IEX Plans Corporate Listings on ‘Flash Boys’ Exchange in 2017


(this article first appeared on Reuters)

IEX Group, the newest U.S. equities exchange operator, is actively courting companies to list their stocks on its exchange, according to a letter sent to potential listing clients that was obtained by Reuters.

IEX plans to begin listing companies in 2017, and is offering “significant incentives” to its initial founding issuers, according to the letter, which did not go into more detail.

IEX declined to comment.

The New York-based company, which was featured in Michael Lewis’s book “Flash Boys: A Wall Street Revolt,” will challenge Intercontinental Exchange Inc’s (ICE.N) New York Stock Exchange and Nasdaq Inc (NDAQ.O) for corporate listings.

“Flash Boys” followed the exchange’s founders as they built what they saw as a more investor-focused market that included a “speed bump” to slow trades by a fraction of a second to help level the playing field for fast and slow traders alike.

The book caused a heated debate on Wall Street after Lewis said the market was rigged by profit-hungry exchanges in favor of high-frequency trading firms.

IEX launched The Investors Exchange on Aug. 19 after operating an off-exchange trading platform for more than 2-1/2 years, and is hoping its unique model will attract business.

“Our exchange is designed to protect long-term fundamental investors from predatory trading strategies that increase costs for your shareholders and can cause unnecessary volatility in your stock,” IEX said in the letter.

NYSE and Nasdaq compete fiercely for corporate listings, from courting initial public offerings to luring companies already listed on their rival exchanges, both of which can be public relations windfalls.

Exchanges charge various listing fees based on factors such as the amount of shares a company lists.

Last quarter, ICE earned $105 million in revenue from corporate and other listings. NYSE lists more than 2,400 companies, according to its website. (www.nyse.com/list)

Nasdaq earned $68 million in revenue from listing services last quarter. The exchange lists around 3,100 companies, according to its website.

NYSE offers listing companies the chance to ring the opening or closing bell on the floor of the New York Stock Exchange, giving them exposure to the TV news channels that broadcast from the iconic location. Nasdaq puts listing companies’ names on an electronic billboard at its Times Square location in New York.

Bats Global Markets (BATS.Z) lists its own stock, but has focused on listing exchange-traded funds rather than companies.

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