IEX proposes immediate rule change for D-Peg orders during quote instability

On October 15, 2026, Investors Exchange LLC filed a proposed rule change with the Securities and Exchange Commission (Release No. 34-106732; File No. SR-IEX-2026-42). The filing, published in the Federal Register (Vol. 91, No. 208, pp. 68201-68204; FR Doc No. 2026-22030) on October 26, 2026, is designated non-controversial under Section 19(b)(3)(A) and is effective immediately.

The proposal amends Rule 11.190(b)(10) to require that a Discretionary Peg (D-Peg) order received during a period of quote instability (CQI) or quote imbalance (QII) post at its resting price - the less aggressive of one minimum price variant or the order's limit price - rather than initially pricing at the less aggressive of the Midpoint Price or the limit price. Conforming edits are also proposed to Rules 11.190(a)(3), 11.190(h)(3)(C)(ii), and 11.190(h)(3)(D)(ii). The change applies only to bookable D-Peg orders with a time-in-force that allows posting (e.g., DAY, GTX, SYS, GTT).

Non-bookable D-Peg orders with IOC or FOK time-in-force remain unchanged and will continue to seek execution at the less aggressive of the Midpoint Price or the limit price, regardless of CQI or QII status. Resting D-Peg orders also retain their existing behavior: they exercise the minimum price discretion necessary to meet a contra-side order's limit price when CQI or QII is not in effect, and they trade only at their resting price during instability or imbalance periods.

Illustratively, under the proposed rule a D-Peg buy order for 100 shares with a $10.11 limit and DAY time-in-force, submitted during a CQI-determined unstable bid, would be priced at $10.09 and would not trade with a resting M-Peg at the midpoint $10.11. The Commission is soliciting comments on the filing from interested persons.