[ M A R K E T
founders are launching MEMX to
lower their own costs, and will not
pass it back to their investors, is
irrelevant.
“It is hard to understand why
anyone would think this would be
bad for the marketplace,” Sussman
said. “If the MEMX is successful,
it should lower the costs for all
the brokers that connect to the US
exchange market. Remember that
US institutional equity commission
rates have been falling for years,
unlike exchange connectivity and
market data fees. And can anyone
seriously complain about increased
fragmentation? Fragmentation is
like having kids – after you have
three of them, you just go numb to
the pain.”
If nothing else, MEMX promises
to bring competition to the US
exchange landscape and gives deal-
ers a seat at the table, so to speak,
in terms of the current exchange
governance structure.
Looking back on the difficult
road IEX travelled in establishing
itself as an exchange – although
the disputes around IEX were
specific to its controversial speed
bump, something that MEMX has
ruled out – it’s hard to imagine
that Nasdaq, NYSE and Cboe will
welcome MEMX with open arms
to the exchange industry.
The MEMX founders have said
they will file an application with
the US financial regulator to
operate as a national securities ex-
change in the early part of this year.
Given the proposed timeframe and
market reaction amid the develop-
ment, where incumbent exchanges
saw their share prices drop around
2% following the announcement,
we can expect to see some major
drama in 2019 as the ongoing battle
between Wall Street and regulated
exchanges comes to a head.
R E V I E W
|
E X C H A N G E S ]
Kellner to lead MEMX
In late February, MEMX announced the appointment of Jonathan
Kellner as the group’s first chief executive.
Kellner left electronic trading equity broker Instinet last year after
spending over 11 years with the firm, where he held the position of
chief executive since March 2014.
“The launching of MEMX, with the backing of a diverse and large
cross-section of leading market players, is a transformative develop-
ment that will drive a more competitive equity trading environment,”
Kellner commented.
Having joined Nomura in 2003, the Wall Street veteran made the
transition to Instinet four years later following Nomura’s acquisition
of the brokerage.
In October last year, cryptocurrency exchange operator Coinbase
announced Kellner would be joining the firm to lead its institutional
business. However, the offer was withdrawn before Kellner took up
the position as Coinbase scrapped its plans to launch into the institu-
tional space.
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