A group of money managers, broker-dealers, market makers and financial service firms plan to launch an equity exchange in direct competition to the New York Stock Exchange, Nasdaq and IEX Group.
The new exchange, called Members Exchange, will file sometime later this year for operational approval with the Securities and Exchange Commission and will begin once it receives it, according to a news release from the exchange.
The exchange will be owned by its nine founding members: Fidelity Investments, Morgan Stanley (MS), UBS Group, Citadel Securities, Bank of America Merrill Lynch, Charles Schwab, TD Ameritrade, E-Trade and Virtu Financial.
The exchange in a statement on its website said it will offer "a new option to investors with a simpler platform and features that will benefit both retail and institutional investors." The features will include:
• A limited number of order types.
• Investments in technology.
• Lower pricing on market data and connectivity and transaction fees.
• No speed bumps — a trading delay that's used by exchanges to bar high-frequency traders from using predatory techniques to read the market in advance of trades.
"As the only member-owned equities trading platform, MEMX will represent the interests of its founders and their collective client base, comprised of retail and institutional investors, on U.S. market structure issues," the exchange said on its website. "Competition in the marketplace brings out the best in all the participants and benefits investors. Increasing the diversity of exchanges improves overall market robustness, stability and innovation, which will ultimately result in improved operational transparency and reduced fixed costs."