Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Fee Schedule Concerning Transaction Fees for Tape B Securities, 31231-31236 [2024-08682]
Download as PDF
<![CDATA[
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Notices
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
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of
FINRA. 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–FINRA–2024–005 and
should be submitted on or before May
15, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–08688 Filed 4–23–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99989; File No. SR–IEX–
2024–06]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Exchange’s Fee Schedule Concerning
Transaction Fees for Tape B Securities
khammond on DSKJM1Z7X2PROD with NOTICES
April 18, 2024.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on April 8,
2024, the Investors Exchange LLC
(‘‘IEX’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II and III
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.
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
16:48 Apr 23, 2024
Jkt 262001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Pursuant to the provisions of Section
19(b)(1) under the Securities Exchange
Act of 1934 (‘‘Act’’),4 and Rule 19b–4
thereunder,5 IEX is filing with the
Commission a proposed rule change to
amend the Exchange’s fee schedule
applicable to Members 6 (the ‘‘Fee
Schedule’’) pursuant to IEX Rule
15.110(a) and (c). Changes to the Fee
Schedule pursuant to this proposal are
effective upon filing,7 and will be
operative on May 1, 2024.
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
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 modify its
Fee Schedule, pursuant to IEX Rule
15.110(a) and (c), to modify the
transaction fees applicable to most 8
displayed executions of Tape B
securities.9 As proposed, the Exchange
will increase the rebate paid for
executions of displayed liquidity adding
4 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
6 See IEX Rule 1.160(s).
7 15 U.S.C. 78s(b)(3)(A)(ii).
8 This fee proposal will not change the fees
charged or fee codes applied for Retail and Retail
Liquidity Providing executions of Tape B securities,
which execute for free. Additionally, while the fee
proposal includes a fee code change for all other
executions of Tape B securities that are priced at
less than $1.00 per share, the fees charged for such
executions will not change. Finally, as described
infra, certain pegged order types that by design are
not likely to interact with displayed liquidity will
not be subject to the increased fees charged for
taking displayed liquidity in Tape B securities.
9 ‘‘Tape B securities’’ are securities listed on any
national securities exchange other than the New
York Stock Exchange or The Nasdaq Stock Market.
5 17
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
31231
orders in Tape B securities with an
execution price of $1.00 per share or
more from $0.0004 to $0.0014 per share,
increase the fee for executions of most 10
displayed liquidity removing orders in
Tape B securities from $0.0010 to
$0.0020 per share (unless a lower fee
applies), and introduce two new fee
codes to reflect these fee changes. IEX
is not proposing any changes to
executions that add or remove nondisplayed liquidity in Tape B securities,
which will continue to be subject to the
same fees charged for executions in
Tape A and C securities.11 The
Exchange notes that other exchanges
also offer different fees for Tape B
executions that are designed to
incentivize the posting of displayed
liquidity in Tape B securities.12 IEX’s
proposed fee structure for executions of
Tape B securities is less than or in line
with other exchanges, but with lower
access fees and rebates and without the
use of any volume-based pricing.13
IEX is making this proposal to
incentivize the posting of displayed
liquidity in Tape B securities by
increasing the rebate applied to those
orders, thereby promoting price
discovery and market quality on the
Exchange, which the Exchange believes
benefits all Members and market
participants. The Exchange periodically
assesses its fee structure. Based upon a
recent assessment, the Exchange
believes that the proposed pricing
change would further incentivize
Members to submit displayed orders in
Tape B securities priced at or above
$1.00 per share.
10 See
supra note 5.
discussed below, IEX is proposing to
introduce a new fee code that will apply to nondisplayed adding or removing executions of Tape
B securities, but the fees charged for these
executions will be unchanged.
12 See, e.g., MEMX Equities Fee Schedule
(effective April 1, 2024), available at https://
info.memxtrading.com/equities-trading-resources/
us-equities-fee-schedule/ (paying an ‘‘additive
rebate’’ of $0.0002 per share for Tape B securities
if the member satisfies a volume threshold in its
Tape B trades, but offering no similar rebate for
Tape A or C securities); Nasdaq Equity 7, Section
118(a)(1), available at https://listingcenter.nasdaq.
com/rulebook/nasdaq/rules/
Nasdaq%20Equity%207#section_118_nasdaq_
market_center_order_execution_and_routing
(paying a supplemental rebate of $0.0001 per share
for Tape B displayed liquidity providing orders, but
offering no similar rebate for Tape A or C
securities).
13 See, e.g., MEMX Equities Fee Schedule, supra,
note 9 (offering rebates for adding displayed Tape
B liquidity of $0.0015 to $0.0035, depending upon
trading volume, and charging as much as $0.0030
to remove Tape B liquidity); Nasdaq Equity 7,
Section 118(a)(1), supra, note 9 (offering rebates for
adding displayed Tape B liquidity of $0.0028 to
$0.0036, depending upon trading volume, and
charging as much as $0.0030 to remove Tape B
liquidity).
11 As
E:\FR\FM\24APN1.SGM
24APN1
31232
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Notices
Fee Schedule Changes
khammond on DSKJM1Z7X2PROD with NOTICES
IEX proposes to increase the rebate it
pays for adding displayed liquidity in
Tape B securities from $0.0004 per
share to $0.0014 per share for
executions priced at or above $1.00 per
share. ‘‘Sub-dollar’’ 14 executions of
Tape B securities that add displayed
liquidity will continue to execute for
free. Consistent with the higher rebate
IEX will pay for adding displayed
liquidity in Tape B securities, IEX
proposes to increase the fee for
removing displayed liquidity in Tape B
securities from $0.0010 per share to
$0.0020 per share. Sub-dollar
executions of Tape B securities that
remove displayed liquidity will
continue to be charged 0.09% of the
Total Dollar Value (‘‘TDV’’) of the
execution.
IEX does not propose to change the
fee ($0.0010 per share) currently
applicable to Discretionary Peg (‘‘DPeg’’),15 Fixed Midpoint Peg (‘‘FMPeg’’),16 Midpoint Peg (‘‘M-Peg),17 or
Primary Peg (‘‘P-Peg’’) 18 orders that
remove displayed liquidity in Tape B
securities. IEX notes that each of these
four order types is designed to execute
within the spread (i.e., at a price
between the NBBO 19). IEX understands
that Members and other market
participants typically use these order
types with the expectation that they will
either add or remove non-displayed
liquidity, and that they will not execute
against displayed liquidity. However,
these four order types may execute
against displayed orders in certain
‘‘edge case’’ scenarios, such as when a
resting D-Peg order is invited to Recheck
the Order Book 20 and matches with a
displayed odd lot order, or when an
incoming M-Peg order matches with a
displayed order standing its ground in
a locked or crossed market. Currently, in
these circumstances, the non-displayed
pegged order is charged the same fee
(i.e., $0.0010 per share) as if it traded
with a non-displayed order (Fee Code
Combination TL). To provide greater fee
determinism to its Members and
consistent with current practice, IEX
proposes to continue charging $0.0010
per share for D-Peg, FM-Peg, M-Peg, and
P-Peg orders that remove displayed
liquidity in a Tape B security in one of
the above-listed circumstances.
Notwithstanding this exception, if an
incoming Post Only 21 order for a Tape
B security executes against a resting MPeg or FM-Peg order with the Trade
Now 22 instruction, IEX proposes to
charge the M-Peg or FM-Peg order a fee
of $0.0020 per share, not the $0.0010
per share fee that would otherwise
apply had the M-Peg or FM-Peg order
executed against a displayed order for a
Tape B security. IEX is proposing to
make this distinction because Members
that include a Trade Now instruction on
their M-Peg or FM-Peg orders have
thereby specified their willingness to
match with incoming Post Only orders,
and thus indicated their willingness to
pay the $0.0020 per share fee IEX will
charge for taking displayed liquidity in
Tape B securities.
IEX is not proposing to change the
fees charged or fee codes applied to
Retail 23 or Retail Liquidity Provider 24
orders that execute in Tape B securities.
Thus, a Retail order that takes liquidity
from a non-displayed order in a Tape B
security will be assigned Fee Code
Combination TIR (free execution), and
the non-displayed order will be
assigned Fee Code Combination MIB
(fee of $0.0010 per share). Relatedly, a
Retail order that takes liquidity from a
Additional fee
codes
Description
B .......................
