The state of Illinois has put in a formal bid to lure the electronic backbone of the New York Stock Exchange here. And with the NYSE now saying that tax considerations may force it to move its headquarters, too, Illinois is preparing to try to capture the entire operation as well.
In a phone interview, Deputy Gov. Dan Hynes said the Pritzker administration has been in contact with NYSE officials for several months about making the Chicago area the base of the exchange's network of servers, which host the electronic trades that make up most stock transactions today.
That pitch specifically is to expand a site in the western suburbs here that now is the NYSE’s secondary data-center location. The main site currently is in New Jersey, across the Hudson River from Manhattan, but exchange officials have talked about moving it elsewhere since New Jersey began considering a possible transaction tax on all trades.
Hynes said Illinois officials contacted NYSE after the New Jersey tax news broke in September, with Gov. J.B. Pritkzer and an official from Intersect Illinois, the state’s corporate recruitment arm, personally meeting with an exchange search committee to pitch Illinois for the electronic hub. At least a few other states are believed to also be competing, including Texas as well as Georgia, home of NYSE owner Intercontinental Exchange.
Asked if Illinois now will expand its efforts in wake of a public threat this week by NYSE President Stacey Cunningham to also move the exchange’s headquarters, Hynes replied, “Absolutely. We’re interested in bringing them here, in whole or in part.” Cunningham made his statement after efforts to pass a trading tax picked up steam in the New York State Legislature.
Key to Illinois’ pitch is Pritzker’s opposition to a transaction tax here.
Some political progressives say such a tax would be an easy way to raise billions of dollars without hurting ordinary people. Foes say such taxes inevitably will be passed on to buyers, including pension funds, and are easily evaded in the era of electronic trading.
Pritzker opposed such a levy during his 2020 election campaign, saying the so-called "LaSalle Street Tax" will be ineffective. Chicago Mayor Lori Lightfoot, too, has opposed such a tax, saying it could drive business from the city.
Hynes said Pritzker’s pitch on the digital hub also underlined that Illinois now has a new sales-tax exemption for the cost of materials used in new data centers, and that the state does not have “natural disasters”—notably hurricanes, like those that have struck New Jersey in recent years. Illinois also a large financial role as the home of a variety of commodities and trading exchanges such as CME Group, houses more than 100 data centers, and has a robust fiber optic network of the type needed for instantaneous stock trading.
After news of the New Jersey legislation surfaced in the fall, NYSE moved its trading for a week to the Chicago-area facility, saying it was a “test.” Hynes said the “test” worked well.
Luring even the NYSE server operation here “would strengthen Illinois’ reputation as a global financial center,” Hynes said. NYSE’s facility here “already is one of the largest data centers in the state,” he added. Construction would create hundreds of construction jobs, with permanent jobs also likely hitting some hundreds.
Hynes declined to give odds on Illinois’ chances, saying only that the NYSE search committee “seemed impressed.”
In an emailed statement, Jordon Troy, the mayor's deputy press secretary, wrote that "Chicago has both the financial infrastructure and expertise ideal for a financial exchange. From our dense data center ecosystem to our futures and options exchanges, the largest by volume—we have a great pipeline of diverse talent, connected business networks and the exchange business know-how that would make a NYSE move a viable and successful one. We are uniquely positioned for the NYSE and any other financial exchange, fin tech company, etc., looking to accelerate, disrupt, grow and thrive."
A spokesman for NYSE did not immediately respond to a request for comment. Though trading is much more dispersed today than in the past, NYSE still is the largest exchange in the world in terms of the total capitalization of companies listed on it, more than twice as big as its nearest competitor.
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New York Stock Exchange threatens to move HQ, and Illinois hopes to bid - Crain's Chicago Business
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