From the November 01, 2011 issue of Futures Magazine • Subscribe!

CBSX snaps up NSX

Under the radar

With all the announcements of national exchange mergers, smaller mergers have been getting lost in the shuffle. Recently, CBOE Stock Exchange (CBSX) announced it had entered into a definitive agreement to acquire the National Stock Exchange (NSX).

In the past, Chicago Board Options Exchange (CBOE), which owns 49% of CBSX, has owned portions of NSX, but has reduced its ownership in recent years. According to David Harris, president and CEO of CBSX, CBOE’s ownership level in NSX was not a factor. "It wasn’t a ‘Hey, CBOE ownership has declined over time and now we’re going to buy back in.’ That was more of an ancillary fact that didn’t really play into the acquisition," he says.

Instead, he says that when NSX began searching for an acquirer, CBSX recognized what NSX had to offer. "We get our own SRO (self-regulatory organization) license, we get a group of customers that support our business and on the stock side, most of the larger, more successful markets run multiple books," he says. "This allows CBSX also to be more competitive by offering a better pricing solution to more customers than what CBSX currently is, which is a single price point."

Harris says that he expects the deal to receive approval from the Securities and Exchange Commission sometime in Q4.

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