Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Table in Rule 11.410(a) To Update the Market Data Source That the Exchange Will Use To Determine the Top of Book Quotation for NYSE Chicago, Inc. and To Amend Rules 2.220(a)(7) and 11.410(a) To Reflect the Name Change of Chicago Stock Exchange, Inc. to NYSE Chicago, Inc., 65204-65206 [2019-25588]
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65204
Federal Register / Vol. 84, No. 228 / Tuesday, November 26, 2019 / Notices
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the Proposed
Rule Change is consistent with the
requirements of the Exchange Act, and
in particular, the requirements of
Section 17A of the Exchange Act 20 and
the rules and regulations thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,21
that the Proposed Rule Change (SR–
OCC–2019–008) be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–25587 Filed 11–25–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87578; File No. SR–IEX–
2019–12]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Table in Rule 11.410(a) To Update the
Market Data Source That the Exchange
Will Use To Determine the Top of Book
Quotation for NYSE Chicago, Inc. and
To Amend Rules 2.220(a)(7) and
11.410(a) To Reflect the Name Change
of Chicago Stock Exchange, Inc. to
NYSE Chicago, Inc.
November 20, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
November 15, 2019, the Investors
Exchange LLC (‘‘IEX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
20 In
approving this Proposed Rule Change, the
Commission has considered the proposed rules’
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
21 15 U.S.C. 78s(b)(2).
22 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Pursuant to the provisions of Section
19(b)(1) under the Act,4 and Rule 19b–
4 thereunder,5 IEX is filing with the
Commission a proposed rule change to
amend the table in Rule 11.410(a) to
update the market data source that the
Exchange will use to determine the Top
of Book 6 quotation for NYSE Chicago,
Inc. (‘‘XCHI’’) and to amend Rules
2.220(a)(7) and 11.410(a) to reflect the
name change of Chicago Stock
Exchange, Inc. to NYSE Chicago, Inc.
The Exchange has designated this rule
change as ‘‘non-controversial’’ under
Section 19(b)(3)(A) of the Act 7 and
provided the Commission with the
notice required by Rule 19b–4(f)(6)
thereunder.8
The text of the proposed rule change
is available at the Exchange’s website at
www.iextrading.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of
and basis for the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these 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 Exchange proposes to amend the
table in IEX Rule 11.410(a) to update the
market data source that the Exchange
will use to determine the Top of Book
quotation for NYSE Chicago, Inc.
(‘‘XCHI’’) and to amend IEX Rules
2.220(a)(7) and 11.410(a) to reflect the
name change of Chicago Stock
Exchange, Inc to NYSE Chicago, Inc.
Specifically, the Exchange proposes to
amend and update the table in Rule
11.410(a) specifying the primary and
secondary sources for XCHI as a result
4 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
6 See IEX Rule 11.410(a)(1).
7 15 U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4.
5 17
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of XCHI’s establishment of NYSE
Chicago BBO, NYSE Chicago Trades and
NYSE Chicago Integrated Feed (‘‘NYSE
Chicago Market Data Feeds’’ or ‘‘direct
feeds’’).9 As specified in Rule
11.410(a)(2), the Exchange uses market
data from each away trading center that
produces a Protected Quotation 10 to
determine its Top of Book quotation, as
well as the NBBO 11 for certain
reporting, regulatory and compliance
systems within IEX. As proposed, the
Exchange will use securities
information processor (‘‘SIP’’) data, i.e.,
CQS SIP data for securities reported
under the Consolidated Quotation
Services and Consolidated Tape
Association plans and UQDF SIP data
for securities reported under the Nasdaq
Unlisted Trading Privileges national
market system plan, to determine XCHI
Top of Book quotes. No secondary
source is proposed to be specified as SIP
data will be used exclusively. While the
Exchange uses proprietary market data
feeds to determine the Protected
Quotations of all but one of the other
away markets,12 as specified in Rule
11.410, it has determined to utilize the
SIP quote feeds for XCHI because the
Exchange is in the process of
implementing technology changes to
support use of the NYSE Chicago
Market Data Feeds. Once these changes
are complete, IEX will file a rule change
under Section 19(b) of the Act and Rule
19b–4 thereunder to amend relevant
portions of Rule 11.410 once these steps
are complete, to again specify that the
Exchange will use XCHI’s direct feeds as
the primary source of XCHI’s Protected
Quotations.13 The Exchange notes that it
is not necessary to utilize the XCHI
direct feed in order to determine XCHI
Top of Book quotes and thereby enable
the Exchange to comply with applicable
requirements of Regulation NMS with
respect to its Top of Book quotes. The
Exchange also notes that other
exchanges also use SIP market data
feeds to determine Top of Book quotes
for some away markets, including XCHI,
pursuant to effective rule filings.14
The Exchange is also proposing a
conforming change to Rule 11.410(a)(2)
to reflect that, as proposed, the
Exchange will not use proprietary
market data feeds as the primary source
9 See Securities Exchange Act Release No. 87389
(October 23, 2019), 84 FR 57904 (October 29, 2019)
(SR–NYSECHX–2019–15).
