Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Allow Non-Displayed Discretionary Limit Orders To Be Submitted With a Minimum Quantity Instruction, 25439-25442 [2023-08753]
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Federal Register / Vol. 88, No. 80 / Wednesday, April 26, 2023 / Notices
07(2)(a), (b), and (c) of Regulation S–X
(‘‘Disclosure Requirements’’).
SUMMARY OF APPLICATION: The requested
exemption would permit Applicants to
enter into and materially amend
subadvisory agreements with
subadvisers without shareholder
approval and would grant relief from
the Disclosure Requirements as they
relate to fees paid to the subadvisers.
APPLICANTS: Two Roads Shared Trust
and Hypatia Capital Management LLC.
FILING DATES: The application was filed
on January 24, 2023 and amendments
on March 21, 2023 and April 14, 2023.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 15, 2023, and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit, or, for lawyers, a
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
Stacy H. Louizos, stacy.louizos@
blankrome.com and Timothy Burdick,
tburdick@ultimusfundsolutions.com.
FOR FURTHER INFORMATION CONTACT:
Trace W. Rakestraw, Senior Special
Counsel, at (202) 551–6825 (Division of
Investment Management, Chief
Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ amended and restated
application, dated April 14, 2023, which
may be obtained via the Commission’s
website by searching for the file number
at the top of this document, or for an
Applicant using the Company name
search field on the SEC’s EDGAR
system. The SEC’s EDGAR system may
be searched at https://www.sec.gov/
edgar/searchedgar/legacy/
companysearch.html. You may also call
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the SEC’s Public Reference Room at
(202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Dated: April 20, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–08754 Filed 4–25–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97341; File No. SR–IEX–
2023–05]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Allow NonDisplayed Discretionary Limit Orders
To Be Submitted With a Minimum
Quantity Instruction
April 20, 2023.
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 April 7,
2023, the Investors Exchange LLC
(‘‘IEX’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘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
Pursuant to the provisions of 19(b)(1)
under the Act,3 and Rule 19b–4
thereunder,4 IEX is filing with the
Commission a proposal to allow nondisplayed Discretionary Limit orders to
be submitted with a minimum quantity
instruction. The Exchange has
designated this proposal as noncontroversial and provided the
Commission with the notice required by
Rule 19b–4(f)(6)(iii) under the Act.5
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.
1 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 17 CFR 240.19b–4(f)(6)(iii).
2 17
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25439
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 statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in s 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 purpose of this proposed rule
filing is to amend IEX Rule 11.190(b)(7)
to offer Members 6 the option of
including a Minimum Quantity
(‘‘MQTY’’) 7 instruction on a nondisplayed 8 Discretionary Limit (‘‘DLimit’’) order. As proposed, a nondisplayed D-Limit MQTY order would
function exactly like any other MQTY
order at IEX.
Background
Since the approval of its exchange
application, IEX, like other equities
exchanges,9 has offered Members 10 the
option of including a MQTY instruction
on a non-displayed order. IEX’s
rulebook defines a MQTY order as a
non-displayed, non-routable order that
enables a Member to specify an
‘‘effective minimum quantity’’, which is
the minimum share amount at which
the order will execute.11 A MQTY order
will not execute unless the volume of
contra-side liquidity available to
execute against the order meets or
exceeds the effective minimum
quantity.
IEX understands that some market
participants use MQTY orders as part of
a trading strategy designed to limit the
price impact on a security when
passively executing larger orders. In
other words, MQTY orders are often
used to reduce the likelihood of a larger
resting order interacting with small
orders entered by professional traders,
6 See
IEX Rule 1.160(s).
IEX Rule 11.190(b)(11).
8 See IEX Rule 11.190(b)(3).
9 See, e.g., Cboe BZX Exchange, Inc. Rule
11.9(c)(5); MEMX, LLC Rule 11.6(f); The Nasdaq
Stock Market LLC Rule 4703(e); and New York
Stock Exchange LLC Rule 7.31(i)(3).
10 See IEX Rule 1.160(s).
11 See IEX Rule 11.190(b)(11).
7 See
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possibly adversely impacting the
execution of their larger order. For
example, professional traders may use
small pinging orders to detect the
presence of a large resting order and
then use that information to cause the
quotes in that security to widen or skew
in a manner that adversely impacts the
price that the resting order can trade at.
