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<title>Federal Register, Volume 91 Issue 2 (Monday, January 5, 2026)</title>
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[Federal Register Volume 91, Number 2 (Monday, January 5, 2026)]
[Notices]
[Pages 297-303]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-24231]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104528; File No. SR-IEX-2025-36]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
IEX Fee Schedule Concerning Certain Connectivity Fees
December 30, 2025.
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 December 19, 2025, 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,
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.
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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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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Pursuant to the provisions of Section 19(b)(1) under the Act,\4\
and Rule 19b-4 thereunder,\5\ the Exchange is filing with the
Securities and Exchange Commission (``Commission'') a proposed rule
change to amend its Fee Schedule,\6\ pursuant to IEX Rules 15.110(a)
and (c), to increase the fee for physical connectivity at its Primary
Data Center, add a fee for physical connectivity at the Disaster
Recovery Data Center, and add a fee for Drop Copy logical port fees.
Changes to the Fee Schedule pursuant to this proposal are effective
upon filing,\7\ and will be operative beginning on January 1, 2026.
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ See IEX Fee Schedule--Connectivity Fees table, available at
<a href="https://www.iexexchange.io/resources/trading/fee-schedule#connectivity-fees">https://www.iexexchange.io/resources/trading/fee-schedule#connectivity-fees</a>.
\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
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The text of the proposed rule change is available at the Exchange's
website at <a href="https://www.iexexchange.io/resources/regulation/rule-filings">https://www.iexexchange.io/resources/regulation/rule-filings</a>
and at the principal office of the Exchange.
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 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
IEX is proposing to amend the Connectivity Fees section of its Fee
Schedule, pursuant to IEX Rules 15.110(a) and (c), to increase fees for
physical port connections to its Primary Data Center,\8\ add a fee for
physical port connections to its Disaster Recovery Data Center,\9\ and
add a fee for logical Drop Copy Ports.\10\ Specifically, the
[[Page 298]]
Exchange proposes to increase the monthly fees for each physical port
connection to its Primary Data Center from $4,000 to $7,000, which fee
would continue to include one (1) 10G or 1G connection to the ITF free
of charge. The Exchange also proposes to amend the Fee Schedule to
begin charging a new monthly fee of $3,000 for each physical connection
to the Disaster Recovery Data Center, which the Exchange has previously
provided free of charge with a physical connection to the Primary Data
Center. In addition, the Exchange proposes a new monthly fee of $450
for each logical Drop Copy Port, which the Exchange currently provides
free of charge.
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\8\ All connections to the IEX Primary Data Center (including
for order entry and market data receipt) are made through IEX's
point-of-presence (``IEX POP'') in Secaucus, NJ. From the IEX POP,
messages travel to IEX's Primary Data Center. The only connections
offered to the Primary Data Center are 10 gigabit (``10G'') physical
port connections. The Exchange offers both 10G and 1 gigabit
(``1G'') physical port connections to the IEX Testing Facility
(``ITF'') included with a Primary Data Center connection and as
discussed below, the Exchange is not proposing to add fees for the
connections to the ITF itself.
\9\ The Disaster Recovery Data Center, also known as the
``Secondary Data Center,'' is the physical location of IEX's backup
trading platform. It is located in Chicago, Illinois.
\10\ Confirmations of orders and execution reports are
transmitted by the Exchange over the Order Entry Port that was used
to enter the order. A ``drop copy'' contains redundant information
that a Member chooses to have ``dropped'' to another destination
(e.g., to allow the Member's back office and/or compliance
department, or another Member--typically the Member's clearing
broker--to have immediate access to the information for risk
management and other purposes). Drop copies can only be sent via a
drop copy port. Drop copy ports cannot be used to enter orders.
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The Exchange proposes to implement the changes to the Fee Schedule
pursuant to this proposal on January 1, 2026.
