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There were no Schedule C appointing dealer, IEX Services LLC (‘‘IEXS’’).4 and physical distance and network authorities revoked during October Currently, users access IEX through the connectivity.10 The proposed 2020. Exchange-provided network interface at elimination of the coil delay on Authority: 5 U.S.C. 3301 and 3302; E.O. the IEX Point-of-Presence, or ‘‘POP,’’ outbound order execution messages and 5 10577, 3 CFR, 1954–1958 Comp., p. 218. located in Secaucus, New Jersey. proprietary market data will affect IEXS Electronic messages that users send in the same manner that it effects other Office of Personnel Management. inbound to the IEX system, and order Exchange users, thus ensuring that the Alexys Stanley, execution messages and IEX proprietary Exchange’s affiliated routing broker- Regulatory Affairs Analyst. market data sent outbound to users, dealer is similarly situated and not [FR Doc. 2021–02253 Filed 2–3–21; 8:45 am] traverse the IEX coil, which is a box competitively advantaged vis-a`-vis any BILLING CODE 6325–39–P containing approximately 38 miles of non-affiliated routing broker-dealer.11 compactly coiled optical fiber cable, and The Exchange also proposed to make travel an additional geographic and several non-substantive clarifying physical distance between the POP and changes to add further detail to Rule SECURITIES AND EXCHANGE the IEX system located at the Exchange’s 11.510 to: (i) Define the term ‘‘POP’’; 12 COMMISSION primary data center in Weehawken, (ii) reference the 350 microsecond New Jersey.6 The time required for such latency on inbound communications [Release No. 34–91016; File No. SR–IEX– communications to traverse the coil from the POP to the IEX system and 2020–18] combined with the geographic and from the system routing logic to the order book separately from the proposed Self-Regulatory Organizations; physical distance (and related networking) currently equates to an 37 microsecond latency on outbound Investors Exchange, LLC; Order equivalent 350 microseconds of communications from the system to the Granting Approval of Proposed Rule latency.7 IEXS is a member of the Change To Amend IEX Rule 11.510 To Exchange and its associated routing 10 See proposed Rule 11.510(a); see also Notice, Reduce the Outbound Latency That logic currently is subject to the same supra note 3, at 81984. Specifically, the Exchange Presently Applies to All Messages Sent proposed to amend Rule 11.510(a) to state that 350 microseconds of latency as other From IEX Back to Users of the outbound communications from the IEX system to members when sending order messages Exchange the POP will not traverse the physical distance to the IEX order book and when provided by coiled optical fiber and instead will be subject to an equivalent 37 microseconds of latency January 29, 2021. receiving order execution messages and 8 due to traversing the geographic distribution and IEX proprietary market data. As a network connectivity between the system at the I. Introduction result, IEXS has no speed or primary data center and the network access point On December 9, 2020, the Investors informational advantage compared to of the POP. See proposed Rule 11.510(a). Relatedly, Exchange LLC (‘‘Exchange’’) filed with other Exchange members and data the Exchange proposed to amend Rule 11.510(b)(2) 9 to state that, for outbound communications the Securities and Exchange recipients. (including, without limitation, execution report Commission (‘‘SEC’’ or ‘‘Commission’’), IEX’s proposed elimination of the coil messages found in the Exchange’s FIX pursuant to Section 19(b)(1) of the delay on outbound order execution Specification, quote and trade update messages messages and proprietary market data found in the Exchange’s TOPS and DEEP Securities Exchange Act of 1934 specifications, and DROP messages), the Exchange’s (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a will reduce the latency on outbound connectivity infrastructure is designed to provide proposed rule change to amend IEX communications to 37 microseconds, an equivalent 37 microseconds of latency from the Rule (‘‘Rule’’) 11.510 to reduce the which latency will be due to geographic system at the primary data center to the Exchange- provided network interface at the POP. See outbound latency that presently applies proposed Rule 11.510(b)(2). 