Notice2026-04710
Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify IEX Rule 11.190(b)(7)
Primary source
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Published
March 11, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 47 (Wednesday, March 11, 2026)</title>
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[Federal Register Volume 91, Number 47 (Wednesday, March 11, 2026)]
[Notices]
[Pages 12035-12038]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04710]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104942; File No. SR-IEX-2026-07]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
IEX Rule 11.190(b)(7)
March 6, 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 February 24, 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\ IEX is filing with the Commission a
proposed rule change to provide Users a new order handling option they
can apply to Discretionary Limit orders they submit to the Exchange.
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 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.
[[Page 12036]]
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 filing is to amend IEX Rule
11.190(b)(7) to add a new optional order handling instruction for
Discretionary Limit \6\ (``D-Limit'') orders. Currently if the System
\7\ receives a D-Limit buy (sell) order during a period of ``quote
instability'',\8\ and the D-Limit order has a limit price equal to or
higher (lower) than the quote instability determination price level
(``CQI Price''), the price of the order will be automatically adjusted
by the System to one (1) minimum price variation (``MPV'') \9\ lower
(higher) than the CQI Price.\10\ Under this proposal, a User \11\ would
have the option of either: (i) having the order post to the Order Book
\12\ at its limit price or execute on entry against eligible resting
interest on the Order Book; or (ii) selecting an order handling
instruction to allow the D-Limit order to be price adjusted as
described above.\13\ In either case, if the D-Limit order posts to the
Order Book, and the System makes another quote instability
determination, the order will be subject to automatic price adjustment
like any other resting D-Limit buy (sell) order (i.e., if the order has
a price equal to or higher (lower) than the CQI Price, it will be
automatically adjusted by the System to a price one MPV lower (higher)
than the CQI Price).\14\
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\6\ See IEX Rule 11.190(b)(7).
\7\ See IEX Rule 1.160(nn).
\8\ See IEX Rule 11.190(g)(1) (detailing the functionality of
the crumbling quote indicator (``CQI'') which assesses a quote's
instability).
\9\ See IEX Rule 11.210.
\10\ See IEX Rule 11.190(b)(7)(A) and (B).
\11\ See IEX Rule 1.160(qq). Users include both Members and
Sponsored Participants, see IEX Rule 1.160(ll), but the terms
``Member'' and ``User'' are used interchangeably in this filing.
\12\ See IEX Rule 1.160(p).
\13\ The default order handling for incoming D-Limit orders will
be option (1) as described above. Users can submit this optional
order handling instruction at both the order and session level.
\14\ See IEX Rule 11.190(b)(7)(C) and (D).
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Background
A D-Limit order may be a displayed or non-displayed limit order
that upon entry and when posting to the Order Book is priced to be
equal to and ranked at the order's limit price, but will be
automatically adjusted by the System to a price one MPV lower (higher)
than the CQI Price during periods of quote instability (i.e., when the
CQI is ``on'').\15\
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\15\ See IEX Rule 11.190(b)(7)(A)-(D).
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As described above, if the CQI is ``on'' when the System receives a
D-Limit buy (sell) order with a limit price equal to or higher (lower)
than the CQI Price, the price of the order will be automatically
adjusted by the System to one MPV lower (higher) than the CQI
Price.\16\ Similarly, when unexecuted shares of a D-Limit buy (sell)
order are posted to the Order Book, if a quote instability
determination is made and such shares are ranked and displayed (in the
case of a displayed order) by the System at a price equal to or higher
(lower) than the CQI Price, the price of the order will be
automatically adjusted by the System to a price one MPV lower (higher)
than the CQI Price.\17\
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\16\ See IEX Rule 11.190(b)(7)(A) and (B).
\17\ See IEX Rule 11.190(b)(7)(C) and (D).
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Proposal
Unless otherwise instructed by the User, a D-Limit order that
arrives when a quote instability determination is in effect will not be
subject to a price adjustment, as described below. Specifically, an
incoming D-Limit buy (sell) order with a limit price equal to or higher
(lower) than the CQI Price, which arrives during a period of quote
instability, would not be automatically price adjusted to one minimum
price variation (MPV) lower (higher) than the CQI price, unless the
User has selected that order handling instruction.
Nothing in this proposal changes the core functionality of a D-
Limit order, i.e., the manner in which the System automatically price
adjusts D-Limit orders; rather, the proposal is designed to give Users
more control over the price at which their incoming D-Limit orders book
or trade. Additionally, IEX is not proposing any changes to how a
resting D-Limit order to buy (sell) priced equal to or higher (lower)
than the CQI Price will be automatically adjusted in the event of a
quote instability determination.
The proposed change is responsive to informal feedback from Members
\18\ seeking more flexibility in how their D-Limit orders will function
on entry. Specifically, IEX understands that some Members would prefer
that their D-Limit orders not automatically price adjust on entry
during periods of quote instability, because such Members have entered
the order with a limit price consistent with their trading objectives
at that time with the preference that the order either post to the
Order Book at its limit price or execute against eligible resting
interest on the Order Book.
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\18\ See IEX Rule 1.160(s). As discussed in note 11, supra, the
terms ``Member'' and ``User'' are used interchangeably in this
filing.
