82 FR 48733 - Self-Regulatory Organizations; Investors Exchange LLC; Order Approving Proposed Rule Change To Adopt Rule 14.602 To Describe the Complimentary Products and Services To Be Made Available to All Listed Companies
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 201 (October 19, 2017)
Federal Register Volume 82, Issue 201 (October 19, 2017)
| Page Range | 48733-48734 | |
| FR Document | 2017-22644 |
[Federal Register Volume 82, Number 201 (Thursday, October 19, 2017)] [Notices] [Pages 48733-48734] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-22644] [[Page 48733]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81872; File No. SR-IEX-2017-20] Self-Regulatory Organizations; Investors Exchange LLC; Order Approving Proposed Rule Change To Adopt Rule 14.602 To Describe the Complimentary Products and Services To Be Made Available to All Listed Companies October 13, 2017. I. Introduction On August 10, 2017, the Investors Exchange LLC (``IEX'' or the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to adopt Rule 14.602 to describe the complimentary products and services to be made available to all listed companies. The proposed rule change was published for comment in the Federal Register on August 29, 2017.\3\ No comment letters were received in response to the Notice. This order approves the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 81469 (August 23, 2017), 82 FR 41077 (``Notice''). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change The Exchange has proposed to adopt Rule 14.602 to describe the complimentary products and services that will be offered to all listed companies pursuant to a listing program that the Exchange intends to begin in 2017.\4\ --------------------------------------------------------------------------- \4\ See id. at 41078. --------------------------------------------------------------------------- In particular, the Exchange has proposed to provide all listed companies with the same optional complimentary services through access to IEX Issuer, a market information analytics platform consisting of access to a team of market professionals and web-based content.\5\ As described by the Exchange in its proposal, the team of market professionals will provide market intelligence, fundamental and technical trading analysis, and real-time market information to all listed companies.\6\ The Exchange also stated that the web-based portion of IEX Issuer will provide similar information that will enable all listed companies to follow their stock's trading, competitors, and market activity through an online interface.\7\ Further, IEX noted that IEX Issuer may, from time to time, provide information about products and services from third-party vendors that IEX determines may be relevant to listed issuers, without any subsidy or other involvement by the Exchange for such products and services.\8\ The proposed rule text states that the Exchange will provide a description of all products and services available through IEX Issuer on its Web site.\9\ --------------------------------------------------------------------------- \5\ See proposed Rule 14.602. \6\ See id. \7\ See Notice, supra note 3, at 41078. \8\ See proposed Rule 14.602. The provision of any products and services from a third-party vendor would need to be effected through arrangements directly between the listed issuer and the third-party vendor, without any subsidy or other involvement by the Exchange. See id. \9\ See id. --------------------------------------------------------------------------- The Exchange represented in its proposal that all issuers listed on the Exchange will have access to services through IEX Issuer on the same basis and that the Exchange will not be proposing to offer any additional products and services to listed companies on a tiered or differentiated basis.\10\ --------------------------------------------------------------------------- \10\ See Notice, supra note 3, at 41078. --------------------------------------------------------------------------- III. Discussion and Commission Findings The Commission has carefully reviewed the proposed rule change and finds that it is consistent with the requirements of Section 6 of the Act.\11\ Specifically, the Commission finds that the proposal is consistent with Sections 6(b)(4) \12\ and 6(b)(5) of the Act \13\ in particular, in that the proposed rule is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among Exchange members, issuers, and other persons using the Exchange's facilities, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Moreover, the Commission finds that the proposed rule change is consistent with Section 6(b)(8) of the Act \14\ in that it does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f. In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \12\ 15 U.S.C. 78f(b)(4). \13\ 15 U.S.C. 78f(b)(5). \14\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Commission believes that the proposed rule change, which would permit the Exchange to provide complimentary products and services to all listed companies through IEX Issuer, as described above,\15\ is appropriate and consistent with the Act. The Commission believes that by describing in its Rules the products and services available to listed companies, the Exchange is adding greater transparency to its rules and the fees applicable to such companies.