In what may be a long overdue victory for the “good guys”, the WSJ reports that the SECs staff has recommended that the agency approve IEX Group Inc.’s “controversial” bid to launch a new stock exchange, signaling likely approval when the agency’s commissioners vote on the order Friday. This decision takes place despite vocal objections of not only Nasdaq, by not only the entire HFT lobby, as IEX’s technology would provide an HFT-free exchange as a result of its 350-microsecond speed bump which would force all traders to be on an equal footing, but most notably despite the repeated complaints by NY Fed darling, HFT powerhouse Citadel (and employer of one Ben Bernanke), which has argued in the past that granting IEX an exchange status would corrupt US equity markets.
That would end months of debate and lobbying over the startup’s proposal to launch the first platform that slows down trading, countering the decadelong trend toward ever-greater speed.
There is still a chance IEX may be rejected in the last moment: according to the WSJ, “the SEC’s three sitting commissioners aren’t required to support the staff’s views, and one may vote no. But the full commission rarely rejects a formal staff recommendation. If the SEC’s commissioners give the green light to IEX, which stands for Investors’ Exchange, it would be the first major new stock exchange in the U. S. since the SEC approved several venues in 2010 that are now owned by BATS Global Markets Inc.”
For regular readers, IEX’ campaign – and symbolism, in a dramatically fragmented market, catering exclusively to well-paying HFT clients who spend millions for the opportunity to frontrun orderflow – is familiar, but here is a brief recap:
This post was published at Zero Hedge by Tyler Durden – Jun 14, 2016.
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