Connectivity Fee Changes
The Exchange offers the ability to physically connect to the
Exchange via the IEX point-of-presences (the ``IEX POP'') \11\ to its
Members, Data Recipients,\12\ Service Bureaus,\13\ Sponsored
Participants,\14\ and Extranet Providers \15\ (collectively,
``Connectivity Subscribers'').\16\ Connecting directly to the Exchange
is optional and not required to participate on the Exchange. The number
of physical connections to IEX's Primary Data Center (via the IEX POP)
assigned to each Connectivity Subscriber is determined by each
Connectivity Subscriber based on the scope and scale of its trading
activity on the Exchange (or other activity on the Exchange, in the
case of Data Recipients, Service Bureaus, Sponsored Participants, and
Extranet Providers). As of November 1, 2025, 35% of IEX Members
maintain one or more direct physical port connections to the Exchange's
Primary Data Center and 45% of IEX's Members have physical port
connectivity to the Exchange indirectly through a Service Bureau or
Extranet Provider \17\ rather than directly.\18\ Thus, the 35% of
Members with direct physical port connections will be subject to the
proposed fee increase for physical port connectivity to the Primary
Data Center, assuming no changes in the number of direct physical port
connections maintained by such Members.\19\
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\11\ The IEX POP is located at the NY5 data center in Secaucus,
New Jersey. Physical connectivity is provided via network switch and
cabling infrastructure that allows a subscriber to access a logical
port to send and receive order messages, as well as receive market
data messages.
\12\ See IEX Rule 11.130(c).
\13\ See IEX Rule 11.130(d).
\14\ See IEX Rule 11.130(b).
\15\ See IEX Rule 11.130(e).
\16\ See IEX Rule 11.510(a). Service Bureaus offer technology-
based services to Members for a fee, including physical connectivity
and Order Entry Ports. Extranet Providers offer physical
connectivity services to Members and Data Recipients.
\17\ Third-party connectivity providers such as Service Bureaus
and Extranet Providers play an important role in expanding access to
the Exchange and distributing the Exchange's market data, reducing
barriers to entry and enabling market participants to access the
Exchange without the need to connect directly. Third-party
connectivity providers may pass some or all of the connectivity fees
on to their subscribers, depending on the contractual relationship
between the parties. The Exchange receives no part of the revenue
earned by third-parties reselling connectivity.
\18\ IEX understands that some of the remaining 20% of Members
access the Exchange indirectly through other Members.
\19\ The proposed fee increase may cause some Members, as well
as Service Bureaus and Extranet Providers, to reduce or eliminate
their physical connectivity to the Primary Data Center. Further, the
Service Bureaus and Extranet Providers that maintain physical port
connectivity to the Exchange may increase the fees they charge to
Members utilizing their connectivity as a result of the proposed fee
increase.
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The Exchange proposes to increase the monthly fee of $4,000 for
each physical port connection to the Primary Data Center (all of which
are 10G connections) to $7,000, which fee would also continue to
include an option for one (1) 10G or 1G connection to its ITF.\20\
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\20\ The ITF can also be accessed free of charge via the
internet.
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In addition, the Exchange currently offers Connectivity Subscribers
the ability to physically connect to its Disaster Recovery Data Center
free of charge, provided they pay for a direct connection to the
Primary Data Center. The Exchange proposes to introduce a monthly fee
of $3,000 for each physical port connection to the Disaster Recovery
Data Center.\21\ As of November 1, 2025, 11% of Members maintain at
least one (1) physical port connection to the Disaster Recovery Data
Center and additional IEX Members have the ability to connect to the
Disaster Recovery Data Center indirectly through a Service Bureau or
Extranet Provider rather than directly. Thus the 11% of Members with
direct connectivity would be subject to the proposed monthly fee of
$3,000 per physical port connection, assuming no changes in the number
of physical port connections maintained by such Members.\22\
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\21\ The Exchange will continue to offer logical order entry
ports at the Disaster Recovery Data Center free of charge. See IEX
Fee Schedule--Connectivity Fees, supra note 6, footnote 3.
\22\ The Exchange recognizes that instituting a fee for
connectivity previously provided free of charge may cause some
Members, as well as Service Bureaus and Extranet Providers, to
reduce or eliminate their physical connectivity to the Disaster
Recovery Data Center. Further, the Service Bureaus and Extranet
Providers that maintain physical port connectivity to the Disaster
Recovery Data Center may increase the fees they charge to Members
utilizing their connectivity as a result of the proposed fee
increase.
