CBOE Holdings Takes Equity Stake in Eris Exchange Holdings and Companies Announce Strategic Product Partnership
OREANDA-NEWS. CBOE Holdings, Inc. (NASDAQ: CBOE) and Eris Exchange, LLC (Eris) announced today that CBOE Holdings has made a minority equity investment in its parent, Eris Exchange Holdings, LLC. Eris is a U.S.-based futures exchange group offering swap futures as a capital-efficient alternative to over-the-counter (OTC) swaps. Concurrent with this investment, CBOE will join Eris' board of directors.
"We are pleased to partner with Eris, which has established itself as a global leader in providing innovative, futurized product solutions that respond to today's regulatory and market challenges," said Edward T. Tilly, CEO of CBOE Holdings. "Our partnership with Eris demonstrates CBOE's ongoing focus on leveraging our product innovation expertise to capitalize on the continuing convergence of the OTC and listed marketplaces. Our partnership with Eris, like our partnership in CurveGlobal, positions CBOE to tap into that opportunity by bringing new capital efficiencies and exchange-traded products to the interest rate marketplace."
"Our alliance with CBOE provides Eris with growth capital for strategic initiatives and aggressive product expansion," said Neal Brady, CEO and co-founder of Eris. "CBOE is globally recognized as a leading exchange for proprietary derivative products and indexes, with a rich history of cultivating new risk management tools across a variety of asset classes. We're thrilled to collaborate with CBOE on new product, market data and index initiatives, and to provide access to Eris products to CBOE's global trading community."
Since creating the listed-options industry in 1973, CBOE has created nearly every options product innovation of note including equity and index options, FLEX® options and WeeklysSM options, as well as the CBOE Volatility Index® (VIX® Index) and VIX options and futures. The Eris partnership adds to a series of innovative partnership announcements in recent months, including CBOE's majority equity investment in Vest Financial, an asset management firm that provides options-based investments through structured protective strategies and innovative technology solutions; its partnership with Environmental Financial Products (EFP) to create the American Financial Exchange (AFX), an electronic marketplace for small and mid-sized banks to lend and borrow short-term funds; and its minority investment in CurveGlobal, a new European futures exchange focused on delivering capital efficiencies between interest rates futures and cleared OTC swaps.
Financial terms of CBOE Holdings' investment were not disclosed. Near term, CBOE considers its investment in Eris to be immaterial from a financial perspective; however, CBOE is very optimistic about the potential for growth longer term.
About Eris Exchange, LLC:
The Eris Exchange group includes a U.S. futures exchange registered as a Designated Contract Market with the CFTC. The Exchange lists cash-settled interest rate swap futures with current open interest of 159,000 contracts in USD Interest Rate Swap Futures. Eris Interest Rate Swap Futures listed on Eris are cleared by CME Clearing, and are based on the Eris Methodology™, an award-winning product design for constructing swap futures in a capital-efficient manner through intellectual property, expertise and patent-pending innovations. The Eris Methodology is also licensed by Intercontinental Exchange (ICE), Johannesburg Stock Exchange (JSE), TMX Group companies including Montreal Exchange (MX), and CBOE Futures Exchange (CFE) for listing interest rate, equity variance and credit default swap futures. Trademarks of Eris Exchange and/or its affiliates include Eris, Eris Exchange, Eris SwapBook, Eris BlockBox, Eris PAI and Eris Methodology.
About CBOE Holdings, Inc.:
CBOE Holdings, Inc. (NASDAQ: CBOE) is the holding company for Chicago Board Options Exchange (CBOE), CBOE Futures Exchange (CFE), and other subsidiaries. CBOE, the largest U.S. options exchange and creator of listed options, continues to set the bar for options and volatility trading through product innovation, trading technology and investor education.
CBOE Holdings offers equity, index and ETP options, including proprietary products, such as options and futures on the CBOE Volatility Index (VIX Index) and S&P 500 options (SPX), the most active U.S. index option. Other products engineered by CBOE include equity options, security index options, Weeklys options, FLEX options, and benchmark products such as the CBOE S&P 500 BuyWrite Index (BXM).