The Chicago Board Options Exchange claimed victory in its legal battle with the International Securities Exchange, as a court in Illinois ruled that it held exclusive trading rights for Dow Jones Industrial Average and S&P 500 options.
The CBOE holds contracts from the owners of both indexes, giving it an exclusive right to list or offer markets for options on those indexes. Its contract to trade DJIA index options expires in 2017, while its S&P 500 contract expires one year later.
The CBOE will feel some relief at the ruling, having filed its suit four years ago when the ISE tried to begin selling index options in spite of the CBOE’s contracts.
“No third party should be able to interfere with contractual licensing agreements,” said CBOE Chairman William Brodsky. “Nor should any exchange have a free ride on the enormous investment CBOE made in creating options on these indexes and in developing and marketing them over two decades.”
ISE vowed to appeal the decision, saying that the value of the indexes was information in the public domain, and that allowing multiple listing of index options would lower costs for investors.
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