[Federal Register Volume 84, Number 186 (Wednesday, September 25, 2019)]
[Notices]
[Pages 50485-50489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20700]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87019; File No. SR-IEX-2019-10]


Self-Regulatory Organizations: Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Add a 
Corporate Discretionary Peg Order Type and Make Two Minor Non-
Substantive Clarifying Changes to the Definition of a Discretionary Peg 
Order

September 19, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 13, 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

[[Page 50486]]

by the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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,\5\ 
and Rule 19b-4 thereunder,\6\ IEX is filing with the Securities and 
Exchange Commission (``Commission'') a proposed rule change to add an 
additional Discretionary Peg order type (a ``Corporate Discretionary 
Peg'' or ``C-Peg'' order) that pegs to the less aggressive of (i.e., 
the lower of) the Midpoint Price,\7\ the consolidated last sale price, 
or the order's limit price, if any. The Exchange is also proposing to 
make two non-substantive, clarifying changes to the definition of a 
Discretionary Peg order. The Exchange has designated this rule change 
as ``non-controversial'' under Section 19(b)(3)(A) of the Act \8\ and 
provided the Commission with the notice required by Rule 19b-4(f)(6) 
thereunder.\9\ 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.
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    \5\ 15 U.S.C. 78s(b)(1).
    \6\ 17 CFR 240.19b-4.
    \7\ See Rule 1.160(t).
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4.
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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 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 purpose of this proposed rule filing is to amend IEX Rule 
11.190 to add a new type of Discretionary Peg order type, a C-Peg 
order. As set forth in proposed Rule 11.190(b)(16), a C-Peg order is a 
non-displayed, pegged, buy order that upon entry into the System,\10\ 
the price of the order is automatically adjusted to be equal to the 
less aggressive of (i.e., the lower of) the Midpoint Price, the 
consolidated last sale price, or the order's limit price, if any. 
Furthermore, when unexecuted shares of a C-Peg order are posted to the 
Order Book,\11\ consistent with the discretionary functionality of the 
order type, the price of the order is automatically adjusted by the 
System to be equal to and ranked at the less aggressive of one minimum 
price variant (``MPV'') \12\ less than the NBB,\13\ the consolidated 
last sale price, or the order's limit price, if any (the order's 
``resting price'').
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    \10\ See Rule 1.160(nn).
    \11\ See Rule 1.160(p).
    \12\ See Rule 11.210.
    \13\ The term ``NBB'' means the national best bid, as set forth 
in Rule 600(b) of Regulation NMS under the Act, determined as set 
forth in IEX Rule 11.410(b).
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    In order to meet the limit price of active orders on the Order 
Book, a C-Peg order will exercise the least amount of price discretion 
necessary from the C-Peg order's resting price to its discretionary 
price (i.e., the less aggressive of the Midpoint Price, consolidated 
last sale price, or the C-Peg order's limit price, if any), except 
during periods of quote instability as defined in Rule 11.190(g), when 
a C-Peg order is only eligible to trade at its resting price, as 
discussed further below. When exercising price discretion, a C-Peg 