\16\ This will help to ensure that individual listed companies are not given specially negotiated packages of products and services to list or remain listed that would raise unfair discrimination issues under the Act. --------------------------------------------------------------------------- \15\ See supra notes 5-7 and accompanying text. \16\ The Commission views complimentary products and services provided by exchanges to listed companies as a discount on the ultimate listing fees paid by such companies. See, e.g., Securities Exchange Act Release Nos. 65127 (August 12, 2011), 76 FR 51449 (August 18, 2011) (order approving SR-NYSE-2011-20) and 65963 (December 15, 2011), 76 FR 79262 (December 21, 2011) (order approving SR-NASDAQ-2011-122). --------------------------------------------------------------------------- The Commission notes that all listed companies will receive access to the same services on the same basis without any differentiation and the Exchange is not proposing to offer any additional products and services to listed companies on a tiered or differentiated basis. Accordingly, the Commission believes that the proposed rule change is consistent with the requirements of the Act and, in particular, that the products and services are equitably allocated among issuers consistent with Section 6(b)(4) of the Act, and the rule does not unfairly discriminate between issuers consistent with Section 6(b)(5) of the Act. As described above, the Exchange will provide all of the products and services and will separately provide information about additional products and services available from third-party vendors that IEX determines may be relevant to listed issuers. As noted by the Exchange in its proposal, listed companies may elect to purchase products and services from other vendors, or not to use any such products and services, rather than accepting the products and services offered by the Exchange.\17\ The Exchange stated that the provision of any products and services from a third-party vendor would need to be effected through arrangements directly between the listed issuer and the third-party vendor, without any subsidy or other involvement by the Exchange.\18\ The Exchange further stated that it does not have exclusive arrangements with third-party vendors with respect to any optional access to discounted products and services from third-party vendors.\19\ The Exchange has represented that listed companies will not be required to accept any discounted products and [[Page 48734]] services as a condition to listing.\20\ The Commission believes that these representations should additionally help to ensure that individual listed companies are not given specially negotiated deals, through Exchange subsidized discounts on products and services from third-party vendors, to list or remain listed that would raise unfair discrimination issues under the Act . --------------------------------------------------------------------------- \17\ See Notice, supra note 3, at 41079. \18\ This representation is also specifically set forth in the proposed rule text. \19\ See Notice, supra note 3, at 41079. \20\ See id. --------------------------------------------------------------------------- The Commission believes that the Exchange is responding to competitive pressures in the market for listings in making this proposal. Specifically, the Exchange stated in its proposal that it expects to face competition as a new entrant in the market for exchange listings and that it believes the complimentary products and services that it offers to listed companies will facilitate its ability to attract and retain listings.\21\ In particular, the Exchange states that it expects to face significant competition from the New York Stock Exchange (``NYSE'') and the Nasdaq Stock Market LLC (``Nasdaq'') for listings, both of which offer complimentary products and services to listed companies.\22\ Accordingly, the Commission believes that the proposed rule reflects the current competitive environment for exchange listings among national securities exchanges, and is appropriate and consistent with Section 6(b)(8) of the Act.\23\ --------------------------------------------------------------------------- \21\ See id. at 41078. \22\ See id. See also Section 907.00 of the NYSE Listed Company Manual and Nasdaq Rule IM-5900-7. \23\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\24\ that the proposed rule change (SR-IEX-2017-20), be, and hereby is, approved. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-22644 Filed 10-18-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 48733
SECURITIES AND EXCHANGE interface.7 Further, IEX noted that IEX Commission believes that by describing
COMMISSION Issuer may, from time to time, provide in its Rules the products and services
information about products and services available to listed companies, the
[Release No. 34–81872; File No. SR–IEX–
2017–20]
from third-party vendors that IEX Exchange is adding greater transparency
determines may be relevant to listed to its rules and the fees applicable to
Self-Regulatory Organizations; issuers, without any subsidy or other such companies.16 This will help to
Investors Exchange LLC; Order involvement by the Exchange for such ensure that individual listed companies
Approving Proposed Rule Change To products and services.8 The proposed are not given specially negotiated
Adopt Rule 14.602 To Describe the rule text states that the Exchange will packages of products and services to list
Complimentary Products and Services provide a description of all products or remain listed that would raise unfair
To Be Made Available to All Listed and services available through IEX discrimination issues under the Act.
