Odd Lots - 49: The Man Who Wants to Better Trading by Slowing It

Episode Date: October 12, 2016

Brad Katsuyama has racked up oceans of newspaper ink since being propelled into the public spotlight as the protagonist of Michael Lewis's book on high-frequency trading, Flash Boys. The 38-year-old co-founder and chief executive of IEX, an exchange with a 'speed bump' designed to slow down lightning-fast traders on behalf of longer-term investors, won U.S. regulatory approval in June. In this special edition of Odd Lots, Katsuyama speaks with Bloomberg View Columnist Matt Levine about the next big steps in stock market structure. See omnystudio.com/listener for privacy information.

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slash audio. That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor. Put knowledge to work and grow your business. with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at cIT.com. Put knowledge to work. Hello and welcome to another edition of the Odd Lots podcast. I'm Tracy Allaway, executive editor of Bloomberg Markets. And I'm Joe Wisenthal, managing editor at Bloomberg Markets. Joe, this is a special, special episode of the podcast. It's special because we're not on it, right?

Yeah. It's extra special because we've edited ourselves out. No, we are going to be playing an interview today that Bloomberg View columnist Matt Levine and a friend of this podcast, as you know, has done with Brad Katsuyama. He is the co-founder and CEO of an exchange that I think we've all heard of. It's called I-E-X.

You might remember it from such movies as Michael Lewis's, or movies, such books as Michael Lewis's Flash Boys. Right. This was the exchange, because there's been all this anxiety about high frequency trading, right? Exactly. So Flash Boys is about the evils of high frequency trading and how they're messing up markets. There were some examples in there that some people took issue with. But basically, high frequency trading is the villain of Flash Boys. Certainly a lot of politicians. Certainly a lot of politicians and regulators seem to be on board with that view. And then we had IEX that sprang forth from this guy called Brad Katsuyama.

And IEX was basically the antithesis of high frequency trading. They kind of install speed bumps to prevent people from doing that. And they're supposed to be a different way of trading, a better way of trading. And I mean, the book is worth reading. I don't know if you've read it. But what's definitely worth listening to is this interview. Great. Well, this is an interview.

It's associated with the November 6th edition of Bloomberg Markets Magazine. And I hope everyone enjoys it. There's sort of an origin story for IEX. You were a trader at RBC almost 10 years ago. You noticed that there was that, you know, you'd try to buy 100,000 shares. You could only get 25,000 of them. You're wondering what was up. thought it was a software problem, eventually figured out that it was a sort of issue with the

structure, with the deep structure of the U.S. stock exchanges. So you built a thing at RBC that would help your clients avoid that and get the full 100,000 shares. Then you were like, well, we can do this more broadly. And so you built a trading venue called IEX that did the same thing, that you coiled wire in a shoebox so that when people sent you an order for 100,000 shares and you had 25,000, you'd give them the 25,000. And before you told anyone else about those 25, thousand, you would run to the other exchanges, get the other 75,000 that were displayed, and give people the full size of their order. And that was kind of like the origin story of IAX that's told in Flash Boys. It's sort of a plot of Flash Boys. I've seen you tell it on stage.

And now that you become a stock exchange, it occurs to me that that story is not quite true anymore, right? Like the thing that is the sort of basis of the origin story is this router that skips the speed bumper that allows people to get all the shares before the high-frequency traders learn about it and can race ahead of them. And as part of the SEC process, you had to take that out. So I want to hear just kind of what your thought process on that was. Like, do you miss it? Was there ever a moment when you said we'd rather not be in exchange than do this? Part of the story was that we realized that when we were trying to buy or sell stock across the broader market, that executions at the venues that we got to first would lead to fading of

liquidity or trading ahead at other venues. And so we originally started IEX, under the premise that we would be this router for clients that wanted to trade through any broker, could send a routable order to IEX, and we could get that order out to the market. And that was the original premise that we started with. And thank goodness, it evolves because we're routing, I think, 40 to 50 million shares a day. We're matching 10 million shares of that on our own market, which means that if that was our only premise, we would be doing a very small amount of volume on IEX and sending a lot of volume elsewhere. And I think the way that the concept evolved was to say or ask the question,

