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Brad Katsuyama on why IEX exited listings business: ‘We’re not an events company’

Scott Gamm

Brad Katsuyama’s IEX is exiting the listings business after roughly one year, the company announced on Monday.

“We’re not an events company,” Katsuyama told Yahoo Finance.

IEX was being encouraged to consider staging opening and closing bell ceremonies at the Oculus mall in lower Manhattan, which is situated next to the World Trade Center and features a high-end shopping mall. The main listings providers Nasdaq (NDAQ) and Intercontinental Exchange’s (ICE) New York Stock Exchange, host high-profile opening and closing bell ceremonies at their respective New York City headquarters that often feature high-profile guests and are televised and streamed nationally.

But IEX only had one listed company, Interactive Brokers (IBKR), which began trading on its exchange in October 2018 and will switch to the Nasdaq (NDAQ) on Oct. 7.

Both IEX and Interactive Brokers shared the same concerns of only having one company listed on the exchange.

Brad Katsuyama, CEO and co-founder of IEX, speaks at the 2017 Forbes Under 30 Summit in Boston, Massachusetts, U.S. October 2, 2017. REUTERS/Brian Snyder

Katsuyama said there were challenges in getting the boards of other public companies to approve a switch. While corporate executives were on board with switching to IEX, Katsuyama said this was a board level decision. Plus, the New York Stock Exchange and Nasdaq charge the listing fees at the start of the year, according to Katsuyama, leaving a shorter window for companies to decide on a switch.

“It didn’t feel like the highest return on investment,” Katsuyama said, referring to the notion of staying in the listings business.

What’s next for IEX

Instead, IEX will focus on its trading business and launching other technology businesses.

“Any exchange can trade all stocks regardless of where they are listed - when IEX was approved in 2016, we were approved to be a trading exchange and we decided to enter listings on top of that,” he said. “Exiting listings does not impact our trading business at all. We can focus all resources on trading.

Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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