New stock-market exchange set to go head-to-head with Wall Street’s old guard

A group of financial heavyweights including Morgan Stanley MS, +0.11% Fidelity Investments and Citadel Securities LLC plans to launch a new low-cost stock exchange to challenge the New York Stock Exchange and Nasdaq Inc., the companies said.

The creation of the new venue, called Members Exchange or MEMX, comes after years of frustration among Wall Street brokers and traders with the fees charged by U.S. stock exchanges.

MEMX will be controlled by the nine banks, brokerages and high-frequency trading firms funding it, according to a news release viewed by The Wall Street Journal. Such an arrangement harks back to the era when exchanges were owned by their members, typically stockbrokers.

MEMX investors also include investment banks Bank of America Merrill Lynch BAC, -0.65% and UBS Group AG UBS, -0.08% high-speed trader Virtu Financial Inc. VIRT, -2.05% and retail brokers Charles Schwab Corp. SCHW, -0.09% E*Trade Financial Corp. ETFC, -0.26% and TD Ameritrade Holding Corp. AMTD, -0.82% according to the news release.

An expanded version of this article appears at WSJ.com

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