[Federal Register Volume 88, Number 68 (Monday, April 10, 2023)]
[Notices]
[Pages 21219-21223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07415]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97252; File No. SR-IEX-2023-04]


Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Several IEX Rules To Permit, and in Some Instances Require, Electronic 
Service and Filing of Documents in Disciplinary and Other Proceedings

April 4, 2023.
    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 April 3, 2023, 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) of Act,\4\ the 
Exchange is filing with the Commission a proposed rule change to amend 
IEX Rules 9.132, 9.133, 9.135, 9.146, 9.321, 9.341, 9.349, 9.351, 
9.522, 9.524, 9.525, 9.559 and 9.630 to permit, and in some instances 
require, electronic service and filing of documents in disciplinary and 
other proceedings and appeals in conformity with recent changes by the 
Financial Industry Regulatory Authority, Inc. (``FINRA'').
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    The Exchange has designated this proposed rule change as ``non-
controversial'' under Section 19(b)(3)(A) of the Act \5\ and provided 
the Commission with the notice required by Rule 19b-4(f)(6) 
thereunder.\6\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 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 
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 those 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 IEX Rules 9.132, 9.133, 9.135, 
9.146, 9.321, 9.341, 9.349, 9.351, 9.522, 9.524, 9.525, 9.559 and 9.630 
to permit, and in some instances require, electronic service and filing 
of documents in disciplinary and other proceedings and appeals in 
conformity with recent changes by FINRA.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release Nos. 94654 (April 8, 
2022), 87 FR 22264 (April 14, 2022) (SR-FINRA-2022-009) 
(``Electronic Service Amendments Filing'').
---------------------------------------------------------------------------

Background
    In 2020, following the outbreak of the Coronavirus Disease 
(``COVID-19''), FINRA temporarily amended certain of its rules, 
including rules related to the method of service and filing in 
disciplinary proceedings before the Office of Hearing Officers 
(``OHO'') and appeals before the National Adjudicatory Council, among 
other types of administrative proceedings (the ``temporary 
amendments'').\8\ The temporary amendments allowed, and in some 
instances required, FINRA to serve certain documents on parties by 
electronic mail (``email'') and required parties to file or serve 
documents by

[[Page 21220]]

email, unless the parties agreed to an alternative method of 
service.\9\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 88917 (May 20, 
2020), 85 FR 31832 (May 27, 2020) (SR-FINRA-2020-015) (Notice and 
immediate effectiveness of filing to temporarily amend certain 
timing, method of service and other procedural requirements in FINRA 
Rules during the outbreak of COVID-19). FINRA extended the temporary 
amendments several times before filing to make certain of the 
aforementioned amendments permanent. The temporary amendments 
included rule changes to permit the conduct of virtual hearings 
(i.e., FINRA Rules 9261 and 9830), which rule changes are not being 
included in this proposal. Rather, the Exchange is solely copying a 
subset of rules covered by the temporary amendments as discussed 
herein.
    \9\ See Id.
---------------------------------------------------------------------------

    In support of its Electronic Service Amendments Filing, FINRA noted 
that advances in technology and its availability made filing and 
service permitted by the temporary amendments more efficient than under 
FINRA's ``original'' (non-amended) rules.\10\ Moreover, FINRA 
determined that electronic service and filing is beneficial for 
parties, panelists and FINRA staff.\11\ FINRA also noted that the 
Commission likewise amended its rules in November 2020 to require 
electronic filing and service of documents in its administrative 
proceedings.\12\ For these reasons, FINRA determined that making 
permanent the temporary amendments would similarly improve and 
modernize FINRA's operations.\13\ In 2022, the Commission approved 
FINRA's Electronic Service Amendments Filing, thereby making permanent 
the temporary amendments to FINRA's rules regarding electronic service 
and filing, with some modifications.\14\
---------------------------------------------------------------------------

