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On August 3, 2007, the Delaware Chancery Court granted Chicago Board Options Exchange's (CBOE) request for a suspension of further proceedings in the litigation brought against CBOE and its directors by the Chicago Board of Trade (CBOT) and other plaintiffs. Under the Court's order, this stay of proceedings will remain in effect until the Securities and Exchange Commission (SEC) takes final action on the issue of whether the there are any "members" of the Board of Trade entitled to utilize the Exercise Right following the recent acquisition of the Board of Trade by CME Group, Inc. Under CBOE's filing with the SEC, that acquisition extinguished any Exercise Right eligibility. CBOT had asked the Court to enter judgment rejecting that interpretation, but the Court agreed with CBOE that this matter should be decided by the SEC and stayed all court proceedings until the SEC has made its final decision on that issue.
In another ruling, the Court denied a motion brought by CBOT and other plaintiffs requesting the entry of a temporary injunction to prohibit CBOE from enforcing an interim interpretation and policy that allows former Exerciser Members to remain as CBOE members until the SEC issues its final ruling regarding whether the CME Group (ticker symbol CME) acquisition extinguished further Exercise Right eligibility. CBOE's interpretation and policy, known as the Interim Access Rule, was filed with the SEC on July 2, 2007 and became an effective CBOE rule upon filing.
CBOE is extremely gratified with the court's decisions. The Court denied and rejected CBOT's motion for a temporary restraining order. As a result, the Interim Access Rule will remain in full force and effect. In addition, consistent with prior precedent, the Court affirmed that the SEC maintains exclusive jurisdiction over membership access and over whether Exercise Right eligibility survived the CME Group acquisition.Although the Court retained jurisdiction over certain contractual issues, if any of these issues remain relevant after the SEC's decision on eligibility, the Court in no way retained any authority to revisit or overrule the SEC's eligibility determination.
