Wall Street firms are forming a new exchange to take on NYSE and Nasdaq

Markets • January 7, 2019, 12:12PM EST

UPDATED: January 10, 2019, 9:00AM EST

A slew of Wall Street banks and brokers are creating a new exchange venture to usurp the stock market duopoly of NYSE and Nasdaq. The venture, dubbed Members Exchange, will be run by nine banks, trading firms, and brokers, according to an exclusive report by Alexander Osipovich at the Wall Street Journal. Its CEO hasn't been announced. Fidelity, Virtu Financial, and Citadel Securities are among the firms comprising the new entity, which is preparing to apply for exchange status from the Securities and Exchange Commission.

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Brokers and exchanges have long squabbled over the mounting cost of market data. MEMX's lower fees could lure market participants away from NYSE and Nasdaq, which handle approximately half of all stock trading in the U.S., according to the WSJ. "We think with the right team we could run an exchange at a fraction of the cost of what the incumbents are offering,” said Virtu CEO Doug Cifu.

MEMX has raised $70 million as part of fundraising round.

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].