Notice2026-01988
Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX Rules 2.230 and 2.190 Regarding Retention of Jurisdiction and Voluntary Termination
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
February 2, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 21 (Monday, February 2, 2026)</title>
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[Federal Register Volume 91, Number 21 (Monday, February 2, 2026)]
[Notices]
[Pages 4706-4711]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01988]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104720; File No. SR-IEX-2026-02]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX
Rules 2.230 and 2.190 Regarding Retention of Jurisdiction and Voluntary
Termination
January 28, 2026.
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 January 22, 2026, 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 amend IEX Rule 2.230 (Retention of
Jurisdiction) and IEX Rule 2.190 (Voluntary Termination of Rights as a
Member). This proposed rule change is designed to update the Exchange's
retention of disciplinary jurisdiction over a former Member \6\ and
persons whose association with a Member has been terminated, and to
simplify the manner in which a Member may voluntarily terminate its
membership with the Exchange. The Exchange has designated this proposal
as ``non-controversial'' under Section 19(b)(3)(A) of the Act \7\ and
provided the
[[Page 4707]]
Commission with the notice required by Rule 19b-4(f)(6)(iii) under the
Act.\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(s). The term ``Member'' is defined as
``any registered broker or dealer that has been admitted to
membership in the Exchange.''
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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="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 (i) amend IEX Rule 2.230 to update the
Exchange's retention of disciplinary jurisdiction over a former Member,
or person whose association with a Member \9\ has been terminated, for
conduct that occurred prior to the effective date of termination; \10\
and (ii) amend IEX Rule 2.190 to simplify the manner in which a Member
may voluntarily terminate its membership with the Exchange.
Specifically, as described below, the Exchange proposes to replace rule
provisions requiring the Exchange to file, within two years of a
termination, a complaint with respect to any violative conduct by a
terminated Member or a person associated with a Member that occurred
prior to termination, with rule text providing that the Exchange
retains jurisdiction following a termination, provided that, within one
year of a termination, the Exchange provides written notice that an
inquiry has commenced regarding matters that occurred prior to the
termination. In addition, the Exchange proposes amending the voluntary
termination process by removing the conditions related to completion of
investigations and examinations to avoid unnecessary delay of voluntary
termination requests.
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\9\ See IEX Rule 1.160(y)(1). The term ``Member'' is used in
this filing to refer both to Members and persons associated with a
Member unless otherwise indicated.
\10\ See IEX Rule 2.230.
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As a national securities exchange and self-regulatory organization
(``SRO''), IEX is subject to several provisions of the Act with respect
to rule enforcement and discipline of Members and persons associated
with Members. Section 6(b)(1) \11\ of the Act requires the Exchange to
enforce compliance by its members and persons associated with its
members with applicable provisions of the Act, the rules and
regulations thereunder and Exchange Rules. Section 6(b)(6) \12\ of the
Act requires that IEX Rules must provide that its members and persons
associated with its members shall be appropriately disciplined for such
violations of applicable provisions of the Act, the rules and
regulations thereunder and Exchange Rules (i.e., rule violations).\13\
Section 6(b)(7) \14\ of the Act provides that IEX Rules must provide a
fair procedure for the disciplining of members and persons associated
with members for rule violations.
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\11\ 15 U.S.C. 78f(b)(1).
\12\ 15 U.S.C. 78f(b)(6).
\13\ IEX Rule 2.120(a) provides that ``the Exchange is required
to discipline Members and persons associated with Members for
violations of the provisions of IEX Rules, its Operating Agreement,
its interpretations and policies and with the provisions of the Act
and regulations thereunder.''
\14\ 15 U.S.C. 78f(b)(7).
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Pursuant to current Rule 2.230, the Exchange retains disciplinary
jurisdiction over potential conduct violative of IEX Rules by a former
Member or person formerly associated with a Member, that occurred prior
to membership or association termination, by filing a complaint \15\
within two years of the membership or association termination.
