Financial titans plan low-cost stock exchange

A number of well-known banks and other financial institutions are teaming up to reduce costs and open up opportunities for investors through a new, lower-cost stock exchange.

MEMX, or Members Exchange, is expected to offer a simplified, transparent equity trading platform for both retail and institutional investors.

Founding members include Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, Fidelity Investments, Morgan Stanley and UBS.

New York-based MEMX will offer a limited number of order types to simplify transactions and lower pricing on market data and transaction fees. It aims to compete with the New York Stock Exchange and Nasdaq. The NYSE parent – the Intercontinental Stock Exchange – and the Nasdaq are two of the three major companies that control most of the exchanges – and have been criticized for raising fees for brokers and traders.

An application is expected to be filed with the Securities and Exchange Commission in early 2019. MEMX officials expect it to start trading shortly after it receives approval – however, that process could be lengthy, according to The Wall Street Journal.

There has been a bigger push to lower costs, fees and other barriers for investors throughout recent years. For example, in August Fidelity announced that it was launching two no-fee funds, giving more investors access to both domestic and global markets. The SEC has also taken up more cases regarding fees brokers are required to pay to access market data.