 11.350(c)(2)(B). All orders eligible for execution in
the Opening Auction (i.e., orders on the Opening Auction Book and
orders on the Pre-Market Continuous Book that are not Auction
Ineligible Orders \21\) are Auction Eligible Orders.\22\ Auction
Eligible Orders will be ranked and maintained in accordance with IEX
auction priority, pursuant to Rule 11.350(b). Moreover, pursuant to
Rule 11.350(a)(2), non-displayed buy (sell) orders on the Pre-Market
Continuous Book with a resting price (as defined in Rule
11.350(b)(1)(A)(i)) within the Reference Price Range will be priced at
the Protected NBB (NBO) for the purpose of determining the clearing
price,\23\ but will be ranked and eligible for execution in the Opening
Auction match at the order's resting price.\24\ Thus, non-displayed
orders will influence the Opening Auction clearing price if such price
is at or outside the Reference Price Range, but not if the clearing
price is within the Reference Price Range.
---------------------------------------------------------------------------
\18\ See Rule 11.350(a)(22).
\19\ See Rule 11.350(a)(9).
\20\ See Rule 1.160(gg).
\21\ See Rule 11.350(a)(3).
\22\ See Rule 11.350(a)(2).
\23\ Note, non-displayed buy (sell) orders on the Continuous
Book with a resting price (as defined in Rule 11.350(b)(1)(A)(i))
within the Reference Price Range will be priced at the Protected NBB
(NBO) for the purpose of determining the clearing price and the
Indicative Clearing Price disseminated in IEX Auction Information as
set forth in Rule 11.350(a)(9)(E).
\24\ The Exchange notes that in the case of an IPO, Halt, or
Volatility Auction, there is no continuous trading and therefore no
Continuous Book. Accordingly, there would be no non-displayed
interest on the Continuous Book to which this functionality would
apply.
---------------------------------------------------------------------------
IEX Closing Auction
Similar to the Opening Auction, pursuant to Rule 11.350(d)(1), the
Exchange allows Users to submit orders eligible for execution in the
Closing Auction \25\ at the beginning of the Pre-Market Session, which
begins at 8:00 a.m. Any orders designated for the Closing Auction Book
\26\ are queued until 4:00 p.m. (or such earlier time as the Regular
Market Session \27\ ends on days that IEX is subject to an early
closing) at which time they will be eligible to be executed in the
Closing Auction. In addition to orders on the Closing Auction Book, all
limit and pegged orders resting on the Continuous Book with a time-in-
force of DAY, GTX, GTT, or SYS are eligible for execution in the
Closing Auction, (``Regular-Market Continuous Book'').\28\ Similar to
the Opening Auction, the Exchange does not place any restrictions on
the entry of orders to the Regular-Market Continuous Book to avoid
unnecessary disruptions to continuous trading.
---------------------------------------------------------------------------
\25\ See Rule 11.350(d).
\26\ Pursuant to Rule 11.350(a)(1)(B), orders on the Closing
Auction Book would include MOC orders and LOC orders. See Rules
11.350(a)(24), and 11.350(a)(20).
\27\ See Rule 1.160(gg).
\28\ The following types of orders are not eligible for
execution in the Closing Auction: market orders (except MOC orders)
and orders with a time-in-force of IOC or FOK, because Market orders
entered during the Regular Market Session and orders marked IOC or
FOK do not rest on the Continuous Book, and therefore are not
eligible for the Closing Auction.
---------------------------------------------------------------------------
Pursuant to Rule 11.350(d)(2)(A), beginning at the Closing Auction
Lock-in Time \29\ and updated every one second thereafter, the Exchange
will disseminate IEX Auction Information via electronic means. The
Exchange will attempt to conduct a Closing Auction for all IEX-listed
securities at 4:00 p.m., or such earlier time as the Regular Market
Session ends on days that IEX is subject to an early closing, in
accordance with the clearing price determination process set forth in
Rule 11.350(d)(2)(B). All orders eligible for execution in the Closing
Auction (i.e., orders on the Closing Auction Book and orders on the
Regular-Market Continuous Book) are Auction Eligible Orders. Auction
Eligible Orders will be ranked in accordance with IEX Auction Priority
set forth in Rule 11.350(b). Moreover, pursuant to Rule 11.350(a)(2),
[[Page 9783]]
non-displayed buy (sell) orders on the Regular-Market Continuous Book
with a resting price (as defined in Rule 11.350(b)(1)(A)(i)) within the
Reference Price Range will be priced at the Protected NBB (NBO) for the
purpose of determining the clearing price,\30\ but will be ranked and
eligible for execution in the Closing Auction match at the order's
resting price. Thus, as with the Opening Auction, non-displayed orders
resting on the Regular-Market Continuous Book will influence the
Closing Auction clearing price if such price is at or outside the
Reference Price Range, but not if the clearing price is within the
Reference Price Range.
