Brodsky: rival exchange plan full of "gaping holes"
The proposed market model of Boston Options Exchange (BOX)
"completely eviscerates" legal market safeguards, according to
Chicago Board Options Exchange (CBOE), which has asked US
regulators to block the creation of BOX.
In a scathing letter to Securities and Exchange Commission
(SEC), CBOE chairman Bill Brodsky described the BOX proposals
as "fundamentally deficient" and said that, if allowed to go
ahead as planned, BOX "would lead to a dangerous mutation of
the options markets".
Brodsky's attack centred on the fact that BOX is seeking to
establish itself as a facility of Boston Stock Exchange (BSE),
which he described as being "apparently eager to 'rent out' its
registration as a securities exchange". BSE has therefore
submitted a rule-change application to SEC, rather than a more
onerous new exchange application.
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