well, why does, why can someone get a signal from one place and get to the next? And it really came down to co-location and this idea that people could pay to put their servers as close as possible to the exchanges, get fast information. And now with microwave connectivity, etc. can beam orders to other markets faster than people that are traveling through cable or people that don't have the same level of sophistication or have paid for the same level of access. And so when we thought about it, you know, RBC as a broker could only solve a very narrow part of the problem. And the problem was broader because not only for orders that were routed, what about orders that are resting on the exchange or what about orders that are pegged on

exchanges, how are those orders treated when there's this huge kind of disparity between who knows what, when? And that evolved into things such as, you know, discretionary peg and midpoint peg and basically the involvement of the speed bumps. So I think if we had stayed as focused only on the router, I don't know if I-X would have made it, because the router became secondary to our operation as a market. And so you don't miss the former structure of the The benefit, I guess the slight change now is the fact that the router trades a little bit less on IEX, because the router doesn't know there are certain orders that are displayed and there are certain orders that are not displayed. And then non-displayed orders aren't being broadcast to the router because that would create an unfair advantage. Even though that advantage exists for certain exchanges today, hopefully that gets addressed.

But from our standpoint, so it trades slightly less on IEX. So I guess that's a small change, but the customer experience doesn't change. So I think that for us was most important. So can I ask you like the customer experience? So I said the origin story, the story that you tell on stage is this thing about the kind of the routing. Yes. The customers on IEX, the people that you talk to who are like, you know, owners who are the sort of ultimate customers, what is important to them? Like, is it kind of this fill rate on routable orders?

Like, what are they kind of, what do they think that is your advantage versus other exchanges? I think most important to them is they feel like we represent their interests. I think they've, they've. Yeah, what does that mean? It means that the market has evolved in a way where they were kind of in a position to be the last to know. Since clients can't be members of exchanges, meaning that a broker is a member, the client has to route an order through a broker member to get to the exchange. They're kind of just by that relationship on the outside looking in. And as a result, a lot of these things that evolved over the last decade, we earned a lot of credibility when we were at RBC going out there and meeting with these customers saying, here's what's really happening.

happening. Here's an explanation for this experience you're having when you can't buy or sell what you see. That level of trust parlayes into us as an exchange saying, here are the things that you should be focused on, here are the things that we think are important, here are the ways that we're different. So I think it starts first and foremost with that. So for a customer, would you say that they use IEX for kind of more the specific structural, like we have DPEG at Price against this crumbling quote? Or would you say that it's more a kind of general sense of these are the guys who explain stuff to us? the guys we trust. These are the guys who have kind of more transparency around fees or whatever. Like, is it about you or is it about DPEG? I think, I think it depends. You know, we work a lot with buy-side clients who are just as sophisticated as we are, who do a huge amount of analysis,

and they actually teach us a lot about the market. And so they are very specifically using us for a particular reason. Some others that, let's say, haven't dove that deep into market structure, turn around and said, you know what, you did the right thing for us at RBC, you did the right thing for us as an ATS. We trust you, we believe you, and you have a sophisticated following. It depends. I don't think everyone's as sophisticated as some of the by-side shops, nor can they be because they don't have the resources. But I think in general, you know, we have a good group of supporters, some based on data, some based on trust. But we like the fact that we have very sophisticated supported supporters.

I'm going to talk a little bit more about kind of like the origin story, Flashboy stuff, just because, like, you are the hero of a Michael Lewis book, which is an unusual situation for anyone in finance to find themselves in. Right. One question that I kind of want to ask is Michael Lewis, for a generation on Wall Street, created this, or like, popularized, this notion that equity traders are dopes, right? Like, equities in Dallas became a famous insult after Liars Poker. Did you ever talk about that with him?

