American Stock Exchange

The American Stock Exchange (ASE or AMEX) is the second largest stock exchange and the third largest securities trading market in the United States, after the New York Stock Exchange (NYSE) and Nasdaq. Market (NASDAQ). Companies listed on American stock exchanges are mainly growing small and medium-sized companies and mainly trade stocks, options, index funds (ETFs) and special types of investment products, such as convertible bonds, trust units and structured products.


The history of the American Stock Exchange can be traced back to 1908, when the New York Curb Market Agency was established to manage over-the-counter trading on Wall Street Curb. In 1912, the institution was renamed the New York Curb Exchange and moved into its own building in 1921. In 1953, the exchange changed its name again to the American Stock Exchange to reflect its nationwide reach. In 2008, the American Stock Exchange merged with NYSE Euronext and changed its name to NYSE Alternext U.S. In 2012, the exchange changed its name again to NYSE MKT LLC. In 2017, the exchange resumed its name as the American Stock Exchange.


The headquarters of the American Stock Exchange is located at 11 Broadway in New York City, not far from the New York Stock Exchange. The exchange uses an electronic trading system, but still retains some manual roles, such as specialists and floor brokers. The exchange's trading hours are 9:30-16:00 (Eastern Time) every working day, except weekends and regular closed days.

Advantages of American Stock Exchanges

American stock exchanges have the following advantages for small and medium-sized companies that want to list on the U.S. market:


Relatively low listing requirements: The American Stock Exchange has lower listing requirements than the New York Stock Exchange and Nasdaq, such as market capitalization, revenue, shareholder equity, etc. This allows some smaller or faster-growing companies to more easily access capital markets.


Relatively Low Fees: Amex’s listing fees and annual fees are also lower than those of the other two major exchanges, which helps reduce a company’s financial burden.


Relatively high exposure: Companies listed on the American Stock Exchange enjoy the same media attention and investor recognition as the New York Stock Exchange because both exchanges are owned by the Intercontinental Exchange Group. In addition, American stock exchanges also provide some services to increase exposure, such as opening bells, road shows, webcasts, etc.


Product diversification: American stock exchanges not only trade traditional stocks and options, but also trade some innovative products, such as index funds (ETFs), convertible bonds, trust units and structured products. These products can meet the needs of different types of investors and provide more investment options and strategies.

Challenges for American Stock Exchanges

Although American stock exchanges have their own advantages, they also face some challenges, mainly in the following aspects:


Declining market share: The market share of American stock exchanges has continued to decline in recent years, and the gap with the New York Stock Exchange and Nasdaq has grown wider. According to August 2020 data, stock trading volume on the American Stock Exchange accounted for 1.6% of the U.S. market, while the New York Stock Exchange and Nasdaq accounted for 23.4% and 18.7% respectively. This means that U.S. stock exchanges are relatively less liquid and competitive.


Loss of listed companies: The number of listed companies on U.S. stock exchanges is also declining, with some companies choosing to move to other exchanges or go private. According to data from June 2020, there are 389 listed companies on the American Stock Exchange, while the New York Stock Exchange and Nasdaq have 2,339 and 3,149 respectively. This means that U.S. stock exchanges are relatively less diverse and less attractive.


Regulatory pressure: As a national stock exchange, the American Stock Exchange must comply with the rules and requirements of regulatory agencies such as the U.S. Securities and Exchange Commission (SEC). These rules and requirements may change as the market environment and policies change, bringing certain uncertainties and risks to American stock exchanges and their listed companies.

The future of U.S. stock exchanges

Facing challenges, American stock exchanges are constantly seeking improvements and innovations to enhance their competitiveness and value. Some possible directions include:


Strengthening synergies with Intercontinental Exchange Group: Intercontinental Exchange Group is one of the world's largest financial market infrastructure providers. In addition to the New York Stock Exchange and the American Stock Exchange and the New York Stock Exchange, there are other Financial markets and clearinghouses such as futures, options, foreign exchange, energy, commodities, etc. These markets and clearing houses are owned by the Intercontinental Exchange Group (ICE). Intercontinental Exchange Group is one of the world's largest financial market infrastructure providers, founded in 2000 to digitize energy markets and provide greater price transparency. Intercontinental Exchange Group continues to expand its business scope and product categories through acquisitions and innovation, and provides customers with high-quality data and technology services. As part of the Intercontinental Exchange Group, American Stock Exchange is able to leverage its powerful resources and platforms to improve its efficiency and competitiveness.


Adapting to market changes: American stock exchanges are also constantly adapting to market changes and needs, launching some new products and services to satisfy different types of investors and listed companies. For example, the American Stock Exchange launched a new trading system in 2019 called NYSE American Options, which is designed to provide a faster, more flexible, and fairer options trading experience. The American Stock Exchange also launched a new listing method in 2020, called direct listing, which allows companies to list on the exchange without issuing new shares or hiring underwriters. This approach can help companies save costs and time and keep shareholders in control.


Focus on social responsibility: American stock exchanges are also paying attention to social responsibility and sustainable development, supporting some initiatives and activities that benefit the environment, society and governance (ESG). For example, the American Stock Exchange joined the Climate Action 100+ initiative launched by the United Nations Climate Change Secretariat in 2019, pledging to work with listed companies to reduce greenhouse gas emissions and improve climate disclosure and governance. Amex also partnered with the New York Stock Exchange in 2020 to launch a new ESG index series designed to reflect the best-performing ESG leaders across industries.

Conclusion on the American Stock Exchange

To sum up, the American Stock Exchange is a long-established, diversified, innovative and responsible securities trading platform that provides small and medium-sized companies with an opportunity to enter the capital market and provides investors with a platform to trade a variety of products. The choice provides society with a contribution to sustainable development. As part of the Intercontinental Exchange Group, American Stock Exchange is also able to leverage its powerful resources and platforms to improve its efficiency and competitiveness. While facing challenges, American stock exchanges are constantly seeking improvement and innovation to adapt to market changes and needs and create value for customers.


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