10 See IEX Rule 1.160(bb).
11 See IEX Rule 1.160(u).
12 The Exchange uses CQS/UQDF SIP data as the
exclusive source of market data for NYSE National
(XCIS). See IEX Rule 11.410(a).
13 See supra note 5[sic].
14 See, e.g., Nasdaq Stock Market Rule 4759(a).
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Federal Register / Vol. 84, No. 228 / Tuesday, November 26, 2019 / Notices
from which it will determine Top of
Book quotations for XCHI.
Finally, the Exchange proposes to
amend Rules 2.220(a)(7) and 11.410(a)
to reflect the name change of XCHI from
Chicago Stock Exchange, Inc. to NYSE
Chicago, Inc.15 IEX Rule 2.220(a)(7) lists
the away trading centers that IEX
Services LLC (‘‘IEX Services’’) routes to
as outbound router for the Exchange.
Rule 11.410(a), as discussed above,
specifies the market data sources for
each away trading center that the
Exchange uses for necessary price
reference points.
The Exchange is not proposing any
other changes to Rule 11.410 with
respect to its use of market data feeds
and calculations of necessary price
reference points. The proposed change
merely specifies the market data feeds
that the Exchange will use to determine
XCHI Top of Book quotes, and does not
alter the manner in which orders are
handled or routed by the Exchange.
2. Statutory Basis
IEX believes that the proposed rule
change is consistent with the provisions
of Section 6(b) 16 of the Act in general,
and furthers the objectives of Section
6(b)(5) of the Act 17 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 change removes
impediments to and perfects the
mechanism of a free and open market
and protects investors and the public
interest because it provides
transparency with respect to the sources
of market data that it will use to
determine XCHI Top of Book quotes.
For the reasons discussed in the
Purpose section, the Exchange believes
that use of SIP market data will enable
it to determine XCHI Top of Book
quotes and comply with applicable
requirements of Regulation NMS. In
addition, and as further noted in the
Purpose section, other exchanges use
SIP market data to determine Top of
Book quotes for some away markets,
including NYSE National, Inc., so the
proposed change does not raise any new
or novel issues not already considered
by the Commission.
15 See
Securities Exchange Act Release No. 84494
(October 26, 2018), 83 FR 54953 (November 1, 2018)
(SR–NYSECHX–2018–05).
16 15 U.S.C. 78f.
17 15 U.S.C. 78f(b)(5).
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The Exchange also believes it is
consistent with the Act to make a
conforming change to Rule 11.410(a)(2)
so that provision is consistent with the
table in Rule 11.410(a).
Further, the Exchange believes it is
consistent with the Act to update the
referenced rules to reflect the name
change of XCHI so that IEX’s rules
accurately specify away markets
referenced, as well as to avoid any
potential confusion on the part of
market participants. As noted in the
Purpose section, the proposed changes
are nonsubstantive and do not alter the
manner in which orders are handled or
routed by the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
IEX does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
update does not impact competition in
any respect since its purpose is to
enhance transparency and with respect
to the operation of the Exchange and its
use of market data feeds, and to update
an away market name.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 18 and
subparagraph (f)(6) of Rule 19b–4
thereunder.19
A proposed rule change filed under
Rule 19b–4(f)(6) 20 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
18 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) 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.
20 Id.
19 17
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65205
Rule 19b–4(f)(6)(iii),21 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
upon filing. The Exchange noted in its
filing that other exchanges use SIP
market data to determine Top of Book
quotes for some away markets,
including NYSE National, Inc., so the
proposed change does not raise any new
or novel issues. For these reasons, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. The Commission hereby
designates the proposed rule change to
be operative upon filing.22
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
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–2019–12 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–2019–12. This file
number should be included in the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
21 17
CFR 240.19b–4(f)(6)(iii).
purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
22 For
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Federal Register / Vol. 84, No. 228 / Tuesday, November 26, 2019 / Notices
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 Section, 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 will also be available for
inspection and copying at the IEX’s
principal office and on its internet
website at www.iextrading.com. 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–2019–12 and
should be submitted on or before
December 17, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–25588 Filed 11–25–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87576; File No. SR–
NYSEArca–2019–14]
19b–4 thereunder,2 a proposed rule
change to make certain changes to the
listing rule for shares (‘‘Shares’’) of the
PGIM Ultra Short Bond ETF (‘‘Fund’’).
