- Company plans to transition digital asset derivatives
trading and clearing into existing derivatives and clearing
business lines
- Plans to wind down Cboe Digital Spot Market in third
quarter 2024
CHICAGO, April 25,
2024 /PRNewswire/ -- Cboe Global Markets, Inc. (Cboe:
CBOE), the world's leading derivatives and securities exchange
network, today announced plans to refocus its digital asset
business to leverage its core strengths in derivatives, technology
and product innovation while realizing operating efficiencies for
both Cboe and its clients. These changes are being made as part of
Cboe's strategic review, taking into consideration the lack of
regulatory clarity in the digital space, and are aligned with
Cboe's longer term strategy.
Cboe plans to transition and fully integrate its digital asset
derivatives, currently offered by Cboe Digital, into its existing
Global Derivatives and Clearing businesses. This move is expected
to create efficiencies for Cboe and clients, while enabling
Cboe to harness the power of its broader global derivatives
franchise and global technology platform to support and fuel growth
of the exchange-traded digital asset derivatives market.
Additionally, the company plans to wind down operations of the
Cboe Digital Spot Market, the company's spot digital asset trading
platform, in the third quarter of 2024, subject to regulatory
review. John Palmer, President of
Cboe Digital, will become Head of U.S. Derivatives Market
Development, under the leadership of Cathy
Clay, EVP, Head of Global Derivatives.
Cboe plans to transition its cash-settled bitcoin
and ether futures contracts, currently available for trading on the
Cboe Digital Exchange to the Cboe Futures Exchange (CFE) in the
first half of 2025, pending regulatory review and certain corporate
approvals. This move will consolidate all Cboe U.S. futures
products, including digital asset futures, onto one exchange
powered by world-class technology, creating efficiencies for
clients across the globe. By transitioning digital asset
derivatives to CFE, this product set will benefit from the holistic
support of the Cboe Global Derivatives business, including global
derivatives sales and distribution, product development, market
structure and investor education expertise.
"Refocusing our digital asset business enables us to refine our
strategy, leveraging our core strengths in derivatives, technology
excellence and product innovation to help maximize opportunities
for our business and deliver efficiencies for Cboe and our
clients," said Fred Tomczyk, Chief Executive Officer of Cboe
Global Markets. "We believe these changes enable greater
optimization and strategic alignment for our business across
geographies and asset classes, further supporting our long-term
growth strategy."
In addition, Cboe will maintain ownership and operation of Cboe
Clear Digital, the clearing arm of Cboe Digital, and plans to align
Cboe Clear Digital with Cboe Clear Europe, its European clearing
house, under unified leadership. Cboe Clear Digital will continue
to facilitate the clearing of bitcoin and ether
futures. Cboe Clear Europe will continue to serve as the
pan-European central clearing party (CCP) for Cboe's European
equities and derivatives exchanges across the EU, UK and
Switzerland. Vikesh Patel, the current President of Cboe
Clear Europe, will now also oversee U.S. clearing.
"Bringing digital asset derivatives and clearing into our
existing business lines enables us to leverage the full
breadth of our global derivatives team and unlock the full value of
Cboe to our clients around the world," said David Howson, Global President of Cboe. "We
expect to continue to see greater demand for exchange-traded
derivatives to help manage crypto exposures, hedge
risk and enhance capital and operational
efficiencies. Optimizing our derivatives and clearing business
operations and product development across borders and asset classes
enables us to better serve our diverse client base and sharpen our
strategic focus."
The company anticipates that the wind down of the Cboe Digital
Spot Market operations will have an immaterial impact on Cboe's net
revenue in 2024. The company estimates that expense savings will be
in the range of $2 million to
$4 million in 2024, with savings
expected to be in the $11 million to
$15 million range on a normalized
annual basis. Cboe will provide more details about these strategic
changes during its forthcoming first-quarter 2024 earnings call on
May 3, 2024. A conference call with
remarks by the company's senior management will begin at
7:30 a.m. CT (8:30 a.m. ET). A live audio webcast for the
conference call and the presentation that will be referenced during
the call will be available on the Investor Relations section of
Cboe's website at ir.cboe.com under Events.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world's leading
derivatives and securities exchange network, delivers cutting-edge
trading, clearing and investment solutions to people around the
world. Cboe provides trading solutions and products in multiple
asset classes, including equities, derivatives, FX, and digital
assets, across North America,
Europe and Asia Pacific. Above all, we are committed to
building a trusted, inclusive global marketplace that enables
people to pursue a sustainable financial future. To learn more
about the Exchange for the World Stage, visit www.cboe.com.