Companies Issuer on its Web site.9 The Commission notes that all listed
The Exchange represented in its companies will receive access to the
October 13, 2017. proposal that all issuers listed on the same services on the same basis without
I. Introduction Exchange will have access to services any differentiation and the Exchange is
through IEX Issuer on the same basis not proposing to offer any additional
On August 10, 2017, the Investors and that the Exchange will not be
Exchange LLC (‘‘IEX’’ or the products and services to listed
proposing to offer any additional companies on a tiered or differentiated
‘‘Exchange’’) filed with the Securities products and services to listed
and Exchange Commission basis. Accordingly, the Commission
companies on a tiered or differentiated believes that the proposed rule change
(‘‘Commission’’) pursuant to Section basis.10
19(b)(1) of the Securities Exchange Act is consistent with the requirements of
of 1934 (‘‘Act’’) 1 and Rule 19b–4 III. Discussion and Commission the Act and, in particular, that the
thereunder,2 a proposed rule change to Findings products and services are equitably
adopt Rule 14.602 to describe the allocated among issuers consistent with
The Commission has carefully Section 6(b)(4) of the Act, and the rule
complimentary products and services to reviewed the proposed rule change and
be made available to all listed does not unfairly discriminate between
finds that it is consistent with the issuers consistent with Section 6(b)(5) of
companies. The proposed rule change requirements of Section 6 of the Act.11
was published for comment in the the Act.
Specifically, the Commission finds that
Federal Register on August 29, 2017.3 As described above, the Exchange will
the proposal is consistent with Sections
No comment letters were received in provide all of the products and services
6(b)(4) 12 and 6(b)(5) of the Act 13 in
response to the Notice. This order and will separately provide information
particular, in that the proposed rule is
approves the proposed rule change. about additional products and services
designed to provide for the equitable
available from third-party vendors that
II. Description of the Proposed Rule allocation of reasonable dues, fees, and
IEX determines may be relevant to listed
Change other charges among Exchange
issuers. As noted by the Exchange in its
The Exchange has proposed to adopt members, issuers, and other persons
proposal, listed companies may elect to
Rule 14.602 to describe the using the Exchange’s facilities, and is
purchase products and services from
complimentary products and services not designed to permit unfair
other vendors, or not to use any such
that will be offered to all listed discrimination between customers,
products and services, rather than
companies pursuant to a listing program issuers, brokers, or dealers. Moreover,
accepting the products and services
that the Exchange intends to begin in the Commission finds that the proposed
offered by the Exchange.17 The
2017.4 rule change is consistent with Section
Exchange stated that the provision of
In particular, the Exchange has 6(b)(8) of the Act 14 in that it does not
any products and services from a third-
proposed to provide all listed impose any burden on competition not
party vendor would need to be effected
companies with the same optional necessary or appropriate in furtherance
through arrangements directly between
complimentary services through access of the purposes of the Act.
the listed issuer and the third-party
to IEX Issuer, a market information The Commission believes that the
vendor, without any subsidy or other
analytics platform consisting of access proposed rule change, which would
involvement by the Exchange.18 The
to a team of market professionals and permit the Exchange to provide
complimentary products and services to Exchange further stated that it does not
web-based content.5 As described by the have exclusive arrangements with third-
Exchange in its proposal, the team of all listed companies through IEX Issuer,
as described above,15 is appropriate and party vendors with respect to any
market professionals will provide optional access to discounted products
market intelligence, fundamental and consistent with the Act. The
and services from third-party vendors.19
technical trading analysis, and real-time The Exchange has represented that
7 See Notice, supra note 3, at 41078.
market information to all listed 8 See listed companies will not be required to
proposed Rule 14.602. The provision of any
companies.6 The Exchange also stated products and services from a third-party vendor accept any discounted products and
that the web-based portion of IEX Issuer would need to be effected through arrangements
will provide similar information that directly between the listed issuer and the third- 16 The Commission views complimentary
will enable all listed companies to party vendor, without any subsidy or other
products and services provided by exchanges to
involvement by the Exchange. See id.
