Bourse operator Cboe to buy Canada’s NEO exchange

FILE PHOTO: Chicago Board Options Exchange Global Markets headquarters building in Chicago

By John McCrank

NEW YORK (Reuters) – Cboe Global Markets on Monday said it agreed to buy Canadian stock exchange operator Aequitas Innovations Inc, known as NEO, for an undisclosed amount, expanding its North American footprint in the latest of a string of recent acquisitions.

Trading levels surged at the beginning of the COVID-19 and have remained elevated, benefiting exchange operators like Cboe, the third-largest U.S. stock exchange operator by volume.

The NEO deal, which is expected to close in the first half of 2022, pending regulatory approval, will give Cboe a fully registered securities exchange in Canada in addition to the alternative trading system MATCHNow, which it acquired last year, creating operating efficiencies though scale.

Together, the two trading platforms have a share of around 16.5% of the Canadian equities market and will be better placed to compete against Toronto Stock Exchange operator TMX Group.

“Adding NEO to the Cboe network better enables us to create a first-class equities offering in Canada, bolstering our global markets in North America, Europe and Asia Pacific, and bringing us one step closer to our vision of building one of the world’s largest global derivatives and equities trading networks,” said Cboe Chief Executive Officer Ed Tilly.

In the past month, Cboe has said it agreed to acquire cryptocurrency trading platform Eris Digital Holdings (ErisX), a spot and derivatives exchange for digital assets; announced it was a limited partner in the planned acquisition of trading software firm Trading Technologies International; and said it planned to launch a new U.S. Treasuries trading platform.

NEO also offers listing and market data services, and its sister company, NEO Connect, provides a distribution platform supporting mutual funds, private funds and private corporate bonds.

Chicago-based Cboe operates trading platforms and products in equities, derivatives and foreign exchange across North America, Europe and Asia Pacific.

(Reporting by John McCrank; Editing by Dan Grebler)