Relatedly, under current Rule 2.190, a Member's voluntary termination
of membership will not be effective until 30 days after the terminating
Member has: (i) provided written notice; (ii) paid in full all
indebtedness owed to the Exchange; (iii) there is a final disposition
of any investigation or disciplinary action against the Member; and
(iv) any examination of the Member has been completed and all
exceptions resolved.\16\ Accordingly, before the Exchange may
effectuate a Member's voluntary termination of membership, it must
ensure that all examinations and investigations concerning the
terminated Member or associated person are completed, and, to the
extent that any complaint results therefrom or otherwise, Rule 2.230
requires that the complaint be filed within two years of the
termination date.
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\15\ IEX Rule 9.212(a) (Complaint Issuance--Requirements,
Service, Amendment, Withdrawal, and Docketing) provides that a
complaint ``shall be in writing and signed by the Department of
Enforcement or the Department of Market Regulation . . . [and]
specify in reasonable detail the conduct alleged to constitute the
violative activity and the rule, regulation, or statutory provision
the Respondent is alleged to be violating or to have violated . . .
[and] shall be served by the Department of Enforcement or the
Department of Market Regulation on each Party pursuant to IEX Rules
9.131 and 9.134, and filed at the time of service with the Office of
Hearing Officers pursuant to IEX Rules 9.135, 9.136, and 9.137.''
\16\ IEX Rule 2.190 also authorizes the Board to declare a
resignation effective at any earlier time.
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The Exchange believes that these requirements are unnecessarily
burdensome to both IEX and a terminating Member. Specifically, the
requirement that investigations and examinations be completed before a
voluntary termination may take effect can result in significant delay
in effectuating a membership termination, even though some of the
investigations and examinations will not ultimately result in a
conclusion that the Member violated applicable IEX Rules.\17\
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\17\ The examinations that FINRA conducts on behalf of IEX are
typically routine ``cycle'' examinations that are not prompted by
potential violative activity by the firm but may nevertheless take
several months to complete. In such circumstances, examinations can
delay termination.
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As described more fully below, the proposed rule change provides
for IEX's appropriate ongoing disciplinary jurisdiction over former
Members and persons formerly associated with Members by requiring that
the Exchange give written notice, within one year of the termination
date, of the commencement of any inquiry into conduct that occurred
before the membership or associational termination. The Exchange
believes that the one-year notice requirement to retain jurisdiction
over a former Member or associated person is a more reasonable approach
rather than the current approach that can delay a termination until an
investigation of a regulatory matter has progressed such that filing a
complaint with two years is feasible.
In addition, the proposed rule change is designed to simplify the
voluntary termination process to avoid unnecessary delay of voluntary
termination requests by removing the conditions related to completion
of investigations and examinations, while retaining the requirement to
provide written notice to the Exchange. In addition, the Exchange
proposes expanding the current requirement to pay all debt owed to the
Exchange to cover all fees, assessments, charges, fines, or other
amounts due to the Exchange, the Commission, or the
[[Page 4708]]
Securities Investor Protection Corporation (``SIPC'').
The Exchange does not believe the proposed rule change will
adversely impact the Exchange's disciplinary jurisdiction over Members
or persons associated with Members. As discussed above, the Exchange
believes that a one-year time period to retain jurisdiction is a
reasonable time for IEX (and FINRA on its behalf) to determine whether
an investigation and/or examination may result in findings of potential
rule violations by the former Member. If IEX (or FINRA) were to
determine that regulatory action is appropriate, it would have adequate
time to complete investigation of the matter. Further, as discussed
below, these proposed changes are based on substantially identical
rules of BZX, MIAX Pearl Equities, NYSE Arca, MEMX, and Nasdaq, with
only non-substantive differences to account for different rule
structures.
