CBOE Adds Slice of U.S. Stock Market

CBOE Stock Exchange said it agreed to acquire the National Stock Exchange, an all-electronic stock exchange now based in Jersey City, N.J.

The move will put two similarly sized electronic exchanges under one roof. CBOE Stock Exchange handles roughly 35.3 million shares a day, by last reported count; NSX handled 42.6 million shares on Thursday.

By comparison, the two all-electronic exchanges operated by BATS Global Markets on Thursday handled 1.1 billion shares.

All told, 4.5 billion shares of U.S. companies exchanged hands on Thursday.

CBSX is trying to “expand its footprint in the securities exchange space by wholly owning and operating a second exchange,’’ the company said in its announcement of the agreement.

The NSX will be operated as a separate exchange. Data systems and business operations.

Both exchanges have moved operations to the East Coast in recent years, to be nearer other trading venues and market participants.

On July 1, CBSX began operating from the Equinix NY4 Internet Business Exchange data center in Secaucus, NJ. NSX, once before a member of the Chicago Board Options Exchange, moved its headquarters and operations to Jersey City from Chicago about five years ago.

The NSX acquisition is expected to be completed by year’s end.

"With the changing landscape of the securities marketplace and after careful consideration, NSX felt it was in the best interests of its customers to pursue an acquisition,’’ said Joseph S. Rizzello, NSX CEO. "

The all-electronic CBOE Stock Exchange was created in 2007 by the Chicago Board Options Exchange and four market-maker partners. The exchange offers trading in more than 7,600 equities and exchange traded funds listed on U.S. securities markets.

CBSX uses CBOE's technology platform, CBOEdirect.

The National Stock Exchange trading in all US exchange-listed equities on its NSX Blade trading platform, launched in 2006.

Where NYSE Euronext spent $500 billion building new data centers in Basildon, England, and Mahway, N.J., NSX spent more like $500,000 building out its system for connecting brokers to 10 financial data centers in New York and New Jersey.

"The acquisition of NSX is an important milestone, marking a new phase of growth at CBSX," CBSX CEO David Harris said. "Economies of scale should enable us to efficiently operate a second exchange and to grow our customer base by providing additional pricing models to the U.S. equities marketplace."

-- This article first appeared on Securities Technology Monitor.