Several financial heavyweights including Morgan Stanley and Fidelity Investments announced Monday they planned a new public exchange for stocks, marking a challenge to the NYSE and Nasdaq.
Emphasizing the need for lower trading costs, the initiative, which calls itself MEMX or Members Exchange, expects to file an application in early 2019 with the US Securities and Exchange Commission.
The mission is to ‘increase competition, improve operational transparency, further reduce fixed costs and simplify the execution of equity trading in the US,’ the group said in a press release.
‘We are excited to partner with other market leaders to build the next members-owned exchange that will drive competition and benefit all market participants,’ said Jamil Nazarali, global head of business development of Citadel Securities, one of nine financial heavyweights backing the platform.
Nine companies in all are founding members of the exchange, including Bank of America Merrill Lynch, Charles Schwab, E*Trade, TD Ameritrade, UBS and Virtu Financial.
MEMX raised $70 million from the original group, Bloomberg News reported.
The new exchange will sharpen competition in the industry. Together, New York Stock Exchange parent Intercontinental Exchange, Nasdaq and Cboe Global markets handle more than three fifths of US equities trading volume, according to The Wall Street Journal.
Shares of all three companies fell Monday.