Miami International Holdings will debut its first cash equities exchange later this month in an increasingly crowded field, with trading firms including UBS, Citadel Securities and Hudson River Trading as investors.
MIAX Pearl Equities, set to launch on Sept. 25, joins Miami International Holdings’ portfolio of three options exchanges: MIAX, MIAX Pearl and MIAX Emerald, the exchange holding company said Monday.
Participating trading firms, which also include Jump Trading and Simplex Trading, have the right to invest in Miami International Holdings in exchange for prepaying some exchange fees and reaching an unspecified liquidity volume threshold on the new equity exchange, the firm said.
In all, MIAX Pearl Equities offered 22 prepaid fee units and the transaction was fully subscribed, according to the firm.
“A number of the trading firms participating in the transaction are the largest in the U.S. equities space, and the fact that all 22 of our prepaid units were subscribed for speaks to the confidence that they have in the MIAX Exchange Group,” said Thomas Gallagher, Miami International Holdings’ chairman and CEO. He added that UBS, Hudson River and Jump Trading were first-time participants in the firm’s exchanges.
The appearance of MIAX Pearl Equities comes amid a wave of fresh stock exchange debuts as coronavirus-related economic turmoil and the rise of retail trading apps such as Robinhood send equity trading volume through the roof.
The Long-Term Stock Exchange, a Silicon Valley-based environmental, social and governance-minded exchange, launched on Sept. 9. The exchange aims to attract private companies with longer-term sustainability and diversity goals looking to go public.
Meanwhile, the UBS, Goldman Sachs and BlackRock-backed Members Exchange plans to fully launch by the end of the month. It aims to compete with the New York Stock Exchange and Nasdaq through transparency and lower transaction fees. The exchange is also backed by additional partners including Bank of America, Charles Schwab, TD Ameritrade and Fidelity Investments.
After MIAX Pearl Equities, the Long-Term Stock Exchange and the Members Exchange launch, there will be a total of 16 U.S. stock exchanges, with even more potentially on the horizon.
MIAX plans to differentiate itself from the crowded field by listing companies from Latin America and starting out “40 percent cheaper than the lowest-cost operator today,” Gallagher told Reuters last year. Though the firm is based in New Jersey, it maintains a Miami office, which could help when dealing with Latin American firms.
UBS’ participation in both the Members Exchange and MIAX Pearl Equities shows that the Swiss investment bank is trying to keep trading opportunities open amid global economic turbulence. The bank reported a 11% year-over-year decline in net profit during the April through June quarter to $1.23 billion, with the majority of income driven by its global wealth management business. It is rumored to be mulling a merger with Credit Suisse to create one of Europe’s largest banks.