December 14, 2015
I am a retail investor and do not have a sophisticated knowledge of the subject. However, I do not approve of some market participants being permitted to game the system to the financial disadvantage of other market participants. It appears that HFT's through technical ingenuity have been allowed to front run the market and so skim substantial profits from the market.
To the extent the IEX would blunt the HFT's activities and provide investors with an alternative exchange that shields them from the activities of HFT's I support the IEX application.
Approval of the IEX application is a short term solution that would give investors the opportunity to avoid the predations of HFT's. However, in the absence of rules to the contrary, it is possible that new ways may be developed by the exchanges or their members to unfairly tilt the mechanics of the marketplace in their favour to the disadvantage of other market participants. Because the exchanges are in competition with each other this this kind of behaviour would seem natural. At the same time it seems to me that the exchanges through their trading platforms are providing a kind of utility to the markets. That utility would also appear to be the mechanism through which 'fair, orderly, and efficient markets' is delivered. In other words, the competition between exchanges should be limited to the efficiency of their respective operations and not to the manipulation of the prices of shares passing through their trading platforms.