First, a definition:
What is a 'Payment For Order Flow'?
A payment for order flow is the compensation and benefit a brokerage receives by directing orders to different parties to be executed. The brokerage firm receives a small payment, usually a penny per share, as compensation for directing the order to the different parties.
Quote from The Verge article
"This evening the Securities and Exchange Commission approved an application by a startup called IEX to become a full-fledged stock exchange. By approving IEX, the SEC was giving its stamp of approval to one of the most high-profile challenges to the current Wall Street regime. Co-founded by a Canadian trader named Brad Katsuyama, IEX is designed to be a market free from high-frequency traders who use their speed to skim profits off the orders from ordinary citizens."
Full Article:
http://www.theverge.com/2016/6/17/11957258/iex-sec-approves-stock-exchange
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