order maintains time priority at its resting price and is prioritized 
behind any non-displayed interest at the discretionary price for the 
duration of that book processing action. If multiple C-Peg orders are 
exercising price discretion during the same book processing action, 
they maintain their relative time priority at the discretionary price. 
In the event the NBB becomes locked or crossed, C-Peg orders resting on 
or posting to the Order Book are priced one (1) MPV less aggressive 
than the locking or crossing price.\14\
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    \14\ See Rule 11.190(h)(3)(C)(ii) and (D)(ii) regarding how 
Discretionary Peg orders behave in locked and crossed markets.
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    Pursuant to Rule 11.190(g), the Exchange utilizes real time 
relative quoting activity of certain Protected Quotations \15\ and a 
proprietary mathematical calculation (the ``quote instability 
calculation'') to assess the probability of an imminent change to the 
current Protected NBB to a lower price (``quote instability 
factor'').\16\ When the quoting activity meets predefined criteria and 
the quote instability factor calculated is greater than the Exchange's 
defined quote instability threshold, the System treats the quote as 
unstable and the crumbling quote indicator (``CQI'') is on at that 
price level for two milliseconds, or until the CQI triggers again. 
During all other times, the quote is considered stable, and the CQI is 
off. The System independently assesses the stability of the Protected 
NBB and Protected NBO for each security.
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    \15\ Pursuant to Rule 11.190(g), only the Protected Quotations 
of the New York Stock Exchange, Nasdaq Stock Market, NYSE Arca, 
Nasdaq BX, Cboe BZX Exchange, Cboe BYX Exchange, Cboe EDGX Exchange, 
and Cboe EDGA Exchange are considered in the calculation.
    \16\ Rule 11.190(g) also applies to quote instability involving 
sell orders, but because C-Peg orders are always buy orders, this 
rule filing only addresses the applicability of Rule 11.190(g) to 
buy orders.
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    As proposed, when the CQI is on, resting C-Peg orders will not 
exercise price discretion to meet the limit price of an active (i.e., 
taking) order. However, C-Peg orders are eligible for execution at 
their resting price when the CQI is on, if at or below the consolidated 
last sale price and the order's limit price (if any). Therefore, when 
IEX determines the quote to be unstable, C-Peg orders are protected 
from trading more aggressively at a price that appears to be unstable, 
and thus imminently stale, between the order's resting price and the 
Midpoint Price.
    Further, C-Peg orders will not be executable until at least one 
consolidated last sale trade in the security has occurred on the 
current day.\17\
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    \17\ See infra discussion on Members' compliance obligations 
with respect to the safe harbor of Rule 10b-18 of the Exchange Act. 
17 CFR 240.10b-18.
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    Otherwise, C-Peg orders would operate in the same manner as 
Discretionary Peg (``D-Peg'') orders. Specifically, both C-Peg and D-
Peg orders:
     May have any TIF described in Rule 11.190(c) and as 
described in Rule 11.190(a)(3).
     Are not eligible for routing pursuant to Rule 11.230(b) 
and (c)(2).
     May not be ISOs, as defined in Rule 11.190(b)(12).
     May be submitted with a limit price or without a limit 
price.

