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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Notices
There were no Schedule C appointing authorities revoked during October 2020.
Authority: 5 U.S.C. 3301 and 3302; E.O.
10577, 3 CFR, 19541958 Comp., p. 218.
Office of Personnel Management.
Alexys Stanley, Regulatory Affairs Analyst.
FR Doc. 202102253 Filed 2321; 8:45 am BILLING CODE 632539P

SECURITIES AND EXCHANGE
COMMISSION
Release No. 3491016; File No. SRIEX
202018

Self-Regulatory Organizations;
Investors Exchange, LLC; Order Granting Approval of Proposed Rule Change To Amend IEX Rule 11.510 To Reduce the Outbound Latency That Presently Applies to All Messages Sent From IEX Back to Users of the Exchange January 29, 2021.

I. Introduction On December 9, 2020, the Investors Exchange LLC Exchange filed with the Securities and Exchange Commission SEC or Commission, pursuant to Section 19b1 of the Securities Exchange Act of 1934
Act 1 and Rule 19b4 thereunder,2 a proposed rule change to amend IEX
Rule Rule 11.510 to reduce the outbound latency that presently applies to all messages sent from IEX to users of the Exchange, as well as to make conforming changes to the outbound latency that applies to all trading messages sent from the IEX order book to the system routing logic with respect to routable orders. The proposed rule change was published for comment in the Federal Register on December 17, 2020.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change.

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II. Description of the Proposal The Exchange proposed to amend Rule 11.510 to eliminate the coil delay that is currently applied to outbound order execution messages and IEX proprietary market data sent to IEX
users and the IEX system routing logic used by IEXs affiliated routing broker1 15

U.S.C. 78sb1.
CFR 240.19b4.
3 See Securities Exchange Act Release No. 90645
December 11, 2020, 85 FR 81982 December 17, 2020 Notice.
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dealer, IEX Services LLC IEXS.4
Currently, users access IEX through the Exchange-provided network interface at the IEX Point-of-Presence, or POP, located in Secaucus, New Jersey.5
Electronic messages that users send inbound to the IEX system, and order execution messages and IEX proprietary market data sent outbound to users, traverse the IEX coil, which is a box containing approximately 38 miles of compactly coiled optical fiber cable, and travel an additional geographic and physical distance between the POP and the IEX system located at the Exchanges primary data center in Weehawken, New Jersey.6 The time required for such communications to traverse the coil combined with the geographic and physical distance and related networking currently equates to an equivalent 350 microseconds of latency.7 IEXS is a member of the Exchange and its associated routing logic currently is subject to the same 350 microseconds of latency as other members when sending order messages to the IEX order book and when receiving order execution messages and IEX proprietary market data.8 As a result, IEXS has no speed or informational advantage compared to other Exchange members and data recipients.9
IEXs proposed elimination of the coil delay on outbound order execution messages and proprietary market data will reduce the latency on outbound communications to 37 microseconds, which latency will be due to geographic 4 See proposed Rule 11.510; Notice, supra note 3, at 81982. The Exchange did not propose any changes to the coil delay that applies to inbound order messages, including order cancellations and modifications, from users at the POP to the IEX
system and from the system routing logic to the order book. See proposed Rule 11.510; Notice, supra note 3, at 81984. The Exchange does not apply a coil delay to its communications with the Securities Information Processors SIPs or away trading centers, and those aspects of the Exchange likewise are not changing under the proposal. See Notice, supra note 3, at 81983.
5 See Notice, supra note 3, at 81983.
6 Id.
7 Id.
8 Id. If a user sends a routable order to the Exchange, after traversing the inbound latency including the coil from the POP to the IEX system, the order is directed to the system routing logic. Id.
The current 350 microsecond latency on order messages between the IEX routing logic and order book is implicated when the routing logic has determined to route to the IEX order book all or part of the routable order submitted by the user, and is in addition to the 350 microsecond latency between the POP and the IEX system. Id. As a result, currently, users connected at the POP experience a cumulative, one-way latency of 700 microseconds on routable order messages to and from the IEX
system. Id. at 8198384; see also Rule 11.230b, 11.510c1, and proposed Supplementary Material Supp. .03 to Rule 11.510.
9 See Notice, supra note 3, at 81983.

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and physical distance and network connectivity.10 The proposed elimination of the coil delay on outbound order execution messages and proprietary market data will affect IEXS
in the same manner that it effects other Exchange users, thus ensuring that the Exchanges affiliated routing brokerdealer is similarly situated and not competitively advantaged vis-a-vis any non-affiliated routing broker-dealer.11
The Exchange also proposed to make several non-substantive clarifying changes to add further detail to Rule 11.510 to: i Define the term POP; 12
ii reference the 350 microsecond latency on inbound communications from the POP to the IEX system and from the system routing logic to the order book separately from the proposed 37 microsecond latency on outbound communications from the system to the 10 See proposed Rule 11.510a; see also Notice, supra note 3, at 81984. Specifically, the Exchange proposed to amend Rule 11.510a to state that outbound communications from the IEX system to the POP will not traverse the physical distance provided by coiled optical fiber and instead will be subject to an equivalent 37 microseconds of latency due to traversing the geographic distribution and network connectivity between the system at the primary data center and the network access point of the POP. See proposed Rule 11.510a. Relatedly, the Exchange proposed to amend Rule 11.510b2
to state that, for outbound communications including, without limitation, execution report messages found in the Exchanges FIX
Specification, quote and trade update messages found in the Exchanges TOPS and DEEP
specifications, and DROP messages, the Exchanges connectivity infrastructure is designed to provide an equivalent 37 microseconds of latency from the system at the primary data center to the Exchangeprovided network interface at the POP. See proposed Rule 11.510b2.
11 See Notice; supra note 3, at 81986. Specifically, the Exchange proposed to amend Rule 11.510c1
to state that all outbound communications including, without limitation, execution report messages found in the Exchanges FIX specification from the order book to the system routing logic are subject to 37 microseconds of latency, which is in addition to the 37 microsecond latency on outbound communications from the IEX system to the POP described in proposed Rule 11.510b2.
See proposed Rule 11.510c1; see also proposed Supp. .03 stating that all responses from the IEX
order book to the system routing logic are subject to 37 microseconds of latency and all messages from the system routing logic to users are subject to an additional 37 microseconds of outbound latency. Users connected to IEX at the POP
therefore would experience a cumulative delay of 74 microseconds on outbound messages from the IEX system regarding their routable orders. See proposed Rule 11.510c1; see also proposed Supp. .03. Users would continue to experience a cumulative latency of 700 microseconds on inbound routable order messages. See proposed Rule 11.510c1; proposed Supp. .03; Notice, supra note 3, at 81984. In addition, the Exchange proposed to amend Rule 11.510c2A to specify that the IEX routing logic may only receive Exchange data products subject to 37 microseconds of latency, equivalent to the outbound latency applicable to all other data product recipients that is described in proposed Rule 11.510b2. See proposed Rule 11.510c2A.
12 See proposed Rule 11.510a.

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