The Exchanges recognize the importance of having arrangements in place that would allow their members and customers to continue to trade in the event of a disabling event or occurrence. The Memorandum of Understanding contemplates that customers and members of each exchange will be able to continue to trade through the facilities of the back-up exchange. Both exchanges will work collaboratively to develop the logistics of the back-up arrangement. Final implementation will be subject to approval by the Securities and Exchange Commission.
"Given our history of cooperation with the CBOE during emergencies, such as in the days following the earthquake of 1989, we look forward to a formal mutual aid agreement. Business Continuity Planning both for the PCX and our member firms is a prudent and necessary part of our obligation to protect the investing public," said PCX Chairman and CEO Philip D. DeFeo.
"CBOE is pleased to formalize the understanding that we believe has existed, but has taken on heightened importance in light of recent events," said CBOE Chairman and CEO William Brodsky. "We appreciate the spirit of cooperation that has been demonstrated during this process, allowing CBOE to forge contingency plans with all three floor-based exchanges."
Founded in 1882, the Pacific Exchange today trades options on more than 1,100 stocks. The PCX has a long and distinguished history of innovation. It was the first exchange in the world with electronic order routing, execution and reporting systems; the first to develop net clearance and settlement systems; and the first exchange in the U.S. to demutualize. In March 2002, the PCX migrated its equities trading operations to the Archipelago Exchange, the first fully electronic, open market for stocks listed on the New York, American, and Pacific exchanges, as well as the Nasdaq Stock Market. Archipelago operates as a regulated facility of the Pacific Exchange and is the second largest stock exchange in the U.S.
CBOE, the world's largest options marketplace and the creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, access the CBOE website at www.cboe.com.
