US Markets

Wall Street-backed MEMX launches in challenge to NYSE and Nasdaq

The Members Exchange (MEMX), a new U.S. stock exchange backed by some of the biggest customers of the New York Stock Exchange and Nasdaq Inc, launched on Monday with pricing aimed at taking market share from the incumbents.

By John McCrank

NEW YORK, Sept 21 (Reuters) - The Members Exchange (MEMX), a new U.S. stock exchange backed by some of the biggest customers of the New York Stock Exchange and Nasdaq Inc NDAQ.O, launched on Monday with pricing aimed at taking market share from the incumbents.

"Out of the gate, we're looking to be aggressive in order to attract order flow so that people can experience our exchange," Chief Executive Officer Jonathan Kellner said in a recent interview.

The new bourse went live trading seven symbols, including Alphabet Inc GOOG.O, BlackBerry Ltd BB.N, and Exxon Mobil Corp <XOM.N), and plans to begin trading all U.S. stocks on Sept. 29.

The exchange's mission is to improve the market through technological innovation, reduced complexity, and lower fees, while being a voice for its members on market issues, Kellner said.

MEMX was founded in January 2019 by nine financial institutions, including Bank of America BAC.N, Charles Schwab Corp SCHW.N, Virtu Financial VIRT.O, Morgan Stanley MS.N, Fidelity and Citadel Securities.

Since then, MEMX has raised more than $135 million and brought on more than 40 members, including BlackRock Inc BLK.N, Goldman Sachs Group Inc GS.N, JPMorgan Chase and Co JPM.N and Jane Street Capital.

The Jersey City, New Jersey-based exchange was founded after years of complaints by brokers and other market participants over what they saw as unjustifiably high fees charged by most exchanges for things like market data and exchange connectivity.

Initially, MEMX will give away its market data and will pay more in rebates to brokers that add liquidity to its exchange than it charges in trading fees, meaning it will lose money as it tries to take share from Intercontinental Exchange Inc's ICE.N NYSE, Nasdaq, and Cboe Global Markets CBOE.Z.

The exchange will "normalize" its fees once it attracts meaningful volume, but those fees will be very competitive and MEMX will be transparent in how it sets them, Kellner said.

(Reporting by John McCrank; editing by Jonathan Oatis)

((john.mccrank@thomsonreuters.com Twitter @jmccrank; 1 646 223-6643; Reuters Messaging: john.mccrank.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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