81982 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

42 17 CFR 240.19b–4(f)(2). 

43 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(1). 

5 17 CFR 240.19b–4. 

6See IEX Rule 1.160(qq). 

7See IEX Rule 1.160(nn). 

8See IEX Rule 2.220(a). 

19b–4(f)(2) 42 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

PEARL–2020–33 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–PEARL–2020–33. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–PEARL–2020–33 and 

should be submitted on or before 

January 7, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.43

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27730 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90645; File No. SR–IEX– 

2020–18] 

Self-Regulatory Organizations; 

Investors Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Amend IEX Rule 11.510 To Reduce the 

Outbound Latency That Presently 

Applies to All Trading Messages Sent 

From IEX Back to Users of the 

Exchange 

December 11, 2020. 

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 December 

9, 2020, the Investors Exchange LLC 

(‘‘IEX’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Pursuant to the provisions of Section 

19(b)(1) under the Act,4 and Rule 19b– 

4 thereunder,5 IEX is filing with the 

Commission a proposed rule change to 

amend IEX Rule 11.510 to reduce the 

outbound latency that presently applies 

to all trading messages sent from IEX 

back to Users 6 of the Exchange to 

include only the actual geographic 

distance and related network 

connectivity, as well as to make 

conforming changes to the outbound 

latency that applies to all trading 

messages sent from the IEX System 7 to 

the System routing logic 8 with respect 

to routable orders. 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 amend IEX 

Rule 11.510 to reduce the outbound 

latency that presently applies to all 

trading messages sent from the IEX 

System at its primary data center back 

to Users of the Exchange to include only 

the actual geographic distance and 

related network connectivity, as well as 

to make conforming changes to the 

outbound latency that applies to all 

trading messages sent from the IEX 

System to the System routing logic with 

respect to routable orders. 

The Exchange is not proposing to 

make any changes to the additional 

latency that applies in a symmetrical 

manner to all inbound order messages 

(i.e., orders, modifications or 

cancellations) regardless of whether 

such orders are to make or take 

liquidity. This additional latency on 

inbound order messages, commonly 

referred to as the ‘‘IEX Speedbump,’’ 

continues to be a critical part of the IEX 

system and is designed to protect the 

interests of investors, brokers, and 

market makers that rest orders on IEX. 

As described in more detail below, 

the additional latencies that are 

currently applied to both inbound and 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81983 

9See IEX Rule 1.160(s). 10See IEX Rule 1.160(ll). 11A Point-of-Presence is the location at which 

customers of an exchange (or other technological 

system) can connect to the exchange. 

12Please see discussion infra with respect to the 

connectivity infrastructure applicable to routable 

orders. 

13See IEX Rule 11.510(b)(1). 

14See IEX Rule 11.330(a). 

15See IEX Rule 11.510(b)(2). IEX’s backup data 

center, in Chicago, Illinois, which only consumes 

market data from the SIPs, does not have any 

inbound or outbound POP/coil latency, see IEX 

Rule 11.510 Supplementary Material .01, and is 

therefore unaffected by this proposed rule change. 

16See IEX Rule 1.160(p). 

17See IEX Rule 11.230(b). 

18See IEX Rule 11.130(a). 

19See IEX Rule 11.130(a). 

outbound messages between IEX and 

Users were put in place for completely 

different purposes. In contrast to the 

resting order protective design of the 

additional inbound latency, the 

additional outbound latency was 

designed simply to avoid potential 

information leakage about an execution 

on IEX that could reduce a Member’s 9

ability to access liquidity on other 

markets after trading on IEX. As 

discussed more fully below, since the 

IEX exchange launch in 2016 there have 

been significant improvements in 

routing technology as well as reductions 

in Securities Information Processor 

(‘‘SIP’’) market data dissemination 

latencies, and as a result the Exchange 

believes that the additional outbound 

latency is no longer necessary. 

The Exchange also notes that no other 

national securities exchanges currently 

provide for additional latency to 

outbound communications. 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 the operations of other 

national securities exchanges, or that 

Members could not readily incorporate 

into their trading systems. 

Background 

Connectivity Description 

Currently, all Users, which include 

Members and Sponsored Participants,10

access IEX through the Exchangeprovided network interface at the IEX 

Point-of-Presence 11 or ‘‘POP,’’ located 

in Secaucus, New Jersey.12 After 

entering through the POP, a User’s 

electronic message sent to the System 

traverses the IEX ‘‘coil’’ which is a box 

containing approximately 38 miles of 

compactly coiled optical fiber cable. 

