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 April 30, 2026, 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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 Commission a proposed rule change to amend IEX Rule 11.190(g)(1) to incrementally optimize the effectiveness of the proprietary mathematical calculation used to make quote instability determinations for certain orders. The Exchange has designated this proposal as non-controversial and provided the Commission with the notice required by Rule 19b-4(f)(6)(iii) under the Act.^[6]

The text of the proposed rule change is available at the Exchange's website at https://www.iexexchange.io/​resources/​regulation/​rule-filings and at the principal office of the Exchange.

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

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

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

1. Purpose

The purpose of the proposed rule change is to amend IEX Rule 11.190(g)(1) to incrementally optimize the proprietary mathematical calculation used to make quote instability determinations for certain orders ( i.e., to assess the probability of a “crumbling quote”—an imminent change to the current Protected NBB ^[7] to a lower price or the current Protected NBO ^[8] to a higher price for a particular security). This calculation is referred to as the “crumbling quote indicator” or “CQI”. The System ^[9] uses the CQI to make quote instability determinations for all Discretionary Limit (“D-Limit”) ^[10] and Corporate Discretionary Peg (“C-Peg”) ^[11] orders, and for Discretionary Peg (“D-Peg”) ^[12] and primary peg (“P-Peg”) ^[13] orders unless the User ^[14] submitted the D-Peg or P-Peg order with an instruction that the System apply the Quote Imbalance Indicator ^[15] instead of the CQI to the order.

Description of CQI Functionality

The Exchange has made incremental changes to optimize and enhance the effectiveness of the CQI in determining whether a crumbling quote exists several times since Exchange launch.^[16] Each change to the CQI was designed to incrementally increase the coverage ^[17] of the System's quote instability determinations in predicting whether a particular quote is unstable by adjusting the logic underlying the quote instability calculation and introducing enhanced functionality designed to increase the number of crumbling quotes identified, while maintaining the CQI's accuracy rate ^[18] in predicting the direction and timing of the next price change in the NBB or NBO, as applicable. The incrementally increased coverage is designed to increase protection from adverse selection associated with latency arbitrage during periods of quote instability to applicable D-Limit, C-Peg, D-Peg and P-Peg orders.

The CQI utilizes real time relative quoting activity of certain Protected Quotations ^[19] as reference data and a ( printed page 25639) “quote instability calculation” in which nine separate “quote instability rules” ^[20] —each with specific conditions based on either the price, size, or price and size of the Signal Exchanges to assess the probability of a crumbling quote. Each of these rules can trigger a quote instability determination for either the NBB (for buy orders) the NBO (for sell orders), or both, of a particular security, meaning the System treats the quote as unstable and the CQI is on at that price level for two milliseconds.^[21] During all other times, the quote is considered stable, and the CQI is off. The System independently assesses the stability of the Protected NBB and Protected NBO for each security.

The CQI includes four categories of rules designed to predict whether the Protected NBB or Protected NBO is unstable, as follows:

• Disappearing bids (or offers)—This category includes four rules that focus on whether one or more of the Signal Exchanges is no longer disseminating a bid or offer at the Signal Best Bid ^[22] or Signal Best Offer ^[23] as applicable; ^[24]

• Recent changes in quote size—This category includes two rules that focus on whether there is an imbalance in the size of bids and offers at the Signal Best Bid or Signal Best Offer; ^[25]

• Locked or crossed market—This category includes one rule that focuses on situations where the Signal Best Bid and Signal Best Offer are locked or crossed; ^[26] and

• Quotation Changes—This category includes two rules that focus on changes to the Signal Best Bid or Signal Best Offer.^[27]

On a security-by-security basis, if the specified conditions of any of the quote instability rules are met, then the rule is deemed to be “True” for that security. Each rule also must be active before it can trigger a quote instability determination. When one or more quote instability rules is deemed to be True and any of such rules are active,^[28] the System will treat the quote as unstable.

IEX Rule 11.190(g)(3) provides that IEX reserves the right to modify the quote instability calculations as appropriate, subject to a filing of a proposed rule change with the SEC. Pursuant to this provision, IEX identified a modification to the CQI that it believes will enhance its effectiveness, as described below.