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\29\ See Rule 11.350(a)(22).
\30\ Note, non-displayed buy (sell) orders on the Continuous
Book with a resting price (as defined in proposed Rule
11.350(b)(1)(A)(i)) within the Reference Price Range will be priced
at the Protected NBB (NBO) for the purpose of determining the
clearing price and the Indicative Clearing Price disseminated in IEX
Auction Information as set forth in Rule 11.350(a)(9)(E).
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As described in the rule filing proposing rules governing auctions
in IEX-listed securities,\31\ the Exchange's handling of non-displayed
interest on the Continuous Book resting within the Reference Price
Range in the Opening and Closing Auction is designed to protect the
anonymity of resting non-displayed interest on the Continuous Book
during the dissemination of IEX Auction Information. Specifically, the
Exchange believes that without such treatment, information leakage
would occur if the Indicative Clearing Price is closer to the midpoint
of the NBBO than the Reference Price \32\ that is disseminated via IEX
Auction Information. This would indicate that there is non-displayed
interest resting on the Continuous Book for at least the size of the
imbalance and priced at least as aggressively as the Reference Price.
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\31\ See Securities Exchange Act Release No. 80583 (May 3,
2017), 82 FR 21634 (May 9, 2017). See also supra note 12.
\32\ See Rule 11.350(a)(9)(A).
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Reference Price Range
For the Opening or Closing Auction, the Reference Price Range is
defined in Rule 11.350(a)(30) as the prices between and including the
Protected NBB and Protected NBO, if the Protected NBBO is valid. The
Protected NBBO is valid when there is both a Protected NBB and
Protected NBO in the security (i.e., the market is not one-sided or
zero-sided), the Protected NBBO is not crossed, and the midpoint of the
Protected NBBO is less than or equal to the Maximum Percentage \33\
away from both the Protected NBB and Protected NBO. The Maximum
Percentage values set forth in Rule 11.350(a)(26) are as follows:
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\33\ See Rule 11.350(a)(26).
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5% if the Protected Midpoint Price \34\ is less than or
equal to $25.00;
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\34\ Id.
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2.5% if the Protected Midpoint Price is greater than
$25.00 but less than or equal to $50.00; or
1.5% if the Protected Midpoint Price is greater than
$50.00.
In the event that the Protected NBBO is not valid, the Reference
Price Range will be equal to the IEX best bid and offer (``IEX BBO''),
if the IEX BBO is valid. The IEX BBO is valid where there is both an
IEX best bid and IEX best offer in the security (i.e., the IEX BBO is
not one-sided or zero-sided), and the midpoint of the IEX BBO is less
than or equal to the Maximum Percentage away from both the IEX best bid
and the IEX best offer. Where the IEX BBO is not valid, the Reference
Price Range is set to the higher (lower) price of the Final
Consolidated Last Sale Eligible Trade,\35\ or the Protected NBB (NBO),
if not crossed, or the IEX best bid (offer).
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\35\ See Rule 11.350(a)(6), which defines the Final Consolidated
Last Sale Eligible Trade as the last trade prior to the end of
Regular Market Hours, or where applicable, prior to trading in the
security being halted or paused, that is last sale eligible and
reported to the Consolidated Tape, rounded to the nearest MPV or
Midpoint Price calculated by the System, whichever is closer. If no
such transaction was executed in accordance with the preceding
sentence, then the Final Consolidated Last Sale Eligible Trade will
be the previous official closing price.
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Proposed Changes
During development and testing of the functionality for Opening and
Closing Auctions the Exchange identified that in crossed markets, Rule
11.350(a)(2) does not properly reflect the Exchange's planned handling
of non-displayed orders resting on the Continuous Book within the
Reference Price Range, and conflicts with the Exchange's existing rules
regarding the pricing of orders. Specifically, Rule 11.350(a)(2) states
in relevant part that non-displayed buy (sell) orders on the Continuous
Book will be priced to the Protected NBB (NBO) for the purposes of
determining the clearing price. However, as discussed above, the
Reference Price Range is generally--but not always--equal to the
Protected NBBO.\36\ Therefore, when the Reference Price Range does not
equal the Protected NBBO, pricing non-displayed buy (sell) orders to
the Protected NBB (NBO) may result in such orders being priced beyond a
User's defined limit price, or the Midpoint Price Constraint as set
forth in Exchange Rule 11.190(h)(2) and 11.190(h)(3)(D)(i).