I don't think so. No. I knew that. The back of your mind. Well, it's funny, when I first started in the business, the first book I was told to read was Lyres Poker. And I was starting on the equities trading desk. And I remember specifically equities and Dallas. I was like, wow, okay. Well, you know, I saw that as an opportunity. But no, I don't recall us ever talking about that. Was it strange to, I mean, he is not just that, but like he's kind of created the mindset,

he's created the way that a lot of Wall Street thinks about Wall Street for a generation. and you were kind of telling him how Wall Street works. Was that like a strange experience to be like, no, no, Michael, you have it all wrong? Well, the Moneyball was a huge kind of influential book for me. I mean, starting at the Royal Bank of Canada back in 2002, you know, we needed to find ways to be different with, you know, without the same resources as the biggest banks out there. And so I read Moneyball and that I felt like that had a pretty big influence on the way we thought. you know, the discussion with Michael started with really helping him write a story about somebody else. He had stumbled on the story of Sergei Alanikov, who got thrown in prison for taking computer code,

and went to a couple people, characters in the big short, who I know. And so really the first few months was really just giving him background and saying, he'd ask a question, what is this? And we try our best to kind of answer it. And that evolved into him getting to understand and know our story a little bit more. So in many ways, it's, you know, we were telling him the same things that we had been talking to the by side about for a long time. And there was a decision point where we had to decide whether we were going to talk about us or not. Giving him background and write a story about somebody else is very different than talking to him about you and your life and your decisions.

And at the time, it's, it's, there was a bit of a conflict. The personal side of me was a little bit more reserved. And I had to like really kind of talk it through with my wife and say, is this something that, you know, we really want to do. but as the CEO of IEX, which was brand new, we hadn't launched. It was there's all, and really it's a very complicated subject, and he's someone that can tell that in a different type of way. As the CEO of IEX, it was a no-brainer. When you sort of first started talking about IEX specifically,

did you think, wow, this is a Michael Lewis story? Did you think we just, you know, we run some, we run a stock venue? We had been told for a while that this is a Michael Lewis story. Did I necessarily believe that I could be the main character, one? Probably not. And it's funny because one of the things he told me kind of in the middle of his research, where he's like, you're a fairly boring person. He's like, it's hard to, he basically said it's hard to make you jump off the page.

So an editor suggested that I ask you, could you be where you are today without Flashboys? And I kind of, I want to know the answer. I mean, you think you're very lucky that it happened. I kind of want to ask the opposite question, which is like, you know, there you were. You had byside clients. You had kind of a business going. and I mean you tell me but it seems like it would have worked without Flash Boys at least in some commercial way has kind of going so big and so pop culture has that put pressures on you that

make it harder has it spread you too thin or made things too controversial like has there been a downside of the book there have been upsides and downsides and but I do think the upsides far outweighed the downsides you know the upsides were the story had much greater reach than Ronan and I could have ever gotten going door to door. So I think that, on that front, that was important. And it's important not to be an ATS or like a mid-sized ATS. You didn't need that, but to really kind of be in exchange and kind of try to take this to the next level. I think that was critically important. You know, the downside was that it upset a lot of people. And we made the decision early on. We wanted brokers to be our members and our customers, which was hard because the byside was our strongest

relationships. We're sticking the broker in between, and Flash Boys upset a lot of people. So we had to try to say, listen, we're not going to back away from what we said, but we do think there's a way forward here for us all to kind of work together. And, you know, it worked in some cases. In some cases, I'm sure some people are still upset, but if I were to weigh the pros and cons, I'd say it's absolutely helped. Put knowledge

