What Is Regional Stock Exchange?
A regional stock exchange is a stock exchange not located in that country's primary financial center, and where regional companies are listed. Often, companies who cannot meet the strict listing requirements of a national exchange may qualify for a listing on a regional exchange, though a company that qualifies to be on a national exchange may also register for a listing on one or more regional exchanges.
- A regional stock exchange is a stock exchange not located in that country's primary financial center, and where regional companies are listed.
- Often, companies who cannot meet the strict listing requirements of a national exchange may qualify for a listing on a regional exchange.
- Regional stock exchanges add to overall market liquidity and increase the efficiency of financial markets.
Understanding Regional Stock Exchange
In the United States, a regional stock exchange is one that exists outside of New York City, which is seen as the nation’s financial center and home to the New York Stock Exchange (NYSE), NASDAQ and the American Stock Exchange (AMEX).
In the U.S. there are four major regional exchanges, and each has a specific market that they focus on. They are:
- Boston: Primary focus is on mutual funds.
- Chicago: Trades regionally listed stocks, stocks from other exchanges, including the NYSE, AMEX, and NASDAQ, to service the needs of its regional financial institutions.
- Pacific: Known for servicing the derivatives market.
- Philadelphia: Primary focus on providing a market for options from various sectors (metals, oil, semiconductors, banks, utilities, and currency).
Regional stock exchanges trade in over-the-counter (OTC) and localized companies, which are too small to register on a national exchange. By increasing participation in markets, regional stock exchanges add to overall market liquidity and increase the efficiency of financial markets.
History of Regional Stock Exchanges
The Securities and Exchange Commission (SEC) formed as part of the Securities Exchange Act of 1934. At the founding of the SEC, there were 24 SEC-registered exchanges. Nineteen more received a temporary exemption from registration. In 1934, major regional stock exchanges existed across the United States, including the Boston exchange, Philadelphia Stock Exchange, Chicago exchange, and Pacific stock exchange. Each of these clearinghouses had a distinct focus.
For example, the Pacific Exchange was known as a derivatives market, while the Philadelphia Stock Exchange was known for trading currency. The NASDAQ acquired the Philadelphia and Boston exchanges, while the NYSE procured the Pacific Exchange, ending their time as independent entities. In 2018, the NYSE reached an agreement to purchase the Chicago Exchange.
Regional exchanges currently registered with the SEC include:
- BOX Options Exchange LLC
- Cboe BYX Exchange, Inc.
- Cboe BZX Exchange, Inc.
- Cboe C2 Exchange, Inc.
- Cboe EDGA Exchange, Inc.
- Cboe EDGX Exchange, Inc.
- Cboe Exchange, Inc.
- Chicago Stock Exchange, Inc.
- The Investors Exchange LLC
- Miami International Securities Exchange
- MIAX PEARL, LLC
Regional Stock Exchanges Overseas
Similar to the United States, other nations also have national exchanges. The London Stock Exchange (LSE) and the Tokyo Stock Exchange (TSE) are examples of foreign national exchanges. These countries may also have regional stock exchanges. For example, the U.K. has The International Stock Exchange on the Channel Islands and the Eastern Caribbean Securities Exchange, which covers British territories in the Caribbean.
Regional stock exchanges abroad may also function as the primary exchange for a group of closely situated countries. For example, the Bourse Régionale des Valeurs Mobilières SA (BRVM) is a regional stock exchange that serves Côte D'Ivoire, Senegal, Niger and five other West African countries.