The Commission has long recognized
this concern:
Another type of implicit transaction cost
reflected in the price of a security is shortterm price volatility caused by temporary
imbalances in trading interest. For example,
a significant implicit cost for large investors
(who often represent the consolidated
investments of many individuals) is the price
impact that their large trades can have on the
market. Indeed, disclosure of these large
orders can reduce the likelihood of their
being filled.’’ 12
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A MQTY order resting on the IEX
Order Book 13 will only execute with a
willing 14 contra-side order that satisfies
the resting order’s effective minimum
quantity. For active orders,15 IEX offers
Members three options for how a MQTY
order will determine satisfaction of its
effective limit quantity parameter:
Composite; Minimum Execution Size
with Cancel Remaining (‘‘MinExec
Cancel Remaining’’); and Minimum
Execution Size with All or None
Remaining (‘‘MinExec AON
Remaining’’).16 When an active MQTY
order is marked Composite, it will
execute against all willing contra-side
resting orders of any size, provided that
the aggregate execution size is equal to
or greater than the active order’s
effective minimum quantity. When an
active MQTY order is marked either
MinExec Cancel Remaining or MinExec
AON Remaining, it will execute against
each willing contra-side resting order in
priority, provided that each individual
execution size meets the active order’s
effective minimum quantity and
satisfies the MQTY order’s time-in-force
(‘‘TIF’’) terms.17 Upon reaching a resting
order that would trade with the active
MQTY order based on its price, but does
12 See Securities Exchange Act Release No. 42450
(February 23, 2000), 65 FR 10577, 10581 (February
28, 2000) (SR–NYSE–99–48).
13 See IEX Rule 1.160(p).
14 Pursuant to IEX Rule 11.190(b)(11) a ‘‘willing’’
contra-side order is one that is priced so as to be
marketable against the MQTY order in question.
15 An ‘‘active order’’ is an order checking the
Order Book for contra-side interest against which to
execute and includes new incoming orders as well
as orders rechecking the Order Book pursuant to
IEX Rule 11.230(a)(4)(D). There can only be one
active order for each symbol at any given time. See
IEX Rule 1.160(b).
16 See IEX Rule 11.190(b)(11)(G).
17 See IEX Rule 11.190(c). For example, an active
MQTY order with a TIF of FOK, like any FOK
order, will only execute for its full quantity, or
otherwise be canceled.
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not satisfy its effective minimum
quantity, the active MQTY order will
post to the Order Book or cancel back
to the User as per the order’s TIF and
MQTY terms. For example, if the active
MQTY order has a TIF of IOC or is
designated as MinExec Cancel
Remaining, then any unexecuted shares
will cancel back to the Member. But if
the active MQTY order is designated as
MinExec AON Remaining and has a TIF
of DAY, GTX, SYS, or GTT, then any
unexecuted shares will post to the Order
Book. If the remaining size of a MQTY
order designated as MinExec AON
Remaining is smaller than the effective
minimum quantity of the order, the
effective minimum quantity of the order
will change to equal the number of
shares remaining.
In October 2020,18 IEX introduced a
new type of limit order, the D-Limit
order,19 which is designed to help
protect liquidity providers from
potential adverse selection during
periods of quote instability in a fair and
nondiscriminatory manner.20 A D-Limit
order may be a displayed or nondisplayed limit order that upon entry
and when posting to the Order Book is
priced to be equal to and ranked at the
order’s limit price, but will be adjusted
to a less-aggressive price during periods
of quote instability, as defined in IEX
Rule 11.190(g).21
Currently, both displayed and nondisplayed D-Limit orders cannot be a
MQTY order.22 While IEX offers most
non-displayed orders the ability to
include a MQTY instruction, IEX did
not offer non-displayed D-Limit MQTY
orders at the time of their introduction
to reduce technical complexity.