Proposal

IEX conducted an analysis of the efficacy of CQI in predicting whether a crumbling quote would occur, by reviewing randomly selected market data from January and February 2026. These results were then validated by testing different randomly selected dates from the same time period. Based upon this analysis, IEX proposes to update the Signal Best Bid ^[29] and Signal Best Offer ^[30] reference price definitions to which the CQI rules are applied (and a conforming change to two of the rules) to include IEX's Protected Quotation in addition to the eleven Signal Exchanges' Protected Quotations. As described in more detail below, IEX testing indicates that adding IEX's Protected Quotation to the Signal Best Bid and Signal Best Offer reference price computations would increase the CQI's coverage with comparable accuracy.

Specifically, IEX proposes to add the term “Input Exchanges” to the preamble to IEX Rule 11.190(g), defined as the Signal Exchanges plus IEX. And IEX proposes to modify the definitions of two quote instability variables, Signal Best Bid and Signal Best Offer, so that each definition specifies that for purposes solely of the CQI,^[31] the Signal Best Bid and Signal Best Offer are the highest Protected Bid and lowest Protected Offer, respectively, of the Input Exchanges.

IEX is not proposing any changes to the other values, reference prices, or inputs to the CQI or any substantive changes to its nine quote instability rules. In other words, IEX is merely proposing to update the reference variables Signal Best Bid and Signal Best Offer by adding IEX to the Signal Best Bid and Signal Best Offer. IEX is not proposing to include itself in the Signal Exchanges. Therefore the various CQI rules which assess quoting patterns across the Signal Exchanges would not reflect IEX's quote. These existing CQI rules, which each compare the results of a mathematical calculation to specified reference price variables, will continue to operate in the same manner as currently specified, other than minor conforming change as described below.

The proposed changes to these reference prices used by the CQI are designed to increase the CQI's coverage by accounting for times that IEX's Protected Quotation is at or more aggressive than the highest Protected Bid and/or lowest Protected Offer of the Signal Exchanges. IEX's quote “presence” ( i.e., time with a quotation on both sides of the national best bid and national best offer,^[32] or NBBO) has significantly increased in the last few years, and IEX now has a higher quote presence than all but two of the Signal Exchanges.^[33]

Accordingly, IEX believes that including IEX in the Signal Best Bid and Signal Best Offer reference data would enhance coverage of the System's quote instability determinations in predicting whether a particular quote is unstable because it would enable generation of a quote instability determination under additional circumstances, such as when IEX is one of the Input Exchanges with a quote at the Signal Best Bid or Signal Best Offer and thereby provide greater protection for IEX displayed orders. For example, assume the following:

1. Nasdaq, EDGX, and IEX each have a displayed order at the NBB of 15.10, which is each of their Protected Bid and also the Signal Best Bid.

2. The Nasdaq and EDGX displayed orders move to 15.09, which is now the Signal Best Bid. Although IEX still has a displayed order at 15.10 its quote is not included in the Signal Best Bid so the Signal Best Bid is not at 15.10.

3. CQI Rule DB1 specifies that it will be “true” if Delta Bids is greater than one (1). The Signal will fire if it is true and active. ( printed page 25640)

4. Delta Bids is defined as: number of these three (3) exchanges (BATS, EDGX, and Nasdaq) that had a Protected Bid equal to the Signal Best Bid within the preceding one (1) millisecond (or within the time period since the start time of the current Signal Best Bid if shorter), but for which the exchange's Protected Bid is no longer equal to the Signal Best Bid.

5. Signal Best Bid is defined as the highest Protected Bid of the Signal Exchanges. It does not include IEX's Protected Bid under current rules.

6. Under current rules, in the scenario described above, DB1 would not be true because both the Nasdaq and EDGX Protected Bids would be equal to the Signal Best Bid of 15.09, i.e., would not meet the condition that the number of Signal Exchanges that are no longer equal to the Signal Best Bid is more than one. Notwithstanding IEX's Protected Bid at 15.10, the Signal Best Bid would be 15.09.

7. However, with the proposed change, the Signal Best Bid would include IEX's Protected Bid at 15.10 and thus the Signal Best Bid would be 15.10. As a result, CQI Rule DB1 would be true because neither the Nasdaq nor EDGX Protected Bid would be equal to the Signal Best Bid. As a result CQI Rule DB1 would be true and fire if active.

IEX's market data analysis evidences that the inclusion of IEX's Protected Quotation in the reference data used by the CQI would result in an incremental enhancement to the efficacy of the CQI, while still being “on” for only small portion of the trading day, as set forth in the chart below:

Chart 1

Thus, IEX believes that the proposed change will incrementally enhance the existing protection provided by D-Limit orders by providing greater coverage ( i.e., identifying more potentially crumbling quotes) with comparable accuracy.

