On Jan. 7, MEMX exchange was announced by group of large firms.
- Group of large banks, brokers, market makers revealed plans to launch exchange.
- Named Members Exchange, to compete with established NYSE, Nasdaq exchanges.
- By: Bank of America, UBS, Citadel, Fidelity, E*TRADE, M. Stanley, TD, UBS, Virtu.
Critique
- Responded to claims of unjustified price level on data feed by existing exchanges.
- Cited issues on market access, data provision by concentrated group of exchanges.
- Reform encouraged by SEC, see Commissioner Jackson speech Sep. 2018.
- SEC held roundtable in Sep. 2018, rejected data feed fees proposed by
Nasdaq, NYSE as did not demonstrated it conforms with Exchange Act.
New Exchange Plan
- Aims to disrupt exchange business, to simplify, lower fees, and boost competition.
- Increase in transparency may erode incumbents' ability to maintain level of prices.
- No plan to compete with NYSE and Nasdaq, on separate business of listing stocks.
- Will file an application with SEC in early 2019 for approval to operate as exchange.