4 See proposed Rule 11.510; Notice, supra note 3, to all messages sent from IEX to users 11 at 81982. The Exchange did not propose any See Notice; supra note 3, at 81986. Specifically, of the Exchange, as well as to make changes to the coil delay that applies to inbound the Exchange proposed to amend Rule 11.510(c)(1) conforming changes to the outbound order messages, including order cancellations and to state that all outbound communications modifications, from users at the POP to the IEX (including, without limitation, execution report latency that applies to all trading messages found in the Exchange’s FIX specification) messages sent from the IEX order book system and from the system routing logic to the order book. See proposed Rule 11.510; Notice, from the order book to the system routing logic are to the system routing logic with respect supra note 3, at 81984. The Exchange does not subject to 37 microseconds of latency, which is in to routable orders. The proposed rule apply a coil delay to its communications with the addition to the 37 microsecond latency on outbound communications from the IEX system to change was published for comment in Securities Information Processors (‘‘SIP(s)’’) or away trading centers, and those aspects of the Exchange the POP described in proposed Rule 11.510(b)(2). the Federal Register on December 17, likewise are not changing under the proposal. See See proposed Rule 11.510(c)(1); see also proposed 3 2020. The Commission received no Notice, supra note 3, at 81983. Supp. .03 (stating that all responses from the IEX order book to the system routing logic are subject comment letters on the proposed rule 5 See Notice, supra note 3, at 81983. to 37 microseconds of latency and all messages 6 change. This order approves the Id. from the system routing logic to users are subject proposed rule change. 7 Id. to an additional 37 microseconds of outbound 8 Id. If a user sends a routable order to the latency). Users connected to IEX at the POP II. Description of the Proposal Exchange, after traversing the inbound latency therefore would experience a cumulative delay of (including the coil) from the POP to the IEX system, 74 microseconds on outbound messages from the The Exchange proposed to amend the order is directed to the system routing logic. Id. IEX system regarding their routable orders. See Rule 11.510 to eliminate the ‘‘coil’’ The current 350 microsecond latency on order proposed Rule 11.510(c)(1); see also proposed delay that is currently applied to messages between the IEX routing logic and order Supp. .03. Users would continue to experience a outbound order execution messages and book is implicated when the routing logic has cumulative latency of 700 microseconds on determined to route to the IEX order book all or part inbound routable order messages. See proposed IEX proprietary market data sent to IEX of the routable order submitted by the user, and is Rule 11.510(c)(1); proposed Supp. .03; Notice, users and the IEX system routing logic in addition to the 350 microsecond latency between supra note 3, at 81984. In addition, the Exchange used by IEX’s affiliated routing broker- the POP and the IEX system. Id. As a result, proposed to amend Rule 11.510(c)(2)(A) to specify currently, users connected at the POP experience a that the IEX routing logic may only receive cumulative, one-way latency of 700 microseconds Exchange data products subject to 37 microseconds 1 15 U.S.C. 78s(b)(1). on routable order messages to and from the IEX of latency, equivalent to the outbound latency 2 17 CFR 240.19b–4. system. Id. at 81983–84; see also Rule 11.230(b), applicable to all other data product recipients that 3 See Securities Exchange Act Release No. 90645 11.510(c)(1), and proposed Supplementary Material is described in proposed Rule 11.510(b)(2). See (December 11, 2020), 85 FR 81982 (December 17, (‘‘Supp.’’) .03 to Rule 11.510. proposed Rule 11.510(c)(2)(A). 2020) (‘‘Notice’’). 9 See Notice, supra note 3, at 81983. 12 See proposed Rule 11.510(a).

