[ I N D U S T R Y
P R O F I L E
I
n June this year, the Securities
and Exchange Commission
(SEC) officially approved
the Investors Exchange’s (IEX)
application to become a registered
trading venue. Brad Katsuyama,
chief executive officer at IEX,
wrote a letter following the SEC’s
decision and said: “It’s been quite a
journey…”
He added: “We have faced several
obstacles along the way and we
learned along the way, but we hope
our partners realise that our team’s
hearts and minds are in the right
place”
The regulatory approval was a
controversial decision and saw
companies like Citadel and the
New York Stock Exchange (NYSE)
voicing their concerns. Nasdaq also
threatened legal action against the
SEC over its decision. We caught
up with co-founders of IEX, Kat-
suyama and Ronan Ryan - presi-
dent at the exchange - to discuss
what has happened since it became
a registered trading venue.
Hayley McDowell: You’ve been an
exchange for a little while now, it
was a controversial move and you
received a lot of hostility from
incumbent exchange groups like
NYSE and Nasdaq. Are you experi-
encing that same hostility now and
do you think your exchange status
could be under threat due to this?
Brad Katsuyama: We don’t see any
threat to the status, but what’s
happening now is that the hostility
has shifted back to being private
rather than public. One of the
benefits of the public comment
to the Securities and Exchange
Commission is that it allowed our
supporters - Franklin Templeton,
T. Rowe Price, even players like
42
TheTrade
Winter 2016
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I E X
C O - F O U N D E R S ]
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questioning the role of the stock exchange.”
BRAD KATSUYAMA
Goldman Sachs and Virtu Finan-
cial - to write positive commentary
about IEX and why it should be
approved. I think that forced the
incumbent exchanges to publicly
state their opposition to a market
that was designed to protect inves-
tors. I think that for us it was an
extremely interesting - and in some
ways gratifying - process because it
showed what was at stake.
After ‘Flash Boys’ a lot of people
thought this was just marketing,
but very clearly it does matter,
to the extent that a competitor
(Nasdaq) threatened to sue its own
regulator over the approval of a
new marketplace. We’ve been un-
der attack since IEX was founded,
so this is something we’re used
to. I guess our critics feel that the
only way to get your point across