Retention of Jurisdiction
Currently, Rule 2.230(a) provides that the Exchange retains
disciplinary jurisdiction over a Member or a person associated with a
Member for matters that commenced prior to the effective membership or
associational termination, provided that any such complaint is filed
within two years after the effective date of the membership termination
or associational termination.\18\ Rule 2.230(b) further provides that
the Exchange retains jurisdiction over a person whose association with
a Member has terminated, or upon such person's failure, while subject
to IEX's jurisdiction, to provide information requested by IEX pursuant
to IEX Rules, provided that any such complaint is filed within two
years after the termination of association. In addition, if a
termination notice is amended and discloses that any such person may
have engaged in actionable conduct, the two year time period in which
to file a complaint will recommence.
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\18\ Investigations and disciplinary actions are conducted in
accordance with Chapters 8 and 9 of the IEX Rules. Chapter 8
contains provisions related to investigations and sanctions, that
require, among other things, that a Member, person associated with a
Member or any other person subject to the Exchange's jurisdiction,
provide information or testimony or permit an inspection and copying
of books, records, or accounts to the Exchange upon request. Chapter
9 contains the Code of Procedure and includes proceedings for, among
other things, disciplining a Member or person associated with a
Member. IEX Rule 8.310 provides for the imposition of sanctions,
after compliance with Chapter 9 Rules, on a Member or person
associated with a Member for rule violations, as well as for any
neglect or refusal to comply with an order, direction, or decision
issued under IEX Rules.
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The Exchange proposes to amend Rule 2.230(a) to provide that, with
respect to Members and persons associated with Members whose membership
or association has been terminated, the Exchange shall retain
disciplinary jurisdiction over the former Member or associated person
with respect to matters that occurred prior to the termination,
provided that the Exchange provides written notice of the commencement
of an inquiry into such matters within one year of the Exchange's
receipt of the termination notice.
Under the current Rule 2.230(a), the Exchange retains disciplinary
jurisdiction over a terminated Member provided that any complaint is
filed within two years after the effective date of the termination. In
contrast, the proposed amendments to Rule 2.230(a) would not require
that a disciplinary matter have progressed to the point of filing a
complaint for the Exchange to retain jurisdiction over a terminated
Member but instead requires the Exchange to provide notice of the
commencement of any inquiry into such matters within a year of
termination to retain jurisdiction over a terminated Member.\19\
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\19\ As proposed, the notice requirement would not apply to a
person who at any time after a termination again subjects himself or
herself to the disciplinary jurisdiction of the Exchange by once
again becoming a Member or a person associated with a Member.
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The Exchange believes that a one year period in which to provide
notice of the commencement of any inquiry is reasonable because it
balances the Exchange's need for sufficient time to determine whether
there are any outstanding potential disciplinary issues to investigate
and provides the terminated Member with clarity, within one year of its
termination, whether any potential disciplinary matters are
outstanding.
The Exchange believes that its retention of disciplinary
jurisdiction pursuant to the proposed rule change will appropriately
enable the Exchange to continue to enforce compliance by the Exchange's
Members and persons associated with them, with the Act, the rules and
regulations thereunder, and the Rules of the Exchange. Because this
rule change will allow the Exchange to retain disciplinary jurisdiction
over a terminated Member or person associated with a Member without the
need to file a complaint as a prerequisite to retaining jurisdiction,
the Exchange will be able to more efficiently administer its
enforcement obligations with respect to terminated Members and persons
associated with them.
In addition, together with the proposed amendments to Rule 2.190
described below, the Exchange believes the proposed amendments will
facilitate a more efficient voluntary termination process, in which a
Member may voluntarily terminate its membership and cease being subject
to Member obligations notwithstanding any ongoing disciplinary actions
or examinations, provided the Member satisfies the conditions of the
proposed amended Rule 2.190. In addition, the Exchange believes that,
notwithstanding differences in rule structures among the exchanges, the
proposed rule text for the retention of jurisdiction rule, Rule 2.230,
is substantially identical to the rule text in comparable rules of BZX,
MEMX, MIAX Pearl Equities, and Nasdaq with only non-substantive
differences to account for different rule structures.\20\
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\20\ See, e.g., BZX Rule 8.1(b); MEMX Rule 8.1(b); MIAX Pearl
Rule 1000(c); Nasdaq Rule 9110(d).