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Connecting directly to the Disaster Recovery Data Center is not
mandatory, but the Exchange recommends it to minimize service
disruption in the event of an issue at the Primary Data Center.
Pursuant to IEX Rule 2.250 (Mandatory Participation in Testing of
Backup Systems), the Exchange requires certain Members who account for
a meaningful percentage of the Exchange's overall volume to, at least
once every twelve (12) months, connect to the Disaster Recovery Data
Center to participate in functional and performance testing.\23\
However, Members participating in the mandatory testing are not
required to purchase a direct connection to the Disaster Recovery Data
Center and the Exchange permits any designated Member to connect
through a third-party, such as an Extranet Provider, for purposes of
the mandatory testing.\24\
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\23\ See IEX Rule 2.250.
\24\ In the most recent testing (October 2025), one designated
Member connected to the Disaster Recovery Data Center through an
Extranet Provider for the mandatory testing.
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Drop Copy Port Fees
Similar to other exchanges, the Exchange offers Drop Copy Ports for
receipt of duplicate trade execution reports and order messages (which
are sent via Order Entry Ports). A Drop Copy Port is a form of logical
port \25\ that allows subscribers (``Port Subscribers'') to receive, in
real time, copies of their order flow, which can be configured based on
various combinations of information relating to specific Member firms,
clearing Market Participant IDs (or MPIDs), and/or sessions, according
to the subscriber's needs.
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\25\ Logical ports provide users with the ability to perform
specific functions through a connection to the Exchange's System,
such as order entry and receiving data. Logical connectivity for
order entry or drop copies is provided via network switch and
cabling infrastructure at the IEX Primary Data Center that delivers
order and execution messages, as well as server infrastructure that
runs software processes responsible for validating and formatting
such messages for either internal or external consumption.
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The Exchange currently provides Drop Copy Ports free of charge. The
Exchange proposes to charge $450 for each Drop Copy Port per month.
This proposed fee would not apply to logical
[[Page 299]]
ports used for other purposes, such as Order Entry Ports.
Drop Copy Ports are optional and the Exchange does not impose any
minimum or maximum requirements for how many Drop Copy Ports a Port
Subscriber must maintain, and it is not proposing to impose any minimum
or maximum requirements. Each Port Subscriber is free to determine the
number of Drop Copy Ports it subscribes to based on the scope and scale
of its trading activity on the Exchange, and their need for real-time
information about their trading activity. As of November 1, 2025, 28%
of Members are Drop Copy Port Subscribers and would be subject to the
proposed monthly fee of $450 per Drop Copy Port, assuming no changes in
the number of direct Drop Copy Ports assigned to Members.\26\
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\26\ The Exchange recognizes that instituting a fee for Drop
Copy Ports, previously provided free of charge, may cause some
Members to reduce or eliminate their Drop Copy Ports.
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Proposed Fees--Additional Discussion
The Exchange notes that the proposed fee changes are designed to
enable the Exchange to continue to maintain and improve its
connectivity technology and services. The Exchange also notes that the
proposed fees are within the range of, or lower than, the fees charged
for comparable physical connectivity and drop copy ports by other
equities exchanges with similar or lower market share than IEX.
As proposed, the Exchange will assess fees for physical
connectivity to the Disaster Recovery Data Center and for Drop Copy
Ports based on the number of physical connections to the Disaster
Recovery Data Center and the number of Drop Copy Ports assigned to each
Member or service provider (i.e., Service Bureau and/or Extranet
Provider) as of the first day of each month. This is consistent with
the billing methodology the Exchange uses to bill for physical and
logical ports, as reflected in current footnotes 1 and 3 to the
Connectivity Fees table.\27\
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\27\ See IEX Fee Schedule, supra note 6.
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In general, the Exchange believes that exchanges, in setting fees
of all types, should meet very high standards of transparency to
demonstrate why each new fee or fee increase meets the Exchange Act
requirements. The Exchange believes this high standard is especially
important when an exchange imposes fees for market participants to
access an exchange's marketplace. As discussed further in the Statutory
Basis section, the Exchange believes the proposed fees are reasonable
when compared with the fees charged by other equities exchanges with
similar or lower market share for physical connectivity at their
primary and disaster recovery data centers and for drop copy ports.
