Members Exchange (MEMX)
 |
|---|
| Members Exchange | |
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| Founded | 2019 |
|---|---|
| Headquarters | New York, NY |
| Key People | Jonathan Kellner, CEO |
| Employees | 50 + |
| Products | Stock exchange |
| Profile | |
| Website | https://memx.com/ |
| Blog | https://memx.com/blog/ |
Members Exchange (MEMX) is a national securities exchange that is owned by a consortium of broker-dealers, financial services firms and market makers. It launched on September 21, 2020 with live trading in seven stocks, and moved to Phase Two of its rollout on September 29, when it began trading all National Market System (NMS) listings. [1] [2]
By its launch date, MEMX had 50 members and 18 investors and had raised in excess of $135 million in financing.[3]
MEMX was proposed in January 2019 with a goal of introducing new competition to the US stock markets space, challenging NYSE, Nasdaq and Cboe Global Markets.[4] The exchange aims to offer clients a unified order entry messaging standard, a simplified market data and distribution model, and simplified order types and order routing, according to an SEC filing. The exchange said it intends to increase transparency in the industry with "simple and fair pricing" on costs for connectivity and market data.
The exchange's original owners were Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, E*TRADE, Fidelity Investments, Morgan Stanley, TD Ameritrade, UBS, and Virtu Financial.[5][6] These owners initially invested $70 million in MEMX in initial funding, according to the Wall Street Journal.
In February 2020, JPMorgan, Goldman Sachs and Jane Street Capital joined those firms in backing Members Exchange[7] and in June 2020, Citi became the latest major financial institution to back MEMX following a separate funding round which included BlackRock, Wells Fargo, and Flow Traders, and raised $65 million.
On September 16, 2021 MEMX's market share reached an all-time high of 4.24%, making it the fastest growing U.S. equity exchange.[8]
In March 2022, MEMX announced plans to launch a new US listed options exchange called MEMX Options.[9] MEMX announced on August 9, 2022 that the SEC had approved its rule filing to launch MEMX Options, which will use a price time-model.[10] MEMX completed a strategic equity round of funding led by Optiver in March 2023 and said it plans to launch MEMX Options in August of 2023. Optiver assumed a MEMX board seat as part of the transaction. Other firms participating in the round include: Belvedere Strategic Capital, Chicago Trading Company, and IMC, as well as existing investors Citadel Securities and Virtu Financial.[11]
History[edit]
A group of nine broker-dealers announced the formation of Members Exchange on January 7, 2019. The consortium said it was forming MEMX to reduce fixed costs for its members and increase transparency around how the costs are set.[12]
MEMX’s development came during a debate within the industry about prices charged by the established exchanges for their data and trading information. The SEC blocked a price increase for market data for NYSE and Nasdaq in late 2018, and in 2019 it called on exchanges to justify any increase in fees.[13]
In November 2019 MEMX said in a statement that it had filed with the SEC and, subject to approval, would go live in the middle of 2020. It also said it would begin client connectivity testing in the last quarter of 2019.[14]
MEMX said in February 2020 that its marketplace would go live on July 24, pending SEC approval.[15]
The SEC approved the exchange's application in May 2020 as the 15th U.S. stock exchange.[16]
In April 2020 MEMX said it was delaying the launch to the third quarter and had delayed industry testing for its platform, which was to begin on May 11, because of the coronavirus crisis.[17] In August 2020, MEMX's CEO Jonathan Kellner said the exchange had rescheduled the launch for Monday, September 21, 2020. [18]
The exchange launched on September 21, 2020 with an initial seven securities available for trading: Acasti Pharma Inc. (ACST), Alphabet Inc. (GOOG), BlackBerry Ltd. (BB), Consolidated Edison Inc. (ED), Exxon Mobil Corporation (XOM), Ford Motor Co. 6.20% Notes Due June 1, 2059 (F-B), and the iShares Ultra Short-Term Bond ETF (ICSH).[19]
On October 6, 2021, MEMX announced that it would deliver real-time equities pricing data from its exchange to the Pyth network, a decentralized financial market data distribution platform.[20]
Products and Services[edit]
The all-electronic stock exchange was designed to serve as a low-cost competitor to the NYSE and Nasdaq. In its application with the SEC, MEMX indicated it would offer a different kind of electronic trading model — a unified order entry messaging standard, a simplified market data and distribution model, and simplified order types and order routing. Initially, MEMX also will not charge for connectivity or market data.[21]
Subject to approval from the SEC, starting April 1, 2022, MEMX will charge a blanket fee of $0.01 for professional and non-professional users of depth-of-book, top-of-book and last sale market data.[22]
Key People[edit]
- Jonathan Kellner - CEO and chairman of the board of MEMX.
- Thomas Fay - Chief Operating Officer
- Dominick Paniscotti - Chief Technology Officer
- Louise Curbishley - Chief Financial Officer
References[edit]
- ↑ Members Exchange Goes Live. Business Wire.
- ↑ Wall Street-Backed Exchange Set to Launch as Rival to NYSE, Nasdaq. WSJ.com.
- ↑ Newest U.S. Stock Exchange MEMX Debuts, Keeps It Simple. John Lothian News.
- ↑ Group of Leading Retail Brokers, Financial Services Firms, Banks, and Global Market Makers Plan to Launch the Only Member-Owned Equities Exchange, MEMX™, Members Exchange. MEMX.
- ↑ Wall Street Firms Plan New Exchange to Challenge NYSE, Nasdaq; Morgan Stanley, Fidelity and Citadel Securities among backers of new ‘Members Exchange’. Wall Street Journal.
- ↑ What’s In Style? Member’s Exchange Brings Together Wall Street Behemoths To Take On Nasdaq, NYSE and Cboe Global Markets. John Lothian News.
- ↑ JPMorgan and Goldman throw weight behind exchange start-up. The Financial Times.
- ↑ MEMX News. MEMX.
- ↑ Wall Street-backed MEMX to launch options exchange. Reuters.
- ↑ MEMX Gains SEC Approval to Trade Options. MEMX.
- ↑ MEMX Expands Investor Base With Leading Options Firms. MEMX via Businesswire.
- ↑ Former Instinet CEO tapped to head new Wall Street-backed exchange. Reuters.
- ↑ JPMorgan and Goldman throw weight behind exchange start-up. The Financial Times.
- ↑ MEMX targets mid-2020 launch after seeking green light from US regulator. The Trade News.
- ↑ Goldman, JPMorgan Lead New Funding Round for Members Exchange. The Wall Street Journal.
- ↑ New Exchange Seeks SEC Nod to Take On NYSE, Nasdaq. The Wall Street Journal.
- ↑ NYSE and Nasdaq challenger MEMX delays launch due to coronavirus crisis. Reuters.
- ↑ MEMX Reschedules Launch. Traders Magazine.
- ↑ Members Exchange Goes Live. Business Wire.
- ↑ MEMX becomes first equities exchange to feed pricing data into DeFi Pyth Network. The Trade News.
- ↑ Newest U.S. Stock Exchange MEMX Debuts, Keeps It Simple. John Lothian News.
- ↑ MEMX introduces fees for real-time equities market data. TheTrade.