Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX Rules 2.220(a)(7) and 11.410(a) To Include the Long-Term Stock Exchange, Inc. (LTSE) in the List of Away Trading Centers to Which the Exchange Routes and the Market Data Sources the Exchange Will Use To Determine LTSE's Top of Book Quotation, 13684-13686 [2020-04678]
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13684
Federal Register / Vol. 85, No. 46 / Monday, March 9, 2020 / Notices
controversial’’ under Section 19(b)(3)(A)
of the Act 6 and provided the
Commission with the notice required by
Rule 19b–4(f)(6) thereunder.7 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.
(SR–OCC–2020–801) and that OCC is
AUTHORIZED to implement the
proposed change as of the date of this
notice.
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020–04771 Filed 3–6–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88313; File No. SR–IEX–
2020–03]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend IEX
Rules 2.220(a)(7) and 11.410(a) To
Include the Long-Term Stock
Exchange, Inc. (LTSE) in the List of
Away Trading Centers to Which the
Exchange Routes and the Market Data
Sources the Exchange Will Use To
Determine LTSE’s Top of Book
Quotation
March 3, 2020.
jbell on DSKJLSW7X2PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
20, 2020, the 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 self-regulatory organization. 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’’),3 and Rule 19b–4
thereunder,4 the Exchange is filing with
the Commission a proposed rule change
to amend IEX Rules 2.220(a)(7) and
11.410(a) to include the Long-Term
Stock Exchange, Inc. (‘‘LTSE’’) in the
list of away trading centers to which the
Exchange routes and the market data
sources the Exchange will use to
determine LTSE’s Top of Book 5
quotation, in anticipation of LTSE’s
planned launch. The Exchange has
designated this rule change as ‘‘non1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(1).
4 17 CFR 240.19b–4.
5 See IEX Rule 11.410(a)(1).
2 17
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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 [sic] 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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend IEX
Rules 2.220(a)(7) 8 and 11.410(a) 9 to
include the Long-Term Stock Exchange,
Inc. (‘‘LTSE’’) in the list of away trading
centers to which the Exchange routes
and the market data sources the
Exchange will use to determine LTSE’s
Top of Book 10 quotation, in anticipation
of LTSE’s planned launch, which LTSE
expects ‘‘toward the end of Q1 2020.’’ 11
The Exchange is also proposing to realphabetize the list of away trading
centers in both IEX Rules 2.220(a)(7)
and 11.410(a).
Specifically, the Exchange proposes to
amend IEX Rule 2.220(a)(7) to add LTSE
to the list of away trading centers to
which IEX Services routes orders. As set
forth in IEX Rule 11.230(b)(2), IEX
Services routes eligible orders to away
trading centers with accessible
Protected Quotations in compliance
with Regulation NMS Rule 611.12 The
Exchange must include LTSE in its list
of away trading centers to which it
routes, because LTSE’s best-priced,
displayed quotation will be a Protected
Quotation under Regulation NMS Rule
600(b)(62) 13 for purposes of Regulation
NMS Rule 611.14
The Exchange also proposes to amend
and update the table in IEX Rule
11.410(a) specifying the primary sources
for LTSE market data. As specified in
IEX Rule 11.410(a)(2), the Exchange
uses market data from each away
trading center that produces a Protected
Quotation 15 to determine each away
trading center’s Top of Book quotation,
as well as the NBBO 16 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 plan, to
determine LTSE Top of Book quotes. No
secondary source for LTSE market data
will be specified because LTSE has
announced that it will only distribute
market data to the SIPs and will not
have a proprietary market data feed.17
Consistent with the proposed changes
to the table in IEX Rule 11.410(a), the
Exchange proposes to make a
conforming change to IEX Rule
11.410(a)(2) to reflect that, as proposed,
the Exchange will use SIP data as the
primary source from which it will
determine Top of Book quotations for
LTSE and for certain reporting,
regulatory and compliance systems
within IEX.18 While the Exchange uses
proprietary market data feeds to
determine the Protected Quotations of
all but two of the other away markets,19
it will utilize the SIP quote feeds to
determine LTSE’s Protected Quotations
because LTSE will only distribute
market data to the SIP and will not have
a proprietary market data feed.20
Furthermore, the Exchange is
proposing to make nonsubstantive
changes to the list of away trading
13 17
6 15
U.S.C. 78s(b)(3)(A).
