The 13th U.S. stock exchange began trading in 2016: IEX, which aims to fight predatory, computer-based high-frequency trading. The new exchange, cofounded by Brad Katsuyama, aims to compete with Nasdaq and NYSE and is supposed to offer a fairer shake to everyone trading on the market by using a “speed bump” that essentially forces high-frequency trading machines to place trades at the same rate as other players. The existence of this new exchange and its approval by the Securities and Exchange Commission has rattled the industry. Nasdaq threatened to sue the SEC ahead of its decision, and several representatives from high-frequency trading firms attempted to deter the SEC from awarding IEX exchange status. But IEX has prevailed. So far, it has an average market share of 1.95%.
IEX is slowly ramping up. It started in 2016 by slowly adding stocks to its marketplace, mostly adding those less likely to be traded in order to ensure the exchange didn’t have any problems. In November 2016, the company hired Sara Furber, who previously served as managing director at Morgan Stanley, to be the exchange’s head of listings. A number of companies have expressed an interest in listing because of frustrations over competing with high-frequency traders. IEX plans to allow companies to list starting in 2017.