Copyright © 2024. Investors Exchange LLC. This document may not be modified, reproduced, or redistributed without the written permission of Investors Exchange LLC. All rights reserved. INVESTORS EXCHANGE RULE BOOK Updated through January 16, 2024* * Investors Exchange rules were adopted by Securities Exchange Act Release No. 34-78101; File No. 10-222 (June 17, 2016). Dates of subsequent changes to the Investors Exchange Rule Book are indicated herein. Investors Exchange Page 2 of 474 Table of Contents CHAPTER 1. ADOPTION, INTERPRETATION AND APPLICATION OF IEX RULES, AND DEFINITIONS .... 11 Rule Series 1.100. General Provisions ................................ ................................ ................................ ................................ ... 11 Rule 1.110. Adoption of IEX Rules ......................................................................................................................................................................... 11 Rule 1.120. Effective Date ......................................................................................................................................................................................... 11 Rule 1.130. Interpretation ......................................................................................................................................................................................... 11 Rule 1.140. Reserved. ................................................................................................................................................................................................. 11 Rule 1.150. Applicability ............................................................................................................................................................................................ 11 Rule 1.160. Definitions ................................................................................................................................................................................................ 11 Rule 1.170. Regulation of IEX and Its Members.............................................................................................................................................. 15 Rule 1.180. Fingerprint-Based Background Checks of Employees and Independent Contractors ......................................... 15 CHAPTER 2. MEMBERS OF THE EXCHANGE ................................ ................................ ................................ ....... 16 Rule 2.110. Rights, Privileges and Duties of Members................................................................................................................................. 16 Rule 2.120. Obligations of Members and the Exchange ............................................................................................................................ 16 Rule 2.130. Member Eligibility ............................................................................................................................................................................... 16 Rule 2.140. Prohibited Conditions Relating to Expungement of Customer Dispute .................................................................... 16 Rule 2.150. Reserved ................................................................................................................................................................................................. 17 Rule 2.160. Registration Requirements and Restrictions on Membership ......................................................................................... 17 Rule 2.170. Application Procedures for Membership or to become an Associated Person of a Member ......................... 30 Rule 2.180. Revocation of Membership or Association with a Member ............................................................................................. 31 Rule 2.190. Voluntary Termination of Rights as a Member ..................................................................................................................... 32 Rule 2.200. Dues, Assessments and Other Charges .................................................................................................................................. 32 Rule 2.210. No Affiliation between Exchange and any Member ........................................................................................................... 32 Rule 2.220. IEX Services LLC as Outbound Router.................................................................................................................................... 32 Rule 2.230. Retention of Jurisdiction ............................................................................................................................................................... 35 Rule 2.240. Fidelity Bonds .................................................................................................................................................................................... 36 Rule 2.250. Mandatory Participation in Testing of Backup Systems .................................................................................................. 36 CHAPTER 3. RULES OF FAIR PRACTICE ................................ ................................ ................................ ............. 37 Rule 3.110. Business Conduct of Members ..................................................................................................................................................... 37 Rule 3.120. Violations Prohibited ........................................................................................................................................................................ 37 Rule 3.130. Use of Fraudulent Devices............................................................................................................................................................. 37 Rule 3.140. False Statements ............................................................................................................................................................................... 37 Rule 3.150. Know Your Customer....................................................................................................................................................................... 37 Rule 3.160. Fair Dealing with Customers ........................................................................................................................................................ 37 Rule 3.170. Suitability .............................................................................................................................................................................................. 38 Rule 3.180. The Prompt Receipt and Delivery of Securities ................................................................................................................... 38 Rule 3.190. Charges for Services Performed ................................................................................................................................................. 38 Rule Series 3.200. Information and Disclosure Rules ................................ ................................ ................................ ...... 38 Rule 3.200. Use of Information Obtained in Fiduciary Capacity.......................................................................................................... 38 Rule 3.210. Publication of Transactions and Quotations.......................................................................................................................... 38 Rule 3.220. Offers at Stated Prices ................................................................................................................................................................... 39 Investors Exchange Page 3 of 474 Rule 3.230. Payments Involving Publications that Influence the Market Price of a Security ................................................... 