K .......................
Tape B security .........................................................................
Discretionary Peg, Fixed Midpoint Peg, Midpoint Peg, or Primary Peg order removes displayed liquidity (Tape B).
displayed odd lot order in a Tape B
security will be assigned Fee Code
Combination TLR (free execution), and
the displayed odd lot order will be
assigned Fee Code Combination MLB
(rebate of $0.0014 per share).
IEX also proposes to introduce two
new Fee Code Modifiers: ‘‘B’’ and ‘‘K’’
to reflect the proposed fee changes. Fee
Code Modifier B would be included on
any execution report for an execution of
a Tape B security, with the exception of
executions of Retail and Retail Liquidity
Provider orders, which will continue to
execute for free, as described above. In
addition, Fee Code Modifier K would be
included on execution reports for D-Peg,
FM-Peg, M-Peg, or P-Peg orders that
remove displayed liquidity in a Tape B
security in the circumstances discussed
above.
IEX also proposes to add two new
footnotes to the Fee Schedule: (i)
proposed Footnote 2, which would
apply to Fee Code Modifier B, and (ii)
proposed Footnote 3, which would
apply to Fee Code Combination TLBK.
Proposed Footnote 2 reads in full:
Fee Code B: Fee Code B applies to all
executions of Tape B securities, other than
executions of Retail and Retail Liquidity
Provider orders and executions with Base Fee
Codes X, O, C, H, and P.25
And Proposed Footnote 3 reads in full:
TLBK will not apply to Midpoint Peg and
Fixed Midpoint Peg orders with Trade Now
functionality enabled that take liquidity from
an incoming Post Only order for a Tape B
security; such executions will be assigned
Fee Code Combination TLWB.
IEX proposes to add these Fee Codes
to the Fee Code Modifiers table on the
IEX Fee Schedule as follows (internal
footnotes omitted):
Fee
See Relevant Fee Code Combinations Below.
See Relevant Fee Code Combinations Below.
Additionally, IEX proposes to add
nine new Fee Code Combinations to the
Additional Fee Code Combinations and
Associated Fees table that reflect the
fees IEX proposes to assess for
executions involving a Tape B
security: 26
14 ‘‘Sub-dollar’’ refers to orders or executions
priced at less than $1.00 per share.
15 See IEX Rule 11.190(b)(10).
16 See IEX Rule 11.190(b)(19).
17 See IEX Rule 11.190(b)(9).
18 See IEX Rule 11.190(b)(8).
19 See IEX Rule 1.160(u).
20 See IEX Rule 11.230(a)(4)(D).
21 See IEX Rule 11.190(b)(20).
22 When an incoming Post Only order matches a
resting order with a Trade Now instruction, the
resting order converts into an executable order that
removes liquidity against the incoming Post Only
order, and the incoming Post Only order becomes
the liquidity adding order. See IEX Rule
11.190(b)(21). A Trade Now instruction cannot be
added to a D-Peg or P-Peg order. See IEX Rules
11.190(b)(8) and 11.190(b)(10).
23 See IEX Rule 11.190(b)(15).
24 See IEX Rule 11.190(b)(14). Retail Liquidity
Provider orders can only match with Retail orders
and will always be assigned Fee Code Combination
MIA (free execution), irrespective of if the
execution is a Tape B security.
25 Fee Code X applies to securities that trade in
the Opening Cross. Fee Codes O, C, H, and P are
the Auction Match fee codes. As reflected in
proposed footnote 2, these fee codes will continue
to apply to Tape B securities.
26 As described above, all nine of the following
Fee Code Combinations will be modified by
proposed footnote 2.
VerDate Sep<11>2014
16:48 Apr 23, 2024
Jkt 262001
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
E:\FR\FM\24APN1.SGM
24APN1
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Notices
• Fee Code Combination MIB would
apply to an order that adds nondisplayed liquidity in a Tape B security.
These executions will be charged a fee
of $0.0010 per share for executions at or
above $1.00 and 0.10% of the TDV for
sub-dollar executions.
• Fee Code Combination MLB would
apply to an order that adds displayed
liquidity in a Tape B security. These
executions will be paid a rebate of
$0.0014 per share for executions at or
above $1.00 and execute for free for subdollar executions.
• Fee Code Combination MLYB
would apply to a Post Only order that
executes on entry with a contra-side
order with the Trade Now instruction in
a Tape B security. These executions will
be paid a rebate of $0.0014 per share.
Because the Exchange will disregard the
Post Only instruction on sub-dollar
orders,27 IEX proposes to have the
‘‘Executions below $1.00’’ column of the
Additional Fee Code Combinations and
Associated Fees table column read ‘‘N/
A’’.28
• Fee Code Combination TIB would
apply to an order that removes nondisplayed liquidity in a Tape B security.
These executions will be charged a fee
of $0.0010 per share for executions at or
above $1.00 and 0.10% of TDV for subdollar executions.
• Fee Code Combination TIYB would
apply to a Post Only order priced at
$1.00 or more that removes nondisplayed liquidity in a Tape B security
on entry. These executions will be
charged a fee of $0.0010 per share for
executions at or above $1.00. Because
the Exchange will disregard the Post
Only instruction on sub-dollar orders,29
IEX proposes to have the ‘‘Executions
below $1.00’’ column of the Additional
Fee Code Combinations and Associated
Fees table read ‘‘N/A’’.30
• Fee Code Combination TLB would
apply to an order that removes
displayed liquidity in a Tape B security.
These executions will be charged a fee
27 See
IEX Rule 11.190(b)(20)(A).
incoming sub-dollar order for a Tape B
security with a disregarded Post Only instruction
will not trigger a resting order with the ‘‘Trade
Now’’ instruction to become the taking order and
will not be treated as the displayed liquidity adding
order. Thus, Fee Code Combination MLYB would
never apply. If the incoming order matched with a
resting non-displayed or displayed order, it will
result in a Fee Code Combination of TLB or TIB,
with fees of 0.09% or 0.10% of TDV, respectively.
29 See supra note 24.
30 An incoming sub-dollar order with a
disregarded Post Only instruction that executes on
entry with a resting non-displayed order will result
in a Fee Code Combination of TIB (‘‘Removes nondisplayed liquidity (Tape B)’’) on the execution
report and be charged the normal sub-dollar dark
taking fee of 0.10% of the Total Dollar Value
(‘‘TDV’’).
khammond on DSKJM1Z7X2PROD with NOTICES
28 An
VerDate Sep<11>2014
16:48 Apr 23, 2024
Jkt 262001
of $0.0020 per share for executions at or
above $1.00 and 0.09% of TDV for subdollar executions.
• Fee Code Combination TLBK would
apply to a D-Peg, FM-Peg, M-Peg, or PPeg order that removes displayed
liquidity in a Tape B security. These
executions will be charged a fee of
$0.0010 per share for executions at or
above $1.00 and 0.09% of TDV for subdollar executions. As described above,
Fee Code Combination TLBK will be
modified by proposed footnote 2, which
explains that M-Peg and FM-Peg orders
with a Trade Now instruction that
execute against an incoming Post Only
order will be assigned Fee Code
Combination TLWB, and will not be
assigned Fee Code Combination TLBK.
• Fee Code Combination TLYB would
apply to a Post Only order priced at
$1.00 or more that removes displayed
liquidity on entry in a Tape B security.
These executions will be charged a fee
of $0.0020 per share. Because the
Exchange will disregard the Post Only
instruction on sub-dollar orders,31 IEX
proposes to have the ‘‘Executions below
$1.00’’ column of the Additional Fee
Code Combinations and Associated Fees
table read ‘‘N/A’’.32
• Fee Code Combination TLWB
would apply to a resting non-displayed
order with the Trade Now instruction
that executes against an incoming Post
Only order priced at $1.00 or more per
share. These executions will be charged
a fee of $0.0020 per share. Because the
Exchange will disregard the Post Only
instruction on an incoming sub-dollar
orders,33 that order will not trigger a
resting order with the ‘‘Trade Now’’
instruction to become the taking order.
Therefore, Fee Code Combination TLWB
would never apply to a resting nondisplayed order that matches with an
incoming sub-dollar order with a Post
Only instruction, and IEX proposes to
have the ‘‘Executions below $1.00’’
column of the Additional Fee Code
Combinations and Associated Fees table
column read ‘‘N/A’’.