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POP and from the order book to the that could reduce their ability to access messages and proprietary market data. system routing logic; 13 (iii) further liquidity on other markets after trading As a result, IEXS will have no describe, without alteration, how the on IEX.21 Since 2016, however, various informational or time advantage—or Exchange handles incoming routable technological developments, including resulting competitive advantage—over orders, and specify that the 350 the widespread availability of improved any other IEX member.26 Also, due to microseconds of latency on inbound smart order routing techniques that take the equivalent reduction in the latency communications from the routing logic into account transmission latency in attendant to both outbound execution to the order book is in addition to the coordinating simultaneous order arrival messages and IEX proprietary market inbound latency on communications and execution times across multiple data, parties to an execution on IEX will from the POP to the system; 14 (iv) refine trading venues, have greatly reduced the not receive information regarding the references to ‘‘POP’’ throughout the rule potential for information leakage when execution prior to other market such that they refer to connectivity at sweeping the market, thus mitigating participants, and thus will have no the POP or the connectivity the utility of IEX’s outbound coil delay informational or time advantage—or infrastructure between the system and to IEX users.22 In addition, SIP latencies resulting competitive advantage—over the POP, as appropriate; 15 (v) add have decreased materially since 2016, members who receive IEX proprietary explanatory cross references to effectively nullifying the purpose of the data but are not parties to the execution. provisions within the rule; 16 and (vi) coil delay on IEX proprietary data since For these reasons, the Commission make non-substantive grammatical market participants currently can believes that the proposal is not revisions.17 receive SIP data faster than IEX designed to permit unfair proprietary data.23 discrimination, consistent with Section III. Discussion and Commission Against this backdrop, the Exchange 6(b)(5) of the Act, and would not impose Findings asserts that the considerations that any inappropriate or unnecessary After careful review, the Commission existed in 2016 for imposing the coil burden on competition, consistent with finds that the proposed rule change is delay on its outbound order execution Section 6(b)(8) of the Act. consistent with the requirements of the messages and proprietary data have In addition, permitting the Exchange Act and the rules and regulations been superseded by developments in to modernize its infrastructure in a way thereunder applicable to a national the market and are now outweighed by that will better enable its members to securities exchange.18 In particular, the the benefits that would be provided by manage risk and market exposure Commission finds that the proposed the proposal—in particular, without inhibiting their ability to rule change is consistent with Section enhancement of members’ ability to capture liquidity when routing orders to 6(b)(5) of the Act,19 which requires, manage risk and market exposure multiple market venues is consistent among other things, that the rules of a through receipt of execution messages with the Section 6(b)(5) goals of national securities exchange be and IEX market data closer in time to promoting just and equitable principles designed to prevent fraudulent and when executions or quote changes of trade, removing impediments to and manipulative acts and practices, to occur.24 The Exchange also states that perfecting the mechanism of a free and promote just and equitable principles of the proposal would enable other open market and a national market trade, to remove impediments to and exchanges to update their pegged orders system, and protecting investors and the perfect the mechanism of a free and faster, and enable other exchanges’ public interest. These goals also will be open market and a national market affiliated routing brokers to more furthered by the proposal to the extent system, and, in general, to protect quickly incorporate executions on IEX that other exchanges are better able to investors and the public interest, and into their routing decisions.25 manage their own resting orders and not be designed to permit unfair Importantly, IEXS (the Exchange’s routing processes through faster receipt discrimination between customers, affiliated routing broker) and all other of order messages and proprietary data issuers, brokers or dealers; and with IEX members will remain on equal from IEX. This potential effect on other Section 6(b)(8) of the Act,20 which footing in that they will experience the exchanges, coupled with the fact that no requires that the rules of a national same 37 microseconds of latency on other exchange currently imposes an securities exchange not impose any their receipt of IEX order execution artificial delay on outbound order burden on competition that is not execution messages or proprietary necessary or appropriate. 