CEO Brad Katsuyama of IEX at NYC Offices.Michael Falco/The Globe and Mail
The Flash Boys grow up
On June 17, hours after markets closed in New York, Brad Katsuyama received the news he'd been wanting to hear for months. He didn't wait long to address his team.
"We have slightly concerning news. Concerning for other exchanges, 'cause IEX was … approved!" he said, adding a seven-letter expletive before his final word.
A YouTube video posted on Monday shows the room erupting into cheers and applause, with people hugging, jumping and high-fiving in elation.
Mr. Katsuyama – a former RBC trader from Markham, Ont.best known for his starring role in the Michael Lewis bestseller Flash Boys – had just received approval from the U.S. Securities and Exchange Commission allowing his company, Investors' Exchange LLC, to become a fully fledged national stock exchange.
The decision capped an arduous and divisive process that began, in earnest, when the upstart trading venue filed its application with the U.S. watchdog last August. After five revisions to its proposal, 474 letters from fans and critics and multiple delays, the outfit better known as IEX finally knew its fate.
"There was this overwhelming sense of relief that the facts spoke for themselves," Mr. Katsuyama said this week in a phone interview. "We believed from day one that we fit within the rules and just because our business model does not appeal to our competitors or a small group of high-speed traders, does not mean we shouldn't be given the right to compete."
It's a key victory for a startup that is trying to upend the modern U.S. stock market in which super-fast traders are able to exploit their speed to the detriment of smaller investors who are not as swift. Story
For CPPIB, new money and new questions
Billions of new dollars are set to flow into an expanded Canada Pension Plan, raising questions about how its money manager will generate the returns it needs.
Beginning in 2019, Ottawa and eight provinces are preparing to phase in broad increases to the contributions that workers and employers will make to fund their retirement years, in order to boost the benefits they will receive.
Canada Pension Plan Investment Board, which manages CPP's $280-billion investment portfolio, will likely have to take a unique investment approach with the new money, according to the chief actuary of Canada.
"There will be – or there might be – a different investment policy, because we should invest the money in a different way," said Jean-Claude Ménard. He added that the intention is to report the financing approach and results of the existing CPP funds separately from the new "CPP2" contributions. Story
Brexit on Bay Street
Let's be honest: Brexit-induced chaos is the last thing Bay Street – and global capital markets – need right now.
Early this year we were reminded of investors' frighteningly fragile confidence. In the first week back to work after the Christmas holidays, fears about Chinese economic malaise sent markets into a tailspin. That shock, coupled with plummeting oil prices, put Canadians in the dumps. On Bay Street, it was an ugly reminder of just how quickly sentiment can turn.
It happened again on Friday. Story
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