Self-Regulatory Organizations; Investors Exchange LLC; Order Approving a Proposed Rule Change To Add a New Discretionary Limit Order Type Called D-Limit

Document Headings Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. Securities and Exchange Commission [Release No. 34-89686; File No. SR-IEX-2019-15] I. Introduction On December 16, 2019, the Investors Exchange LLC (“IEX” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”)  [ 1 ] and Rule 19b-4 thereunder, [ 2 ] a proposed rule change to adopt a new order type, the Discretionary Limit order (“D-Limit”). The proposed rule change was published for comment in the Federal Register on December 30, 2019. [ 3 ] On February 12, 2020, the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. [ 4 ] On March 27, 2020, the Commission instituted proceedings to determine whether to approve or disapprove the proposed rule change (“OIP”). [ 5 ] This order approves the proposed rule change. II. Description of the Proposed Rule Change A. Latency Arbitrage IEX explains that its proposal “is designed to protect liquidity providers, institutional investors as well as market makers, from potential adverse selection by latency arbitrage trading strategies in a fair and nondiscriminatory manner. . . .”  [ 6 ] IEX uses the term “latency arbitrage” to refer to trading strategies that trade…