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So you're now in exchange you have been for, what, like a month? What does it look like for you to win? Like, what's the end game? And I guess like what I mean by that is like there's one model that is like, there are different types of participants in the market. Some of them think that your model favors them

is good for them, and so they come to you. Others think that bats are nicer, NASDAG's model is better for them, they go to them. There's just sort of like a market segmentation. There's room for a bunch of different approaches and a bunch of different exchanges that kind of cater slightly to different investor types. And the other way to think about it is

you need to kill everyone, that you have the right model, everyone else has the wrong model. So like, what's the right way to look at it? And like, what, what success look like to you? So it's hard for us to try to say a specific market share goal is what we want to do because a lot of the decisions that we make mean we trade less volume. So DPEG is about preventing trades from happening. The speed bump deterred some types of, some types of activities. Not paying rebates as an exchange is a huge differentiator. And we think it's a benefit to IEX and it's a benefit to kind of the investors and brokers that we're trying

to cater to. But not paying someone to send you an order when a bunch of other exchanges are doing that, there's a disincentive there. I think if you're paying rebates, we'd be a lot more of the volume. So we try not to set market share targets. We try to focus mostly on, is the data kind of showing our third parties? Are the brokers happy with their execution? And it's really kind of an education process. You know, the rebate is such a huge short-term incentive. You have to have a very strong sales pitch to get someone to change their behavior to come to a market that won't pay you to come there. So I think for us, it's a longer sales cycle. You know, in many ways, if I were to really drop the hammer and say, we have to get to X percent

by this time, people internally at IEX would probably start making different decisions. And I think that that's something that we don't want to do. We don't have a revenue target. We don't have a market share target. We care mostly about the experience on our market. It's interesting because you're not choosing one or the other of what I said. On the one hand, it sounds like you don't have any near-term goal to be 100% of the market, right? You are happy to have an ecosystem of different competitors. But on the other hand, you count it as a win when your competitors kind of move towards your approach. You do think that you're doing at least some things the right way and there's only run right way and you're moving the whole market to your way? Well, it depends on whose perspective

you view the right way. So the exchanges clearly have set their trading models up to sell latency and to basically provide certain advantages for people that want to pay for them. That caters do a certain class of the market and we're trying to do something almost the exact opposite, where we're created a universal speed bump and there's one way in and one way out. Do we think we're serving the most critical player in the market? We do. Because at the end of the day, the stock market was built to serve long-term investors and help them invest in companies. But does that mean that everyone should have to serve that one constituent? No, because that's what makes for competition.

Can we talk about some of the other speed bumps? Sure. The one I think is maybe most interesting is the Chicago one. Yeah. Because, you know, again, I go back to the origin story of IEX more than like the kind of exact president structure, which is this notion that you want to get all the volume that's listed in the market, you send out, you find a way to send out an order such that you get every piece of displayed liquidity. The Chicago Speed bump, Chicago Saga Exchange, what they've done is created a speed bump that

applies only to incoming liquidity taking orders, which means effectively that market makers on Chicago have a last look. They can put up an order and when a new order comes in to take their liquidity, they get a few microseconds or whatever to decide whether or not. they want to pull their order. Right. So it's sort of the opposite of the story that is told in Flashboys. What do you think about that? So what they're trying to do is actually very similar to what NASDAQ, I think, proposed a few years ago.

And I think when NASDAQ proposed it, it was a five- millisecond speed bump as opposed to 350. Which is an eternity. Right. So I think it'll be interesting to see how the SEC handles it because it's an asymmetrical application of latency. So, which means that slowing down certain parties and not others, I think we'll create a bit of a challenge. I think that one thing that happens is that people, customers, come to exchanges and say, hey, this would be a good idea. And I think like a year or two ago, you'd read news articles about that dialogue. Yeah.

And there would be a certain level of suspicion because the customers coming to the exchanges would generally be high-frequency traders and everyone would say, There's a new order type on an exchange. That probably means that it's a high-frequency trader coming to game the exchange or to pick off other people. One, do you think that's true? And two, has your kind of view on that change, is you've run an ATS and then an exchange and had customers come to you and talk to you about new order types? Yeah, I think it's true that customers are trying to get markets to do things that would help them. I mean, I think that's natural. There's a certain level of influence that customers are going to have. the bigger the customer, the greater the influence. I think that that's perfect, you know, that it probably exists in most business cultures. You know, what the exchange does with that information, I think, is something that's completely different. You know, we 99% of the order

