RiskTech Forum

US Firms Plan to Open Competitor to NYSE and Nasdaq

Posted: 8 January 2019  |  Source: Finextra

Morgan Stanley, E*Trade and Fidelity Investments are among a group of Wall Street firms backing a new equities exchange hoping to take on Nyse, Nasdaq and Cboe Global Markets.

Members Exchange (MEMX) is being set up by nine retail broker-dealers, banks and market makers, including Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, TD Ameritrade, UBS and Virtu Financial.

It is vowing to increase competition, improve operational transparency, cut costs and simplify the execution of equity trading in the US. The new entity, which needs to secure SEC approval, is promising a simple trading model with basic order types using the latest technology.

Steve Quirk, EVP, trading and education, TD Ameritrade, says: "All types of investors could benefit from this simplified investing experience that will foster competition and promote practices that put the needs of investors first."

Shares in Nasdaq and Nyse owner Intercontinental Exchange fell more than two per cent in trading on Monday.

In a statement, Nasdaq responded to MEMX: "We welcome competition to our transparent, highly regulated equity markets. However, with more than 40 equity trading venues already in operation in the United States, we are keen to learn more about the value proposition of a new exchange."