June 30 (Reuters) - A top U.S. financial industry group

has raised concerns over stock exchange IEX's proposal to launch

a new options trading platform, urging regulators to scrutinize

whether the plan meets market fairness and transparency

standards.

IEX has proposed an options exchange that would introduce a

350-microsecond pause on trades, designed to prevent ultra-fast

traders from exploiting brief price differences.

The Securities Industry and Financial Markets Association,

which represents broker-dealers, investment banks and asset

managers, said that the proposed setup could harm investors.

Brokers are required to send orders to the exchange that

display the best price. However, under IEX's plan, those

displayed prices might disappear before the trade is executed,

potentially leaving customers with inferior deals, SIFMA said.

The group urged the Securities and Exchange Commission to

examine whether IEX's system would unfairly benefit certain

traders while making it more challenging for others, including

everyday investors, to obtain competitive pricing.

"It has been well established by the SEC and Federal Court

that IEX innovations ... help investors and do not harm them,"

the company's chief market policy officer John Ramsay said.

"We have publicly provided extensive data and analysis to

show that it will be targeted to meet that purpose and will have

the same beneficial impact in the options markets."

Last week, market maker Citadel Securities also requested

that the SEC reject IEX's proposed options exchange.