Chicago Board Options Exchange (CBOE) stepped up its battle with Chicago Board of Trade (CBoT) over exercise rights last week, saying it would terminate those rights if and when CBoT is acquired by Chicago Mercantile Exchange (CME), a deal scheduled to complete next year.
CBOE submitted a rule filing with Securities and Exchange Commission (SEC) to allow the exchange to cancel the exercise right, which provides CBoT members the right to trade and lease seats on CBOE without purchasing exchange membership. At press time, there were 292 exercisers from CBoT on CBOE. In total, CBOE has 931 members.
CBOE, which has been negotiating and feuding over exercise rights with CBoT for a number of years, has contended that CME's proposed $8bn buyout of CBoT means that CBoT would no longer have "members" as defined by the 1973 charter agreement which created CBOE. In its filing with SEC, CBOE argued that,...