Major financial firms in the United States are teaming up to launch a cheaper bourse that will compete with the New York Stock Exchange and Nasdaq.
To be identified as Members Exchange, or MEMX, the new initiative will be financed and controlled by Bank of America, Merrill Lynch, Charles Schwab Corp, E*TRADE Financial Corp, TD Ameritrade Holdings Corp, UBS, Virtu Financial, Morgan Stanley,Fidelity Investments, Citadel Securities LLC.
The launch of Memx is seen as a response to the various criticism raised against the high fees charged for data on stock trades by the big US Stock exchanges.
The industry players said the new bourse will strive to encourage competition, improve transparency cost and promote equity trading in the United States.
“The announcement is the latest salvo in the on-going fee battle between exchanges and other market participants, and one which should be taken seriously at least from the perspective of the potential earnings pressure on existing exchanges,” Nathan Flanders of Fitch Ratings was quoted by Reuters.
MEMX will offer advanced technology with a simple trading model and a lower pricing on market data,connectivity and transaction fees.
Brokers and traders have accused the three US Stock Exchanges for raising fees for services like data feeds used to monitor movements in stock prices.