IEX, the Wall Street firm at the centre of the high-frequency trading debate sparked by Michael Lewis's recent book Flash Boys, has filed to officially become a stock exchange.

According to a filing made public by the Securities and Exchange Commission on Wednesday, IEX has formally applied to become America's 12th stock market and compete with Nasdaq, the NYSE and even the TSX starting next year.

Earlier this year, a company called Aequitas founded a new stock exchange in Canada for the same reason: to create an alternative to the high-frequency trading that currently dominates trading on existing stock exchanges.

IEX — founded by Canadian and ex-Royal Bank of Canada banker Brad Katsuyama — was the focus of Lewis's book about high-frequency trading, a term that describes complicated networks whereby investment firms make money by capitalizing on microscopic gaps in the amount of time it takes to buy and sell huge blocks of shares.

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While widespread, critics say high-frequency trading is unfair to smaller investors because it gives a built-in advantage to large firms that pay for ever-faster networks. Katsuyama's company was hailed in the book and in media reports from the time for trying to install a sort of "speed bump" in the trading process, which would ensure that nobody could gain an advantage based on speed alone.

Normally technology helps to bring down costs over time, but IEX says high-frequency trading or HFT has actually had the opposite effect, making stock trading more expensive by adding costs charged to traders for faster and faster trading mechanisms, fees which ultimately get passed on to clients.

"IEX believes data and technology should be provided at a reasonable cost or no cost at all," Katsuyama said in a letter to IEX clients Wednesday. "IEX can be an agent of change to address these issues … while charging a reasonable and transparent fee for services provided."

Since launching in October 2013, IEX has operated as an alternative trading platform for certain clients. On its busiest day ever, roughly 414 million shares traded hands via IEX, which represented 1.86 per cent of all the stocks traded in the U.S. that day.

The plan to become a full stock exchange would move the company into the big leagues, positioning it to compete directly with other exchanges to execute trades for clients.

The move to become a full exchange would also give the company membership in a system known as the National Market System. Any exchange within that system with the lowest price for any given stock is entitled to host the trade. IEX's current status as an alternative trading platform doesn't give it that advantage, which limits its size.

Joining the NMS is likely to see IEX's trading volumes grow exponentially, as investors could no longer choose to avoid it, if the price was right.

The move to become an exchange would also allow IEX to make money from companies by charging them to list on their exchange.