7 17 CFR 240.19b–4.
8 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.
9 IEX Rule 11.410(a) specifies the market data
sources for each away trading center that the
Exchange uses for necessary price reference points.
10 See IEX Rule 11.410(a)(1).
11 See LTSE FAQ for Exchange Launch published
on January 3, 2020, available at: https://ltse.com/
static/MA-2020-001-e5bc8cb62425903526027
cdeed7b14fd.pdf.
12 17 CFR 242.611.
PO 00000
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Fmt 4703
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CFR 242.600(b)(62).
Securities Exchange Act Release No. 85828
(May 10, 2019), 84 FR 21841, 21849 (May 15, 2019)
(File No. 10–234) (Order approving LTSE
application for registration as a national securities
exchange).
15 See IEX Rule 1.160(bb).
16 See IEX Rule 1.160(u).
17 See supra note 11 at 2.
18 See IEX Rule 11.410(a)(2).
19 The Exchange also uses CQS/UQDF SIP data as
the exclusive source of market data for NYSE
Chicago (XCHI) and NYSE National (XCIS). See IEX
Rule 11.410(a).
20 See supra note 11 at 2.
14 See
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Federal Register / Vol. 85, No. 46 / Monday, March 9, 2020 / Notices
centers in IEX Rule 2.220(a)(7) and the
table of away trading centers in IEX
Rule 11.410(a) to list each away trading
center in alphabetical order.
The Exchange is not proposing any
other changes to IEX Rules 2.220(a)(7)
and 11.410. The proposed changes do
not alter the manner in which orders are
handled or routed by the Exchange.
jbell on DSKJLSW7X2PROD with NOTICES
2. Statutory Basis
IEX believes that the proposed rule
change is consistent with the provisions
of Section 6(b) 21 of the Act in general,
and furthers the objectives of Section
6(b)(5) of the Act 22 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.
For the reasons discussed in the
Purpose section, 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 including LTSE in the
list of away trading centers to which IEX
routes and in the sources of market data
the Exchange will use to determine
away trading center Top of Book quotes
will facilitate the Exchange’s
compliance with the applicable
requirements of Regulation NMS.
Similarly, the Exchange believes it is
consistent with the Act to specify in
Rule 11.410(a)(2) that the Exchange will
use SIP data to calculate LTSE’s Top of
Book quotation and for certain
reporting, regulatory and compliance
systems within the Exchange, because it
will facilitate compliance with the
applicable requirements of Regulation
NMS and provide clarity in this regard
to market participants.
Additionally, adding LTSE to the list
of away trading centers to which IEX
routes and in the sources of market data
the Exchange will use to determine
away trading center Top of Book quotes
provides transparency with respect to
the away trading centers to which IEX
Services may route orders and the
sources of market data the Exchange
will use to determine LTSE Top of Book
quotes. In addition, and as further noted
in the Purpose section, LTSE will only
disseminate its market data through the
SIP, so use of SIP data to determine
LTSE’s Top of Book quotes is the only
means to do so.
21 15
22 15
U.S.C. 78f.
U.S.C. 78f(b)(5).
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Further, the Exchange believes it is
consistent with the Act to update the
referenced rules to list all the away
trading centers in alphabetical order, to
enhance clarity to 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 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) of the Act 23 and Rule 19b–
4(f)(6) thereunder.24
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 25 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 26
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
23 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). 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, along with a brief
description and text of 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.
25 17 CFR 240.19b–4(f)(6).
26 17 CFR 240.19b–4(f)(6)(iii).
24 17
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13685
the Commission to waive the 30-day
operative delay.
The proposed rule change amends
IEX rules to reflect the launch of LTSE
as an away trading center with a
Protected Quote and specifies that IEX
will route orders to LTSE and use the
SIP to determine LTSE’s Top of Book
quotation. Additionally, the proposed
rule change will make a nonsubstantive
change to re-alphabetize the list of away
trading centers in IEX Rule 2.220(a)(7)
to enhance clarity to market
participants.