2. Statutory Basis
IEX believes that the proposed rule
change is consistent with the provisions
of Section 6(b) 34 of the Act in general
and furthers the objectives of Sections
6(b)(4) 35 of the Act, in particular, in that
31 See
supra note 24.
incoming sub-dollar order with a
disregarded Post Only instruction that executes on
entry with a resting displayed order will result in
a Fee Code Combination of TLB (‘‘Removes
displayed liquidity (Tape B)’’) on the execution
report and be charged the normal sub-dollar lit
taking fee of 0.09% of the TDV.
33 See supra note 24.
34 15 U.S.C. 78f.
35 15 U.S.C. 78f(b)(4).
31233
it is designed to provide for the
equitable allocation of reasonable dues,
fees and other charges among its
Members and other persons using its
facilities. The Exchange believes that
the proposed fee change is reasonable,
fair and equitable, and nondiscriminatory.
IEX has concluded that, in the context
of current regulatory requirements
governing access fees and rebates, it is
not able to sufficiently compete with
other exchanges for order flow in Tape
B securities without offering higher
rebate incentives. Based on informal
discussions with market participants,
IEX believes that Members and other
market participants may be more willing
to send displayed orders in Tape B
securities to IEX if the proposed fee
structure was adopted.
Accordingly, IEX has designed the
proposed access fee and rebate to attract
and incentivize displayed orders in
Tape B securities as well as order flow
seeking to trade with such displayed
orders. Moreover, increases in displayed
liquidity of Tape B securities would
contribute to the public price discovery
process which would benefit all market
participants and protect investors and
the public interest.
As it has stated repeatedly, IEX
believes that the existing access fee level
of $0.0030 per share set by Rule 610 of
Regulation NMS 36 heavily affects the
way that exchanges compete for order
flow and has led to various market
distortions and inefficiencies. It has also
created a collective action problem that
substantially hinders the ability of
exchanges to compete by offering better
execution quality and without relying
on high access fees and correspondingly
high rebates. The Commission can
resolve this problem and help to
promote more displayed liquidity by
adjusting the access fee cap to $0.0010
per share, a level consistent with other
market-based trading cost measures and
one favored by a broad spectrum of
market participants and virtually all
institutional investors that have
commented on this issue.37 IEX hopes to
be able to further adjust its transaction
prices in the near future to reflect a
market-wide adoption of lower access
fees as a result of this critically-needed
reform.
32 An
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
36 17
CFR 242.610
IEX comment letters on S7–30–22,
Regulation NMS: Minimum Pricing Increments,
Access Fees, and Transparency of Better-Priced
Orders: https://www.sec.gov/comments/s7-30-22/
s73022-20160364-328968.pdf; https://www.sec.gov/
comments/s7-30-22/s73022-276579-672162.pdf;
https://www.sec.gov/comments/s7-30-22/s73022434239-1076742.pdf.
37 See
E:\FR\FM\24APN1.SGM
24APN1
31234
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
Accordingly, IEX has designed this
proposed rebate to attract and
incentivize displayed order flow in
Tape B securities as well as order flow
seeking to trade with displayed order
flow in Tape B securities. Moreover,
increases in displayed liquidity of Tape
B securities would contribute to the
public price discovery process which
would benefit all market participants
and protect investors and the public
interest.
The Exchange believes that the
proposed fee structure for providing and
removing displayed liquidity in Tape B
securities is reasonable and consistent
with the Act. Specifically, the Exchange
believes that for securities that trade at
or above $1.00 per share, it is reasonable
to provide an increased rebate of
$0.0014 per share for providing
displayed liquidity in Tape B securities
and to increase the fee for removing
displayed liquidity in Tape B securities
from $0.0010 per share to $0.0020 per
share, which is designed to keep IEX’s
displayed trading prices for Tape B
securities competitive with those of
other exchanges.38 In this regard, IEX
notes that while many competing
exchanges pay rebates to provide
displayed liquidity in Tape B securities
that are substantially higher than those
proposed, others charge fees to provide
displayed liquidity for Tape B securities
that trade at or above $1.00 per share.39
Further, IEX notes that for securities
that trade at or above $1.00 per share,
many competing exchanges charge
substantially higher fees to remove
displayed liquidity than those charged
by IEX.40 And, as discussed in the
38 As discussed in the Purpose section, IEX’s
proposed rebate of $0.0014 per share for displayed
liquidity adding orders in Tape B securities priced
at $1.00 or more is below the rebate ranges of
$0.0015 to $0.0035 per share and $0.0028 to
$0.0036 per share paid by MEMX and Nasdaq,
respectively, for displayed liquidity adding orders.
And IEX’s proposed fee of $0.0020 for removing
displayed liquidity in Tape B securities priced at
$1.00 or more is also below the $0.0030 per share
fee charged by both MEMX and Nasdaq for
displayed liquidity removing orders. See supra note
10.
39 See e.g., Nasdaq BX Equity 7 Section 118(a)
($0.0020 fee per share to add displayed liquidity in
Tape B securities priced at or above $1.00 per
share), available at https://listingcenter.nasdaq.
com/rulebook/bx/rules/BX%20Equity%207; Cboe
BYX Equities Fee Schedule ($0.0020 fee per share
to add displayed liquidity in Tape B securities
priced at or above $1.00 per share, available at
https://www.cboe.com/us/equities/membership/fee_
schedule/byx/; Cboe EDGA Equities Fee Schedule
($0.0030 fee per share to add displayed liquidity in
Tape B securities priced at or above $1.00 per share,
available at https://www.cboe.com/us/equities/
membership/fee_schedule/edga/.
40 See e.g., Cboe BZX Equities Fee Schedule
($0.0030 fee per share to remove displayed liquidity
in Tape B securities priced at or above $1.00 per
share), available at https://markets.cboe.com/us/
equities/membership/fee_schedule/bzx/; MIAX
VerDate Sep<11>2014
16:48 Apr 23, 2024
Jkt 262001
Purpose section, other exchanges also
offer specific fee incentives for Tape B
securities.41 Consequently, IEX believes
that the proposed fee structure for
providing and removing displayed
liquidity in Tape B securities is within
the range charged by competing
exchanges and does not raise any new
or novel issues not already considered
by the Commission in the context of
other exchanges’ fees.
Further, IEX believes that it is
reasonable and consistent with the Act
not to modify the fees charged to D-Peg,
FM-Peg, M-Peg, and P-Peg orders that
remove displayed liquidity (except for
M-Peg and FM-Peg orders with a Trade
Now instruction that remove displayed
liquidity from an incoming Post Only
order), even if it is in a Tape B security.
As discussed in the Purpose section,
these four order types are designed to
interact with non-displayed liquidity,
but in unexpected circumstances can
trade with displayed liquidity. IEX
understands that, in general, Members
seek fee determinism, i.e., the ability to
know in advance the transaction fees
that will apply to particular orders at
the time they send the orders, and a lack
thereof could operate to disincentive
order flow. Consequently, IEX believes
it is fair and equitable to continue
charging $0.0010 per share for displayed
liquidity removing executions of these
four order types to avoid this impact.
Further, IEX notes that any Member can
submit a D-Peg, FM-Peg, M-Peg, or PPeg order, and therefore this fee will
apply equally to all Members.
However, if an incoming Post Only 42
order for a Tape B security executes
against a resting M-Peg or FM-Peg order
with the Trade Now 43 instruction, IEX
Pearl Equities Exchange Fee Schedule ($0.00295 fee
per share to remove displayed liquidity in in Tape
B securities priced at or above $1.00 per share),
available at https://www.miaxglobal.com/sites/
default/files/fee_schedule-files/MIAX_Pearl_
Equities_Fee_Schedule_04012024.pdf; MEMX Fee
Schedule ($0.0030 fee per share to remove
displayed liquidity in in Tape B securities priced
at or above $1.00 per share), available at https://
info.memxtrading.com/fee-schedule/; Nasdaq
Equity 7 Section 118(a) (up to $0.0030 fee per share
to remove displayed liquidity in in Tape B
securities priced at or above $1.00 per share),
available at https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules/nasdaq-equity-7; New York
Stock Exchange Price List 2024 ($0.00275 fee per
share to remove displayed liquidity in in Tape B
securities priced at or above $1.00 per share),
available at https://www.nyse.com/publicdocs/nyse/
markets/nyse/NYSE_Price_List.pdf.
