82 FR 45917 - Self-Regulatory Organizations: Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Listing Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 189 (October 2, 2017)

Page Range		45917-45921
FR Document		2017-21002
Federal Register, Volume 82 Issue 189 (Monday, October 2, 2017)
[Federal Register Volume 82, Number 189 (Monday, October 2, 2017)]
[Notices]
[Pages 45917-45921]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-21002]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81725; File No. SR-IEX-2017-30]


Self-Regulatory Organizations: Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Related to 
Listing Fees

September 26, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on September 13, 2017, the Investors Exchange LLC (``IEX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) under the Securities 
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ 
Investors Exchange LLC (``IEX'' or ``Exchange'') is filing with the 
Commission a proposed rule change to amend Rule 14.601, which is 
currently reserved, to (i) adopt an annual fee of $50,000 for companies 
listing on the Exchange and (ii) provide for specified fee credits.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CRF [sic] 240.19b-4.
---------------------------------------------------------------------------

    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 the 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statement [sic] 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
    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.\6\ The Exchange 
plans to begin a listing program in 2017 and is proposing to adopt a 
simple fee structure for listed companies.\7\ Specifically, the 
Exchange proposes to amend Rule 14.601 to (i) adopt an all-inclusive 
annual fee of $50,000 for companies listing on the Exchange and (ii) 
provide for specified fee credits for a company that is approved for 
IEX listing \8\ and, prior to or within 120 calendar days of the first 
IEX listing, announces its intent to transfer its listing to IEX in the 
company's press release issued pursuant to Rule 12d2-2(c)(2)(iii) under 
the Act \9\ announcing its intent to withdraw its securities from 
listing on its current national securities exchange.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 34-78101 (June 17, 
2016), 81 FR 41141 (June 23, 2016) (File No. 10-222).
    \7\ The Exchange's listing program launch is pending Commission 
rulemaking to amend Rule 146 under Section 18 of the Securities Act 
of 1933 (``Securities Act'') to designate securities listed on the 
Exchange as covered securities for purposes of Section 18(b) of the 
Securities Act. See Securities Act Release No. 10390 (July 14, 2017) 
82 FR 33839 (July 21, 2017) (File No. S7-06-17) proposing such rule 
amendment.
    \8\ See IEX Rule 14.202.
    \9\ Rule 12d2-2(c) under the Act specifies, among other things, 
the requirements applicable to an issuer of a class of securities 
listed on a national securities exchange to notify the Commission of 
its withdrawal of such securities from listing on such national 
securities exchange. Subparagraph 2(ii) thereto requires that the 
issuer must provide notice to its national securities exchange of 
such determination no fewer than 10 days before notification to the 
Commission. Subparagraph (2)(iii) thereto requires that 
``[c]ontemporaneous with providing written notice to the exchange of 
its intent to withdraw a class of securities from listing and/or 
registration, the issuer must publish notice of such intention, 
along with its reasons for such withdrawal, via a press release and, 
if it has a publicly accessible Web site, posting such notice on 
that Web site.''
---------------------------------------------------------------------------

    As proposed, paragraph (a) of Rule 14.601 contains introductory 
text stating that the rule sets forth the required listing fees. 
Paragraph (b) specifies a $50,000 all-inclusive annual listing fee that 
will be payable annually by each listed company on January 1st of each 
year for the upcoming calendar year, subject to fee credits as 
specified in paragraph (c) and described more fully below. The annual 
listing fee will not be charged in the first calendar year of a 
company's listing on IEX, but thereafter would be the only fee payable 
by a listed company per year for all aspects of its listing. The 
Exchange is not proposing to charge application fees, entry fees, fees 
for the listing of additional shares, recordkeeping fees, substitution 
listing fees, fees for a written interpretation of listing rules or 
hearing fees. All listed companies will be subject to the same annual 
listing fee, without differentiation based on the number of shares 
outstanding, unless eligible for a fee credit as described below. 
Paragraph (b) also provides that the annual fee will be subject to a 
pro-rata refund if the company ceases to be