The Exchange believes that waiver of
the operative delay is consistent with
the protection of investors and the
public interest because it will allow the
Exchange to implement the proposed
rule change in anticipation of LTSE’s
exchange launch, thereby facilitating
IEX’s compliance with the applicable
requirements of Regulation NMS and
providing clarity to market participants
with respect to whether IEX routes to
LTSE and how IEX determines LTSE’s
Top of Book quotation. 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 rule
change does not raise any new or novel
issues. Therefore, the Commission
hereby waives the operative delay and
designates the proposal as operative
upon filing.27
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 28 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:
27 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
28 15 U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 85, No. 46 / Monday, March 9, 2020 / Notices
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–2020–03 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Vanessa Countryman, Secretary,
Securities and Exchange Commission,
100 F Street NE, Washington, DC
20549–1090.
jbell on DSKJLSW7X2PROD with NOTICES
All submissions should refer to File
Number SR–IEX–2020–03. 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 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–2020–03 and
should be submitted on or before March
30,2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–04678 Filed 3–6–20; 8:45 am]
BILLING CODE 8011–01–P
29 17
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88312; File No. SR–CBOE–
2020–014]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing of a
Proposed Rule Change Relating To
Adopt a Delta-Adjusted at Close (DAC)
Order Instruction That a User May
Apply to an Order When Entering it
Into the System for Execution in an
Electronic or Open Outcry Auction
March 3, 2020.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
18, 2020, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the 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
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to adopt a
Delta-Adjusted at Close (‘‘DAC’’) order
instruction that a User may apply to an
order when entering it into the System 3
for execution in an electronic or open
outcry auction. The text of the proposed
rule change is provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/CBOELegalRegulatory
Home.aspx), at the Exchange’s Office of
the Secretary, 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
Exchange 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Rule 1.1, which defines the System as the
Exchange’s hybrid trading platform that integrates
electronic and open outcry trading of option
contracts on the Exchange, and includes any
connectivity to the foregoing trading platform that
is administered by or on behalf of the Exchange,
such as a communications hub.
2 17
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
statements may be examined at the
places specified in Item IV below. The
Exchange 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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to adopt a
Delta-Adjusted at Close or DAC order
instruction that a User may apply to an
order when entering it into the System
for execution in an electronic or open
outcry auction. In particular, if a DAC
order executes during the trading day,
upon receipt of the official closing price
or value for the underlying from the
primary listing exchange or index
provider, respectively, the System will
adjust the original execution price of a
DAC order based on a delta value
applied to the change in the underlying
reference price between the time of
execution and the market close. As
proposed, DAC orders will allow Users
the opportunity to incorporate into the
pricing of their options the closing price
or value of the underlying on the
transaction date based on how much the
price or value changed during the
trading day.
Near the market close, the Exchange
has observed that significant numbers of
market participants interact in the
equity markets, which may substantially
impact the price or value, as applicable,
of the underlying at the market close.
For example, shares of exchange-traded
funds (‘‘ETFs’’) that track indexes,
which are increasingly popular, often
trade at or near the market close in order
to better align with the indexes they
track and attempt to align the market
price of shares of the ETF as close to the
net asset value (‘‘NAV’’) 4 per share as
possible. Further, the Exchange
understands that market makers and
other liquidity providers seek to balance
their books before the market close and
contribute to increased price discovery
surrounding the market close. The
Exchange also believes it is common for
other market participants to seek to
offset intraday positions and mitigate
exposure risks based on their
predictions of the closing underlying
prices or underlying indexes (which
represent the settlement prices of
options on those underylings). The
Exchange understands this substantial
4 The NAV is an ETF’s total assets minus its total
liabilities. ETFs generally must calculate their NAV
at least once every business day, and typically do
so after market close. See 17 CFR 270.2a–4.