types or changes that we discuss, we don't implement because we'll find edge cases or we'll find things where, okay, well, that's not going to work, or that will never get approved, or, you know, this has some unintended consequence that we didn't think about. So part of, you know, the reason, you know, we have such a good group is it's very diverse. There's people from New York and NASDAQ from traders. We just added our chief strategy officers, this guy, Eric Stocklin, who came from Getco, or KCG now, and his perspective, he's teaching us things every day. He's got an incredible perspective, but he's looking at the world through a lens that helps us understand, okay, well, if we did this, then here's the result of that. So most of the things that we talk about internally

never see the light of day. And I think because we want to ensure that each thing we roll out has a pretty universal utility. And in many cases, if anyone is upset with this particular order type or change, it's kind of a very narrow section of participant. It's really trying to look to change things with the greatest possible utility. But do I think customers are trying to influence outcomes? Of course. I absolutely. I think to think otherwise. Do you have more sympathy for your competitors now after? I don't think people set out.

Having talked to people that worked at some of these firms, they set out to really end up where they are. I think you put one foot in front of the other, and this kind of wake-up call comes, and you pop up and you say, where am I? You know, how do we get here? And I think, I don't, so I don't think it was this massive chess match where they saw every move coming and played it the way it is.

I think it was part of it was a reaction. I think BATS had a tremendous influence on New York and NASDAQ. And I think that, you know, competitively, they started to kind of chase different types of revenue streams and, you know, ended up where they ended up. And so I think, do I have sympathy for them? I don't. But do I think it was part of this massive plan that's unfolded for the last decade exactly how they thought? Probably not. How are you going to avoid ending up in 10 years somewhere very different from where you want to be? Like, what's your check on that? Oh, I think, I mean, a big check on that is really how, you know, how IEX was formed and who we've been supported by.

And I think our number one asset is the relationships and trust we have with the by side. I think if we lose that, we lose a lot of credibility and it becomes harder to do what we want to do. We're driven and motivated in a different way. It took us nine and a half months to raise the money. we needed to. And that was, those were like pretty tough moments. But, you know, deep kind of in our hearts, we knew that we had to be owned by the by side to give us, number one, we wanted to be neutral. We wanted the by side to own us, and we wanted the sell side to be our members. And we wanted to try to align them in a way that was unique. You know, I do think that our relationship

with the by side is just something that we're not willing to sacrifice for some money. I think it'd be a very bad short-term mistake. So I want to get back to something you said about you, the diversity of your team coming from exchanges and high-frequency traders. Do you notice, like, philosophical differences? Do people say, you know, do you say, this is wrong? And people say, no, we do that all the time. That's fine. Because are there different perspectives that surprise you?

Yeah, there are certainly different perspectives, you know. And so that's been kind of what's been great. And I think, you know, even, you know, John Ramsey came from the SEC. And so there's all sorts of different perspectives. we tend to be very collaborative in terms of big decisions. And yeah, and we don't always agree on everything. Is there an example of like a fight that like you and your kind of guys from like the RBC world just philosophically think one thing and the guys who come to you from exchanges

or high frequency traders or whatever? Like no, no, no, you're you have it all wrong. You're not like a factual question, but like, you know, a sort of philosophy question. What's right question? I'll give you one interesting one. So as the application process escalated, and we were doing our best to answer and address the questions through the comment period. And then the exchanges and others took it kind of to the media with pretty sensational language and started to kind of shape the conversation and the un-American and these types of things came out. And so we felt like we needed to respond in an equally strong way.

