[Federal Register Volume 89, Number 190 (Tuesday, October 1, 2024)]
[Notices]
[Pages 79988-79990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22415]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101192; File No. SR-IEX-2024-18]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify a 
Representation in a Recent Rule Filing Regarding the Planned Migration 
of its System

September 25, 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 September 18, 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 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) under the Act \4\, 
and Rule 19b-4 thereunder \5\, the Exchange is filing with the 
Commission a proposal to modify a representation in a recent rule 
filing regarding the amount of advance notice IEX will give before 
implementing that rule filing. The Exchange has designated this 
proposal as non-controversial and is requesting a waiver of the notice 
required by Rule 19b-4(f)(6)(iii) under the Act.\6\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    There is no rule text for this proposed rule change.

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
    On September 4, 2024, in connection with IEX's planned migration of 
its System \7\ from a data center located in Weehawken, New Jersey to a 
data center located in Secaucus, New Jersey, IEX filed with the 
Commission an immediately effective proposed rule change.\8\ The Data 
Center Migration Filing amended IEX Rules 11.190 and 11.510 to remove 
references to the latency applicable to outbound communications from 
IEX's System (``outbound latency'') to its Users \9\ (defined as 
Members \10\ and Sponsored Participants \11\), Data Recipients \12\, 
and Service Bureaus \13\ (collectively, ``Participants'' \14\); the 
filing also added Temporary Supplementary Material .01 to IEX Rule 
11.510(a) to describe the minor temporary change in inbound latency 
\15\ during the data center migration. The Data Center Migration Filing 
included a representation that IEX would issue a Trading Alert at least 
30 days in advance of the migration ``describing the transition, 
schedule, and impact.'' \16\ For the reasons set forth below, IEX is 
making this filing to modify the advance notice period in the Data 
Center Migration Filing from 30 to 28 days.
---------------------------------------------------------------------------

    \7\ See IEX Rule 1.160(nn).
    \8\ See Securities Exchange Act Release No. 101018 (September 
12, 2024), 89 FR 76526 (September 18, 2024) (SR-IEX-2024-17) (``Data 
Center Migration Filing'').
    \9\ See IEX Rule 1.160(qq).
    \10\ See IEX Rule 1.160(s).
    \11\ See IEX Rule 1.160(ll).
    \12\ See IEX Rule 11.130(c).
    \13\ See IEX Rule 11.130(d).
    \14\ See IEX Rule 11.130(a).
    \15\ See IEX Rule 11.510(b)(1).
    \16\ See supra note 5.
---------------------------------------------------------------------------

    IEX has issued three Trading Alerts informing market participants 
about the

[[Page 79989]]

planned data center migration. The first Trading Alert, issued on 
August 29, 2024 (``August 29 Alert''), informed Participants of the 
data center migration planned for the fourth quarter of 2024, described 
how the migration would reduce the outbound latency from 37 
microseconds to a negligible latency, explained that Participants would 
not need to make any configuration changes to accommodate the data 
center migration, and provided three Saturday testing dates in 
September 2024.\17\ The second Trading Alert, issued on September 9, 
2024 (``September 9 Alert''), provided additional detail about the data 
center migration planned for the fourth quarter of 2024.\18\ In 
particular, the September 9 Alert detailed the temporary change to 
IEX's inbound latency during the migration: from 350 to 387 
microseconds for inbound messages and from 350 to 424 microseconds for 
routable orders.\19\ The September 9 Alert also provided an overview of 
the migration schedule that would entail migrating client gateways, 
market data feeds, and matching engines on a symbol-by-symbol 
basis.\20\
---------------------------------------------------------------------------

    \17\ See IEX Trading Alert #2024-024, https://iextrading.com/alerts/#/263. IEX understands that Members that use arrival-time 
routing strategies may choose to update their routing logic during 
the migration period.
    \18\ See IEX Trading Alert #2024-027, https://iextrading.com/alerts/#/256.
    \19\ Id.
    \20\ Id.
---------------------------------------------------------------------------

    On Monday, September 16, 2024, IEX issued a third Trading Alert 
(``September 16 Alert''), which announced the October 14, 2024 
scheduled commencement of the data center migration and detailed which 
aspects of the System would be migrated until the October 31, 2024 
completion.\21\
---------------------------------------------------------------------------

    \21\ See IEX Trading Alert #2024-028, https://iextrading.com/alerts/#/266.
---------------------------------------------------------------------------