[[Page 45918]]

listed on IEX during the calendar year for which such fee was paid. 
Paragraph (d) specifies that the Exchange is not proposing to charge 
any other listing fees.
    The Exchange proposes to provide a fee credit to any company that 
is approved for IEX listing and prior to or within 120 calendar days of 
the first IEX listing, announces its intent to transfer its listing to 
IEX in the company's press release issued pursuant to Rule 12d2-
2(c)(2)(iii) under the Act \10\ announcing its intent to withdraw its 
securities from listing on its current national securities exchange. 
The credit will also apply to the first IEX listing if such listing is 
a transfer from another national securities exchange. The Exchange will 
provide notice of the first listing to the issuer community on the day 
when the first listing occurs. The fee credit will be the greater of 
$250,000 or the amount of any nonrefundable listing fees actually paid 
by the company to another listing exchange during the calendar year in 
which it lists on IEX if the company is no longer listed on such other 
exchange upon listing on IEX. The fee credit may only be used to offset 
the IEX all-inclusive listing fee.\11\
---------------------------------------------------------------------------

    \10\ Id.
    \11\ See proposed Rule 14.601(b).
---------------------------------------------------------------------------

    Notwithstanding the fee credit, IEX will have sufficient resources 
available for its listing compliance program, which helps to assure 
that listing standards are properly enforced and investors are 
protected. Specifically, as described in the Commission's order 
approving IEX's exchange application, the Exchange and IEX Group, Inc. 
(its parent) have entered into an agreement that requires IEX Group, 
Inc. to provide adequate funding for the Exchange's operations, 
including regulation of the Exchange.\12\
---------------------------------------------------------------------------

    \12\ See supra note 6 [sic].
---------------------------------------------------------------------------

2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6(b) \13\ of the Act in general, and furthers the 
objectives of Sections [sic] 6(b)(4) \14\ 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, issuers and 
other persons using its facilities. Additionally, IEX believes that the 
proposed fees are consistent with the investor protection objectives of 
Section 6(b)(5) \15\ of the Act, in particular, in that they are 
designed to promote just and equitable principles of trade, to remove 
impediments to a free and open market and national market system, and 
in general to protect investors and the public interest, and are not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
    \15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As a preliminary matter, IEX is a new entrant in the exchange 
listing market and expects to face intense competition from the New 
York Stock Exchange (``NYSE'') and the Nasdaq Stock Market 
(``NASDAQ''), which, IEX believes, essentially operate as a duopoly in 
the U.S. listing market with the vast majority of operating companies 
listed on U.S. securities exchanges listed on those two. As discussed 
more fully below, IEX's proposed simple low cost flat-fee structure, 
combined with the limited fee credit, as well as no fee in the first 
year of listing, is designed to address the significant competitive 
challenges. Moreover, in view of the competition among listing 
exchanges, whereby companies can easily choose not to list on IEX, the 
fees that IEX can charge listed companies are constrained by the fees 
charged by its competitors and IEX cannot charge fees in a manner that 
would be unreasonable, inequitable, or unfairly discriminatory.
    As described more fully below, IEX's proposed listing fees and 
credits are available to all listed companies in a consistent and 
transparent manner, treating similarly situated companies similarly. 
IEX has chosen to structure its listing fees differently than NYSE and 
NASDAQ, which are generally based on shares outstanding. This structure 
has existed for many years, and has been justified on the basis that 
companies with fewer shares outstanding tend to be smaller companies, 
which may use fewer of the listing exchange's services and be more 
willing to forgo an exchange listing if it costs more.\16\ However, the 
Exchange does not believe that the number of shares outstanding of a 
particular company necessarily corresponds to the size of the company. 
To the contrary, there are a variety of examples that demonstrate that 
shares outstanding does not correlate to larger market capitalization. 
This fee structure thus results in similarly situated companies being 
charged materially different listing fees. For example, Conagra Brands, 
Inc. (symbol: CAG), Fleetcor Technologies Inc. (symbol: FLT), and 
Autozone Inc. (symbol: AZO) each have similar market capitalizations 
($13.5 billion, $13.1 billion, and $14.7 billion respectively) but 
because of differences in shares outstanding, we estimate that CAG paid 
an annual listing fee in 2017 to NYSE of $436,438 per year while FLT 
paid $96,473 and AZO paid $59,500. Similarly, NVIDIA Corp (symbol: 
NVDA) and The Priceline Group Inc. (symbol: PCLN) each have similar 
market capitalizations ($99 billion and $87.8 billion respectively) but 
because of differences in shares outstanding, we estimate that NVDA 
paid an annual listing fee in 2017 to NASDAQ of $155,000 while PCLN 
paid $55,000. And we estimate that Biocryst Pharmaceuticals Inc. 
(symbol: BCRX), with a market capitalization of only $397.3 million, 
paid a $100,000 annual listing fee to NASDAQ in 2017, almost double the 
PCLN fee notwithstanding that PCLN's market capitalization is 
approximately 221 times greater ($87.4 billion greater) than BCRX's 
market capitalization.\17\
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release No. 73647 (November 19, 
2014), 79 FR 70232 (November 25, 2014) (SR-NASDAQ-2014-087).
    \17\ Market capitalization estimates are based on Bloomberg data 
as of August 28, 2017. NYSE and NASDAQ listing fee estimates are 
based on listing fees reflected in Section 902 of the NYSE Listed 
Company Manual and the NASDAQ Rule 5900 Series (as applicable) and 
assumes (for NASDAQ) that each company paid the all-inclusive annual 
listing fee. Listing fee estimates are based on shares outstanding 
as reflected in Bloomberg data as of August 28, 2017.
---------------------------------------------------------------------------

