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What changed in Cboe Global Markets's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Cboe Global Markets's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+662 added−622 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-17)

Top changes in Cboe Global Markets's 2023 10-K

662 paragraphs added · 622 removed · 515 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

179 edited+63 added−52 removed145 unchanged
Biggest changeThese included proposals to: ● Create a European Single Access Point (“ESAP”) which will be a common source of public, free information about EU companies and investment products, regardless of where in the EU they are located or originated. ● Amendments to the ELTIF framework to promote long-term investments through European Long-Term Investment Funds (“ELTIFs”). ● Making funding more diversified for companies by reviewing the Alternative Investment Fund Managers Directive (“AIFMD”). ● Enhancing market transparency by reviewing the Markets in Financial Instruments Regulation (“MiFIR”).
Biggest changeIn November 2021 the EU Commission published an update regarding progress against the CMU Action Plan alongside a number of new legislative proposals designed to contribute to the objectives of CMU. ​ 20 Table of Contents These included proposals to: ● Create a European Single Access Point (“ESAP”) which will be a common source of public, free information about EU companies and investment products, regardless of where in the EU they are located or originated. ● Amend the ELTIF framework to promote long-term investments through European Long-Term Investment Funds (“ELTIFs”). ● Make funding more diversified for companies by reviewing the Alternative Investment Fund Managers Directive (“AIFMD”). ● Enhance market transparency by reviewing the Markets in Financial Instruments Regulation (“MiFIR”). ● Create a binding, comprehensive information and communication technology risk management framework for the EU financial sector through the Digital Operational Resilience Act (“DORA”).
The Options segment includes options on market indices (“index options”), as well as on the stocks of individual corporations (“equity options”), and options on ETPs, such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”), which are “multi-listed” options and listed on a non-exclusive basis.
The Options segment includes options on market indices (“index options”), as well as on the stocks of individual corporations (“equity options”) and on ETPs such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”), which are “multi-listed” options and listed on a non-exclusive basis.
Our proprietary indices include: ● volatility indices based on broad-based market indices, such as the S&P 500 and the Russell 2000, ● volatility indices based on ETFs, and ● options strategy benchmark indices, such as the Cboe BuyWrite, PutWrite and Collar indices based on the S&P 500 and Russell 2000, BuyWrite and PutWrite indices based on MSCI EAFE and MSCI Emerging Markets, and BuyWrite indices based on other broad-based market indices.
Our proprietary indices include: ● volatility indices based on broad-based market indices, such as the S&P 500 and the Russell 2000, ● volatility indices based on ETFs, and ● options strategy benchmark indices, such as the Cboe BuyWrite, PutWrite and Collar indices based on the S&P 500 and Russell 2000, BuyWrite and PutWrite indices based on MSCI EAFE and MSCI Emerging Markets indices, and BuyWrite indices based on other broad-based market indices.
This licensing arrangement with DJI Opco, LLC (acquired by S&P in 2012) extends through December 31, 2033. We use market data from the trading of options on these indices to create Cboe volatility indices, variance indicators and BuyWrite indices, and to trade options and other products on these indices. ● FTSE Russell.
This licensing arrangement with DJI Opco, LLC (acquired by S&P in 2012) extends through December 31, 2033. We use market data from the trading of options on these indices to create Cboe volatility indices, variance indicators and BuyWrite indices, and we trade options and other products on these indices. ● FTSE Russell.
The Exchanges have entered into certain other multi-party Rule 17d-2 agreements that allocate responsibility among the participating SROs, which may include the Exchanges, for oversight of their allocated common members compliance with certain rules governing, among other items, options related sales practices, options related market surveillance, insider trading, NMS and consolidated audit trail NMS plan (“CAT”) compliance.
