IEX is run by the people at the center of the Michael Lewis book, “Flash Boys: A Wall Street Revolt,” which profiles the early efforts of the IEX team to create a trading exchange that would be somewhat shielded from high-frequency traders.
.. Other exchanges and trading firms had urged the S.E.C. to reject the IEX application to become an exchange.
.. The most novel and controversial feature of the IEX exchange is a so-called speed bump that would slow down trading slightly to throw off traders that rely only on speed.
.. The speed bump slows trades down by only 350 microseconds — or millionths of a second — but that is an eternity in a stock exchange universe in which computers can buy and sell stocks in nanoseconds — or billionths of a second.
.. IEX won support — and financial backing — from several large mutual fund companies, which said that the exchange would help them trade more cheaply and efficiently, as well as from hundreds of small investors, many of whom read “Flash Boys” and wrote in to the S.E.C.
.. In a letter written in May, Nasdaq’s lawyers suggested that the S.E.C. could face a lawsuit if it approved the IEX application.