    In addition, a company that has made the decision to effect a 
forward stock split will, under the existing exchange pricing 
structure, be charged double their previous listing fee (subject to any 
relevant maximum fees as discussed below) despite the fact that the 
company has not changed in structure or market capitalization.
    IEX also does not believe that smaller companies use fewer listing 
exchange services. To the contrary, the Exchange believes that larger 
companies generally use fewer regulatory services than smaller 
companies since they tend to be more consistently above the continued 
listing requirements, and also tend to utilize more sophisticated 
advisors for interactions with the listing exchange. Thus, the Exchange 
believes that its simple listing fee and credit structure is a more 
reasonable and equitable approach, as described below.
    The Exchange believes that $50,000 per year for the all-inclusive 
annual listing fee is fair and reasonable based on IEX's anticipated 
costs to support and maintain a listing business, including its listing 
compliance program. IEX also notes that the proposed fee is less than 
all NYSE fees, within the range of NASDAQ fees, and materially less 
than the maximum annual fees charged by each of NYSE and NASDAQ. 
Currently, annual listing fees for NYSE range from $59,500 to

[[Page 45919]]

$500,000,\18\ while annual listing fees for NASDAQ range from $32,000 
to $155,000,\19\ each depending on the company's total shares 
outstanding. The all-inclusive annual listing fees applicable to 
companies listed on the NASDAQ Global Select Market range from $45,000-
$155,000.\20\ IEX notes that its listing standards are substantially 
similar to the listing standards for NASDAQ Global Select market and 
therefore believes that it is most relevant to compare the IEX proposed 
all-inclusive annual listing fee to the NASDAQ Global Select Market 
all-inclusive annual listing fee range.
---------------------------------------------------------------------------

    \18\ See Sections 902.02 and 902.03 of the NYSE Listed Company 
Manual.
    \19\ See NASDAQ Rule 5920(c) for NASDAQ Capital Market annual 
fees, Rule 5910(c) for NASDAQ Global and Global Select annual fees, 
and IM-5910-1 for the all inclusive annual listing fees applicable 
to companies listed on the NASDAQ Global Market (including the 
Global Select Market).
    \20\ Id.
---------------------------------------------------------------------------

    IEX also believes that it is reasonable to structure its fee as an 
all-inclusive fee. NASDAQ has begun to structure its annual listing 
fees as an all-inclusive fee, noting that such a fee structure 
simplifies billing and provides transparency and certainty to companies 
as to the annual cost of listing.\21\ IEX also believes that such 
considerations warrant use of an all-inclusive fee.
---------------------------------------------------------------------------

    \21\ See, e.g., Securities Exchange Act Release No. 78149 (June 
24, 2016), 81 FR 42388 (June 29, 2016) (SR-NASDAQ-2016-085).
---------------------------------------------------------------------------

    IEX further believes that it is reasonable to provide a fee credit 
under the terms described in the Purpose section. Transferring a 
listing to a new exchange is a significant decision for a public 
company, and the Exchange anticipates that NYSE and NASDAQ will each 
actively seek to retain listed companies considering transferring their 
listing to IEX. Accordingly, the Exchange believes that although 
listing on IEX will provide certain benefits to issuers compared to 
listing on NYSE and NASDAQ--such as its investor and issuer focused 
model--the Exchange also believes that meaningful fee credits are 
initially necessary to establish its listing program quickly.
    As the Commission has explicitly acknowledged, the current listing 
market is highly concentrated, noting that, ``[e]ntrant exchanges cann 
. . . face barriers to entry related to reputation. Exchanges that 
enter the market may not be able to quickly establish a strong 
reputation for high quality listings, which may adversely affect their 
ability to compete with incumbent exchanges. This lack of reputation 
may discourage both investors and issuers from transacting or listing 
on an entrant exchange, which may reinforce an entrant exchange's lack 
of reputation.'' \22\
---------------------------------------------------------------------------

