January 31, 2016
I am in no way an expert on the stock market. But I know that individual retail investors generally face disadvantages when pursuing investment strategies for their retirement portfolios and their children's investments for college. In other words, individual investors like myself are directly and often unfairly impacted by how the markets perform and execute trades to support their important investment goals. While I have read articles about sophisticated traders and market participants who employ short term strategies tied to high speed trading, my focus as a mother is investing in a disciplined and careful way for my own needs and my children's future through what I hope are fair stock executions that don't take advantage of me. I am aware that well-financed opposition exists to IEX's exchange application, and I sense that this opposition seeks to protect a status quo that generally hurts small investors and benefits the powerful. This opposition seems to be directed at a speed issue that is rather arcane to the common investor, something involving a margin of error that must meet some level of acceptance based on a speed delay or speed bump being 350 microseconds.
I did some research and note that one James Angel, a professor of finance at Georgetown University's McDonough School of Business, believes that U.S. stock exchanges are competitive enough and that if one exchange isn't providing good service, the market will correct itself and shift into other exchanges. If this is the case, wouldnt it be reasonable to grant a competitive option and allow IEX to operate as a full stock exchange? As Professor Angel stated better than I might:
"The SEC should not be in the business of micromanaging the details of how stock exchanges operate. Stock exchanges should be free to experiment with different ways of running their business."
I urge the SEC to let the market dictate IEX's success or failure. Competition and choice typically benefits consumers/users. I welcome the goal of IEX to be an alternative and potentially better option for true long term stock investing and not for fast stock traders who seem to exploit earnest retail investors like me.
I appreciate your time and consideration of my general views on this issue. Please exercise your best possible judgment on IEX's application and please consider and respect the needs of all investors.
Sincerely,
Carol Mack