The Exchanges have entered into certain other multi-party Rule 17d-2 agreements that allocate responsibility among the participating SROs, which may include the Exchanges, for oversight of their allocated common members compliance with certain rules governing, among other items, options related sales practices, options related market surveillance, insider trading, NMS and consolidated audit trail (“CAT”) NMS plan compliance.
Prior to that, he served as Bats' Executive Vice President and Global Chief Information Officer since February 2014, he served as Bats' Senior Vice President and Chief Operation Officer from 2007 to 2014 and he has held other various senior leadership positions since 2005. Prior to being one of the founders of Bats, Mr.
Prior to that, he served as Bats' Executive Vice President and Global Chief Information Officer since February 2014, he served as Bats' Senior Vice President, Chief Operation Officer from 2007 to 2014 and he has held other various senior leadership positions since 2005. Prior to being one of the founders of Bats, Mr.
Cboe is an equal opportunity employer and provides equal employment opportunities to all qualified persons without regard to sex, race, color, ethnicity, creed, religion, national origin, ancestry, citizenship status, age, veteran or military status, disability, marital status, domestic partnership or civil union status, pregnancy, sexual orientation, genetic status, gender identity or expression, and any other characteristic protected by law (a “Protected Characteristic”).
Cboe is an equal opportunity employer and provides equal employment opportunities to all qualified persons without regard to sex, gender, race, color, ethnicity, creed, religion, national origin, ancestry, citizenship status, age, veteran or military status, disability, marital status, domestic partnership or civil union status, pregnancy, sexual orientation, genetic status, gender identity or expression, and any other characteristic protected by applicable law (a “Protected Characteristic”).
If any such threats or events materialize, we may be subject to contractual restrictions, liability and damages, loss of business, penalties, unfavorable publicity, and increased scrutiny by regulators, which may have an adverse effect on our business. The pending bankruptcy of FTX and the bankruptcies of other digital asset platforms has brought increased scrutiny to the digital asset industry.
If any such threats or events materialize, we may be subject to contractual restrictions, liability and damages, loss of business, penalties, unfavorable publicity, and increased scrutiny by regulators, which may have an adverse effect on our business. The bankruptcy of FTX and the bankruptcies of other digital asset platforms has brought increased scrutiny to the digital asset industry.
Cboe Clear Europe also clears equity derivative instruments as traded on Cboe NL. Cboe Clear Europe clearing participants include EEA regulated banks and brokerage trading firms. Our institutional global FX customers include banks, broker-dealers, hedge funds, asset managers, proprietary trading firms, Commodity Trading Advisors, and corporates.
Cboe Clear Europe also clears equity derivative instruments traded on Cboe NL. Cboe Clear Europe clearing participants include EEA regulated banks and brokerage trading firms. Our institutional global FX customers include banks, broker-dealers, hedge funds, asset managers, proprietary trading firms, Commodity Trading Advisors, and corporates.
In Europe, following the implementation of the Directive on Markets in Financial Instruments (Directive 2014/65/EU) (“MiFID II”), for the derivatives and cash and spot markets, rebates are generally available if they are tied to a market making scheme or specific service.
Following the implementation of the Directive on Markets in Financial Instruments (Directive 2014/65/EU) (“MiFID II”), for the derivatives and cash and spot markets, rebates are generally available if they are tied to a market making scheme or specific service.
In Japan, for our cash and spot markets, Cboe Japan, offers two fully electronic displayed markets, Chi-Alpha, which utilizes a price-time market model, combined with the “maker-taker” pricing model and Chi-Select, which utilizes a price-time retail customers focused market model, combined with the “taker-maker” pricing model.
In Japan, for our cash and spot markets, Cboe Japan, offers two fully electronic displayed markets, Cboe-Alpha, which utilizes a price-time market model, combined with the “maker-taker” pricing model and Cboe-Select, which utilizes a price-time retail customers focused market model, combined with the “taker-maker” pricing model.
Our goal is to ensure that equal pay and equal opportunity for all that results in a collaborative, high performing organization bringing new innovations to market and providing superior service to our customers.
