IEX Forced to Offer Huge Concession to Win NYSE, Nasdaq Listings

(Bloomberg) -- IEX Group Inc., acknowledging how hard it will be to battle the New York Stock Exchange and Nasdaq Stock Market’s listing duopoly, is offering companies that transfer to its Investors Exchange five years of no listing fees.

The company, made famous by Michael Lewis’s 2014 book “Flash Boys,” announced Friday that it wants to charge the companies it hosts a flat annual fee of $50,000. It also dangled a big incentive: the first stock to shift from NYSE or Nasdaq, and anyone who announces their own move within 120 days, will get at least $250,000 in fee credits.

“Based on discussions with companies currently listed on NYSE and Nasdaq, the exchange believes that a meaningful fee credit is necessary to incentivize currently listed companies to transfer their listing to IEX,” the firm said in the Securities and Exchange Commission filing dated Thursday.

IEX faces a daunting task in taking on NYSE and Nasdaq, which currently host every stock listed on a U.S. exchange. NYSE and Nasdaq both list more than 2,000 public companies -- many of them among the most famous corporations in the world -- and have huge staffs serving them.

IEX has an ex-Morgan Stanley managing director, Sara Furber, running its listings effort and hopes to start hosting companies as soon as October. One easy target: Nasdaq-listed Wynn Resorts Ltd., the casino operator whose founder Steve Wynn is an IEX investor.

NYSE and Nasdaq often base listing fees on how many shares outstanding a company has. IEX won’t, instead charging a flat rate.

“IEX’s proposed simple low cost flat-fee structure, combined with the limited fee credit, as well as no fee in the first year of listing, is designed to address the significant competitive challenges,” IEX said.