CBOE Joins S&P 500 Just After Completing BATS Acquisition

The surprise deal forms major new competitor to the likes of the InterContinental Exchange, NASDAQ and CME Group.

CBOE Holdings, the holding company of the Chicago Board of Options Exchange, is on its way to join the S&P 500 stocks benchmark. The news comes just a day before the company is to complete its acquisition of BATS Global Markets.

Commenting on the news, the CEO of the company Edward Tilly said: “We are honored to join ranks with other great blue chip companies listed in the S&P 500. This recognition highlights our company’s continued strong growth since going public in 2010 and our acquisition of Bats Global Markets, expected to close tomorrow.”

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“The acquisition will enable CBOE to significantly expand its product line and broaden its geographic reach, solidifying our position as a leader in providing global investors with cutting-edge trading and investment solutions,” Tilly elaborated.

BATS Acquisition

CBOE acquired BATS Global Markets shortly after its IPO for $3.2 billion in a surprise deal that is forming major new competitor to the likes of the InterContinental Exchange, NASDAQ and CME Group. The acquisition marked the foray of CBOE into the FX market via BATS foreign exchange focused subsidiary, Hotspot.

Commenting in his regular CEO Newsletter, Chris Concannon, the head honcho of BATS Global Markets, said: “The pending combination with CBOE doesn’t spell the end of the journey for BATS but is instead a major milestone in our mission to Make Markets Better by leveraging great technology and a unique spirit of innovation.”

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“As a customer, issuer, supporter, vendor or competitor, you can expect to see Bats’ same vibrant competitive forces — and many familiar faces — as we join with CBOE. More than anything, we look forward to continuing our work alongside you as our partner as we move into this next phase of BATS history,” the CEO of BATS elaborated.

Concannon on the Market in 2017

Chris Concannon

In his final newsletter Concannon elaborated on some key upcoming developments for the financial markets in 2017. The CEO of BATS thinks that Reg NMS will come under serious review in 2017. The rule was established in 2005, aiming to boost competition between different markets and has been touted as the main reason for rise of high-frequency trading over the past decade.

Concannon also expects some last-minute adjustments to the MiFID II framework before it takes effect in the beginning of 2018.

On the FX Global Code, he stated that the most difficult part of its adoption will be adherence.

Finally, Concannon said that he views that the market-maker exemption from the Volcker Rule will get bigger.

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