Chicago Stock Exchange

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Chicago Stock Exchange
CHX Logo.jpg
Founded 1882
Headquarters Chicago
Key People John Kerin, CEO and President
Twitter @TradeOnCHX
Website http://www.chx.com/

The Chicago Stock Exchange offers trading on securities, particularly stocks and bonds of utility, banking, and railroad companies.

The Intercontinental Exchange announced acquisition of the Chicago Stock Exchange (CHX) for an undisclosed amount in April 2018. The plan is to move the exchange onto the NYSE Pillar trading technology, making the exchange part of ICE's securities exchanges group.[1][2]

CHX is a niche player in the U.S. equities market, executing less than 0.5 percent of U.S. stock transactions.[3]

It is a national securities exchange and self-regulatory organization which operates with the oversight of the U.S. Securities and Exchange Commission (SEC).

CHX Products

History

Established on March 21, 1882, the exchange integrated with the St. Louis Stock Exchange, Cleveland Stock Exchange and Minneapolis/St. Paul Stock Exchange in 1949, and came to be known as Midwest Stock Exchange. After 10 years, it took over the New Orleans Stock Exchange. In 1993, the exchange switched its name back to the Chicago Stock Exchange (CHX).[6]

On Apr. 26, 1920, the CHX Stock Clearing Corp. was established.

On Feb. 8, 2005, the demutualization plan of the Chicago Stock Exchange, which had already been approved by its members, received approval from the Securities and Exchange Commission. All CHX memberships were extinguished as part of the demutualization transaction, which was effective on Feb. 9, 2005.

On July 31, 2006, the exchange announced regulatory and shareholder approval of an investment in CHX by Bank of America Corp.; Bear Stearns; E*TRADE FINANCIAL Corp.; and Goldman, Sachs & Co.

On Feb. 1, 2007, the exchange completed migration to its New Trading Model (NTM) platform under sanction of the SEC.

In May of 2007, CHX launched a new brand identity with a redesigned website, new exchange logo, and the tag of "Trade On." [7] The new brand identity was implemented to reflect CHX's evolution from a member-owned regional securities exchange to a streamlined, national and technology-driven market.

In January 2010, CHX implemented a tiered fee structure designed to reward its most active customers and offering an incentive for firms to direct additional business to the CHX. The new structure applies to matching engine trading in stocks priced over $1.00 executed during the regular trading session. It allows customers to receive the highest rebates and pay the lowest take fees when executing in excess of 5,000,000 shares of average daily provide volume on the CHX. [8]

In October of 2015 the SEC granted approval to CHX for its on-demand auction product, CHX|snap, which allowed the exchange to hold mini auctions lasting less than one second on individual stocks that trade at the exchange.[9] The exchange has said it will be the first in the U.S. to offer such auctions.[10]

In August of 2016, the Chicago Stock Exchange revealed plans for a 350-microsecond speed bump, similar to the controversial delay on IEX Group’s Investors Exchange, which started trading earlier that month as the 13th official U.S. stock exchange. The idea is to make trading more fair by blunting the advantage of some of the high speed traders. However, whereas IEX slows down everyone using its exchange, CSX only plans to slow down traders who take liquidity.[11] The SEC approved the plan in October of 2017, [12] but only a few days later put its decision on hold until the three-member commission could vote on it.[13]

In February of 2016, CHX announced an agreement to be acquired by an investor group led by Chongqing Casin Enterprise Group. [14] The acquisition would be the first sale of a U.S. exchange to a Chinese company.[15] The deal received approval from the Committee on Foreign Investment in the US (Cfius) in December of 2016 and was originally set to close in the second half of 2016, but needed SEC approval.[16] However, in July 2017 eleven members of Congress asked the SEC to stop the sale, saying the regulator would be unable to monitor the foreign buyers.[17]

In November 2017, Chongqing Jintian Industrial Co. and Chongqing Longshang Decoration Co. dropped out of the group bidding on CHX along with the American company Xian Tong Enterprises Inc. Together, they had planned to buy 36.44 percent of the exchange. Chongqing Casin Enterprise Group remained as the lead investor through a subsidiary called North America Casin Holdings Inc. and intended to buy a 29 percent stake under an amended proposal.[18]

The proposed transaction was in limbo for nearly two years and finally the SEC rejected the bid in February of 2018, ending CHX's plan of becoming a hub for Chinese stocks. In April 2018, the Intercontinental Exchange announced it would acquire the exchange.[19][20]

Key People

References

  1. Intercontinental Exchange Agrees to Acquire Chicago Stock Exchange. ICE.
  2. NYSE parent ICE to acquire Chicago Stock Exchange. Marketwatch.
  3. Lawmakers urge SEC to stop Chicago Stock Exchange's China deal. Reuters.
  4. The SNAPSM Auction Advantage. CHX.com.
  5. CHX Announces May 13 Start For SNAPSM Auctions. Business Wire.
  6. Chicago (Midwest) Market Dusts Off Its Original Name. The New York Times.
  7. CHX LAUNCHES NEW BRAND IDENTITY. Chicago Stock Exchange.
  8. CHX Announces New Fee Structure. Businesswire.
  9. SEC Green Lights SNAP Auctions. CHX.
  10. The Chicago Stock Exchange's big idea to slow down trading. Crain's Chicago Business.
  11. Chicago Stock Exchange Targets Latency Arbitrage With Delay. Bloomberg.
  12. SEC Approves Chicago Stock Exchange's 'Speed Bump' for Trading. The Wall Street Journal.
  13. SEC Halts Chicago Exchange's Speed-Bump Plan. The Wall Street Journal.
  14. Investor Group to Acquire Chicago Stock Exchange. BusinessWire.
  15. Chinese investor group to buy Chicago Stock Exchange. Crain's Chicago Business.
  16. Chinese consortium wins approval for Chicago Stock Exchange takeover. The Financial Times.
  17. Lawmakers urge SEC to stop Chicago Stock Exchange's China deal. Reuters.
  18. 2 Chinese investors drop out of bid for Chicago Stock Exchange. The Chicago Tribune.
  19. Chinese-backed bid for Chicago Stock Exchange hits a snag. Crain's Chicago Business.
  20. SEC Kills Chinese-Linked Takeover of Chicago Stock Exchange. Bloomberg.