IEX also estimated the impact of the proposed change on standard limit order executions by simulating the markouts ^[34] for such executions had the orders been subject to the protection of the current CQI or the CQI as proposed to be updated (“CQI Update”). Assessment of these executions is designed to simulate differences in adverse selection protection from the current CQI and the CQI Update. As shown in the chart below, both the current CQI and the CQI Update result in substantially improved markouts over executions without CQI protection, but the CQI Update would have provided incrementally enhanced protection compared to the current CQI (as measured by markouts) because it is better at identifying situations when adverse selection is most likely:

Chart 2

Similarly, IEX believes that the CQI Update will incrementally enhance the existing protection the CQI offers pegged orders by providing greater coverage ( i.e., identifying more potentially crumbling quotes) with comparable accuracy. IEX estimated the impact of the CQI Update (compared to the existing CQI) on traditional midpoint order executions by simulating the markouts had the orders been subject to the protection of the current CQI or the CQI Update. Assessment of these executions is designed to simulate differences in adverse selection protection from CQI and CQI Update. As shown in the chart below, both CQI and the CQI Update result in improved markouts over executions without CQI protection, but the CQI Update would have provided incrementally enhanced protection compared to the CQI (as measured by markouts) because it is better at identifying situations when adverse selection is most likely:

Chart 3 ( printed page 25641)

Based on the foregoing, IEX believes that the inclusion of IEX's Protected Quotation in the Signal Best Bid and Signal Best Offer calculations will incrementally enhance the effectiveness of the CQI in predicting whether a crumbling quote will occur by better reflecting the market activity in a particular security.

Conforming Changes

IEX also proposes to make two conforming changes to the CQI formula set forth in IEX Rule 11.190(g)(1). First, IEX proposes to revise the term “Update”,^[35] a variable used by the CQI which refers to changes in the price or size of a Signal Exchange's Protected Bid or Offer. To reflect inclusion of IEX's Protected Quotation, IEX proposes to modify the definition of Update to specify that for purposes solely of the CQI, “Update” means any change in the price or size of an Input Exchange's Protected Bid or Offer.^[36]

Second, IEX proposes to revise two of the disappearing bids (and offers) rules contained in Rule 11.190(g)(1)(C)(i)(c) and (d) as follows (underlined and italicized language proposed to be added):

• Rule DB3 (DO3) assesses whether Delta Bids (Offers) is greater than or equal to (1) one and Bids (Offers) isless than or equal to (1) one. The rule's Activation Threshold is 0.30.
• Rule DB4 (DO4) assesses whether Delta Bids (Offers) is greater than or equal to (1) one, Bids (Offers) isless than or equal to (1) one, and the product of Signal Best Bid (Offer) and Aggregate Best Bid (Offer) Size is less than $60,000. The rule's Activation Threshold is 0.30.

These changes are necessitated because, with the inclusion of IEX in the reference variables Signal Best Bid and Signal Best Offer (for the CQI), but not in the reference variables Bids (the number of Signal Exchanges for which the highest Protected Bid is equal to the Signal Best Bid) and Offers (the number of Signal Exchanges for which the lowest Protected Offer is equal to the Signal Best Offer), it is possible that the value of “Bids” or “Offers” will be zero.

Implementation

The Exchange will announce the implementation date of the proposed rule change by Trading Alert at least ten days in advance of such implementation date and within 90 days of effectiveness of this proposed rule change.

2. Statutory Basis

IEX believes that the proposed rule change is consistent with Section 6(b) ^[37] of the Act in general, and furthers the objectives of Section 6(b)(5) of the Act,^[38] in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. As discussed in the Purpose section, the proposed change is based on the Exchange's analysis of market data, which supports that the proposed change would incrementally enhance the effectiveness of the CQI in providing protection from adverse selection associated with latency arbitrage during periods of quote instability to applicable D-Limit, C-Peg, D-Peg and P-Peg orders.