After exiting the coil, the User’s message 

travels an additional geographic or 

physical distance to the System, located 

at the Exchange’s primary data center in 

Weehawken, New Jersey. The time 

required for a message to traverse the 

coil combined with the physical 

distance (and related networking) to the 

System equates to an equivalent 350 

microseconds of latency, referred to 

herein as the ‘‘inbound latency.’’ 13 All 

inbound messages (e.g., orders to buy or 

sell and any modification to a 

previously sent open order) from any 

User traverse this connectivity 

infrastructure, including the coil, in a 

symmetrical manner regardless of the 

type of message or whether the User is 

seeking to buy, sell, make or take 

liquidity. 

Separately, all outbound messages 

from IEX back to a User (e.g., 

confirmations of an execution that 

occurred on IEX), as well as messages 

from IEX’s TOPS, DEEP and DROP data 

products 14 (collectively ‘‘Data 

Products’’), pass through the 

communication infrastructure in 

reverse, referred to herein as the 

‘‘outbound latency.’’ 15

Other incoming and outgoing 

messages to and from IEX are not 

subject to either the inbound or 

outbound latency. Instead, they are sent 

and received directly to and from the 

System, subject only to the latencies 

inherent in the geographic distances 

that the messages travel. These other 

messages include (i) incoming 

proprietary market data from other 

national securities exchanges and 

market data from the SIPs and (ii) 

outgoing messages to the SIPs (to 

disseminate IEX’s quotation and last 

sale/execution information), the 

National Securities Clearing Corporation 

(to transmit executed transactions) and 

other national securities exchanges (to 

route orders for potential execution on 

such exchanges). In addition, all IEX 

Order Book 16 processing and order 

executions on the IEX Order Book occur 

within the System and are not subject to 

the inbound or outbound connectivity 

infrastructure. 

IEX’s affiliated broker-dealer, IEX 

Services LLC (‘‘IEXS’’), is a Member of 

the Exchange and is subject to the same 

inbound and outbound latency as other 

Members, as described in IEX Rules 

2.220 and 11.510. If a User sends a 

routable order to the Exchange for 

potential execution on IEX, after 

traversing the inbound latency 

(including the coil) to reach the System, 

it is directed to the System routing logic 

rather than the IEX matching engine.17

Upon receipt of a routable order, the 

System routing logic may route all or a 

portion of the order to the IEX Order 

Book or to another national securities 

exchange. Any such orders routed to the 

IEX Order Book by the System routing 

logic are subject to an additional 350 

microsecond inbound latency between 

the IEX routing logic and the IEX Order 

Book. Similarly, the IEX routing logic 

may only receive IEX Data Products 

subject to the same 350 microsecond 

outbound latency as other data 

recipients. These additional inbound 

and outbound latency delays place IEXS 

in the same position as any Member that 

is a third-party routing broker in 

reaching the IEX Order Book, receiving 

outbound order messages, and receiving 

IEX Data Products, i.e., IEXS has no 

speed or informational advantage 

compared to other Members and data 

recipients. 

See IEX Rule 11.510 for a complete 

description of the manner in which 

Participants 18 and Extranet Providers 19

may connect to, access, and interact 

with the System including the 

applicable latencies. 

The Critical Function of the 

‘‘Speedbump’’ 

The IEX Speedbump, which applies 

additional latency to inbound order 

messages (including modifications and 

cancellations), is designed to enable IEX 

to more effectively manage and price 

orders resting on its book when the 

market moves. This is because (as 

described above) orders sent to IEX are 

delayed by 350 microseconds in 

reaching IEX’s matching engine but IEX 

does not delay its own receipt of market 

data from other national securities 

exchanges and the SIPs. This approach 

is designed to enable IEX’s matching 

engine to timely process price changes 

and to price or execute orders on the 

IEX Order Book at the most accurate 

prices possible. As the Commission 

noted in approval of IEX’s application to 

operate as a national securities exchange 

in 2016: 

