Cincinnati Stock Exchange (CSE)

What Was the Cincinnati Stock Exchange?

The Cincinnati Stock Exchange was a securities exchange formed in 1885 by a group of Cincinnati businessmen. The CSE's headquarters moved to Chicago in 1995, and in 2003 the CSE changed its name to the National Stock Exchange (NSX) and now maintains its headquarters in New Jersey. 

Understanding the Cincinnati Stock Exchange

The Cincinnati Stock Exchange was founded by several prominent Cincinnati businessmen in the year 1885, responding to the growing financial needs of the city. As more and more major businesses set up in Cincinnati, these merchants needed a way to publicly trade shares in the titanic industries. It quickly became the fiscal hub of the city. In 1976, its trading floor was shut down, and the market became all electronic, operating through telephones and computers.

In 1995, as economic particularism was on the wane, the market moved from Cincinnati to the regional hub of commerce and stock trading, Chicago, but continued to operate as the Cincinnati Stock Exchange until November 7, 2003, when it was renamed the National Stock Exchange (NSX).

In 1980, the CSE replaced its physical trading floor with a much more efficient geographically dispersed electronic trading floor because of amendments made in 1975 to the Securities and Exchange Act. In 1985, the CSE became the first fully electronic exchange in the United States, capable of automatically executing orders through the Intermarket Trading System. The CSE was also the first exchange to introduce a competing specialist system, in 1992.

The National Stock Exchange (NSX)

The Cincinnati Stock Exchange had been owned by its founders and their heirs since its inception, but in 2006 as the National Stock Exchange (NSX) it demutualized and eventually moved to Jersey City, NJ. In September of 2011, it was announced that the CBOE Stock Exchange had arranged to purchase the National Stock Exchange, and the acquisition was completed on December 30, 2011, though the NSX was never merged with the CBOE Exchange or moved to Chicago, and the two continued to operate in parallel.

In May 2014, the exchange changed its pricing structure to charge both sides a fee when a trade was made. All trading operations were ceased on May 30, 2014, but the exchange released a statement claiming that it was still a registered securities exchange. The purpose of the statement was to maintain investor confidence as the exchange underwent a major reorganization. Rampant speculation that the exchange may be shutting down was fueled by the recent closure of the owner of NSX, the CBOE Stock Exchange, in April of that year.

On February 24, 2015, the National Stock Exchange was purchased by an entity known as National Stock Exchange Holdings, and trading resumed in late December of that year. In December of 2016, the New York Stock Exchange announced that it had agreed to purchase the National Stock Exchange, and, pending SEC approval, the NSX shut down trading operations again on February 1, 2017.

Assuming the SEC approves the acquisition, the NYSE has announced that it plans to integrate it into a Pillar, an experimental trading platform, and to rename it “NYSE National,” both at indeterminate points in the future.

On January 12, 2018, the SEC greenlit the resumption of operations of NYSE National, Inc., which subsequently commenced the second quarter of that fiscal year. NYSE National remains a fully electronic market that combines the high performance of NYSE Pillar technology with a “taker/maker” fee schedule. With the highest exchange rebates available for removing liquidity, NYSE National is an attractive trading venue for investors using fee-sensitive strategies to take liquidity or for passive traders seeking to minimize their time-to-fill.