April 30, 2012 / 6:41 PM / 7 years ago

BOX Options Exchange gets approval to self-regulate

* BOX expects to start using exchange license in mid-May

* New self-regulatory organization board to be elected

* BOX, as SRO, eliminates need to be regulated by rival

April 30 (Reuters) - The BOX Options Exchange said on Monday that it has won approval from U.S. security regulators to act as its own self-regulatory organization, freeing it from the need to pay a rival to provide key regulatory services.

BOX, which has been seeking its SRO status with the U.S. Securities and Exchange Commission since at least 2008, expects to start using its own exchange license in mid-May.

Being an SRO eliminates the need for BOX to be regulated by rival exchange operator Nasdaq OMX Group Inc, which has been providing regulatory oversight of its options market.

BOX is owned indirectly by the Montreal Exchange, a subsidiary of TMX Group Inc and seven broker dealers.

“After years of hard work, we are excited to act as our own SRO and no longer be regulated by a competitor,” said BOX CEO Tony McCormick in a statement.

Self-policing is a hot-button issue in the U.S. exchange industry, as the SEC conducts probes several markets, including CBOE Holdings Inc, for possible lapses in self-regulation.

As part of the restructuring related with the SEC approval, TMX Group will take a 40 percent economic interest and a 20 percent voting interest in the new SRO, BOX said. TMX will maintain its ownership through its 53.8 percent stake in BOX Holdings Group LLC, which will own and operate the options trading platform.

The new SRO board will be elected in the coming weeks and will likely include: Paul Stevens, former president of OCC, Laurence Mollner, former chairman of the Futures Industry Association; Robert Whaley, Vanderbilt University professor; TMX Group CEO Thomas Kloet and James Boyle of UBS.

BOX Options Exchange, an all-electronic equity options market, was launched in February 2004. BOX’s market share is 3.67 percent of total options volume through March this year, according to OCC, which clears all U.S.-listed options.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below