FIA BOCA 2023: 5 decades of Cboe – technology migration at the heart of growth strategy

abdelaziz Fathi

Cboe Global Markets is poised to expand its global equities and market data businesses through recent mergers and acquisitions and technology migrations in the APAC region and Canada.

Cboe Global Markets, one of the world’s leading exchange operators, is celebrating its 50th anniversary this April. In a recent media event held on the sidelines of FIA Inc.’s BOCA 2023 event, the company’s top executives highlighted the past year’s achievements and their broader significance within Cboe’s storied history.

Ed Tilly, the CEO of Cboe, praised the company’s recent mergers and acquisitions, which he believes demonstrate the resilience of Cboe’s strategy. He also expressed confidence in their vision for the future, thanks to the remarkable success they have had.

During the event, Tilly shared additional insights into Cboe’s technology migration strategy in the APAC region and Canada. Cboe has successfully completed the technology migration of MatchNow, Canada’s largest dark pool stock trading platform, which it acquired in 2020 from Virtu Financial.

Moreover, less than two years after acquiring trading venue operator Chi-X Asia, Cboe is ready to finalize the migration of CXJ’s trading systems to Cboe technology. Cboe Japan, formerly Chi-X Japan, is planned to be fully integrated into Cboe’s existing global business operations and technology platforms by Q3 2023.

According to Cboe officials, these migrations will bring significant improvements in the performance of its APAC franchise, further expanding its global equities and market data businesses. Cboe is thus poised to cement its foothold in North America, Europe, and Asia Pacific.

David Howson, Cboe’s global president, highlighted the success of the BIDS model in the U.S. and Europe. BIDS operates the largest block trading ATS by volume in the U.S., facilitating interaction between the buy-side and sell-side for block trades. In Europe, the platform has grown its market share by 34.5% by the end of 2022.

Moving to North America, Howson expects to achieve the same success as Cboe extends BIDS’ block-trading capabilities into Canada, providing additional liquidity and matching opportunities.

Cboe’s recent acquisition of Toronto-based stock exchange operator NEO has given it a comprehensive equity offering accounting for approximately 15% total equities market share. The transaction allows Cboe to leverage the combined strengths and assets of both exchange operators, including liquidity and investor outreach programs.

When asked about their crypto ambitions, John Palmer, President of Cboe Digital, emphasized their excitement about the industry’s prospects. Cboe is coming off a record month after closing the syndicate of 13 great investors that are deeply embedded within both traditional finance and in the crypto space.

Palmer also drew attention to the benefits of regulatory oversight on crypto. Cboe Digital operates a regulated exchange and clearinghouse with Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) to comply with federal regulations. He stressed that recent events in the industry had led to a better understanding of the benefits of regulatory oversight, the value of managing counterparty risk, financial solvency, system safeguards, and resilient market infrastructure.

Overall, Cboe’s successful acquisitions and organic growth, combined with its regulatory compliance, give it a unique position in the industry, making it one of the leading global trading networks in the world.

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