CBOE Holdings today announced that Chicago Board Options Exchange and C2 Options Exchange have entered into an agreement with the Financial Industry Regulatory Authority (FINRA), under which FINRA will perform the majority of the exchanges’ regulatory services.
CBOE also entered into a separate agreement with FINRA, under which CBOE will assign to FINRA its responsibility to perform regulatory services for the Options Regulatory Surveillance Authority (ORSA), the central organization facilitating collaboration in insider trading surveillance and investigations for all U.S. options exchanges.
The FINRA oversight will start on January 1, 2015.
Regulation of CBOE Futures Exchange will continue to be provided by CFE Regulatory Services staff.
“We’re pleased to announce completion of these agreements,” said CBOE Holdings CEO Edward T. Tilly in a press statement. “By combining FINRA’s regulatory independence and efficiency and CBOE’s regulatory oversight experience, we are further reinforcing the integrity of our markets and investor protection. Ultimately, our agreements with FINRA signify CBOE’s ongoing commitment to maintain the highest standards in market regulation and to reliably serve the investing public.”
The vast majority of CBOE’s and C2’s Regulatory Services Division, ORSA staff and Systems Development Department staff who support options regulation — about 125 employees – have accepted positions with FINRA.
CBOE and C2 will continue to be responsible for the regulation of their markets and will maintain an in-house regulatory team to manage CBOE and C2 regulatory surveillance programs and to oversee the FINRA regulatory services relationship.
Tim Thompson, CBOE senior vice president and Chief Regulatory Officer, will be moving to FINRA as a senior vice president. CBOE Vice President and Deputy Chief Regulatory Officer Greg Hoogasian will succeed Thompson and be named CBOE Chief Regulatory Officer.
