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Recently, the global investment banks Goldman Sachs
and Jeffries along with
the High Frequency Trading (HFT) firm
Virtu submitted comment letters to the SEC in support of IEX. These are required reading for
any HFT or Wall Street Bank with a trading desk or Dark Pool. Here are a few of the benefits
your firm will enjoy and why you should support IEX's application to become an NMS Exchange:
- For HFT, you will be viewed as one of the "good" HFT who do not rely on nefarious
quote fading and latency arbitrage.
- Lower data fees. IEX policies will put the spiraling out of control rise in data
feed costs in the spotlight for many years to come.
- The market for executing retail orders will open up. The outrageous lengths
that Citadel is taking to protect internalization is all you need to know that it's
a wildly lucrative business and in grave jeopardy if the IEX application is approved.
- For Wall Street banks: it will slow down Citadel's take over of the rest of your trading business - think
Bonds. They have been using the recent negativity to argue for relaxing rules to
allow them into your other lines of business.
- Your support will likely win you buy-side commission dollars from brokers who still think
it's OK to have a prop trading desk "making markets" in 7,000 names in
their own
dark pool (it's not OK: buy-side should start CYA actions and finding other
places to trade like IEX).
- IEX will eventually gain approval - you will gain positive free publicity from your
supportive actions.
Be like Goldman and Virtu: write a letter and help change the market for the better.
How to submit an SEC comment letter on IEX.
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