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April 2, 2014

IEX Welcomes High-Speed Traders, as Long as They Behave

“IEX Group Inc.’s trading platform was built to combat predatory practices. That doesn’t mean it’s on a crusade to kill high-frequency trading firms.

“Chief Executive Officer Brad Katsuyama, whose firm is the subject of Michael Lewis’s new book “Flash Boys,” welcomes all kinds of traders on his five-month-old platform that’s trying to reshape the $22 trillion U.S. equity market. Virtu Financial Inc., one of the biggest high-speed trading firms, trades on IEX, for instance.

“It’s not about being anti-HFT, but about being pro-fairness,” Katsuyama said during an interview today. “It would be easy for us to go after Virtu or an HFT firm because of the way we’re being shaded. But it’s not fair because although they are only a small percentage of our overall volume, they are a good contributor of value to our market.”

“IEX aims to level the playing field for investors by curbing the pace of buying and selling — eliminating opportunities for the fastest firms to trade in front of slower ones. To avoid conflicts of interest, IEX doesn’t let brokers or traders such as Virtu own stakes. Only money managers such as Brandes Investment Partners, David Einhorn’s Greenlight Capital Inc. and Bill Ackman’s Pershing Square Capital Management LP are owners.”

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Read full Bloomberg article here.

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