IEX, the company founded by “Flash Boys” hero Brad Katsuyama, has won the backing of the Securities and Exchange Commission’s staff in its bid to become an exchange, according to a report from The Wall Street Journal.
According to WSJ, the SEC staff recommended the company win its bid to become an exchange. That suggests that IEX will win full approval when the SEC’s commissioners vote on the matter Friday.
IEX had no comment on the report.
IEX in September filed with the SEC to become a stock exchange, triggering an ugly war of words between its backers and its enemies.
Opponents of IEX’s plan say that approving the application could destabilize the stock market. They include the New York Stock Exchange and Nasdaq, which — through its law firm — said that the SEC could be sued if it approves IEX’s application.
Primarily at issue is IEX’s use of a “speed bump” when routing orders, which the firm says puts all traders on its platform on a level playing field. Existing exchanges have said this results in investors using IEX’s platform receiving stale quotes for their trades.
Business Insider recently sat down with Katsuyama and discussed high-frequency trading and the firm’s journey. We asked Katsuyama, who was named to Business Insider’s inaugural Creators list, what would happen if the SEC approved the IEX application.
Here’s the excerpt from the interview:
Matt Turner: You’ll have news by June 18. What will happen if you get good news?
Brad Katsuyama: If there is good news, the brokers will need some time to connect and configure their systems, and we will give them some time to do that, and a couple months after that it would be our official launch date.
We also asked how he was feeling ahead of the big decision. He said:
Katsuyama: I try not to think about it too much. It is just another data point. Everything that needs to be said has been said. We’ve done what we can do, and I do believe we’ve done enough.