Cboe Media
Contacts
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Cboe Analyst
Contact
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Angela
Tu
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Tim
Cave
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Kenneth Hill,
CFA
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+1-646-856-8734
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+44 (0)
7593-506-719
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+1-312-786-7559
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atu@cboe.com
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tcave@cboe.com
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khill@cboe.com
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Cboe®, Cboe Global Markets®, Cboe Digital®, and CFE® are
registered trademarks of Cboe Exchange, Inc. or its affiliates. All
other trademarks and service marks are the property of their
respective owners.
Cboe Digital Futures are currently offered through Cboe
Digital Exchange, LLC, a CFTC registered DCM and Cboe Clear
Digital, LLC, a CFTC registered DCO. The CFTC does not have
regulatory oversight authority over certain virtual currency
products including spot market trading of virtual currencies. Cboe
Digital's Spot Market is not licensed, approved or registered with
the CFTC and transactions on the Cboe Digital Spot Market are not
subject to CFTC rules, regulations or regulatory oversight. The
Cboe Digital Spot Market may be subject to certain state licensing
requirements and currently operates in NY pursuant to Cboe Clear
Digital license ("BitLicense") to engage in virtual currency
business activity by the New York
State Department of Financial Services.
There are important risks associated with transacting in any
of the Cboe Company products and digital assets discussed here.
Before engaging in any transactions in those products and digital
assets, it is important for market participants to carefully review
the disclosures and disclaimers contained
at: https://www.cboe.com/us_disclaimers/.
Trading in futures is not suitable for all market
participants and involves the risk of loss, which can be
substantial and can exceed the amount of money deposited for a
futures position. You should, therefore, carefully consider whether
trading in futures is suitable for you in light of your
circumstances and financial resources. You should put at risk only
funds that you can afford to lose without affecting your lifestyle.
For additional information regarding the risks associated with
trading futures see the Risk Disclosure Statement
Referenced in CFTC Letter 16-82.
Cautionary Statements Regarding Forward-Looking
Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve a number of risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "might,"
"should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. All statements that reflect
our expectations, assumptions or projections about the future other
than statements of historical fact are forward-looking statements.
These forward-looking statements, which are subject to known and
unknown risks, uncertainties and assumptions about us, may include
projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements
are only predictions based on our current expectations and
projections about future events. There are important factors that
could cause our actual results, level of activity, performance or
achievements to differ materially from those expressed or implied
by the forward-looking statements.
We operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible to predict all risks and uncertainties, nor
can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements.
Some factors that could cause actual results to differ
include: the loss of our right to exclusively list and
trade certain index options and futures products; economic,
political and market conditions; compliance with legal and
regulatory obligations; price competition and consolidation in our
industry; decreases in trading or clearing volumes, market data
fees or a shift in the mix of products traded on our exchanges;
legislative or regulatory changes or changes in tax regimes; our
ability to protect our systems and communication networks from
security vulnerabilities and breaches; our ability to attract and
retain skilled management and other personnel; increasing
competition by foreign and domestic entities; our dependence on and
exposure to risk from third parties; global expansion of
operations; factors that impact the quality and integrity of our
and other applicable indices; our ability to manage our growth and
strategic acquisitions or alliances effectively; our ability
to operate our business without violating the intellectual property
rights of others and the costs associated with protecting our
intellectual property rights; our ability to minimize the risks,
including our credit, counterparty, investment, and default risks,
associated with operating a European clearinghouse; our ability to
accommodate trading and clearing volume and transaction traffic,
including significant increases, without failure or degradation of
performance of our systems; misconduct by those who use our markets
or our products or for whom we clear transactions; challenges to
our use of open source software code; our ability to meet our
compliance obligations, including managing potential conflicts
between our regulatory responsibilities and our for-profit status;
our ability to maintain BIDS Trading as an independently managed
and operated trading venue, separate from and not integrated with
our registered national securities exchanges; damage to our
reputation; the ability of our compliance and risk management
methods to effectively monitor and manage our risks; restrictions
imposed by our debt obligations and our ability to make payments on
or refinance our debt obligations; our ability to maintain an
investment grade credit rating; impairment of our goodwill,
long-lived assets, investments or intangible assets; the impacts of
pandemics; the accuracy of our estimates and expectations;
litigation risks and other liabilities; and risks relating to
digital assets, including winding down the Cboe Digital spot
crypto market, operating a digital assets futures
clearinghouse, cybercrime, changes in digital asset
regulation, and fluctuations in digital asset prices. More detailed
information about factors that may affect our actual results to
differ may be found in our filings with the SEC, including in our
Annual Report on Form 10-K for the year ended December 31, 2023 and other filings made from
time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to
update any forward-looking statement whether as a result of new
information, future events or otherwise, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
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SOURCE Cboe Global Markets, Inc.