Further, the Exchange believes that the proposed fees--insofar as
they incentivize Subscribers to consolidate their usage of connectivity
services or discontinue unused connectivity subscriptions--will help to
encourage a more efficient allocation of connectivity services usage in
a way that aligns with the Exchange's regulatory obligations. As a
national securities exchange, the Exchange is subject to the Regulation
Systems Compliance and Integrity (``Reg SCI'').\28\ Reg SCI Rule
1001(a) requires that the Exchange establish, maintain, and enforce
written policies and procedures reasonably designed to ensure, among
other things, that its Reg SCI systems have adequate capacity levels to
maintain the Exchange's operational capability and promote the
maintenance of fair and orderly markets.\29\ By encouraging Users to be
efficient with their usage of connectivity services, the proposed fees
will increase overall system efficiency and support the Exchange's Reg
SCI obligations by ensuring that unused application sessions are
available to be allocated based on individual User needs and as the
Exchange's overall order and trade volumes increase.
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\28\ 17 CFR 242.1000-1007.
\29\ 17 CFR 242.1000(a).
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Conforming Changes to Fee Schedule
As proposed, the Connectivity Fees table in the Fee Schedule would
be amended as follows to reflect the proposed fee changes (footnotes
omitted):
------------------------------------------------------------------------
Service Fee
------------------------------------------------------------------------
10G Physical Port Connection to Primary $7,000[4,000] per month.
Data Center.
10G Physical Port Connection to $3,000 per month[Included with
Disaster Recovery Data Center. 10G Physical Port Connection
at Primary Data Center].
1G or 10G Physical Port Connection to Included with 10G Physical Port
IEX Test Facility (``ITF''). Connection at Primary Data
Center.
Logical Port (except for Primary Data FREE.
Center Order Entry Ports and Drop Copy
Ports).
* * * * * * *
Drop Copy Port......................... $450 per port per month.
------------------------------------------------------------------------
Because the Exchange will no longer provide Disaster Recovery Data
Center connectivity free of charge, the Exchange proposes removing the
phrase ``[i]ncluded with 10G Physical Port Connection at Primary Data
Center'' from the Fee column. The Exchange also proposes revising the
parenthetical in the Logical Port row of the Connectivity Fee table to
indicate that Drop Copy Ports are excluded from the Logical Ports that
the Exchange offers free of charge.
In addition, the Exchange proposes to amend the footnotes in the
Connectivity Fees table to state that billing for physical connectivity
ports for the Disaster Recovery Data Center and for Drop Copy Ports
will be based on the number of ports assigned to each Member or Service
Bureau as of the first day of each month. Specifically, the Exchange
proposes to amend footnote 1 to reference physical connectivity to the
Disaster Recovery Data Center as follows:
Physical connectivity fees are billed to and payable by the
Member, Service Bureau, Data Recipient, or Extranet Provider
maintaining the physical port connection at the Primary Data Center
or Disaster Recovery Data Center based on the number of physical
connections to each [the Primary] Data Center as of the first of
each month.
The Exchange also proposes to add a new footnote 5 to the last row
of the table, appended to the Drop Copy Port row, after the words
``$450 per port per month,'' as follows:
Fees for Drop Copy Ports are billed to and payable by the Member
or Service Bureau maintaining the port(s) based on the number of
Drop Copy Ports assigned to each Member or Service Bureau as of the
first of each month.
[[Page 300]]
Implementation
The Exchange plans to implement the proposed fee changes on January
1, 2026, subject to effectiveness of this proposed rule change, in
order to provide ample advance notice and allow impacted market
participants time to prepare for the changes. On November 25, 2025, the
Exchange announced the planned implementation of the proposed fees on
January 1, 2026, subject to the filing and effectiveness of an SEC rule
filing.\30\
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\30\ See IEX Trading Alert #2025-34, available at <a href="https://iextrading.com/alerts/#/320">https://iextrading.com/alerts/#/320</a>.
