Chicago Stock Exchange - Explained
What is the Chicago Stock Exchange?
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Table of ContentsWhat is the Chicago Stock Exchange?How Does the Chicago Stock Exchange Work?Academic Research for Chicago Stock Exchange (CHX)
What is the Chicago Stock Exchange?
The Chicago Stock Exchange is a national securities exchange in Chicago which regulates itself and functions under the watch of the U.S. Securities and Exchange Commission (SEC). As we speak, The Chicago Stock Exchange is based in FOUR40 South LaSalle Street.
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How Does the Chicago Stock Exchange Work?
The Chicago Stock Exchange was established on March 21, 1882, and later in 1949, it combined with stock exchanges in the region like Cleveland Stock Exchange St. Louis Stock Exchange, and Minneapolis-St. Paul Stock Exchange resulting in Midwest Stock exchange. In 1959 the New Orleans Stock Exchange joined with Midwest Stock Exchange to form the Midwest Stock Exchange Service Corporation in the 1960s. Its purpose was to consolidate accounting for organizations that are members. Later in 1993, it resorted to converting its name back to Chicago Stock Exchange. The Chicago Stock Exchange was established on March 21, 1882, with Mr. Charles Henrotin being appointed the president and the chairman. In April the same year, they contracted a lease at 115 Dearborn Street for the business set up and during this period they sold memberships amounting to 750. The Chicago Stock Exchange officially became a national property on May 15, 1882, where it came up with its offices. Henrotin was the pioneering individual to market the concept together with a number of business partners. The Chicago Stock Exchange shifted its office to old CHX block in 1894 designed by firms of Adler and Sullivan situated in Washington and LaSalle streets. The former building had been destroyed in 1972 but the pioneer business floor is currently located at the Art Institute of Chicago. The exchange gained growth meaningfully in the 1880s accompanied by bond and stock increase. This enabled them to realize huge returns. In July 1941 World War I made the Exchange shut down its operations and was not functional until December 11. On October 1915 the method of listing and doing business in stocks moved from percent to par value to dollars. Chicago Stock Clearing Corporation was developed on April 26, 1920 while on October 29, 1929, there was a crash in the stock market. This led to a hard economic period in Chicago and the stock market. Later in 1949 the CHX joined with the exchanges of St. Louis, Cleveland and Minneapolis resulting in the Midwest Stock Exchange. In 1959 the New Orleans Stock Exchange combined with Midwest Stock exchange leading to the formation of the Midwest Stock Exchange Service Corporation in the 1960s. Its objective was to provide accounting and finance services to its partner organizations. The CHX would later in 1978 come up with Intermarket Trading System (ITS), which enhanced the transfer of orders to various exchanges so that customers get the most perfect deal.CHX improved on its technological capabilities in the 1980s so as to enhance business. In 1982, the CHX developed the MAX system that enabled CHX to be amongst the pioneer stock exchanges providing fully automated services. Lastly, in 1987, CHX put down programs that could allow trading in the securities of Nasdaq. During the 1990s the Exchange was reformed and converted its name in 1993 back to Chicago Stock Exchange portraying its identity and roots within the Chicago financial environment. In 1997 CHX started doing business in Exchange- Traded Funds (ETFs). Many changes were experienced during the start of the new millennium. In 2005, SEC validated a shift of the structure from a nonprofit member-owned firm to the profit-making corporation of the stockholders. Currently, it functions as it belongs to CHX Holdings, a Delaware corporation. In 2005, the CHX introduced an electronic avenue of doing business. In 2006, the Exchange revealed the decision of shareholders and laws confirming investment in CHX by Bank of America Corporation, Bear Stearns, E*TRADE Financial Corporation, and Goldman Sachs & Co.CHX in the same year reported that it had finished migrating to the NEW Trading Model platform (the CHX Matching System). On 30 May 2014, The National Stock Exchange stopped trading reducing the number of active stocks in the USA to 11. Wrote Bloomberg, abandoned "just one public exchange, Chicago Stock Exchange Inc., that isn't owned Bats, Nasdaq OMX Group or Intercontinental Exchange Group Inc." On February 2016 a Chinese led investment firm called Chongqing Casin Enterprise Group approved an understanding to take over CHX Holdings, INC., the major firm of the Chicago Stock Exchange for unstated amount subject to regulatory confirmation. This Casin group was established in 1997. Some little ownership is controlled by Bank of America, E-Trade, Goldman Sachs and JPMorgan Chase. The buying price is said to be below $100M.This deal was however interrogated by the 2016 US presidential aspirant one Mr. Donald Trump in his campaigns. Besides this, Congressman Robert Pittenger encouraged the United States Department of the Treasury to investigate the background of this Casin Group. By August 2017, this deal was still hanging with the U.S. Securities and Exchange Commission holding reservations. The government blocked its sale in February 2018.