September 13, 2016
Chair White, Commissioners, and Members of the Equity Market Structure Advisory Committee, thank you for the opportunity to comment on the Access Fee Pilot now that the IEX is operating as a stock exchange.
The IEX has no maker or taker fees for lit quote executions, and yet it only manages to attract a tiny fraction of the daily volume to its market. Based on this, I think simply eliminating or reducing the maker/taker fees, as per the Access Fee Pilot committees recommendation, will do little to drive volume back to the lit markets.
Given the interest in gathering data for new policy, I encourage the committee to include some form of trade-at pilot to see if forcing either execution on lit exchanges or price improvement off-exchange improves execution quality. I imagine that it will, given the reduction in adverse selection, the number of hidden and midpoint orders on lit exchanges, and the built-in price improvement for dark trading.
It is unfair for off exchange quotes to get execution preference at lit prices with no price improvement.