Chicago Board Options Exchange (CBOE) stepped up its battle
with Chicago Board of Trade (CBoT) over exercise rights last
week, saying it would terminate those rights if and when CBoT
is acquired by Chicago Mercantile Exchange (CME), a deal
scheduled to complete next year.
CBOE submitted a rule filing with Securities and Exchange
Commission (SEC) to allow the exchange to cancel the exercise
right, which provides CBoT members the right to trade and lease
seats on CBOE without purchasing exchange membership. At press
time, there were 292 exercisers from CBoT on CBOE. In total,
CBOE has 931 members.
CBOE, which has been negotiating and feuding over exercise
rights with CBoT for a number of years, has contended that
CME's proposed $8bn buyout of CBoT means that CBoT would no
longer have "members" as defined by the 1973 charter agreement
which created CBOE. In its filing with SEC, CBOE argued that,
"Once CBoT members cease to be owners of CBoT, they will cease
to be able to avail themselves of the exercise right as a means
of acquiring membership in CBOE." The filing also stated that
CBOE would allow for some current exercisers to be
"grandfathered" for a certain period of time. No cut off date
has been determined.
This article is available exclusively to subscribers
Please log in to continue reading.
Not yet a subscriber?
Click here to take a free trial.
Already have an account? |
Please fill in your details below and a customer service representative will contact you.