    \10\ See Electronic Service Amendments Filing, supra note 7, 87 
FR 22267.
    \11\ See Id.
    \12\ See Amendments to the Commission's Rules of Practice, 
Securities Exchange Act Release No. 90442 (November 17, 2020), 85 FR 
86464 (File No. S7-18-15) (December 30, 2020) (codified at 17 CFR 
201 (2020)).
    \13\ See Electronic Service Amendments Filing, supra note 7, 87 
FR 22266-67.
    \14\ See Securities Exchange Act Release Nos. 95147 (June 23, 
2022), 87 FR 38803 (June 29, 2022) (SR-FINRA-2022-009) (order 
approving change to certain FINRA rules to permit, and in some 
instances require, electronic service and filing of documents in 
disciplinary and other proceedings and appeals) (``Electronic 
Service Amendments Approval Order''). The Electronic Service 
Amendments Approval Order related to FINRA Rules 1012, 1015, 6490, 
9132, 9133, 9135, 9146, 9321, 9341, 9349, 9351, 9522, 9524, 9559 and 
9630 (collectively, ``the Electronic Service Amendments'').
---------------------------------------------------------------------------

Proposal
    To likewise improve and modernize its rules, the Exchange proposes 
to modify certain of the rules in Chapter 9 of the IEX Rule Book to 
allow for electronic service and filing of documents in disciplinary 
and other proceedings in conformity with the Electronic Service 
Amendments.\15\ IEX and FINRA are parties to a regulatory service 
agreement pursuant to which FINRA provides various regulatory services 
to and on behalf of IEX (``RSA'').\16\ Among the services that FINRA 
provides are disciplinary and dispute resolution services involving IEX 
Members,\17\ including adjudicating matters on IEX's behalf through 
FINRA's OHO.
---------------------------------------------------------------------------

    \15\ Consistent with the Electronic Service Amendments Approval 
Order, the Exchange is not proposing to permit electronic service of 
an initial complaint on a respondent due to heightened fair process 
concerns. As is the case today, the only permissible methods of 
serving the initial complaint are by hand, mail or courier. See IEX 
Rule 9.131(b) (requiring that service be pursuant to IEX Rule 
9.134).
    \16\ See IEX Rule 9.001.
    \17\ See IEX Rule 1.160(s).
---------------------------------------------------------------------------

    Consistent with the Electronic Service Amendments, the Exchange 
proposes to amend certain of its disciplinary rules related to filing, 
service and other procedural requirements and appeals. The proposed 
rule change includes provisions to allow, and in some instances 
require, FINRA, acting on behalf of IEX, to serve certain documents on 
parties by email and require parties to file or serve documents by 
email, unless another method of service is ordered by the 
Adjudicator.\18\ In addition, to support the transition to email 
service and filing, the Exchange proposes to require parties in OHO 
proceedings to file and serve all parties with their current email 
address and contact information at the time of their first appearance, 
and to file and serve any change in email address or contact 
information during the course of the proceeding.
---------------------------------------------------------------------------

    \18\ To the extent that a party lacks the ability to use or 
access technology needed to file, serve or accept service by email, 
FINRA, as adjudicator, may order an alternative method of service 
upon a showing of good cause. See Electronic Service Amendments 
Filing, supra note 7, 87 FR 22265.
---------------------------------------------------------------------------

    The proposed rule change would permit service of documents other 
than the initial complaint by email among various other methods of 
service, such as personal service, mail and courier, and to provide 
that service by email is deemed complete upon sending. The Exchange 
intends to elect email service whenever possible. If FINRA, acting on 
behalf of IEX, has knowledge that the address used for service is not 
current or not functional (i.e., FINRA receives a bounce back or other 
message indicating that there was a failure to deliver the email), 
FINRA will use other permissible methods of service until it can verify 
the party's email address.\19\ The Exchange notes that, in most cases, 
FINRA and the relevant party, or their counsel, will have already 
engaged in communications prior to the service of documents or other 
information. Accordingly, in most cases, FINRA will already have 
information regarding the relevant party, or their counsel's, preferred 
method of service.
---------------------------------------------------------------------------

    \19\ As indicated in the proposed rule text, the Exchange will 
consider service by email complete upon sending of the relevant 
document or other information. This is consistent with service by 
mail under the current rules.
---------------------------------------------------------------------------

