Word came out earlier this week that Ivers Riley, former Chairman of the International Securities Exchange (ISE), who is widely credited with the creation of the exchange trade fund (ETF), passed away.
Riley was a true innovator in the world of derivatives. So much so that when Futures had a special issue on product innovation several years ago, we reached out to Riley to share his story on the formation and early days of the ETF, which he designed while he was an executive with the American Stock Exchange.
Riley had pointed out that when he was working on the ETF idea, it was a broad one that would encompass a product that would create an easy way to trade all different kinds of assets classes.
The first ETFs focused on specific equity index based funds but as the ETF became more popular, their true potential, and original design, played out with various products.
Below is the official statement from the ISE, which includes comments from individuals who worked with Riley over the years.
The International Securities Exchange Holdings, Inc. (ISE Holdings) today released a statement on the passing of Ivers W. Riley, who joined ISE’s Board of Directors in 2000 and served as its Chairman from 2002 to 2006.
David Krell, ISE Chairman and a co-founder of the exchange, said, "Ivers was a true rarity in this industry. He was involved in many of the transformative moments that set the course for the robust options markets in existence today. From convincing the SEC to allow trading of puts, to developing the first ETF products, to leading the industry toward the benefits of electronic trading, Ivers had a clear vision driven by a desire for innovation and transparency. Over the course of forty years, I have known and admired Ivers as our careers have intersected many times. I succeeded him as head of Marketing at the CBOE. He subsequently hired me to join him at the NYSE and ultimately prepared me to assume his role as head of Options and Index Products after he left the firm. He had great enthusiasm for the options industry and product offering, and he was both a personal inspiration and a mentor. Beyond his professional accomplishments, Ivers was deeply committed to his family and friends. He will be greatly missed by me and the countless others whose careers and lives were positively influenced by his presence."
Gary Katz, ISE President and CEO, and a co-founder of the exchange, said, "It was my great fortune and privilege to know Ivers and to benefit from his mentorship and strong example as a leader throughout my career. He influenced my decision to first enter the industry and join the NYSE’s options division, and subsequently, Ivers challenged me and the rest of the industry during his tenure at the AMEX to improve and remain sharp as he drove innovation that transformed the industry. Finally, it was an immense honor when Ivers accepted a position on the ISE Board and later became Chairman. Throughout the almost thirty years that I have known and worked with Ivers, the most lasting memories and strongest impressions are of his integrity, of his passion for his career, and of the joy that he brought into the lives of his family and friends. I will miss him deeply."
In addition to his role as Chairman of ISE, Mr. Riley was chief executive of the Hong Kong Futures Exchange and chairman of the HKFE Clearing Corporation from 1994 to 1997, and again from 1999 to 2000. Mr. Riley was Senior Executive Vice President in charge of all derivatives activity at the American Stock Exchange from 1986 to 1993. While at Amex, he was the driving force in the development of SPDRs, a popular exchange-traded fund based on the S&P 500 index. Mr. Riley also previously held positions at the New York Stock Exchange and Chicago Board Options Exchange.
Mr. Riley received his Bachelor of Science degree in finance from The University of California, Los Angeles and completed an advanced management program at Harvard University. He is the 2005 recipient of the Joseph W. Sullivan Award presented by the Options Industry Council in honor of his contributions to the industry, and is an inductee of the Futures Industry Association’s Hall of Fame.