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Financial Services Firms to Launch New Members Exchange

By Jonah A. Toleno of Shustak Reynolds & Partners, P.C. posted on Tuesday, January 22, 2019.

Nine financial services firms have announced plans to start their own trading exchange called the “Members Exchange”. Among the founding banks and brokerages are UBS, Morgan Stanley, Bank of America Merrill Lynch, Charles Schwab, and Fidelity Investments. The planned launch comes after years of broker dissatisfaction with the high data feed and stock monitoring costs charged by current leading exchanges.

The Members Exchange firms hope to reduce client services fees and increase transparency as a result of the new exchange. Industry members predict that the Members Exchange will encourage competition among current, existing exchanges, which currently charge firms substantial fees for necessary services such as data feeds and market information distribution, potentially leading to reduced fees across all the exchanges.

No date for the launch of the Members Exchange has been announced. Participating firms anticipate seeking approval from the Securities and Exchange Commission (SEC) for the exchange early in 2019.

Partner Jonah A. Toleno is based in our San Diego, California office. She practices in securities and financial services law and acts as trial counsel and outside corporate counsel for numerous financial, business, and individual clients. She can be reached at (619) 696-9500 or [email protected] with questions.

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