Xerxes Wilson

The News Journal

The Delaware Board of Trade was announced in July.

The trading system is being developed for small- and medium-sized firms.

The company has signed a 15-year lease for 10,000 square feet of space in Hercules Plaza.

The group behind a startup stock exchange in Wilmington is courting companies to list on the trading system, now anticipated to launch late next month. The project, called the Delaware Board of Trade, was announced in July and had originally been scheduled to open last fall.

"It is not a question if we are going to open up and make it, it is more a question of how and when," said Dennis Toner, a project manager for the exchange, which in January signed a 15-year lease for 10,000 square feet in Hercules Plaza at 1313 N. Market St.

Toner said they're waiting for approval from the Financial Industry Regulatory Authority, an independent board that regulates securities firms.

The exchange is envisioned as an all-electronic trading network for small- and medium-sized businesses and is being proposed by a number of high-profile executives. The CEO is John F. Wallace, a former chief executive of the Philadelphia Stock Exchange; Toner was a top aide to Joe Biden when he was in the U.S. Senate.

Board of Trade officials want to create a trading platform they say will have the same level of transparency of large exchanges without the regulatory hoops that prevent some companies from listing.

The project was announced last summer as the startup turned to New Castle County government for help raising money. Accumulating start-up capital proved to be the biggest hurdle, Toner said.

STORY: Stock exchange - Why Wilmington?

STORY: 15-year lease signed for Wilmington stock exchange

The administration of New Castle County Executive Thomas P. Gordon loaned the startup $3 million in December. The money had been given to through a DuPont executive's estate and was previously invested in stocks and bonds with the proceeds benefiting local parks. Under pressure from the County Council, Gordon restored the parkland investment money with county reserve funds.

Earlier this year, an outside attorney hired by the County Council said that Gordon's office overreached its authority in loaning parkland trust money to the Board of Trade and said the executive's decision to restore that trust with county tax reserve money sidestepped the council's oversight. No further action was taken on the issue.

Toner said the venture has the startup capital it needs, but declined to discuss how much or what entities are involved in funding the project. He said the government funding is not the largest funding source the company has. He said the company currently has about 12 people working for it.

The exchange the first year is projected to hire up to 50 workers paid an average $136,000 annually, and eventually up to 125 making an average of $86,000. Gordon and city officials have said the project could help spur growth in Wilmington's financial services sector.

The company is currently operating out of an office on the 1200 block of Market St., Toner said the Hercules Plaza space is not ready yet.

"The work we have right now is going out to talk to so-called market makers about bringing listings to the exchange," Toner said. "Until it happens, you are just not sure, but every indication is we will be able to bring listings to the market very soon. We are likely to do a soft opening in July."

STORY: Gordon restores parkland fund used for stock exchange

STORY: $15M bond for Wilmington stock exchange OK'd

Once running, the exchange will owe annual interest payments of 6 percent on the government loan that is to be repaid over five years. On Tuesday, the County Council is expected to introduce legislation to divert those interest payments to a new strategic economic development fund.



The fund was set up to house $7.5 million moved from county tax reserves to pay DuPont Co. over five years. That money is part of a larger state package officials floated in an effort to retain as much of the DuPont in Delaware as the company undergoes its $130 billion merger with Dow Chemical Company.





County Councilwoman Janet Kilpatrick said proceeds from the stock exchange loan will contribute a new economic development effort in the county through the strategic fund. County government has issued tax incentives to companies in the past, but direct cash aid through grants and loans is a new function for local government.

Kilpatrick said she foresees the fund being used to help smaller businesses that are seeking startup capital or money for new technology or renovations. She said County Council later this summer will lay out the rules for what businesses will qualify and how those businesses will apply. The state has similar programs, but Kilpatrick said the county should also play a role.

"The state program looks statewide," Kilpatrick said. "We need to look specifically at New Castle County and we need to push to get creative and well-paying jobs."

The council is expected to vote on the legislation in early July.

Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com. Follow @Ber_Xerxes on Twitter