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2. Statutory Basis
IEX believes that the proposed fees are consistent with the
provisions of Section 6(b) \31\ of the Act in general and further the
objectives of Section 6(b)(4) \32\ of the Act, in particular, in that
they are designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities. The Exchange also believes that the proposed fee
changes are designed to promote just and equitable principles of trade
and are not designed to permit unfair discrimination, consistent with
the objectives of Section 6(b)(5) \33\ of the Act. The Exchange
believes the proposed fees are reasonable because they will better
enable the Exchange to continue to maintain and improve its
connectivity services and facilities. In addition, as discussed below,
the Exchange believes the proposed fees are reasonable based on a
comparison to fees charged by other exchanges with similar or lower
market share for similar connectivity.
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\31\ 15 U.S.C. 78f(b).
\32\ 15 U.S.C. 78f(b)(4).
\33\ 15 U.S.C. 78f(b)(5).
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The Proposed Fees Are Reasonable and Comparable to the Fees Charged by
Other Exchanges for Similar Connectivity and Ports
Proposed 10G Physical Port Fee
The Exchange believes that the proposed fee of $7,000 per month per
physical port connection to the Primary Data Center is reasonable
because it is within the range of fees charged for comparable physical
connectivity by other equities exchanges with similar or lower market
share, and less than fees charged for comparable physical connectivity
by two such exchanges.\34\ IEX's year-to-date market share as of
November 1, 2025 was approximately 2.86%. Based on publicly available
information as of November 1, 2025, the Exchange compared the proposed
fee of $7,000 to the fees charged for comparable physical connectivity
to primary data centers by other equities exchanges with similar or
lower market share than IEX. As set forth in the table below, the
proposed fee of $7,000 is lower than the fees charged by Cboe BZX and
MIAX Pearl Equities for physical port connectivity to their primary
data centers. While Cboe BZX's market share is slightly higher than
IEX's, MIAX's market share is lower. IEX notes, however, that the
proposed fee is higher than the physical port connectivity fees charged
by MEMX, which has a lower market share than IEX.
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\34\ Exchange market share data noted in this rule filing
represent the percent of executed share volume by the relevant
exchange compared to market-wide executed share volume in NMS
securities (see Rule 600(64) of Regulation NMS) based on NYSE TAQ
(Trade and Quote) data.
------------------------------------------------------------------------
Physical port fees
Market share for each 10 gigabit
Exchange as of 11/1/ physical port
2025 (%) connection per month
------------------------------------------------------------------------
Cboe BZX.......................... 3.59 $8,500.\a\
MIAX Pearl Equities............... 1.08 $8,000.\b\
IEX............................... 2.86 Proposed $7,000.
MEMX.............................. 2.18 $6,000.\c\
------------------------------------------------------------------------
Table Endnotes
\a\ See Cboe BZX Equities Fee Schedule, Physical Connectivity Fees,
available at <a href="https://www.cboe.com/us/equities/membership/fee_schedule/bzx/">https://www.cboe.com/us/equities/membership/fee_schedule/bzx/</a> bzx/.
\b\ See MIAX Pearl Equities Fee Schedule, System Connectivity Fees
Section, available at <a href="https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Equities_Fee_Schedule_10012025.pdf">https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Equities_Fee_Schedule_10012025.pdf</a>.
\c\ See MEMX Connectivity Fee Schedule, available at <a href="https://info.memxtrading.com/connectivity-fees/">https://info.memxtrading.com/connectivity-fees/</a>.
10G Disaster Recovery Connectivity Fee
The Exchange believes that the proposed fee of $3,000 per month per
physical connectivity to the Disaster Recovery Data Center is
reasonable because it is equal to or less than fees charged for
comparable physical connectivity to disaster recovery data centers by
other equities exchanges with similar or lower market share. As set
forth in the table below, the proposed fee of $3,000 is equivalent to
the fees charged by MIAX Pearl Equities and MEMX for physical
connectivity to their disaster recovery data centers and IEX's market
share is higher than the market share of those exchanges. The proposed
fee is lower than the fee charged by Cboe BZX, which has a higher
market share than IEX.
