The Securities and Exchange Commission unanimously approved an interpretation of the Certificate of Incorporation of the Chicago Board Options Exchange, which terminates Chicago Board of Trade (CBOT) members’ exercise rights on the CBOE. The CBOE had awarded every full member of the CBOT the opportunity to trade as a full CBOE member, known as an exercise right, in exchange for the CBOT’s assistance when the CBOE’s was formed. The CBOE determined, however, that the CBOT members’ exercise rights were terminated when the CBOT was purchased by the Chicago Mercantile Exchange (CME) and ceased to exist as an independent entity.
The SEC decision does not affect the lawsuit previously filed by the CME against the CBOE in Delaware, asserting that CBOT members are entitled to equity in CBOE. Therefore, this issue will not be resolved until the Delaware courts rule.