[T]he purpose of IEX’s coil is to provide an 

intentional buffer that slows down incoming 

orders to allow IEX’s matching engine to 

update the prices of resting ‘‘pegged’’ orders 

when away prices change to protect resting 

pegged orders from the possibility of adverse 

selection when the market moves to a new 

midpoint price. The allowable price of a 

‘‘pegged’’ order will change whenever the 

best displayed price across all exchanges 

changes, but it takes time for IEX’s system to 

receive other exchange data feeds and 

recalculate the price of each pegged order 

resting on its book. For various reasons, IEX’s 

systems may not recalculate prices as fast as 

some of the fastest low-latency traders in the 

market are able to send orders accessing 

pegged orders resting on IEX at potentially 

‘‘stale’’ prices. The Commission believes that 

the application of the POP/coil delay delays 

the ability of low-latency market participants 

to take a ‘‘stale’’-priced resting pegged order 

81984 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

20See Securities Exchange Act Release No. 34– 

78101 (June 17, 2016), 81 FR 41141, 41155 (June 23, 

2016) (‘‘Exchange Approval Order’’). 

21See IEX Rule 11.190(g). 

22See Securities Exchange Act Release No. 89686 

(August 26, 2020), 85 FR 54438 (September 1, 2020) 

(approving SR–IEX–2019–15) (‘‘D-Limit Approval 

Order’’). 

23Serial routing entails routing an order first to 

one exchange, and then routing whatever shares 

remain in the order to other exchanges. 

24See Exchange Approval Order, supra note 20. 

25The SIPs are comprised of three plans: The 

CTA Plan (trade data on Tapes A&B), the CQ Plan 

(quote data on Tapes A&B), and the UTP Plan (trade 

and quote data on Tape C). Since IEX’s exchange 

launch in September 2016, the average latencies for 

quote messages on the SIPs has dropped from 470 

ms to 19.5 ms (CQ Plan) and from 762 ms to 13.2 ms 

(UTP Plan); and the average latencies for trade 

messages on the SIPs has dropped from 320 ms to 

20 ms (CTA Plan) and from 619.7 ms to 15.7 ms (UTP 

Plan). See ‘‘Key Operating Metrics of Tape A&B 

U.S. Equities Securities Information Processor (CTA 

SIP),’’ available at https://www.ctaplan.com/ 

publicdocs/ctaplan/CTAPLAN_Processor_Metrics_

3Q2020.pdf and ‘‘UTP Q3 2020—September Tape C 

Quote Metrics’’ and ‘‘September Tape C Trade 

Metrics,’’ available at https://www.utpplan.com/ 

DOC/UTP_website_Statistics_Q3-2020- 

September.pdf. 

26Ordinary course network connectivity includes 

switches and cabling to connect the network access 

point at the POP to the System. 

27See D-Limit Approval Order supra note 22 at 

54441–42. 

28See supra note 25. 

on IEX (i.e., before IEX finishes its process of 

re-pricing the pegged order in response to 

changes in the NBBO) based on those market 

participants’ ability to more effectively digest 

direct market data feeds and swiftly submit 

an order before IEX finishes its process of 

updating the prices of pegged orders resting 

on its book. (internal citations omitted) 20

In addition, with IEX’s recent 

addition of its D-Limit order type, the 

IEX speed bump helps IEX re-price DLimit orders in the few seconds of the 

day when IEX’s Crumbling Quote 

Indicator 21 detects that the national best 

bid or offer is likely to move in a 

direction adverse to the User of the 

order within two milliseconds.22

This application of the IEX 

Speedbump, and the benefits therein, 

are distinct and different from the 

additional (and symmetrical) latency 

imposed on outbound trading messages 

which was designed to slightly delay 

news of an execution to the participants 

to the execution and to IEX’s Data 

Products. The outbound latency thus 

enables a market participant using a 

serial routing technique 23 that executes 

a trade on IEX to avoid potential 

information leakage when subsequently 

seeking to access liquidity on other 

markets before news of the IEX 

execution could affect resting liquidity 

on those markets 24 (e.g., potentially 

resulting in cancellations or re-pricing 

of such liquidity). Since the time of 

IEX’s exchange approval in 2016 there 

have been a myriad of technology 

advances, including improvements in 

smart-order routing techniques and a 

reduction in SIP latencies.25

Consequently, and as discussed more 

fully below and in the Statutory Basis 

section, IEX does not believe that the 

considerations that existed in 2016 

necessitate continuing to impose 

additional latency on outbound order 

messages or IEX Data Products. 

