IT IS a ruse familiar to officials the world over: if you have embarrassing or controversial news, release it on a Friday, the later the better. The decision on June 17th, a Friday, by the Securities and Exchange Commission (SEC), Wall Street’s main regulator, to approve a new stock exchange sounds mundane. But the fact that the briefing explaining the agency’s reasoning was scheduled for 8pm gives a sense of the awkwardness of the topic.

IEX, the newly approved exchange, has one distinctive feature. Whereas most share-trading venues pride themselves on the speed with which trades can be executed, IEX promises to slow down transactions deliberately, with a “speed bump” of 350 millionths of a second. This idea has been controversial for two reasons. First, it is hard to reconcile with rules that oblige an exchange to execute a trade immediately, at the best available price, even if that means sending it to a rival market. Second, by attempting to slow things down, IEX is taking aim at a system it believes is rigged to favour ultra-fast high-frequency traders (HFTs) at the expense of the investors and companies that stockmarkets are supposed to...Continue reading