A group of major Wall Street investment firms will set up a rival stocks exchange in the coming months that they hope will take market share from established rivals such as Nasdaq (NDAQ) and CME Group (CME) . Nasdaq and CME shares fell.
Morgan Stanley (MS) , Fidelity Investments and Citadel Securities will launch the low-cost trading venue, which they plan to called the "Members Exchange", or MEMX, sometime later this year. Bank of America Merrill Lynch, Charles Schwab (SCHW) , TD Ameritrade (AMTD) , Virtu Financial (VIRT) , UBS Group (UBS) and E*Trade Financial (ETFC) are also involved in funding and controlling the upstart exchange.
"The founding members of MEMX represent leading retail brokers, global banks and financial service firms, and market makers - a diverse array of market participants organizing for the common goal of improving markets for retail and institutional investors," said Virtu CEO Douglas Cifu. "The launching of MEMX is a testament to the market-wide demand for competition, innovation, and transparency."
"As a founding member of MEMX, we look forward to being part of an initiative we believe will transform markets for the better," said TD Ameritrade's Steve Quirk. "All types of investors could benefit from this simplified investing experience that will foster competition and promote practices that put the needs of investors first."
Nasdaq Inc. shares fell $2.07, or 2.5%, to $79.88, while CME Group lost 0.4% to close at $184.00 each.