Wall Street banks Goldman Sachs, Bank of America and Bear Stearns are in talks to acquire a joint minority stake in the Chicago Stock Exchange (CHX), according to a Wall Street Journal report.
Any investment by the banks would add up to less than 50% of the exchange, says the report which cites people familiar with the matter. However the talks are still in the early stages and could fall through.
The Chicago exchange converted from a member-owned organisation to a private, for-profit company in February last year. At the time CHX said the move would make "joint ventures and acquisitions easier to achieve".
CHX's move to sell of a stake of its business follows similar transactions by regional exchanges in Boston and Philadelphia last year.
In August 2005 US banks Morgan Stanley, Citigroup, UBS and Credit Suisse said they were acquiring a combined 25% equity stake in the Philadelphia Stock Exchange (PHLX) for almost $19 million. Merrill Lynch and Citadel Derivatives had earlier acquired ten per cent stakes in PHLX for a rumoured $7.5 million apiece.
Morgan Stanley and Citadel Derivatives also acquired shares in the Boston Options Exchange (Box) last year.
The investments come as regional exchanges struggle to compete against larger competitors such as the New York Stock Exchange and Nasdaq, and amid rising concern amongst Wall Street banks and brokers that the dominant exchanges in the US could use their market power to raise trading fees.