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

IEX's proposal to briefly pause incoming orders is probably consistent with rules that seek to ensure a fair and competitive trading environment, Rick Ketchum, the chief executive officer of the Financial Industry Regulatory Authority (Finra), said Wednesday. Regulations “should be sufficiently flexible” to accommodate IEX's proposal as long as the delay is fully disclosed and found to benefit investors, he added.

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