An Illinois state judge handed CBOE Holdings Inc. a decisive victory on Thursday that cemented the exchange operator’s right to exclusively list index options.
Cook County Circuit Court Judge William Maki barred rival International Securities Exchange from trading index options on U.S. stock benchmarks such as the Standard & Poor’s 500 index .
“ISE is permanently restrained and enjoined from listing or providing an exchange market for the trading of DJIA and/or S&P 500 index options,” Maki said in the ruling.
“The court finds that the trading of index options on the DJIA and S&P 500 by ISE would misappropriate the Index Providers’ rights in their indexes.”
ISE, owned by Deutsche Boerse’s Eurex unit, said it would appeal the much-anticipated ruling.
In response, shares of the Chicago Board Options Exchange parent jumped more than 3 percent but then dropped. They were off 0.8 percent, at $29, in mid-afternoon trading.
The 2006 case pitted CBOE, the top U.S. options venue, against ISE, which sued S&P owner McGraw Hill Cos. and Dow Jones index then-owner Dow Jones & Co. in federal court in New York. CBOE countersued in Illinois state court shortly afterwards.
Joining CBOE in its suit was CME Index Services. The CME Group Inc. unit became a party to the lawsuit after it bought a 90 percent stake in a joint venture with News Corp.’s Dow Jones & Co. for the Dow Jones indexes business.
CBOE relies on exclusively listed options indexes for 32 percent of its transaction fee revenue. Losing that exclusivity would have had a “material adverse effect” on financial performance, CBOE said in a recent filing with the Securities and Exchange Commission.
The ruling comes less than a month after CBOE’s $339 million initial public offering.
Companies in this article
CBOE Holdings
CBOE Holdings Inc. claims it is the largest option exchange in the United States. The company, in addition to its core options trading business, provides marketplaces for trading futures contracts...
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