Our goal is to ensure that fair pay and equal opportunity for all that results in a collaborative, high performing organization bringing new innovations to market and providing superior service to our customers.
We will provide a copy of these documents without charge to stockholders upon written request to Investor Relations, Cboe Global Markets, Inc., 433 West Van Buren Street, Chicago, Illinois 60607. Our website and information included in or linked to our website are not part of this Form 10-K. 33 Table of Contents
We will provide a copy of these documents without charge to stockholders upon written request to Investor Relations, Cboe Global Markets, Inc., 433 West Van Buren Street, Chicago, Illinois 60607. Our website and information included in or linked to our website are not part of this Form 10-K. 34 Table of Contents
The main activities that the exchanges, as applicable, are required to monitor for the purpose of compliance with these rules include: ● surveillance designed to detect violations of exchange trading rules; ● surveillance designed to detect violations of SEC and/or CFTC rules; ● investigation of matters involving potential rule violations; ● the investigation of complaints about possible rule violations brought by customers, TPHs, members or other SROs; and ● the examination of TPHs or members for compliance with rules such as those related to net capital, books and records, market access and other matters related to the TPHs’ or members’ exchange business functions.
The main activities that the exchanges, as applicable, are required to monitor for the purpose of compliance with these rules include: ● surveillance designed to detect violations of exchange trading rules; ● surveillance designed to detect violations of SEC and/or CFTC rules; ● investigation of matters involving potential rule violations; ● the investigation of complaints about possible rule violations brought by customers, TPHs, members or other SROs; and 25 Table of Contents ● the examination of TPHs or members for compliance with rules such as those related to net capital, books and records, market access and other matters related to the TPHs’ or members’ exchange business functions.
Item 1. Business The following description of the business should be read in conjunction with the information included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2022. This description contains forward-looking statements that involve risks and uncertainties.
Item 1. Business The following description of the business should be read in conjunction with the information included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2023. This description contains forward-looking statements that involve risks and uncertainties.
The Global FX segment includes institutional FX trading services that occur on the Cboe FX fully electronic trading platform, non-deliverable forward FX transactions (“NDFs”) offered for execution on Cboe SEF and Cboe Swiss, as well as revenue generated from the licensing of proprietary market data and from access and capacity services. ● Digital.
The Global FX segment includes institutional FX trading services that occur on the Cboe FX fully electronic trading platform, non-deliverable forward FX transactions (“NDFs”) offered for execution on Cboe SEF, as well as revenue generated from the licensing of proprietary market data and from access and capacity services.
C2 options utilizes a pro-rata allocation market model, combined with the maker-taker pricing model. For our U.S. derivatives futures market, which is fully electronic, CFE utilizes a price-time market model, combined with a pricing model where all market participants generally pay fees, subject to specified exceptions.
C2 options utilizes a pro-rata allocation market model, combined with the maker-taker pricing model. For CFE’s U.S. derivatives futures market, which is fully electronic, CFE utilizes a price-time market model, combined with a pricing model where all market participants generally pay fees, subject to specified exceptions.
Reasonably designed controls and governance framework are in place and are intended to help ensure quality third-party pricing sources were used. Cboe Clear Digital clears cryptocurrencies from 51 U.S. jurisdictions authorized by license or not subject to licensing.
Reasonably designed controls and governance framework are in place and are intended to help ensure quality third-party pricing sources were used. Cboe Clear Digital clears cryptocurrencies from 50 U.S. jurisdictions authorized by license or not subject to licensing.
Cboe delivers cutting-edge trading, clearing and investment solutions across the globe through a comprehensive ecosystem that helps drive innovation and growth. Key Growth Strategy Initiatives Our strategy is to build one of the world’s largest global derivatives and securities networks to create value and drive growth by: ● Innovating to capture growing demand for trading products and data services, globally.