41 See supra note 9.
42 See IEX Rule 11.190(b)(20).
43 When an incoming Post Only order matches a
resting order with a Trade Now instruction, the
resting order converts into an executable order that
removes liquidity against the incoming Post Only
order, and the incoming Post Only order becomes
the liquidity adding order. See IEX Rule
11.190(b)(21).
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
proposes to charge the M-Peg or FM-Peg
order a fee of $0.0020 per share, not the
$0.0010 per share fee that would
otherwise apply had the M-Peg or FMPeg order executed against a displayed
order for a Tape B security, as described
in the preceding paragraph. IEX is
proposing to make this distinction
because the Member who included a
Trade Now instruction on its M-Peg or
FM-Peg order specified its willingness
to match with incoming Post Only
orders, and thus indicated its
willingness to pay the $0.0020 per share
fee IEX will charge for taking displayed
liquidity in Tape B securities.
Correspondingly, IEX believes that it
is reasonable and consistent with the
Act to modify the fees charged to M-Peg
and FM-Peg orders with a Trade Now
instruction that remove displayed
liquidity from an incoming Post Only
order in a Tape B security. As discussed
in the Purpose section, the Member who
included a Trade Now instruction on its
M-Peg or FM-Peg order specified its
willingness to match with incoming
Post Only orders, and thus indicated its
willingness to pay the $0.0020 per share
fee IEX will charge for taking displayed
liquidity in Tape B securities.
The Exchange also believes that it is
reasonable and consistent with the Act
not to modify its displayed fees for subdollar executions to synchronize those
fees with the proposed fees for
executions at or above $1.00 per share.
The Exchange believes that the existing
fee structure for such executions
continues to be reasonably designed to
incentivize displayed order flow (and
orders seeking to trade with displayed
order flow) in such securities.
Further, IEX believes that it is
reasonable and consistent with the Act
not to change the fees applicable to the
execution of Retail orders that remove
liquidity, which will continue to
execute for free. In this regard, the
Exchange believes that the existing fee
structure continues to be reasonably
designed to incentivize the entry of
Retail orders and Retail Liquidity
Provider orders, and notes that the
Commission, in approving IEX’s Retail
Price Improvement Program,
acknowledged the value of exchanges’
offering incentives to attract both retail
investor orders and orders specifically
designated to execute only with retail
orders.44
The Exchange further believes that the
proposed fee change is consistent with
the Act’s requirement that the Exchange
provide for an equitable allocation of
44 See Securities Exchange Act Release No. 86619
(August 9, 2019), 84 FR 41769, 41771 (August 15,
2019) (SR–IEX–2019–05).
E:\FR\FM\24APN1.SGM
24APN1
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
fees that is also not unfairly
discriminatory.
First, the fees for adding and
removing displayed liquidity in Tape B
securities will apply on a per share basis
in an equal and nondiscriminatory
manner to all Members, without regard
to the volume of orders submitted by a
Member or other factors.
Second, because the fees would apply
on a flat, per share basis—like IEX’s
existing fees—they will continue to be
fully deterministic, in that a Member
will be able to determine the Exchange
fees for each execution in a Tape B
security. IEX believes this aspect of its
fee proposal will assist all Members in
making decisions about routing of
orders without the uncertainties
associated with volume tiers or other
requirements that cannot be determined
at the time of the trade. IEX notes that
applying fees in this way is consistent
with the purpose of the Commission’s
proposal to require that exchange fees
be set in a manner such that the amount
of a fee or rebate related to each trade
is determinable at the time of the
trade.45
Additionally, the Exchange believes
that it is reasonable to add footnote 2 to
the Fee Codes section of the Fee
Schedule to clarify that only Fee Code
Combinations that include new Fee
Code B are for executions of Tape B
securities. Adding this footnote will
avoid any potential confusion as to the
applicable fees and rebates for each
execution.
Finally, to the extent the proposed
change is successful in incentivizing the
entry and execution of displayed orders
on IEX, such greater liquidity will
benefit all market participants by
increasing price discovery and price
formation (on IEX and market-wide) as
well as market quality and execution
opportunities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
IEX believes that the proposed rule
change will not result in 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 proposed fee change is
designed to enhance IEX’s
competitiveness with other venues, as
described in the Statutory Basis section.
45 See Securities Exchange Act Release No. 96494
(December 14, 2022), 87 FR 80266, 80292–93
(December 29, 2022) (File No. S7–30–22).
VerDate Sep<11>2014
16:48 Apr 23, 2024
Jkt 262001
In this context, the Exchange does not
believe that the proposed fees would
burden competition on competing
venues or their participants. Moreover,
as noted in the Statutory Basis section,
the Exchange believes that the proposed
changes do not raise any new or novel
issues not already considered by the
Commission.
The Exchange believes that the
proposed rule change will not impose
any burden on intramarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because, while different fees are
assessed in some circumstances, these
different fees are not based on the type
of Member entering the orders that
match or on the volume of orders
submitted by a Member but on the type
of order entered or if the security at
issue is a Tape B security, and all
Members can submit any type of order
for any type of security and will be
subject to the same fee for that type of
order and security. IEX believes that
applying a flat, per share fee or rebate
for each type of order avoids imposing
a burden on competition by ensuring
that individual Members do not gain a
competitive advantage over other
Members based solely on their size or
volume of orders they are able to submit
to the Exchange. Further, the proposed
fee changes are designed to encourage
market participants to bring increased
order flow to the Exchange, which
benefits all market participants.
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 foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) 46 of the Act.
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) 47 of the Act to
determine whether the proposed rule
46 15
47 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
U.S.C. 78s(b)(2)(B).
Frm 00109
Fmt 4703
Sfmt 4703
31235
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
IEX–2024–06 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–2024–06. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office 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–2024–06 and should be
submitted on or before May 15, 2024.
E:\FR\FM\24APN1.SGM
24APN1
31236
Federal Register / Vol. 89, No. 80 / Wednesday, April 24, 2024 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.48
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–08682 Filed 4–23–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99990; File No. SR–IEX–
2024–07]
Self-Regulatory Organizations;
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Activation Value in IEX Rule
11.190(g)(2)
April 18, 2024.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on April 12,
2024, 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.
khammond on DSKJM1Z7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Pursuant to the provisions of Section
19(b)(1) under the Act,4 and Rule 19b–
4 thereunder,5 the Exchange is filing
with the Commission a proposed rule
change to amend IEX Rule 11.190(g)(2)
to incrementally optimize the
effectiveness of the proprietary
mathematical calculation used to make
quote instability determinations for
certain orders, and to correct two crossreference errors and one typographical
error. 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.6
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.
48 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(1).
5 17 CFR 240.19b–4.
6 17 CFR 240.19b–4(f)(6)(iii).
1 15
VerDate Sep<11>2014
16:48 Apr 23, 2024
Jkt 262001
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of
and basis for the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend IEX Rule
11.190(g)(2) to incrementally optimize
the proprietary mathematical
calculation used to make quote
instability determinations for certain
orders (i.e., to assess the probability of
a ‘‘crumbling quote’’—an imminent
change to the current Protected NBB 7 to
a lower price or the current Protected
NBO 8 to a higher price for a particular
security). This calculation is referred to
as the ‘‘crumbling quote indicator’’ or
‘‘CQI’’. This proposed rule change
would only modify the functionality of
CQI 2,9 which is the CQI version used
to make quote instability determinations
for all Discretionary Limit (‘‘D-Limit’’) 10
orders, and for Discretionary Peg (‘‘DPeg’’),11 primary peg (‘‘P-Peg’’),12 and
Corporate Discretionary Peg (‘‘C-Peg’’) 13
orders for which the User 14 selected
CQI 2 (collectively ‘‘CQI 2 enhanced
pegged orders’’).15
The Exchange also proposes to correct
two cross-reference errors and one
typographical error in the rule text
defining the CQI 2.
7 See
IEX Rule 1.160(cc).
IEX Rule 1.160(cc).
