Document ID: SEC-2019-1771-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Investors Exchange, LLC
Posted Date: 2019-11-26T05:00Z

[Federal Register Volume 84, Number 228 (Tuesday, November 26, 2019)]
[Notices]
[Pages 65204-65206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25588]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87578; File No. SR-IEX-2019-12]

Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Table in Rule 11.410(a) To Update the Market Data Source That the 
Exchange Will Use To Determine the Top of Book Quotation for NYSE 
Chicago, Inc. and To Amend Rules 2.220(a)(7) and 11.410(a) To Reflect 
the Name Change of Chicago Stock Exchange, Inc. to NYSE Chicago, Inc.

November 20, 2019.
    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 November 15, 2019, 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\ IEX is filing with the Commission a 
proposed rule change to amend the table in Rule 11.410(a) to update the 
market data source that the Exchange will use to determine the Top of 
Book \6\ quotation for NYSE Chicago, Inc. (``XCHI'') and to amend Rules 
2.220(a)(7) and 11.410(a) to reflect the name change of Chicago Stock 
Exchange, Inc. to NYSE Chicago, Inc. The Exchange has designated this 
rule change as ``non-controversial'' under Section 19(b)(3)(A) of the 
Act \7\ and provided the Commission with the notice required by Rule 
19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ See IEX Rule 11.410(a)(1).
    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    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 statement 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 the table in IEX Rule 11.410(a) to 
update the market data source that the Exchange will use to determine 
the Top of Book quotation for NYSE Chicago, Inc. (``XCHI'') and to 
amend IEX Rules 2.220(a)(7) and 11.410(a) to reflect the name change of 
Chicago Stock Exchange, Inc to NYSE Chicago, Inc.
    Specifically, the Exchange proposes to amend and update the table 
in Rule 11.410(a) specifying the primary and secondary sources for XCHI 
as a result of XCHI's establishment of NYSE Chicago BBO, NYSE Chicago 
Trades and NYSE Chicago Integrated Feed (``NYSE Chicago Market Data 
Feeds'' or ``direct feeds'').\9\ As specified in Rule 11.410(a)(2), the 
Exchange uses market data from each away trading center that produces a 
Protected Quotation \10\ to determine its Top of Book quotation, as 
well as the NBBO \11\ for certain reporting, regulatory and compliance 
systems within IEX. As proposed, the Exchange will use securities 
information processor (``SIP'') data, i.e., CQS SIP data for securities 
reported under the Consolidated Quotation Services and Consolidated 
Tape Association plans and UQDF SIP data for securities reported under 
the Nasdaq Unlisted Trading Privileges national market system plan, to 
determine XCHI Top of Book quotes. No secondary source is proposed to 
be specified as SIP data will be used exclusively. While the Exchange 
uses proprietary market data feeds to determine the Protected 
Quotations of all but one of the other away markets,\12\ as specified 
in Rule 11.410, it has determined to utilize the SIP quote feeds for 
XCHI because the Exchange is in the process of implementing technology 
changes to support use of the NYSE Chicago Market Data Feeds. Once 
these changes are complete, IEX will file a rule change under Section 
19(b) of the Act and Rule 19b-4 thereunder to amend relevant portions 
of Rule 11.410 once these steps are complete, to again specify that the 
Exchange will use XCHI's direct feeds as the primary source of XCHI's 
Protected Quotations.\13\ The Exchange notes that it is not necessary 
to utilize the XCHI direct feed in order to determine XCHI Top of Book 
quotes and thereby enable the Exchange to comply with applicable 
requirements of Regulation NMS with respect to its Top of Book quotes. 
The Exchange also notes that other exchanges also use SIP market data 
feeds to determine Top of Book quotes for some away markets, including 
XCHI, pursuant to effective rule filings.\14\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 87389 (October 23, 
2019), 84 FR 57904 (October 29, 2019) (SR-NYSECHX-2019-15).
    \10\ See IEX Rule 1.160(bb).
    \11\ See IEX Rule 1.160(u).
    \12\ The Exchange uses CQS/UQDF SIP data as the exclusive source 
of market data for NYSE National (XCIS). See IEX Rule 11.410(a).
    \13\ See supra note 5[sic].
    \14\ See, e.g., Nasdaq Stock Market Rule 4759(a).
---------------------------------------------------------------------------