Cboe delivers cutting-edge trading, clearing and investment solutions across the globe through a comprehensive ecosystem that helps drive innovation and growth. ​ 10 Table of Contents Key Growth Strategy Initiatives Our strategy is to build one of the world’s largest global derivatives and securities networks to create value and drive growth by: ● Innovating to capture growing demand for trading products and data services, globally.
Fees, net of plan costs, from UTP, CTA, and OPRA are allocated and distributed to plan participants like us according to their share of tape fees based on a formula, required by Regulation NMS, which may take into account both trading and quoting activity. Our Market Models We operate a variety of derivatives and cash and spot markets.
Fees, net of plan costs, from UTP, CTA, and OPRA are allocated and distributed to plan participants like us according to their share of tape fees based on a formula, required by Regulation NMS, which may take into account both trading and quoting activity. 13 Table of Contents Our Market Models We operate a variety of derivatives and cash and spot markets.
In addition to index data dissemination, through Cboe’s Global Indices platform, we distribute real-time cryptocurrency prices and indicative net asset values. See above for additional information regarding our proprietary indices. 12 Table of Contents ● Risk and Market Analytics. Services include analytics and historical data with three areas of focus: o Data and Market Analytics.
In addition to index data dissemination, through Cboe’s Global Indices platform, we distribute real-time cryptocurrency prices and indicative net asset values. See above for additional information regarding our proprietary indices. ● Risk and Market Analytics. Services include analytics and historical data with three areas of focus: o Data and Market Analytics.
The SEC also requires that Cboe Global Markets not take any actions that would interfere with the effectuation of any decisions by the Board of Directors of any of the Exchanges relating to its regulatory functions or the structure of the market that it regulates or that would interfere with the ability of such Exchange to carry out its responsibilities under the 24 Table of Contents Exchange Act.
The SEC also requires that Cboe Global Markets not take any actions that would interfere with the effectuation of any decisions by the Board of Directors of any of the Exchanges relating to its regulatory functions or the structure of the market that it regulates or that would interfere with the ability of such Exchange to carry out its responsibilities under the Exchange Act.
For our FX NDF markets, Cboe SEF and Cboe Swiss platforms utilize a price-firmness-time priority market model and charge a flat commission based upon the notional amount traded on the platform and the capacity in which a participant is trading. Cboe Digital, which is fully electronic, for our digital asset spot and futures markets, utilizes a price-time priority model.
For our FX NDF markets, Cboe SEF utilizes a price-firmness-time priority market model and charge a flat commission based upon the notional amount traded on the platform and the capacity in which a participant is trading. Cboe Digital, which is fully electronic, for our digital asset spot and futures markets, utilizes a price-time priority model.
Our ATS equities participants in the United States include subscribers of BIDS Trading, which are SEC-registered broker-dealers, and certain customers of those broker-dealers. Our futures customers include banks, futures commission merchants and their customers, hedge funds, asset managers, proprietary trading firms, and Commodity Trading Advisors.
Our ATS equities participants in the United States include subscribers of 15 Table of Contents BIDS Trading, which are SEC-registered broker-dealers, and certain customers of those broker-dealers. Our futures customers include banks, futures commission merchants and their customers, hedge funds, asset managers, proprietary trading firms, and Commodity Trading Advisors.
In order to ensure market integrity, we regulate and monitor our TPHs’ and members’ trading activities by using both our employees and third parties under regulatory services agreements (“RSAs”). See “Regulatory Agreements” below. Providing effective regulation is important for attracting and retaining the confidence and participation of market-makers, broker-dealers and institutional and retail investors.
In order to ensure market integrity, we regulate and monitor our TPHs’ and members’ trading activities by using both our employees and/or third parties under regulatory services agreements (“RSAs”). See “U.S. Regulatory Agreements” below. Providing effective regulation is important for attracting and retaining the confidence and participation of market-makers, broker-dealers and institutional and retail investors.
