Major Wall Street firms have agreed to launch a new exchange to compete with Nasdaq And NYSE
On Monday, 7 January, consortium, bringing together some of the largest investment companies in the United States, announced plans to launch a new stock exchange. The site with the proposed name MEMX (abbr. от Members Exchange) should become a competitor of the famous Nasdaq and NYSE, offering more favorable trading conditions.
Why do you need a new exchange ?
Brokers and Wall Street traders have complained about high fees for years, which the largest American exchanges had to pay. Now Morgan Stanley, Fidelity Investments and Citadel Securities LLC decided to change the current situation.
In their press statement, they said, that the new site should increase competition, which will lead to more transparency, lower fees and easier market access.
In total, the consortium of founders of the new exchange will include nine companies, including Bank of America Merrill Lynch, Charles Schwab Corp, E*TRADE Financial Corp, TD Ameritrade Holdings Corp, UBS и Virtu Financial.
MEMX perspectives
The founders of the new exchange plan to attract traders with lower commissions and tariffs for access to market data, as well as the high speed of the trading system (it will be built on the most up-to-date technologies).
Last year, the US Securities and Exchange Commission also drew attention to the excessively high fees of exchanges. (SEC). Besides, the regulator canceled the increase in prices for access to data, which the sites carried out in May 2018 of the year.
The MEMX administration plans to apply for a license with the SEC at the beginning 2019 of the year.
Who are the founding members?
Members Exchange was founded by a group of the world's leading financial institutions, which included:
- The largest online retail brokers in the US, who serve retail investors, placing millions of orders daily
- Global banks and firms, financial service providers, that serve retail and institutional investors
- World's leading market makers, which together provide retail investors with more 700 million dollars a year to raise prices
The founding members of MEMX are Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, E * TRADE, Fidelity Investments, Morgan Stanley, TD Ameritrade, UBS и Virtu Financial.
Why now?
Market competition identifies the best entrants and benefits investors. Increasing the diversity of exchanges improves the overall stability of the market, stability and innovation, which will ultimately lead to increased operational transparency and lower fixed costs.
How MEMX differs from other stock exchanges?
MEMX will offer investors a new option with a simpler platform and features, which will benefit both retailers, and institutional investors, including:
- Limited number of order types to promote simple and transparent interactions
- Investment in the best and latest technology to ensure fast and efficient execution
- Lower prices for market data and connection and transaction costs
- No speed bumps
As the only stock trading platform, member-owned, MEMX will represent the interests of its founders and their collective client base, composed of retail and institutional investors, on the structure of the US market.
When will MEMX start trading?
MEMX will submit required regulatory documents for SEC approval to operate as a national securities exchange earlier this year. We expect to start trading shortly after receiving SEC approval.
Official website of the stock exchange : www.memxtrading.com/
