Daniel Labovitz

Through becoming a registered securities exchange, GIX will become the firm stock market in the US focused on the $35 trillion sustainability economy.

Speaking to interest in the sustainability-focused exchange, Charles Dolan, co-founder and president, previously told The TRADE that important conversations were underway with key buy-side players, explaining: “Our discussions with major buy-side firms have revealed a high level of interest in our initiative. They believe our direction will significantly influence asset allocation decisions and other industry practices, making it a game-changer for the entire sector.”

The GIX trading platform is set to be powered by MEMX technology and offer non-tiered, competitive liquidity and quoting programs.

In addition, GIX confirmed that it will also be part of the National Market System (NMS), ensuring best execution. 

 “Climate risk is business risk. It’s that simple. US investors and companies are continuing to pursue sustainability because it makes financial and competitive sense,” said Dolan in an official announcement on 14 April.

Read more: Keeping ESG commercial

Speaking to The TRADE last July, chief executive and co-founder Daniel Labovitz, highlighted the importance of the GIX mandate and the opportunity it represents for market makers to voluntarily take on a dual listing matter.

He further highlighted the significance of firms taking accountability through joining GIX, adding that joining the platform will be a reflection of a business’ integrity and the character of its leadership. 

“[…] Contrary to popular belief, an exchange is not just about ‘buy, buy, sell, sell,’ which is the domain of brokers. The true essence lies in the infrastructure that supports these transactions,” he said. 

“The role of GIX is to provide an unbiased platform where investors can meet to buy and sell, guided by credible, reliable, and trustworthy information. This is the essence of what an exchange does, and GIX is committed to fulfilling this need for the sustainability world.”

GIX founders also include Jim Buckley, former chief regulatory officer of the National Stock Exchange, and Lou Pastina, former executive vice president of operations on the NYSE floor. 

The post GIX trading platform becomes first green securities exchange to gain SEC approval appeared first on The TRADE.

GIX submitted its Form 1 application on 9 May 2023, outlining plans to operate a fully automated electronic trading platform for the trading of listed equities – no physical trading floor is planned.

Daniel Labovitz

Specifically, the GIX plan is to list companies that make a “binding commitment” to set, implement, measure, and achieve sustainability goals while being transparent with investors about the state of play as things progress.

Importantly, companies can dual-list and be recognised on GIX without giving up their primary listing exchange.

Prior to launching GIX, founders Daniel Labovitz (CEO) and Charles Dolan (COO) served as head of regulatory policy and executive floor governor, respectively, at the New York Stock Exchange (NYSE).

Speaking to The TRADE, Labovitz highlights the key motivations behind listing on GIX: “Voluntarily taking on a dual listing matters. It says something about the integrity of the company and the character of its leadership that they’re willing to do this, create value in the long term, and be held accountable for it.”

“If your company makes a gesture that says, ‘I am willing to be held accountable for my environmental promises through the listing process’ that is a really significant statement. It means your company is sincere in its motivation to follow through on those promises. It means you’re serious,” explains Labovitz. 

Discussing the aims of GIX, Labovitz tells The TRADE that it comes down to addressing all aspects of an exchange’s offering.

“Contrary to popular belief, an exchange is not just about ‘buy, buy, sell, sell,’ which is the domain of brokers. The true essence lies in the infrastructure that supports these transactions. The role of GIX is to provide an unbiased platform where investors can meet to buy and sell, guided by credible, reliable, and trustworthy information. This is the essence of what an exchange does, and GIX is committed to fulfilling this need for the sustainability world.”

Read more: Keeping ESG commercial

Once live, the GIX trading platform is set to be powered by technology from exchange operator MEMX. In addition, GIX has confirmed that it will be part of the National Market System (NMS), ensuring best execution for all trades directed or routed to GIX. 

Furthermore, the exchange plans to implement a ‘return to green’ program set to commit a portion of its gross revenue to support companies focused on sustainability.

In an announcement, the SEC stated: “The Commission is publishing this notice to solicit comments on GIX’s Form 1 application.  The Commission will take any comments it receives into consideration in making its determination about whether to grant GIX’s request to be registered as a national securities exchange.”

The founders – including Jim Buckley, former chief regulatory officer of the National Stock Exchange, and Lou Pastina, former executive vice president of operations on the NYSE floor – all have decades of experience in capital markets, working for and with major US stock exchanges.

Over the years, the individuals witnessed developments in the marketplace and capital markets and also saw their own personal beliefs evolve, recognising the importance of leaving the world a better place, Dolan tells The TRADE. As a result, they pinpointed a need for a sustainability-focused stock exchange and recognised that they could be the ones to build it.

Dolan adds that more recently, conversations are being had with key buy-side players: “Our discussions with major buy-side firms have revealed a high level of interest in our initiative. They believe our direction will significantly influence asset allocation decisions and other industry practices, making it a game-changer for the entire sector.”

Read more: Goldman Sachs Asset Management hit with $4m SEC penalty over ESG violations

Speaking in an announcement today, Shiva Rajgopal, advisor to GIX, affirmed that it is the accountability for sustainability promises which is key.

“The marketplace needs a ‘trust but verify’ approach to help reduce greenwashing. There’s a tremendous financial opportunity to bring together sustainable-minded investors with companies working hard to meet their environmental commitments. For that opportunity to be realised, there needs to be better transparency and accountability of sustainability initiatives and reporting. GIX will provide that.”

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