What Is a Regional Stock Exchange?
A regional stock exchange is a stock exchange that is located in a region outside that country's primary financial center. 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 that 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 Exchanges
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).
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. There are seven regional exchanges in the U.S. that are registered with the SEC.
The Securities and Exchange Commission (SEC) was 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.
These four major regional exchanges each had a specific market that they focused on. They were:
- Boston: Primary focus is on mutual funds.
- Chicago: Trades regionally listed stocks, and 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).
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.
These are the exchanges currently registered with the SEC:
- BOX 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.
- Investors Exchange LLC
- Long-Term Stock Exchange, Inc.
- MEMX, LLC
- Miami International Securities Exchange
- MIAX Emerald, LLC
- MIAX PEARL, LLC
- Nasdaq BX, Inc.
- Nasdaq GEMX, LLC
- Nasdaq ISE, LLC
- Nasdaq MRX, LLC
- Nasdaq PHLX LLC
- The Nasdaq Stock Market
- New York Stock Exchange LLC
- NYSE Arca, Inc.
- NYSE Chicago, Inc.
- NYSE American LLC
- NYSE National, Inc.
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.