24
Brad Katsuyama
Chief Executive Officer
IEX Group
PNR

Long waits for regulatory approvals — par for the course in the financial industry — might try the patience of entrepreneurs intent on disrupting the old order. Brad Katsuyama, however, wasn’t driven to distraction by the Securities and Exchange Commission’s deliberations on IEX Group’s application, filed in August 2015 and approved on June 17, to become a full-fledged national exchange. All the while, he had a business to run, having launched the upstart, buy-side-owned IEX alternative trading system in 2013. After being portrayed heroically in Michael Lewis’s 2014 best seller, Flash Boys, Katsuyama was continually debating opponents of what he presented as a “fair and simple” antidote to established exchanges’ costs and complexities. The application process “forced all parties to be transparent about what they stand for,” says the 38-year-old. Those that supported IEX’s bid — including Franklin Templeton Investments, Goldman Sachs Group and OppenheimerFunds — were prominently thanked on the company’s website. New York–based IEX’s primary innovation, developed in-house, is a 350-microsecond “speed bump” that is designed to negate the advantages used by some predatory high frequency traders. “Pension, mutual and hedge funds don’t care about microseconds, and they’re the real liquidity providers for the market,” Katsuyama says. “The world doesn’t need another exchange selling microwave products.” IEX’s ranks have grown rapidly: It hired employee No. 50 in January 2015, and 22 more through mid-July 2016. CEO Katsuyama’s senior team combines colleagues he previously worked with at RBC Capital Markets — chief technology officer Rob Park, president Ronan Ryan, COO John Schwall — with the likes of chief market policy officer John Ramsay, a former SEC trading and markets division head; chief regulatory officer Claudia Crowley, who was CEO of NYSE Regulation; general counsel Sophia Lee, formerly of Liquidnet Holdings; and chief strategy officer Eric Stockland, who joined in June from KCG Holdings and had represented KCG on IEX’s Quality of Markets Committee. Says Katsuyama: “We have to ask, Do we want to follow other people’s models or forge our own path? We spend a lot of time meeting with companies outside our core business and thinking about how we can incorporate those ideas.”


 
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