---------------------------------------------------------------------------
\36\ For example, when the Protected NBBO is crossed, the
Reference Price Range would be equal to the IEX BBO (assuming it was
valid). In addition, when the Protected NBBO is one-sided (and
therefore the IEX BBO is also necessarily one-sided), the Reference
Price Range would be equal to the higher (lower) of the Final
Consolidated Last Sale Eligible Trade, or the Protected NBB (NBO).
---------------------------------------------------------------------------
For example, if the Protected NBBO is $10.15 x $10.09 (crossed),
and the IEX BBO is $10.05 x $10.10, the Reference Price Range would be
equal to the IEX BBO. However, pursuant to current Rule 11.350(a)(2),
non-displayed orders to buy resting at their limit price on the
Continuous Book between $10.05 and $10.09 would be priced to the
Protected NBB of $10.15 for purposes of determining the clearing price,
which is more aggressive than their User defined limit prices, as well
as the Midpoint Price Constraint of $10.09 (pursuant to Rule
11.190(h)(3)(D)(i)).
Thus, the Exchange proposes to amend Rule 11.350(a)(2) to clarify
that for Opening and Closing Auctions, non-displayed buy (sell) orders
on the Continuous Book with a resting price within the Reference Price
Range will be priced at the lower (upper) threshold of the Reference
Price Range. As a result, when the Reference Price Range does not equal
the Protected NBBO (e.g., when the Protected NBBO is crossed), non-
displayed buy (sell) orders on the Continuous Book with a resting price
within the Reference Price Range will be adjusted to less aggressive
prices, consistent with the User defined limit price, if any, as well
as the Midpoint Price Constraint.\37\
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\37\ Modifying the example above under the proposed Rule, if the
Protected NBBO is $10.15 x $10.09 (crossed), and the IEX BBO is
$10.05 x $10.10, the Reference Price Range would be equal to the IEX
BBO. Pursuant to proposed Rule 11.350(a)(2), non-displayed orders to
buy resting at their limit price on the Continuous Book between
$10.05 and $10.09 would be priced to the IEX best bid of $10.05 for
purposes of determining the clearing price, which is consistent with
User defined limit prices, as well as the Midpoint Price Constraint
of $10.09 (pursuant to Rule 11.190(h)(3)(D)(i)).
---------------------------------------------------------------------------
In addition to the clarification above, the Exchange further
identified that Rule 11.350(a)(2) does not explicitly reflect the
Exchange's handling of non-displayed orders resting on the Continuous
Book within the Reference Price Range in one-sided markets.
Specifically, as described above, Rule 11.350(a)(2) states in relevant
part that non-displayed buy (sell) orders resting on the Continuous
Book within the Reference Price Range will be priced to the Protected
NBB (NBO) for the purposes of determining the clearing price. However,
when there is no valid Protected NBBO or IEX BBO, and thus the
Reference Price Range is a single price (e.g., when the Reference Price
Range is equal to the Final Consolidated
[[Page 9784]]
Last Sale Eligible Trade), the Exchange's rules do not explicitly
identify that non-displayed buy (sell) orders on the Continuous Book
resting with a price above (below) the Reference Price Range will be
priced equal to the Reference Price Range for purposes of determining
the clearing price.
As discussed above, the treatment of non-displayed interest on the
Continuous Book resting within the Reference Price Range is generally
designed to protect the anonymity of resting non-displayed interest on
the Continuous Book during the dissemination of IEX Auction
Information. Accordingly, the Exchange's proposed handling of non-
displayed interest on the Continuous Book when the Reference Price
Range is a single price (i.e., when in a one-sided market the Reference
Price Range is equal to either the Final Consolidated Last Sale
Eligible Trade, Protected NBB, Protected NBO, IEX best bid, or IEX best
offer) is designed with the same goal of avoiding unnecessary
information leakage.