However, in the more than two years
since the introduction of D-Limit orders,
IEX has received informal feedback from
Members indicating that they would
like to be able to submit non-displayed
D-Limit orders with a MQTY instruction
to decrease the potential price impact of
large D-Limit orders. Additionally, these
Members indicate that they would
submit more non-displayed D-Limit
orders if they could use a MQTY
instruction to set a minimum size for
each fill. Based on this feedback, IEX
proposes to enable fully non-displayed
D-Limit orders to be MQTY orders,
which is consistent with how IEX treats
other fully non-displayed limit orders.23
Specifically, IEX proposes to amend IEX
Rule 11.190(b)(7)(F)(vi), which currently
states that a D-Limit order may not be
a MQTY,24 to instead read as follows:
‘‘Non-displayed Discretionary Limit
orders may be a MQTY, as defined in
paragraph (11) below. Displayed and
partially displayed (i.e., reserve)
Discretionary Limit orders may not be a
MQTY, as defined in paragraph (11)
below.’’ 25 IEX is proposing no other
changes to D-Limit orders and no
changes at all to MQTY functionality.
18 See IEX Trading Alert 2020–029, available at
https://iextrading.com/alerts/#/126.
19 See Securities Exchange Act Release No. 89686
(August 26, 2020), 85 FR 54438 (September 1, 2020)
(SR–IEX–2019–15) (‘‘D-Limit Approval Order’’).
20 See Securities Exchange Act Release No. 87814
(December 20, 2019), 84 FR 71997, 71998
(December 30, 2019) (SR–IEX–2019–15) (‘‘D-Limit
Proposal’’).
21 See IEX Rules 11.190(b)(7) and 11.190(g).
22 See IEX Rule 11.190(b)(7)(F)(vi).
23 See IEX Rule 11.190(a)(2)(F). Reserve orders,
being partially displayed and partially nondisplayed, are not able to be MQTY orders. See IEX
Rule 11.190(b)(2)(H). Consistent with this
functionality, IEX’s proposal would not change the
fact that a D-Limit reserve order cannot be a MQTY
order.
24 See IEX Rule 11.190(b)(7)(F)(vi).
25 See Proposed IEX Rule 11.190(b)(7)(F)(vi).
26 15 U.S.C. 78f(b).
27 15 U.S.C. 78f(b)(5).
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
6(b) of the Act,26 in general, and furthers
the objectives of 6(b)(5),27 in particular,
in that it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and 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.
Specifically, the Exchange believes that
the proposed rule change is consistent
with the protection of investors and the
public interest because it is designed to
provide more flexibility and
opportunities for Members to add nondisplayed liquidity to the Exchange. As
noted in the Purpose section, the
proposed rule change is responsive to
informal feedback from some Members,
stating that they want to combine the
benefits of a non-displayed D-Limit
order with those of a MQTY order.
By providing additional functionality
to non-displayed D-Limit orders, IEX
believes that the proposed rule change
may attract additional liquidity to the
Exchange by incentivizing Members to
submit larger, non-displayed D-Limit
orders to the Exchange, in particular
Members that are not currently resting
non-displayed D-Limit orders on IEX.
To the extent this proposal is successful
in attracting more non-displayed DLimit orders to the Exchange, IEX
believes it will provide an overall
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benefit to market participants generally,
even though these larger MQTY orders
will not always interact with smaller
orders that are not able to satisfy the
MQTY constraints. Thus, IEX believes
this proposal supports the purposes of
the Act 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 further believes that the
proposed rule change is consistent with
the Act because it would be available to
all Members on a fair, equal and
nondiscriminatory basis regardless of
their technological sophistication.
Moreover, the proposal is designed to
incentivize the entry of additional nondisplayed D-Limit orders by providing
MQTY functionality to support
Members’ ability to control the size and
price impact of the execution of such
orders. To the extent that such incentive
is successful in increasing the overall
liquidity pool available at IEX, all
market participants, including takers of
liquidity, will benefit.
Furthermore, because MQTY orders
surrender execution priority if their
MQTY conditions are not satisfied,28
when a D-Limit MQTY order is unable
to trade with a contra-side order because
of its MQTY instruction, if there is
another order resting on the Order Book
behind the D-Limit order, such order
could trade with the contra-side order.
Therefore, IEX does not believe that
increasing the number of MQTY orders
on the Exchange (which is designed to
increase liquidity on IEX) would
necessarily reduce the overall likelihood
of MQTY contra-side orders executing
on IEX, which is consistent with the
purposes of the Act to protect investors
and the public interest.
In addition, as noted in the Purpose
section, a D-Limit MQTY order is a
combination of two order types the
Commission has already approved—
MQTY orders—which are also a
common order type on equity
exchanges 29—and D-Limit orders.30
And all Members would be eligible to
include the optional MQTY instruction
on their fully non-displayed D-Limit
orders in the same manner.
