[Federal Register Volume 89, Number 214 (Tuesday, November 5, 2024)]
[Notices]
[Pages 87924-87926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25637]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101481; File No. SR-IEX-2024-22]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
the Implementation Timeline for Its Planned Data Center Migration, 
Which Was Set Forth in a Recent Rule Filing

October 30, 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 October 16, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of 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 the implementation timeline for its 
planned data center migration, which was set forth in a recent 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\
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available at the Exchange's 
website at www.iextrading.com, at the principal office of the Exchange, 
and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 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
    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 provided that IEX would implement the data 
center migration through a phased approach over several weeks. 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'')

[[Page 87925]]

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\
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    \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 8.
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    On September 18, 2024, IEX filed with the Commission an immediately 
effective proposed rule change that specified that the data center 
migration start date would be October 14, 2024, and also relatedly 
modified the advance notice period in the Data Center Migration Filing 
from 30 to 28 days.\17\ The Updated Data Center Migration Filing also 
provided that if, for an unforeseen reason, IEX must further delay the 
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.\18\
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    \17\ See Securities Exchange Act Release No. 101192 (September 
25, 2024), 89 FR 79988 (October 1, 2024) (SR-IEX-2024-18) (``Updated 
Data Center Migration Filing'').
    \18\ Id.
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    IEX issued several Trading Alerts informing market participants 
about the planned data center migration--the first three Trading 
Alerts, issued on August 29, 2024, September 9, 2024, and September 16, 
2024, provided relevant information about the data center migration 
that was scheduled to occur on a phased basis beginning on October 14, 
2024 and concluding on October 31, 2024.\19\ The September 16, 2024 
Trading Alert provided the requisite 28 days' prior notice of the 
planned October 14, 2024 migration start date.\20\
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    \19\ See IEX Trading Alert #2024--024, https://iextrading.com/alerts/#/263; IEX Trading Alert #2024-027, https://iextrading.com/alerts/#/256; IEX Trading Alert #2024-028, https://iextrading.com/alerts/#/266.
    \20\ See IEX Trading Alert #2024-028, https://iextrading.com/alerts/#/266.
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    IEX has been conducting ongoing testing in preparation for the data 
center migration, and recently determined that it would be optimal for 
the full migration to occur on a single day, following robust weekend 
preparation, rather than on a phased basis over several weeks. IEX 
believes that this approach will streamline the data center migration 
transition and thereby reduce burdens on Members and market 
participants as well as reduce any potential risks thereto. It will 
also eliminate the temporary minor increase in inbound latency that 
would have been in effect during the phased migration, as described in 
the Data Center Migration Filing and Temporary Supplementary Material 
.01 to IEX Rule 11.510(a).
    On October 4, 2024, IEX issued a fourth Trading Alert announcing 
that the migration would occur on Monday, October 21, 2024,\21\ 
following preparation over the preceding weekend. However, in order to 
provide time for additional testing and optimization, IEX now proposes 
to extend the migration date beyond October 21, 2024. The Exchange will 
announce the new migration date by Trading Alert with at least 10 days' 
notice (consistent with the Updated Data Center Migration Filing). The 
Exchange plans to announce the new migration date as soon as possible, 
thereby providing more than 10 days' notice of the scheduled migration 
date to market participants.
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    \21\ See IEX Trading Alert #2024-031, https://iextrading.com/alerts/#/269.
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    For the reasons stated above, IEX also proposes to modify the 
description of the migration set forth in the Data Center Migration 
Filing, to clarify that the full data center migration will occur on a 
single day following preparation during the preceding weekend. Thus, 
IEX also proposes to delete Temporary Supplementary Material .01 to IEX 
Rule 11.510(a) which describes the minor temporary change in inbound 
latency that would have occurred during the previously planned phased 
data center 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 it is designed to 
streamline the data center migration transition and thereby reduce 
burdens on Members and market participants as well as reduce any 
potential risks thereto, as described in the Purpose section, while 
providing appropriate transparency and clarity to market participants 
and the Commission regarding the data center migration and the related 
rule changes.
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    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
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    As noted in the Data Center Migration Filing and Updated Data 
Center Migration Filing, 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 or other aspects 
of the migration. Nevertheless, IEX understands that Members that use 
arrival-time routing strategies may choose to update their routing 
logic to account for the reduction in IEX's outbound latency following 
the migration. IEX believes that the notices already provided regarding 
the migration, combined with the pending Trading Alert that will 
provide greater than 10 days' advance notice of the migration date, 
collectively provide sufficient notice to remove impediments to and 
perfect the mechanism of a free and open market and to protect 
investors and the public interest.
    Furthermore, IEX believes that the revised migration approach is 
consistent with the Act because it enables IEX to conduct an orderly 
migration during a single weekend, and thus without impacting normal 
trading. Moreover, as described in the Updated Data Center Migration 
Filing, IEX has already provided, and will continue to provide, market 
participants with sufficient time to fully test the data center 
migration before IEX announces the migration start date. Thus, this 
approach is designed to allow IEX to maintain a functioning market 
without interruption prior to and after 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.
    Finally, IEX believes that conducting the migration over a single 
weekend, with no transitional period while the Exchange is open for 
trading, will minimize any potential impact on Members that use 
arrival-time routing strategies, because they will no longer need to 
consider updating their routing logic to reflect the temporary changes 
to IEX's inbound latencies that would have applied during any trading 
days while the data center migration was in progress. Thus, IEX 
believes this rule change is consistent with the Act, because it should 
remove impediments to and perfect the mechanism of a free and open 
market and protect investors.

[[Page 87926]]

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 the manner in which IEX will migrate its data center, as 
described in the Data Center Migration Filing. As described in the 
Purpose and Statutory Basis section, the Exchange does not believe that 
this change will place any burden on competition and will reduce 
burdens on Members and market participants. Moreover, the proposed 
change 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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has designated this rule filing as non-controversial 
under Section 19(b)(3)(A) \24\ of the Act and Rule 19b-4(f)(6) \25\ 
thereunder. Because the proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder. The Exchange has requested the Commission waive the 
five-day prefiling requirement for this filing to enable IEX to conduct 
an orderly migration of its data center in the coming weeks, while 
providing a minimum of 10 days' notice of the migration date. Further, 
and as described in the Purpose and Statutory Basis sections, the 
proposal is designed to streamline the data center migration and 
thereby reduce burdens on Members and market participants as well as 
reduce any potential risks thereto, while providing appropriate 
transparency and clarity to market participants and the Commission 
regarding the data center migration and the related rule changes.
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    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to give the Commission 
written notice of the self-regulatory organization's intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the 
date of filing of the proposed rule change, or such shorter time as 
designated by the Commission. IEX has satisfied this requirement.
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    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 to enable the 
proposed rule change to become operative upon filing. Waiving the 30-
day delay in this manner would permit the Exchange to implement the 
proposed rule change during the weekend prior to the migration date, 
and thus without impacting normal trading.
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    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \28\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \28\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

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#b0c2c5dcd59dd3dfddddd5dec4c3f0c3d5d39ed7dfc6"><span class="__cf_email__" data-cfemail="7a080f161f57191517171f140e093a091f19541d150c">[email protected]</span></a>. Please include 
file number SR-IEX-2024-22 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-2024-22. 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-2024-22 and should be 
submitted on or before November 26, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-25637 Filed 11-4-24; 8:45 am]
BILLING CODE 8011-01-P


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