9 IEX supports two versions of the CQI—Option
1 Crumbling Quote (which is based on the CQI in
effect when IEX began operating as a national
securities exchange in 2016) (‘‘CQI 1’’) and Option
2 Crumbling Quote (‘‘CQI 2’’). See IEX Rule
11.190(g)(1) and (g)(2), respectively. CQI 1 is not
affected by this proposed rule change.
10 See IEX Rule 11.190(b)(7).
11 See Rule 11.190(b)(10).
12 See Rule 11.190(b)(8).
13 See Rule 11.190(b)(16).
14 See IEX Rule 1.160(qq).
15 Users may select which CQI version to apply
to D-Peg, P-Peg, and C-Peg orders (pegged orders
eligible to exercise price discretion to their
discretionary price except during periods of quote
instability). See IEX Rules 11.190(b)(8)(K),
11.190(b)(10)(K), and 11.190(b)(16)(K).
8 See
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
Background
When CQI 2 generates a quote
instability determination (i.e., it is ‘‘on’’
pursuant to IEX Rule 11.190(g)(2)), CQI
2 enhanced pegged orders resting on the
Order Book 16 do not exercise price
discretion to meet the limit price of an
active (i.e., taking) order, and remain
pegged to a price that is the less
aggressive of one (1) minimum price
variant (‘‘MPV’’) 17 less aggressive than
the primary quote (i.e., one MPV below
(above) the NBB 18 (NBO 19) for buy
(sell) orders) or the order’s limit price,
if any.20
Relatedly, D-Limit orders priced at or
more aggressively than the quote
instability determination price level
(‘‘CQI Price’’) are re-priced when CQI 2
is on.21 Specifically, if the System 22
receives a D-Limit buy (sell) order when
CQI 2 is on, and the D-Limit order has
a limit price equal to or higher (lower)
than the CQI Price, the price of the order
will be automatically adjusted by the
System to a price one (1) MPV lower
(higher) than the CQI Price (the
‘‘effective limit price’’). Similarly, when
unexecuted shares of a D-Limit buy
(sell) order are posted to the Order
Book, if a quote instability
determination is made and such shares
are ranked and displayed (in the case of
a displayed order) by the System at a
price equal to or higher (lower) than the
CQI Price, the price of the order will be
automatically adjusted by the System to
a price one MPV lower (higher) than the
CQI Price.23
Once the price of a D-Limit order that
has been posted to the Order Book is
automatically adjusted by the System to
its effective limit price, the order will
continue to be ranked and displayed (in
the case of a displayed order) at the
adjusted price, 24 unless subject to
another automatic adjustment; if the
order is subject to the price sliding
provisions of IEX Rule 11.190(h); or if
the User elects, pursuant to IEX Rule
11.190(b)(7)(E)(i), that the order will be
re-priced if resting at a price that is less
aggressive than the NBB (for a buy
order) or NBO (for a sell order) ten (10)
milliseconds after the most recent quote
16 See
IEX Rule 1.160(p).
IEX Rule 11.210.
18 See IEX Rule 1.160(u).
19 See IEX Rule 1.160(u).
20 C-Peg orders are also constrained by the
consolidated last sale price of the security, and
therefore cannot trade, book, or exercise discretion
at a price that is more aggressive than the
consolidated last sale price. See IEX Rule
11.190(b)(16).
21 See IEX Rules 11.190(b)(7)(A) and (B).
22 See IEX Rule 1.160(nn).
23 See IEX Rule 11.190(b)(7)(C) and (D).
24 See IEX Rule 11.190(b)(7)(F).
17 See
E:\FR\FM\24APN1.SGM
24APN1
]]>Agencies
[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Notices]
[Pages 31231-31236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08682]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99989; File No. SR-IEX-2024-06]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Fee Schedule Concerning Transaction Fees for Tape B
Securities
April 18, 2024.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 8, 2024, the Investors Exchange LLC (``IEX'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Pursuant to the provisions of Section 19(b)(1) under the Securities
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ IEX is
filing with the Commission a proposed rule change to amend the
Exchange's fee schedule applicable to Members \6\ (the ``Fee
Schedule'') pursuant to IEX Rule 15.110(a) and (c). Changes to the Fee
Schedule pursuant to this proposal are effective upon filing,\7\ and
will be operative on May 1, 2024.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ See IEX Rule 1.160(s).
\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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 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 modify its Fee Schedule, pursuant to IEX
Rule 15.110(a) and (c), to modify the transaction fees applicable to
most \8\ displayed executions of Tape B securities.\9\ As proposed, the
Exchange will increase the rebate paid for executions of displayed
liquidity adding orders in Tape B securities with an execution price of
$1.00 per share or more from $0.0004 to $0.0014 per share, increase the
fee for executions of most \10\ displayed liquidity removing orders in
Tape B securities from $0.0010 to $0.0020 per share (unless a lower fee
applies), and introduce two new fee codes to reflect these fee changes.
IEX is not proposing any changes to executions that add or remove non-
displayed liquidity in Tape B securities, which will continue to be
subject to the same fees charged for executions in Tape A and C
securities.\11\ The Exchange notes that other exchanges also offer
different fees for Tape B executions that are designed to incentivize
the posting of displayed liquidity in Tape B securities.\12\ IEX's
proposed fee structure for executions of Tape B securities is less than
or in line with other exchanges, but with lower access fees and rebates
and without the use of any volume-based pricing.\13\
---------------------------------------------------------------------------
\8\ This fee proposal will not change the fees charged or fee
codes applied for Retail and Retail Liquidity Providing executions
of Tape B securities, which execute for free. Additionally, while
the fee proposal includes a fee code change for all other executions
of Tape B securities that are priced at less than $1.00 per share,
the fees charged for such executions will not change. Finally, as
described infra, certain pegged order types that by design are not
likely to interact with displayed liquidity will not be subject to
the increased fees charged for taking displayed liquidity in Tape B
securities.
\9\ ``Tape B securities'' are securities listed on any national
securities exchange other than the New York Stock Exchange or The
Nasdaq Stock Market.
\10\ See supra note 5.
\11\ As discussed below, IEX is proposing to introduce a new fee
code that will apply to non-displayed adding or removing executions
of Tape B securities, but the fees charged for these executions will
be unchanged.
\12\ See, e.g., MEMX Equities Fee Schedule (effective April 1,
2024), available at https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/ (paying an ``additive rebate''
of $0.0002 per share for Tape B securities if the member satisfies a
volume threshold in its Tape B trades, but offering no similar
rebate for Tape A or C securities); Nasdaq Equity 7, Section
118(a)(1), available at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Equity%207#section_118_nasdaq_market_center_order_execution_and_routing (paying a supplemental rebate of $0.0001 per share for
Tape B displayed liquidity providing orders, but offering no similar
rebate for Tape A or C securities).
\13\ See, e.g., MEMX Equities Fee Schedule, supra, note 9
(offering rebates for adding displayed Tape B liquidity of $0.0015
to $0.0035, depending upon trading volume, and charging as much as
$0.0030 to remove Tape B liquidity); Nasdaq Equity 7, Section
118(a)(1), supra, note 9 (offering rebates for adding displayed Tape
B liquidity of $0.0028 to $0.0036, depending upon trading volume,
and charging as much as $0.0030 to remove Tape B liquidity).
---------------------------------------------------------------------------
IEX is making this proposal to incentivize the posting of displayed
liquidity in Tape B securities by increasing the rebate applied to
those orders, thereby promoting price discovery and market quality on
the Exchange, which the Exchange believes benefits all Members and
market participants. The Exchange periodically assesses its fee
structure. Based upon a recent assessment, the Exchange believes that
the proposed pricing change would further incentivize Members to submit
displayed orders in Tape B securities priced at or above $1.00 per
share.
[[Page 31232]]
Fee Schedule Changes
IEX proposes to increase the rebate it pays for adding displayed
liquidity in Tape B securities from $0.0004 per share to $0.0014 per
share for executions priced at or above $1.00 per share. ``Sub-dollar''
\14\ executions of Tape B securities that add displayed liquidity will
continue to execute for free. Consistent with the higher rebate IEX
will pay for adding displayed liquidity in Tape B securities, IEX
proposes to increase the fee for removing displayed liquidity in Tape B
securities from $0.0010 per share to $0.0020 per share. Sub-dollar
executions of Tape B securities that remove displayed liquidity will
continue to be charged 0.09% of the Total Dollar Value (``TDV'') of the
execution.
