MEMX (Members Exchange)
MEMX, which stands for Members Exchange, is a US-based, technology-driven financial market exchange operator. The company's primary function is to own and operate national securities exchanges, serving as a direct competitor to established exchanges like the New York Stock Exchange (NYSE) and Nasdaq. Founded in 2019 by a consortium of nine of the industry???s largest banks, financial services firms, market makers, and retail broker-dealers, MEMX was created with the core mission to increase competition, improve operational transparency, reduce fixed costs, and simplify the execution of equity trading in the US market. The founding members include major institutions such as BofA Securities, Charles Schwab Corporation, Citadel LLC, Fidelity Investments, Morgan Stanley, and UBS, indicating a strong industry-alignment model.
Continue…Core Business and Function
MEMX???s fundamental business is operating modern, high-performance trading platforms for US financial instruments. The company leverages a data-centric exchange architecture and state-of-the-art infrastructure to deliver a platform that prioritizes simplicity, efficiency, and lower costs for its participants. The design philosophy aims to align exchange services with the interests of market participants???a deliberate counterpoint to the traditional exchange model.
A key aspect of its operation is its focus on transparency and simplicity in its trading model, which includes a limited number of order types to promote straightforward interactions. The exchange also initially distinguished itself by offering market data and connectivity at a lower cost, or in some cases, free of charge, to its members, driving down fixed costs for market participants. The company???s overall goal is to act as a positive change agent for market structure reform.
Products and Services
MEMX currently operates two primary national securities exchanges and provides ancillary technology services to the financial community.
1. MEMX Equities Exchange
The MEMX Equities Exchange is the company's flagship product, which launched trading operations in September 2020 following approval from the U.S. Securities and Exchange Commission (SEC) to operate as a national securities exchange.
- Function: It is a platform for the trading of all exchange-listed securities in the United States.
- Key Features: It offers a streamlined trading experience through its technologically advanced platform, supporting a limited set of order types for simplicity and transparent interaction. The exchange infrastructure is built for efficiency and speed, ensuring highly efficient and fast trade execution for both retail and institutional investors.
2. MEMX Options Exchange (MEMX Options)
Launched in September 2023, MEMX Options is an expansion of the company???s core exchange model into the U.S. options market.
- Function: It provides a venue for the electronic trading of U.S. equity options, extending the same member-aligned, low-cost, and transparent model from its equities platform to the options community.
- Key Features: The options exchange utilizes the proven data-centric architecture of the equities platform, offering traders both passive and active risk management capabilities within the trading system.
3. Technology and Data Services
Beyond its direct exchange operations, MEMX leverages its proprietary, high-speed trading technology by offering it as a service to other entities.
- Exchange Technology Licensing: MEMX provides its advanced exchange technology and services to external clients. Notable clients include new market venues like EDX Markets and Dream Exchange, which utilize MEMX's platform to power their own trading operations. This product line demonstrates MEMX???s commitment to innovation and competition by supporting the creation of new market centers.
- Connectivity and Market Data: As an exchange, MEMX provides essential services for market participants to connect and receive information.
- Data Feeds: It offers real-time market data feeds directly from the exchange, including a real-time top-of-book feed, which provides the best bid and best offer on the exchange, and a real-time trade feed for reporting of executions.
- Connectivity: MEMX supports connectivity via direct cross-connects within its data centers, as well as through approved Extranet Providers and Telco Providers, offering low-cost and high-performance access.
- Pre-Trade Risk Management: The exchange offers an integrated system of pre-trade risk controls on incoming orders. These filters are designed to prevent erroneous orders and are dynamically configurable by members, applying risk checks consistently to all participant orders to mitigate risk without adding unnecessary latency.