Further, as noted in Chart 1 in the Purpose section, IEX expects that the proposed CQI Update would increase CQI's volume-weighted coverage by 4.9% (from 70.1% to 75.0%) with a comparable accuracy rate. Thus, the Exchange believes that the proposed change is consistent with the Act because it is designed to increase the coverage of the CQI, thereby providing additional protection from adverse selection associated with latency arbitrage during periods of quote instability to D-Limit, D-Peg, P-Peg, and C-Peg orders, thus protecting investors and the public interest. Moreover, IEX's market data analysis, as described in the Purpose section supports that with the proposed change, the CQI would be “on” for only a small portion of the trading day while providing robust protection in a narrowly tailored manner that balances the ability of long-term investors to access liquidity in the ordinary course.

Additionally, the Exchange believes that the proposed rule change may result in more and larger sized displayed and non-displayed D-Limit orders, as well as non-displayed D-Peg, P-Peg and C-Peg orders, being entered on IEX as a result of the improved coverage and continued accuracy of the CQI. To the extent more orders are entered, the increased liquidity would benefit all IEX members and their customers. And to the extent that more displayed D-Limit orders are entered, price discovery and price formation will be enhanced on IEX and in the market generally to the benefit of all IEX Members and market participants. Furthermore, the Exchange notes that all Members and their customers are eligible to use D-Limit, D-Peg, P-Peg and C-Peg orders, and therefore all Members and their customers are eligible to benefit from the proposed enhanced protections against adverse selection provided by the CQI. Thus, the Exchange believes that application of the rule change is equitable and not unfairly discriminatory.

Additionally, the Exchange notes that the CQI is a narrowly tailored fixed formula specified transparently in IEX rules, that was previously approved by the Commission.^[39] The Exchange is not proposing to add any new functionality, but merely to enhance an SEC approved quote instability calculation as described in the Purpose Section. And as proposed, the CQI will continue to be a narrowly tailored fixed formula specified transparently in IEX's rules. Thus, IEX does not believe that the proposal raises any new or novel issues that have not already been considered by the Commission, in that the CQI ( printed page 25642) functionality was previously approved by the Commission.^[40]

Also, IEX Rule 11.190(g)(3) specifically contemplates that the Exchange will periodically modify the quote instability calculations as appropriate, and the proposed rule change is consistent with this provision.

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

IEX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, as discussed in the Statutory Basis section, the proposal is designed to enhance competition by incentivizing additional liquidity.

With regard to intra-market competition, the proposed changes to the reference data used by the CQI would apply equally to all Members on a fair, impartial and nondiscriminatory basis without imposing any new burdens on the Members because D-Limit, D-Peg, P-Peg and C-Peg orders are each optional order types, and the CQI is one of two choices of Quote Dynamics ^[41] that Members may apply to their eligible pegged orders. The Commission has already approved the CQI ^[42] and as discussed in the Purpose and Statutory Basis sections, the proposed rule change is designed to merely provide a narrowly tailored enhancement; therefore, no new burdens are being proposed.

With regard to inter-market competition, other exchanges are free to adopt similar quote instability calculations subject to the SEC rule filing process. In this regard, the Exchange notes that NYSE American LLC until recently had a “discretionary pegged order type”, see former NYSE American LLC Rule 7.31E(h)(3)(D), which copied an earlier iteration of the Exchange's quote instability calculation.^[43]

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) ^[44] of the Act and Rule 19b-4(f)(6) ^[45] thereunder. Because the proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.

The Exchange believes that the proposed rule change meets the criteria of subparagraph (f)(6) of Rule 19b-4 ^[46] because it would neither significantly affect the protection of investors or the public interest nor impose any significant burden on competition. Rather, the proposed rule change is designed to benefit investors through a minor enhancement to the CQI to incrementally optimize the proprietary mathematical calculation used to make quote instability determinations for certain orders, as described herein.

IEX notes that it has previously adopted several rule changes that made other incremental enhancements to the quote instability calculation specified in Rule 11.190(g)(1) through rule filings pursuant to subparagraph (f)(6) of Rule 19b-4.^[47] The Exchange believes that this proposed rule change is comparable or smaller in scope to those earlier filings and does not raise any new or novel issues not already considered by the Commission.

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) ^[48] of the Act to determine whether the proposed rule change should be approved or disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

Electronic Comments

• Use the Commission's internet comment form (https://www.sec.gov/​rules/​sro.shtml); or
• Send an email torule-comments@sec.gov. Please include file number SR-IEX-2026-14 on the subject line.

Paper Comments

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

All submissions should refer to file number SR-IEX-2026-14. 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 ( https://www.sec.gov/​rules/​sro.shtml). 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-2026-14 and should be submitted on or before June 1, 2026.