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Markets

SEC likely to approve 'Flash Boys' exchange

Opening sequence

Opening sequence

Markets

SEC likely to approve 'Flash Boys' exchange

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COMING UP:SEC likely to approve 'Flash Boys' exchange

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Transcript

00:00:01
>> In the fast pace world of trading, one man is trying to slow things down with a new kind of exchange. Brad Katsuyama the subject of Flash Boys, the Michael Lewis book about high frequency traders front running retail investors with souped up lightning fast computers may be close to opening an exchange with Speed Bumps.
00:00:20
According to the Wall Street Journal, an advisory panel at the U.S. Securities and Exchange Commission on Tuesday, recommended that Katsuyama's investors exchange or IEX be approved. But the big players like the New York Stock Exchange, the NASDAQ, and others are fighting to stop that from happening. Reuters correspondent Chuck Mikolajczak covers the exchanges.
00:00:41
>> IEX believes that their speed bump benefits retail investors because it stops high frequency traders from jumping ahead when they see an order. And by the time a retail investor will get there they won't be able to get the price that they thought they were gonna be able to get.
00:00:59
The exchanges on the other side are saying the regulations specifically state there cannot be an intentional delay. IEX's speed bump is an intentional delay.>> The NASDAQ has threatened to sue the SEC if it approves the speed bump design. Saying that it violates rules that ensure immediate trades, but Mikolajczak says that big exchanges have other issues with it.
00:01:21
>> What this'll do, it will bring volumes down. So if you're bringing volumes down, you're also bringing down revenue on the exchanges.>> The SEC has a June 18th deadline to vote on the proposal.