21 See Notice, supra note 3, at 81983–84. By market data,27 also support the IEX’s coil delay on outbound order contrast, the inbound coil delay, which is not conclusion that the proposal will not affected by this proposal, is designed to enable IEX execution messages and proprietary to more effectively manage and price orders resting impose any inappropriate or market data, which has been in place on its book when the market moves. Id. at 81983. unnecessary burden on competition, since IEX became a registered national 22 Id. at 81983–86; see also Securities Exchange securities exchange in 2016, was Act Release No. 89686 (August 26, 2020), 85 FR 26 IEX will sequence the necessary systems designed to help IEX members avoid 54438, 54441 (September 1, 2020). changes to implement this proposed rule change in 23 See Notice, supra note 3, at 81984 and n.25 two steps, the first occurring for IEX users and the potential information leakage in (noting that, at the time of IEX’s exchange launch second for IEXS, thus ensuring that IEX’s system connection with an execution on IEX in September 2016 the average latencies for quote routing logic is not preferenced over other users messages was 470 microseconds for the CQ Plan during implementation. Id. at 81985. After step one 13 See proposed Rule 11.510(a) and 11.510(c)(1). and 762 microseconds for the UTP Plan, and for and before step two, while all outbound trade messages was 320 microseconds for the CTA 14 See proposed Rule 11.510(c)(1). communications from the order book to the routing Plan and 619.7 microseconds for the UTP Plan); see logic would continue to be subject to an equivalent 15 See proposed Rule 11.510. also www.utpplan.com (stating that current median 350 microseconds of latency, outgoing messages 16 See proposed Rule 11.510(b), 11.510(c)(3)(A), latency is approximately 13.0–14.2 microseconds); (i.e., responses) from the routing logic to users (with and Supp. .02. www.ctaplan.com (stating that current median respect to routable orders sent to IEX) would be 17 See proposed Rule 11.510. latency is under 17 microseconds for quotes and subject to the proposed reduced outbound latency 18 In approving this proposed rule change, the under 18 microseconds for trades); and compare of 37 microseconds. Id. at 81985 n.29. During this Commission has considered the proposed rule’s current Rule 11.150(b)(2) (stating that the POP is intervening period IEXS also would be able to impact on efficiency, competition, and capital currently designed to provide 350 microseconds of receive IEX proprietary market data subject to the formation. See 15 U.S.C. 78c(f). latency on IEX proprietary market data). same 37 microseconds of latency as other members 19 15 U.S.C. 78f(b)(5). 24 See Notice, supra note 3, at 81984–86. and data recipients. Id. 20 15 U.S.C. 78f(b)(8). 25 Id. at 81986. 27 Id. at 81986.

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consistent with Section 6(b)(8) of the to defer the billing of initial listing fees identified after the IPO. However, Act. payable by Acquisition Companies. The unlike other types of listed companies Finally, the Commission believes that text of the. The proposed rule change is that have pre-existing operations or that the Exchange’s proposed clarifying available on the Exchange’s website at fund their operations by proceeds raised changes to Rule 11.510 add helpful www.nyse.com, at the principal office of from the IPO, following the IPO, an detail that will further enhance the Exchange, and at the Commission’s Acquisition Company funds a trust investors’ understanding of how IEX Public Reference Room. account with an amount typically equal operates in a manner consistent with the II. Self-Regulatory Organization’s to 100% of the gross proceeds of the Act, thereby helping to protect investors 5 Statement of the Purpose of, and IPO. As such, operating expenses are and the public interest consistent with Statutory Basis for, the Proposed Rule typically borne by the Acquisition Section 6(b)(5) of the Act. Change Company’s sponsor, particularly during IV. Conclusion the initial post-IPO period. The In its filing with the Commission, the Acquisition Company’s sponsor is the It is therefore ordered, pursuant to self-regulatory organization included entity or management team that forms Section 19(b)(2) of the Act,28 that the statements concerning the purpose of, the Acquisition Company and, typically, proposed rule change (SR–IEX–2020– and basis for, the proposed rule change runs the operations of the Acquisition 18) be and hereby is approved. and discussed any comments it received Company until an appropriate target For the Commission, by the Division of on the proposed rule change. The text company is identified and the business Trading and Markets, pursuant to delegated of those statements may be examined at combination is consummated. The authority.29 the places specified in