Notice2025-23332
Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Handling of Incoming Post Only Orders
Primary source
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Published
December 19, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 242 (Friday, December 19, 2025)</title>
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[Federal Register Volume 90, Number 242 (Friday, December 19, 2025)]
[Notices]
[Pages 59606-59608]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23332]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104411; File No. SR-IEX-2025-35]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
the Handling of Incoming Post Only Orders
December 16, 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 8, 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
Commission a proposed rule change to modify IEX Rule 11.190(b)(20) to
modify the handling of Post Only orders that at time of entry would
lock or cross a Protected Quotation \6\ of an external market. The
Exchange has designated this proposed rule change as ``non-
controversial'' under Section 19(b)(3)(A) of the Act \7\ and provided
the Commission with the notice required by Rule 19b-4(f)(6)
thereunder.\8\
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ See IEX Rule 1.160(bb).
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4.
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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 Exchange proposes to amend IEX Rule 11.190(b)(20) to provide
that a Post Only order that at time of entry would lock or cross a
Protected Quotation of an external market will be re-priced by the
System \9\ before booking, in a manner consistent with the
functionality of other exchanges that offer similar order types.
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\9\ See IEX Rule 1.160(nn).
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IEX defines a Post Only order as a displayed, non-routable order
that will not remove liquidity from the IEX Order Book \10\ except in
certain circumstances.\11\ Specifically, an order with a Post Only
instruction will only remove liquidity if it is an order to trade a
security priced below $1.00,\12\ or if it would receive price
improvement (as measured against the less aggressive of the order's
limit price or the contra-side Protected Quotation) of at least
$0.01.\13\
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\10\ See IEX Rule 1.160(p).
\11\ See IEX Rule 11.190(b)(20).
\12\ See IEX Rule 11.190(b)(20)(A).
\13\ See IEX Rule 11.190(b)(20)(B).
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If neither of the conditions in the preceding paragraph are met,
the incoming Post Only order will post to the Order Book, unless there
is a non-displayed order with a Trade Now instruction \14\ that locks
the price of the incoming Post Only order, in which case the resting
order will ``be converted to an executable order that removes liquidity
against such incoming order.'' \15\ In that circumstance, the Post Only
order would execute as a displayed liquidity adding order without
having actually posted to the Order Book. All non-displayed limit
orders (limit,\16\ reserve,\17\ and D-Limit \18\ orders) automatically
include a Trade Now instruction, and certain non-displayed pegged
orders (Midpoint,\19\ Offset,\20\ Market,\21\ and Fixed Midpoint \22\
Peg) may include a Trade Now instruction if selected by the User.
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\14\ See IEX Rule 11.190(b)(21).
\15\ Id.
\16\ See IEX Rule 11.190(a)(1)(H).
\17\ See IEX Rule 11.190(b)(2)(J).
\18\ See IEX Rule 11.190(b)(7)(F)(xi).
\19\ See IEX Rule 11.190(b)(9)(K).
\20\ See IEX Rule 11.190(b)(13)(M).
\21\ See IEX Rule 11.190(b)(18)(M).
\22\ See IEX Rule 11.190(b)(19)(K).
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Post Only orders that were not designated by the User to cancel are
also subject to display-price sliding,\23\ so that a Post Only order
that would lock or cross a Protected Quotation of an external market
will be ranked and displayed by the System at one (1) minimum price
variant (``MPV'') \24\ below the current NBO \25\ (for bids) or one (1)
MPV above the current NBB \26\ (for offers). For example, under IEX's
current rules, if the NBBO for a security is $10.10 x $10.20, and IEX
does not have any resting interest to sell at $10.20, an incoming Post
Only order to buy with a limit price of $10.20 would be re-priced and
rest on the Order Book at $10.19 (one MPV below the NBO). However, if
in the above example IEX had a non-displayed order to sell at $10.20
with a Trade Now instruction resting on its Order Book, the incoming
Post Only order would execute against the resting non-displayed order
rather than re-price and post to the Order Book.
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\23\ See IEX Rule 11.190(b)(20)(C)(``If not designated by the
User to cancel, any untraded quantity of a Post Only order will be
subject to display-price sliding as set forth in IEX Rule
11.190(h)(1)'').
\24\ See IEX Rule 11.210(a).
\25\ See IEX Rule 1.160(u).
\26\ See IEX Rule 1.160(u).
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Based on informal feedback, IEX understands that Members who submit
Post Only orders are typically employing a trading strategy that is
contingent on them being able to be the provider of displayed
liquidity. Consequently, they have expressed a preference that orders
with a Post Only modifier remove liquidity as infrequently as possible
(e.g., the order described above would re-price or cancel if it would
lock the Protected Quotation of any external market). Based on this
feedback, IEX is now proposing to change its Post Only rule in a manner
consistent with Members' preferences that will continue to incentive
Members to provide displayed liquidity to the market and thereby
contribute to public price discovery in a manner that is consistent
with the Act.
Specifically, IEX proposes to amend IEX Rule 11.190(b)(20) by
adding a new subparagraph (C) which will read in full:
If not designated by the User to cancel, a Post Only order that,
at time of entry, would lock or cross a Protected Quotation of an
external market will be ranked and displayed by the System at one
(1) MPV below the current NBO (for bids) or one (1) MPV above the
current NBB (for offers).\27\
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\27\ See proposed IEX Rule 11.190(b)(20)(C).
Under this proposed rule change, Post Only orders will continue to
execute on
[[Page 59607]]
entry as the liquidity adding order if they lock a resting non-
displayed order with a Trade Now instruction so long as the Post Only
order does not also lock a Protected Quotation of an external market.