The proposed rule change was
published for comment in the Federal
Register on April 2, 2019.3 On May 10,
2019, pursuant to Section 19(b)(2) of the
Act,4 the Commission designated a
longer period within which to approve
the proposed rule change, disapprove
the proposed rule change, or institute
proceedings to determine whether to
approve or disapprove the proposed
rule change.5 On June 27, 2019, the
Commission instituted proceedings
pursuant to Section 19(b)(2)(B) of the
Act 6 to determine whether to approve
or disapprove the proposed rule
change.7 On September 23, 2019, the
Commission designated a longer period
within which to issue an order
approving or disapproving the proposed
rule change.8 On November 14, 2019,
the Exchange filed Amendment No. 1 to
the proposed rule change.9 The
Commission has received no comment
letters on the proposal. This order
approves the proposed rule change, as
modified by Amendment No. 1.
II. Description of the Proposal
A. The Fund and the Shares
PGIM Investments LLC (‘‘Adviser’’) is
the investment adviser for the Fund.
PGIM Fixed Income (‘‘Subadviser’’), a
unit of PGIM, Inc., is the subadviser to
the Fund. According to the Exchange,
the investment objective of the Fund is
to seek total return through a
combination of current income and
capital appreciation, consistent with
preservation of capital. The Fund seeks
to achieve its investment objective by
investing primarily in a portfolio of U.S.
dollar denominated short-term fixed,
variable and floating rate debt
instruments. Under normal market
2 17
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Approving a
Proposed Rule Change, as Modified by
Amendment No. 1, Relating to the
Permitted Investments of the PGIM
Ultra Short Bond ETF
November 20, 2019.
I. Introduction
On March 13, 2019, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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
23 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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Jkt 250001
CFR 240.19b–4.
Securities Exchange Act Release No. 85430
(Mar. 27, 2019), 84 FR 12646 (Apr. 2, 2019)
(‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 85829
(May 10, 2019), 84 FR 22221 (May 16, 2019). The
Commission designated July 1, 2019, as the date by
which the Commission shall approve or disapprove,
or institute proceedings to determine whether to
approve or disapprove, the proposed rule change.
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 86220,
84 FR 31868 (Jul. 3, 2019).
8 See Securities Exchange Act Release No. 87058,
84 FR 51210 (Sep. 27, 2019).
9 In Amendment No. 1, the Exchange
supplemented the proposed rule change by adding
additional details regarding certain of the asset
backed securities in which the Fund may invest.
Amendment No. 1 is available at: https://
www.sec.gov/comments/sr-nysearca-2019-14/
srnysearca201914-6425213-198531.pdf.
3 See
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
conditions,10 the Fund invests at least
80% of its net assets (plus any
borrowings for investment purposes) in
a portfolio of financial instruments
consisting of (1) the Principal
Investment Instruments (as defined in
the First Prior Order); and (2)
derivatives (as described in the Prior
Orders) that (a) provide exposure to
such Principal Investment Instruments,
or (b) are used to enhance returns,
manage portfolio duration, or manage
the risk of securities price fluctuations,
as described in the Prior Orders.11
The Shares commenced trading on the
Exchange on April 10, 2018, pursuant to
the generic listing standards under
Commentary .01 to NYSE Arca Rule
8.600–E (‘‘Managed Fund Shares’’).12
Since then, the Exchange has
proposed—and the Commission has
approved—two proposed rule changes
to expand the permitted investments of
the Fund beyond what is permitted
under the generic listing
requirements.13 By this proposed rule
change, the Exchange proposes to again
amend the listing rule applicable to the
Shares.
B. The Proposed Modifications to the
Shares’ Listing Rule
The Exchange proposes to amend two
requirements of the Shares’ current
listing rule as set forth in the First Prior
Order, namely the requirements that: (1)
The Fund’s investments in non-U.S.
Government, non-agency, non-GSE and
other privately issued asset backed
securities (including mortgage-backed
securities) (‘‘Private ABS/MBS’’) are
limited to 20% of the total assets of the
Fund;14 and (2) the Fund may invest
10 The term ‘‘normal market conditions’’ is
defined in NYSE Arca Rule 8.600–E(c)(5).
