Market participants advise of the difficulties of starting a new exchange from scratch.

The exchange space is one that is constantly evolving, from mergers and consolidation, to the uncertainty surrounding regulation. It is an environment that is becoming increasingly difficult for newcomers.

“Coming in as a new exchange will be difficult,” said Thomas Wittman, president of Nasdaq OMX, during the FIA OIC Equity Options Conference. “They need to have a model that adds value. They have to do something new, and can’t just copy an existing model. Most of us have scale now, and we can use existing infrastructure to run multiple exchanges.”

“There are costs as well as benefits to having more competitors,” said Steven Crutchfield, chief executive officer of NYSE Amex Options during the conference. “Every time there’s a new exchange, there is a lot that has to be done.” As a startup, an entire infrastructure would need to be put in place. Testing of the network needs to be done and code needs to be written for the trading engine. In addition to the grunt work that needs to be done, there is the sheer amount of costs to also be wary of.

There are currently 13 equities exchanges in the U.S., with a fourteenth possibly looking to join the fray in the form of the MIAX Equities Exchange. New Jersey-based Miami International Holdings will look to join the equities space next year following the launch of the MIAX Options Exchange, an options venue currently slated to launch during the second quarter of 2012, pending regulatory approval.  That would be the tenth options exchange in the U.S. Both platforms are to be located in Miami and would be built from the ground up. They would focus on listing securities and stocks from companies based in Central and South America.

“If the industry continues to grow the way it has, more the merrier,” said Boris Ilyevsky, managing director of the International Securities Exchange at the FIA conference. “Becoming an exchange has become more difficult over past few years.”

“What is the entrant bringing to marketplace?” asked Tony McCormick, chief executive of the Boston Options Exchange. “Why do you need to connect to them? Do they bring value? If so, then come on.”