CBOE files for demutualisation on way to IPO

The Chicago Board Options Exchange (CBOE) has filed for demutualisation and restructuring as it heads for an initial public offering (IPO). The exchange'smembers will receive stock but lose their trading rights as part of the process.

Under the restructuring, the CBOE will become a wholly-owned subsidiary of a new holding company, CBOE Holdings. CBOE’s 931 memberships will be converted into shares of CBOE Holdings stock. The number of shares has not been decided. In a recent sale, a CBOE membership was valued at $1.9 million. However, members will lose their right to trade on the exchange or to lease that right to a trader. Any party wishing to trade will have to buy trading permits from the exchange.

The restructuring is subject to a vote of CBOE’s current members and regulatory approval. The process could take up to nine months, the exchange said. (also see: CBOE prepares for demutualisation)