39 Rule 3.240. Customer Confirmations ............................................................................................................................................................... 39 Rule 3.250. Disclosure of Control Relationship with Issuer .................................................................................................................... 39 Rule 3.260. Discretionary Accounts ................................................................................................................................................................. 39 Rule 3.270. Improper Use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts ......................................................................................................................................................................................................................... 41 Rule 3.280. Communications with Customers and the Public............................................................................................................... 42 Rule 3.290. Customer Disclosures ..................................................................................................................................................................... 42 Rule 3.291. Influencing or Rewarding Employees of Others; Gratuities ............................................................................................43 Rule 3.292. Telemarketing.....................................................................................................................................................................................43 Rule 3.293. Short-Interest Reporting ...............................................................................................................................................................43 CHAPTER 4. FINANCIAL AND OPERATIONAL RULES ................................ ................................ ..................... 43 Rule Series 4.100. FINANCIAL CONDITION ................................ ................................ ................................ ....................... 43 Rule 4.110. Capital Compliance............................................................................................................................................................................43 Rule 4.120. Regulatory Notification and Business Curtailment ............................................................................................................ 44 Rule 4.130. Reserved. ............................................................................................................................................................................................. 44 Rule 4.140. Audit ...................................................................................................................................................................................................... 44 Rule Series 4.200. MARGIN ................................ ................................ ................................ ................................ .................. 44 Rule 4.210. Prohibitions and Exemptions ...................................................................................................................................................... 44 Rule 4.220. Day Trading Margin ........................................................................................................................................................................ 44 Rule Series 4.300. RESERVED. ................................ ................................ ................................ ................................ ............ 45 Rule Series 4.400. RESERVED. ................................ ................................ ................................ ................................ ............ 45 Rule Series 4.500. BOOKS, RECORDS AND REPORTS ................................ ................................ ................................ .... 45 Rule 4.511. General Requirements ......................................................................................................................................................................45 Rule 4.512. Customer Account Information ...................................................................................................................................................45 Rule 4.513. Record of Written Customer Complaints............................................................................................................................... 46 Rule 4.540. Furnishing of Records ................................................................................................................................................................... 46 Rule 4.550. Disclosure of Financial Condition ............................................................................................................................................. 46 CHAPTER 5. SUPERVISION ................................ ................................ ................................ ................................ .... 47 Rule 5.110. Supervision ............................................................................................................................................................................................ 47 Rule 5.120. Supervisory Control System ......................................................................................................................................................... 59 Rule 5.130. Annual Certification of Compliance and Supervisory Processes ................................................................................. 60 Rule 5.140. Reserved. ............................................................................................................................................................................................. 60 Rule 5.150. Prevention of the Misuse of Material, Non-Public Information ..................................................................................... 60 Rule 5.160. Anti-Money Laundering Compliance Program ...................................................................................................................... 61 Rule 5.170. Transactions for or by Associated Persons ............................................................................................................................ 62 CHAPTER 6. MISCELLANEOUS PROVISIONS ................................ ................................ ................................ ..... 62 Rule 6.110. Comparison and Settlement Requirements ............................................................................................................................ 62 Rule 6.120. Failure to Deliver and Failure to Receive ................................................................................................................................ 63 Rule 6.130. Forwarding of Proxy and Other Issuer-Related Materials; Proxy Voting.................................................................. 63 Rule 6.140. Assigning of Registered Securities in Name of a Member or Member Organization ......................................... 64 Rule 6.150. Commissions....................................................................................................................................................................................... 64 Investors Exchange Page 4 of 474 Rule 6.160. Off-Exchange Transactions........................................................................................................................................................... 65 Rule 6.170. Regulatory Services Agreement ................................................................................................................................................. 