Proposal 

The Exchange proposes to amend IEX 

Rule 11.510 to reduce the outbound 

latency that presently applies to all 

trading messages sent from IEX back to 

Users to the actual geographic distance 

and related network connectivity 26

between the Exchange System and the 

IEX POP. As proposed, all outbound 

communications (including execution 

and other order report messages, as well 

as TOPS, DEEP and DROP messages) 

would be treated in the same manner. 

The Exchange estimates that removal of 

the coiled optical fiber would reduce 

the outbound latency to 37 

microseconds. 

IEX is not proposing any changes to 

the additional latency applied to 

inbound orders, cancellations or 

modifications from any User, regardless 

of making or taking liquidity or any 

other factors, which will maintain the 

symmetry of IEX’s Speedbump design 

for all Users. Users would still be 

required to connect to IEX at the POP. 

IEXS would continue to be subject to 

the existing additional inbound latency 

when the IEX routing logic sends an 

order to the IEX Order Book (a total 

delay of 700 microseconds for inbound 

routable orders) but would be subject to 

the reduced outbound latency in 

receiving execution and order messages 

as well as IEX Data Products in the same 

manner as those of other Members and 

data recipients. Therefore, reducing the 

outbound latency will have no impact 

on IEX’s ability to provide the benefits 

of protection from certain trading 

strategies when using pegged or D-Limit 

orders. 

In addition, based on informal 

feedback from Members, IEX 

understands that a reduction in the 

outbound latency would enhance 

Members’ execution and risk 

management processes, including with 

respect to hedging and re-routing, by 

enabling them to receive reports of IEX 

executions sooner than is currently the 

case. Moreover, IEX believes that these 

benefits would apply to all Members, 

regardless of business model, by 

supporting overall execution and risk 

management. IEX further understands 

that receiving execution reports closer 

in time to when an execution occurred 

would enable Members and their 

clearing firms to incorporate the 

financial and other exposure of an 

execution into their risk management 

systems and thereby enable enhanced 

monitoring and control of applicable 

risks. IEX believes that these execution 

and risk management benefits outweigh 

the concerns that previously existed 

regarding the risk to serial routing 

techniques. As the Commission has 

noted, current and commonplace 

routing techniques seek to have orders 

arrive and execute simultaneously 

across multiple venues and are able to 

capture liquidity across multiple venues 

simultaneously without signaling those 

executions to the market in a way that 

would impact prices or available 

liquidity.27 As a result, IEX believes that 

Members and other market participants 

can use such routing techniques instead 

of serial routing techniques to avoid 

potential information leakage when 

subsequently seeking to access liquidity 

on other markets after an IEX execution. 

IEX also believes that its Data 

Products would be more useful if they 

were not subject to the additional 

outbound latency so that Members can 

more effectively use IEX market data in 

their execution and risk management 

decisions. Additionally, IEX notes that 

since its exchange launch in 2016 the 

SIPs have materially reduced their 

average latencies for dissemination of 

quote and trade messages, as discussed 

above.28 Thus, IEX believes that these 

reduced latencies enable some market 

participants to receive IEX market data 

messages from the SIPs before they can 

receive such messages on TOPS and 

DEEP. In these circumstances delaying 

IEX’s Data Products effectively renders 

them of limited utility. Consequently, as 

proposed, IEX Data Products will also 

be subject to the reduced outbound 

latency. 

Accordingly, IEX proposes to amend 

IEX Rule 11.510 to reflect the changes 

described above as well as to streamline 

descriptions of the communications 

infrastructure for inbound and 

outbound latency. As proposed the 

changes are as follows: 

• Add new language to paragraph (a) to 

add specificity to the reference to the POP, 

including that it is an abbreviation for the 

IEX point-of-presence and that its network 

address is specified in the Exchange’s 

Connectivity Manual. In addition, clarifying 

language is added to specify and describe the 

latency for inbound and outbound 

communications between the System and the 

POP, including that outbound 

communications from the System to the POP 

do not traverse the distance provided by 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81985 

29After step one and before step two, all 

outbound communications between the System and 

the System routing logic will continue to be subject 

to an equivalent 350 microseconds of latency. 

Outgoing messages (i.e., responses) from the System 

routing logic to Users (with respect to routable 

orders sent to IEX) would be subject to the proposed 

reduced outbound latency of 37 microseconds. 

