The answer to your first question is not clear yet. If all the bids are collated by the existing exchanges and the transaction gets executed on one of the existing exchanges, that setup would be a major fillip to IEX. This setup will let IEX add value in terms of novel products and it’s monopoly status is not under a grave threat.
In case of the alternative, which is what seems to be proposed in one of CERC circular, the existing exchanges will get reduced to brokers. All trades will be executed on the central coupling platform.
My vague thoughts are, If the govt’s intent is not to have the monopoly status continue(for whatever reason) they will have a new coupling operator. The existing market coupling circular also seems to have been pressurized by one of the govt entities that benefits from IEX not having it’s monopoly status. They may have had a win at that but convincing the govt to implement things at a larger scale is nowhere this easy.
If the govt’s intent is to have MBED but doesn’t want to own up the complexity of implementing a coupling operator, that would mean the existing exchanges will still remain exchanges and all the bids from all exchanges will be collated and be visible on all of them. This setup would be the best thing for IEX investors.
I personally feel, if the govt really wants to have it’s own coupling operator, that’s a big undertaking and will only delay MBED and status quo will continue. Keeping interest of the sector in mind, a faster execution of MBED and coupling operator would be to let the existing exchanges collate bids. I would like to be believe this is what will happen but alas.
Disc: Not invested, but tracking closely.
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