While Cboe Digital and its vendors have experienced in the past cybersecurity threats and events of varying degrees, we are not aware of any of these threats or events having a material impact on Cboe Digital’s business, financial condition or operating results to date.
While Cboe Digital and its vendors have experienced cybersecurity threats and events of varying degrees, we are not aware of any of these threats or events having a material impact on Cboe Digital’s business, financial condition or operating results to date.
Cboe Digital does not commingle its own corporate assets with the customer digital assets in the omnibus wallets, other than corporate assets that are held in omnibus wallets to facilitate customer transactions relating to the digital assets contained in the omnibus wallet, including in order to pay customary transaction fees and expenses.
Cboe Digital does not hold its own corporate assets together with the customer digital assets in the omnibus wallets, other than corporate assets that are held in omnibus wallets to facilitate customer transactions relating to the digital assets contained in the omnibus wallet, including in order to pay customary transaction fees and expenses.
Employee Engagement and Pulse Surveys, Town Halls and an Open-Door Policy In 2022, Cboe conducted our fifth annual employee engagement survey and has implemented career, leadership, and culture focused programs in response to the survey findings. Our participation rate exceeds standard benchmarks and a significant majority of our employees would recommend Cboe as a great place to work.
Employee Engagement and Pulse Surveys, Town Halls and an Open-Door Policy In 2023, Cboe conducted our sixth annual employee engagement survey and has implemented career, leadership, and culture focused programs in response to the survey findings. Our participation rate exceeds standard benchmarks and a significant majority of our employees would recommend Cboe as a great place to work.
C2 Options, BZX Options, and EDGX Options are all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options. The Options segment also includes applicable market data revenue generated from the consolidated tape plans, the licensing of proprietary options market data, index licensing, and access and capacity services. ● North American Equities.
C2 Options, BZX Options, and EDGX Options are all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options. The Options segment also includes applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary options market data, index licensing, routing services, and access and capacity services. ● North American Equities.
Through the process of netting, in 2022, Cboe Clear Europe eliminated 71%, or €34 billion of the average daily cleared value, leaving an average daily settlement value of €14 billion. In 2021, Cboe Clear Europe provided CCP protection for an average of €43 billion of cleared value on a daily basis.
In 2022, Cboe Clear Europe provided CCP protection for an average of €48 billion of cleared value on a daily basis. Through the process of netting, in 2022, Cboe Clear Europe eliminated 71%, or €34 billion of the average daily cleared value, leaving an average daily settlement value of €14 billion.
Digital assets require control of one or more unique public and private keys relating to the local or online digital wallet in which the digital assets are held. The networks require one or more private keys relating to a digital wallet to authorize a spending transaction.
Digital assets require control of one or more unique public and private keys relating 18 Table of Contents to the local or online digital wallet in which the digital assets are held. The networks require one or more private keys relating to a digital wallet to authorize a spending transaction.
Due to the delayed completion of CAIS, the SROs/Plan Participants have submitted to the SEC requests to extend the timeline for the completion of Phase 2e and the deadline for the final financial accountability milestone and additional requests may be submitted.
Due to the delayed completion of CAIS, the SROs/Plan 27 Table of Contents Participants have submitted to the SEC requests to extend the timeline for the completion of Phase 2e and the deadline for the final financial accountability milestone and additional requests may be submitted.
Because Cboe Digital does not have a trading entity for proprietary or 17 Table of Contents liquidity trading purposes, Cboe Digital maintains its own digital assets only to facilitate customer trading. Cboe Digital does not currently pledge, rehypothecate, or invest customer digital assets, although its customer agreements and rulebook permit it to do so in the future.
Because Cboe Digital does not have a trading entity for proprietary or liquidity trading purposes, Cboe Digital maintains its own digital assets only to facilitate customer trading. Cboe Digital does not currently pledge, rehypothecate, or invest customer digital assets, although its customer agreements and rulebook permit it to do so in the future.