Further, IEXS would be able to receive IEX Data 

Products subject to the same 37 microseconds of 

latency as other Members and data recipients. 

30 15 U.S.C. 78f(b). 

31 15 U.S.C. 78f(b)(5). 32See supra note 27. 

coiled optical fiber and are subject to an 

equivalent 37 microseconds of latency due to 

traversing the geographic distribution and 

network connectivity between the System at 

the primary data center and the network 

access point of the POP. Conforming changes 

would be made to existing rule text to refer 

to inbound communications separately from 

outbound communications and replace the 

word ‘‘with’’ with ‘‘to’’ to be descriptive of 

the one-way communications referenced. 

Conforming changes to subparagraph (a)(1) 

would reflect that the Connectivity Manual 

was referenced and abbreviated previously. 

Subparagraph (a)(2) would be revised to 

replace the phrase ‘‘traverse the POP’’ with 

more descriptive language ‘‘traverse the 

connectivity infrastructure between the 

System and the POP.’’ 

• Paragraph (b) would be amended to 

replace the current heading, ‘‘IEX POP 

Connectivity’’ with ‘‘IEX Connectivity 

Infrastructure’’ which is more descriptive of 

the content of the paragraph. In addition, 

references to ‘‘inbound POP latency’’ and 

‘‘outbound POP latency’’ would each delete 

the word ‘‘POP’’ to align with the clarifying 

changes to paragraph (a). Further, new 

language would be added to reference that 

connectivity between the System routing 

logic and the Order Book and the manner in 

which the System routing logic may receive 

IEX’s Data Products are described in 

paragraph (c). 

• Subparagraphs (b)(1) and (b)(2) would 

each also be amended to refer to the 

Exchange’s connectivity infrastructure rather 

than the POP in describing the design goals 

of the inbound and outbound latency. 

Subparagraph (b)(2) would also be amended 

to specify the outbound latency and to 

update references to the types of messages 

included in the parenthetical examples. 

• Paragraph (c)(1) would be amended to 

make conforming terminology changes to 

those proposed for paragraph (b). In addition, 

new language would be added to clarify and 

describe how the changes to the outbound 

latency apply to the System routing logic. 

• Paragraph (c)(2) would be amended to 

make conforming terminology changes to 

those proposed for paragraph (b). In addition, 

new language would be added to specify that 

the System routing logic may only receive 

IEX Data Products subject to 37 microseconds 

of outbound latency, equivalent to the 

outbound latency applicable to all other data 

recipients. 

• Paragraph (c)(3) would be amended to 

make conforming terminology changes to 

those proposed for paragraph (b) and to 

delete an extra space in a cross-reference to 

IEX Rule 11.240(d). 

• Supplementary Material .02 would be 

amended to make conforming terminology 

changes (including deleting the term ‘‘POP’’ 

from the heading) to those proposed for 

paragraph (b), to reference the latency for the 

outbound latency, and to include the 

inbound and outbound latencies for routable 

orders in the description of which latencies 

are impacted by force majeure events. 

• Supplementary Material .03 would be 

amended to clarify when the outbound 

versus inbound latency applies to routable 

orders. 

Implementation 

The Exchange plans to implement the 

proposed rule change in two steps. In 

the first step, the Exchange would 

reduce the outbound latency between 

the System and the POP from 350 to 37 

microseconds, but would retain the 

existing outbound latency between the 

System and the System routing logic. In 

the second step, the Exchange would 

reduce the outbound latency between 

the System and the System routing logic 

from 350 to 37 microseconds. The 

purpose of the two-step implementation 

is to enable the IEX technology team to 

focus on each part separately, thereby 

mitigating potential risks, in a manner 

consistent with standard technology 

best practices. IEX is choosing to reduce 

the outbound latency to the System 

routing logic in the second step to avoid 

giving the System routing logic any 

preference over other Users. The 

Exchange expects that there will be 

several days between the two steps of 

the implementation and will provide at 

least ten (10) days’ notice to Members 

and market participants of the 

implementation timeline.29

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,30 in general, and 

furthers the objectives of Section 

6(b)(5),31 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 

enhance IEX Members’ execution and 

risk management efforts. As described 

in the Purpose section, IEX believes that 

a reduction in the outbound latency 

would enhance Members’ execution and 

risk management processes, including 

with respect to hedging and re-routing, 

by enabling them to receive reports of 

IEX executions sooner than is currently 

the case. IEX further believes that this 

reduction in outbound latency will 

enable Members and their clearing firms 

to incorporate the financial and other 

exposure related to IEX executions into 

their risk management systems and 

thereby enable enhanced monitoring 

and control of applicable risks. 

