A FAIRER STOCK EX­CHANGE

Fast Company - - Innovation By Design - —CLIFF KUANG

In 2007, Brad Kat­suyama was trad­ing stocks for the Royal Bank of Canada when he no­ticed that ev­ery time he placed an or­der, the stock price jumped by one or two cents. He re­al­ized that high-fre­quency traders were us­ing faster con­nec­tions to buy the stock he wanted and re­sell it to him for a profit. And it was wide­spread, cost­ing in­vestors like him up to $160 mil­lion a day. So Kat­suyama cre­ated the In­vestors Ex­change, an up­start trad­ing plat­form pow­ered by an in­ge­nious hack: Ev­ery trade en­coun­ters a vir­tual “speed bump” to sub­vert high-fre­quency traders. In Septem­ber 2016, IEX opened for pub­lic business.

User-cen­tered think­ing plays a big role. Prod­uct chief Adrian Facini spent more than a decade on

Wall Street, where he grew dis­il­lu­sioned by traders gam­ing the sys­tem. “Dur­ing the de­sign process, we think about how trad­ing fea­tures can be used or abused,” he ex­plains. “If some­thing can be ma­nip­u­lated, we nix it.” The NYSE has now copied IEX’S speed-bump idea. But Facini isn’t both­ered by the im­i­ta­tion, in­sist­ing that while any­one can copy a fea­ture, “they can’t copy our ethos.”

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