CBOE votes to sell ownership stake back to NSX
The Chicago Board Options Exchange's (CBOE) approved a proposal to sell its 68 percent ownership stake in the National Stock Exchange (NSX) back to NSX, in a board of directors meeting held Tuesday. In addition to selling its NSX Certifications of Proprietary Membership to the NSX (formerly the Cincinnati Stock Exchange), the CBOE will relinquish its rights to six of NSX's 13 board seats. The NSX's Board of Trustees approved the proposal at its meeting on Aug. 10. The decision to sell ends an affiliation between the two exchanges that was initiated in 1986. "As CBOE's business strategy has shifted, the investment in NSX is no longer integral to our needs. However, we are pleased to continue to be the facilities provider to NSX," said CBOE Chairman and CEO William Brodsky in a statement. Pending approval by the NSX's membership and the Securities and Exchange Commission, the proposed sale could free the NSX to pursue a more independent business strategy. It's been reported that the NSX has held discussions about merging with INET ECN, the largest electronic communications network which also is seeking exchange status. Today, INET reports its trades in Nasdaq stocks to NSX, which is the basis for a market-data revenue sharing program between NSX and INET. "CBOE's interest in NSX was spurred by the stock trading capability NSX offered, while CBOE provided NSX technology expertise and capital to support its historic transformation into the country's first all-electronic stock exchange," said NSX CEO and President David Colker in a statement. "Now as NSX continues to grow and evolve, it is in our best interest to have greater control over its own business."