Wall Street firms take aim at America’s stock-exchange oligopoly

Time for some old-fashioned customer service

ON JANUARY 7TH nine of America’s largest brokers and banks said they planned to launch a new equities exchange, dubbed the Members Exchange (MEMX). Though it has yet to gain approval from the Securities and Exchange Commission (SEC), the share prices of Intercontinental Exchange (ICE), Nasdaq and CBOE, the parent groups of America’s largest exchanges, fell by 2-3%. But MEMX is merely their latest reason to fret.

For more than a century stock exchanges were utilities: not-for-profit, self-regulated and owned by their broker members. Starting in the 1990s most became companies, often listed on their own exchanges. The New York Stock Exchange (NYSE) became publicly traded in 2006. Around the same time the SEC created the National Market System—rules designed to foster competition. Chief among these was Rule 611, the “order-protection rule”, which requires...



via The Economist: Finance and economics Business Feeds

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