11 The terms ‘‘First Prior Order’’ and ‘‘Prior
Orders’’ are defined infra at note 13.
12 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940 (15 U.S.C. 80a–1) organized as an open-end
investment company or similar entity that invests
in a portfolio of securities selected by its investment
adviser consistent with its investment objectives
and policies. In contrast, an open-end investment
company that issues Investment Company Units,
listed and traded on the Exchange under NYSE
Arca Rule 5.2–E(j)(3), seeks to provide investment
results that correspond generally to the price and
yield performance of a specific foreign or domestic
stock index, fixed income securities index or
combination thereof.
13 See Securities Exchange Act Release No. 83319
(May 24, 2018), 83 FR 25097 (May 31, 2018) (SR–
NYSEArca–2018–15) (‘‘First Prior Order’’); and
Securities Exchange Act Release No. 84818
(December 13, 2018) (SR–NYSEArca–2018–75)
(together with the First Prior Order, ‘‘Prior Orders’’).
14 At the time the proposed rule change was filed,
Commentary .01(b)(5) to NYSE Arca Rule 8.600–E
provided that non-agency, non-government
sponsored entity and privately issued mortgagerelated and other asset-backed securities
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]]>Agencies
[Federal Register Volume 84, Number 228 (Tuesday, November 26, 2019)]
[Notices]
[Pages 65204-65206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25588]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87578; File No. SR-IEX-2019-12]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Table in Rule 11.410(a) To Update the Market Data Source That the
Exchange Will Use To Determine the Top of Book Quotation for NYSE
Chicago, Inc. and To Amend Rules 2.220(a)(7) and 11.410(a) To Reflect
the Name Change of Chicago Stock Exchange, Inc. to NYSE Chicago, Inc.
November 20, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on November 15, 2019, the Investors Exchange LLC (``IEX''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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 Act,\4\
and Rule 19b-4 thereunder,\5\ IEX is filing with the Commission a
proposed rule change to amend the table in Rule 11.410(a) to update the
market data source that the Exchange will use to determine the Top of
Book \6\ quotation for NYSE Chicago, Inc. (``XCHI'') and to amend Rules
2.220(a)(7) and 11.410(a) to reflect the name change of Chicago Stock
Exchange, Inc. to NYSE Chicago, Inc. The Exchange has designated this
rule change as ``non-controversial'' under Section 19(b)(3)(A) of the
Act \7\ and provided the Commission with the notice required by Rule
19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ See IEX Rule 11.410(a)(1).
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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 the
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these 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 Exchange proposes to amend the table in IEX Rule 11.410(a) to
update the market data source that the Exchange will use to determine
the Top of Book quotation for NYSE Chicago, Inc. (``XCHI'') and to
amend IEX Rules 2.220(a)(7) and 11.410(a) to reflect the name change of
Chicago Stock Exchange, Inc to NYSE Chicago, Inc.
Specifically, the Exchange proposes to amend and update the table
in Rule 11.410(a) specifying the primary and secondary sources for XCHI
as a result of XCHI's establishment of NYSE Chicago BBO, NYSE Chicago
Trades and NYSE Chicago Integrated Feed (``NYSE Chicago Market Data
Feeds'' or ``direct feeds'').\9\ As specified in Rule 11.410(a)(2), the
Exchange uses market data from each away trading center that produces a
Protected Quotation \10\ to determine its Top of Book quotation, as
well as the NBBO \11\ for certain reporting, regulatory and compliance
systems within IEX. As proposed, the Exchange will use securities
information processor (``SIP'') data, i.e., CQS SIP data for securities
reported under the Consolidated Quotation Services and Consolidated
Tape Association plans and UQDF SIP data for securities reported under
the Nasdaq Unlisted Trading Privileges national market system plan, to
determine XCHI Top of Book quotes. No secondary source is proposed to
be specified as SIP data will be used exclusively. While the Exchange
uses proprietary market data feeds to determine the Protected
Quotations of all but one of the other away markets,\12\ as specified
in Rule 11.410, it has determined to utilize the SIP quote feeds for
XCHI because the Exchange is in the process of implementing technology
changes to support use of the NYSE Chicago Market Data Feeds. Once
these changes are complete, IEX will file a rule change under Section
19(b) of the Act and Rule 19b-4 thereunder to amend relevant portions
of Rule 11.410 once these steps are complete, to again specify that the
Exchange will use XCHI's direct feeds as the primary source of XCHI's
Protected Quotations.\13\ The Exchange notes that it is not necessary
to utilize the XCHI direct feed in order to determine XCHI Top of Book
quotes and thereby enable the Exchange to comply with applicable
requirements of Regulation NMS with respect to its Top of Book quotes.
