Cboe to acquire Chi-X Asia Pacific to enter Australia and Japan markets

Cboe Global Markets has reached a deal to acquire Chi-X Asia Pacific as it plans to enter Australia and Japan, two of the world’s largest securities markets.

Chi-X Asia Pacific is an alternative market operator and provider of market solutions in the APAC region. Its core operations are in Australia and Japan.

Chi-X Australia (CXA) is the country’s second-largest securities exchange, with an 18.4 percent total market share. Its trading offering includes all Australian-listed securities and the exclusive trading of CXA quoted warrants and ETFs.

Chi-X Japan (CXJ) is the third-largest equities venue in the country with a 2.7 percent lit market share. A proprietary trading system for Japanese equities, CXJ offers four trading books including both displayed and non-displayed mechanisms.

The deal will help Cboe expand its global equities business, including bringing industry-leading block platform, BIDS Trading, to the Asia Pacific region.

The APAC region expansion is part of Cboe’s strategy to build one of the world’s largest global equities and derivatives trading networks. The deal is expected to close in the second or third quarter of 2021, pending regulatory review.

Ed Tilly, Chairman, President and CEO at Cboe Global Markets, said: “With the planned acquisition of Chi-X Asia Pacific, we continue to execute on our growth strategy by broadening our geographic and asset class presence while enabling the further extension of our product offerings to our global network of customers.

“This is an exciting investment in attractive, growing markets that will complement our North American and European operations and provide a foothold in the key Asia Pacific region, positioning us to become a truly global marketplace for our customers.

“In a short number of years, the Chi-X Asia Pacific team has built their business into one of the largest market operators in Asia Pacific. We look forward to working with them to accelerate the company’s further growth, building on our shared cultures of innovation and customer-first approach as we aim to bring greater choice to investors in Asia Pacific.”

David Howson, President of Cboe’s European operations, will lead the company’s business expansion into the region and will work closely with the Chi-X Australia team led by Vic Jokovic and Chi-X Japan team led by Toru Irokawa.

The addition of Asia Pacific equities is expected to create a global block trading platform to serve a broader base of customers. Chi-X Asia Pacific is expected to provide an expanded distribution network enabling Cboe to further offer its proprietary products to clients in Australia and Japan.

Chi-X Asia Pacific generated approximately $26 million in net revenue in 2020, a 26% growth YoY. Non-transactional revenue comprised 67 percent of the overall net revenue.

FinanceFeeds has recently covered Cboe’s launch of a new Data and Access Solutions division within the company, which will be led by Catherine Clay. She was promoted to Executive VP of Information Solutions and has also been appointed to Cboe’s Executive leadership team.

By bringing together Cboe’s Information Solutions and global market data and access services, Cboe aims to create a holistic global offering and to unify the sales teams, providing customers with a single point of contact for all of these services.

Cboe is also increasingly targeting the retail OTC market. This could be considered a synergy for firms in the OTC sector as it is likely to bring the established and highly trusted listed products within reach of the retail traders.