Applying this rule change to the above example, if the NBBO for a
security is $10.10 x $10.20, an incoming Post Only order to buy with a
limit price of $10.20 that would lock the Protected Quotation of an
external market would be re-priced to $10.19 (unless designated to
cancel). However, if IEX also had a non-displayed order to sell at
$10.19 with a Trade Now instruction resting on its Order Book, the
incoming Post Only order would execute against the resting non-
displayed order at $10.19 and not post to the Order Book.
IEX also proposes to renumber the current subparagraphs (C)-(F) of
IEX Rule 11.190(b)(20) to be subparagraphs (D)-(G).
IEX also notes that this proposed change to Post Only order
functionality is consistent with how similar order types are handled by
other exchanges. For example, the Nasdaq Stock Market LLC (``Nasdaq''),
handles incoming post only orders that would lock or cross a Protected
Quotation in the same manner as IEX now proposes to handle them;
specifically, it would either cancel or re-price (depending on the
order's instructions) the order to one MPV lower (higher) than the NBO
(NBB) for bids (offers).\28\ And the New York Stock Exchange
(``NYSE''), would either cancel or re-price (depending on the order's
instructions) an incoming post only orders (called an ``ALO Order'')
that would lock or cross a Protected Quotation to a price that is one
MPV lower (higher) than the NBO (NBB) for bids (offers).\29\
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\28\ See Nasdaq Equity 4, Rule 4702(b)(4)(A).
\29\ See NYSE Rule 7.31(e)(2)(B)(ii). NYSE would re-price the
``display price'' but not the ``working price'' which in this
context is analogous to how IEX will retain the order's limit price
even after it is re-priced.
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Implementation
The Exchange will announce the implementation date of the proposed
changes by Trader 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
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\30\ in general, and furthers the
objectives of Section 6(b)(5),\31\ 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, and 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.
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\30\ 15 U.S.C. 78f(b).
\31\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that the proposed rule change
is consistent with the public interest and protection of investors as
it would better align IEX's Post Only order type handling with Members'
preferences in a manner that will encourage Members to submit more Post
Only orders to the exchange, thereby removing impediments to and
perfecting the mechanism of a free and open market.
Additionally, the Exchange believes that the proposed rule change
is consistent with the protection of investors and the public interest,
because it is designed to encourage Members to add displayed liquidity
on the Exchange. As discussed above, this proposed rule change would
better align IEX's Post Only order functionality with the expectations
and trading strategies of IEX's Members seeking to add liquidity to the
Exchange. This in turn is designed to encourage the posting of more
displayed liquidity on the Exchange, and to the extent that such an
incentive is successful in increasing the overall liquidity pool
available at IEX, all market participants, including takers of
liquidity, will benefit. Thus, IEX believes this proposal supports the
purposes of the Act 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.
In addition, as noted in the Purpose section, this proposed rule
change would align IEX's Post Only order functionality with that of
Nasdaq and NYSE.\32\ Thus, IEX does not believe that the proposed
change raises any new or novel material issues that have not already
been considered by the Commission in connection with existing order
types offered by other national securities exchanges, which supports
the purposes of the Act 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.
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\32\ See supra notes 28 and 29.
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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
impose any burden on 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. To the contrary,
the proposal is designed to enhance IEX's competitiveness with other
markets by further incentivizing the posting of displayed liquidity on
the Exchange. As noted above, the Exchange believes the proposed rule
change would generally align order handling on IEX with trading
functionality on other equity exchanges and thus would promote
competition among exchanges by offering Members similar functionality
and order handling to those available on other exchanges. The Exchange
also believes that, to the extent the proposed change would increase
opportunities for the posting of displayed orders to IEX's Order Book,
the proposed change would promote competition by making the Exchange a
more attractive venue for order flow and enhance market quality for all
market participants. Moreover, competing exchanges have adopted and can
continue to adopt the same functionality contained in this proposal,
subject to the SEC rule change process, as discussed in the Purpose
section.
The Exchange also does not believe that the proposed rule change
will impose any burden on intramarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. All Members
are eligible to submit Post Only orders. Moreover, the proposal would
provide potential benefits to all Members to the extent that allowing
Post Only orders incentivizes the provision of more displayed liquidity
on IEX.
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) \33\ of the Act and
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Rule 19b-4(f)(6) \34\ 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.
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\33\ 15 U.S.C. 78s(b)(3)(A).
\34\ 17 CFR 240.19b-4(f)(6).
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The Exchange believes that the proposed rule change meets the
criteria of subparagraph (f)(6) of Rule 19b-4 \35\ because it would not
significantly affect the protection of investors or the public
interest. Rather, the proposed rule change neither significantly
affects the protection of investors or the public interest, nor does it
impose any burden on competition because it would merely adjust the
functionality of Post Only orders so that it better aligns with the
functionality with how Post Only orders work on other exchanges such as
Nasdaq and NYSE, as discussed in the Purpose and Statutory Basis
sections, and does not raise any new or novel material issues that have
not already been considered by the Commission. Accordingly, IEX has
designated this rule filing as non-controversial under Section
19(b)(3)(A) of the Act \36\ and paragraph (f)(6) of Rule 19b-4
thereunder.\37\
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\35\ 17 CFR 240.19b-4(f)(6).
\36\ 15 U.S.C. 78s(b)(3)(A).
\37\ 17 CFR 240.19b-4(f)(6).
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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
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#bbc9ced7de96d8d4d6d6ded5cfc8fbc8ded895dcd4cd"><span class="__cf_email__" data-cfemail="4331362f266e202c2e2e262d3730033026206d242c35">[email protected]</span></a>. Please include
file number SR-IEX-2025-35 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-2025-35. 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-2025-35 and
should be submitted on or before January 9, 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. 2025-23332 Filed 12-18-25; 8:45 am]
BILLING CODE 8011-01-P
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