    FINRA Rule Series 9000 contains procedural requirements that apply 
to FINRA's own disciplinary and adjudicatory processes. Chapter 9 (Code 
of Procedure) of IEX's Rule Book contains filing, service and other 
procedural requirements that intentionally track the requirements in 
FINRA's Rule Series 9000 in order to facilitate FINRA acting on IEX's 
behalf when called upon to do so under the RSA. Due to the enactment of 
the Electronic Service Amendments, IEX's Chapter 9 rules are currently 
inconsistent with some of the rules in FINRA Rule Series 9000, which 
now allows, and in some instances requires, FINRA to serve certain 
documents on parties by email and require parties to file or serve 
documents by email, unless another method of service is ordered by the 
Adjudicator. IEX is therefore proposing conforming changes to its rules 
to align them with the Electronic Service Amendments.
    The proposed rule changes would permit IEX (and by extension FINRA, 
when acting on behalf of IEX) to serve documents other than the initial 
complaint by email among various other methods of service, such as 
personal service, mail and courier, and to provide that service by 
email is deemed complete upon sending. The proposed amendments also 
contain provisions to ensure that parties who lack the ability to use 
or access email can request relief from the Adjudicator to use an 
alternative method of service upon a showing of good cause.\20\
---------------------------------------------------------------------------

    \20\ See supra note 18.
---------------------------------------------------------------------------

    Chapter 9 of IEX's Rule Book, among other things, sets forth the 
procedure for IEX proceedings for disciplining a member, associated 
person or formerly associated person. IEX Rule Series 9.130 is of 
general applicability to all proceedings set forth in Chapter 9, unless 
a rule specifically provides otherwise. IEX Rules 9.132(b),\21\ 
9.133(b),\22\ and 9.146(l) \23\ provide that the documents and other 
information governed by those rules be served pursuant to IEX Rule 
9.134, which permits service on the parties using the following 
methods: (1) personal service, (2) mail, or (3) courier.\24\ IEX Rule 
9.134 does not permit service by email. The proposed rule change would 
amend IEX Rule 9.132(b) to allow IEX (or FINRA

[[Page 21221]]

acting on behalf of IEX) to serve the relevant documents or information 
by email, and amend IEX Rules 9.133(b) and 9.146(l) to require parties 
to serve documents by email, unless an alternative method of service is 
ordered by the Adjudicator.
---------------------------------------------------------------------------

    \21\ See IEX Rule 9.132(b) (Service of Orders, Notices, and 
Decisions by Adjudicator; How Served).
    \22\ See IEX Rule 9.133(b) (Service of Papers Other Than 
Complaints, Orders, Notices or Decisions; How Served).
    \23\ See IEX Rule 9.146(l) (Motions; General).
    \24\ See IEX Rule 9.134 (Methods of, Procedures for Service).
---------------------------------------------------------------------------

    The proposed rule changes would also amend IEX Rule 9.135 to add 
paragraph (d), which would require parties in OHO proceedings to file 
and serve the parties with their current email address and contact 
information at the time of their first appearance, and to file and 
serve any change in email address or contact information during the 
course of the proceeding.\25\ As noted above, this will ensure that all 
parties have accurate electronic contact information for all other 
parties.
---------------------------------------------------------------------------

    \25\ See proposed IEX Rule 9.135 (Filing of Papers with 
Adjudicator; Procedure)
---------------------------------------------------------------------------

    IEX Rule Series 9.300 sets forth the procedures for review of 
disciplinary proceedings by the IEX Board \26\ and for applications for 
SEC review. IEX Rules 9.321, 9.341(c), 9.349(c), and 9.351(e) require 
IEX to serve documents in connection with those proceedings. IEX 
proposes to amend IEX Rules 9.321, 9.341(c), 9.349(c), and 9.351(e) to 
allow for email as a method of service.\27\
---------------------------------------------------------------------------

    \26\ See IEX Rule 1.160(e).
    \27\ See proposed IEX Rules 9.321 (Transmission of Record); 
9.341(c) (Oral Argument; Notice Regarding Oral Argument); 9.349(c) 
(IEX Appeals Committee Formal Consideration; Decision; Issuance of 
Decision after Expiration of Call for Review Period); 9.351(e) 
(Discretionary Review by IEX Board; Issuance of Decision After 
Expiration of Call for Review Period).
---------------------------------------------------------------------------