------------------------------------------------------------------------
Disaster recovery
Market share connectivity fees
Exchange as of 11/1/ for each 10 gigabit
2025 (%) physical port
connection per month
------------------------------------------------------------------------
Cboe BZX.......................... 3.59 $6,000.\d\
IEX............................... 2.86 Proposed $3,000.
MIAX Pearl Equities............... 1.08 $3,000.\e\
MEMX.............................. 2.18 $3,000.\f\
------------------------------------------------------------------------
Table Endnotes
\d\ See supra, table endnote a.
\e\ See supra, table endnote b.
\f\ See supra, table endnote c.
[[Page 301]]
Drop Copy Port Fee
The Exchange believes that the proposed fee of $450 per month per
Drop Copy Port is reasonable because it is equal to or less than fees
charged for drop copy ports by other equities exchanges with similar or
lower market share. As set forth in the table below, the proposed fee
of $450 per port is lower than the fees charged by Nasdaq BX and NYSE
Texas, and IEX's market share is higher than the market share of those
exchanges. The proposed fee is equivalent to the fees charged by MIAX
Pearl Equities, MEMX, and LTSE for drop copy ports. IEX's market share
is higher than the market share of those exchanges. In addition, the
proposed fee is lower than the fees charged by Cboe BZX, although BZX's
market share is slightly higher than IEX's.
------------------------------------------------------------------------
Market share Drop copy port fees
Exchange as of 11/1/ for each port per
2025 (%) month
------------------------------------------------------------------------
Cboe BZX.......................... 3.59 $550.\g\
Nasdaq BX......................... 0.26 $500.\h\
NYSE Texas........................ 0.34 $455.\i\
IEX............................... 2.86 Proposed $450.
MIAX Pearl Equities............... 1.08 $450.\j\
MEMX.............................. 2.18 $450.\k\
LTSE.............................. 0.03 $450.\l\
------------------------------------------------------------------------
Table Endnotes
\g\ See supra, table endnote a.
\h\ See Nasdaq BX Fee Schedule, Connectivity Section, available at
<a href="https://nasdaqtrader.com/Trader.aspx?id=bx_pricing#connectivity">https://nasdaqtrader.com/Trader.aspx?id=bx_pricing#connectivity</a>.
\i\ See NYSE Texas Fee Schedule, Connection Charges Section, available
at <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-texas/NYSE_Texas_Fee_Schedule.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-texas/NYSE_Texas_Fee_Schedule.pdf</a>.
\j\ See supra, table endnote b.
\k\ See supra, table endnote c.
\l\ See LTSE Fee Schedule, Connectivity Fees, available at <a href="https://cdn.prod.website-files.com/6462417e8db99f8baa06952c/68dd36bd3206d4b31a164179_LTSE%20Fee%20Schedule_October%201%2C%202025.pdf">https://cdn.prod.website-files.com/6462417e8db99f8baa06952c/68dd36bd3206d4b31a164179_LTSE%20Fee%20Schedule_October%201%2C%202025.pdf</a> df.
The Proposed Fees Are Equitably Allocated and Not Designed To Permit
Unfair Discrimination
The Exchange believes that its proposed physical port connectivity
fee of $7,000 to connect to the Primary Data Center, which includes
physical port connectivity to the ITF for no additional charge, and its
proposed fee of $3,000 for physical connectivity to the Disaster
Recovery Data Center are reasonable, fair and equitable, and are not
designed to permit unfair discrimination between Members because they
will apply equally to all Members and other Connectivity Subscribers
\35\ that choose to purchase direct physical connectivity to the
Exchange.
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\35\ As discussed above, the types of firms that might pay for
physical port connectivity to the Exchange are: Members, Service
Bureaus, Data Recipients, Sponsored Participants, and Extranet
Providers. See supra notes 12 through 15.
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No broker-dealer is required by rule or regulation to become a
Member of the Exchange or to connect directly to the Exchange. Further,
a direct connection to the Exchange is not a requirement to participate
on the Exchange. The proposed fees will apply to all Connectivity
Subscribers in the same manner and are not targeted at a specific type
or category of market participant engaged in any particular trading
strategy. The proposed fees are not tied to volume-based tiers or
dependent on executing a minimum volume of orders on IEX.