    \22\ See Securities Act Release No. 10390 (July 14, 2017), 82 FR 
33839 (July 21, 2017) (File No. S7-06-17).
---------------------------------------------------------------------------

    As proposed, IEX's fee credit is designed to address these 
significant competitive challenges, and quickly establish a strong 
reputation for high quality listings. Based on discussions with 
companies currently listed on NYSE and NASDAQ, the Exchange believes 
that a meaningful fee credit is necessary to incentivize currently 
listed companies to transfer their listing to IEX. In this regard, 
companies generally view a listing transfer as a long-term commitment 
and therefore the financial incentive should align with such long-term 
commitment. IEX further believes, based on these discussions, that in 
order to be meaningful the fee credit must accomplish two objectives: 
Provide at least five years of free listing and cover the listing fees 
already paid by the company in the year of listing on IEX.\23\ In order 
to address both objectives, the fee credit will be for a minimum of 
$250,000 (to cover five years of listing fees) or the greater of the 
amount of any nonrefundable listing fee actually paid by the company to 
another listing exchange during the calendar year in which it lists on 
IEX if the company is no longer listed on such other exchange upon 
listing on IEX.
---------------------------------------------------------------------------

    \23\ In the event that the Exchange proposes increases to its 
listing fees, such increases will include a grandfathering provision 
for companies that have remaining credits available so that each 
such company obtains the contemplated years of free listing as 
proposed herein, subject to Commission filing and effectiveness.
---------------------------------------------------------------------------

    Further, the Exchange believes that it is reasonable, and 
consistent with an equitable allocation of listing fees to provide a 
larger fee credit to companies that have already paid comparatively 
larger listing fees to NYSE or NASDAQ, which for some NYSE companies is 
as high as $500,000.\24\ In this regard, the Exchange believes that an 
NYSE or NASDAQ listed company that has paid such larger listing fees 
may require a corresponding credit in order to incentivize the company 
to transfer its listing to IEX. Accordingly, the Exchange believes that 
providing an enhanced credit is not an inequitable allocation of fees 
because it merely operates to address the potential disincentive to 
list that may exist for a company that has paid listing fees higher 
than $250,000. All similarly situated companies will receive the same 
credit.
---------------------------------------------------------------------------

    \24\ See Section 902 of the NYSE Listed Company Manual.
---------------------------------------------------------------------------

    The Exchange notes that there is precedent to provide a listing fee 
credit based on the amount of listing fees paid to another exchange. 
For example, NASDAQ Rules provide that NASDAQ waives a portion of its 
annual fee in the case of securities that transfer to NASDAQ, by 
providing such companies with a credit in the pro-rated amount of any 
annual listing fee paid to its prior listing exchange for the period of 
time after the transfer, which is used to offset NASDAQ listing fees 
for the first year of listing.\25\ In its rule filing adopting this 
credit,\26\ NASDAQ (then a subsidiary of the National Association of 
Securities Dealers, Inc.), noted that the credit would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system by removing an impediment to issuers 
transferring from another market to NASDAQ. Similarly, IEX's proposed 
enhanced listing fee credit for a company that paid more than $250,000 
in listing fees in the year of its transfer to IEX is designed to 
incentivize such companies to transfer to IEX by providing a credit for 
listing fees actually paid to another exchange in the year of transfer, 
thereby removing a potential impediment to such transfers. Further, the 
Exchange notes that NYSE and Nasdaq each offer incentives to certain 
listed companies that transfer from the other market in the form of 
specified products and services that are valued as high as $757,500 for 
a transfer from NYSE to Nasdaq and $263,000 for a transfer from Nasdaq 
to NYSE.\27\ Similarly, the IEX's proposed credit is designed to 
incentivize companies listed on other markets to transfer their listing 
to IEX. Thus, IEX believes that the monetary value of its proposed fee 
credit transfer incentives is comparable

