IEX Group Inc. should have a clear path to winning Securitiesand Exchange Commission (SEC) approval to be a stock exchangedespite claims that its trademark “speed bump” would violate marketrules, according to a top U.S. financial regulator.

IEX's proposal to briefly pause incoming orders is probablyconsistent with rules that seek to ensure a fair and competitivetrading environment, Rick Ketchum, the chief executive officer ofthe Financial Industry Regulatory Authority (Finra), saidWednesday. Regulations “should be sufficiently flexible” toaccommodate IEX's proposal as long as the delay is fully disclosedand found to benefit investors, he added.

Competing exchanges and some brokerage firms have attacked IEX'sspeed bump, a feature that the company says restrictshigh-frequency traders from jumping ahead of slower-movinginvestors. The firm made famous by Michael Lewis's 2014 book,“Flash Boys,” has been feuding with critics for months over thedesign of its market, with both sides lobbying the SEC andCongress.

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