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]]>Agencies
[Federal Register Volume 85, Number 46 (Monday, March 9, 2020)]
[Notices]
[Pages 13684-13686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04678]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88313; File No. SR-IEX-2020-03]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX
Rules 2.220(a)(7) and 11.410(a) To Include the Long-Term Stock
Exchange, Inc. (LTSE) in the List of Away Trading Centers to Which the
Exchange Routes and the Market Data Sources the Exchange Will Use To
Determine LTSE's Top of Book Quotation
March 3, 2020.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 20, 2020, the 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 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\ 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''),\3\ and Rule 19b-4 thereunder,\4\ the
Exchange is filing with the Commission a proposed rule change to amend
IEX Rules 2.220(a)(7) and 11.410(a) to include the Long-Term Stock
Exchange, Inc. (``LTSE'') in the list of away trading centers to which
the Exchange routes and the market data sources the Exchange will use
to determine LTSE's Top of Book \5\ quotation, in anticipation of
LTSE's planned launch. The Exchange has designated this rule change as
``non-controversial'' under Section 19(b)(3)(A) of the Act \6\ and
provided the Commission with the notice required by Rule 19b-4(f)(6)
thereunder.\7\ 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.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
\5\ See IEX Rule 11.410(a)(1).
\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 [sic] 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend IEX Rules 2.220(a)(7) \8\ and
11.410(a) \9\ to include the Long-Term Stock Exchange, Inc. (``LTSE'')
in the list of away trading centers to which the Exchange routes and
the market data sources the Exchange will use to determine LTSE's Top
of Book \10\ quotation, in anticipation of LTSE's planned launch, which
LTSE expects ``toward the end of Q1 2020.'' \11\ The Exchange is also
proposing to re-alphabetize the list of away trading centers in both
IEX Rules 2.220(a)(7) and 11.410(a).
---------------------------------------------------------------------------
\8\ 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.
\9\ IEX Rule 11.410(a) specifies the market data sources for
each away trading center that the Exchange uses for necessary price
reference points.
\10\ See IEX Rule 11.410(a)(1).
\11\ See LTSE FAQ for Exchange Launch published on January 3,
2020, available at: https://ltse.com/static/MA-2020-001-e5bc8cb62425903526027cdeed7b14fd.pdf.
---------------------------------------------------------------------------
Specifically, the Exchange proposes to amend IEX Rule 2.220(a)(7)
to add LTSE to the list of away trading centers to which IEX Services
routes orders. As set forth in IEX Rule 11.230(b)(2), IEX Services
routes eligible orders to away trading centers with accessible
Protected Quotations in compliance with Regulation NMS Rule 611.\12\
The Exchange must include LTSE in its list of away trading centers to
which it routes, because LTSE's best-priced, displayed quotation will
be a Protected Quotation under Regulation NMS Rule 600(b)(62) \13\ for
purposes of Regulation NMS Rule 611.\14\
---------------------------------------------------------------------------
\12\ 17 CFR 242.611.
\13\ 17 CFR 242.600(b)(62).
\14\ See Securities Exchange Act Release No. 85828 (May 10,
2019), 84 FR 21841, 21849 (May 15, 2019) (File No. 10-234) (Order
approving LTSE application for registration as a national securities
exchange).
---------------------------------------------------------------------------
The Exchange also proposes to amend and update the table in IEX
Rule 11.410(a) specifying the primary sources for LTSE market data. As
specified in IEX Rule 11.410(a)(2), the Exchange uses market data from
each away trading center that produces a Protected Quotation \15\ to
determine each away trading center's Top of Book quotation, as well as
the NBBO \16\ 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 plan, to determine LTSE Top of Book
quotes. No secondary source for LTSE market data will be specified
because LTSE has announced that it will only distribute market data to
the SIPs and will not have a proprietary market data feed.\17\
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\15\ See IEX Rule 1.160(bb).
\16\ See IEX Rule 1.160(u).
\17\ See supra note 11 at 2.
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Consistent with the proposed changes to the table in IEX Rule
11.410(a), the Exchange proposes to make a conforming change to IEX
Rule 11.410(a)(2) to reflect that, as proposed, the Exchange will use
SIP data as the primary source from which it will determine Top of Book
quotations for LTSE and for certain reporting, regulatory and
compliance systems within IEX.\18\ While the Exchange uses proprietary
market data feeds to determine the Protected Quotations of all but two
of the other away markets,\19\ it will utilize the SIP quote feeds to
determine LTSE's Protected Quotations because LTSE will only distribute
market data to the SIP and will not have a proprietary market data
feed.\20\
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\18\ See IEX Rule 11.410(a)(2).
