82 FR 41077 - Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing of Proposed Rule Change To Adopt Rule 14.602 To Describe the Complimentary Products and Services To Be Made Available to All Listed Companies

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 166 (August 29, 2017)

[Federal Register Volume 82, Number 166 (Tuesday, August 29, 2017)]
[Notices]
[Pages 41077-41079]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-18242]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81469; File No. SR-IEX-2017-20]


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

August 23, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on August 10, 2017, the Investors Exchange LLC (``IEX'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.

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[[Page 41078]]

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 the Securities 
Exchange Act of 1934 (``Exchange Act''),\4\ and Rule 19b-4 
thereunder,\5\ Investors Exchange LLC (``IEX'' or ``Exchange'') is 
filing with the Commission a proposed rule change to adopt Rule 14.602 
to describe the complimentary products and services to be made 
available to all listed companies.
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CRF [sic] 240.19b-4.
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.iextrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On June 17, 2016, the Commission granted IEX's application for 
registration as a national securities exchange under Section 6 of the 
Act including approval of rules applicable to the qualification, 
listing and delisting of companies on the Exchange. The Exchange plans 
to begin a listing program in 2017 and is proposing to adopt Rule 
14.602 to describe the complimentary products and services that will be 
offered to all listed companies in this proposed rule change.
    As proposed, IEX will 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. The team of market professionals 
will serve as a single source of timely market intelligence, 
fundamental and technical trading analysis, and real-time market 
information to all listed companies. 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. In addition, 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. 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. A description of all products and 
services available through IEX Issuer will be provided on the 
Exchange's Web site.
    All issuers listed on the Exchange will have access to services 
through IEX Issuer on the same basis. IEX is not proposing to offer any 
additional products and services to listed companies on a tiered or 
differentiated basis.
2. Statutory Basis
    IEX believes that the proposed rule change is consistent with 
Section 6 of the Act \6\ in general, and furthers the objectives of 
Section 6(b)(4) \7\ of the Act, in particular, in that it is designed 
to provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuers and other persons using its 
facilities. The Exchange also believes that the proposed rule change is 
consistent with Section 6(b)(5) of the Act \8\ in that it is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \6\ 15 U.S.C. 78F [sic]
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that it is fair and reasonable to offer 
optional complimentary products and services to attract and retain 
listings in a highly competitive market. The Exchange believes that the 
existing U.S. exchange listing market for operating companies is 
essentially a duopoly of the New York Stock Exchange (``NYSE'') and 
Nasdaq Stock Market (``Nasdaq''), with the vast majority of operating 
companies listed on U.S. securities exchanges listed on those two. Both 
NYSE and Nasdaq offer complimentary products and services to listed 
companies,\9\ and the Exchange believes that some listed companies want 
such products and services. The Exchange expects to face significant 
competition from NYSE and Nasdaq as a new entrant into the exchange 
listing market, and believes that offering IEX Issuer will facilitate 
its ability to attract and retain the listing of companies that want 
complimentary products and services. IEX believes that to the extent 
IEX's listing program is successful, it will provide a competitive 
alternative, which will thereby benefit issuers and investors, remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, consistent with the protection of investors 
and the public interest.
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    \9\ See Section 907.00 of the NYSE Listed Company Manual and 
Nasdaq Rule IM-5900-7.
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    The Exchange believes that its proposed provision of issuer 
products and services is fair and not unfairly discriminatory because 
it will offer all products and services to each listed company on the 
same terms and conditions without differentiation among listed 
companies whereby certain companies receive enhanced or more services.

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, and as 
discussed in the Statutory Basis section, IEX believes that the 
proposed rule change will enhance competition by facilitating IEX's 
listing program which will allow the Exchange to provide companies with 
another listing option, thereby promoting intermarket competition 
between exchanges in furtherance of the principles of Section 11A(a)(1) 
of the Act \10\ in that it is designed to promote fair competition 
between exchange markets by offering a new listing market to compete 
with Nasdaq and NYSE. Moreover, as a new listing venue, IEX expects to 
face intense competition from existing exchanges. Consequently, the 
degree to which IEX's products and services offerings to listed 
companies could impose any burden on intermarket competition is 
extremely limited, and IEX does not believe that such products and 
services offering would impose any burden on competing venues that is 
not necessary or appropriate in furtherance of the purposes of the Act.
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    \10\ 15 U.S.C. 78k-1(a)(1).
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    IEX also does not believe that the proposed rule change will result 
in any burden on intramarket competition since IEX will offer the 
complimentary products and services to all listed companies on the same 
basis without any differentiation. Consequently, IEX does not believe 
that the proposal will

[[Page 41079]]

impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.
    IEX also notes that it does not have exclusive arrangements with 
third-party vendors with respect to optional access to discounted 
products and services from third-party vendors. IEX believes that 
multiple third-party vendors offer similar services and listed 
companies will not be required to accept any discounted products and 
services as a condition to listing. IEX listed companies are free to 
purchase similar products and services from other vendors, or not to 
use any such products and services, instead of accepting the products 
and services described herein offered by the Exchange. Thus, even if 
IEX were to list a large number of companies, it nonetheless does not 
believe that the proposed rule change will adversely impact competition 
for such products and services.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 [email protected]. Please include 
File Number SR-IEX-2017-20 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-IEX-2017-20. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-IEX-2017-20 and should be 
submitted on or before September 19, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-18242 Filed 8-28-17; 8:45 am]
 BILLING CODE 8011-01-P