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Specifically, the Exchange is proposing the following change to
Rule 2.230. The Exchange proposes replacing the existing Rule 2.230(a)
and (b) with a single paragraph stating that any Member or person
associated with a Member will continue to be subject to the Exchange's
jurisdiction with respect to matters that occurred prior to the
termination, provided that the Exchange provides written notice of the
commencement of any inquiry into disciplinary matters within one year
of receiving written notice of termination. In addition, the Exchange
proposes adding text stating that the Exchange will not be required to
provide such notice when a person at any time after a termination
becomes a Member or a person associated with a Member again, since by
doing so, the Member or associated person expressly consents to the
Exchange's jurisdiction over members to enforce compliance with the
Exchange Act, and the Exchange's Rules.\21\
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\21\ See IEX Rule 2.120.
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The Exchange also proposes removing is language in current Rule
2.230(b) stating that the Exchange retains jurisdiction over an
associated person who fails to provide information requested by the
Exchange pursuant to IEX Rules. This rule text is no longer necessary
because Rule 8.210(a) (Provisions of Information and Testimony and
Inspection and Copying of Books) provides that an Adjudicator \22\ of
an Exchange disciplinary proceeding or IEX staff may
[[Page 4709]]
require an associated person subject to IEX's jurisdiction to provide
information or testify with respect to any matter involved in a
disciplinary proceeding. Since under the proposed rule change the
Exchange will retain jurisdiction over a person whose association was
terminated, provided the Exchange gives the requisite notice specified
in amended Rule 2.230, it is no longer necessary to include the current
Rule 2.230(b) rule text referenced above because Rule 8.210(a) allows
the Exchange to obtain information from the person.
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\22\ See IEX Rule 9.120(a).
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Voluntary Membership Termination
Rule 2.190 governs a Member's right to voluntarily terminate its
IEX membership. Currently, the rule provides that a Member's voluntary
termination of its membership rights shall not take effect until 30
days after certain specified conditions have been satisfied, including:
(i) receipt of such written resignation; (ii) all indebtedness due the
Exchange shall have been paid in full; (iii) any Exchange investigation
or disciplinary action brought against the Member has reached a final
disposition; and (iv) any examination of such Member is completed and
all exceptions noted have been reasonably resolved. The Rule further
provides that the Board may declare a resignation effective at any
time.
The Exchange has observed that the current requirements of Rule
2.190--that investigations and examinations be completed, and all
exceptions resolved--before a voluntary termination will take effect
have resulted in significant delay in effectuating a membership
termination pending completion of such matters, some of which have
resolved without a finding of any violations. Similarly, the two year
time limit in which to file a complaint with respect to any potentially
violative conduct may be unduly restrictive for the Exchange (and FINRA
on its behalf) in the case of a complex matter. And as a practical
matter, if filing a complaint is warranted, all exceptions with respect
to the investigation or examination in question will not be resolved
which means that termination cannot occur until the exceptions have
been addressed through a disciplinary matter.
The Exchange believes that Rule 2.190, as amended, will facilitate
a more efficient voluntary termination process, in which a Member may
voluntarily terminate its Member status and cease being subject to
Member obligations notwithstanding any ongoing disciplinary proceedings
or examinations, given that the Exchange, through amended Rule 2.230
will be able to retain disciplinary jurisdiction over the Member
following such voluntary termination if warranted. The proposed
amendments will streamline the voluntary termination process by
removing conditions that have the potential to unnecessarily prolong
unwanted obligations of membership, including, for example, filing
annual reports with the Exchange through FINRA \23\ and maintaining
certain books and records.\24\ As discussed below, IEX does not believe
it is necessary to delay a membership termination until any pending
investigations, disciplinary proceedings, or examinations have reached
a final disposition or are completed and all exceptions noted have been
reasonably resolved because IEX will have one year to retain
jurisdiction over a terminated member or associated person. IEX
believes this is an adequate time frame to determine whether
potentially violative conduct may have occurred prior to termination.