For example, if the Final Consolidated Last Sale Eligible Trade is
$10.20, the Protected NBBO is $10.15 x $10.09 (crossed), and the IEX
BBO is $10.05 x $10.50 (beyond the Maximum Percentage), both the
Protected NBBO and IEX BBO would be invalid. Thus, pursuant to Rule
11.350(a)(30), the Reference Price Range would be equal to the Final
Consolidated Last Sale Eligible Trade of $10.20, which is higher than
the IEX best bid, ($10.05) and lower than the IEX best offer
($10.50).\38\ Assuming IEX has non-displayed sell orders resting at a
price more aggressive than the Reference Price Range between $10.15 and
$10.19, such orders would be priced to $10.20 for purposes of
determining the clearing price. Pricing such sell orders more passively
to $10.20 for purposes of determining the clearing price would prevent
such interest from pushing the Indicative Clearing Price \39\ lower
than the Reference Price, while the Auction Book Clearing Price \40\
remains above the Reference Price. Ordinarily, one would expect the
Reference Price to be more aggressive than both the Indicative Clearing
Price and the Auction Book Clearing Price. However, in this example,
because the Indicative Clearing Price is more aggressive than both the
Reference Price and the Auction Book Clearing Price, IEX Auction
Information would have signaled the presence, size, and side of the
non-displayed orders resting on the Continuous Book between $10.15 and
$10.19. However, because current Rule 11.350(a)(2) only addresses
orders resting within the Reference Price Range, and the Reference
Price Range in the example above is a single price, Rule 11.350(a)(2)
does not specify how non-displayed buy (sell) orders on the Continuous
Book resting with a price above (below) the Reference Price Range will
be priced. Accordingly, the Exchange proposes to clarify that such
order will be priced equal to the Reference Price Range for the purpose
of determining the clearing price.
---------------------------------------------------------------------------
\38\ Note, the Exchange evaluates the Final Last Sale Eligible
Trade against the IEX BBO (even though it is beyond the Maximum
Percentage) because the Protected NBBO is crossed, and therefore
does not accurately reflect the market for the security.
\39\ See Rule 11.350(a)(9)(E).
\40\ See Rule 11.350(a)(9)(F).
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Furthermore, the Exchange is proposing to make a change to the
language in Rule 11.350(a)(30)(C) in order to more clearly describe the
method of calculating the Reference Price Range when both the Protected
NBBO and IEX BBO are not valid. The fundamental purpose of existing
Rule 11.350(a)(30)(C) is to constrain the Reference Price Range to
prices that reflect the broader market for the security. With regard to
the pricing of non-displayed buy (sell) orders resting on the
Continuous Book, the upper (lower) threshold of the Reference Price
Range is utilized as a passive benchmark to which such buy (sell)
orders will be effectively pegged for purposes of determining the
clearing price, in order to avoid information leakage as discussed
above. Thus, as described above, the Reference Price Range is generally
the Protected NBBO, or alternatively the IEX BBO, when such prices are
valid. However, in the event both the Protected NBBO and IEX BBO are
not valid, the Exchange determines what price--between the Final
Consolidated Last Sale Eligible Trade, and the available Protected NBB
and/or NBO, or IEX best bid and/or offer--best reflects the market for
the security.
Current Rule 11.350(a)(30), however, pre-supposes that when
evaluating subsection (C), the market is necessarily one-sided, and
thus does not account for when the market is two-sided (i.e., when
there is both a Protected NBB and Protected NBO, and/or both an IEX
best bid and best offer, neither of which are valid). Accordingly, the
Exchange is proposing to amend Rule 11.350(a)(30)(C) to more clearly
describe the method of determining the Reference Price Range when
neither the Protected NBBO nor IEX BBO are valid and the market is one-
sided. Additionally, the Exchange proposes to re-letter current sub-
paragraph (D) of Rule 11.350(a)(30) as new sub-paragraph (E), and
insert a new sub-paragraph (D) to clearly describe the method of
determining the Reference Price Range when neither the Protected NBBO
nor IEX BBO are valid and the market is two-sided.
Specifically, proposed Rule 11.350(a)(30)(C) clarifies that if
there is neither a Valid Protected NBBO nor a Valid IEX BBO, and the
market is one-sided, the Reference Price Range is equal to the price of
the Final Consolidated Last Sale Eligible Trade, unless such price is:
Lower than the Protected NBB, in which case the Reference
Price Range shall be the price of the Protected NBB; or
Higher than the Protected NBO, in which case the Reference
Price Range shall be equal to the price of the Protected NBO.