and I think that created a bit of, you know, internally to say, why don't we just keep going the process that we're going? You know, we'll win on merit and other people are like, no, no, we have to amped this up because we're losing, we're playing one game and they're playing another game. And I think so things like that that are more than us off. I think many of them would say that like you started that game with Flashplays. Well, yeah, so, so yes, I guess if you wanted to roll, if you wanted to roll a clockback in 2012. But again, so we have debates. internally a lot. You know, I had written like six op-eds over that application process. None of them ever got published. Wasn't there one in Bloomberg do? I've written one. I've written many, but one

has gotten, I've gotten one through my team. And, you know, I'm thankful to the team. You know, I was trained as a traitor. Something happens and I react. And I'm learning to be patient. And I'm thankful to the team for not, you know, because once you get in this, this habit, this of responding to everything, you almost have to keep that up. Whereas if you're smarter and more strategic about how you respond and how you engage, it actually lets us focus on the most important thing, which is running the company. So, yeah, so there are, you know, the best part about I-X is we're aligned at the highest levels, and that helps us sort out, you know, any disagreements we have at, you know, any levels lower than that. But in general, it's been,

you know, I've learned more from the people inside the walls at I-X than I have kind of ever. I've learn more. Since, you know, we started I-EX, I've learned more about market structure than I think I did before, mostly because I'm getting all these different perspectives. So now you're a stock exchange. You're also like a famous guy. You're like Michael Lewis here. You're sort of a voice on some issues around like the fairness of Wall Street and like these big questions. My first question is like, what's next from a business perspective? And you tell me, but one obvious thing is listings. Like what's going on there? So one of the benefits of fly Boys was that it got the market structure story to publicly traded companies who had no idea

that their stock wasn't trading 90% of its volume on New York or wasn't trading, you know, or that, you know, other markets could even trade their stock. And I think that, so that was a big benefit to us. And so we got a lot of inbound interest about saying, you know, there's really been no choice for us. And this seems like something different. And our shareholders are talking about it and can we learn more. So listings is something that we're definitely interested in, but we're still in the process of kind of working through, you know, how can we be different? So that's a business yet to be formed, but one that has some interest. You know, we've looked at other asset classes. We've talked about other geographies, and the number

one thing for us is to not get distracted. We still feel like there's so much work to do in U.S. equities that I think spreading ourselves too thin would be a mistake right now. So although we We do get a lot of inbound interest from varying parties and traders and customers in other assets and regions. You know, we're universally, we're 74 people, and so we're universally focused on U.S. equities. But I do think that if we start to gain traction, looking elsewhere, you know, we always have our ears and eyes open.

So I guess we'll kind of see down the line. But, yeah, the focus is definitely U.S. equities. There's a discussion about you or helping long-term investors kind of invest in a very specific market microstructure way. There's another big discussion in kind of U.S. equity markets around people saying shareholders have too short-term or perspective or companies have two short-term or perspective. It seems to me that there's at least the sort of like verbal overlap there, right? Where companies come to you and they say, you're the long, you're the stock exchange for long-term investors. We want long-term investors. We want people who

don't care so much about quarterly numbers. Do you think about that overlap in terms of like listing standards or in terms of anything, or is that just kind of like further afield from your subject expertise? So I think, I mean, it is a bit further afield for us. I mean, we, so like the long-term stock exchange, that idea, it's an interesting idea. And I like Eric and what they're doing. It's always it seems like a natural fit for you, again, in like a sort of verbal sense. Yeah. And so philosophically we're aligned. But yeah, to dramatically change the listing standards, that is, I think you kind of summarized it well. It's not our core expertise is to arm up with lawyers and try to change, you know, dot the eyes and cross the T's a different way.

So I think what they're trying to do is extremely interesting to us. We do see it as a problem, but not one that IEX necessarily solving those types of like regulatory rule-based standards. I don't think that's high on our list. Although I think there are equal merits to what they're trying to accomplish because it is, you know, short-termism is definitely a, you know, a problem in the market. And I think them setting out to try to solve that, we give them a lot of credit and I think we have a good relationship with them. So it's good. We're encouraged by the fact that people are trying to take on different parts of where they think the market can improve.

So maybe sort of like thinking about it broadly, like it seems like you have like one big idea and you're kind of working with full focus to like implement and sell that one big idea. And you're not kind of looking to kind of branch out and to all that. Other big ideas at this point? Not yet. Yeah. Not yet. We, we, we, I keep saying second or third inning.

