The Securities and Exchange Commission will delay IEX’s bid to become a full-fledged stock exchange and pointed to a recent tweak to its business model as the reason.
IEX wants to put a 350 microsecond “speed bump” on stock orders as a way to keep out ultrafast traders from taking advantage of slower investors.Rivals, including the New York Stock Exchange and Citadel, who called the speed bump unfair and claimed it would violate existing rules that require exchanges to provide instantaneous quotes.
IEX also says it has plans that would allow its own brokerage clients to bypass the speed bump, which is more than weird.
The SEC said it is evaluating the revised proposals and “whether they constitute unfair discrimination, or impose an unnecessary or inappropriate burden on competition.”
The agency also called for more public input on IEX’s application, which has already drawn hundreds of comment letters. An IEX spokesman declined to comment.
Jeffrey Newman represents whistleblowers.