Notice2024-06069
Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX Rule 6.210 (Ex-Dividend or Ex-Right Dates)
Primary source
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Published
March 22, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 57 (Friday, March 22, 2024)</title>
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[Federal Register Volume 89, Number 57 (Friday, March 22, 2024)]
[Notices]
[Pages 20525-20527]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06069]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99757; File No. SR-IEX-2024-05]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX
Rule 6.210 (Ex-Dividend or Ex-Right Dates)
March 18, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 13, 2024, the Investors Exchange LLC (``IEX'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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,\3\
and Rule 19b-4 thereunder,\4\ IEX is filing with the Commission a
proposed rule change to amend IEX Rule 6.210 (Ex-Dividend or Ex-Right
Dates) to conform it to the Commission's amendment to Rule 15c6-1(a) of
the Act \5\ to shorten the standard settlement cycle for most broker-
dealer transactions. 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\
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\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
\5\ See Securities Exchange Act Release No. 96930, Investment
Advisers Act Release No. 6239 (February 15, 2023), 88 FR 13872
(March 6, 2023) (``T+1 Adopting Release'').
\6\ 17 CFR 240.19b-4(f)(6)(iii).
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The text of the proposed rule change is available at the Exchange's
website at <a href="http://www.iextrading.com">www.iextrading.com</a>, at the principal office of the Exchange,
and at the Commission's Public Reference Room.
[[Page 20526]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Effective May 28, 2024, the standard settlement cycle for most
broker-dealer transactions will be shortened from two business days
after the trade date (``T+2'') to one business day after the trade date
(``T+1'').\7\ To reflect this shortened settlement cycle, IEX proposes
to amend IEX Rule 6.120 (Ex-Dividend or Ex-Right Dates).
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\7\ See T+1 Adopting Release, 88 FR 13872, 13916 (amending Rule
15c6-1(a) under the Act to require settlement no later than T+1
starting on May 28, 2024).
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IEX Rule 6.120 currently provides that transactions in securities
traded ``regular'' shall be ``ex-dividend'' or ``ex-rights'' as the
case may be, on the first business day preceding the record date fixed
by the company or the date of the closing of the transfer books.\8\ It
also provides that if the record date or closing of transfer books
occurs on a day other than a business day, the transaction will be ex-
dividend or ex-rights on the second preceding business day.\9\
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\8\ See IEX Rule 6.210.
\9\ Id.
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The Exchange proposes to amend IEX Rule 6.120 to shorten the time
frames by one business day. With this change, the ex-dividend or ex-
right date would be the same business day as the record date, if the
record date occurs on a business day, or the first business day
preceding the record date if the record date occurs on a day other than
a business day. IEX notes that this rule change is substantively
identical to a recent Nasdaq Phlx LLC (``Nasdaq Phlx'') rule change
that amended Nasdaq Phlx Equity 11, Section 6 (Ex-dividend, Ex-
rights).\10\
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\10\ See Securities Exchange Act Release No. 98955 (November 15,
2023), 88 FR 81161 (November 21, 2023) (SR-Phlx-2023-49).
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Implementation
The Exchange proposes to implement this proposed rule change on
Tuesday, May 28, 2024, the compliance date specified in the
Commission's amendment to Rule 15c6-1(a) of the Act,\11\ or such later
date as may be announced by the Commission, so that the operative date
coincides with implementation of the T+1 standard settlement cycle
industry change. IEX will announce the operative date of the proposed
rule change in a trader alert.
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\11\ See supra note 8.
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2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\12\ in general and furthers the
objectives of Section 6(b)(5) \13\ of the Act in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest. The proposed rule change seeks to conform IEX's rules
with the adopted Commission rule amendment to shorten the standard
settlement cycle for most broker-dealer transactions from T+2 to
T+1.\14\ The proposal is consistent with the Commission's amendment to
Rule 15c6-1(a) of the Act to require standard settlement no later than
T+1. This proposal will provide IEX Members \15\ with regulatory
certainty as to the settlement cycle that will be utilized to settle
transactions executed on the Exchange.
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\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(5).
\14\ See supra note 6.
\15\ See IEX Rule 1.160(s).
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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, as amended. The proposed rule
change is not designed to address any competitive issues but rather to
provide for the appropriate determination and dissemination of ex-
dates, to provide certainty as to which security holder will receive
the corporate action consideration. The Exchange also believes that the
proposed rule change will serve to promote clarity and consistency, as
noted in the Statutory Basis section, thereby reducing burdens on
competition and facilitating investor protection.
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
Because the foregoing 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.
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.
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
<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#a3d1d6cfc68ec0cccecec6cdd7d0e3d0c6c08dc4ccd5"><span class="__cf_email__" data-cfemail="8ffdfae3eaa2ece0e2e2eae1fbfccffceaeca1e8e0f9">[email protected]</span></a>. Please include
file number SR-IEX-2024-05 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-2024-05. 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 submission, all subsequent amendments, all
written statements
[[Page 20527]]
with respect to the proposed rule change that are filed with the
Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of the filing also 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-2024-05 and should be submitted on
or before April 12, 2024.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06069 Filed 3-21-24; 8:45 am]
BILLING CODE 8011-01-P
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