Market Surveillance Services

Description and Responsibilities

IEX Regulation and IEX Market Operations provide real-time surveillance for activity on Investors Exchange to maintain an orderly marketplace and level playing field for investors, market participants, and listed companies. In an effort to foster marketplace integrity, IEX oversees the complete and timely disclosure of material information by IEX-listed companies.

IEX and FINRA conduct comprehensive post-trade surveillance of trading on IEX, designed to provide innovative, fair, and equitable regulation for IEX. When activity is identified that may be potentially in violation of Exchange rules or the federal securities laws, it is subject to further review and potential disciplinary action. Information received by IEX Regulation or FINRA (on its behalf) is confidential and used strictly for regulatory purposes. IEX Regulation implements fair and independent decisions within the scope of its authority and without influence from IEX business or commercial interests.

Disclosure

IEX Rules require that, except in unusual circumstances, companies make prompt disclosure to the public through any Regulation FD-compliant method (or combination of methods) of disclosure of any material information that would reasonably be expected to affect the value of its securities or influence investors' decisions. Companies are required to notify IEX Regulation at least ten minutes prior to the public release of certain material news announcements when the public release of the information is made between System Hours (i.e., 8:00 a.m. - 5:00 p.m. ET). If the public release of the material information is made outside of System Hours, companies must notify IEX Regulation of the material information at least 10 minutes prior to the start of System Hours. This notification must be provided via email to listing-notification@iextrading.com. IEX Regulation does not accept material news disclosures by fax or phone, except in emergency situations. IEX Regulation business hours are from 7:00 a.m. to 6:00 p.m. ET, Monday through Friday. IEX Regulation assesses company disclosures for materiality and in certain circumstances, may implement a temporary trading halt to allow for even dissemination of the information. A trading halt provides the public with an opportunity to evaluate material information and consider it in making investment decisions.

IEX Regulation monitors real time trading in IEX-listed securities during the trading day for price and volume activity utilizing automated surveillance systems. In the event of certain price and volume movements without a reasonable explanation, IEX Regulation may contact a company in order to review the unusual market activity. IEX Regulation treats the information provided by the company and other sources in a highly confidential manner, and uses it to assess market activity and assist in maintaining fair and orderly markets.

Trading Halts

IEX Regulation makes reasonable efforts to conduct timely reviews of material news notifications, reach appropriate determinations regarding the materiality of the announcement, monitor newswires for material news affecting IEX-listed companies and, when appropriate, implement temporary trading halts prior to the public dissemination of the material news. The consideration of temporary trading halts occurs during Regular Market Hours (i.e., 9:30 a.m. – 4:00 p.m. ET) as well as during pre-market and after-hours trading sessions (i.e., 8:00 – 9:30 a.m. and 4:00 – 5:00 p.m. ET). IEX Regulation generally implements trading halts between System Hours. Outside of System Hours, IEX Regulation may implement temporary trading halts at the request of an IEX-listed company when related to material news or in conjunction with a regulatory trading halt imposed by a foreign listing market.

Prior to implementing a trading halt, IEX Regulation will seek to discuss the news with a company official. IEX Regulation may need to ask questions and review the news content in more depth with the company. This is especially common when reviewing disclosures related to clinical trials, FDA-related issues, developments regarding customers or suppliers and legal or regulatory developments. The staff will call the corporate official at the company's main number or will call the corporate official directly at the phone number on file with IEX in order to obtain relevant information. If IEX Regulation is unable to reach a company official to review the materiality of the announcement before the news is made public, IEX Regulation will make reasonable judgement on whether to implement a trading halt prior to dissemination. IEX Regulation may also halt trading once the news disclosure is made public to allow for adequate dissemination to market participants. Such decisions will be made with a view towards protecting the interests of market participants generally, fair and orderly markets and reasonably assuring a level playing field.

In cases where IEX Regulation is unaware material news is about to be made public (such as might occur in the case of an unsolicited tender offer), IEX Regulation will make an assessment once the news is public whether any further steps are appropriate. There may be situations where, due to the passage of time, IEX determines that a trading halt would not be in the best interests of the market. Such decisions will be made with a view towards protecting the interests of market participants generally, fair and orderly markets and reasonably assuring a level playing field. Any trades that occur during the period after news dissemination but before implementation of the trading halt, or that occur if no halt is implemented, will stand unless these trades result from a trading error that meets the requirements of IEX Rule 11.270.

A temporary trading halt benefits existing and potential shareholders by ensuring that material news is distributed equally among all market participants and by ensuring that all trading is based on publicly held facts. Trading is normally resumed in a stock about thirty minutes following the dissemination of the material announcement through the news media or another Regulation FD-compliant manner, although IEX may vary the length of the trading halt in consultation with the company, or when IEX is scheduling trading resumptions around the open or close of Regular Market Hours.

IEX also follows regulatory halts implemented in non-IEX-listed securities by the listing exchange. IEX Regulation is informed of these regulatory halts by data feed or other notification by the primary listing exchange. IEX Regulation attempts to implement these halts as rapidly as possible after notification, but timing is affected by factors similar to those outlined above, including delays in notification by the primary listing exchange.

This Trading Halt description is for informational purposes only. IEX reserves the right to take any and all actions, at any time, to halt or resume trading in securities trading in its system, in accordance with its obligations as a self-regulatory organization.