[[Page 50487]]

     Are eligible to trade during the Regular Market Session. 
If a C-Peg or D-Peg order is submitted pre-market with a TIF of DAY, 
the order will be queued by the System until the start of the Regular 
Market Session (and in the case of a C-Peg, until after at least one 
last sale eligible trade in the security has occurred).
     May be a MQTY, as defined in Rule 11.190(b)(11).
     Are always non-displayed.
     May be an odd lot, round lot, or mixed lot.
     Are eligible to be invited by the System to Recheck the 
Order Book to trade against interest resting at the Midpoint Price as 
described in Rule 11.230(a)(4)(D).
    The Exchange believes that a C-Peg order can assist Members 
handling an issuer's (and/or its affiliated purchasers') repurchases 
(or ``buybacks'') of an issuer's common stock in managing compliance 
with certain aspects of the ``safe harbor'' under Rule 10b-18 of the 
Act (``Rule 10b-18'').\18\ Rule 10b-18 provides an issuer (and its 
affiliated purchasers) with a ``safe harbor'' from liability for 
manipulation under Sections 9(a)(2) of the Act \19\ and Rule 10b-5 
under the Act \20\ in connection with the issuer's buyback of its 
common stock in the market. For the safe harbor to apply, buybacks by 
or on behalf of the issuer must comply with four specific provisions 
with respect to the manner, time, price, and volume of the repurchases, 
and not be made as ``part of a plan or scheme to evade the federal 
securities laws.'' \21\
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    \18\ See 17 CFR 240.10b-18. Use of a C-Peg order is merely a 
tool to assist Members (and issuers and their affiliated purchasers) 
with compliance with specified aspects of the Rule 10b-18 safe 
harbor. Use of a C-Peg order would not guarantee that such order 
meets all of the requirements of the safe harbor conditions, and 
Members submitting C-Peg orders on behalf of issuers and their 
affiliated purchasers remain fully responsible for all aspects of 
compliance with the Rule 10b-18 safe harbor. In addition, issuers 
and their affiliated purchasers, if relying on the safe harbor for 
buybacks, remain fully responsible for all aspects of their 
compliance with the safe harbor conditions. IEX also notes that this 
rule change proposal is unrelated to a petition for rulemaking that 
IEX submitted in 2018 seeking a modification of the pricing safe 
harbor condition to include executions priced at the midpoint of the 
NBBO. See Petition for Rulemaking from John Ramsay on behalf of IEX 
(March 27, 2018) (Petition Number 4-722).
    \19\ 15 U.S.C. 78i(a)(2).
    \20\ 17 CFR 240.10b-5.
    \21\ See Securities Exchange Act Release No. 48766 (November 10, 
2003), 68 FR 64952, 64954 (November 17, 2003) (``Adopting 
Release'').
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    Although the Rule 10b-18 safe harbor conditions apply directly to 
issuers (and their affiliated purchasers), issuers retain broker-
dealers to conduct buybacks on their behalf subject to the relevant 
conditions of Rule 10b-18. A C-Peg order may assist IEX's broker-dealer 
Members conducting buybacks on behalf of an issuer (or their affiliated 
purchasers) with their efforts to comply with two aspects of the price 
and timing conditions of the Rule 10b-18 safe harbor for securities 
traded on IEX as described below.\22\
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    \22\ The price condition provides that the Rule 10b-18 purchases 
must be effected at a purchase price that ``[d]oes not exceed the 
highest independent bid or the last independent transaction price, 
whichever is higher, quoted or reported in the consolidated system 
at the time the Rule 10b-18 purchase is effected.'' The timing 
conditions provide that any stock repurchases not be the ``opening 
(regular way) purchase reported in the consolidated system,'' not be 
made within 10 or 30 minutes of the market close (depending upon the 
volume or public float value of the stock), and only trade after 
market close if they meet certain criteria. 17 CFR 240.10b-
18(b)(3)(i) and (b)(2).
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    First, a C-Peg order may assist Members' compliance with the price 
condition because a C-Peg order will not trade above the last 
transaction price reported in the consolidated system (i.e., the 
``consolidated last sale price'' \23\). The Member handling the order 
must separately manage compliance with whether the transaction meets 
the independence test since Exchange functionality will not validate 
whether the consolidated last sale price was an ``independent'' 