follow their stock’s trading, competitors, 9 See id.
listed companies as a discount on the ultimate
and market activity through an online listing fees paid by such companies. See, e.g.,
10 See Notice, supra note 3, at 41078.
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Securities Exchange Act Release Nos. 65127
11 15 U.S.C. 78f. In approving this proposed rule
(August 12, 2011), 76 FR 51449 (August 18, 2011)
1 15 U.S.C. 78s(b)(1). change, the Commission has considered the (order approving SR–NYSE–2011–20) and 65963
2 17 CFR 240.19b–4. proposed rule’s impact on efficiency, competition, (December 15, 2011), 76 FR 79262 (December 21,
3 See Securities Exchange Act Release No. 81469 and capital formation. See 15 U.S.C. 78c(f). 2011) (order approving SR–NASDAQ–2011–122).
(August 23, 2017), 82 FR 41077 (‘‘Notice’’). 12 15 U.S.C. 78f(b)(4). 17 See Notice, supra note 3, at 41079.
4 See id. at 41078. 13 15 U.S.C. 78f(b)(5). 18 This representation is also specifically set forth
5 See proposed Rule 14.602. 14 15 U.S.C. 78f(b)(8). in the proposed rule text.
6 See id. 15 See supra notes 5–7 and accompanying text. 19 See Notice, supra note 3, at 41079.
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![48734 Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices
services as a condition to listing.20 The SECURITIES AND EXCHANGE technical and conforming changes
Commission believes that these COMMISSION relating to U.S. tax withholding and
representations should additionally information reporting performed by
[Release No. 34–81871; File No. SR–DTC– DTC with respect to Tax Events; and (ii)
help to ensure that individual listed 2017–018]
companies are not given specially add a fee relating to the announcement
negotiated deals, through Exchange Self-Regulatory Organizations; The of Tax Events (‘‘New Fee’’) to the DTC
subsidized discounts on products and Depository Trust Company; Notice of Fee Schedule (‘‘Fee Schedule’’),8 as
services from third-party vendors, to list Filing and Immediate Effectiveness of discussed below.
or remain listed that would raise unfair Proposed Rule Change To Amend the II. Clearing Agency’s Statement of the
discrimination issues under the Act . DTC Distributions Guide Relating to Purpose of, and Statutory Basis for, the
The Commission believes that the Announcements and Tax Treatment of Proposed Rule Change
Exchange is responding to competitive Certain Corporate Action Events and
To Amend the DTC Fee Schedule In its filing with the Commission, the
pressures in the market for listings in clearing agency included statements
making this proposal. Specifically, the October 13, 2017. concerning the purpose of and basis for
Exchange stated in its proposal that it Pursuant to Section 19(b)(1) of the the proposed rule change and discussed
expects to face competition as a new Securities Exchange Act of 1934 any comments it received on the
entrant in the market for exchange (‘‘Act’’),1 and Rule 19b–4 thereunder,2 proposed rule change. The text of these
listings and that it believes the notice is hereby given that on October statements may be examined at the
complimentary products and services 2, 2017, The Depository Trust Company places specified in Item IV below. The
that it offers to listed companies will (‘‘DTC’’) filed with the Securities and clearing agency has prepared
facilitate its ability to attract and retain Exchange Commission (‘‘Commission’’) summaries, set forth in sections A, B,
listings.21 In particular, the Exchange the proposed rule change as described and C below, of the most significant
states that it expects to face significant in Items I, II and III below, which Items aspects of such statements.