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\23\ 17 CFR 240.17a-5.
\24\ See IEX Rule 4.511.
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Accordingly, the Exchange proposes to amend Rule 2.190 to remove
the conditions set forth in Rule 2.190(iii) (the requirement that any
Exchange investigation or disciplinary action brought against the
Member has reached a final disposition) and (iv) (the requirement that
any examination by the Exchange of such Member is completed and all
exceptions noted have been reasonably resolved). As proposed, amended
Rule 2.190 would require that a Member's voluntary termination would
not be effective until a Member has provided written notice of
resignation to the Exchange (current Rule 2.190(i)), completed any
outstanding filings required under the Rules, and paid any outstanding
fees, assessments, charges, fines, or other amounts due to the
Exchange, the Commission, or SIPC. The proposed change would expand
current Rule 2.190(ii), which requires all indebtedness due the
Exchange be paid in full, to also cover all outstanding fees,
assessments, charges, fines, or other amounts due to the Exchange, the
Commission or SIPC to ensure that a Member has complied with these
important financial obligations before a termination may take effect.
The Exchange also proposes to remove the rule text in Rule 2.190
providing that a voluntary termination will not take effect until 30
days after the Member has satisfied the stated conditions. The Exchange
believes this 30 day waiting period is unnecessary because the Exchange
will be able to promptly verify whether the terminating Member has
satisfied the criteria to terminate.
In addition, as proposed, amended Rule 2.190 will require, as a
condition of voluntary termination, that the Member make any
outstanding filings required under the Exchange's Rules. The Exchange
believes this amendment is appropriate because, to the extent a Member
voluntarily terminating its membership is delinquent in any filings
required by IEX Rules or FINRA rules incorporated by reference, this
condition will ensure that the Member comes into compliance on required
filings before the termination takes effect.\25\ This provision is
substantially identical to the voluntary termination rules at BZX, MIAX
Pearl Equities, and NYSE Arca.\26\
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\25\ See e.g., IEX Rule 4.120 (Regulatory Notification and
Business Curtailment), based on FINRA Rule 4120, which requires
members to file certain regulatory reports concerning financial and
operating conditions.
\26\ See, e.g., BZX Rule 2.8; MIAX Pearl Equities Rule 206; and
NYSE Arca Rule 2.22(b).
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The Exchange proposes to delete current Rule 2.190(ii), which
requires the resigning Member to pay in full all indebtedness due to
the Exchange. As proposed, amended Rule 2.190 will require a resigning
Member to pay any outstanding fees, assessments, charges, fines, or
other amounts due to the Exchange, the Commission, or SIPC. The
proposed amendment is more expansive than the existing language in Rule
2.190. The Exchange believes the proposed amendment is appropriate
because it furthers the protection of investors by ensuring that a
resigning Member has complied with these important financial
obligations before their termination takes effect. This provision is
substantially identical to the voluntary termination rules of BZX, MIAX
Pearl Equities, and NYSE Arca.\27\
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\27\ Id.
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The Exchange also proposes to remove the proviso at the end of Rule
2.190 that the Board may declare a Member's resignation effective at
any earlier time. In light of the proposed amendments, the Exchange
does not expect there will be extended delays in the effectiveness of a
membership termination and accordingly there is no compelling reason
for the conditions in the proposed rule amendments to be subject to
override by the Board. Furthermore, the other exchanges with similar
rules do not include such a provision.\28\ Therefore, the Exchange
proposes removing this rule text from the amended rule.
