What is MEMX

MEMX, or "Members Exchange," is an equities exchange founded in early 2019. The exchange is wholly owned by its founding members, a group of 9 banks, financial services firms, market makers and retail broker-dealers. These members include Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, E*TRADE, Fidelity Investments, Morgan Stanley, TD Ameritrade, UBS and Virtu Financial.

Why MEMX Was Created

The nine participating founding members of MEMX announced plans to file an application with the U.S. Securities and Exchange Commission (SEC) in early 2019. If approved, MEMX will operate as a national securities exchange. The mission of the exchange is "to increase competition, improve operational transparency, further reduce fixed costs and simplify the execution of equity trading in the U.S.," per a press release. MEMX is designed to represent the interests of its founders' clients, a group of retail and institutional investors.

These same clients all have massive presences on existing global exchanges including the NYSE and the Nasdaq, MEMX would ultimately compete with those exchanges. MEMX joins other exchanges such as IEX, founded by the IEX Group in 2017, to offer alternatives to established stock exchanges for its clients.

Practically, MEMX aims for a straightforward trading model including a low-cost fee structure and basic order types commonly found on comparable exchanges. A key component of MEMX will be its simplicity. The exchange's website indicates that it will include "a limited number of order types to promote simple and transparent interactions," as well as "no speedbumps" to potentially hold up the trading process.

A trading launch date for MEMX has not been set as of this writing. However, the exchange website indicates that the founding members "expect to start trading shortly after receiving SEC approval."