competition from the New York Stock have been prepared by the clearing (A) Clearing Agency’s Statement of the
Exchange (‘‘NYSE’’) and the Nasdaq agency. DTC filed the proposed rule Purpose of, and Statutory Basis for, the
Stock Market LLC (‘‘Nasdaq’’) for change pursuant to Section 19(b)(3)(A) Proposed Rule Change
listings, both of which offer of the Act 3 and Rules 19b–4(f)(2) and
(f)(4) thereunder.4 The Commission is 1. Purpose
complimentary products and services to
listed companies.22 Accordingly, the publishing this notice to solicit The proposed rule change would (i)
Commission believes that the proposed comments on the proposed rule change revise the Distributions Guide to (A)
from interested persons. enhance Announcements by adding Tax
rule reflects the current competitive
environment for exchange listings I. Clearing Agency’s Statement of the Events as a Distribution Event and (B)
among national securities exchanges, Terms of Substance of the Proposed make technical and conforming changes
and is appropriate and consistent with Rule Change relating to U.S. tax withholding and
Section 6(b)(8) of the Act.23 information reporting performed by
The proposed rule change 5 would (i) DTC with respect to Tax Events; and (ii)
IV. Conclusion revise the Distributions Guide to (A) add the New Fee to the Fee Schedule,
enhance the DTC Announcements as discussed below.
It is therefore ordered, pursuant to feature (‘‘Announcements’’) within the
Section 19(b)(2) of the Act,24 that the DTC Distributions Service A. Distributions Service
proposed rule change (SR–IEX–2017– (‘‘Distributions Service’’) 6 by adding Announcements Feature
20), be, and hereby is, approved. new corporate action events that do not The Distributions Service includes the
involve the payment of funds or announcement, collection, allocation
For the Commission, by the Division of
distribution of Securities through DTC, and reporting by DTC, on behalf of its
Trading and Markets, pursuant to delegated
but which may result in a taxable event Participants, of dividend, interest and
authority.25
for holders (‘‘Tax Event’’), as a type of principal payments for Eligible
Eduardo A. Aleman, distribution covered by Announcements Securities held by Participants at DTC.
Assistant Secretary. (‘‘Distribution Event’’) 7 and (B) make This centralized processing provides
[FR Doc. 2017–22644 Filed 10–18–17; 8:45 am] efficiency for Participants for their
1 15 U.S.C. 78s(b)(1).
BILLING CODE 8011–01–P receipt of (i) payment information and
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
(ii) payments on Distribution Events,
4 17 CFR 240.19b–4(f)(2) and (f)(4).
from multiple issuers and agents.9 In
5 Each capitalized term not otherwise defined this regard, Announcements provides
herein has its respective meaning as set forth in the Participants with information pertaining
Rules, By-Laws and Organization Certificate of DTC to their record date (‘‘Record Date’’) 10
(the ‘‘DTC Rules’’), available at http:// positions for Distribution Events.11 This
www.dtcc.com/legal/rules-and-procedures.aspx and
the DTC Distributions Service Guide (‘‘Distributions
Guide’’), available at http://www.dtcc.com/∼/ stock splits, stock dividends, automatic dividend
media/Files/Downloads/legal/service-guides/ reinvestments, spinoffs, rights distributions, pay in
Service%20Guide%20Distributions.pdf. kind, and liquidation. Distributions Guide, supra
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20 See id. 6 The Distributions Service includes DTC’s note 1 at 12.
8 Available at http://www.dtcc.comn/media/Files/
21 See id. at 41078. announcement, collection, allocation and reporting
22 See id. See also Section 907.00 of the NYSE of dividend, interest and certain principal payments Downloads/legal/fee-guides/dtcfeeguide.pdf?la=en.
9 See Distributions Guide, supra note 5 at 9.
Listed Company Manual and Nasdaq Rule IM– on behalf of Participants holding Securities at DTC.
See Distributions Guide, supra note 1 at 9. 10 The Record Date is the date set by an issuer of
5900–7.
7 Distribution Events covered by Announcements a security by which an investor must own the
23 15 U.S.C. 78f(b)(8).
include cash dividends, interest, principal, capital security in order to be eligible to receive an
24 15 U.S.C. 78s(b)(2).
gains, sale of rights on American depositary upcoming distribution.
25 17 CFR 200.30–3(a)(12). receipts, return of capital, dividend with option, 11 See Distributions Guide, supra note 5 at 11–13.
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Document Created: 2017-10-19 02:56:28
Document Modified: 2017-10-19 02:56:28
| 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 48733 |
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