Document ID: SEC-2017-0967-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Investors Exchange, LLC
Posted Date: 2017-06-07T04:00Z

[Federal Register Volume 82, Number 108 (Wednesday, June 7, 2017)]
[Notices]
[Pages 26552-26554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11754]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80845; File No. SR-IEX-2017-19]

Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Remove 
the Ten (10) Price Level Limitation on Aggregated Depth of Book 
Quotations Disseminated on the IEX Data Platform, and To Add Rule 
11.330(a)(5) To Offer Historical Data

June 1, 2017.
    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 May 23, 2017, 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 Securities 
Exchange Act of 1934 (``Act''), and Rule 19b-4 thereunder, Investors 
Exchange LLC (``IEX'' or the ``Exchange'') is filing with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change to amend Rule 11.330(a)(2) to remove the ten (10) price level 
limitation on aggregated depth of book quotations for all displayed 
orders resting on the Order Book disseminated on the IEX Data Platform; 
and to add Rule 11.330(a)(5) to offer Historical Data (``HIST''), an 
additional data product that offers historical data. 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.
    The text of the proposed rule change is available at the Exchange's 
Web site 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
    The Exchange proposes to amend Rule 11.330(a)(2) to remove the ten 
(10) price level limitation on aggregated depth of book quotations for 
all displayed orders resting on the Order Book disseminated on the IEX 
Data Platform; and to add Rule 11.330(a)(5) to offer Historical Data 
(``HIST''), an additional data product that offers historical data. 
Currently, Rule 11.330(a)(2) states that the IEX Data Platform is a 
data feed, available through the Exchange's public Web site, that 
offers aggregated top of book quotations for all displayed orders 
resting on the Order Book, aggregated depth of book quotations for all 
displayed orders resting on the Order Book for up to ten (10) price 
levels, and execution information (i.e., last sale information) for 
executions on the Exchange. The Exchange believes that market 
participants that make use of the IEX Data Platform would benefit from 
receiving all aggregated depth of book quotations for all orders 
resting on the Order Book at every price level, in the same manner that 
such information is disseminated over IEX DEEP.\4\ Accordingly, the 
Exchange proposes to amend Rule 11.330(a)(2) to offer aggregated depth 
of book quotations on the IEX Data Platform for all displayed orders 
resting on the Order Book at each price level, rather than providing 
only ten (10) price levels. The IEX Data Platform will continue to 
offer aggregated top of book quotations for all displayed orders 
resting on the Order Book, and execution information (i.e., last sale 
information) for executions on the Exchange. Furthermore, the IEX Data 
Platform will continue to be provided free of charge. In addition, 
after informal discussions with market participants and other users, 
the Exchange has determined that there is demand for historical market 
data related to quotations and transaction information on the Exchange. 
Accordingly, the Exchange is proposing to offer HIST, a data product 
that offers historical data for download from the Exchange's public Web 
site. HIST will include the same substantive data that is provided in 
real time via TOPS and DEEP on a T+1 basis via the Exchange's public 
Web site, free of charge.
---------------------------------------------------------------------------

    \4\ See IEX Rule 11.330(a)(3), describing IEX DEEP.
---------------------------------------------------------------------------

    As is the case currently with respect to TOPS, DEEP and the IEX 
Data Platform, the aggregated best bid and offer (``BBO'') and last 
sale information disseminated through the proposed IEX Data Platform 
will be reported under the Consolidated Tape Association (``CTA'') Plan 
or the Nasdaq/UTP Plan. The Exchange will release such information to 
the IEX Data Platform in compliance with Rule 603(a) of Regulation NMS, 
which requires that exchanges distribute market data on terms that are 
``fair and reasonable'' and ``not unreasonably discriminatory,'' and 
prohibits an exchange from releasing data relating to quotes and trades 
to its customers through proprietary feeds before it sends its quotes 
and trade reports for inclusion in the consolidated feeds.\5\
---------------------------------------------------------------------------

    \5\ See Regulation NMS, 70 FR 37,496, 37,567 (June 29, 2005) 
(adopting release); see also Concept Release, 75 FR at 3601 (January 
21, 2010).
---------------------------------------------------------------------------

    The Exchange plans to implement the proposed changes on May 15, 
2017, which is the scheduled launch date of IEX DEEP, and the IEX Data 
Platform.\6\
---------------------------------------------------------------------------

    \6\ See IEX Trading Alert #2017-011, April 19, 2017 (https://www.iextrading.com/trading/alerts/2017/011/). The Commission notes 
that the Exchange originally filed the proposed rule change on May 
12, 2017 (SR-IEX-2017-17) but withdrew that filing and replaced it 
with the current filing on May 23, 2017.
---------------------------------------------------------------------------

2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions

[[Page 26553]]