    IEX Rule Series 9.520 sets forth the procedures for eligibility 
proceedings and review of those proceedings by the IEX Board. IEX Rules 
9.522(a)(4),\28\ 9.524(a)(3)(A) and (B),\29\ 9.524(b)(3),\30\ and 
9.525(e) \31\ require IEX to serve documents in connection with those 
proceedings, but do not allow for email as a method of service. The 
proposed rule change would amend those rules to allow for email as a 
method of service.\32\ Further, under the proposed change to IEX Rule 
9.524(a)(3)(A) and (B), the disqualified member or sponsoring member 
would be required to serve documents and the exhibit and witness lists 
by email unless an alternative method of service is ordered by the 
Adjudicator.\33\ Additionally, IEX proposes to add new paragraph (d) to 
IEX Rule 9.524, which states that service by email shall be deemed 
complete upon sending the documents or decision.\34\
---------------------------------------------------------------------------

    \28\ See IEX Rule 9.522(a)(4) (Initiation of Eligibility 
Proceeding; Member Regulation Consideration; Service).
    \29\ See IEX Rule 9.524(a)(3)(A) and (B) (IEX Appeals Committee 
Consideration; Transmission of Documents).
    \30\ See IEX Rule 9.524(b)(3) (IEX Appeals Committee 
Consideration; Issuance of Decision After Expiration of Call for 
Review Period).
    \31\ See IEX Rule 9.525(e) (Discretionary Review by the IEX 
Board; Issuance of Decision).
    \32\ See proposed IEX Rules 9.522(a)(4); 9.524(a)(3)(A) and (B); 
9.524(b)(3); and 9.525(e).
    \33\ See proposed IEX Rule 9.524(a)(3)(A) and (B).
    \34\ See proposed IEX Rule 9.524(c).
---------------------------------------------------------------------------

    IEX Rule Series 9.550 sets forth the procedures for expedited 
proceedings \35\ and the ability of the IEX Board to call for review a 
proposed decision prepared under IEX Rule Series 9.550. IEX Rule 
9.559(h) (Transmission of Documents) sets forth the timing and method 
of service requirements for IEX (or FINRA acting on behalf of IEX) to 
provide documents considered in commencing the expedited proceeding 
\36\ and for the parties to exchange proposed exhibit and witness lists 
\37\ in advance of an expedited proceeding.\38\ IEX Rule 9.559(h) does 
not allow for email as a method of service. IEX proposes to amend IEX 
Rules 9.559(h)(1) and (2) to allow for email service, unless an 
alternative method of service is ordered by the Adjudicator and to 
remove text from Rule 9559(h)(2) that requires that documents served by 
email must also be served by overnight courier or personal service.\39\ 
IEX Rule 9.559(q)(2) \40\ requires the IEX Board to serve its decision 
when it issues one, and IEX Rule 9.559(q)(5) \41\ requires the IEX 
Board to serve the decision on the parties and all members with which 
the respondent is associated. IEX Rules 9.559(q)(2) and (5) also do not 
allow for email as a method of service. The proposed rule change would 
amend Rule 9.559(q)(2) and (5) to allow for email as a method of 
service. Further, IEX proposes to add new paragraph (s) to IEX Rule 
9.559, which states that service by email shall be deemed complete upon 
sending the documents or decision.\42\ Additionally, the proposed 
amendment also makes a non-substantive change to correct a 
typographical error in the rule's title (adding a period to ``9550'').
---------------------------------------------------------------------------

