German derivatives exchange Eurex and the International Securities Exchange (ISE) received final approval from the Securities and Exchange Commission Wednesday to complete their cross-Atlantic merger.
With last month’s announcement of Nasdaq’s planned purchase of the Philadelphia Stock Exchange, that leaves only a few independent U.S. based options exchanges looking for a partner.
The Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), the first two equity options exchanges, have yet to demutualize or find partners.
NYSE Euronext operates NYSE Arca, which is the old Pacific Stock Exchange (PCX) but there has been speculation that it could go after one of the remaining exchanges.
CBOE is still battling with CME Group over the former Chicago Board of Trade exercise rights, which has complicated their efforts to demutualize. While the issue is still mired in the courts the market appears to be betting on CBOE as a seat recently sold for a record $3.15 million. If t the CBOE loses its battle over the exercise rights, that value could be diluted as some 800 plus CBOT exercise rights holders could get a portion of shares distributed in a CBOE demutualization.
While a link up with CME Group may make the most sense, consolidating Chicago’s three major exchanges under one roof, there is much bad blood to resolve and CBOE has forged a strong relationship with the Intercontinental Exchange (ICE). The two had worked out a resolution to the exercise right issue as part of ICE’s bid for the CBOT.
In the meantime Amex has been losing market share. Chances are when 2008 is wrapping one or both of these exchanges will be for profit and part of a larger perhaps global derivatives exchange.
