IEX In Talks To Become a Full Exchange

The buyside's first dark pool that slows down HFT - and was the hero of Michael Lewis' Flash Boys - is raising money to become a full-fledged exchange.

IEX, the upstart equity dark pool that were pained as the heroes of Michael Lewis’ blockbuster “Flash Boys” on the evils of hogh frequency trading, is looking to become a full fledged exchange.

The Wall Street Journal reports that IEX CEO Brad Katsuyama and his team are seeing money to move beyond a buyside dark pool that adds latency to thwart high-speed traders in an attempt to level the playing field.

The WSJ adds:

The firm is in talks with potential investors to raise millions of dollars to expand its operations and pay for the increased regulatory costs of becoming a full-fledged exchange, according to people familiar with the talks. At present, IEX is a “dark pool,” a lightly regulated, private trading venue.

IEX could fetch a valuation of $200 million to $300 million, although the numbers could change because the discussions are continuing, the people say. That valuation is high for a company that has only been fully operational since October and controls just a tiny percentage of stock trading the U.S.

The WSJ adds that IEX is in talks with potential investors from “hedge funds, private-equity groups and asset managers, according to people familiar with the talks.”

[Meet IEX’s latest hire: Sophia Lee. A Traders Exlcusive.]