Item IV below. funds in the trust account are typically J. Matthew DeLesDernier, The Exchange has prepared summaries, invested in short-term U.S. government Assistant Secretary. set forth in sections A, B, and C below, securities or held as cash, earning of the most significant parts of such interest over time. Thus, the unique [FR Doc. 2021–02266 Filed 2–3–21; 8:45 am] statements. BILLING CODE 8011–01–P structure of an Acquisition Company A. Self-Regulatory Organization’s results in the sponsor’s extreme fee Statement of the Purpose of, and the sensitivity, particularly during the SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule initial post-IPO period before any COMMISSION Change substantial amount of interest is earned from the trust account. The Exchange [Release No. 34–91012; File No. SR–NYSE– 1. Purpose 2021–06] believes that the market practice of Section 102.06 sets forth listing depositing 100% of the gross proceeds Self-Regulatory Organizations; New requirements applicable to any of the IPO in a trust account (rather than York Stock Exchange LLC; Notice of company with a business plan is to the minimum of 90% required by Filing and Immediate Effectiveness of complete an initial public offering and Section 102.06) benefits shareholders Proposed Rule Change Amending engage in a merger or acquisition with and is consistent with investor Sections 902.02 and 902.11 of the one or more unidentified companies protection because it assures that NYSE Listed Company Manual To within a specific period (‘‘Acquisition shareholders choosing to exercise their Defer the Billing of Initial Listing Fees Company’’). Section 902.11 provides right to redeem shares for a pro rata Payable by Acquisition Companies that an Acquisition Company is subject share of the trust account will receive to a flat initial listing fee of $85,000 at the full IPO price paid, rather than a January 29, 2021. the time of initial listing. Based on lesser amount guaranteed by Exchange Pursuant to Section 19(b)(1) 1 of the experience listing these companies, the rules. Accordingly, to encourage this Securities Exchange Act of 1934 Exchange proposes to defer the billing market practice the Exchange believes it (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 and payment of initial listing fees until is appropriate to defer the payment of notice is hereby given that, on January one year from the date of an Acquisition the initial listing fee owed by an 21, 2021, the New York Stock Exchange Company’s initial listing on the Acquisition Company listed on the LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with Exchange. For the avoidance of doubt, Exchange until the first anniversary of the Securities and Exchange such fee is owed to the Exchange at the the date of listing. The initial listing fee Commission (‘‘Commission’’) the time of initial listing based on the fee paid at that time would be based on the proposed rule change as described in schedule in effect on the date of listing fee schedule in effect at the time of Items I, II, and III below, which Items but will be billed by the Exchange and initial listing. have been prepared by the self- become payable on the first anniversary The Exchange believes that the regulatory organization. The of the date of listing. The Exchange proposed fee deferral would provide an Commission is publishing this notice to notes that the Nasdaq Stock Market incentive to sponsors to list Acquisition solicit comments on the proposed rule (‘‘Nasdaq’’) is the Exchange’s primary Companies on the Exchange. The change from interested persons. competitor in the market for the listing Exchange also believes it is reasonable of Acquisition Companies and that to balance its need to remain I. Self-Regulatory Organization’s Nasdaq has a deferral provision Statement of the Terms of Substance of competitive with other listing venues, comparable to the deferral the Exchange while at the same time ensuring the Proposed Rule Change proposes.4 The Exchange proposes to amend Acquisition Companies are formed to 5 Section 102.06 of the Manual provides that an Sections 902.02 and 902.11 of the NYSE raise capital in an initial public offering Acquisition Company could pay operating and Listed Company Manual (the ‘‘Manual’’) (‘‘IPO’’) with the purpose of using the other expenses, subject to a limitation that 90% of proceeds to acquire one or more the gross proceeds of the company’s offering must be retained in the trust account. However, the 28 15 U.S.C. 78s(b)(2). unspecified businesses or assets to be Exchange understands that marketplace demands 29 17 CFR 200.30–3(a)(12). typically dictate that 100% of the gross proceeds 1 15 U.S.C. 78s(b)(1). 4 See Securities Exchange Act Release No. 89403 from the IPO be kept in the trust account and that 2 15 U.S.C. 78a. (July 31, 2020 [sic]), 85 FR 46198 (July 31, 2008 only interest earned on that account be used to pay 3 17 CFR 240.19b–4. [sic]) (SR–NASDAQ–2020–038). taxes and a limited amount of operating expenses.

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