Notice2025-22143
Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Compliance Rule Regarding the National Market System Plan Governing the Consolidated Audit Trail To Be Consistent With the Bona Fide Market Maker Exception Under Regulation SHO
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 8, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 233 (Monday, December 8, 2025)</title>
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[Federal Register Volume 90, Number 233 (Monday, December 8, 2025)]
[Notices]
[Pages 56804-56806]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22143]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104301; File No. SR-IEX-2025-30]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Compliance Rule Regarding the National Market System Plan
Governing the Consolidated Audit Trail To Be Consistent With the Bona
Fide Market Maker Exception Under Regulation SHO
December 3, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on November 24, 2025, the Investors Exchange LLC (``IEX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I 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. 78a.
\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) of the Act,\3\ and
Rule 19b-4 thereunder,\4\ the Exchange is filing with the Commission a
proposed rule change to amend Rule 11.630(a)(2) of the Exchange's
compliance rule (``CAT Compliance Rule'') regarding the National Market
System Plan Governing the Consolidated Audit Trail (the ``CAT NMS
Plan'' or ``Plan'') \5\ to be consistent with the amendment to the CAT
NMS Plan that requires broker-dealers with a reporting obligation to
CAT to report whether an original receipt or origination of an order to
sell an equity security is a short sale for which a market maker is
claiming the bona fide market making exception in Rule
[[Page 56805]]
203(b)(2)(iii) of Regulation SHO (``BFMM Locate Exception'').\6\
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\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
\5\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth in the CAT Compliance Rule.
\6\ See Securities Exchange Act Rel. No. 98738 (Oct. 13, 2023),
88 FR 75100 (Nov. 1, 2023); Securities Exchange Act Rel. No. 98739
(Oct. 13, 2023), 88 FR 75079 (Nov. 1, 2023).
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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
The purpose of this proposed rule change is to amend Rule
11.630(a)(2) of the CAT Compliance Rule to be consistent with the
amendment to the CAT NMS Plan related to the BFMM Locate Exception. In
2023, the Commission amended the CAT NMS Plan to require the reporting
to the CAT of reliance on the BFMM Locate Exception.\7\ Specifically,
the Commission added paragraph (D) to Section 6.4(d)(ii) of the CAT NMS
Plan, which requires each Participant, through its Compliance Rule, to
require its Industry Members \8\ to record and report to the Central
Repository the following:
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\7\ Id.
\8\ See IEX Rule 11.610(u).
for the original receipt or origination of an order to sell an
equity security, whether the order is for a short sale effected by a
market maker in connection with bona fide market making activities
in the security for which the exception in Rule 203(b)(2)(iii) of
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Regulation SHO is claimed.
Accordingly, the Exchange proposes to amend its CAT Compliance Rule
to reflect this additional CAT reporting requirement. Specifically, the
Exchange proposes to add paragraph (G) to Rule 11.630(a)(2), which
would require each Industry Member to record and report to the Central
Repository the following:
for the original receipt or origination of an order to sell an
equity security, whether the order is for a short sale effected by a
market maker in connection with bona fide market making activities
in the security for which the exception in Rule 203(b)(2)(iii) of
Regulation SHO is claimed.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act,\9\ which require,
among other things, that the Exchange's rules must be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, and, in general, to protect
investors and the public interest, and Section 6(b)(8) of the Act,\10\
which requires that the Exchange's rules not impose any burden on
competition that is not necessary or appropriate.
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\9\ 15 U.S.C. 78f(b)(6).
\10\ 15 U.S.C. 78f(b)(8).
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The Exchange believes that this proposal is consistent with the Act
because it is consistent with the amendment to the CAT NMS Plan
approved by the Commission and is designed to assist the Exchange and
its Industry Members in meeting regulatory obligations pursuant to the
Plan. In approving the Plan, the Commission noted that the Plan ``is
necessary and appropriate in the public interest, for the protection of
investors and the maintenance of fair and orderly markets, to remove
impediments to, and perfect the mechanism of a national market system,
or is otherwise in furtherance of the purposes of the Act.'' \11\ To
the extent that this proposal implements the Plan as amended, and
applies specific requirements to Industry Members, the Exchange
believes that this proposal furthers the objectives of the Plan, as
identified by the Commission, and is therefore consistent with the Act.
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\11\ See Securities Exchange Act Release No. 79318 (Nov. 15,
2016), 81 FR 84696, 84697 (Nov. 23, 2016).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
notes that the proposed rule change is consistent with the amendment to
the CAT NMS Plan approved by the Commission and is designed to assist
the Exchange in meeting its regulatory obligations pursuant to the
Plan. The Exchange also notes that the amendment to the CAT Compliance
Rule will apply equally to all Industry Members that trade equity
securities. In addition, all national securities exchanges and FINRA
are proposing these amendments to their CAT Compliance Rules.
Therefore, this is not a competitive rule filing, and, therefore, it
does not impose a burden on competition.
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)(iii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The
Commission believes that waiving 30-day operative delay is consistent
with the protection of investors and the public interest because the
proposal seeks to amend the Exchange's CAT Compliance Rule to reflect
the requirement in the CAT NMS Plan that industry members report for
the original receipt or origination of an order to sell an equity
security, whether the order is for a short sale effected by a market
maker in connection with bona fide market making activities in the
security for which the exception in Rule 203(b)(2)(iii) of Regulation
SHO is
[[Page 56806]]
claimed.\16\ The proposal does not introduce any novel regulatory
issues. Accordingly, the Commission designates the proposed rule change
to be operative upon filing.\17\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ See supra note 6.
\17\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 to
determine whether the proposed rule 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
<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#93e1e6fff6bef0fcfefef6fde7e0d3e0f6f0bdf4fce5"><span class="__cf_email__" data-cfemail="4230372e276f212d2f2f272c3631023127216c252d34">[email protected]</span></a>. Please include
file number SR-IEX-2025-30 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-2025-30. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet 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-2025-30 and should be submitted on
or before December 29, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22143 Filed 12-5-25; 8:45 am]
BILLING CODE 8011-01-P
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