---------------------------------------------------------------------------
\14\ ``Sub-dollar'' refers to orders or executions priced at
less than $1.00 per share.
---------------------------------------------------------------------------
IEX does not propose to change the fee ($0.0010 per share)
currently applicable to Discretionary Peg (``D-Peg''),\15\ Fixed
Midpoint Peg (``FM-Peg''),\16\ Midpoint Peg (``M-Peg),\17\ or Primary
Peg (``P-Peg'') \18\ orders that remove displayed liquidity in Tape B
securities. IEX notes that each of these four order types is designed
to execute within the spread (i.e., at a price between the NBBO \19\).
IEX understands that Members and other market participants typically
use these order types with the expectation that they will either add or
remove non-displayed liquidity, and that they will not execute against
displayed liquidity. However, these four order types may execute
against displayed orders in certain ``edge case'' scenarios, such as
when a resting D-Peg order is invited to Recheck the Order Book \20\
and matches with a displayed odd lot order, or when an incoming M-Peg
order matches with a displayed order standing its ground in a locked or
crossed market. Currently, in these circumstances, the non-displayed
pegged order is charged the same fee (i.e., $0.0010 per share) as if it
traded with a non-displayed order (Fee Code Combination TL). To provide
greater fee determinism to its Members and consistent with current
practice, IEX proposes to continue charging $0.0010 per share for D-
Peg, FM-Peg, M-Peg, and P-Peg orders that remove displayed liquidity in
a Tape B security in one of the above-listed circumstances.
---------------------------------------------------------------------------
\15\ See IEX Rule 11.190(b)(10).
\16\ See IEX Rule 11.190(b)(19).
\17\ See IEX Rule 11.190(b)(9).
\18\ See IEX Rule 11.190(b)(8).
\19\ See IEX Rule 1.160(u).
\20\ See IEX Rule 11.230(a)(4)(D).
---------------------------------------------------------------------------
Notwithstanding this exception, if an incoming Post Only \21\ order
for a Tape B security executes against a resting M-Peg or FM-Peg order
with the Trade Now \22\ instruction, IEX proposes to charge the M-Peg
or FM-Peg order a fee of $0.0020 per share, not the $0.0010 per share
fee that would otherwise apply had the M-Peg or FM-Peg order executed
against a displayed order for a Tape B security. IEX is proposing to
make this distinction because Members that include a Trade Now
instruction on their M-Peg or FM-Peg orders have thereby specified
their willingness to match with incoming Post Only orders, and thus
indicated their willingness to pay the $0.0020 per share fee IEX will
charge for taking displayed liquidity in Tape B securities.
---------------------------------------------------------------------------
\21\ See IEX Rule 11.190(b)(20).
\22\ When an incoming Post Only order matches a resting order
with a Trade Now instruction, the resting order converts into an
executable order that removes liquidity against the incoming Post
Only order, and the incoming Post Only order becomes the liquidity
adding order. See IEX Rule 11.190(b)(21). A Trade Now instruction
cannot be added to a D-Peg or P-Peg order. See IEX Rules
11.190(b)(8) and 11.190(b)(10).
---------------------------------------------------------------------------
IEX is not proposing to change the fees charged or fee codes
applied to Retail \23\ or Retail Liquidity Provider \24\ orders that
execute in Tape B securities. Thus, a Retail order that takes liquidity
from a non-displayed order in a Tape B security will be assigned Fee
Code Combination TIR (free execution), and the non-displayed order will
be assigned Fee Code Combination MIB (fee of $0.0010 per share).
Relatedly, a Retail order that takes liquidity from a displayed odd lot
order in a Tape B security will be assigned Fee Code Combination TLR
(free execution), and the displayed odd lot order will be assigned Fee
Code Combination MLB (rebate of $0.0014 per share).
---------------------------------------------------------------------------
\23\ See IEX Rule 11.190(b)(15).
\24\ See IEX Rule 11.190(b)(14). Retail Liquidity Provider
orders can only match with Retail orders and will always be assigned
Fee Code Combination MIA (free execution), irrespective of if the
execution is a Tape B security.
---------------------------------------------------------------------------
IEX also proposes to introduce two new Fee Code Modifiers: ``B''
and ``K'' to reflect the proposed fee changes. Fee Code Modifier B
would be included on any execution report for an execution of a Tape B
security, with the exception of executions of Retail and Retail
Liquidity Provider orders, which will continue to execute for free, as
described above. In addition, Fee Code Modifier K would be included on
execution reports for D-Peg, FM-Peg, M-Peg, or P-Peg orders that remove
displayed liquidity in a Tape B security in the circumstances discussed
above.
IEX also proposes to add two new footnotes to the Fee Schedule: (i)
proposed Footnote 2, which would apply to Fee Code Modifier B, and (ii)
proposed Footnote 3, which would apply to Fee Code Combination TLBK.
Proposed Footnote 2 reads in full:
Fee Code B: Fee Code B applies to all executions of Tape B
securities, other than executions of Retail and Retail Liquidity
Provider orders and executions with Base Fee Codes X, O, C, H, and
P.\25\
---------------------------------------------------------------------------
\25\ Fee Code X applies to securities that trade in the Opening
Cross. Fee Codes O, C, H, and P are the Auction Match fee codes. As
reflected in proposed footnote 2, these fee codes will continue to
apply to Tape B securities.
---------------------------------------------------------------------------
And Proposed Footnote 3 reads in full:
TLBK will not apply to Midpoint Peg and Fixed Midpoint Peg
orders with Trade Now functionality enabled that take liquidity from
an incoming Post Only order for a Tape B security; such executions
will be assigned Fee Code Combination TLWB.
IEX proposes to add these Fee Codes to the Fee Code Modifiers table
on the IEX Fee Schedule as follows (internal footnotes omitted):
------------------------------------------------------------------------
Additional fee codes Description Fee
------------------------------------------------------------------------
B........................... Tape B security..... See Relevant Fee
Code Combinations
Below.
K........................... Discretionary Peg, See Relevant Fee
Fixed Midpoint Peg, Code Combinations
Midpoint Peg, or Below.
Primary Peg order
removes displayed
liquidity (Tape B).
------------------------------------------------------------------------
Additionally, IEX proposes to add nine new Fee Code Combinations to
the Additional Fee Code Combinations and Associated Fees table that
reflect the fees IEX proposes to assess for executions involving a Tape
B security: \26\
---------------------------------------------------------------------------
\26\ As described above, all nine of the following Fee Code
Combinations will be modified by proposed footnote 2.
---------------------------------------------------------------------------
[[Page 31233]]
Fee Code Combination MIB would apply to an order that adds
non-displayed liquidity in a Tape B security. These executions will be
charged a fee of $0.0010 per share for executions at or above $1.00 and
0.10% of the TDV for sub-dollar executions.
Fee Code Combination MLB would apply to an order that adds
displayed liquidity in a Tape B security. These executions will be paid
a rebate of $0.0014 per share for executions at or above $1.00 and
execute for free for sub-dollar executions.
Fee Code Combination MLYB would apply to a Post Only order
that executes on entry with a contra-side order with the Trade Now
instruction in a Tape B security. These executions will be paid a
rebate of $0.0014 per share. Because the Exchange will disregard the
Post Only instruction on sub-dollar orders,\27\ IEX proposes to have
the ``Executions below $1.00'' column of the Additional Fee Code
Combinations and Associated Fees table column read ``N/A''.\28\
---------------------------------------------------------------------------
\27\ See IEX Rule 11.190(b)(20)(A).
\28\ An incoming sub-dollar order for a Tape B security with a
disregarded Post Only instruction will not trigger a resting order
with the ``Trade Now'' instruction to become the taking order and
will not be treated as the displayed liquidity adding order. Thus,
Fee Code Combination MLYB would never apply. If the incoming order
matched with a resting non-displayed or displayed order, it will
result in a Fee Code Combination of TLB or TIB, with fees of 0.09%
or 0.10% of TDV, respectively.
---------------------------------------------------------------------------
Fee Code Combination TIB would apply to an order that
removes non-displayed liquidity in a Tape B security. These executions
will be charged a fee of $0.0010 per share for executions at or above
$1.00 and 0.10% of TDV for sub-dollar executions.
