Pending final agreement between the two parties, the CBOE will integrate Primex Trading's technology with its existing electronic order routing and execution systems, furthering the Exchange's transition to a combined open outcry/digital auction market. Once implemented, this new hybrid marketplace will provide CBOE's retail and professional customers with enhanced access to improved prices and liquidity.
The system's design uniquely fosters increased interaction between orders and the market at large. It is intended to play an important role in the CBOE's new Best Execution Assurance Programsm, which is designed to ensure that orders executed at the exchange receive the best price available.
Brokers can seek better prices and liquidity for their customer orders by forwarding them to the Primex Auction System, which broadcasts the orders to an electronic trading crowd of potential bidders. Crowd participants compete through the Primex auction for orders, and in the process, provide opportunities for those orders to receive price improvement and enhanced liquidity.
"Today's agreement between the CBOE and Primex Trading further demonstrates our commitment to maintaining the superiority of the CBOE Best Execution Assurance Program in a changing competitive environment", said William J. Brodsky, CBOE Chairman and CEO.
The CBOE will operate the Primex Auction System as a facility of its exchange, providing the necessary regulatory oversight. Primex Trading has previously licensed a version of its digital market to the Nasdaq Stock Market, Inc. to facilitate auction-style trading of U.S.-listed equities.
"We are pleased that the CBOE has strongly endorsed our digital auction model," said Glen Shipway, chief executive of Primex Trading. "This is another example of a market taking pro-active steps to place a priority on the customers' interest."
CBOE, the world's largest options market and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For more information about the CBOE and its products, visit the CBOE Web site at www.cboe.com. For more information on the Primex Auction System, visit www.primextrading.com
