The prevailing culprits in this - and
we strongly believe this, which is
why we put our money where our
mouth is to set up an exchange -
are the exchanges themselves.
BK: The buy-side is more aware
that some aspects of HFT are good
and other aspects are bad. Even
internally at IEX we realised the
buy-side are more aware of the
difference in how firms act. What
was gratifying during the application process is seeing a letter
of support from Virtu Financial,
which sharply contrasted other
HFT firms that were attacking us.
the creation of advantages for some
to the detriment of others. That’s
what the exchanges have done.
There are many HFT firms that
trade on IEX and there are many
that won’t trade on IEX. When
we designed our technology and
our 350-microsecond delay, the
whole point of that was to create
an equaliser and allow everyone
trading on IEX - whether you’re a
slow or fast trader - you can both
leave with a positive outcome.
That was the thing missed in all of
these arguments. I think market
structure should be the concern for
the buy-side in the US and Europe.
RR: Too often the easy target in this
conversation is HFT being good
or bad for institutional investors.
When you think back to before
‘Flash ‘Boys’ was published, we
quit our jobs to set an up exchange
specifically because the exchange
is the centre of the ecosystem, and
it is the exchanges enabling the
activities of some of these players.
This is a big problem and it continues to be the biggest problem in the
market. From a HFT standpoint,
we have always said that we are
not anti-HFT but we are against
“From a HFT standpoint,
we have always said
that we are not anti-HFT
but we are against the
creation of advantages
for some to the detriment