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\28\ Id.
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[[Page 4710]]
Finally, the Exchange proposes amending the first sentence of Rule
2.190 to remove the terms ``only'' and ``addressed'' because they are
unnecessarily duplicative and replacing the second sentence with ``(a)
made any outstanding filings required under the Rules; and (b) paid any
outstanding fees, assessments, charges, fines, or other amounts due to
the Exchange, the Commission or the Securities Investor Protection
Corporation.''
2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\29\ in general and further the
objectives of Section 6(b)(1) \30\ of the Act in that is is designed to
enable the Exchange to carry out the purposes of the Act and to comply
with the provisions of the Act, the rules and regulations thereunder,
and the rules of the Exchange.
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\29\ 15 U.S.C. 78f.
\30\ 15 U.S.C. 78f(b)(1).
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As a general matter, IEX believes that the proposed rule change is
consistent with the Act because it will make the voluntary termination
process more efficient for Members and the Exchange because it will
enable the Exchange to retain disciplinary jurisdiction over a
terminated Member or person associated with a Member without the need
to file a complaint as a prerequisite to retaining such jurisdiction,
and thereby enable the Exchange to more efficiently administer its
enforcement obligations with respect to terminated Members and persons
associated with them. Members will not be forced to incur unwanted
membership obligations during the pendency of any ongoing investigation
or examination (which in many cases do not identify any violative
conduct), and thereby foster cooperation and coordination between the
Exchange and its Members and persons associated with them, and will
apply uniformly to all Members wishing to voluntarily terminate their
membership.
Specifically, the Exchange believes the proposed changes to Rules
2.230 and 2.190 are consistent with Section 6(b)(1) \31\ of the Act
because they would allow the Exchange to retain disciplinary
jurisdiction over a terminated Member within an appropriate time period
following termination, while not unduly prolonging the termination
process and subjecting the Member to unwanted membership obligations.
The Exchange believes these proposed rule changes will continue to
support the Exchange's ability to carry out its regulatory obligations
under the Act in the context of a voluntary termination by a Member, or
the termination of a person's association with a Member.
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\31\ 15 U.S.C. 78f(b)(1).
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The Exchange believes the proposed change to Rule 2.230 enabling
the Exchange to retain disciplinary jurisdiction over terminated
Members and persons associated with Members is also consistent with the
above-referenced requirements. As discussed in the Purpose section, as
proposed, the Exchange will have an appropriate time period in which to
retain jurisdiction over terminated Members and persons associated with
a Member and thereby address any potentially violative conduct without
the needing to delay termination until a full investigation is
completed.
The Exchange believes the proposed change to Rule 2.190 requiring a
Member seeking to terminate to provide the Exchange with written
notice, make any outstanding filings and pay any outstanding fees owed
to the Exchange, the Commission, or SIPC before a termination will be
deemed effective are consistent with the Act's requirements that an
exchange's rules be designed to prevent fraudulent and manipulative
acts and practices, promote just and equitable principles of trade,
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and protect investors and the
public interest. As discussed in the Purpose section, IEX believes that
this requirement furthers the protection of investors and the public
interest by ensuring that a resigning Member has complied with these
important financial obligations before their termination takes effect.
The Exchange also believes that the proposed rule change regarding
retention of jurisdiction is consistent with Section 6(b)(6) \32\ of
the Act in that it is designed to provide authority to the Exchange to
appropriately enable it to discipline former Members and persons
associated with its Members for any rule violations that occurred
during membership or association with a Member.
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\32\ 15 U.S.C. 78f(b)(6).
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Further, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(7) \33\ of the Act because it would
support a fair procedure for the disciplining of Members and persons
associated with Members for rule violations. Specifically, as proposed
the Exchange will be able to retain jurisdiction over terminated
Members and persons associated within a reasonable period of time for
rule violations that may have occurred while the firm was a Member or
while an individual was associated with a Member. The Exchange believes
that one year is reasonable in that it provides adequate time for
FINRA, on the Exchange's behalf, to determine whether an inquiry into a
potential disciplinary matter is warranted.\34\
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\33\ 15 U.S.C. 78f(b)(7).