[[Page 45920]]

to the monetary value of the transfer incentives offered by NYSE and 
NASDAQ.
---------------------------------------------------------------------------

    \25\ See NASDAQ IM-5900-4 (Waiver of Certain Annual Listing Fees 
Upon Transfer of a Non-Nasdaq Exchange Listed Security).
    \26\ See Securities Exchange Act Release No. 53696 (April 21, 
2006), 71 FR 25273 (April 28, 2006) (SR-NASD-2006-047).
    \27\ See Section 907.00 of the NYSE Listed Company Manual and 
Nasdaq Rule IM-5900-7. The Exchange notes that the transfer 
incentive values are provided over multiple years. Further, the 
value of the Nasdaq incentives noted are for listed companies with a 
market capitalization of $5 billion that transfer from NYSE to the 
Nasdaq Global Market or Global Select Market. Listed companies that 
transfer from NYSE to the Nasdaq Global Market or Global Select 
Market with market capitalization of up to $750 million and between 
$750 million or more but less than $5 million [sic] receive 
incentives over multiple years in the form of specified products and 
services valued at an aggregate of $144,500 and $553,500 
respectively. The value of the NYSE incentives noted are for listed 
companies with a global market value of $400 million or more that 
transfer from another national securities exchange to NYSE. Listed 
companies with a global market value of less than $400 million 
receive incentives over 24 calendar months in the form of specified 
products and services valued at $153,000.
---------------------------------------------------------------------------

    Moreover, as discussed above, both NYSE and NASDAQ charge listing 
fees predominantly based on the number of shares outstanding, such that 
a company with fewer shares outstanding is generally charged a lower 
listing fee than a company with a larger number of shares outstanding. 
By providing a higher credit to a company that has paid listing fees in 
excess of $250,000 to NYSE, the IEX credit is designed to take into 
account the fact that some issuers have been subject to higher fees 
based on their number of shares outstanding, and to provide issuers a 
credit incentive on that basis.
    The Exchange believes that limiting the fee credit to companies 
that announce their intent to transfer listing to IEX prior to or 
within 120 calendar days of the first IEX listing, as described in the 
Purpose Section, will operate as an incentive to companies listed on 
NYSE or NASDAQ to transfer their listing to IEX expeditiously in order 
to enable the Exchange to achieve critical mass relatively quickly, in 
a highly competitive environment. As described in the Purpose Section, 
the Exchange will provide notice to the issuer community on the day 
when the first listing occurs, and IEX believes that the 120 calendar 
day period will provide ample time for any company that meets IEX's 
listing requirements to successfully complete the clearance \28\ and 
application processes,\29\ issue the required press release within 120 
calendar days of the first IEX listing, and thus receive the fee 
credit. As the Commission has noted, and as discussed above, if a new 
listing exchange does not quickly establish a strong reputation for 
high quality listings, it may adversely affect its ability to compete 
with incumbent exchanges.\30\ Structuring the availability of the fee 
credit within the specified time window is designed to address the 
imperative to quickly establish a strong reputation for high quality 
listings.
---------------------------------------------------------------------------

    \28\ See IEX Rule 14.201.
    \29\ See IEX Rule 14.202.
    \30\ See supra note 22 [sic], Section VI., Economic Analysis at 
33842.
---------------------------------------------------------------------------

    The Exchange believes that this structure is reasonable, not an 
inequitable allocation of fees, and not unfairly discriminatory since 
while the time window is open any company that meets IEX's listing 
standards will be able to make a decision to list on IEX, make the 
requisite announcement, and obtain the fee credit once it lists on IEX. 
While a company that is not in existence at that time would not be able 
to take the actions necessary to obtain a fee credit, IEX does not 
believe that this issue means that the fee credit is inequitable or 
unfairly discriminatory. NASDAQ provides several other categories of 
fee incentives to companies that transfer to NASDAQ from another 
exchange. These include an entry fee waiver, as well as a 
``grandfathering'' incentive related to the all-inclusive annual 
listing fee whereby the company's fee is based on the lower of its 
shares outstanding as of the date of listing or at the time of billing. 
For example, NASDAQ provides an accommodation to companies that applied 
to list on NASDAQ prior to January 1, 2015 and list after that date 
whereby such companies are billed based on the lower of its shares 
outstanding at the time of application of listing.\31\ Thus companies 
that apply to list on NASDAQ after January 1, 2015 are not able to take 
advantage of this accommodation, including companies that did not exist 
prior to January 1, 2015. In its rule filing proposing this 
accommodation, NASDAQ asserts that it is consistent with the Act based 
on competitive considerations.\32\ Similarly, IEX's proposed fee credit 
is designed to address competitive considerations (as discussed above) 
and is thus also consistent with the Act. Accordingly, IEX believes 
that the timing of availability of the fee credit to individual 
companies does not raise any new or novel issues not already considered 
by the Commission.
---------------------------------------------------------------------------

