This article is written by IEX. So they want to be able to show a protected (lit) quote that they can pull based on their algorithm. Imagine that I send a marketable buy order to my broker. The broker’s router must send the order to the exchange displaying best offer - the quote which is granted the privilege to be protected. But by the time the order gets to IEX, they decide to pull it - remember they already have asymmetric speed bump. Bait and switch? Why should my order be mandated to be sent to exchange where it will be disadvantaged? https://www.sec.gov/comments/sr-iex-2019-15/sriex201915-6775258-208127.pdf
Thats a good reason to reject it, thats why they should approve it in a modified form From the article: "We believe that these concerns could be lessened if IEX were to offer this order type as “un-protected”." If all other participants adoped a similar rule the CQS would fade all at once. This is in essence the same problem I ran into when implemented my order pegging algorithm on nasdaq, and the system reacting to its own orders. If I was sending hidden limit orders improving upon the NBB or NBO then they wouldnt look as if the best price had jumped when the order appears in the quote feed. exact same logic happens intra-exchange with regards to reg NMS
what you describe is not a bait and switch at all though. The crumbling quote indicator is on for only 0.1% of the trading session. That's not much time. You are being bait and switched by all kinds of hft traders on nasdaq though. The paper describes using logic math and data. Its not some opinion piece or an editorial , read it and try to write some rigorous statements instead of just spouting off random english words flippanty. I have nothing to gain by arguing with the uninformed , Good luck
You are informed by the statistics collected (manufactured) by a biased party. I was simply providing the other side of the argument. But whatever.