Amex hires advisor in step to become for-profit

The American Stock Exchange, the third-largest U.S. equity market, has hired Morgan Stanley to help it become a for-profit shareholder-owned company, the first step toward a possible public stock offering.

Morgan Stanley will also study “potential strategic future initiatives” for the market, the exchange said in a statement Thursday. Members of the 164-year-old marketplace would still have to approve any plan to convert their memberships or seats into shares.

Since taking the helm in 2005, Chief Executive Neal Wolkoff has overhauled the exchange’s trading systems to recoup some of the business lost to faster all-electronic rivals such as Nasdaq Stock Market Inc. A conversion from not-for-profit status as soon as this year would give the exchange stock that it could use in transactions for expansion, Wolkoff said.

“As we see exchanges changing their form to for-profit, publicly traded organizations, they have a currency that we don’t have and they have a scale that we need to achieve,” Wolkoff said. “A lot of this is designed to bring the Amex into a high level of competitiveness, and for all of those reasons, this is a very important year for us.”