As he digs deeper, he realizes that secretive high-frequency trading firms, taking advantage of lightning-fast computers, willing accomplices in the stock exchanges and some poorly thought-out federal regulation, have effectively hijacked the equity markets. Roused to action by what he has discovered, Katsuyama quits his job and starts up a new exchange, IEX, which includes a clever "speed bump" that levels the playing field for investors.

Rather than keeping the traders out of certain marketplaces, fees will be used as a disincentive, and "speed bumps" will be put in place to slow down the electronic traders whose lightning-fast speed allows them to profit from tiny price differences, Mr. Schmitt said.

The STA does not believe that limiting the successful dark pools to de minimis percentages of volume is the appropriate answer. Regulation NMS was promulgated to promote the public display of limit orders, it drove more trading to dark venues. Trimming the quoting and access thresholds to unrealistically low levels could result in an explosion of new ATSs and further fragment the market. Once a pool sponsor has developed the logic for the dark pools matching engine, it may easily replicate it under a separate ATS filing. Structural speed bumps will not force the dark pool operators to push order flow to lit venues.