Fee Code Combination TIYB would apply to a Post Only order
priced at $1.00 or more that removes non-displayed liquidity in a Tape
B security on entry. These executions will be charged a fee of $0.0010
per share for executions at or above $1.00. Because the Exchange will
disregard the Post Only instruction on sub-dollar orders,\29\ IEX
proposes to have the ``Executions below $1.00'' column of the
Additional Fee Code Combinations and Associated Fees table read ``N/
A''.\30\
---------------------------------------------------------------------------
\29\ See supra note 24.
\30\ An incoming sub-dollar order with a disregarded Post Only
instruction that executes on entry with a resting non-displayed
order will result in a Fee Code Combination of TIB (``Removes non-
displayed liquidity (Tape B)'') on the execution report and be
charged the normal sub-dollar dark taking fee of 0.10% of the Total
Dollar Value (``TDV'').
---------------------------------------------------------------------------
Fee Code Combination TLB would apply to an order that
removes displayed liquidity in a Tape B security. These executions will
be charged a fee of $0.0020 per share for executions at or above $1.00
and 0.09% of TDV for sub-dollar executions.
Fee Code Combination TLBK would apply to a D-Peg, FM-Peg,
M-Peg, or P-Peg order that removes displayed liquidity in a Tape B
security. These executions will be charged a fee of $0.0010 per share
for executions at or above $1.00 and 0.09% of TDV for sub-dollar
executions. As described above, Fee Code Combination TLBK will be
modified by proposed footnote 2, which explains that M-Peg and FM-Peg
orders with a Trade Now instruction that execute against an incoming
Post Only order will be assigned Fee Code Combination TLWB, and will
not be assigned Fee Code Combination TLBK.
Fee Code Combination TLYB would apply to a Post Only order
priced at $1.00 or more that removes displayed liquidity on entry in a
Tape B security. These executions will be charged a fee of $0.0020 per
share. Because the Exchange will disregard the Post Only instruction on
sub-dollar orders,\31\ IEX proposes to have the ``Executions below
$1.00'' column of the Additional Fee Code Combinations and Associated
Fees table read ``N/A''.\32\
---------------------------------------------------------------------------
\31\ See supra note 24.
\32\ An incoming sub-dollar order with a disregarded Post Only
instruction that executes on entry with a resting displayed order
will result in a Fee Code Combination of TLB (``Removes displayed
liquidity (Tape B)'') on the execution report and be charged the
normal sub-dollar lit taking fee of 0.09% of the TDV.
---------------------------------------------------------------------------
Fee Code Combination TLWB would apply to a resting non-
displayed order with the Trade Now instruction that executes against an
incoming Post Only order priced at $1.00 or more per share. These
executions will be charged a fee of $0.0020 per share. Because the
Exchange will disregard the Post Only instruction on an incoming sub-
dollar orders,\33\ that order will not trigger a resting order with the
``Trade Now'' instruction to become the taking order. Therefore, Fee
Code Combination TLWB would never apply to a resting non-displayed
order that matches with an incoming sub-dollar order with a Post Only
instruction, and IEX proposes to have the ``Executions below $1.00''
column of the Additional Fee Code Combinations and Associated Fees
table column read ``N/A''.
---------------------------------------------------------------------------
\33\ See supra note 24.
---------------------------------------------------------------------------
2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \34\ of the Act in general and furthers the
objectives of Sections 6(b)(4) \35\ of the Act, in particular, in that
it is designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities. The Exchange believes that the proposed fee change is
reasonable, fair and equitable, and non-discriminatory.
---------------------------------------------------------------------------
\34\ 15 U.S.C. 78f.
\35\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
IEX has concluded that, in the context of current regulatory
requirements governing access fees and rebates, it is not able to
sufficiently compete with other exchanges for order flow in Tape B
securities without offering higher rebate incentives. Based on informal
discussions with market participants, IEX believes that Members and
other market participants may be more willing to send displayed orders
in Tape B securities to IEX if the proposed fee structure was adopted.
Accordingly, IEX has designed the proposed access fee and rebate to
attract and incentivize displayed orders in Tape B securities as well
as order flow seeking to trade with such displayed orders. Moreover,
increases in displayed liquidity of Tape B securities would contribute
to the public price discovery process which would benefit all market
participants and protect investors and the public interest.
As it has stated repeatedly, IEX believes that the existing access
fee level of $0.0030 per share set by Rule 610 of Regulation NMS \36\
heavily affects the way that exchanges compete for order flow and has
led to various market distortions and inefficiencies. It has also
created a collective action problem that substantially hinders the
ability of exchanges to compete by offering better execution quality
and without relying on high access fees and correspondingly high
rebates. The Commission can resolve this problem and help to promote
more displayed liquidity by adjusting the access fee cap to $0.0010 per
share, a level consistent with other market-based trading cost measures
and one favored by a broad spectrum of market participants and
virtually all institutional investors that have commented on this
issue.\37\ IEX hopes to be able to further adjust its transaction
prices in the near future to reflect a market-wide adoption of lower
access fees as a result of this critically-needed reform.
---------------------------------------------------------------------------
\36\ 17 CFR 242.610
\37\ See IEX comment letters on S7-30-22, Regulation NMS:
Minimum Pricing Increments, Access Fees, and Transparency of Better-
Priced Orders: https://www.sec.gov/comments/s7-30-22/s73022-20160364-328968.pdf; https://www.sec.gov/comments/s7-30-22/s73022-276579-672162.pdf; https://www.sec.gov/comments/s7-30-22/s73022-434239-1076742.pdf.
---------------------------------------------------------------------------
[[Page 31234]]
Accordingly, IEX has designed this proposed rebate to attract and
incentivize displayed order flow in Tape B securities as well as order
flow seeking to trade with displayed order flow in Tape B securities.
Moreover, increases in displayed liquidity of Tape B securities would
contribute to the public price discovery process which would benefit
all market participants and protect investors and the public interest.
The Exchange believes that the proposed fee structure for providing
and removing displayed liquidity in Tape B securities is reasonable and
consistent with the Act. Specifically, the Exchange believes that for
securities that trade at or above $1.00 per share, it is reasonable to
provide an increased rebate of $0.0014 per share for providing
displayed liquidity in Tape B securities and to increase the fee for
removing displayed liquidity in Tape B securities from $0.0010 per
share to $0.0020 per share, which is designed to keep IEX's displayed
trading prices for Tape B securities competitive with those of other
exchanges.\38\ In this regard, IEX notes that while many competing
exchanges pay rebates to provide displayed liquidity in Tape B
securities that are substantially higher than those proposed, others
charge fees to provide displayed liquidity for Tape B securities that
trade at or above $1.00 per share.\39\ Further, IEX notes that for
securities that trade at or above $1.00 per share, many competing
exchanges charge substantially higher fees to remove displayed
liquidity than those charged by IEX.\40\ And, as discussed in the
Purpose section, other exchanges also offer specific fee incentives for
Tape B securities.\41\ Consequently, IEX believes that the proposed fee
structure for providing and removing displayed liquidity in Tape B
securities is within the range charged by competing exchanges and does
not raise any new or novel issues not already considered by the
Commission in the context of other exchanges' fees.
---------------------------------------------------------------------------
\38\ As discussed in the Purpose section, IEX's proposed rebate
of $0.0014 per share for displayed liquidity adding orders in Tape B
securities priced at $1.00 or more is below the rebate ranges of
$0.0015 to $0.0035 per share and $0.0028 to $0.0036 per share paid
by MEMX and Nasdaq, respectively, for displayed liquidity adding
orders. And IEX's proposed fee of $0.0020 for removing displayed
liquidity in Tape B securities priced at $1.00 or more is also below
the $0.0030 per share fee charged by both MEMX and Nasdaq for
displayed liquidity removing orders. See supra note 10.
\39\ See e.g., Nasdaq BX Equity 7 Section 118(a) ($0.0020 fee
per share to add displayed liquidity in Tape B securities priced at
or above $1.00 per share), available at https://listingcenter.nasdaq.com/rulebook/bx/rules/BX%20Equity%207; Cboe BYX
Equities Fee Schedule ($0.0020 fee per share to add displayed
liquidity in Tape B securities priced at or above $1.00 per share,
available at https://www.cboe.com/us/equities/membership/fee_schedule/byx/; Cboe EDGA Equities Fee Schedule ($0.0030 fee per
share to add displayed liquidity in Tape B securities priced at or
above $1.00 per share, available at https://www.cboe.com/us/equities/membership/fee_schedule/edga/.
