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CBOE And C2 In Discussions On Regulatory Services Agreement With FINRA

Date 11/09/2014

CBOE Holdings, Inc. (NASDAQ: CBOE) today announced that Chicago Board Options Exchange (CBOE) and C2 Options Exchange(C2) are in discussions with the Financial Industry Regulatory Authority (FINRA) on a potential agreement for FINRA to provide certain regulatory services to the CBOE and C2 options markets. 

Negotiations are ongoing, and there is no assurance of a final regulatory services agreement. If terms are reached, a regulatory services agreement could potentially be finalized within the next few months, after consultation with CBOE's regulator. The potential regulatory services agreement is not expected to have a significant impact onCBOE's financial results.

"CBOE is committed to maintaining the highest standards in market regulation," said CBOE Holdings CEO Edward T. Tilly. "Teaming with FINRA, the largest regulator in the securities industry, could enable us to continue to meet those standards and to optimally serve the investing public going forward.  We believe that FINRA's independence and regulatory efficiency together with CBOE's regulatory oversight experience and options expertise could further strengthen the integrity of our markets and investor protection."   

If CBOE and FINRA reach an agreement, it may include the transition to FINRA of certain staff in CBOE's Regulatory Services Division involved in the CBOE and C2 regulatory oversight process, as well as some staff in CBOE's Systems Development group, who support options surveillance.  In that event, CBOE and C2 would still be responsible for the regulation of their markets and would maintain an in-house regulatory team to, at a minimum, manage CBOE and C2 regulatory oversight programs and oversee the FINRA regulatory services relationship. Regulation of the CBOE Futures Exchange (CFE) is not anticipated to be part of this agreement with FINRA.