\19\ The Exchange also uses CQS/UQDF SIP data as the exclusive
source of market data for NYSE Chicago (XCHI) and NYSE National
(XCIS). See IEX Rule 11.410(a).
\20\ See supra note 11 at 2.
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Furthermore, the Exchange is proposing to make nonsubstantive
changes to the list of away trading
[[Page 13685]]
centers in IEX Rule 2.220(a)(7) and the table of away trading centers
in IEX Rule 11.410(a) to list each away trading center in alphabetical
order.
The Exchange is not proposing any other changes to IEX Rules
2.220(a)(7) and 11.410. The proposed changes do 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) \21\ of the Act in general, and furthers the
objectives of Section 6(b)(5) of the Act \22\ 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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\21\ 15 U.S.C. 78f.
\22\ 15 U.S.C. 78f(b)(5).
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For the reasons discussed in the Purpose section, 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 including LTSE in the list of away
trading centers to which IEX routes and in the sources of market data
the Exchange will use to determine away trading center Top of Book
quotes will facilitate the Exchange's compliance with the applicable
requirements of Regulation NMS. Similarly, the Exchange believes it is
consistent with the Act to specify in Rule 11.410(a)(2) that the
Exchange will use SIP data to calculate LTSE's Top of Book quotation
and for certain reporting, regulatory and compliance systems within the
Exchange, because it will facilitate compliance with the applicable
requirements of Regulation NMS and provide clarity in this regard to
market participants.
Additionally, adding LTSE to the list of away trading centers to
which IEX routes and in the sources of market data the Exchange will
use to determine away trading center Top of Book quotes provides
transparency with respect to the away trading centers to which IEX
Services may route orders and the sources of market data the Exchange
will use to determine LTSE Top of Book quotes. In addition, and as
further noted in the Purpose section, LTSE will only disseminate its
market data through the SIP, so use of SIP data to determine LTSE's Top
of Book quotes is the only means to do so.
Further, the Exchange believes it is consistent with the Act to
update the referenced rules to list all the away trading centers in
alphabetical order, to enhance clarity to 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 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) of the Act \23\ and Rule 19b-
4(f)(6) thereunder.\24\
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\23\ 15 U.S.C. 78s(b)(3)(A).
\24\ 17 CFR 240.19b-4(f)(6). 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, along
with a brief description and text of 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 pursuant to Rule 19b-4(f)(6) under the
Act \25\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \26\ permits the
Commission to 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.
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\25\ 17 CFR 240.19b-4(f)(6).
\26\ 17 CFR 240.19b-4(f)(6)(iii).
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The proposed rule change amends IEX rules to reflect the launch of
LTSE as an away trading center with a Protected Quote and specifies
that IEX will route orders to LTSE and use the SIP to determine LTSE's
Top of Book quotation. Additionally, the proposed rule change will make
a nonsubstantive change to re-alphabetize the list of away trading
centers in IEX Rule 2.220(a)(7) to enhance clarity to market
participants.
The Exchange believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to implement the proposed rule
change in anticipation of LTSE's exchange launch, thereby facilitating
IEX's compliance with the applicable requirements of Regulation NMS and
providing clarity to market participants with respect to whether IEX
routes to LTSE and how IEX determines LTSE's Top of Book quotation. 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 rule change does not raise any new or novel
issues. Therefore, the Commission hereby waives the operative delay and
designates the proposal as operative upon filing.\27\
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\27\ For purposes only of waiving the 30-day operative delay,
the Commission also has 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 under
Section 19(b)(2)(B) \28\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\28\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 13686]]
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-2020-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Vanessa Countryman,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-IEX-2020-03. 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 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-2020-03
and should be submitted on or before March 30, 2020.
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\29\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-04678 Filed 3-6-20; 8:45 am]
BILLING CODE 8011-01-P