Moreover, proposed Rule 11.350(a)(30)(D) clarifies that if there is
neither a Valid Protected NBBO nor a Valid IEX BBO and the market is
two-sided, the Reference Price Range is equal to the price of the Final
Consolidated Last Sale Eligible Trade, unless:
The Protected NBBO is not crossed and the price of the
Final Consolidated Last Sale Eligible Trade is either:
[cir] Lower than the Protected NBB, in which case the Reference
Price Range shall be equal to the price of the Protected NBB; or
[cir] Higher than the Protected NBO, in which case the Reference
Price Range shall be equal to the price of the Protected NBO.
The Protected NBBO is crossed and the price of the Final
Consolidated Last Sale Eligible Trade is either:
[cir] Lower than the IEX best bid, in which case the Reference
Price Range shall be equal to the price of the IEX best bid; or
Higher than the IEX best offer, in which case the
Reference Price Range shall be equal to the price of the IEX best
offer.
The Exchange believes the proposed modifications to Rule
11.350(a)(30) are designed to avoid any potential confusion regarding
the Exchange's determination of the Reference Price Range, and
therefore further clarifies the Exchange's handling of non-displayed
interest resting on the Continuous Book within the Reference Price
Range pursuant to Rule 11.350(a)(2).
Lastly, as announced in IEX Trading Alerts #2017-015 and #2017-046,
the Exchange intends to become a primary listing exchange and support
its first
[[Page 9785]]
IEX-listed security in 2018.\41\ In addition, as part of the listings
initiative, the Exchange is providing a series of industry wide weekend
tests for the Exchange and its Members to exercise the various
technology changes required to support IEX Auctions and listings
functionality.\42\ Accordingly, the Exchange is proposing to clarify
its handling of non-displayed orders resting on the Continuous Book
within the Reference Price Range in advance of the industry wide
testing period in order to avoid potential confusion, and allow Members
and other market participants time to develop, test, and deploy any
necessary changes to support such handling.
---------------------------------------------------------------------------
\41\ See IEX Trading Alert #2017-015 (Listings Specifications,
Testing Opportunities, and Timelines), May 31, 2017. See also IEX
Trading Alert #2017-046 (IEX Listings Timeline Update), originally
published on Monday, October 30, 2017, and re-published on Tuesday,
October 31, 2017.
\42\ See, e.g., IEX Trading Alert #2017-028 (First Listings
Functionality Industry Test on Saturday, August 26), August 17,
2017; IEX Trading Alert #2017-037 (Second Listings Functionality
Industry Test on Saturday, September 9), September 7, 2017; IEX
Trading Alert #2017-039 (Third Listings Functionality Industry Test
on Saturday, September 23), September 18, 2017; IEX Trading Alert
#2017-040 (Rescheduled 4th Listing Functionality Industry Test),
September 29, 2017; IEX Trading Alert #2017-046 (IEX Listings
Timeline Update), originally published on Monday, October 30, 2017,
and re-published on Tuesday, October 31, 2017; and IEX Trading Alert
#2017-047 (Fourth Listings Functionality Industry Test on Saturday,
November 4), October 31, 2017.
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2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \43\ of the Act in general, and furthers the
objectives of Section 6(b)(5) of the Act \44\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------
\43\ 15 U.S.C. 78f.
\44\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule changes regarding the
handling of non-displayed orders resting on the Continuous Book within
the Reference Price Range, as well as non-displayed buy (sell) orders
on the Continuous Book resting with a price above (below) the Reference
Price Range in one-sided markets, are consistent with the protection of
investors and the public interest in that they do not substantially
alter the substantive functionality governing the pricing of such
orders for the Opening and Closing Auction. Specifically, as discussed
above, the proposed rules are designed to achieve the Exchange's
existing objective of preserving the anonymity of non-displayed orders
resting on the Continuous Book, and resolve an inconsistency between
the handling of such orders and the Exchanges existing rules regarding
pricing constraints (i.e., any User defined limit price, and the
Midpoint Price Constraint).
Furthermore, the Exchange believes the proposed rule changes are
consistent with the protection of investors and the public interest in
that they are designed to avoid any potential confusion regarding the
Exchange's handling of orders for Opening and Closing Auctions as IEX
continues industry-wide testing to exercise the technology changes
being made by the Exchange and its Members to support IEX as a primary
listing exchange. Additionally, the Exchange believes the proposed
change to rule 11.350(a)(30)(C) to more clearly describe the method of
calculating the Reference Price Range is consistent with the Act and
the protection of investors and the public interest, because as
described above, it is designed to make IEX's rules more complete, and
descriptive of the System's functionality to avoid any potential
confusion among Members and market participants regarding such
functionality. Furthermore, the Exchange believes that by enhancing the
clarity regarding the method of deriving the Reference Price Range, the
proposed rule change compliments the rule changes regarding the pricing
of non-displayed orders resting on the Continuous Book within the
Reference Price Range.
