IEX has filed a change to how newly received, bookable Discretionary Peg orders behave during unstable quotes. When the order’s selected indicator is on, it would post at the less aggressive of one minimum price variation outside the same-side national best quote or its limit, rather than first seeking a midpoint execution. The 15 October filing became immediately effective; the SEC published its notice on 26 October. Operational implementation will follow a separate IEX trading alert.[1]
D-Peg users select either the Crumbling Quote Indicator, which signals quote instability, or the Quote Imbalance Indicator for the order. When that selected indicator is off, a new bookable order first seeks execution at the less aggressive of the midpoint or its limit; any remainder then posts. The amendment preserves the existing protection for orders already resting on the book.[1]
Which orders change—and which do not
D-Peg treatment by state and time-in-force
| Situation | Initial or resting behavior | Practical consequence |
|---|---|---|
| New bookable D-Peg; selected indicator off | First seeks midpoint-or-limit execution; any remainder posts | An immediate eligible execution can precede resting on the bookSource 1 |
| New bookable D-Peg; selected indicator on | Posts at the less aggressive resting price rather than initially at midpoint | Reduces the chance of an immediate execution at a price IEX considers unstableSource 1 |
| Already resting D-Peg; selected indicator on | Trades only at its resting price | No new change to the established protectionSource 1 |
| IOC or FOK D-Peg | Continues to seek immediate execution at midpoint or limit, regardless of the selected indicator | The amendment is not a blanket restriction on every D-Peg instructionSource 1 |
For a broker router, the changed sequence matters: an incoming DAY order that previously could take midpoint liquidity during an indicator event may instead rest. The client’s limit has not changed, but the timing of a fill can. IOC and FOK instructions remain outside this new bookable-order treatment.[1]
IEX says it will give at least ten days’ notice of implementation and implement within 90 days of effectiveness. Router testing therefore needs to cover both indicator states and distinguish newly arriving orders from already resting interest.[1]
Sources & further reading
- SR-IEX-2026-42: D-Peg behavior during quote instability or imbalance U.S. Securities and Exchange Commission · 26 Oct 2026 · Accessed 30 Oct 2026