We have the exclusive right during standard U.S. trading hours to offer listed options contracts in the United States on the Dow Jones Industrial Average (“DJIA”) and Dow 10 Index, and non-exclusive rights to offer listed options on several other Dow Jones indices including the Dow Jones Utilities Average and Dow Jones Transportation Average.
We have the exclusive right during standard U.S. trading hours to offer listed options contracts in the United States on the Dow Jones Industrial Average (“DJIA”) and Dow 10 Index, and 12 Table of Contents non-exclusive rights to offer listed options on several other Dow Jones indices including the Dow Jones Utilities Average and Dow Jones Transportation Average.
Additional information on our approach to ESG can be found in the 2022 Cboe Global Markets, Inc. Environmental, Social and Governance Report located in the Corporate Social Responsibility section of our website at https://www.cboe.com/about/esg/ , which does not form a part of this Form 10-K . 32 Table of Contents Available Information Our website is www.cboe.com.
Additional information on our approach to ESG can be found in the 2023 Cboe Global Markets, Inc. Environmental, Social and Governance Report located in the Corporate Social Responsibility section of our website at https://www.cboe.com/about/esg/ , which does not form a part of this Form 10-K . Available Information Our website is www.cboe.com.
Additional information on our approach to human capital and ESG 27 Table of Contents issues can be found in the Cboe Global Markets, Inc. Environmental, Social and Governance Report located in the Corporate Social Responsibility section of our website at https://markets.cboe.com/about/corporate-social-responsibility, which does not form a part of this Form 10-K.
Additional information on our approach to human capital and environmental, social, and governance (“ESG”) issues can be found in the Cboe Global Markets, Inc. Environmental, Social and Governance Report located in the Corporate Social Responsibility section of our website at https://markets.cboe.com/about/corporate-social-responsibility, which does not form a part of this Form 10-K.
Previously, she was Senior Vice President, Global Head of Information Solutions of the Company’s subsidiary Cboe Exchange, Inc. from February 2019 to March 2021, and she has held other various senior leadership positions since 2015, including Vice President Business Development, a position she was appointed to upon the Company’s acquisition of Livevol, Inc.
Previously, she was Executive Vice President, Global Head of Data and Access Solutions from March 2021 to October 2023, Senior Vice President, Global Head of Information Solutions of the Company’s subsidiary Cboe Exchange, Inc. from February 2019 to March 2021, and she has held other various senior leadership positions since 2015, including Vice President Business Development, a position she was appointed to upon the Company’s acquisition of Livevol, Inc.
Services include FIX Order Routing, Trade Drop Copy Network, CAT reporting, and broker connectivity. We provide data services to market participants globally through a number of distribution channels including direct, via our vendor partners and Cboe Global Cloud, which is our global cloud data distribution service. U.S.
Services include FIX Order Routing, Trade Drop Copy Network, consolidated audit trail (“CAT”) reporting, and broker connectivity. We provide data services to market participants globally through a number of distribution channels including direct, via our vendor partners and Cboe Global Cloud, which is our global cloud data distribution service. U.S.
Digital assets of customers (but not those of Cboe Digital) are commingled in the omnibus wallets, and Cboe Digital maintains the records of the amount and type of digital asset owned by each of its customers in omnibus wallets.
Digital assets of customers (but not those of Cboe Digital) are held together in the omnibus wallets, and Cboe Digital maintains the records of the amount and type of digital asset owned by each of its customers in the omnibus wallets.
Furthermore, electronification of the FX market appears to be experiencing more resistance outside the United States. The electronic spot FX market is also intensely competitive, with over 10 other venues competing for market share as of December 31, 2022. Cboe measures and reports on market share against a narrower set of competitors, included in those venues.
Furthermore, electronification of the FX market appears to be experiencing more resistance outside the U.S. The electronic spot FX market is also intensely competitive, with over 10 other venues competing for market share as of December 31, 2023. Cboe measures and reports on market share against a narrower set of competitors, included in those venues.
