Shares of Intercontinental Exchange — the company that owns the New York Stock Exchange — sank more than 4 percent Monday morning after a report that a number of Wall Street's largest financial companies is set to launch a new, low-cost rival exchange.
The new venue is called Members Exchange (or MEMX), the Wall Street Journal reported. Shares of Nasdaq fell more than 3 percent before the opening bell.
Nine banks, brokerages and other g firms including Morgan Stanley, Fidelity Investments and Citadel Securities will maintain control over MEMX, the report said. MEMX investors also include investment banks Bank of America Merrill Lynch and UBS, as well as retail brokers Charles Schwab, E-Trade and TD Ameritrade.
The New York-based MEMX is set to make its plans public on Monday and members of the investor group plan to apply for exchange status with the Securities and Exchange Commission early this year, the Journal reported.
The launch of another stock exchange would come amid a mass migration toward cheap, no-fee investing options and exchanges across Wall Street. Another such company, the IEX Group, emerged in 2016 with a system that slowed down trading in an effort to neutralize the effect of high-frequency trading. Controversial at first, the so-called speed bumps have proliferated among U.S. market sites, though they differ from IEX's to varying degrees.
The two-year-old IEX, which was founded in 2012, had its first stock listing as of September.
—Click here for the original Wall Street Journal report.
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