Jonathan Kellner to Lead MEMX

On January 7, it was announced that a group of nine financial services firms would come together to launch an equities venue dubbed the Members Exchange (MEMX). The startup finally has its first public face: Jonathan Kellner.

Kellner was previously the CEO of Instinet. He started at the agency broker in 2007 after Nomura Group bought the company. He took the chief executive reins in 2014, but in August 2018 it was reported that he would be stepping down. Then, in October, it was announced that he would be leaving Instinet take over as the managing director of crypto exchange Coinbase’s institutional coverage group, but that pairing fell apart.

Industry reports at the time noted that Kellner was tapped to lead Coinbase’s group in order to help the exchange appeal more toward Wall Street investors. Sources tell WatersTechnology that Kellner was waiting for his non-compete to lapse after leaving Instinet before taking over at Coinbase, but the crypto exchange’s plans changed in the interim. The Block noted that while he was going to use his experience to integrate the company’s newly-announced brokerage unit for over-the-counter trading into its broader business, Coinbase decided to change its strategy and pivot from focusing on Wall Street.

Rather ignominiously, Kellner was out before he could even warm the chief executive seat.

MEMX

Even though Coinbase decided to take a pass, Kellner is not done with the exchange business just yet, as he will head MEMX. But it’s also worth noting that the exchange has yet to launch and still faces regulatory barriers. And even if those hurdles are cleared, the company will have to prove that there’s a need for yet another stock exchange in the United States.

• READ: For a look at why MEMX may struggle to deliver without a clearer purpose, click here.

The nine founding members of MEMX represent a who’s who of financial services firms: Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, E*Trade, Fidelity Investments, Morgan Stanley, UBS, TD Ameritrade, and Virtu Financial.

Their hope is to build this exchange to combat rising market data fees at stalwart venues such as Nasdaq, Cboe and the New York Stock Exchange, whose technology and markets dominate stock trading in the US. MEMX will file an application with the Securities and Exchange Commission in early 2019 for approval to operate as a national securities exchange. A spokesperson for the exchange did not make Kellner or any other executives immediately available, however the press release announcing Kellner’s installation as CEO also quoted Jamil Nazarali, global head of business development for Citadel Securities, as being the chairman of the nascent exchange’s board of directors, meaning its leadership team is beginning to take shape.

• LISTEN: Liquidnet’s Adam Sussman talks about why he believes there’s room for another equities trading venue in the US. To listen to the podcast, click here.

Prior to joining Instinet, Kellner held senior trading and technology positions at Charles Schwab, ITG and Morgan Stanley.