SEC’s approval of IEC speed bump plan gets hurdled by NASDAQ as it threatens to sue Securities and Exchange Commission, if it goes ahead with the approval of competitor’s plan of fully fledged stock market exchange.
What NASDAQ’s attorney says is that speed bump plan (where order is delayed by 350 micro seconds) violets SEC’s own policy where approval of IEC’s offer of stock exchange and order should be available immediately to the traders.
This application of IEC also drowns opposition from New York Stock Exchange and other heavy weights of hedge funds. June 18 is a deadline to approve or reject IDEK Corporation (IEX) which includes speed bump plan.
As per attorneys at Gibson, Dunn and Crutcher, “This interpretation is unlikely to survive in judicial scrutiny”.
NASDAQ raises warning over IEC application and SEC has asked public option about it. In which many responses are started coming in by questioning the legal interpretation of the approval.
In a stiff reply from IEX’s John Ramsay-Chief marketing policy officer said, “NASDAQ is lost ground on merits and competition and debate is over”. NASDAQ wants to stay off from competitions at any cost whatsoever.
Mr. Eugene Scalia (son of late Supreme Court justice Antonin Scalia), has prepared along with other attorneys the letter for Gibson and Dunn and submitted to SEC. However, NASDAQ spokes person declined to comment on any of the developments taking place.
One argument IEX’s founders says that, “ Speed bumps, saves our customers from speed traders, who makes bulk buys and doesn’t take care of small orders for short term gains.” IEX and its well wishers say that this makes sense for small investors to make money, otherwise, big fish take it all.
The owner of the NASDAQ stock exchanges refused this comment by terming it against competition law. NASDAQ spokes person says that it is nothing but just desire to become big and making their own rules in the stock market. There is a so much confusion has been created around approval of IEC’s stock exchange and its speed bump plan. SEC is also under pressure whether to approve IES’s own plan or to reject it.
IEX’s Speed bump plan is explained as where 350 microseconds speed bump is a thousand times faster than blink of an eye. US share trading has undergone a sea change over the years which are beneficial to all. Now there is technology lag where shares can be traded, bought and sold at fraction of second.
As per public opinion of some of the technological expert, it seems few people are ready to give it a try, if it is beneficial to small traders. Their arguments seem holding ground that US is a big economy and we have implemented technology much in advance and before anybody could have imagined. But arguments here surrounds that it should be only for small investors and not for big investors.
At this point of time trading still held by human beings and intervention can be less if more technology is introduced in the future. It is however still required for the smooth functioning of the market.