IEX, the startup stock exchange made famous by Michael Lewis's Flash Boys, has won regulatory approval for a process to open and close a stock. The approval brings IEX one step closer to competing with Nasdaq and NYSE in listing equities. IEX's core mission is to limit the ability of high frequency traders to "scalp" trade from others wishing to participate in the markets.
While US stocks trade on more than a dozen exchanges as well as dark pools, official opening and closing prices typically are set on the listing exchange. The SEC late on Friday also approved IEX’s plan for opening auctions for initial public offerings on listing day and transfers of listings from other exchanges. The group, whose origins are as a dark pool operator, was catapulted to fame as the main character of Flash Boys: A Wall Street Revolt by Michael Lewis. It depicted IEX’s group of traders and technologists as crusaders against a “rigged” market.