Thus, IEX does not believe that the
proposed changes raise any new or
novel material issues that have not
already been considered by the
Commission in connection with existing
order types offered by IEX and other
national securities exchanges.
IEX Rule 11.220(a)(5).
supra note 9.
30 See supra note 12.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
The Exchange does not believe that
the proposed rule change will impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
To the contrary, the proposal is
designed to enhance IEX’s
competitiveness with other markets by
further enhancing IEX’s D-Limit order
type functionality. As discussed in the
Purpose section, the proposal is
designed to incentivize the entry of
additional non-displayed liquidity
providing orders on IEX by offering
Members the flexibility of including an
optional MQTY instruction on fully
non-displayed D-Limit orders. By giving
more opportunities to Members to tailor
D-Limit orders to their trading
strategies, IEX believes this proposal
will increase the overall liquidity profile
on the Exchange, as discussed in the
Statutory Basis section.
The Exchange also does not believe
that the proposed rule change will
impose any burden on intramarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. All Members would
be eligible to include the optional
MQTY instruction on their fully nondisplayed D-Limit orders in the same
manner. Moreover, the proposal would
provide potential benefits to all
Members, as discussed in the Statutory
Basis section, to the extent that there is
more liquidity available on IEX as a
result of increased use of D-Limit orders
attributable to the ability to enter such
orders with a MQTY instruction.
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 designated this rule
filing as non-controversial under
19(b)(3)(A) 31 of the Act and Rule 19b–
4(f)(6) 32 thereunder. Because the
proposed rule change does not: (i)
significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
28 See
29 See
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32 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
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25441
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 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)
thereunder.33
The Exchange believes that the
proposed rule change meets the criteria
of subparagraph (f)(6) of Rule 19b–4 34
because it would not significantly affect
the protection of investors or the public
interest. Rather, the proposed rule
change neither significantly affects the
protection of investors or the public
interest, nor does it impose any burden
on competition because it would merely
combine the attributes of two existing
order types—D-Limit orders and MQTY
orders—to expand the functionality
available to Members, as discussed in
the Purpose section, and does not raise
any new or novel material issues that
have not already been considered by the
Commission in connection with existing
order types offered by IEX. Accordingly,
IEX has designated this rule filing as
non-controversial under 19(b)(3)(A) of
the Act 35 and paragraph (f)(6) of Rule
19b–4 thereunder.36
The Exchange will implement the
proposed rule change within 90 days of
filing, subject to the 30-day operative
delay, and provide at least ten (10) days’
notice to Members and market
participants of the implementation
timeline.
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 19(b)(2)(B) 37 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,
33 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s 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.
34 17 CFR 240.19b–4(f)(6).
35 15 U.S.C. 78s(b)(3)(A).
36 17 CFR 240.19b–4(f)(6).
37 15 U.S.C. 78s(b)(2)(B).
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including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
SMALL BUSINESS ADMINISTRATION
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–2023–05 on the subject line.
Presidential Declaration Amendment of
a Major Disaster for Public Assistance
Only for the State of Mississippi
ddrumheller on DSK120RN23PROD with NOTICES1
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–2023–05. 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
offices of the Exchange. Do not include
personal identifiable information in
submissions; you should submit only
information that you wish to make
available publicly. We may redact in
part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection. All submissions should refer
to File Number SR–IEX–2023–05, and
should be submitted on or before May
17, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.38
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–08753 Filed 4–25–23; 8:45 am]
BILLING CODE 8011–01–P
38 17
CFR 200.30–3(a)(12).
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[Disaster Declaration #17838 and #17839;
Mississippi Disaster Number MS–00152]
Small Business Administration.
Amendment 1.
AGENCY:
ACTION:
This is an amendment of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Mississippi (FEMA–4697–
DR), dated 03/30/2023.
Incident: Severe Storms, Straight-line
Winds, and Tornadoes.
Incident Period: 03/24/2023 through
03/25/2023.
DATES: Issued on 04/20/2023.
Physical Loan Application Deadline
Date: 05/30/2023.
Economic Injury (EIDL) Loan
Application Deadline Date: 01/02/2024.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Recovery &
Resilience, U.S. Small Business
Administration, 409 3rd Street SW,
Suite 6050, Washington, DC 20416,
(202) 205–6734.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for Private Non-Profit
organizations in the State of Mississippi,
dated 03/30/2023, is hereby amended to
include the following areas as adversely
affected by the disaster.