B. Self-Regulatory Organization's Statement on Burden on Competition
IEX does not believe that the proposed rule changes will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed correction does not impact inter-market competition in any
respect since it is designed to achieve the Exchange's existing design
objective of preserving the anonymity of non-displayed orders resting
on the Continuous Book, and resolve an inconsistency between the
handling of such orders and the Exchanges [sic] existing rules
regarding pricing constraints (i.e., any User defined limit price, and
the Midpoint Price Constraint), without substantially altering the
substantive functionality governing the pricing of such orders for the
Opening and Closing Auction. Thus, the Exchange believes there are no
new inter-market competitive burdens imposed as a result of the
proposed rule changes.
In addition, the Exchange does not believe that the proposed
changes will have any impact on intra-market competition. Specifically,
as discussed above, the proposed rule changes do not substantively
alter the functionality governing the Opening and Closing Auctions, and
instead are designed to achieve the Exchange's existing design
objective of preserving the anonymity of non-displayed orders resting
on the Continuous Book, and resolve an inconsistency between the
handling of such orders and the Exchanges [sic] existing rules
regarding pricing constraints (i.e., any User defined limit price, and
the Midpoint Price Constraint). Furthermore, the Exchange believes the
proposed rule changes are designed to make IEX's rules more complete,
and descriptive of the System's functionality to avoid any potential
confusion among Members and market participants regarding such
functionality, to the benefit of all market participants. Lastly, the
Exchange notes that the proposed changes will apply to all Members on a
fair and equal basis. Accordingly, the Exchange believes there are no
new intra-market competitive burdens imposed as a result of the
proposed rule changes.
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \45\ and Rule 19b-4(f)(6) thereunder.\46\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\47\
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\45\ 15 U.S.C. 78s(b)(3)(A)(iii).
\46\ 17 CFR 240.19b-4(f)(6).
\47\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its
intent to file the proposed rule change at least five business days
prior to the date of filing of the proposed rule change, or such
shorter time as designated by the Commission. The Exchange has
satisfied this requirement.
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[[Page 9786]]
A proposed rule change filed under Rule 19b-4(f)(6) \48\ normally
does not become operative for 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\49\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. In its filing with the
Commission, IEX has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. As noted above, IEX states that the proposed changes do not
substantially alter the functionality governing the pricing of non-
displayed orders in the Opening and Closing Auctions and are designed
to achieve IEX's objective of preserving the anonymity of non-displayed
orders resting on the Continuous Book. In addition, IEX notes that the
proposed changes also resolve an inconsistency between the handling of
non-displayed orders and the Exchange's existing pricing constraints.
IEX states that the waiver of the operative delay will allow IEX to
implement the proposed changes while the Exchange continues industry-
wide testing of the technology changes that IEX and its Members are
making to support the Exchange as a listings market. IEX notes that the
proposed clarifications regarding the handling of non-displayed orders
will provide Members and other market participants with time to
develop, test, and deploy any changes necessary to support the handling
of non-displayed orders. The Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and
the public interest because the proposed changes to the operation of
the Opening and Closing Auctions, and in particular the treatment of
non-displayed orders resting on the Continuous Book in a manner that
preserves the anonymity of those orders, are consistent with the
Commission's prior approval of IEX's auctions rules and do not raise
new or novel regulatory issues.\50\ In addition, waiver of the
operative delay will provide IEX and its Members with time to
incorporate the revised functionality into their testing as they
continue to prepare for IEX's functioning as a listings market, which,
among other things, will require IEX to conduct Opening and Closing
Auctions of IEX-listed securities. Therefore, the Commission designates
the proposed rule change operative upon filing.\51\
---------------------------------------------------------------------------
\48\ 17 CFR 240.19b-4(f)(6).
\49\ 17 CFR 240.19b-4(f)(6)(iii).
\50\ See supra note 12.
\51\ For purposes only of waiving the operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such 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) \52\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\52\ 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-2018-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-IEX-2018-03. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-IEX-2018-03, and should be submitted on
or before March 28, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\53\
---------------------------------------------------------------------------
\53\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-04559 Filed 3-6-18; 8:45 am]
BILLING CODE P