65 Rule 6.180. Transactions Involving IEX Employees .................................................................................................................................... 65 Rule 6.210. Ex-Dividend or Ex-Rights Dates ................................................................................................................................................. 65 CHAPTER 7. RESERVED. ................................ ................................ ................................ ................................ ......... 66 CHAPTER 8. INVESTIGATIONS AND SANCTIONS ................................ ................................ ............................. 66 Rule Series 8.100. GENERAL PROVISIONS ................................ ................................ ................................ ........................ 66 Rule 8.100. Regulation of IEX and its Members ...........................................................................................................................................66 Rule 8.110. Availability of IEX Rulebook to Customers .............................................................................................................................66 Rule 8.120. Definitions .............................................................................................................................................................................................66 Rule Series 8.200. INVESTIGATIONS ................................ ................................ ................................ ................................ 66 Rule 8.210. Provisions of Information and Testimony and Inspection and Copying of Books ................................................66 Rule 8.220. Automated Submission of Trading Data Requested ........................................................................................................68 Rule Series 8.300. SANCTIONS ................................ ................................ ................................ ................................ ........... 69 Rule 8.310. Sanctions for Violation of the Rules ..........................................................................................................................................69 Rule 8.320. Effect of a Suspension, Revocation, Cancellation or Bar ................................................................................................70 Rule 8.330. Reserved. .............................................................................................................................................................................................70 Rule 8.340. Release of Disciplinary Decisions ..............................................................................................................................................70 Rule 8.350. Payment of Fines, Other Monetary Sanctions, or Costs; Summary Action for Failure to Pay ........................70 Rule 8.360. Costs of Proceedings ....................................................................................................................................................................... 71 CHAPTER 9. CODE OF PROCEDURE ................................ ................................ ................................ ..................... 71 Rule Series 9.000. CODE OF PROCEDURE ................................ ................................ ................................ ........................ 71 Rule 9.001. Regulatory Contract with FINRA ................................................................................................................................................ 71 Rule 9.100. Application and Purpose ................................................................................................................................................................ 71 Rule 9.110. Application ............................................................................................................................................................................................. 71 Rule 9.120. Definitions ............................................................................................................................................................................................. 72 Rule Series 9.130. Service; Filing of Papers ................................ ................................ ................................ ....................... 75 Rule 9.131. Service of Complaints ....................................................................................................................................................................... 75 Rule 9.132. Service of Orders, Notices, and Decisions by Adjudicator .............................................................................................. 75 Rule 9.133. Service of Papers Other Than Complaints, Orders, Notices, or Decisions ................................................................ 76 Rule 9.134. Methods of, Procedures for Service .......................................................................................................................................... 76 Rule 9.135. Filing of Papers with Adjudicator: Procedure ....................................................................................................................... 78 Rule 9.136. Filing of Papers: Form ..................................................................................................................................................................... 78 Rule 9.137. Filing of Papers: Signature Requirement and Effect .......................................................................................................... 79 Rule 9.138. Computation of Time ...................................................................................................................................................................... 80 Rule Series 9.140. PROCEEDINGS ................................ ................................ ................................ ................................ ....... 80 Rule 9.141. Appearance and Practice; Notice of Appearance ............................................................................................................... 80 Rule 9.142. Withdrawal by Attorney or Representative ............................................................................................................................ 81 Rule 9.143. Ex Parte Communications .............................................................................................................................................................. 81 Rule 9.144. Separation of Functions ................................................................................................................................................................. 82 Rule 9.145. Rules of Evidence; Official Notice .............................................................................................................................................. 83 Investors Exchange Page 5 of 474 Rule 9.146. Motions .................................................................................................................................................................................................. 83 Rule 9.147. Rulings on Procedural Matters ..................................................................................................................................................... 85 Rule 9.148. Interlocutory Review ........................................................................................................................................................................86 Rule 9.149. Reserved................................................................................................................................................................................................86 Rule 9.150. Exclusion from IEX Rule Series 9.000 Proceeding .............................................................................................................86 Rule 9.160. Recusal or Disqualification ............................................................................................................................................................86 Rule Series 9.200. DISCIPLINARY PROCEEDINGS ................................ ................................ ................................ ........... 87 Rule Series 9.210. COMPLAINT AND ANSWER ................................ ................................ ................................ ................. 87 Rule 9.211. Authorization of Complaint ............................................................................................................................................................ 87 Rule 9.212. Complaint Issuance – Requirements, Service, Amendment, Withdrawal, and Docketing ................................. 87 Rule 9.213. Assignment of Hearing Officer and Appointment of Panelists to Hearing Panel or Extended Hearing Panel ................................................................................................................................................................................................................................ 88 Rule 9.214. Consolidation or Severance of Disciplinary Proceedings ................................................................................................89 Rule 9.215. Answer to Complaint ...................................................................................................................................................................... 90 Rule 9.216. Acceptance, Waiver, and Consent; Plan Pursuant to Exchange Act Rule 19d-1(c)(2).......................................... 91 Rule 9.217. Expedited Client Suspension Proceeding. .............................................................................................................................. 93 Rule 9.218. Violations Appropriate for Disposition Under Plan Pursuant to Exchange Act Rule 19d-1(c)(2) ...................96 Rule 9.219. Reserved. ............................................................................................................................................................................................... 97 Rule Series 9.220. REQUEST FOR HEARING; EXTENSIONS OF TIME, POSTPONEMENTS, ADJOURNMENTS ....... 97 Rule 9.221. Request for Hearing .......................................................................................................................................................................... 97 Rule 9.222. Extensions of Time, Postponements, and Adjournments ................................................................................................98 Rule Series 9.230. APPOINTMENT OF HEARING PANEL, EXTENDED HEARING PANEL ................................ ........... 99 Rule 9.231. Appointment by the Chief Hearing Officer of Hearing Panel or Extended Hearing Panel or Replacement Hearing Officer ............................................................................................................................................................................................................99 Rule 9.232. Criteria for Selection of Panelists and Replacement Panelists ....................................................................................100 Rule 9.233. Hearing Panel or Extended Hearing Panel: Recusal and Disqualification of Hearing Officers ......................100 Rule 9.234. Hearing Panel or Extended Hearing Panel: Recusal and Disqualification of Panelists ...................................... 101 Rule 9.235. Hearing Officer Authority ............................................................................................................................................................ 102 Rule Series 9.240. PRE - HEARING CONFERENCE AND SUBMISSION ................................ ................................ ......... 103 Rule 9.241. Pre-hearing Conference ................................................................................................................................................................ 103 Rule 9.242. Pre-Hearing Submission .............................................................................................................................................................. 104 Rule Series 9.250. DISCOVERY ................................ ................................ ................................ ................................ ......... 105 Rule 9.251. Inspection and Copying of Documents in Possession of Staff..................................................................................... 105 Rule 9.252. Requests for Information ............................................................................................................................................................. 107 Rule 9.253. Production of Witness Statements ......................................................................................................................................... 108 Rule Series 9.260. HEARING AND DECISION ................................ ................................ ................................ .................. 109 Rule 9.261. Evidence and Procedure in Hearing ........................................................................................................................................ 109 Rule 9.262. Testimony........................................................................................................................................................................................... 109 Rule 9.263. Evidence: Admissibility ................................................................................................................................................................ 109 Rule 9.264. Motion for Summary Disposition ............................................................................................................................................. 109 Rule 9.265. Record of Hearing ........................................................................................................................................................................... 110 Rule 9.266. Proposed Findings of Fact, Conclusions of Law, and Post-Hearing Briefs ............................................................. 111 Investors Exchange Page 6 of 474 Rule 9.267. Record; Supplemental Documents Attached to Record; Retention........................................................................... 111 Rule 9.268. Decision of Hearing Panel or Extended Hearing Panel ................................................................................................... 112 Rule 9.269. Default Decisions ............................................................................................................................................................................. 114 Rule 9.270. Settlement Procedure ................................................................................................................................................................... 114 Rule 9.280. Contemptuous Conduct ................................................................................................................................................................117 Rule 9.290. Expedited Disciplinary Proceedings ....................................................................................................................................... 118 Rule Series 9.300. REVIEW OF DISCIPLINARY PROCEEDING BY IEX BOARD; APPLICATION FOR SEC REVIEW ................................ ................................ ................................ ................................ ................................ ................................ .. 118 Rule Series 9.310. APPEAL TO OR REVIEW BY THE IEX BOARD ................................ ................................ ................. 118 Rule 9.311. Appeal by Any Party; Cross-Appeal .......................................................................................................................................... 119 Rule 9.312. Review Proceeding Initiated by the IEX Board................................................................................................................... 120 Rule 9.313. Counsel to IEX Board and Appeals Committee................................................................................................................... 121 Rule 9.321. Transmission of Record................................................................................................................................................................. 122 Rule 9.322. Extensions of Time, Postponements, Adjournments....................................................................................................... 122 Rule 9.331. Reserved. ............................................................................................................................................................................................. 123 Rule 9.332. Disqualification and Recusal ...................................................................................................................................................... 123 Rule Series 9.340. PROCEEDINGS ................................ ................................ ................................ ................................ ..... 124 Rule 9.341. Oral Argument .................................................................................................................................................................................. 124 Rule 9.342. Failure to Appear at Oral Argument ...................................................................................................................................... 125 Rule 9.343. Disposition without Oral Argument........................................................................................................................................ 125 Rule 9.344. Failure to Participate Below; Abandonment of Appeal................................................................................................. 125 Rule 9.345. Reserved............................................................................................................................................................................................. 126 Rule 9.346. Evidence in IEX Appeals Committee Proceedings .......................................................................................................... 126 Rule 9.347. Filing of Papers in IEX Appeals Committee Proceedings ..............................................................................................127 Rule 9.348. Powers of the IEX Appeals Committee on Review...........................................................................................................127 Rule 9.349. IEX Appeals Committee Formal Consideration; Decision .............................................................................................127 Rule Series 9350. Discretionary Review by IEX Board ................................ ................................ ................................ ... 128 Rule 9.351. Discretionary Review by IEX Board ......................................................................................................................................... 128 Rule 9.360. Effectiveness of Sanctions ......................................................................................................................................................... 129 Rule 9.370. Application to SEC for Review ................................................................................................................................................. 129 Rule Series 9.500. OTHER PROCEEDINGS ................................ ................................ ................................ ...................... 130 Rule Series 9.520. ELIGIBILITY PROCEEDINGS ................................ ................................ ................................ .............. 130 Rule 9.521. Purpose and Definitions ................................................................................................................................................................ 130 Rule 9.522. Initiation of Eligibility Proceeding by IEX Staff; Member Regulation Consideration .......................................... 131 Rule 9.523. Acceptance of IEX Regulation Recommendations and Supervisory Plans by Consent Pursuant to Exchange Act Rule 19h-1 ....................................................................................................................................................................................... 136 Rule 9.524. IEX Appeals Committee Consideration ................................................................................................................................ 138 Rule 9.525. Discretionary Review by the IEX Board ................................................................................................................................. 141 Rule 9.526. Expedited Review........................................................................................................................................................................... 142 Rule 9.527. Application to SEC for Review.................................................................................................................................................. 142 Rule Series 9.550. EXPEDITED PROCEEDINGS ................................ ................................ ................................ ............... 142 Rule 9.551. Reserved. ............................................................................................................................................................................................. 142 Rule 9.552. Failure to Provide Information or Keep Information Current ...................................................................................... 142 Investors Exchange Page 7 of 474 Rule 9.553. Failure to Pay IEX Dues, Fee and Other Charges ............................................................................................................. 144 Rule 9.554. Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution............................................................................................................................................................... 145 Rule 9.555. Failure to Meet the Eligibility or Qualification Standards or Prerequisites for Access to Services ............ 146 Rule 9.556. Failure to Comply with Temporary and Permanent Cease and Desist Orders .................................................... 147 Rule 9.557. Procedures for Regulating Activities Under IEX Rules 4.110 and 4.120 Regarding a Member Experiencing Financial or Operational Difficulties ................................................................................................................................................................. 149 Rule 9.558. Summary Proceedings for Actions Authorized by Section 6(d)(3) of the Exchange Act .............................. 151 Rule 9.559. Hearing Procedures for Expedited Proceedings Under the Rule 9.550 Series.................................................... 153 Rule Series 9.600. PROCEDURES FOR EXEMPTIONS ................................ ................................ ................................ .... 159 Rule 9.610. Application ......................................................................................................................................................................................... 159 Rule 9.620. Decision .............................................................................................................