The Exchange believes the proposed fees are an equitable allocation
of reasonable fees because they will be assessed solely based on the
number of physical connections a firm selects and not on any other
distinction applied by IEX. Members, Service Bureaus, Sponsored
Participants, Data Recipients, and Extranet Providers can determine
whether to connect directly to the Exchange and if so, the number of
physical port connections to the Primary Data Center and Disaster
Recovery Data Center they need to implement their trading or business
strategies effectively. The number of physical connections to the
Exchange will continue to be based on individual decisions by each
firm. The proposed fees would enable the Exchange to maintain and
improve its connectivity infrastructure, services, and facilities to
benefit its customers and remain competitive with its peers. If the
Exchange charges excessive fees, market participants are free to either
reduce connectivity fees by reducing the number of physical connections
to the Exchange or seek more affordable alternatives, for example as
applicable, by participating through a third-party connectivity
provider.
In addition, Connectivity Subscribers that utilize more physical
connectivity services typically utilize relatively more trading system
bandwidth, and thus those are the firms that consume the most resources
from the Exchange. Accordingly, the Exchange believes that the proposed
fees are not designed to permit unfair discrimination because
Connectivity Subscribers with more complex connections and which use
relatively more of the Exchange's capacity and resources pay a higher
share of the total connectivity services fees.
With respect to Drop Copy Ports, IEX believes that its proposed fee
is reasonable, fair and equitable, and not designed to permit unfair
discrimination because it will apply equally to all Port Subscribers
that are assigned Drop Copy Ports. In addition, Drop Copy Ports are
optional; the Exchange does not impose any minimum or maximum number of
Drop Copy Ports on Port Subscribers. The number of assigned Drop Copy
Ports will continue to be a function of choices made by each Port
Subscriber, including the ability to reduce fees by discontinuing
unused Drop Copy Ports.
All Connectivity Subscribers and Port Subscribers will be subject
to the same fee schedule, regardless of the volume sent to or executed
on IEX. All Members, Service Bureaus, Data Recipients, and Extranet
Providers will pay the same ``per unit'' rate for physical port
connectivity to the Exchange and for each Drop Copy Port. While firms
that send relatively more inbound messages to IEX may select two or
more physical connections to the Exchange or choose to receive or
arrange for copies of their message traffic in a Drop Copy Port,
thereby resulting in higher fees, that distinction is based on
objective differences in usage of port connectivity (the result of
decisions made by each firm) rather than
[[Page 302]]
application of the proposed fees by IEX. Moreover, the Exchange
believes that it is not unfairly discriminatory for Users with higher
message traffic or more complex connections to pay a higher share of
the total connectivity services fees.
The Exchange also believes that it is reasonable, equitable, and
not designed to permit unfair discrimination to base its billing for
physical connectivity to the Disaster Recovery Data Center and for Drop
Copy Ports on the number of physical connections and Drop Copy Ports
assigned to Members and Service Bureaus as of the first day of each
month. IEX believes that this approach is fair because Members and
Service Bureaus will have a reasonable understanding and expectation of
the cutoff date for determining whether the firm requires one or more
physical connections to the Disaster Recovery Data Center. It is also
consistent with how the Exchange currently bills for physical and order
entry ports \36\ and will therefore align billing for the proposed fees
with existing billing practice, reducing the potential for confusion by
Members and Service Bureaus.
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\36\ See IEX Fee Schedule, supra note 6.
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Furthermore, the Exchange believes that the proposed fees are
consistent with Section 11A of the Exchange Act in that they are
designed to facilitate the economically efficient execution of
securities transactions, fair competition among brokers and dealers,
exchange markets and markets other than exchange markets, and the
practicability of brokers executing investors' orders in the best
market.