of Section 6 of the Act \7\ in general, and with Section 6(b)(5) of the 
Act,\8\ in particular. The IEX Data Platform as well as HIST will be 
provided consistent with the purposes of Section 6(b)(5) of the Act.\9\ 
Moreover, the proposed rule change is not designed to permit unfair 
discrimination among customers, issuers, and brokers; and is designed 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4), (5).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule change is designed to promote just and equitable 
principles of trade and remove impediments to and perfect the mechanism 
of a free and open market and a national market system by providing 
quotation and transaction information to market participants via the 
IEX Data Platform, available via the Exchange's public Web site, 
thereby promoting broad price discovery and market efficiency. 
Furthermore, HIST will provide market participants, academics, and 
other users, the ability to analyze and make use of the Exchange's 
historical quotations and transaction information, thereby promoting 
transparency and accessibility to Exchange data products for a variety 
of purposes. For instance, data recipients that wish to back-test 
certain trading strategies can use HIST for such a purpose. As another 
example, data recipients that provide market information through public 
Web sites or develop dynamic stock tickers, portfolio trackers, price/
time graphs and other visual systems can also use HIST for such 
purposes. The Exchange notes that similar historical data products are 
offered by other market centers.\10\ The Exchange also believes this 
proposal is consistent with Section 6(b)(5) of the Act because it is 
designed to protect investors and the public interest and promote just 
and equitable principles of trade by providing greater transparency 
regarding displayed orders in the IEX System on a historical basis 
through HIST and in real-time through the IEX Data Platform. Further, 
the proposal would not permit unfair discrimination because the 
information will be available to all market participants and market 
data vendors on an equivalent basis, and without charge.
---------------------------------------------------------------------------

    \10\ See e.g., Bats Rule 11.22(h); NASDAQ Rule 7022; see also 
www.nyxdata.com for information regarding NYSE OpenBook History and 
ArcaBook FTP, historical data products offered by the NYSE and NYSE 
Arca, respectively.
---------------------------------------------------------------------------

    The Exchange also believes that the proposed rule change is 
consistent with Section 11(A) of the Act \11\ in that it supports (1) 
fair competition among brokers and dealers, among exchange markets, and 
between exchange markets and markets other than exchange markets and 
(2) the availability to brokers, dealers, and investors of information 
with respect to quotations for and transactions in securities. 
Furthermore, the proposed rule change is consistent with Rule 603 of 
Regulation NMS,\12\ which provides that any national securities 
exchange which distributes information with respect to quotations for 
or transactions in an NMS stock do so on terms that are fair and 
reasonable and not unreasonably discriminatory. Moreover, as noted 
above, the Exchange will provide the IEX Data Platform as well as HIST 
to Members and other recipients of Exchange data on terms that are fair 
and reasonable and not unreasonably discriminatory in that both HIST 
and the IEX Data Platform will be provided free of charge. Furthermore, 
HIST and the IEX Data Platform would be accessible on a voluntary 
basis, in that market data distributors are not required by any rule or 
regulation to make this data available. Accordingly, distributors and 
subscribers can discontinue their use at any time and for any reason.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78k-1.
    \12\ See 17 CFR 242.603.
---------------------------------------------------------------------------

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

    IEX does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange is not proposing 
to charge a fee for HIST or the IEX Data Platform, and will make them 
both available to market participants on a fair and impartial basis, 
and on terms that are not unreasonably discriminatory. In addition, the 
Exchange believes that providing both historical TOPS and DEEP data 
through HIST, as well as aggregated depth of book quotations for each 
price level on the IEX Data Platform, as described above, is designed 
to remove impediments to and perfect the mechanism of a free and open 
market and a national market system by providing investors with 
alternative market data, as well as to compete with other exchanges 
that offer similar market data products, such as those currently 
offered by the New York Stock Exchange, Inc. (``NYSE''), the Nasdaq 
Stock Market LLC (``Nasdaq''), and BZX Exchange, Inc. (``Bats'').\13\
---------------------------------------------------------------------------

    \13\ See, e.g., Nasdaq Rule 7023(a)(1)(C), which describes the 
Nasdaq TotalView as a depth-of-book data feed that includes all 
orders and quotes from all Nasdaq members displayed in the Nasdaq 
Market Center as well as the aggregate size of such orders and 
quotes at each price level in the execution functionality of the 
Nasdaq Market Center; See also NYSE OpenBook Aggregated, available 
at http://www.nyxdata.com/nysedata/Default.aspx?tabid=1421, which 
provides a real-time view of the NYSE limit order book including the 
aggregated size at each price level; See Bats Rule 11.22(a) and 
11.22(c), which describe the Bats TCP Depth and Multicast Depth 
feeds as an uncompressed data feed that offers depth of book 
quotations and execution information based on equity orders entered 
into the System. As noted above, see also Bats Rule 11.22(h); NASDAQ 
Rule 7022; see also www.nyxdata.com for information regarding NYSE 
OpenBook History and ArcaBook FTP, historical data products offered 
by the NYSE and NYSE Arca, respectively.
---------------------------------------------------------------------------

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

    Because the foregoing 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)(iii) of the Act \14\ and 
subparagraph (f)(6) Rule 19b-4 thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative for 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay period after which a 
proposed rule change under Rule 19b-4(f)(6) becomes effective. The 
Exchange states that the proposed rule change will provide market 
participants and other users

[[Page 26554]]

greater transparency regarding displayed orders in the IEX System 
through HIST and the IEX Data Platform thereby promoting broad price 
discovery and market efficiency, and will not remove or eliminate any 
data that is currently available to market participants, consistent 
with the protection of investors and the public interest. The 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will provide to investors, without undue delay, public 
access to, and thus greater transparency regarding, displayed orders, 
including historical data, free of charge. Therefore, the Commission 
hereby waives the 30-day operative delay and designates the proposed 
rule change operative upon filing.\18\
---------------------------------------------------------------------------

    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule'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 will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, 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-2017-19 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-IEX-2017-19. This file 
number should be included in 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 Web site (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 Web site 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 will also be available 
for inspection and copying at the IEX's principal office and on its 
Internet Web site at www.iextrading.com. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-IEX-2017-19 and should be submitted on 
or before June 28, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11754 Filed 6-6-17; 8:45 am]
BILLING CODE 8011-01-P