History
The Chicago Stock Exchange was founded in a formal meeting on March 21, 1882. At this time, Charles Henrotin was elected the chairman and president. In April that year, a lease was taken out at 115 Dearborn Street for the location of the exchange and during that month 749 memberships were sold.
In July 1914, the Exchange closed as a result of World War I, and remained closed until December 11. In October 1915, the basis of quoting and trading in stocks changed from percent to par value to dollars. On April 26, 1920, the Chicago Stock Exchange Stock Clearing Corporation was established. On October 29, 1929, the stock market crashed, resulting in a very difficult time period for the Chicago Stock Exchange, and the stock market in general.
In May 1933, the Securities Act of 1933 was enacted. This act provided full disclosure to investors to prohibit fraud in connection with the sales of securities. The following year, the Securities Exchange Act of 1934 was enacted, which regulated securities trading and established the Securities & Exchange Commission (SEC). In 1949, the CHX merged with the exchanges of St. Louis, Cleveland and Minneapolis/St. Paul to form the Midwest Stock Exchange. On September 29, 1952, the trading hours were changed to 10 a.m. – 3:30 p.m., and there was no Saturday trading. In 1959, the New Orleans Stock Exchange became part of the Midwest Stock Exchange, and in the early 1960s the Midwest Stock Exchange Service Corporation was established to provide centralized accounting for member firms.
On May 11, 1973, the Midwest Securities Trust Company (MSTC) was established to provide a central depository for securities certificates and to electronically record transfers of stock ownership. In October of the next year, trading hours at the stock exchange were extended to 4pm, and in the following year, a fixed commission system was abolished. In April 1978, the Chicago Stock Exchange launched an Intermarket Trading System (ITS), a system that allows order to be sent from one exchange to another to ensure that customers receive the best execution available.
In the 1980s, the Chicago Stock Exchange made several technological advancements to improve trading. In 1982, the CHX launched the MAX system, which allowed them to be one of the first stock exchanges to provide fully automated order execution. In 1987, the CHX implemented programs to trade Nasdaq securities.
In the 1990s, the Exchange had a rebirth, and in 1993 changed its name back to the Chicago Stock Exchange (after being the Midwest Stock Exchange), reflecting its roots and identity within the Chicago financial community. In June 1995, securities settlement dates were shortened from five to three business days following trade date and one year later, the CHX extended its trading hours. The Exchange is now open thirty minutes after the primary market closes. In 1997 the Chicago Stock Exchange began trading exchange-traded funds (ETFs).
At the beginning of the new millennium, several major changes occurred. In April 2001, decimal pricing of all stocks was fully implemented. In 2005, the SEC approved a change of the ownership structure of the CHX from a not-for-profit, member-owned company to a for-profit, stockholder-owned corporation. In that same year, the CHX implemented the Electronic Book trading platform; the predecessor technology of the New Trading Model’s Matching System. In 2006 the Exchange announced regulatory and shareholder approval of an investment in CHX by Bank of America Corporation, Bear Stearns, E*TRADE FINANCIAL Corporation, and Goldman, Sachs & Co. Just last year on February 1, the CHX announced that it has completed the migration to the New Trading Model platform.
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—Zora Neale Hurston (1891–1960)