Searched for "peg" in that rule book and came up with this section: Rule 11.190. Orders and Modifiers (b) Order Parameters (10) Discretionary Peg Order (C) Is not eligible for routing pursuant to IEX Rule 11.230(b) and (c)(2).
Indeed, as per the rulebook "Is not eligible for routing pursuant to IEX Rule 11.230(b) and (c)(2)." But I guess in a way that probably makes sense given what a D-PEG is meant to achieve, i.e. it would be difficult to route away and yet still maintain the protections against adverse selection etc. You can't really exercise price discretion if you've routed it away into the hands of the HFTs where you have to bend over and take what you're given. In further support of the above, as Brad Katsuyama said in his recent Bloomberg interview (https://www.bloomberg.com/features/2016-brad-katsuyama-interview/?cmpid==socialflow-twitter-business): "D-peg is about preventing trades from happening" and "D-peg was our answer—to say, “Some people are guessing, with a very high degree of accuracy, that the quote’s about to move.” Do we necessarily want to take a buyer and throw them up to the midpoint if we think they’re going to get run over?"
FYI, its has been a long and hard battle but a little birdie sent me a link earlier.... https://ibkb.interactivebrokers.com/article/2844 Hopefully its true ! Wish they didn't make it quite so difficult ! There was certainly a lot of ->