    \35\ Expedited proceedings are available in a subset of 
disciplinary proceedings set forth in IEX Rules 9.552 through 9.559. 
Examples include IEX Rule 9.552 (Failure to Provide Information or 
Keep Information Current) and IEX Rule 9.555 (Failure to Meet the 
Eligibility or Qualification Standards or Prerequisites for Access 
to Services).
    \36\ See IEX Rule 9.559(h)(1).
    \37\ See IEX Rule 9.559(h)(2).
    \38\ FINRA also amended its Rule 9559(h) to eliminate the 
requirements that, if the specified documents are served by 
facsimile or email, they must also be served by either overnight 
courier or personal delivery. IEX's amendment conforms IEX Rule 
9.559(h)(1) and (2) to match FINRA's rule.
    \39\ See proposed IEX Rule 9.559(h)(2).
    \40\ See IEX Rule 9.559(q)(2).
    \41\ See IEX Rule 9.559(q)(5).
    \42\ See proposed IEX Rule 9.559(s).
---------------------------------------------------------------------------

    IEX Rule Series 9.600 sets forth the procedures for Members to seek 
exemptive relief from a variety of IEX rules, including appealing a 
decision of the Chief Regulatory Officer, made pursuant to IEX Rule 
9.620. IEX Rules 9.630(e)(1) and (2) \43\ require the IEX Board to 
serve its decision pursuant to IEX Rule 9.134, which does not allow for 
email as a method of service. The proposed rule change would amend IEX 
Rule 9.630(e) to allow for email as an alternative method of 
service.\44\ Additionally, IEX proposes to add new paragraph (f) to IEX 
Rule 9.630, which states that service by email shall be deemed complete 
upon sending the documents or decision.\45\
---------------------------------------------------------------------------

    \43\ See IEX Rule 9.630(e) (Appeal; Decision).
    \44\ See proposed IEX Rule 9.630(e)(1) and (2).
    \45\ See proposed IEX Rule 9.630(f).
---------------------------------------------------------------------------

    IEX believes these proposed changes will modernize its rules and 
make service and filing more efficient and effective because it will 
align IEX's service and filing rules with those of FINRA. Email 
technology is widely available, and use of electronic methods of 
service and filing is common practice in the courts and other 
regulatory agencies, including the Commission.\46\ At the same time, 
the proposal provides for alternative methods of service for parties 
who lack the ability to use or access technology needed to send or 
receive documents electronically.
---------------------------------------------------------------------------

    \46\ See supra note 12.
---------------------------------------------------------------------------

    As noted below, the Exchange has filed the proposed rule change for 
immediate effectiveness and has requested that the Commission waive the 
requirement that the proposed rule change not become operative for 30 
days after the date of the filing, so the Exchange can implement the 
proposed rule change immediately.
2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6(b) of the Act,\47\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\48\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, and, in general, to 
protect investors and the public interest. Additionally, the Exchange 
believes the proposed rule change is designed to provide a fair 
procedure for the disciplining of members and persons associated with 
members, consistent

[[Page 21222]]

with Sections 6(b)(7) and 6(d) of the Act.\49\
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78f(b).
    \48\ 15 U.S.C. 78f(b)(5).
    \49\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    IEX believes that the proposed rule change protects investors and 
the public interest by requiring use of broadly available technology to 
make service and filing processes more efficient and effective. IEX's 
disciplinary and eligibility proceedings and other review processes 
serve a critical role in providing investor protection and maintaining 
fair and orderly markets by, for example, sanctioning misconduct and 
preventing further customer harm by members and associated persons.
    The proposed rule change promotes efficiency in these processes by 
aligning IEX's rules with FINRA's rules that permit electronic service 
and filing in most instances. To ensure that documents are effectively 
sent and received, IEX (in line with FINRA's requirements) is proposing 
to require parties to provide and update their contact information, 
including their email address, during the course of a proceeding. These 
amendments reduce the reliance on paper documents in favor of more 
efficient electronic formats. IEX concurs with the Commission and FINRA 
in the belief that adopting rules on electronic service and filing is 
especially important as hybrid and remote work become more common.
    IEX believes as well that the proposed rule change includes 
important safeguards to ensure fairness. For example, there are 
procedures in place for persons who lack the ability to use or access 
technology necessary to send or receive documents electronically. Such 
parties will have the ability to request relief from the Adjudicator to 
file or serve documents by another method.\50\ As discussed in the 
Purpose section, based on FINRA's representations about its experience 
of operating under its temporary amendments, which have permitted 
electronic service and filing since mid-2020, IEX anticipates that 
requests to use non-electronic methods of service will be rare. In 
addition, the proposed rule change balances the interests of fairness 
and efficiency. Service of the initial complaint will continue to occur 
by hand, mail or courier, rather than by electronic means, thus 
ensuring there is satisfactory notice and fair process. Thus, the 
proposed rule change represents a significant step toward modernizing 
the service and filing processes in a manner that will protect 
investors and the public interest by promoting efficiency while 
preserving fair process.
---------------------------------------------------------------------------

