Photographer: Chris Goodney/Bloomberg
IEX Group Inc. Chief Executive Officer Brad Katsuyama.
Norway’s $880 billion sovereign wealth fund, the world’s largest, is throwing its support behind Brad Katsuyama’s new exchange.
Katsuyama’s IEX Group Inc., made famous inMichael Lewis’s best-selling book “Flash Boys,” could shield investors from the predatory habits of high-frequency traders, said the fund, which holds $521.2 billion in stocks globally and is Europe’s biggest equity investor.
“IEX is a trading venue where all players participate on the same terms,” oil fund spokesman Thomas Sevang said in an e-mailed response to questions. “We support this.”
IEX, which the oil fund uses for both direct and indirect trades, doesn’t pay firms to buy or sell shares, shunning a practice that many markets use to lure business from high-speed traders. It mandates a 350-microsecond delay between requests to trade and executions to prevent traders from pre-empting their moves through high-frequency maneuvers.
Concern about dark pools was amplified after the publication of “Flash Boys,” which portrayed an equities market where exchanges, broker-dealers and high-frequency traders are conspiring to cheat investors.
The book says the firms involved helped rig the $22 trillion U.S. stock market. The story centers around Katsuyama, who was global head of electronic sales and trading at RBC Capital Markets LLC before becoming president and chief executive officer of IEX, and his efforts to shed light on the alleged practice of front-running investors by gathering data on their trades before they’re executed and then acting on that information.
Please read more here.