This new stock exchange leverages lower fees to compete with the New York Stock Exchange (NYSE) and the NASDAQ, but it only offers a limited range of order types.
The Members Exchange (MEMX) is a member-owned stock exchange. It was founded in January 2019 and received SEC approval in May 2020. It launched to the general public in September 2020.
While still regulated by the US Securities and Exchange Commission (SEC), the Members Exchange is the only member-owned trading platform in the US. This means it exists and operates to benefit its members rather than a controlling corporation. The exchange is backed by a number of Wall Street heavyweights, including Bank of America, Charles Schwab, Citi, Fidelity, Goldman Sachs, JPMorgan Chase, Morgan Stanley and more.
What can be traded on MEMX?
When the MEMX first launched, there were only seven stock symbols available for trade. It now trades all symbols in the National Market System (NMS), which includes stocks and ETFs on the NYSE, NASDAQ and NYMEX’s COMEX commodity exchange.
Just like trading on the NYSE and NASDAQ, individual investors can access the MEMX through trading platforms like E-Trade or Fidelity to buy and sell stocks. Other member brokerages include Charles Schwab, Chase and TD Ameritrade.
Can I become a member?
No. Individual investors can’t become MEMX members. MEMX membership is reserved for brokerages and trading platforms, but you can sign up with a member institution to access MEMX liquidity.
The Members Exchange aims to undercut the better-established exchanges with a more competitively priced fee schedule:
- A rebate of $0.29 per 100 shares for added displayed liquidity.
- $0.20 per 100 shares for added non-displayed liquidity.
- Members pay $0.25 per 100 shares to remove liquidity.
Which order types does the MEMX support?
MEMX accepts market, limit and pegged orders, complemented by six modifiers: ISO, reserve, non-display, post only, book only and re-pricing. It also offers five time-in-force instructions: IOC, FOK, Day, RHO and GTT.
What’s the difference between MEMX and the NYSE or NASDAQ?
Besides being member-owned rather than company-owned, MEMX claims to offer lower transaction fees and prices on market data than the world’s current top stock exchanges, which provides the potential for members to cut costs. It also aims to simplify trading by offering fewer order types, stating that it’s committed to running on the latest technology.
“We remain focused on our mission to improve markets through technological innovation, reduced complexity and lower fees while serving as a voice for all investors in market structure discussions,” CEO Jonathan Kellner said in announcing MEMX’s launch.
The NYSE and NASDAQ are the big-name exchanges in the industry, and for good reason: nearly 97% of the volume is traded on these exchanges. But there are actually more than a dozen US exchanges available for investors to choose from, including the Boston Stock Exchange, the Chicago Stock Exchange, the Philadelphia Stock Exchange and now, the Members Exchange.
Can a stock be available on more than one exchange?
Yes, stocks can be bought and sold on any exchange the issuing company has listed its shares. Stocks listed on more than one exchange are typically called dual-listings. Dual-listings are typically used by large, multinational companies that want to make shares available to international investors on overseas exchanges.
This member-owned exchange is one of the newest available to US traders. Its success will depend on whether traders prefer reduced fees to a more comprehensive order selection.
To invest in any exchange, you need a brokerage account. Explore your options across multiple trading platforms to find the account that best serves your investment goals.
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