Cato Anti-IEX Piece; Themis Cowen Market Structure Conference Today!

Sometimes we think that we don’t understand Market Structure. Sometimes we think we don’t understand FPGA chips, and speed bumps, and Fix vs Binary, and delay coils. Sometimes we even think that while we are supportive of competition in the form of a new stock exchange called IEX, with seemingly fair rules of engagement, we must be missing something.

After all, so many really smart people are so bat-$hit crazy against the firm and what they have been doing over the last three years. People like Citadel’s Jamil Nazarali, HRT’s Adam Nunes, Larry Tabb, Modern Markets’s Bart Chilton, David Weisberger , and not to mention University of Alaska Professor Holly Bell, who is even associated with the Cato Institute!

Speaking of the Cato Institute, they just put out a think-tank piece called Special Favors For IEX Will Not Fix Bad Regulation. If you read it you will see that the author believe that IEX is getting a carve-out – an exemption from the rules of Reg NMS. The author also believes that IEX ’s speed bump makes its quotes not immediate, and it is bummed out about that. The author closes by saying that REG NMS should be overhauled and fixed, before any special treatment for IEX is granted.

You should be very aware of who and what the Cato Institute is, if you are not already. It is a think tank dedicated to liberty, freedom, limited government and free markets.  Admittedly, reading their mission I find myself wanting to passionately sign up and read their viewpoint on nearly all things.

At one time it was called the Charles Koch Foundation, before being renamed. And while the Cato Institute is sometimes known as being against any government regulation, it is also known as being specifically against anti climate-change regulation, and against anti Wall Street reform. It is also known to be a longtime ally of Big Tobacco.

We would have personally thought that the Cato Institute would be extremely supportive of a new free market solution to equity trading – in the form of an underdog new upstart firm called IEX!  But then we looked at the board of directors!



Sadly, when big money is involved. Even things we want to love can easily get corrupted and distorted.

Later today, Themis Trading and Cowen will hold our 3rd Annual Market Structure Conference in NYC. We are eager to see many friends, old and new, and to share an afternoon discussing topics from the perspective of investors. Speakers will include Brad Katsuyama and Ronan Ryan, founders of IEX, fresh from their recent SEC Exchange approval. The agenda also features:


  • Mett Kinak, VP and head of Global Equity Market Structure and Electronic Trading at T. Rowe Price, and Sal Arnuk, Partner and Co-Head of Equity Trading at Themis, on trade execution quality
  • Tim Quast, President of ModernIR, and investor relations and financial executives from several publicly traded companies on how market structure is affecting issuers
  • Robert Battalio, professor of finance at the University of Notre Dame, on how maker-taker fees create price distortions and conflicts
  • Jeff Alexander and Linda Giordano of TABB Clarity and John Cosenza of Cowen on optimizing liquidity seeking algorithms
  • Eric Hunsader, CEO of Nanex, who will use visual data to illustrate the complexity of equity market trading


We will take good notes, and report back to all of you, are beloved clients. We hope we will see those of you not in attendance at a future event!