Moreover, IEX believes that these 

benefits would apply to all Members, 

regardless of the details or nature of a 

Member’s business, by supporting 

overall execution and risk management. 

Further, IEX believes that these 

execution and risk management benefits 

outweigh the concerns that previously 

existed regarding the risk to serial 

routing techniques. As discussed in the 

Purpose section, and as the Commission 

has noted, current and commonplace 

routing techniques seek to have orders 

arrive and execute simultaneously 

across multiple venues and are able to 

capture liquidity across multiple venues 

simultaneously without signaling those 

executions to the market in a way that 

would impact prices or available 

liquidity.32 As a result, IEX believes that 

Members and other market participants 

can use such routing techniques instead 

of serial routing techniques to avoid 

potential information leakage when 

subsequently seeking to access liquidity 

on other markets after an IEX execution. 

Similarly, and as discussed in the 

Purpose section, IEX believes that its 

Data Products will be more useful for 

execution and risk management 

purposes if they are disseminated closer 

in time to the applicable execution or 

quote change. IEX believes that this is 

particularly true with the recent 

material reduction in SIP latencies, as 

detailed in the Purpose section. 

Further, the Exchange believes that 

the proposed rule change is consistent 

with the protection of investors and the 

public interest because it will apply to 

all Members in the same manner. All 

outbound communications will be 

subject to the same reduction in latency 

on a fair and nondiscriminatory basis. 

Significantly, and as discussed in the 

Purpose section, execution and other 

order messages from the System to 

Users will be subject to the same latency 

as IEX’s Data Products so that the 

parties to an execution do not receive 

information regarding the execution 

prior to other market participants. 

Although the existing delay in 

dissemination of its Data Products was 

designed to enable an order sender to 

avoid the potential for information 

81986 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

33See supra note 22 at 54441. 

34See IEX Rule 2.220(a)(3). 

leakage when accessing liquidity on 

other markets (as discussed in the 

Purpose section), the Exchange believes 

this purpose is clearly outweighed by 

the potential execution and risk 

management benefits to market 

participants in receiving market data 

and execution reports more quickly, and 

the concomitant benefit to efficient 

markets. Moreover, as discussed in the 

Purpose section, the Exchange believes 

that market participants routinely 

utilize routing strategies and techniques 

to avoid potential information leakage, 

by routing in a manner so that child 

orders arrive at multiple markets nearsimultaneously and that the technology 

to do so is well established and has 

evolved since IEX was approved as an 

exchange in 2016.33

Additionally, the Exchange notes that 

IEXS, its routing broker, will continue to 

be on a level playing field compared to 

all other Members, as it will be subject 

to the same outbound latency reduction, 

except for the few days between stages 

one and two of the proposed 

implementation. With respect to these 

few days, the Exchange notes that the 

Act generally does not prohibit an 

exchange from treating its affiliated 

routing broker in a manner that is less 

preferential than other Members. 

Moreover, use of IEXS by other 

Members is optional and any Member 

that does not want to use IEXS may use 

other routers to route orders to away 

trading centers.34

The Exchange also notes that no other 

national securities exchanges currently 

provide for additional latency to 

outbound communications. 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 the operations of other 

national securities exchanges. Moreover, 

because the Exchange does not believe 

that the proposed rule change is novel, 

it believes that IEX Members will be 

readily able to accommodate the 

reduced outbound latency into their 

trading systems. 

Finally, and for clarification purposes, 

IEX is not proposing any changes to the 

additional latency applied to inbound 

orders, cancelations, and modifications 

or to those communications and 

processes that are not subject to the 

inbound or outbound latency, which 

continue to be critical to the protection 

of pegged and D-Limit orders, as 

described above. 

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. To the 

contrary, the proposal is designed to 

enable enhancement of Members’ 

execution and risk management 

processes, as described in the Purpose 

and Statutory Basis sections. 