Primary Counties: Washington.
All other information in the original
declaration remains unchanged.
SUMMARY:
(Catalog of Federal Domestic Assistance
Number 59008)
Francisco Sa´nchez, Jr.,
Associate Administrator, Office of Disaster
Recovery & Resilience.
[FR Doc. 2023–08779 Filed 4–25–23; 8:45 am]
BILLING CODE 8026–09–P
SMALL BUSINESS ADMINISTRATION
[License No. 02/02–0663]
PennantPark SBIC II, LP; Surrender of
License of Small Business Investment
Company
Pursuant to the authority granted to
the United States Small Business
Administration under the Small
Business Investment Act of 1958, as
amended, under Section 309 of the Act
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and section 107.1900 of the Code of
Federal Regulations to function as a
small business investment company
under the Small Business Investment
Company License No. 02/02–0663
issued to PennantPark SBIC II, LP, said
license is hereby declared null and void.
Bailey DeVries,
Associate Administrator, Office of Investment
and Innovation, United States Small Business
Administration.
[FR Doc. 2023–08730 Filed 4–25–23; 8:45 am]
BILLING CODE P
DEPARTMENT OF STATE
[Public Notice: 12055]
Advisory Committee for the Study of
Eastern Europe and the Independent
States of the Former Soviet Union
(Title VIII)
In accordance with the provisions of
the Federal Advisory Committee Act
(Pub. L. 92–463), the Department of
State has filed the renewed Charter for
the Advisory Committee for the Study of
Eastern Europe and the Independent
States of the Former Soviet Union
(Advisory Committee) for an additional
2 years.
The Advisory Committee was
established under the authority of 22
U.S.C. 4503 to provide advice and
recommendations to the Secretary of
State or his or her designated
representative concerning
implementation of the Research and
Training for Eastern Europe and the
Independent States of the Former Soviet
Union Act of 1983, Public Law 98–164,
as amended (The Act).
The Advisory Committee
recommends grant policies for the
advancement of the objectives of the
Act. In proposing recipients for grants
under the Act, the Advisory Committee
strives to give the highest priority to
national organizations with an interest
and expertise in conducting research
and training concerning the countries of
the former Soviet Union and Eastern
Europe and in disseminating the results
of such.
Catherine Kuchta-Helbling,
Executive Director, Advisory Committee for
Study of Eastern Europe and the Independent
States of the Former Soviet Union,
Department of State.
[FR Doc. 2023–08750 Filed 4–25–23; 8:45 am]
BILLING CODE 4710–32–P
E:\FR\FM\26APN1.SGM
26APN1
]]>Agencies
[Federal Register Volume 88, Number 80 (Wednesday, April 26, 2023)]
[Notices]
[Pages 25439-25442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08753]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97341; File No. SR-IEX-2023-05]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Allow
Non-Displayed Discretionary Limit Orders To Be Submitted With a Minimum
Quantity Instruction
April 20, 2023.
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 April 7, 2023, the Investors Exchange LLC (``IEX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 19(b)(1) under the Act,\3\ and Rule
19b-4 thereunder,\4\ IEX is filing with the Commission a proposal to
allow non-displayed Discretionary Limit orders to be submitted with a
minimum quantity instruction. The Exchange has designated this proposal
as non-controversial and provided the Commission with the notice
required by Rule 19b-4(f)(6)(iii) under the Act.\5\
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\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
\5\ 17 CFR 240.19b-4(f)(6)(iii).
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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 statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in s 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 purpose of this proposed rule filing is to amend IEX Rule
11.190(b)(7) to offer Members \6\ the option of including a Minimum
Quantity (``MQTY'') \7\ instruction on a non-displayed \8\
Discretionary Limit (``D-Limit'') order. As proposed, a non-displayed
D-Limit MQTY order would function exactly like any other MQTY order at
IEX.
---------------------------------------------------------------------------
\6\ See IEX Rule 1.160(s).
\7\ See IEX Rule 11.190(b)(11).
\8\ See IEX Rule 11.190(b)(3).
