Members Exchange, a new stock exchange owned by a consortium of big banks and asset managers, received approval from the U.S. Securities and Exchange Commission to begin operations, a major milestone for the would-be challenger.
With the approval, MEMX said that it expects to begin operations in the third quarter of 2020.
“We are excited to earn SEC approval in this challenging environment and appreciate the Commission’s thoughtful and timely review of our application," MEMX CEO Jonathan Kellner said in a statement Tuesday. “This achievement is the result of our team’s great diligence and represents a major step towards launching an exchange designed for all investors.”
MEMX was launched in January 2019 and filed its application with the SEC last October. Its initial investors included financial institutions, including Bank of America Merrill Lynch, Morgan Stanley, UBS and Charles Schwab. JPMorgan Chase & Co., Goldman Sachs and Jane Street Capital joined the list of investors in February following an equity financing round.
“We congratulate the company on this important milestone and remain unified in our belief that MEMX is the right idea at the right time,” the MEMX investor board said in a statement. “We look forward to working with the company as they bring further innovation and reduced costs to the U.S. equities market.”
The insurgent exchange is seeking to woo trading through lower fees and newer technology. It was founded, according to Barron’s, after years of tensions between exchanges and Wall Street firms over matters including fees and a request to the SEC from exchanges for a “trade-at” rule, which would have let traders pick a specific exchange for order executions.
“It’s not unexpected and we welcome competition,” Nasdaq spokesman Joe Christinat said on Tuesday in reaction to the SEC’s approval.
Representatives for the NYSE and Cboe did not return requests for comment.