December 19, 2015
I am a small, non-professional investor and am writing in support of Investors' Exchange (IEX) application to become an exchange.
I have most of my savings - retirement and brokerage - held by retail platforms, Fidelity and TDAmeritrade. TDAmeritrade has admitted accepting payments from high-frequency traders (HFT) in return for data about transactions of their customers. I view this as completely antithetical to a healthy client relationship. I have asked, formally, for TDAI to allow me to route orders to IEX, but they have refused on multiple occasions.
FINRA, as I understand it, is a financial industry self-regulator. FINRA has regulations, such as Rule 5310 providing for Best Execution requirements. My reading of FINRA Rule 5310, supplemental materials .08 and .09, is that each member firm has an obligation to periodically seek out new platforms and new technologies that may provide trading efficiencies, and that I, as a customer, may seek to override a firms judgment as to what constitutes best execution, by providing written instructions, such as Please direct all of my equity orders to IEX. TDAmeritrade refuses to accept such a letter, because they have not established a formal relationship with IEX, despite the fact that they have had ample time to do so and a formal relationship with IEX costs TDAmeritrade nothing unless they route orders to IEX, and then the pricing is comparable to any other platform.
Given that IEX has a business model that fundamentally incorporates fairness for all market participants, big and small, buyer or seller, I would request that the SEC do whatever is necessary to expedite IEX's application to become an exchange.
Respectfully,
Dan Harrison