---------------------------------------------------------------------------
Background
Since the approval of its exchange application, IEX, like other
equities exchanges,\9\ has offered Members \10\ the option of including
a MQTY instruction on a non-displayed order. IEX's rulebook defines a
MQTY order as a non-displayed, non-routable order that enables a Member
to specify an ``effective minimum quantity'', which is the minimum
share amount at which the order will execute.\11\ A MQTY order will not
execute unless the volume of contra-side liquidity available to execute
against the order meets or exceeds the effective minimum quantity.
---------------------------------------------------------------------------
\9\ See, e.g., Cboe BZX Exchange, Inc. Rule 11.9(c)(5); MEMX,
LLC Rule 11.6(f); The Nasdaq Stock Market LLC Rule 4703(e); and New
York Stock Exchange LLC Rule 7.31(i)(3).
\10\ See IEX Rule 1.160(s).
\11\ See IEX Rule 11.190(b)(11).
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IEX understands that some market participants use MQTY orders as
part of a trading strategy designed to limit the price impact on a
security when passively executing larger orders. In other words, MQTY
orders are often used to reduce the likelihood of a larger resting
order interacting with small orders entered by professional traders,
[[Page 25440]]
possibly adversely impacting the execution of their larger order. For
example, professional traders may use small pinging orders to detect
the presence of a large resting order and then use that information to
cause the quotes in that security to widen or skew in a manner that
adversely impacts the price that the resting order can trade at. The
---------------------------------------------------------------------------
Commission has long recognized this concern:
Another type of implicit transaction cost reflected in the price
of a security is short-term price volatility caused by temporary
imbalances in trading interest. For example, a significant implicit
cost for large investors (who often represent the consolidated
investments of many individuals) is the price impact that their
large trades can have on the market. Indeed, disclosure of these
large orders can reduce the likelihood of their being filled.'' \12\
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\12\ See Securities Exchange Act Release No. 42450 (February 23,
2000), 65 FR 10577, 10581 (February 28, 2000) (SR-NYSE-99-48).
A MQTY order resting on the IEX Order Book \13\ will only execute
with a willing \14\ contra-side order that satisfies the resting
order's effective minimum quantity. For active orders,\15\ IEX offers
Members three options for how a MQTY order will determine satisfaction
of its effective limit quantity parameter: Composite; Minimum Execution
Size with Cancel Remaining (``MinExec Cancel Remaining''); and Minimum
Execution Size with All or None Remaining (``MinExec AON
Remaining'').\16\ When an active MQTY order is marked Composite, it
will execute against all willing contra-side resting orders of any
size, provided that the aggregate execution size is equal to or greater
than the active order's effective minimum quantity. When an active MQTY
order is marked either MinExec Cancel Remaining or MinExec AON
Remaining, it will execute against each willing contra-side resting
order in priority, provided that each individual execution size meets
the active order's effective minimum quantity and satisfies the MQTY
order's time-in-force (``TIF'') terms.\17\ Upon reaching a resting
order that would trade with the active MQTY order based on its price,
but does not satisfy its effective minimum quantity, the active MQTY
order will post to the Order Book or cancel back to the User as per the
order's TIF and MQTY terms. For example, if the active MQTY order has a
TIF of IOC or is designated as MinExec Cancel Remaining, then any
unexecuted shares will cancel back to the Member. But if the active
MQTY order is designated as MinExec AON Remaining and has a TIF of DAY,
GTX, SYS, or GTT, then any unexecuted shares will post to the Order
Book. If the remaining size of a MQTY order designated as MinExec AON
Remaining is smaller than the effective minimum quantity of the order,
the effective minimum quantity of the order will change to equal the
number of shares remaining.
---------------------------------------------------------------------------
\13\ See IEX Rule 1.160(p).
\14\ Pursuant to IEX Rule 11.190(b)(11) a ``willing'' contra-
side order is one that is priced so as to be marketable against the
MQTY order in question.
\15\ An ``active order'' is an order checking the Order Book for
contra-side interest against which to execute and includes new
incoming orders as well as orders rechecking the Order Book pursuant
to IEX Rule 11.230(a)(4)(D). There can only be one active order for
each symbol at any given time. See IEX Rule 1.160(b).
\16\ See IEX Rule 11.190(b)(11)(G).
\17\ See IEX Rule 11.190(c). For example, an active MQTY order
with a TIF of FOK, like any FOK order, will only execute for its
full quantity, or otherwise be canceled.
