Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Handling of Incoming Post Only Orders

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104411; File No. SR-IEX-2025-35]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Handling of Incoming Post Only Orders</SUBJECT> <DATE>December 16, 2025.</DATE> Pursuant to Section 19(b)(1)  <SU>1</SU> <FTREF/> of the Securities Exchange Act of 1934 (the “Act”)  <SU>2</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>3</SU> <FTREF/> notice is hereby given that on December 8, 2025, the Investors Exchange LLC (“IEX” or the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  15 U.S.C. 78a. </FTNT> <FTNT> <SU>3</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> Pursuant to the provisions of Section 19(b)(1) under the Act  <SU>4</SU> <FTREF/> , and Rule 19b-4 thereunder, <SU>5</SU> <FTREF/> the Exchange is filing with the Commission a proposed rule change to modify IEX Rule 11.190(b)(20) to modify the handling of Post Only orders that at time of entry would lock or cross a Protected Quotation  <SU>6</SU> <FTREF/> of an external market. The Exchange has designated this proposed rule change as “non-controversial” under Section 19(b)(3)(A) of the Act  <SU>7</SU> <FTREF/> and provided the Commission with the notice required by Rule 19b-4(f)(6) thereunder. <SU>8</SU> <FTREF/> <FTNT> <SU>4</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>5</SU>  17 CFR 240.19b-4. </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> IEX Rule 1.160(bb). </FTNT> <FTNT> <SU>7</SU>  15 U.S.C. 78s(b)(3)(A). </FTNT> <FTNT> <SU>8</SU>  17 CFR 240.19b-4. </FTNT> The text of the proposed rule change is available at the Exchange's website at <E T="03">https://www.iexexchange.io/resources/regulation/rule-filings</E> and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to amend IEX Rule 11.190(b)(20) to provide that a Post Only order that at time of entry would lock or cross a Protected Quotation of an external market will be re-priced by the System  <SU>9</SU> <FTREF/> before booking, in a manner consistent with the functionality of other exchanges that offer similar order types. <FTNT> <SU>9</SU>   <E T="03">See</E> IEX Rule 1.160(nn). </FTNT> IEX defines a Post Only order as a displayed, non-routable order that will not remove liquidity from the IEX Order Book  <SU>10</SU> <FTREF/> except in certain circumstances. <SU>11</SU> <FTREF/> Specifically, an order with a Post Only instruction will only remove liquidity if it is an order to trade a security priced below $1.00, <SU>12</SU> <FTREF/> or if it would receive price improvement (as measured against the less aggressive of the order's limit price or the contra-side Protected Quotation) of at least $0.01. <SU>13</SU> <FTREF/> <FTNT> <SU>10</SU>   <E T="03">See</E> IEX Rule 1.160(p). </FTNT> <FTNT> <SU>11</SU>   <E T="03">See</E> IEX Rule 11.190(b)(20). </FTNT> <FTNT> <SU>12</SU>   <E T="03">See</E> IEX Rule 11.190(b)(20)(A). </FTNT> <FTNT> <SU>13</SU>   <E T="03">See</E> IEX Rule 11.190(b)(20)(B). </FTNT> If neither of the conditions in the preceding paragraph are met, the incoming Post Only order will post to the Order Book, unless there is a non-displayed order with a Trade Now instruction  <SU>14</SU> <FTREF/> that locks the price of the incoming Post Only order, in which case the resting order will “be converted to an executable order that removes liquidity against such incoming order.”  <SU>15</SU> <FTREF/> In that circumstance, the Post Only order would execute as a displayed liquidity adding order without having actually posted to the Order Book. All non-displayed limit orders (limit, orders) automatically include a Trade Now instruction, and certain non-displayed pegged orders (Midpoint, Peg) may include a Trade Now instruction if selected by the User. <FTNT> <SU>14</SU>   <E T="03">See</E> IEX Rule 11.190(b)(21). </FTNT> <FTNT> <SU>15</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>16</SU>   <E T="03">See</E> IEX Rule 11.190(a)(1)(H). </FTNT> <FTNT> <SU>17</SU>   <E T="03">See</E> IEX Rule 11.190(b)(2)(J). </FTNT> <FTNT> <SU>18</SU>   <E T="03">See</E> IEX Rule 11.190(b)(7)(F)(xi). </FTNT> <FTNT> <SU>19</SU>   <E T="03">See</E> IEX Rule 11.190(b)(9)(K). </FTNT> <FTNT> <SU>20</SU>   <E T="03">See</E> IEX Rule 11.190(b)(13)(M). </FTNT> <FTNT> <SU>21</SU>   <E T="03">See</E> IEX Rule 11.190(b)(18)(M). </FTNT> <FTNT> <SU>22</SU>   <E T="03">See</E> IEX Rule 11.190(b)(19)(K). </FTNT> Post Only orders that were not designated by the User to cancel are also subject to display-price sliding, <SU>23</SU> <FTREF/> so that a Post Only order that would lock or cross a Protected Quotation of an external market will be ranked and displayed by the System at one (1) minimum price variant (“MPV”)  <SU>24</SU> <FTREF/> below the current NBO  <SU>25</SU> <FTREF/> (for bids) or one (1) MPV above the current NBB  <SU>26</SU> <FTREF/> (for offers). For example, under IEX's current rules, if the NBBO for a security is $10.10 × $10.20, and IEX does not have any resting interest to sell at $10.20, an incoming Post Only order to buy with a limit price of $10.20 would be re-priced and rest on the Order Book at $10.19 (one MPV below the NBO). However, if in the above example IEX had a non-displayed order to sell at $10.20 with a Trade Now instruction resting on its Order Book, the incoming Post Only order would execute against the resting non-displayed order rather than re-price and post to the Order Book. <FTNT> <SU>23</SU>   <E T="03">See</E> IEX Rule 11.190(b)(20)(C)(“If not designated by the User to cancel, any untraded quantity of a Post Only order will be subject to display-price sliding as set forth in IEX Rule 11.190(h)(1)”). </FTNT> <FTNT> <SU>24</SU>   <E T="03">See</E> IEX Rule 11.210(a). </FTNT> <FTNT> <SU>25</SU>   <E T="03">See</E> IEX Rule 1.160(u). </FTNT> <FTNT> <SU>26</SU>   <E T="03">See</E> IEX Rule 1.160(u). </FTNT> Based on informal feedback, IEX understands that Members who submit Post Only orders are typically employing a trading strategy that is contingent on them being able to be the provider of displayed liquidity. Consequently, they have expressed a preference that orders with a Post Only modifier remove liquidity as infrequently as possible ( <E T="03">e.g.,</E> the order described above would re-price or cancel if it would lock the Protected Quotation of any external market). Based on this feedback, IEX is now proposing to change its Post Only rule in a manner consistent with Members' preferences that will continue to incentive Members to provide displayed liquidity to the market and thereby contribute to public price discovery in a manner that is consistent with the Act. Specifically, IEX proposes to amend IEX Rule 11.190(b)(20) by adding a new subparagraph (C) which will read in full: <EXTRACT> If not designated by the User to cancel, a Post Only order that, at time of entry, would lock or cross a Protected Quotation of an external market will be ranked and displayed by the System at one (1) MPV below the current NBO (for bids) or one (1) MPV above the current NBB (for offers). <SU>27</SU> <FTREF/> <FTNT> <SU>27</SU>   <E T="03">See</E> proposed IEX Rule 11.190(b)(20)(C). </FTNT> </EXTRACT> Under this proposed rule change, Post Only orders will continue to execute on entry as the liquidity adding order if they lock a resting non-displayed order with a Trade Now instruction so long as the Post Only order does not also lock a Protected Quotation of an external market. Applying this rule change to the above example, if the NBBO for a security is $10.10 × $10.20, an incoming Post Only order to buy with a limit price of $10.20 that would lock the Protected Quotation of an external market would be re-priced to $10.19 (unless designated to cancel). However, if IEX also had a non-displayed order to sell at $10.19 with a Trade Now instruction resting on its Order Book, the incoming Post Only order would execute against the resting non-displayed order at $10.19 and not post to the Order Book. IEX also proposes to renumber the current subparagraphs (C)-(F) of IEX Rule 11.190(b)(20) to be subparagraphs (D)-(G). IEX also notes that this proposed change to Post Only order functionality is consistent with how similar order types are handled by other exchanges. For example, the Nasdaq Stock Market LLC (“Nasdaq”), handles incoming post only orders tha ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. 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