Further, as discussed above, IEX believes the proposed fees are
reasonable because they are equitable and not designed to permit unfair
discrimination, based on a comparison to similar fees charged by other
exchanges. IEX does not believe that physical and logical port fees are
properly constrained by competitive market pressures. Nevertheless, the
Exchange believes that, as discussed below, they are not designed to
permit unfair discrimination.
In summary, for all of the foregoing reasons, the Exchange believes
that the proposed fees are reasonable, equitably allocated, and not
designed to permit unfair discrimination.
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 intramarket or intermarket 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. Competing
equities exchanges are free to propose comparable fee structures
subject to the SEC rule filing process. There is no reason to believe
that IEX's proposed fee increases will adversely impact any other
exchange's ability to compete. And, as discussed in the Statutory Basis
section, IEX believes that a comparison to comparable fees charged by
competitor markets supports that the proposed fees are designed to
promote fair and non-discriminatory intermarket competition. As
detailed above, the proposed fees are either in line with, equal to, or
lower than fees charged for comparable physical connectivity and drop
copy ports by other exchanges with similar or lower market share.
Accordingly, the Exchange does not believe its proposed fee changes
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
The Exchange also does not believe that the proposed fees will
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. All Connectivity
Subscribers and Port Subscribers will be charged the same amount for
each physical connection to the Primary Data Center and the Disaster
Recovery Data Center, and for each logical Drop Copy Port. The proposed
fees do not favor certain categories of Connectivity Subscribers or
Port Subscribers in a manner that would impose an undue burden on
competition.
The Exchange does not believe that the proposed rule change would
place particular Connectivity Subscribers or Port Subscribers at the
Exchange at a relative advantage or disadvantage compared to other
Connectivity or Port Subscribers or affect the ability of such firms to
compete. The fact that different total port fees would be assessed
depending on the number of ports a Subscriber requests is not based on
the type of Member requesting physical port connectivity or Drop Copy
Port(s) or their trading volume on the Exchange, but rather is the
result of each Subscriber determining the number of such ports to
request, as discussed in the Statutory Basis section. Accordingly, the
proposed fees for physical connectivity services and Drop Copy Ports
are commensurate with each Subscriber's decision about whether to
directly connect to the Exchange, how many connections it needs, and
whether it needs copies of its message traffic sent to a drop copy
port. In addition, the fact that Connectivity Subscribers who utilize
more physical connectivity services pay a larger portion of the
Exchange's connectivity fees does not place those Connectivity
Subscribers at a competitive disadvantage because those Subscribers
typically utilize the most bandwidth and thus the most resources from
the Exchange. Thus, for the reasons set forth above, the Exchange does
not believe that the proposed fees will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
As described in the Purpose section, the proposed fee changes
arguably promote both intermarket and intramarket competition by
assisting the Exchange in complying with its Regulation SCI compliance
obligations to have capacity levels adequate to maintain IEX's
operational capability and promote the maintenance of fair and orderly
markets, thereby enabling IEX to support a robust trading environment
for its Members and compete with other equities exchange venues.
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) \37\ of the Act.
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\37\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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) \38\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\38\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
[[Page 303]]
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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#2351564f460e404c4e4e464d5750635046400d444c55"><span class="__cf_email__" data-cfemail="f785829b92da94989a9a92998384b7849294d9909881">[email protected]</span></a>. Please include
file number SR-IEX-2025-36 on the subject line.
Paper Comments
<bullet> 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-2025-36. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-IEX-2025-36 and should be submitted on
or before January 26, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
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\39\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-24231 Filed 1-2-26; 8:45 am]
BILLING CODE 8011-01-P
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Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the IEX Fee Schedule Concerning Certain Connectivity Fees
<html> <head> <title>Federal Register, Volume 91 Issue 2 (Monday, January 5, 2026)</title> </head> <body><pre> [Federal Register Volume 91, Number 2 (Monday, January 5, 2026)] [...
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Use this for formal legal and research references to the published document.
91 FR 297
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“Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the IEX Fee Schedule Concerning Certain Connectivity Fees,” thefederalregister.org (January 5, 2026), https://thefederalregister.org/documents/2025-24231/self-regulatory-organizations-investors-exchange-llc-notice-of-filing-and-immediate-effectiveness-of-proposed-rule-chang.