This is getting ugly.
IEX― a trading venue made famous by Michael Lewis’ “Flash Boys” – and the New York Stock Exchange have gotten into a messy war of words over IEX’s exchange application.
The latest instalment of this back-and-forth battle arrived Thursday.
In an earnings call Thursday, Jeffrey Sprecher, chairman and CEO of ICE, which owns the New York Stock Exchange, said that IEX would become a “regulated monopoly” if it were to become an exchange, according to Lisa Beilfuss and Bradley Hope over at The Wall Street Journal.
“I don’t think it’s fair. It is un-American and not fair and not the way our systems should work,” he said, according to Beilfuss and Hope.
Brad Katsuyama, CEO and cofounder of IEX, then responded. In a statement to Business Insider, he said:
“It’s ironic that the supposed centrepiece of American free-market capitalism is using behind-the-scenes political pull to obstruct a new entrant from competing. We stand by our research and would challenge NYSE to prove us wrong. And we find it disingenuous that a company that sells fast lanes and slow lanes, buys patents and IP at an alarming rate, is accusing a new entrant of attempting to create a monopoly. If you want to talk about a regulated monopoly, look at NYSE market data as a start.”
Upstart trading venue IEX
filed with the Securities and Exchange Commission in September to become a stock exchange, kicking off a heated debate of the merits of its application.
The New York Stock Exchange was among those to lodge objections, likening IEX to the “non-fat yogurt” shop on Seinfeld.
IEX replied, calling NYSE’s feedback to the SEC at various points as “disingenuous,” “categorically wrong,” “ironic,” and “unfounded.”
At issue in this whole debate is the IEX speed bump, which IEX says levels the playing field between high-speed traders and the rest of the field. The NYSE said the IEX speed bump would “result in the investors receiving stale and misleading quote information.”
In an op-ed posted on the IEX website on Sunday night, IEX cofounder Don Bollerman says NYSE also has a speed bump. That oped said:
NYSE’s speed bump was intentionally imposed on existing participants with very little disclosure, and without any review or approval by the SEC.
This is unlikely to be the last of it in what has been a long-running back-and-forth battle.
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