MMI Comment Letter to the SEC Regarding the IEX Exchange Application

Based on our reading of IEX’s comment letters, we believe IEX realizes it will need an extraordinary exemption for its unprecedented functionality and has sought to frame the Commission’s approval decision thusly: “Is there room in the national market system for an exchange to adopt any means, however narrowly drawn, to counteract the more pernicious aspects of speed-based trading?1

”By its stated premise, IEX creates a burden of proof it fails to meet. It does not provide any data establishing the presence of “pernicious aspects of speed-based trading” that should compel the Commission to allow exchanges to adopt “any means” to remedy them. At its thesis, this Application demonizes high frequency trading while providing no basis for its conclusions.