\34\ IEX and FINRA are parties to a regulatory services
agreement pursuant to which FINRA has agreed to perform certain
regulatory functions on behalf of IEX. See IEX Rules 8.100; 9.001.
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In addition, the Exchange believes the proposed rule change is
just, equitable, and not unfairly discriminatory. Under the proposed
changes to Rule 2.190, the obligations imposed on Members wishing to
voluntarily terminate--that they make any outstanding filings and pay
any outstanding fees owed to the Exchange, the Commission, or SIPC--
merely impose existing obligations and are the same regardless of the
circumstances surrounding a Member's voluntary termination.
Similarly, the proposed change to Rule 2.230 will enable the
Exchange to continue to enforce compliance by the Exchange's Members
and persons associated with them whose membership or association has
been terminated, with the Act, the rules and regulations thereunder,
and the rules of the Exchange. Because this rule change will allow the
Exchange to retain disciplinary jurisdiction over a terminated Member
or person associated with a Member without the need to file a complaint
as a prerequisite to retaining such jurisdiction, the Exchange will be
able to more efficiently administer its enforcement obligations with
respect to terminated Members and persons associated with them. At the
same time, since the Exchange will be required to notify a terminated
Member or person associated with Members of the commencement of any
inquiry within one year of the termination date, terminated Members and
persons associated with a Member will gain clarity sooner regarding any
potential disciplinary proceedings they may face concerning conduct
that occurred before the termination date. Furthermore, the Exchange's
retention of disciplinary jurisdiction over terminated Members and
associated persons following termination under the proposed change
would apply equally to all Members and associated persons, without
regard to the circumstances of the termination or the amount of trading
a Member did on the Exchange.
The Exchange notes, as discussed in the Purpose section, that the
proposed rule change is substantially identical to
[[Page 4711]]
rules of several other exchanges regarding voluntary terminations and
the retention of jurisdiction over terminated Members. Accordingly, the
Exchange does not believe that the proposed rule change raises any new
or novel issues not already considered by the Commission.
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, as amended. The
proposed rule change is not designed to address any competitive issues
but rather to provide for a simplified voluntary termination process,
and appropriate retention of jurisdiction of former Members and persons
associated with a Member.
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) \35\ of the Act and Rule 19b-4(f)(6) \36\
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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\35\ 15 U.S.C. 78s(b)(3)(A).
\36\ 17 CFR 240.19b-4(f)(6).
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The Exchange believes that this proposal qualifies for non-
controversial filing because the proposed rule change is designed to
update the Exchange's retention of jurisdiction over former Members and
persons formerly associated with a Member, provided that the Exchange
gives notice of the commencement of any inquiry within one year of the
effective termination date, and to simplify the manner in which a
Member may voluntarily terminate membership. The proposed rule change
will not significantly affect the protection of investors or the public
interest because it will continue to provide a fair and appropriate
process for the Exchange to retain jurisdiction over former Members and
associated persons and address any potentially violative conduct. The
Exchange also believes that this filing is non-controversial because it
raises no new or novel issues not already considered by the Commission,
as discussed in the Purpose and Statutory Basis sections. Accordingly,
the Exchange believes that the proposed rule change is eligible for
immediate effectiveness.
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) \37\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\37\ 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#156760797038767a7878707b6166556670763b727a63"><span class="__cf_email__" data-cfemail="0d7f786168206e6260606863797e4d7e686e236a627b">[email protected]</span></a>. Please include
file number SR-IEX-2026-02 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-2026-02. 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-2026-02 and should be submitted on
or before February 23, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-01988 Filed 1-30-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on February 2, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.