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 

because other exchanges offer similar 

functionality. Moreover, the proposed 

rule change would benefit other 

exchanges because it would enable them 

to receive IEX’s Data Products sooner 

than is currently the case which could 

correspondingly enable them to update 

pegged orders more quickly. Similarly, 

as with other Exchange Members, their 

outbound routing brokers would receive 

order messages from IEX sooner than is 

currently the case and could more 

quickly incorporate such information 

into any further routing decisions. 

The Exchange also does not believe 

that the proposed rule change will 

impose any burden on intramarket 

competition because it will apply to all 

Members in the same manner, except for 

the few days between stages one and 

two of the proposed implementation. 

With respect to these few days, as noted 

in the Statutory Basis section, the 

Exchange notes that the Act generally 

does not prohibit an exchange from 

treating its affiliated routing broker in a 

manner that is less preferential than 

other Members. Moreover, use of IEXS 

by other Members is optional and any 

Member that does not want to use IEXS 

may use other routers to route orders to 

away trading centers. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

IEX–2020–18 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–2020–18. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–IEX–2020–18 and should 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 81987 

35 17 CFR 200.30–3(a)(12). 

be submitted on or before January 7, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27726 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: Notice is hereby given, 

pursuant to the provisions of the 

Government in the Sunshine Act, Public 

Law 94–409, the Securities and 

Exchange Commission will hold an 

Open Meeting on Monday, December 

21, 2020 at 10:00 a.m. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 

STATUS: This meeting will begin at 

10:00 a.m. (ET) and will be open to the 

public via audio webcast only on the 

Commission’s website at www.sec.gov. 

MATTERS TO BE CONSIDERED: 

1. The Commission will consider 

whether to authorize the execution of a 

Memorandum of Understanding and 

related documents with the 

Bundesanstalt fu ̈r 

Finanzdienstleistungsaufsicht (‘‘BaFin’’) 

concerning consultation, cooperation 

and the exchange of information related 

to the supervision and oversight of 

certain cross-border over-the-counter 

derivatives entities in connection with 

the use of substituted compliance by 

such entities. 

2. The Commission will consider 

whether to issue an Order, pursuant to 

Exchange Act Rule 3a71–6, granting 

conditional substituted compliance in 

connection with certain Exchange Act 

requirements related to risk control (but 

not including nonbank capital and 

margin requirements), internal 

supervision and compliance, 

counterparty protection, and books and 

records, in response to an application by 

BaFin. 

3. The Commission will consider 

whether to issue a Notice, pursuant to 

Exchange Act Rule 0–13, seeking public 

comment on an application made by a 

foreign financial regulatory authority, 

pursuant to Exchange Act Rule 3a71–6, 

for a substituted compliance 

determination, and on a proposed order 

providing for the conditional 

availability of substituted compliance in 

connection with the application. 

4. The Commission will consider 

whether to approve a proposed rule 

change by New York Stock Exchange 

LLC to amend Chapter One of the Listed 

Company Manual to modify the 

provisions relating to direct listings. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed, please contact 

Vanessa A. Countryman, Office of the 

Secretary, at (202) 551–5400. 

Dated: December 14, 2020. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–27866 Filed 12–15–20; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34138; 812–14951] 

KKR Income Opportunities Fund, et al. 

December 11, 2020. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

under sections 17(d) and 57(i) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) and rule 17d–1 under the Act to 

permit certain joint transactions 

otherwise prohibited by sections 17(d) 

and 57(a)(4) of the Act and rule 17d–1 

under the Act. 

Summary of Application: Applicants 

request an order to permit certain 

business development companies and 

closed-end management investment 

companies to co-invest in portfolio 

companies with each other and with 

certain affiliated investment funds and 

accounts. 

