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CBOE Holdings, Inc. (NASDAQ: CBOE) today announced that C2 Options Exchange, Incorporated (C2), the company's new all-electronic exchange, will launch in late October 2010. Details on C2 trading access, connectivity and an overview of the market model were also announced.
C2 will operate under a separate exchange license, with its own board of directors, rules, connectivity, systems architecture and access structure. The new Exchange will employ a "maker-taker" fee schedule and a modified price/time matching algorithm for multiply-listed classes.
"The launch of C2 marks a significant milestone in the continued evolution of our company, and the prospects that C2 provide are exciting. As a complementary market to CBOE, we believe C2 will appeal to a wide variety of customers and have the potential to expand our customer base," commented William J. Brodsky, Chairman and CEO, CBOE Holdings. "Just as significant, C2 was designed to be a key driver of our competitive efforts going forward. Its flexible structure is designed to provide us with greater strategic optionality and is intended to offer substantial opportunities in a highly competitive and rapidly changing options environment."
It is anticipated that all or substantially all of the industry's multiply-listed, penny pilot option classes will eventually be listed on C2. Products will be launched on a measured rollout schedule. The first phase of the rollout is expected to include 25 to 50 multiply-listed classes over a period of several weeks, with other rollouts to follow through early 2011. C2 will also be capable of listing CBOE's exclusive products, including S&P 500 Index (SPX) options, with plans for those products expected to be announced following the initial launch of C2.
Subject to regulatory approval, C2 will offer access through two different trading permit holder designations, both of which apply only to access to non-exclusive options classes. The fees for those trading permits will be as follows:
- Market Maker Permit (MMP) -- $5,000/month - Gives the holder the ability to both stream quotes and submit orders into the C2 trade engine.
- Electronic Access Permit (EAP) -- $1,000/month - Gives the holder the ability to submit orders only into the C2 trade engine.
Details on the transaction and routing fees, and the initial class rollout schedule, will be announced in early October. All fees are subject to regulatory approval.
Currently, a dozen firms are in the process of connecting to C2. For additional information on C2 connectivity and applying for trading permit holder status, please refer to www.cboe.com/C2 (C2 Information Circulars).