    The Exchange is also proposing a conforming change to Rule 
11.410(a)(2) to reflect that, as proposed, the Exchange will not use 
proprietary market data feeds as the primary source

[[Page 65205]]

from which it will determine Top of Book quotations for XCHI.
    Finally, the Exchange proposes to amend Rules 2.220(a)(7) and 
11.410(a) to reflect the name change of XCHI from Chicago Stock 
Exchange, Inc. to NYSE Chicago, Inc.\15\ IEX Rule 2.220(a)(7) lists the 
away trading centers that IEX Services LLC (``IEX Services'') routes to 
as outbound router for the Exchange. Rule 11.410(a), as discussed 
above, specifies the market data sources for each away trading center 
that the Exchange uses for necessary price reference points.
---------------------------------------------------------------------------

    \15\ See Securities Exchange Act Release No. 84494 (October 26, 
2018), 83 FR 54953 (November 1, 2018) (SR-NYSECHX-2018-05).
---------------------------------------------------------------------------

    The Exchange is not proposing any other changes to Rule 11.410 with 
respect to its use of market data feeds and calculations of necessary 
price reference points. The proposed change merely specifies the market 
data feeds that the Exchange will use to determine XCHI Top of Book 
quotes, and does not alter the manner in which orders are handled or 
routed by the Exchange.
2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6(b) \16\ of the Act in general, and furthers the 
objectives of Section 6(b)(5) of the Act \17\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f.
    \17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change removes 
impediments to and perfects the mechanism of a free and open market and 
protects investors and the public interest because it provides 
transparency with respect to the sources of market data that it will 
use to determine XCHI Top of Book quotes. For the reasons discussed in 
the Purpose section, the Exchange believes that use of SIP market data 
will enable it to determine XCHI Top of Book quotes and comply with 
applicable requirements of Regulation NMS. In addition, and as further 
noted in the Purpose section, other exchanges use SIP market data to 
determine Top of Book quotes for some away markets, including NYSE 
National, Inc., so the proposed change does not raise any new or novel 
issues not already considered by the Commission.
    The Exchange also believes it is consistent with the Act to make a 
conforming change to Rule 11.410(a)(2) so that provision is consistent 
with the table in Rule 11.410(a).
    Further, the Exchange believes it is consistent with the Act to 
update the referenced rules to reflect the name change of XCHI so that 
IEX's rules accurately specify away markets referenced, as well as to 
avoid any potential confusion on the part of market participants. As 
noted in the Purpose section, the proposed changes are nonsubstantive 
and do not alter the manner in which orders are handled or routed by 
the Exchange.

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 believes that the 
proposed update does not impact competition in any respect since its 
purpose is to enhance transparency and with respect to the operation of 
the Exchange and its use of market data feeds, and to update an away 
market name.

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 \18\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\19\
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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) \20\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\21\ 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 so that the proposal 
may become operative upon filing. The Exchange noted in its filing that 
other exchanges use SIP market data to determine Top of Book quotes for 
some away markets, including NYSE National, Inc., so the proposed 
change does not raise any new or novel issues. For these reasons, the 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Commission hereby designates the proposed rule change to be 
operative upon filing.\22\
---------------------------------------------------------------------------

    \20\ Id.
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 shall 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-2019-12 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-2019-12. 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

[[Page 65206]]

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 Section, 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 website 
at www.iextrading.com. 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-2019-12 
and should be submitted on or before December 17, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25588 Filed 11-25-19; 8:45 am]
BILLING CODE 8011-01-P