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JLN Exchange Leader Series 2017: By Leveraging Bats’ Technology, CBOE’s Tilly Wants To Expand Footprint

CBOE Holdings arguably had its biggest year in history in 2016 with the purchase of Bats Global Markets for $3.2 billion. The deal expanded CBOE’s footprint in the securities space in the US and in Europe, plus forex as well. It also provided a new technology platform to keep CBOE competitive.

“It’s taking this unique product set and distributing it across a much broader geography with a much more diverse business development platform,” said Ed Tilly, chairman and CEO of CBOE. “So we’re going to leverage that presence in London.”

Next, CBOE is turning its attention toward the migration of its products onto the Bats trading platform. The exchange will start with the CBOE Futures Exchange, home of the wildly successful VIX futures contract, and then its secondary CBOE C2 options exchange, followed by CBOE.

From a product standpoint, the combined group is looking at ways to deliver new products. The exchange hit a home run with VIX, but it may now be able to do some new contracts with the stable of products coming with Bats.

“We’re trying to answer, from our customers’ perspective, those gaps from risk management in benchmarking to index provision and product innovation,” he said. “That still is a major lift for us in 2017. Adding Bats and adding their expertise in US equities and European equities into that mix, really allows us to hold that customer’s interest.”

Tilly added that one of the keys is on the education side, bringing not only the products and marketing to the industry, but reinforcing it through the CBOE’s education arm CBOE Options Institute as well as ETF.com.

While 2016 made for big headlines, 2017 is the year where CBOE plans to quickly integrate and push into new markets.

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Kharouf is a Chicago-based freelance reporter and editor who was previously CEO and editor-in-chief of John Lothian News.