transaction with respect to the issuer.\24\ A C-Peg order will also not 
peg to the highest independent bid, even if higher than the 
consolidated last sale price, notwithstanding that the price test of 
the Rule 10b-18 safe harbor would permit a trade at such a price. 
Second, a C-Peg order may assist Members' compliance with the first 
aspect of the timing condition of the Rule 10b-18 safe harbor because a 
C-Peg order will not execute until after the first trade in the stock 
is reported to the consolidated tape that day.
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    \23\ The consolidated last sale price is only based on round or 
mixed lot transactions reported to the applicable securities 
information processor (i.e., the Consolidated Trade Association or 
Unlisted Trading Privileges Plans) which is consistent with the term 
as used in the price safe harbor condition. Since 2013, odd-lot 
transactions have been reported to the consolidated tape, but are 
not included in calculations of last sale prices. See Securities 
Exchange Act. Rel. No. 70793 (Oct. 31, 2013), 78 FR 66788 (November 
6, 2013) (S7-24-89) and Securities Exchange Act. Rel. No. 70794 
(Oct. 31, 2013), 78 FR 66789 (November 6, 2013) (SR-CTA-2013-05).
    \24\ IEX notes the Adopting Release includes discussion that the 
term ``independent'' would only include a transaction not effected 
by or on behalf of the issuer (or any of its affiliated purchasers). 
For example, the Adopting Release states that the ``price condition 
is intended to prevent the issuer from leading the market for the 
security through its repurchases by limiting the issuer to bidding 
for or buying its security at a price that is no higher than the 
highest independent published bid or last independent transaction 
price.'' Adopting Release, 68 FR at 64854.
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    Further, use of a C-Peg order will not guarantee that Members meet 
all requirements of the Rule 10b-18 safe harbor, specifically that the 
issuer: (i) Use only one broker-dealer on any single day; (ii) not 
conduct repurchases at certain times prior to the close of a trading 
day; and (iii) not exceed certain purchase volume requirements. 
Additionally, issuers and their affiliated purchasers, if relying on 
the safe harbor for buybacks, remain fully responsible for their 
compliance with all of the safe harbor conditions.
    Based on informal discussions with several Members, IEX believes 
there is significant interest in a Discretionary Peg order type that 
will assist Members with their compliance with the pricing and one of 
the timing conditions of Rule 10b-18, while providing the benefits of a 
Discretionary Peg order, namely the opportunity to execute issuer 
buybacks at the Midpoint Price (if at or lower than the last 
consolidated sale price) with protection from execution at a 
potentially stale price.
    The Exchange notes that this proposed rule change is based on IEX's 
current D-Peg order type and has new features that are substantially 
similar to New York Stock Exchange (``NYSE'') Rules 7.31(i)(4) (Last 
Sale Peg Modifier) and 13(f)(4)(B) (Buy Minus Zero Plus) with several 
minor differences.\25\ Specifically, the NYSE Last Sale Peg Modifier 
order pegs to the lower of the last consolidated sale price, the limit 
price of the order, or the Protected Best Offer,\26\ as opposed to a C-
Peg which pegs to the lower of the Midpoint Price, the consolidated 
last sale price, or the order's limit price, if any. Also, a Last Sale 
Peg Modifier order will be rejected if there is no last consolidated 
sale price (i.e., the stock has not yet traded that day),\27\ but a C-
Peg will wait to execute until there is an initial transaction in the 
stock and then will be marketable.
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    \25\ See Securities Exchange Act Release No. 85649 (April 15, 
2019), 84 FR 16549 (April 19, 2019) (SR-NYSE-2019-16) and Securities 
Exchange Act Release No. 78679 (August 25, 2016), 81 FR 60080 
(August 31, 2016) (SR-NYSE-2016-59).
    \26\ See NYSE Rule 7.31(i)(4).
    \27\ Id.
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    Comparing the NYSE Buy Minus Zero Plus order to the C-Peg, a Buy 
Minus Zero Plus order can only be a limit order that trades at a price 
equal to or lower than the last consolidated sale price of the stock, 
as opposed to a C-Peg order which can be submitted with or without a 
limit price, and the C-Peg's resting price will shift as the spread 
shifts.
    The C-Peg order type is also distinct from the NYSE Last Sale Peg 
and Buy