The Exchange also notes that other exchanges also use SIP market data
feeds to determine Top of Book quotes for some away markets, including
XCHI, pursuant to effective rule filings.\14\
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\9\ See Securities Exchange Act Release No. 87389 (October 23,
2019), 84 FR 57904 (October 29, 2019) (SR-NYSECHX-2019-15).
\10\ See IEX Rule 1.160(bb).
\11\ See IEX Rule 1.160(u).
\12\ The Exchange uses CQS/UQDF SIP data as the exclusive source
of market data for NYSE National (XCIS). See IEX Rule 11.410(a).
\13\ See supra note 5[sic].
\14\ See, e.g., Nasdaq Stock Market Rule 4759(a).
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The Exchange is also proposing a conforming change to Rule
11.410(a)(2) to reflect that, as proposed, the Exchange will not use
proprietary market data feeds as the primary source
[[Page 65205]]
from which it will determine Top of Book quotations for XCHI.
Finally, the Exchange proposes to amend Rules 2.220(a)(7) and
11.410(a) to reflect the name change of XCHI from Chicago Stock
Exchange, Inc. to NYSE Chicago, Inc.\15\ IEX Rule 2.220(a)(7) lists the
away trading centers that IEX Services LLC (``IEX Services'') routes to
as outbound router for the Exchange. Rule 11.410(a), as discussed
above, specifies the market data sources for each away trading center
that the Exchange uses for necessary price reference points.
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\15\ See Securities Exchange Act Release No. 84494 (October 26,
2018), 83 FR 54953 (November 1, 2018) (SR-NYSECHX-2018-05).
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The Exchange is not proposing any other changes to Rule 11.410 with
respect to its use of market data feeds and calculations of necessary
price reference points. The proposed change merely specifies the market
data feeds that the Exchange will use to determine XCHI Top of Book
quotes, and does not alter the manner in which orders are handled or
routed by the Exchange.
2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \16\ of the Act in general, and furthers the
objectives of Section 6(b)(5) of the Act \17\ 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.
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\16\ 15 U.S.C. 78f.
\17\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change removes
impediments to and perfects the mechanism of a free and open market and
protects investors and the public interest because it provides
transparency with respect to the sources of market data that it will
use to determine XCHI Top of Book quotes. For the reasons discussed in
the Purpose section, the Exchange believes that use of SIP market data
will enable it to determine XCHI Top of Book quotes and comply with
applicable requirements of Regulation NMS. In addition, and as further
noted in the Purpose section, other exchanges use SIP market data to
determine Top of Book quotes for some away markets, including NYSE
National, Inc., so the proposed change does not raise any new or novel
issues not already considered by the Commission.
The Exchange also believes it is consistent with the Act to make a
conforming change to Rule 11.410(a)(2) so that provision is consistent
with the table in Rule 11.410(a).
Further, the Exchange believes it is consistent with the Act to
update the referenced rules to reflect the name change of XCHI so that
IEX's rules accurately specify away markets referenced, as well as to
avoid any potential confusion on the part of market participants. As
noted in the Purpose section, the proposed changes are nonsubstantive
and do not alter the manner in which orders are handled or routed by
the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
IEX does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed update does not impact competition in any respect since its
purpose is to enhance transparency and with respect to the operation of
the Exchange and its use of market data feeds, and to update an away
market name.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\19\
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\18\ 15 U.S.C. 78s(b)(3)(A)(iii).
\19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
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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A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative upon filing. The Exchange noted in its filing that
other exchanges use SIP market data to determine Top of Book quotes for
some away markets, including NYSE National, Inc., so the proposed
change does not raise any new or novel issues. For these reasons, the
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The Commission hereby designates the proposed rule change to be
operative upon filing.\22\
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\20\ Id.
\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings 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 [email protected]. Please include
File Number SR-IEX-2019-12 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-2019-12. This file
number should be included in the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use
[[Page 65206]]
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 Section, 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 will also be available for inspection
and copying at the IEX's principal office and on its internet website
at www.iextrading.com. 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-2019-12
and should be submitted on or before December 17, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25588 Filed 11-25-19; 8:45 am]
BILLING CODE 8011-01-P