    IEX waited until September 16 to announce the October 14 migration 
start date to allow for testing of our fallback mechanisms for the 
migration, as well as confirmatory testing of connectivity to the CTA 
SIP conducted over the prior weekend (September 14 and 15). 
Additionally, IEX wanted to offer Participants an opportunity to 
connect to and test the new data center, which it did on September 14. 
While September 16 is 28 days before the migration start date, as noted 
above, IEX already provided more than 30 days' notice to market 
participants of the planned migration before it issued the September 14 
Alert. Furthermore, IEX believes 28 days' advance notice provides 
sufficient advance notice of the migration schedule to inform 
Participants who may need to prepare for the migration.
    IEX selected Monday, October 14, 2024, as the migration start date 
for two primary reasons. First, the migration must start on a Monday to 
allow IEX's technology team to use the preceding weekend to physically 
relocate equipment from the Weehawken data center to the Secaucus data 
center and to test that the equipment is properly installed in the 
Secaucus data center. Second, IEX determined it would be optimal to 
start the migration on October 14, for several logistical reasons, 
including that commencing the migration on October 14 will allow IEX 
sufficient time to fully decommission or relocate IEX's equipment 
currently housed in the Weehawken data center, without causing any 
undue hardship to the Exchange.
    Thus, for the reasons set forth above, IEX is filing this proposal 
to modify the 30 days' advance notice requirement to 28 days' advance 
notice. With this filing, the September 16 Alert will be deemed to 
provide timely notice of the migration. If, for an unforeseen reason, 
IEX must delay the October 14, 2024 data center migration start date, 
IEX will issue an additional Trading Alert providing at least 10 days' 
notice of the new start date for the migration.
2. Statutory Basis
    IEX believes that its proposal is consistent with the provisions of 
Section 6(b) of the Act \22\ in general, and with Section 6(b)(5) of 
the Act,\23\ in particular, in that it is designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest. Specifically, 
the proposal is consistent with the Act because the three Trading 
Alerts described in the Purpose section provided appropriate 
transparency and clarity to market participants and the Commission 
regarding the data center migration and the related rule changes.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As noted in the Purpose section, Participants will not need to make 
any configuration changes to accommodate the reduction in IEX's 
outbound latency set forth in the Data Center Migration Filing. 
Participants also will not need to make any configuration changes to 
accommodate the temporary increases to IEX's inbound latency set forth 
in the Data Center Migration Filing. Nevertheless, IEX understands that 
Members that use arrival-time routing strategies may choose to update 
their routing logic during the migration period. Thus, IEX believes it 
is consistent with the Act to provide at least 28 days' notice of the 
start date of the data center migration, and that the advance notice 
IEX provided of its data center migration is more than sufficient 
notice to remove impediments to and perfect the mechanism of a free and 
open market and to protect investors and the public interest.
    Additionally, as described in the Purpose section, reducing from 30 
to 28 days the amount of advance notice IEX must give to Participants 
of the data center migration schedule allowed IEX sufficient time to 
fully test the data center migration before announcing the start date 
(including allowing Participants a testing date on September 14), and 
allows enough time for IEX to conduct an orderly migration and to 
properly decommission its Weehawken data center. Thus, this slightly 
reduced notice period is designed to allow IEX to maintain a 
functioning market without interruption during the migration, which is 
consistent with the requirements of the Act that a rule change should 
remove impediments to and perfect the mechanism of a free and open 
market and protect investors.

B. Self-Regulatory Organization's Statement on Burden on Competition

    IEX does not believe that the proposal will result in any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. As explained above, the purpose of this proposal 
is to modify from 30 to 28 days the amount of advance notice IEX must 
give to Participants of the data migration schedule. This modest 
reduction in the amount of advance notice IEX must give of the 
migration start date will impact all market participants equally. The 
Exchange does not expect the slightly shorter notice period to place 
any burden on competition. Rather, the change to the notice period will 
allow the Exchange to implement the data center migration in a thorough 
and risk averse manner and is not designed for any competitive purpose.

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.

[[Page 79990]]

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)(iii) \24\ of the Act and Rule 19b-4(f)(6) thereunder \25\ 
in that it effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \25\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of the filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange requested waiver of the five-day prefiling 
requirement for this proposal for the reasons stated in its filing, 
which the Commission hereby grants.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \26\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\27\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay contained in Rule 
19b-4(f)(6)(iii).\28\ The Exchange stated that waiver of the 30-day 
delay would permit the Exchange to promptly notify market participants 
of the data center migration schedule without any confusion as to 
whether IEX has provided sufficient advance notice of the migration, 
thereby allowing market participants sufficient time to test the new 
data center configuration and update any routing logic to account for 
the temporary changes to IEX's inbound latency during the migration. In 
the filing, IEX confirmed that it issued a Trading Alert on September 
16 with details on the migration from the Weehawken data center to the 
Secaucus data center at least 28 days prior to starting the migration, 
which is currently planned for October 14. IEX further represented that 
it provided Participants one round of testing before issuing the 
September 16 Trading Alert. The proposed modification of the duration 
of the notice by IEX to its members of the data center migration from 
30 days to 28 days to account for an intervening weekend during which 
IEX allowed participants to connect to and test the new data center 
does not raise any novel issues and provides sufficient clarification 
of IEX's previously-announced intentions regarding the timing of the 
migration, especially in light of the two prior Trading Alerts that IEX 
issued on August 29 and September 9, and therefore waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\29\
---------------------------------------------------------------------------

    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 17 CFR 240.19b-4(f)(6)(iii).
    \28\ 17 CFR 240.19b-4(f)(6)(iii).
    \29\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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) \30\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \30\ 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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#443631282169272b2929212a3037043721276a232b32"><span class="__cf_email__" data-cfemail="0270776e672f616d6f6f676c7671427167612c656d74">[email protected]</span></a>. Please include 
file number SR-IEX-2024-18 on the subject line.

Paper Comments

    <bullet> 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-2024-18. 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 (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-2024-18 and should be 
submitted on or before October 22, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12) and (59).
---------------------------------------------------------------------------

Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-22415 Filed 9-30-24; 8:45 am]
BILLING CODE 8011-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>