
[Federal Register Volume 82, Number 201 (Thursday, October 19, 2017)]
[Notices]
[Pages 48733-48734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22644]



[[Page 48733]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81872; File No. SR-IEX-2017-20]


Self-Regulatory Organizations; Investors Exchange LLC; Order 
Approving Proposed Rule Change To Adopt Rule 14.602 To Describe the 
Complimentary Products and Services To Be Made Available to All Listed 
Companies

October 13, 2017.

I. Introduction

    On August 10, 2017, the Investors Exchange LLC (``IEX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to adopt Rule 14.602 to describe the complimentary 
products and services to be made available to all listed companies. The 
proposed rule change was published for comment in the Federal Register 
on August 29, 2017.\3\ No comment letters were received in response to 
the Notice. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 81469 (August 23, 
2017), 82 FR 41077 (``Notice'').
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II. Description of the Proposed Rule Change

    The Exchange has proposed to adopt Rule 14.602 to describe the 
complimentary products and services that will be offered to all listed 
companies pursuant to a listing program that the Exchange intends to 
begin in 2017.\4\
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    \4\ See id. at 41078.
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    In particular, the Exchange has proposed to provide all listed 
companies with the same optional complimentary services through access 
to IEX Issuer, a market information analytics platform consisting of 
access to a team of market professionals and web-based content.\5\ As 
described by the Exchange in its proposal, the team of market 
professionals will provide market intelligence, fundamental and 
technical trading analysis, and real-time market information to all 
listed companies.\6\ The Exchange also stated that the web-based 
portion of IEX Issuer will provide similar information that will enable 
all listed companies to follow their stock's trading, competitors, and 
market activity through an online interface.\7\ Further, IEX noted that 
IEX Issuer may, from time to time, provide information about products 
and services from third-party vendors that IEX determines may be 
relevant to listed issuers, without any subsidy or other involvement by 
the Exchange for such products and services.\8\ The proposed rule text 
states that the Exchange will provide a description of all products and 
services available through IEX Issuer on its Web site.\9\
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    \5\ See proposed Rule 14.602.
    \6\ See id.
    \7\ See Notice, supra note 3, at 41078.
    \8\ See proposed Rule 14.602. The provision of any products and 
services from a third-party vendor would need to be effected through 
arrangements directly between the listed issuer and the third-party 
vendor, without any subsidy or other involvement by the Exchange. 
See id.
    \9\ See id.
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    The Exchange represented in its proposal that all issuers listed on 
the Exchange will have access to services through IEX Issuer on the 
same basis and that the Exchange will not be proposing to offer any 
additional products and services to listed companies on a tiered or 
differentiated basis.\10\
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    \10\ See Notice, supra note 3, at 41078.
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III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of Section 6 of the 
Act.\11\ Specifically, the Commission finds that the proposal is 
consistent with Sections 6(b)(4) \12\ and 6(b)(5) of the Act \13\ in 
particular, in that the proposed rule is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
Exchange members, issuers, and other persons using the Exchange's 
facilities, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. Moreover, the Commission finds 
that the proposed rule change is consistent with Section 6(b)(8) of the 
Act \14\ in that it does not impose any burden on competition not 
necessary or appropriate in furtherance of the purposes of the Act.
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    \11\ 15 U.S.C. 78f. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(4).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(b)(8).
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    The Commission believes that the proposed rule change, which would 
permit the Exchange to provide complimentary products and services to 
all listed companies through IEX Issuer, as described above,\15\ is 
appropriate and consistent with the Act. The Commission believes that 
by describing in its Rules the products and services available to 
listed companies, the Exchange is adding greater transparency to its 
rules and the fees applicable to such companies.\16\ This will help to 
ensure that individual listed companies are not given specially 
negotiated packages of products and services to list or remain listed 
that would raise unfair discrimination issues under the Act.
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    \15\ See supra notes 5-7 and accompanying text.
    \16\ The Commission views complimentary products and services 
provided by exchanges to listed companies as a discount on the 
ultimate listing fees paid by such companies. See, e.g., Securities 
Exchange Act Release Nos. 65127 (August 12, 2011), 76 FR 51449 
(August 18, 2011) (order approving SR-NYSE-2011-20) and 65963 
(December 15, 2011), 76 FR 79262 (December 21, 2011) (order 
approving SR-NASDAQ-2011-122).
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    The Commission notes that all listed companies will receive access 
to the same services on the same basis without any differentiation and 
the Exchange is not proposing to offer any additional products and 
services to listed companies on a tiered or differentiated basis. 
Accordingly, the Commission believes that the proposed rule change is 
consistent with the requirements of the Act and, in particular, that 
the products and services are equitably allocated among issuers 
consistent with Section 6(b)(4) of the Act, and the rule does not 
unfairly discriminate between issuers consistent with Section 6(b)(5) 
of the Act.
    As described above, the Exchange will provide all of the products 
and services and will separately provide information about additional 
products and services available from third-party vendors that IEX 
determines may be relevant to listed issuers. As noted by the Exchange 
in its proposal, listed companies may elect to purchase products and 
services from other vendors, or not to use any such products and 
services, rather than accepting the products and services offered by 
the Exchange.\17\ The Exchange stated that the provision of any 
products and services from a third-party vendor would need to be 
effected through arrangements directly between the listed issuer and 
the third-party vendor, without any subsidy or other involvement by the 
Exchange.\18\ The Exchange further stated that it does not have 
exclusive arrangements with third-party vendors with respect to any 
optional access to discounted products and services from third-party 
vendors.\19\ The Exchange has represented that listed companies will 
not be required to accept any discounted products and

[[Page 48734]]

services as a condition to listing.\20\ The Commission believes that 
these representations should additionally help to ensure that 
individual listed companies are not given specially negotiated deals, 
through Exchange subsidized discounts on products and services from 
third-party vendors, to list or remain listed that would raise unfair 
discrimination issues under the Act .
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    \17\ See Notice, supra note 3, at 41079.
    \18\ This representation is also specifically set forth in the 
proposed rule text.
    \19\ See Notice, supra note 3, at 41079.
    \20\ See id.
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    The Commission believes that the Exchange is responding to 
competitive pressures in the market for listings in making this 
proposal. Specifically, the Exchange stated in its proposal that it 
expects to face competition as a new entrant in the market for exchange 
listings and that it believes the complimentary products and services 
that it offers to listed companies will facilitate its ability to 
attract and retain listings.\21\ In particular, the Exchange states 
that it expects to face significant competition from the New York Stock 
Exchange (``NYSE'') and the Nasdaq Stock Market LLC (``Nasdaq'') for 
listings, both of which offer complimentary products and services to 
listed companies.\22\ Accordingly, the Commission believes that the 
proposed rule reflects the current competitive environment for exchange 
listings among national securities exchanges, and is appropriate and 
consistent with Section 6(b)(8) of the Act.\23\
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    \21\ See id. at 41078.
    \22\ See id. See also Section 907.00 of the NYSE Listed Company 
Manual and Nasdaq Rule IM-5900-7.
    \23\ 15 U.S.C. 78f(b)(8).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\24\ that the proposed rule change (SR-IEX-2017-20), be, and hereby 
is, approved.
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    \24\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22644 Filed 10-18-17; 8:45 am]
BILLING CODE 8011-01-P