    \50\ See supra note 18.
---------------------------------------------------------------------------

    Additionally, the Exchange believes that the proposed rule change 
supports the objectives of the Act by providing greater harmonization 
between Exchange rules and FINRA rules of similar purpose, resulting in 
less burdensome and more efficient regulatory compliance. As such, the 
proposed rule change will foster cooperation and coordination with 
persons engaged in facilitating transactions in securities and will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
    Finally, as discussed in the Purpose section, this proposed rule 
change is based on FINRA rule changes approved by the Commission in 
2022.\51\ Therefore, IEX believes there is nothing in this proposal 
that is new or novel that has not been previously considered by the 
Commission.
---------------------------------------------------------------------------

    \51\ See supra note 14.
---------------------------------------------------------------------------

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. To the contrary, IEX believes 
that proposed rule change reduces the burden on competition because it 
eliminates inconsistencies between IEX's Code of Procedure (Chapter 9 
of the IEX Rule Book) and FINRA's rules governing the adjudication of 
disputes and disciplinary proceedings. Additionally, IEX notes that the 
proposed rule change is not intended to address competitive issues but 
is designed to modernize the service and filing process in 
harmonization with the approved FINRA Rules.

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) \52\ of the Act and Rule 19b-4(f)(6) \53\ 
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.
---------------------------------------------------------------------------

    \52\ 15 U.S.C. 78s(b)(3)(A).
    \53\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    The Exchange believes that this filing is non-controversial and 
eligible to become effective immediately because the proposal provides 
a more uniform standard for disciplinary rules across self-regulatory 
organizations and thereby enables the Exchange to modernize the service 
and filing process to conduct disciplinary hearings. The Exchange 
further believes that the proposed rule change would not significantly 
affect the protection of investors or the public interest or impose any 
significant burden on competition because the proposed rule change is 
based on the approved FINRA Electronic Service Amendments.\54\ As such, 
the IEX believes the proposal does not raise any new or novel issues 
not previously considered by the Commission.
---------------------------------------------------------------------------

    \54\ See generally Electronic Service Amendments Approval Order, 
supra note 14.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \55\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\56\ 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 immediately upon filing. Additionally, the 
Exchange has given 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 states that this filing is 
non-controversial and eligible to become effective immediately because 
the proposal promotes uniformity in disciplinary rules across self-
regulatory organizations and thereby enables the Exchange to modernize 
the service and filing process to conduct disciplinary hearings.\57\ 
The Exchange further states that the proposed rule change would not 
significantly affect the protection of investors or the public interest 
or impose any significant burden on competition because the proposed 
rule

[[Page 21223]]

change is based on the approved FINRA Rules. After reviewing the 
filing, the Commission believes that waiver of the 30-day operative 
delay for this proposal is consistent with the protection of investors 
and the public interest. The proposed rule change supports the 
objectives of the Act by providing greater harmonization between 
Exchange rules and FINRA rules of similar purpose, resulting in less 
burdensome and more efficient regulatory compliance. Accordingly, the 
Commission hereby waives the 30-day operative delay and designates the 
proposal operative upon filing.\58\
---------------------------------------------------------------------------

    \55\ 17 CFR 240.19b-4(f)(6).
    \56\ 17 CFR 240.19b-4(f)(6)(iii).
    \57\ See supra Item II.
    \58\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change'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 such 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) \59\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \59\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 [email protected]. Please include 
File Number SR-IEX-2023-04 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-2023-04. 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-2023-04 and 
should be submitted on or before May 1, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\60\
---------------------------------------------------------------------------

    \60\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-07415 Filed 4-7-23; 8:45 am]
BILLING CODE 8011-01-P