    \31\ See, e.g., NASDAQ IM-5910-1(b)(2) (All-Inclusive Annual 
Listing Fee).
    \32\ See Securities Exchange Act Release No. 74472 (March 11, 
2015), 80 FR 13925 (March 17, 2015) (SR-NASDAQ-2015-017).
---------------------------------------------------------------------------

    Finally, IEX believes that it is consistent with the protection of 
investors, the public interest and removing impediments to a free and 
open market and a national market system to provide a pro-rata refund 
of the annual listing fee to a company that ceases to be listed on IEX 
during the calendar year for which such fee was paid. In this regard, 
IEX further believes that if a company ceases to be listed on IEX, 
either because of a corporate action (e.g., merger, acquisition, going 
private transaction) or delisting (whether voluntary or otherwise), the 
company will not have received listing for the entire year and 
therefore should not be required to pay for the entire year. IEX notes 
that NYSE and NASDAQ listing fees are nonrefundable, and believes that 
this structure can have an anticompetitive impact on the listing market 
since companies may be hesitant to transfer listing mid-year, thus 
forgoing the benefits of a nonrefundable listing fee already paid. In 
contrast, IEX's proposal to provide a pro-rata refund is designed to be 
pro-competitive by providing listed companies with the ability to 
transfer listing mid-year without financial penalty.
    In conclusion, the Exchange submits that its proposed fee structure 
satisfies the requirements of Sections 6(b)(4) and 6(b)(5) of the Act 
for the reasons discussed above in that it is an equitable allocation 
of fees, does not permit unfair discrimination between customers, 
issuers, brokers, or dealers, and is designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system. For 
the foregoing reasons, the Exchange also believes that its simplified 
fee structure is consistent with the Act, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to a free and open market and national market system and in general to 
protect investors and the public interest.

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

    IEX does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange 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. To the contrary, the Exchange believes that the 
proposed listing fee structure is designed to provide a competitive 
alternative to listing on NYSE or NASDAQ. The Exchange operates in a 
highly competitive market in which issuers can readily favor competing 
listing exchanges if fee schedules and services at such other exchanges 
are viewed as more favorable. As a new listing exchange, IEX expects to 
face intense competition from NYSE and NASDAQ. Consequently, the 
Exchange believes that the degree to which IEX fees could impose any 
burden on competition is extremely limited, and does not believe that 
such fees would burden competition among issuers or with competing 
venues in a manner that is not necessary or appropriate in furtherance 
of the purposes of the Act. The Exchange also notes that other listing 
venues are similarly free to set their fees.
    The Exchange does not believe that the proposed rule change will 
impose

[[Page 45921]]

any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because, while 
different issuers will be eligible for different fee credits, these 
different fee credits are not based on the type of listed company but 
on the timing of listing on IEX and, when a higher credit is provided, 
on the listing fees already paid to its prior listing exchange. As 
discussed in the Statutory Basis section, limiting fee credits to 
companies that issue the required press release prior to or within 120 
calendar days of the first IEX listing is designed to incentivize 
companies to transfer to IEX expeditiously in order to gain critical 
mass quickly. Further, providing a higher fee credit to companies that 
paid nonrefundable listing fees of more than $250,000 to another 
listing exchange during the calendar year in which it lists on IEX is 
designed to provide a meaningful incentive to such companies to 
transfer their listing to IEX. All similarly situated issuers would be 
treated similarly since the higher credit would be based on the amount 
of the listing fee paid.

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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) \33\ of the Act.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \34\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \34\ 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-2017-30 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-2017-30. 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-2017-30 and should be 
submitted on or before October 23, 2017.
---------------------------------------------------------------------------

    \35\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-21002 Filed 9-29-17; 8:45 am]
 BILLING CODE 8011-01-P
Document Created: 2017-09-30 04:40:39
Document Modified: 2017-09-30 04:40:39
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 45917