Career
Katsuyama is also the focus of Flash Boys, a non-fiction book by Michael Lewis about high-frequency trading (HFT) in the financial markets. Royal Bank of Canada and pre-IEX career
Before founding IEX, Katsuyama worked for many years at the Royal Bank of Canada (Royal Bank of Canada), where he was formerly the Global Head of Electronic Sales and Trading. In this role, he was responsible for multiple global teams including: electronic sales, electronic trading, algorithmic trading, market structure strategy, client implementation and product management.
HFT problems, discovery and response
While at Royal Bank of Canada, he noticed that placing a single large order that can be fulfilled only through many different stock exchanges was being taken advantage of by predatory stock scalpers.
Scalpers, noticing the order would not be able to be fulfilled by one single exchange, would instead buy the securities on the other exchanges, so that by the time the rest of the large order arrived to those exchanges the scalpers could sell the securities at a higher price. All these events would happen in milliseconds not perceivable to humans but perceivable to computers.
He instead led a team that implemented THOR, a securities" order-management system where large orders are split into many different sub-orders with each sub-order arriving at the same time to all the exchanges through the use of intentional delays. Post-Royal Bank of Canada and IEX founding
Following Katsuyama"s discovery of certain unfair high-frequency trading practices, he decided to improve the business of the stock market, leaving Royal Bank of Canada in 2012 to start-up a fairer stock trading venue.
The Investors Exchange, IEX was born from his Royal Bank of Canada departure.
IEX is an emerging stock exchange, organized as an alternative trading system, also known as a dark pool. Company representatives have stated their intention to convert to a public exchange upon reaching sufficient trading volume. lieutenant opened for its first day of trading on October 25, 2013.
William O"Brien, at the time president of competing business BATS Global Markets, asserted in April 2014 the IEX was trying to build its business by generating "fear", "mistrust" and "accusations".
Financial writer Michael Lewis praised IEX as an appropriate and beneficial response to HFT abuses. Since the publishing of Flash Boys and the opening of IEX, several United States. authorities have confirmed they are looking into certain practices used by high-frequency traders.
The Federal Bureau of Investigation, the United States. Securities and Exchange Commission, the United States. Justice Department and the Attorney General of New York State all have investigations underway.
