The Securities and Exchange Commission (SEC) instituted disapproval proceedings on March 18 regarding Investors’ Exchange LLC’s (IEX) application for registration as a national securities exchange, indicating in the order that it will determine whether to grant or deny IEX’s application by June 18, 2016. The SEC also requested comments on several amendments to IEX’s Form 1, which include changes that would redesign IEX’s outbound routing functionality in response to concerns that it gives IEX an unfair advantage over other routing broker-dealers.

Specifically, the SEC published a proposed interpretation that would update the definition of automated quotation under Rule 600(b)(3) of Regulation NMS. Under the proposal, the SEC would interpret “immediate” when determining whether a trading center maintains an “automated quotation” for the purposes of Rule 611 to include response time delays at trading centers that are de minimis, whether intentional or not. The SEC proposed the revised interpretation in response to an increase in the speed of trading technology since the adoption of Regulation NMS and questions posed by IEX’s proposed intentional “speed bump” that would delay access to an exchange’s quotation by a sub-millisecond amount.

Comments on both matters should be submitted on or before April 14, 2016.