Applicants: KKR INCOME 

OPPORTUNITIES FUND (‘‘KIO’’), KKR 

CREDIT OPPORTUNITIES PORTFOLIO 

(‘‘KCOP’’), KKR CREDIT ADVISORS 

(US) LLC (‘‘KKR Credit’’), KKR CREDIT 

ADVISORS (HONG KONG) LIMITED, 

KKR STRATEGIC CAPITAL 

MANAGEMENT LLC, KKR FI 

ADVISORS LLC, KKR FINANCIAL 

ADVISORS LLC, KKR FINANCIAL 

ADVISORS II, LLC, KKR CS ADVISORS 

I LLC, KKR MEZZANINE I ADVISORS 

LLC, KKR FI ADVISORS CAYMAN 

LTD., KAM ADVISORS LLC, KAM 

FUND ADVISORS LLC, KKR CREDIT 

FUND ADVISORS LLC, KKR ASSET 

MANAGEMENT, LTD., KKR CREDIT 

ADVISORS (IRELAND) UNLIMITED 

COMPANY, KKR CREDIT ADVISORS 

(EMEA) LLP, KKR CREDIT ADVISORS 

(SINGAPORE) PTE. LTD., KKR 

CAPITAL MARKETS HOLDINGS L.P., 

KKR CAPITAL MARKETS LLC, KKR 

CAPITAL MARKETS LIMITED, KKR 

CAPITAL MARKETS ASIA LIMITED, 

MCS CAPITAL MARKETS LLC, KKR 

CAPITAL MARKETS PARTNERS LLP, 

KKR CAPITAL MARKETS INDIA 

PRIVATE LIMITED, KKR CAPITAL 

MARKETS (IRELAND) LIMITED, KKR 

CAPITAL MARKETS JAPAN LIMITED, 

KKR RTV MANAGER LLC, KKR LOAN 

ADMINISTRATION SERVICES LLC, 

KKR CORPORATE LENDING LLC, KKR 

CORPORATE LENDING (CAYMAN) 

LIMITED, KKR CORPORATE LENDING 

(UK) LLC, MERCHANT CAPITAL 

SOLUTIONS LLC, MCS CORPORATE 

LENDING LLC, KKR ALTERNATIVE 

ASSETS LLC, KKR ALTERNATIVE 

ASSETS L.P., KKR ALTERNATIVE 

ASSETS LIMITED, KKR CORPORATE 

LENDING (CA) LLC, KKR CORPORATE 

LENDING (TN) LLC, KKR FINANCIAL 

HOLDINGS, INC., KKR FINANCIAL 

HOLDINGS, LTD., KKR FINANCIAL 

HOLDINGS II, LLC, KKR FINANCIAL 

HOLDINGS II, LTD., KKR FINANCIAL 

HOLDINGS III, LLC, KKR FINANCIAL 

HOLDINGS III, LTD., KKR FINANCIAL 

CLO HOLDINGS, LLC, KKR 

FINANCIAL CLO HOLDINGS II, LLC, 

KKR TRS HOLDINGS, LTD., KKR 

STRATEGIC CAPITAL 

INSTITUTIONAL FUND, LTD., KKR 

DEBT INVESTORS II (2006) IRELAND 

L.P., KKR DI 2006 LP, KKR EUROPEAN 

SPECIAL OPPORTUNITIES LIMITED, 8 

CAPITAL PARTNERS L.P., KKR 

FINANCIAL CLO 2007–1, LTD., KKR 

FINANCIAL CLO 2012–1, LTD., KKR 

FINANCIAL CLO 2013–1, LTD., KKR 

FINANCIAL CLO 2013–2, LTD., KKR 

CLO 9 LTD., KKR CLO 10 LTD., KKR 

CLO 11 LTD., KKR CLO 12 LTD., KKR 

CLO 13 LTD., KKR CLO 14 LTD., KKR 

CLO 15 LTD., KKR CLO 16 LTD., KKR 

CLO 17 LTD., KKR CLO 18 LTD., KKR 

CLO 19 LTD., KKR CLO 20 LTD., KKR 

CLO 21 LTD., KKR CLO 22 LTD., KKR 

CLO 23 LTD., KKR CLO 24 LTD., KKR 

CLO 25 LTD., KKR CLO 26 LTD., KKR 

CLO 27 LTD., KKR CLO 28 LTD., KKR 

CLO 29 LTD., KKR CLO 30 LTD., KKR 

CLO 31 LTD., KKR CORPORATE 

CREDIT PARTNERS L.P., KKR 

MEZZANINE PARTNERS I L.P., KKR 

MEZZANINE PARTNERS I SIDE-BYSIDE L.P., KKR–KEATS CAPITAL 

PARTNERS L.P., KKR–MILTON 

CAPITAL PARTNERS L.P., KKR– 

MILTON CAPITAL PARTNERS II L.P., 

KKR LENDING PARTNERS L.P., KKR 

LENDING PARTNERS II L.P., KKR–VRS 

CREDIT PARTNERS L.P., KKR PIP 

INVESTMENTS L.P., KKR SPECIAL 

SITUATIONS (DOMESTIC) FUND L.P.,