Unpublished and scheduled to drop tomorrow. This will close several loopholes that market makers and HF have over retail investors for all trades routed to IEX.
The purpose of the proposed rule change is to enhance the Exchange’s Retail Price Improvement Program for the benefit of retail investors. Specifically, the Exchange proposes to make the following four changes: (i) revise the definition of Retail order in IEX Rule 11.190(b)(15) to apply only to the trading interest of a natural person that does not place more than 390 equity orders per day on average during a calendar month for its own beneficial account(s);7 (ii) provide Order Book8 priority to Retail Liquidity Provider (“RLP”) orders9 at the Midpoint Price10 ahead of other non-displayed orders priced to execute at the Midpoint Price; (iii) disseminate a “Retail Liquidity Identifier” through the Exchange’s proprietary market data feeds and the appropriate securities information processor (“SIP”) when RLP order interest aggregated to form at least one round lot for a particular security is available in the System,11 provided that the RLP order interest is resting at the Midpoint Price and is priced at least $0.001 better than the NBB12 or NBO13; and (iv) amend the definition of RLP orders so such orders can only be midpoint peg orders,14 cannot be Discretionary Peg orders,15 and cannot include a minimum quantity restriction.16 The proposed changes are designed to further support and enhance the ability of non-professional retail investors to obtain meaningful price improvement by incentivizing market participants to compete to provide such price improvement.
Retail Liquidity Provider means a broker that routes retail orders through the IEX. You can call your broker and see if they are an RLP for IEX.
Read some of the DD to learn a bit on how non displayed orders are likely being used by citadel and friends to manipulate the price.
Overall, it seems like a major step in the right direction to help level the playing field. It looks like it has to go through the traditional comment period before approval. (Not an advance notice).
TL;DR: This completely negates the ability for other firms to see retail orders before execution and then act accordingly to manipulate the price. This would give retail orders Priority over other non-displayed orders. It would also force the broker to enter the trade at the midpoint price (Ie between ask and bid). Previously, this could be manipulated to decrease the price by consistently filling orders at lower and lower prices so that even though people are buying, the price drops.
Still reading will add more as needed.