[[Page 50488]]

Minus Plus order types because it is a type of Discretionary Peg order, 
which means that it will exercise the minimum amount of price 
discretion between its resting price and discretionary price when 
seeking to execute at or near the Midpoint Price, except during periods 
of quote instability.
Housekeeping Changes to Rule 11.190(b)(10)
    The Exchange is also proposing to make two non-substantive, 
clarifying changes to the definition of a Discretionary Peg order.\28\ 
Specifically, the Exchange proposes to add text at the end of the 
clause about how a Discretionary Peg order behaves during periods of 
quote instability to explicitly state that the order is only eligible 
to trade at its resting price. While the Exchange believes that the 
existing text clearly provides by implication that during periods of 
quote instability a Discretionary Peg order is only eligible to trade 
at its resting price, the additional text will provide more fulsome 
clarity. The proposed new text is underlined below:
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    \28\ Rule 11.190(b)(10).

. . . In order to meet the limit price of active orders on the Order 
Book, a Discretionary Peg order will exercise the least amount of 
price discretion necessary from the Discretionary Peg order's 
resting price to its discretionary price (defined as the less 
aggressive of the Midpoint Price or the Discretionary Peg order's 
limit price, if any), except during periods of quote instability as 
defined in paragraph (g) below when a Discretionary Peg order is 
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only eligible to trade at its resting price. . . .

    The Exchange also proposes to delete the extraneous word ``that'' 
from Rule 11.190(b)(10)(F), as specified below with the deletion in 
brackets. The proposed deletion merely corrects a typographical error 
and has no impact on the meaning of the rule text.

    Is eligible to trade only during the Regular Market Session. As 
provided in IEX Rule 11.190(a)(3)(D), any pegged order marked with a 
TIF of DAY that is submitted to the System before the opening of the 
Regular Market Session will be queued by the System until the start 
of the Regular Market Session; any pegged order [that] which is 
marked with a TIF other than DAY will be rejected when submitted to 
the System during the Pre-Market Session. Any pegged order submitted 
into the System after the closing of the Regular Market Session will 
be rejected.

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\29\ in general, and furthers the 
objectives of Section 6(b)(5),\30\ in particular, in that it is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, and 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 Exchange 
believes that the proposed rule change is consistent with the 
protection of investors and the public interest because it is designed 
to increase competition among execution venues for issuer buyback order 
flow, with the benefits of a Discretionary Peg order, as described in 
the Purpose section. While issuer buyback orders are conducted on IEX 
today, the Exchange believes that providing an order type that may 
assist Members' compliance with aspects of the Rule 10b-18 safe harbor 
will provide additional incentives for Members (as well as issuers and 
their affiliated purchasers) to conduct buybacks on IEX.
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    \29\ 15 U.S.C. 78f(b).
    \30\ 15 U.S.C. 78f(b)(5).
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    Further, IEX believes that the proposal is consistent with the 
protection of investors and the public interest in that the C-Peg order 
type may assist Members in their compliance with Rule 10b-18's safe 
harbor conditions when conducting issuer buybacks. By increasing the 
likelihood that an issuer's stock buybacks will execute at or near the 
Midpoint Price and decreasing the likelihood that the order will be 
executed at a stale price, IEX believes that the C-Peg order type may 
assist Members and the issuers (and affiliated purchasers) for whom 
they trade with their compliance with the federal securities laws while 
also helping foster enhanced execution quality for an issuer conducting 
a stock buyback.
    In addition, as noted in the Purpose section, a C-Peg order will 
function very similarly to a Discretionary Peg buy order, except that a 
C-Peg order will not execute at a price higher than the consolidated 
last sale price for the security. Further, the proposed C-Peg order 
type contains new functionality that is substantially similar to 
existing NYSE order types, as described in the Purpose section.\31\ 
Thus, IEX does not believe that the proposed changes raise any new or 
novel material issues that have not already been considered by the 
Commission in connection with existing order types offered by the IEX 
and other national securities exchanges.\32\
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    \31\ See supra note 21 [sic].
    \32\ See, e.g., Securities Exchange Act Release No. 85351 (March 
18, 2019), 84 FR 10871 (March 18, 2019) (SR-IEX-2018-23).
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    Also, the Exchange believes that providing for potential execution 
of issuer buybacks at or near the Midpoint Price may facilitate 
Members' compliance with their best execution obligations when acting 
as an agent on behalf of an issuer.\33\ Specifically, as noted in FINRA 
Regulatory Notice 15-46 (Guidance on Best Execution Obligations in 
Equity, Options and Fixed Income Markets), when conducting its review 
of execution quality in any security, a firm should consider, among 
other things, whether it could obtain midpoint price improvement on one 
venue versus less price improvement on another venue.\34\
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    \33\ All IEX Members that handle customer orders as agent are 
required to be FINRA members, and therefore are subject to FINRA 
guidance. See 17 CFR 240.15b9-1(a).
    \34\ See FINRA Regulatory Notice 15-46, endnote 25 available at: 
https://www.finra.org/sites/default/files/notice_doc_file_ref/Notice_Regulatory_15-46.pdf.
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    Further, the Exchange does not believe that the proposed rule 
change raises any concerns regarding unfair competition. All Members 
would be eligible to use a C-Peg order type, regardless of whether the 
Member is conducting an issuer buyback. While not every Member conducts 
a business involving representation of issuer buyback orders, there is 
no restriction on any Member conducting such activity.
    Finally, the Exchange believes that the proposed nonsubstantive 
clarifying changes to Rule 11.190(b)(10) are consistent with the 
protection of investors and the public interest because they will have 
no impact on the functionality of Discretionary Peg orders, but rather 
simply provide additional clarity on how Discretionary Peg orders 
operate.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. To the contrary, IEX 
believes that introducing the C-Peg order type would continue to 
enhance competition and execution quality for Members conducting an 
issuer buyback among execution venues, by providing an order type that 
may assist Members with their compliance with the pricing conditions 
and one of the timing conditions of Rule 10b-18.