\40\ See e.g., Cboe BZX Equities Fee Schedule ($0.0030 fee per
share to remove displayed liquidity in Tape B securities priced at
or above $1.00 per share), available at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/; MIAX Pearl Equities Exchange
Fee Schedule ($0.00295 fee per share to remove displayed liquidity
in in Tape B securities priced at or above $1.00 per share),
available at https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Equities_Fee_Schedule_04012024.pdf;
MEMX Fee Schedule ($0.0030 fee per share to remove displayed
liquidity in in Tape B securities priced at or above $1.00 per
share), available at https://info.memxtrading.com/fee-schedule/;
Nasdaq Equity 7 Section 118(a) (up to $0.0030 fee per share to
remove displayed liquidity in in Tape B securities priced at or
above $1.00 per share), available at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/nasdaq-equity-7; New
York Stock Exchange Price List 2024 ($0.00275 fee per share to
remove displayed liquidity in in Tape B securities priced at or
above $1.00 per share), available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
\41\ See supra note 9.
---------------------------------------------------------------------------
Further, IEX believes that it is reasonable and consistent with the
Act not to modify the fees charged to D-Peg, FM-Peg, M-Peg, and P-Peg
orders that remove displayed liquidity (except for M-Peg and FM-Peg
orders with a Trade Now instruction that remove displayed liquidity
from an incoming Post Only order), even if it is in a Tape B security.
As discussed in the Purpose section, these four order types are
designed to interact with non-displayed liquidity, but in unexpected
circumstances can trade with displayed liquidity. IEX understands that,
in general, Members seek fee determinism, i.e., the ability to know in
advance the transaction fees that will apply to particular orders at
the time they send the orders, and a lack thereof could operate to
disincentive order flow. Consequently, IEX believes it is fair and
equitable to continue charging $0.0010 per share for displayed
liquidity removing executions of these four order types to avoid this
impact. Further, IEX notes that any Member can submit a D-Peg, FM-Peg,
M-Peg, or P-Peg order, and therefore this fee will apply equally to all
Members.
However, if an incoming Post Only \42\ order for a Tape B security
executes against a resting M-Peg or FM-Peg order with the Trade Now
\43\ instruction, IEX proposes to charge the M-Peg or FM-Peg order a
fee of $0.0020 per share, not the $0.0010 per share fee that would
otherwise apply had the M-Peg or FM-Peg order executed against a
displayed order for a Tape B security, as described in the preceding
paragraph. IEX is proposing to make this distinction because the Member
who included a Trade Now instruction on its M-Peg or FM-Peg order
specified its willingness to match with incoming Post Only orders, and
thus indicated its willingness to pay the $0.0020 per share fee IEX
will charge for taking displayed liquidity in Tape B securities.
---------------------------------------------------------------------------
\42\ See IEX Rule 11.190(b)(20).
\43\ When an incoming Post Only order matches a resting order
with a Trade Now instruction, the resting order converts into an
executable order that removes liquidity against the incoming Post
Only order, and the incoming Post Only order becomes the liquidity
adding order. See IEX Rule 11.190(b)(21).
---------------------------------------------------------------------------
Correspondingly, IEX believes that it is reasonable and consistent
with the Act to modify the fees charged to M-Peg and FM-Peg orders with
a Trade Now instruction that remove displayed liquidity from an
incoming Post Only order in a Tape B security. As discussed in the
Purpose section, the Member who included a Trade Now instruction on its
M-Peg or FM-Peg order specified its willingness to match with incoming
Post Only orders, and thus indicated its willingness to pay the $0.0020
per share fee IEX will charge for taking displayed liquidity in Tape B
securities.
The Exchange also believes that it is reasonable and consistent
with the Act not to modify its displayed fees for sub-dollar executions
to synchronize those fees with the proposed fees for executions at or
above $1.00 per share. The Exchange believes that the existing fee
structure for such executions continues to be reasonably designed to
incentivize displayed order flow (and orders seeking to trade with
displayed order flow) in such securities.
Further, IEX believes that it is reasonable and consistent with the
Act not to change the fees applicable to the execution of Retail orders
that remove liquidity, which will continue to execute for free. In this
regard, the Exchange believes that the existing fee structure continues
to be reasonably designed to incentivize the entry of Retail orders and
Retail Liquidity Provider orders, and notes that the Commission, in
approving IEX's Retail Price Improvement Program, acknowledged the
value of exchanges' offering incentives to attract both retail investor
orders and orders specifically designated to execute only with retail
orders.\44\
---------------------------------------------------------------------------
\44\ See Securities Exchange Act Release No. 86619 (August 9,
2019), 84 FR 41769, 41771 (August 15, 2019) (SR-IEX-2019-05).
---------------------------------------------------------------------------
The Exchange further believes that the proposed fee change is
consistent with the Act's requirement that the Exchange provide for an
equitable allocation of
[[Page 31235]]
fees that is also not unfairly discriminatory.
First, the fees for adding and removing displayed liquidity in Tape
B securities will apply on a per share basis in an equal and
nondiscriminatory manner to all Members, without regard to the volume
of orders submitted by a Member or other factors.
Second, because the fees would apply on a flat, per share basis--
like IEX's existing fees--they will continue to be fully deterministic,
in that a Member will be able to determine the Exchange fees for each
execution in a Tape B security. IEX believes this aspect of its fee
proposal will assist all Members in making decisions about routing of
orders without the uncertainties associated with volume tiers or other
requirements that cannot be determined at the time of the trade. IEX
notes that applying fees in this way is consistent with the purpose of
the Commission's proposal to require that exchange fees be set in a
manner such that the amount of a fee or rebate related to each trade is
determinable at the time of the trade.\45\
---------------------------------------------------------------------------
\45\ See Securities Exchange Act Release No. 96494 (December 14,
2022), 87 FR 80266, 80292-93 (December 29, 2022) (File No. S7-30-
22).
---------------------------------------------------------------------------
Additionally, the Exchange believes that it is reasonable to add
footnote 2 to the Fee Codes section of the Fee Schedule to clarify that
only Fee Code Combinations that include new Fee Code B are for
executions of Tape B securities. Adding this footnote will avoid any
potential confusion as to the applicable fees and rebates for each
execution.
Finally, to the extent the proposed change is successful in
incentivizing the entry and execution of displayed orders on IEX, such
greater liquidity will benefit all market participants by increasing
price discovery and price formation (on IEX and market-wide) as well as
market quality and execution opportunities.
B. Self-Regulatory Organization's Statement on Burden on Competition
IEX believes that the proposed rule change will not result in 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 proposed fee change is
designed to enhance IEX's competitiveness with other venues, as
described in the Statutory Basis section. In this context, the Exchange
does not believe that the proposed fees would burden competition on
competing venues or their participants. Moreover, as noted in the
Statutory Basis section, the Exchange believes that the proposed
changes do not raise any new or novel issues not already considered by
the Commission.
The Exchange believes that the proposed rule change will not impose
any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because, while
different fees are assessed in some circumstances, these different fees
are not based on the type of Member entering the orders that match or
on the volume of orders submitted by a Member but on the type of order
entered or if the security at issue is a Tape B security, and all
Members can submit any type of order for any type of security and will
be subject to the same fee for that type of order and security. IEX
believes that applying a flat, per share fee or rebate for each type of
order avoids imposing a burden on competition by ensuring that
individual Members do not gain a competitive advantage over other
Members based solely on their size or volume of orders they are able to
submit to the Exchange. Further, the proposed fee changes are designed
to encourage market participants to bring increased order flow to the
Exchange, which benefits all market participants.
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 foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) \46\ of the Act.
---------------------------------------------------------------------------
\46\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------
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) \47\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\47\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-IEX-2024-06 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-2024-06. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office 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-2024-06 and should be
submitted on or before May 15, 2024.
[[Page 31236]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\48\
---------------------------------------------------------------------------
\48\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-08682 Filed 4-23-24; 8:45 am]
BILLING CODE 8011-01-P
