The Tool Desk
Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →In 2020, New Jersey considered an emergency tax on electronic securities transactions processed by high-volume firms. NYSE, Nasdaq and Cboe warned that they could move matching engines and related infrastructure out of the state. They backed that warning with Chicago contingency tests, but the available record does not show that New Jersey enacted the tax or that a permanent exchange relocation occurred.
What New Jersey proposed taxing
The proposal targeted electronic processing activity performed in New Jersey by firms handling large volumes of securities transactions. The precise rate differed between contemporary accounts, indicating that lawmakers and industry groups were discussing more than one draft or revision.
| Contemporary description | Rate reported | Qualification |
|---|---|---|
| Data Center Knowledge, September 11, 2020 | One-fourth of a cent per transaction ($0.0025) | Applied to companies processing at least 10,000 transactions per year |
| InvestmentNews, 2020 | One-hundredth of a cent per trade ($0.0001) | Reported as a later or competing version; the article did not state a transaction-volume threshold |
Those figures are not interchangeable. A fraction of a cent becomes material when multiplied across enormous order and quote volumes, but the financial effect depends on the final rate, what counts as a taxable transaction, which legal entities are liable, and whether the charge can be passed through to customers.
Why exchanges threatened to leave
A small unit charge could scale into a large operating cost
Electronic markets process huge numbers of messages and trades while competing on extremely narrow margins. NYSE, Nasdaq and Cboe argued that a New Jersey levy would raise the cost of operating matching engines and could ultimately increase costs for investors and other market participants. Nasdaq executive Terry Campbell told InvestmentNews that the strategy “will backfire” and that “You will not get the revenue you predict.”
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute#1 Best Overall
The threatened move involved more than three exchange companies
The opposition coalition included Equinix, Citadel Securities and Virtu Financial, alongside the three named exchanges. That lineup reflected a wider dependency: exchanges, market makers, trading firms, telecommunications providers and colocation operators share the same low-latency facilities. Moving an exchange engine could therefore affect where customers place servers, how they interconnect, and how much capacity data-center providers sell.
New Jersey offered a valuable network location
North Jersey facilities in Secaucus, Mahwah, Carteret and nearby communities sit close to New York financial firms while offering specialized colocation and interconnection. Assemblyman John McKeon, identified as the bill’s lead sponsor, said New Jersey was “blessed to have the geography that is able to serve [the function of being home to electronic trading engines] for the financial markets…” The industry’s point was that this advantage was valuable but not necessarily irreplaceable.
Rank #2
- As a day trader, you can live and work anywhere in the world. You can decide when to work and when not to work.
- You only answer to yourself. That is the life of the successful day trader. Many people aspire to it, but very few succeed. Day trading is not gambling or an online poker game.
- To be successful at day trading you need the right tools and you need to be motivated, to work hard, and to persevere.
How the relocation demonstrations worked
The exchanges did not announce an immediate permanent departure. Instead, they scheduled controlled tests to show regulators and legislators that trading could be operated from another region.
| Exchange | Planned exercise | What it demonstrated |
|---|---|---|
| NYSE | Run NYSE Chicago from a backup Chicago data center for a week beginning at the end of September 2020 | That core operations could be switched to an alternate site for an extended test |
| Nasdaq | Use its Chicago backup as the primary site for a simulated normal trading day | That a regular-session configuration could be operated with Chicago in the primary role |
Bloomberg notices cited in the contemporary reporting told clients to prepare for the exercises. A test of this kind is not evidence that customers permanently moved or that New Jersey facilities became obsolete. It is a contingency demonstration—and, in this dispute, a way to make the relocation threat credible during negotiations.
Rank #3
- Language: english
- Book - trading: technical analysis masterclass: master the financial markets
- It is made up of premium quality material.
Why Secaucus and Equinix NY4 mattered
Equinix NY4 in Secaucus was described as a dense trading hub where market participants could colocate equipment and connect to several networks. The value is not simply the building: it is the concentration of exchange access, communications links, vendors and nearby financial firms.
That ecosystem creates network effects. If matching engines moved, some customers could follow them to preserve latency and connectivity. Colocation demand, cross-connects and supporting infrastructure could then shift as well. A 2025 federal filing identifies NY4 as hosting MIAX Sapphire infrastructure, confirming that the facility remains part of an active market-infrastructure landscape; it does not establish that any of the 2020 exchanges permanently left New Jersey.
Rank #4
- Ideal for Gifting
- Ideal for a bookworm
- Comes with Proper Binding
The budget crisis behind the proposal
New Jersey presented the measure as temporary emergency revenue during the pandemic-era fiscal crisis. InvestmentNews reported a state estimate of $500 million in each of two years, attributed to the State of New Jersey in 2020. The same report said the state was borrowing $4.5 billion to plug a budget gap.
Governor Phil Murphy described the tax as temporary: “It’s not a forever thing.” For policymakers, the appeal was immediate revenue without a permanent tax commitment. For exchanges and their customers, even a two-year charge could influence infrastructure decisions because servers, network links and operating arrangements are planned well beyond a single budget cycle.
Best Value
- Comes with secure packaging
- Easy to read text
- It can be a gift option
What the dispute meant for investors and taxpayers
Potential benefits claimed by the state
- Raise substantial short-term revenue from a concentrated, high-volume industry.
- Place the charge on specialized financial infrastructure rather than on a broad household tax base.
- Use New Jersey’s established geographic advantage to capture revenue from activity already occurring inside the state.
Risks identified by the industry
- Exchanges and market makers could relocate taxable operations, shrinking or eliminating the expected base.
- Costs could be passed to trading firms, brokers or investors through fees and wider spreads.
- Colocation providers and related vendors could lose demand if matching engines and customers moved together.
- One-time relocation and connectivity costs could reduce the state’s long-term economic benefit even if the levy were temporary.
The central policy question was therefore not just the number of cents per trade. It was whether projected revenue would exceed the economic value New Jersey risked losing, and how easily firms could reproduce the required latency and connectivity in another jurisdiction.
Did New Jersey pass the electronic-trades tax?
The documented episode establishes a proposal, organized opposition and contingency testing. It does not establish enactment. The cited accounts also do not prove that NYSE, Nasdaq or Cboe permanently moved their matching engines out of New Jersey as a result of this proposal.
That distinction matters when interpreting later references to Chicago facilities. A backup site can be used for resilience, testing or regulatory demonstrations without replacing the New Jersey production environment. Likewise, the continued identification of NY4 in a 2025 federal filing shows ongoing market-infrastructure activity there, not the outcome of the 2020 legislative fight.
How to evaluate a similar exchange-tax proposal
For any future jurisdiction considering a transaction levy, compare the policy on the same dimensions:
Free tools Windows power users keep installed
One-click scans. No signup required.
Quick Recap
- Per-transaction rate: calculate the charge against realistic message and trade volumes, not a typical retail investor’s number of trades.
- Qualifying volume: identify the exact threshold and whether affiliates, venues or service providers are aggregated.
- Duration: distinguish a one-year emergency measure from a recurring tax that changes long-term location decisions.
- Revenue evidence: separate a state projection from collections demonstrated after implementation.
- Relocation feasibility: account for construction, migration, testing, regulatory approval and customer connectivity—not just the price of a server move.
- Latency and customer proximity: measure the network distance to major firms and counterparties, because a cheaper site may impose trading disadvantages.
- Spillovers: include colocation operators, market makers, telecommunications carriers and other businesses that depend on the exchange cluster.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