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In October 2020,\18\ IEX introduced a new type of limit order, the
D-Limit order,\19\ which is designed to help protect liquidity
providers from potential adverse selection during periods of quote
instability in a fair and nondiscriminatory manner.\20\ A D-Limit order
may be a displayed or non-displayed limit order that upon entry and
when posting to the Order Book is priced to be equal to and ranked at
the order's limit price, but will be adjusted to a less-aggressive
price during periods of quote instability, as defined in IEX Rule
11.190(g).\21\
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\18\ See IEX Trading Alert 2020-029, available at https://iextrading.com/alerts/#/126.
\19\ See Securities Exchange Act Release No. 89686 (August 26,
2020), 85 FR 54438 (September 1, 2020) (SR-IEX-2019-15) (``D-Limit
Approval Order'').
\20\ See Securities Exchange Act Release No. 87814 (December 20,
2019), 84 FR 71997, 71998 (December 30, 2019) (SR-IEX-2019-15) (``D-
Limit Proposal'').
\21\ See IEX Rules 11.190(b)(7) and 11.190(g).
---------------------------------------------------------------------------
Currently, both displayed and non-displayed D-Limit orders cannot
be a MQTY order.\22\ While IEX offers most non-displayed orders the
ability to include a MQTY instruction, IEX did not offer non-displayed
D-Limit MQTY orders at the time of their introduction to reduce
technical complexity. However, in the more than two years since the
introduction of D-Limit orders, IEX has received informal feedback from
Members indicating that they would like to be able to submit non-
displayed D-Limit orders with a MQTY instruction to decrease the
potential price impact of large D-Limit orders. Additionally, these
Members indicate that they would submit more non-displayed D-Limit
orders if they could use a MQTY instruction to set a minimum size for
each fill. Based on this feedback, IEX proposes to enable fully non-
displayed D-Limit orders to be MQTY orders, which is consistent with
how IEX treats other fully non-displayed limit orders.\23\
Specifically, IEX proposes to amend IEX Rule 11.190(b)(7)(F)(vi), which
currently states that a D-Limit order may not be a MQTY,\24\ to instead
read as follows: ``Non-displayed Discretionary Limit orders may be a
MQTY, as defined in paragraph (11) below. Displayed and partially
displayed (i.e., reserve) Discretionary Limit orders may not be a MQTY,
as defined in paragraph (11) below.'' \25\ IEX is proposing no other
changes to D-Limit orders and no changes at all to MQTY functionality.
---------------------------------------------------------------------------
\22\ See IEX Rule 11.190(b)(7)(F)(vi).
\23\ See IEX Rule 11.190(a)(2)(F). Reserve orders, being
partially displayed and partially non-displayed, are not able to be
MQTY orders. See IEX Rule 11.190(b)(2)(H). Consistent with this
functionality, IEX's proposal would not change the fact that a D-
Limit reserve order cannot be a MQTY order.
\24\ See IEX Rule 11.190(b)(7)(F)(vi).
\25\ See Proposed IEX Rule 11.190(b)(7)(F)(vi).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with 6(b) of the Act,\26\ in general, and furthers the objectives of
6(b)(5),\27\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and 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. Specifically, the Exchange believes
that the proposed rule change is consistent with the protection of
investors and the public interest because it is designed to provide
more flexibility and opportunities for Members to add non-displayed
liquidity to the Exchange. As noted in the Purpose section, the
proposed rule change is responsive to informal feedback from some
Members, stating that they want to combine the benefits of a non-
displayed D-Limit order with those of a MQTY order.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78f(b).
\27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
By providing additional functionality to non-displayed D-Limit
orders, IEX believes that the proposed rule change may attract
additional liquidity to the Exchange by incentivizing Members to submit
larger, non-displayed D-Limit orders to the Exchange, in particular
Members that are not currently resting non-displayed D-Limit orders on
IEX. To the extent this proposal is successful in attracting more non-
displayed D-Limit orders to the Exchange, IEX believes it will provide
an overall
[[Page 25441]]
benefit to market participants generally, even though these larger MQTY
orders will not always interact with smaller orders that are not able
to satisfy the MQTY constraints. Thus, IEX believes this proposal
supports the purposes of the Act 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 further believes that the proposed rule change is consistent
with the Act because it would be available to all Members on a fair,
equal and nondiscriminatory basis regardless of their technological
sophistication. Moreover, the proposal is designed to incentivize the
entry of additional non-displayed D-Limit orders by providing MQTY
functionality to support Members' ability to control the size and price
impact of the execution of such orders. To the extent that such
incentive is successful in increasing the overall liquidity pool
available at IEX, all market participants, including takers of
liquidity, will benefit.
