IEX Exchange to Exit Listings Business

IEX Group Inc. will abandon its struggling listings effort after the upstart exchange’s only listed company decided to jump ship, people familiar with the matter said.

The move means that corporate listings will remain an effective duopoly of the New York Stock Exchange and Nasdaq Inc., despite a long effort to break into the business by IEX, whose founders were the heroes of Michael Lewis’s 2014 book “Flash Boys: A Wall Street Revolt.” IEX made the decision after its only listed company,

Interactive Brokers Group
Inc.,


IBKR 0.75%

decided to switch back to Nasdaq, the people said. The Greenwich, Conn.-based online brokerage is expected to publicly announce the decision to switch its listing exchange soon. Representatives of IEX didn’t respond to requests for comment. An Interactive Brokers spokeswoman said she couldn’t immediately comment. Nasdaq declined to comment. Interactive Brokers became IEX’s first listed company a year ago. It is now leaving because of concerns about how its shares have traded on IEX, including wider bid-ask spreads, the people said. Such spreads are the difference between the buying and selling price of a stock. When they widen, investors pay more to trade in and out of a company’s shares. IEX had worked for several years to break into listings. Representatives of IEX approached hundreds of companies as part of the listings effort, including household names such as

Amazon.com
Inc.

and air carrier

United Continental Holdings
Inc.,

The Wall Street Journal reported last year. IEX offered NYSE- and Nasdaq-listed companies steep discounts on their listing fees if they switched over. But the effort was marred by delays and the IEX listings team went through several management changes. In the listings business, companies pay fees to an exchange for it to be the primary marketplace for their shares. NYSE parent

Intercontinental Exchange
Inc.

and Nasdaq earned a combined $734 million from listings last year, according to the companies. A third exchange group,

Cboe Global Markets
Inc.,

has a listings business, but it is focused on exchange-traded funds rather than corporations. To win listings, exchanges present companies with arcane data on the quality of their markets, while also touting perks such as bell-ringings at the NYSE’s historic trading floor or advertising on Nasdaq’s electronic billboard overlooking Times Square. Write to Alexander Osipovich at alexander.osipovich@dowjones.com

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