I really think that's like the case. There's so much work to be done that, and, and we're relatively small to try to try to spread out, spread ourselves really thin. I mean, so, you know, Ronan and Rob Park and John Schwell and Sophia. We all have core expertise. We're all super focused on the business and to start to like, spread. that expertise around, I think, becomes really, really tough. So we built a team to kind of take this challenge on. And I think as if the business starts to mature and we start to kind of settle on a path, you know, could we invest and look at other areas? Absolutely. But it's, you know,

as you say, we're seven days in. We got a lot of work to do. Can we talk a little about the SEC process? Sure. Like, what kind of surprised you about that? So I think the most surprised I was was how vocal the exchanges were against us and kind of how the level got turned up. You know, I think the by side came out of the gates with supportive comment letters. And I think that forced this process from kind of happening behind the scenes to happening in the public comment process. I mean, I think bats in direct ad for the last four exchange approvals.

And I could be wrong in this, but I think they had three comment letters. between the four exchanges. So there was never really any, you know, debate, public debate about those. And I think people would say those were structurally, like pretty similar. Yeah, they were all, they're all fairly similar. I think that if certainly if we had known what we know now at the time those proposals, we might have had a few things to say about it. It's hard. It's hard to say what they look like at the time they got approved. But I think that the by side coming out and supporting IEX forced kind of our opposition. to become public.

And I thought I was a bit surprised with the exchanges. You know, it was tough was that there were so many letters. There were so many comments. It generated so much interest that the SEC had to sort through all of that to make the best decision they could make. And so I think the timing of it, I kind of in a way understood why it had to take so long because there were so many comments. But, you know, we're just thankful that we got through it and got approved. In terms of the SEC itself, are there things you were kind of disappointed by or surprised to the upside in terms of how they dealt with the application and how they dealt with a lot

of like sort of incommensurable pressure on both sides, right? I mean, you have like all these like op-ed saying IAX or the exchange of the people, and then you have all these exchanges saying IEX will ruin market structure. Yeah. It seems to me it would be difficult for the SEC to deal with that. Like what was your kind of impression of how they dealt with it? Yeah. So the people that were directly on IEX's kind of...

application were extremely thorough and, you know, asked a million questions, and we did our best to work with them. And it was a, you know, it was a fairly rigorous and thorough process. So it kind of gives me, it's like one of those things where, you know, some people are upset when they get patted down at security lines at airports. And I don't mind because I'm like, at least they're, you know, they're in there, you know, kind of, you know, trying to, trying to vet things out. So it was a, I think, you know, they did a thorough job. I think, I think, that, you know, the pressure is, and you're right, it was coming from both sides. I think that showed what was at stake. And I think that that caused probably even more deliberations internally

to make sure that they were making the right decision for the right reasons. So, you know, at the end of the day, I think it's, you know, we're, we're just thankful that that process is kind of behind us and we got the approval and now we just have a chance to compete. Like, what's your, like, what would you tell someone who works on Wall Street who has, like, their big idea and like wants to change the world with like one thing that hasn't been talked about like what's like what's your advice for the next view I think it was it was it was a very hard decision to leave RBC and because it there's a certain level of comfort of of working at a large firm and of being as a part of the system and I think um I do think society in general is

shifting to a more transparent society. And I think that what that does is it casts a brighter light on how people make money. We don't have any issue with people making money. I think that's just part of capitalism. And we're capitalists at heart. We're for profit entity. But I think how people make money is going to be a greater focus going forward. And I do think so. If people are thinking about doing something different with their life, just think about the incentives that, you know, that are there for you to do what you do. And if you don't believe in that incentive structure, then finding a different thing to do with your life isn't as risky now as it was in the past. I don't believe so. I think the world's more receptive to people trying to do things differently.

That was, like I said, a special edition of Odd Lots because we weren't in it. But it was great, nonetheless. There's been another edition of the Odd Lots podcast. I'm Joe Wisenthall. You can follow me on Twitter at The Stallworth. And I'm Tracy Allaway. I'm on Twitter at Tracy Allaway. Thanks for listening. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses.

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