Furthermore, because MQTY orders surrender execution priority if
their MQTY conditions are not satisfied,\28\ when a D-Limit MQTY order
is unable to trade with a contra-side order because of its MQTY
instruction, if there is another order resting on the Order Book behind
the D-Limit order, such order could trade with the contra-side order.
Therefore, IEX does not believe that increasing the number of MQTY
orders on the Exchange (which is designed to increase liquidity on IEX)
would necessarily reduce the overall likelihood of MQTY contra-side
orders executing on IEX, which is consistent with the purposes of the
Act to protect investors and the public interest.
---------------------------------------------------------------------------
\28\ See IEX Rule 11.220(a)(5).
---------------------------------------------------------------------------
In addition, as noted in the Purpose section, a D-Limit MQTY order
is a combination of two order types the Commission has already
approved--MQTY orders--which are also a common order type on equity
exchanges \29\--and D-Limit orders.\30\ And all Members would be
eligible to include the optional MQTY instruction on their fully non-
displayed D-Limit orders in the same manner.
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\29\ See supra note 9.
\30\ See supra note 12.
---------------------------------------------------------------------------
Thus, IEX does not believe that the proposed changes raise any new
or novel material issues that have not already been considered by the
Commission in connection with existing order types offered by IEX and
other national securities exchanges.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. To the contrary,
the proposal is designed to enhance IEX's competitiveness with other
markets by further enhancing IEX's D-Limit order type functionality. As
discussed in the Purpose section, the proposal is designed to
incentivize the entry of additional non-displayed liquidity providing
orders on IEX by offering Members the flexibility of including an
optional MQTY instruction on fully non-displayed D-Limit orders. By
giving more opportunities to Members to tailor D-Limit orders to their
trading strategies, IEX believes this proposal will increase the
overall liquidity profile on the Exchange, as discussed in the
Statutory Basis section.
The Exchange also does not believe that the proposed rule change
will impose any burden on intramarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. All Members
would be eligible to include the optional MQTY instruction on their
fully non-displayed D-Limit orders in the same manner. Moreover, the
proposal would provide potential benefits to all Members, as discussed
in the Statutory Basis section, to the extent that there is more
liquidity available on IEX as a result of increased use of D-Limit
orders attributable to the ability to enter such orders with a MQTY
instruction.
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 designated this rule filing as non-controversial
under 19(b)(3)(A) \31\ of the Act and Rule 19b-4(f)(6) \32\ thereunder.
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
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\33\
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\31\ 15 U.S.C. 78s(b)(3)(A).
\32\ 17 CFR 240.19b-4(f)(6).
\33\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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.
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change meets the
criteria of subparagraph (f)(6) of Rule 19b-4 \34\ because it would not
significantly affect the protection of investors or the public
interest. Rather, the proposed rule change neither significantly
affects the protection of investors or the public interest, nor does it
impose any burden on competition because it would merely combine the
attributes of two existing order types--D-Limit orders and MQTY
orders--to expand the functionality available to Members, as discussed
in the Purpose section, and does not raise any new or novel material
issues that have not already been considered by the Commission in
connection with existing order types offered by IEX. Accordingly, IEX
has designated this rule filing as non-controversial under 19(b)(3)(A)
of the Act \35\ and paragraph (f)(6) of Rule 19b-4 thereunder.\36\
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\34\ 17 CFR 240.19b-4(f)(6).
\35\ 15 U.S.C. 78s(b)(3)(A).
\36\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
The Exchange will implement the proposed rule change within 90 days
of filing, subject to the 30-day operative delay, and provide at least
ten (10) days' notice to Members and market participants of the
implementation timeline.
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
19(b)(2)(B) \37\ of the Act to determine whether the proposed rule
change should be approved or disapproved.
---------------------------------------------------------------------------
\37\ 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,
[[Page 25442]]
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-2023-05 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-2023-05. 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 offices of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to File Number SR-IEX-2023-05, and should be submitted on
or before May 17, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
---------------------------------------------------------------------------
\38\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08753 Filed 4-25-23; 8:45 am]
BILLING CODE 8011-01-P
