The American Stock Exchange, which has long struggled for respect on Wall Street, is looking to cash in on the mania for shares of publicly traded exchanges.

The 100-year-old exchange says it's hiring Morgan Stanley ( MS) to begin the process of demutualization, setting the stage for a possible IPO and other "potential strategic future initiatives."

The move by the Amex, which offers trading in equities, options and exchange-traded funds, comes at a time that the exchange is trying to clean up its reputation as something of regulatory backwater. The exchange is believed to be close to settling a Securities and Exchange Commission investigation that ensnarled several of the Amex's former top executives.

The SEC is investigating the Amex's options order handling process. Two years ago, the SEC notified three top Amex executives, including then CEO Salvatore Sodano, that they could face possible regulatory action over the inquiry. Sodano is now the dean of Hofstra University's Frank G. Zarb School of Business.

The Amex also is struggling to stem the loss of its market share, particularly in ETFs -- something it used to have a stranglehold over. Electronic trading platforms and other exchanges all have stolen away trading from the Amex, which has been stubbornly slow to embrace electronic trading.

Still, it's not surprising that the Amex wants to go public. Besides the Chicago Board Options Exchange, the Amex remains one of the last major domestic exchanges to still be private. It has lost trading market share as the exchange remained too long in the dark ages of open-outcry floor trading, while other exchanges such as the Nasdaq Stock Market and the New York Stock Exchange ( NYX) all embraced electronic trading quicker.

The Amex, however, is trying to make up for lost time with the recent introduction of its AEMI, a new electronic trading platform.

The exchange sector has been red-hot as stocks of exchanges have become public and industry consolidation has become feverish. Most recently, the New York Mercantile Exchange ( NMX), an energy futures and commodities exchange, completed an IPO in November. Shares of the Nymex rose 125% on its first day of trading.

But it may make more sense for the Amex to sell itself than to sell shares in an initial public offering. Indeed, the Amex's most valuable asset may be the building that houses its headquarters in Lower Manhattan. The exchange owns the property.

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