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Thus, IEX designed this limited but targeted optional order
handling instruction to give Members the flexibility to elect to enter
D-Limit orders that will not be automatically price-adjusted on entry
when that better suits their trading objectives.\19\ To effect this
proposed change, IEX proposes to modify IEX Rules 11.190(b)(7)(A)
(describing the treatment of buy orders on entry) and 11.190(b)(7)(B)
(describing the treatment of sell orders on entry) by adding language
to each of these paragraphs stating that the price adjustment
functionality only will apply to a D-Limit order on entry if the buy
(sell) order has a limit price that is equal to or higher (lower) than
the CQI Price, ``and the order was submitted with an optional
instruction to allow for price adjustment on entry.'' IEX is proposing
no other changes to the D-Limit order type.
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\19\ See supra note 13.
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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
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\20\ in general, and furthers the
objectives of Section 6(b)(5),\21\ 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. Specifically, the Exchange
believes that the proposed rule change is consistent with the
protection of investors and the public interest because it is designed
to provide more flexibility and opportunities for Members to add both
displayed and non-displayed liquidity to the Exchange. As noted in the
Purpose section, the proposed rule change is responsive to informal
feedback from some Members that they do not necessarily wish to have
their D-Limit orders be price adjusted on entry if they arrive at the
Exchange while the CQI is ``on.'' In response to this feedback, IEX
proposes to allow Users the option of either having a D-Limit order be
subject to price adjustment on
[[Page 12037]]
entry during a period of quote instability or to only be subject to
price adjustment once the order is posted to the Order Book (and if the
CQI is ``on'').
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\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
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By providing additional functionality to enable Members to more
effectively manage D-Limit orders, IEX believes that the proposed rule
change will promote more use of D-Limit orders, thereby attracting
additional liquidity to the Exchange, while remaining consistent with
the purpose of the order type.\22\ To the extent it is successful in
attracting additional liquidity to the Exchange, this rule proposal
will benefit all market participants, thereby supporting 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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\22\ See Securities Exchange Act Release No. 89686 (August 26,
2020), 85 FR 54438 (September 1, 2020) (SR-IEX-2019-15).
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The Exchange further believes that the proposed rule change is
consistent with the Act because it would be available to all Members on
a fair, equal and nondiscriminatory basis regardless of their
technological sophistication. Moreover, the proposal is designed to
incentivize the entry of additional D-Limit orders by providing
flexibility to support Members' ability to manage such orders. To the
extent that this flexibility incentivizes additional D-Limit orders,
all market participants will benefit.
The Exchange also believes that the proposed rule change is
consistent with the protection of investors and the public interest
because the circumstances under which a D-Limit order will be price
adjusted are narrowly tailored, transparent, and predictable, as
described in the Purpose section.
The proposed functionality would merely allow a Member to have its
D-Limit order on entry treated in the same manner as a regular limit
order would be treated on IEX or other exchanges.\23\
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\23\ See, e.g., IEX Rule 11.190(a)(1); MEMX Rule 11.8(b); NYSE
Rule 7.31(a)(2); Cboe BZX Rule 11.9(a)(1).
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Accordingly, based on the foregoing, the Exchange does not believe
that the proposed rule change raises any 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
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 providing additional optional order handling instructions
for D-Limit users. As discussed in the Purpose section, the proposal is
designed to incentivize the entry of additional liquidity providing
orders on IEX by providing flexibility to Members entering D-Limit
orders with respect to the pricing of such orders on entry. Further,
IEX believes this proposal will enhance opportunities for price
discovery and increase the overall displayed (and non-displayed)
liquidity profile on the Exchange, to the benefit of all market
participants.
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
would be eligible to use the new optional order handling instructions
for their D-Limit orders or to have their D-Limit orders continue to be
subject to price adjustment on entry.
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) \24\ of the Act and Rule 19b-4(f)(6) \25\
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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\24\ 15 U.S.C. 78s(b)(3)(A).
\25\ 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 \26\ because it would not
significantly affect the protection of investors or the public
interest. Rather, the proposed rule change is designed to benefit
investors and the public interest by providing enhanced flexibility to
Members' management of their D-Limit orders if such orders arrive
during a period of quote instability, as described in the Purpose and
Statutory Basis sections.
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\26\ 17 CFR 240.19b-4(f)(6).
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IEX notes (as discussed in the Statutory Basis section) that both
the D-Limit order type and the standard IEX limit order type were
approved by the Commission, and this proposed rule change merely allows
Users to decide if a D-Limit order that arrives during a period of
quote instability should be posted to the order book or execute against
resting interest on the Order Book at the order's limit price, in the
same manner as a regular limit order. Accordingly, the Exchange
believes that the proposed rule change is noncontroversial and
satisfies the requirements of Rule 19b-4(f)(6).\27\
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\27\ 17 CFR 240.19b-4(f)(6).
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Furthermore, 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.
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) \28\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\28\ 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#6614130a034b05090b0b030812152615030548010910"><span class="__cf_email__" data-cfemail="bdcfc8d1d890ded2d0d0d8d3c9cefdced8de93dad2cb">[email protected]</span></a>. Please include
file number SR-IEX-2026-07 on the subject line.
[[Page 12038]]
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-2026-07. 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-2026-07 and should be submitted on
or before April 1, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-04710 Filed 3-10-26; 8:45 am]
BILLING CODE 8011-01-P
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