Members Exchange Looking to Compete Against the NYSE and Nasdaq

Members Exchange

The New York Stock Exchange and Nasdaq are about to get some stiff competition. Yesterday, a consortium of high-profile US banks, market movers, and brokerages announced plans to start their own trading venue. According to a news report by CNN Business, the new exchange will be called the ‘Members Exchange.’

Members Exchange Takes over Wall Street

“The level of frustration was just so high for many of us that we had to do something more proactive for us and our clients,” Vlad Khandros, global head of market structure and liquidity strategy at UBS, told CNN Business. “There’s this massive burden on us and our clients.”

The Members Exchange, or MEMX, seeks to change up the long-standing exchange business. For the longest time, it has been dominated by just a few small players. MEMX seeks to simplify the process and lower fees. The exchange plans to do this by boosting competition and transparency. 

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This new exchange is backed by big players such as Bank of America (NYSE:BAC), UBS Group (NYSE:UBS), Charles Schwab (NYSE:SCHW), E*TRADE (NASDAQ:ETFC), and Morgan Stanley (NYSE:MS).

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Members Exchange is likely to change the common theme of rising fees on market makers and brokerages. The fees mostly are applied to data. The NYSE and Nasdaq often charge hefty fees for data feeds on market movers. The new Members Exchange does not plan to compete with Nasdaq or the NYSE on the separate business of listing stocks.

“We welcome competition to our transparent, highly regulated equity markets,” Nasdaq spokesman Joseph Christinat told CNN Business. “However, with dozens of equity trading venues already in operation in the United States, we are keen to learn more about the value proposition of a new exchange.”

MEMX has raised $70 million in an initial round of funding so far, a source told CNN. It remains unknown at this time when the exchange will kick off.

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