[[Page 50489]]

    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Competing 
exchanges have and can continue to adopt similar order types, subject 
to the SEC rule change process, as discussed in the Purpose and 
Statutory Basis sections.\35\ Moreover, there is no barrier to other 
national securities exchange adopting similar order types.
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    \35\ See supra note 21 [sic].
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    The Exchange also does not believe that the proposed rule change 
will impose any burden on intramarket competition that is not necessary 
or appropriate in furtherance of the purposes of the Act. All Members 
would be eligible to use a C-Peg order type, because the use of this 
particular order type will be available to any market participant, not 
just Members conducting issuer buybacks. While not every Member 
conducts a business involving representation of issuer buyback orders, 
there is no restriction on any Member conducting such activity.
    Further, the proposed housekeeping changes to Rule 11.190(b)(10) 
are not designed to address any competitive issue, but rather to 
provide additional clarity on the operation of D-Peg orders.

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 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 \36\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\37\
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    \36\ 15 U.S.C. 78s(b)(3)(A).
    \37\ 17 CFR 240.19b-4(f)(6). In addition, Rule19b-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 filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    The Exchange believes that the proposed rule change meets the 
criteria of subparagraph (f)(6) of Rule 19b-4 \38\ because it may 
assist Members with their compliance with the safe harbor of Rule 10b-
18 and is substantially similar to order types previously approved or 
considered by the Commission and as discussed in the Statutory Basis 
and Burden on Competition sections.\39\ Specifically, the proposed C-
Peg order will function very similarly to a Discretionary Peg buy 
order, except that a C-Peg order will not execute at a price higher 
than the consolidated last sale price for the security.\40\ Further, 
the proposed C-Peg order type contains new functionality that is 
substantially similar to existing NYSE order types, as described in the 
Purpose section.\41\ Thus, IEX does not believe that the proposed 
changes raise any new or novel material issues that have not already 
been considered by the Commission in connection with existing order 
types offered by IEX and other national securities exchanges.
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    \38\ 17 CFR 240.19b-4(f)(6).
    \39\ See supra notes 21, 28 [sic].
    \40\ See supra note 28 [sic].
    \41\ See supra note 21 [sic].
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    The Exchange will implement the proposed rule change within 90 days 
of filing, subject to the 30-day operative delay, and provide at least 
ten (10) days' notice to Members and market participants of the 
implementation timeline.
    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-2019-010 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-2019-010. 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 (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 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 also will be available for inspection 
and copying at the principal office of the Exchange. 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-2019-010 and should be submitted on 
or before October 16, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\42\
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    \42\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-20700 Filed 9-24-19; 8:45 am]
 BILLING CODE 8011-01-P


