April 23, 2020 - In a letter submitted to the SEC today, the FIA Principal Traders Group encouraged the Commission to disapprove the Proposal citing among other things that:
- The IEX proposal is beset with many of the same issues that led the SEC to disapprove the EDGA asymmetric speed bump.
- IEX does not adequately analyze the trading activity occurring when the crumbling quote indicator (“CQI”) is on, nor does it demonstrate that the D-Limit order would not permit unfair discrimination against liquidity taking orders that are not related to latency arbitrage.
- IEX has failed to establish that there is any difference between the technology employed by liquidity takers and liquidity providers that would justify the discriminatory aspects of the D-Limit order type.
- IEX fails to demonstrate the extent to which latency arbitrage is a problem on IEX, nor to what extent the Proposal would reduce latency arbitrage.
- There is no de minimis threshold on quote accessibility.
Finally, FIA PTG reiterated their previous comments that market resiliency could be impacted "if market-wide systemic quote fading is allowed." Now is certainly not the time to implement any changes to market structure that could introduce additional fragility into the national market system. Accordingly, FIA PTG again respectfully urges the Commission to disapprove the IEX Proposal.
