June 16, 2014 / 9:10 PM / in 4 years

Trading venue IEX hires former regulator John Ramsay

NEW YORK, June 16 (Reuters) - IEX Group, the upstart trading venue featured in Michael Lewis’ book “Flash Boys: A Wall Street Revolt,” said on Monday it has hired former regulator John Ramsay as its chief market policy and regulatory officer as it seeks to become a stock exchange.

Ramsay, formerly the acting director of the Securities and Exchange Commission’s (SEC’s) Division of Trading and Markets, will be a liaison for IEX’s dealings with investors, broker-dealers, trading venues, and regulators. He will also oversee the company’s compliance with its regulatory obligations once IEX is registered as a national securities exchange.

The firm was thrust into the spotlight in late March when “Flash Boys” hit the stands, unleashing a fierce debate over the fairness of the U.S. stock market, which the book characterized as overly complicated and rigged in favor of high-speed traders who use their advantages to bilk the system for billions.

IEX opened shop in November with a stated goal of creating a market that was simple and fair. It uses an electronic speed bump to take away any advantages of high-speed traders. It does not pay rebates to entice order flow. It has only four order types versus hundreds at some exchanges, and it is owned by fund companies and individual investors, not by banks or brokers.

“Trading in our equity markets is too complicated, too opaque, and too much affected by conflicts that work against the interests of investors,” Ramsay said in a statement. “IEX is creating a market-based response to these problems, and I am proud to become part of their team in advancing this agenda.”

Ramsay was at the SEC from 1989 to 1994 in the Division of Trading and Markets, and then rejoined the regulator in 2010. From December 2012 to February 2014 he oversaw the group responsible for regulating broker-dealers and self-regulatory organizations, including stock exchanges. He has also practiced as a partner in private law practice, as a senior officer at the Bond Market Association, and as Managing Director and Deputy General Counsel at Citigroup Global Markets.

There are 11 U.S. stock exchanges, including Intercontinental Exchange Inc’s New York Stock Exchange, and venues run by Nasdaq OMX Group and BATS Global Markets. There are also more than 40 Alternative Trading Systems, or “dark pools,” including IEX. (Reporting by John McCrank; Editing by Bernard Orr)

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