Accordingly, we generate revenue from proprietary indices by distributing them for reference purposes, using them as the basis for proprietary products and licensing them for use for third-party indices and products. 11 Table of Contents Strategic Relationships The Company has long-term business relationships with several providers of market indices.
Accordingly, we generate revenue from proprietary indices by distributing them for reference purposes, using them as the basis for proprietary products and licensing them for use for third-party indices and products. Strategic Index Provider Relationships The Company has long-term business relationships with several providers of market indices.
Cboe Digital does not itself trade digital assets, does not trade on its own exchange, and does not maintain an affiliate trading entity for purposes of trading, market making, or liquidity provision on its exchange. Cboe Clear Digital maintains its own operating funds in separate bank accounts at separate banking institutions from where it maintains customer accounts.
Cboe Digital does not itself trade digital assets, does not trade on its own exchange, and does not maintain an affiliate trading entity for purposes of trading, market making, or liquidity provision on its exchange. Cboe Clear Digital maintains its own operating funds in separate bank accounts from its customer funds.
Our CEO also issues weekly letters to help connect with our employees. Human Resources also 29 Table of Contents provided ongoing regular resources and tips to help support the variety of challenges from the new reality of hybrid work to childcare and elder care that our employees faced throughout 2022.
Our CEO also issues weekly letters to help connect with our employees. Human Resources also provided ongoing regular resources and tips to help support the variety of challenges, from the new reality of hybrid work to childcare and elder care, that our employees faced throughout 2023.
The regulations applicable to MATCHNow and NEO cover a wide array of areas, including, but not limited to, marketplace operations (which include corporate governance, fair access, systems compliance and integrity, and conflict management requirements), trading rules, electronic trading risk management, and financial viability. Australian Securities Industry Cboe Australia is subject to comprehensive regulation and oversight by ASIC.
The regulations applicable to Cboe Canada Inc. cover a wide array of areas, including, but not limited to, marketplace operations (which include corporate governance, fair access, systems compliance and integrity, and conflict management requirements), trading rules, electronic trading risk management, and financial viability. 22 Table of Contents Australian Securities Industry Cboe Australia is subject to comprehensive regulation and oversight by ASIC.
As of December 31, 2022, we compete with 16 U.S. options exchanges, in large part due to existing exchange holding companies opening new exchanges that offer different markets and pricing models on existing technology. Most of the equity and ETP options listed and traded on our exchanges are also listed and traded on the other exchanges.
As of December 31, 2023, our four options exchanges compete with 13 other U.S. options exchanges, in large part due to existing exchange holding companies opening new exchanges that offer different markets and pricing models on existing technology. Most of the equity and ETP options listed and traded on our exchanges are also listed and traded on the other exchanges.
EU Transparency Rules On November 11, 2021, the European Council (“E.C.”) published its proposal for a review of EU market structure legislation, including proposed amendments to Markets in Financial Instruments Regulation (“MiFiR”) and Directive 2014/65/EU on markets in financial instruments (“MiFID II”).
EU Transparency Rules On November 11, 2021, the European Council (“E.C.”) published its proposal for a review of EU market structure legislation, including proposed amendments to Markets in Financial Instruments Regulation (“MiFiR”) and Directive 2014/65/EU on markets in financial instruments (“MiFID II”). The legislative phase of the review is now almost complete.
We also compete against certain multi-listed options products, such as options on SPY, which may offer similar market exposure of our proprietary products, such as SPX options. The multi-listed options industry is extremely competitive. We expect this trend to continue.
We also compete against certain multi-listed options products, such as SPY options and cash settled index options, which may offer similar market exposure of our proprietary products, such as SPX options. The multi-listed options industry is extremely competitive. We expect this trend to continue.
Global Senior leaders participated in a Clifton StrengthsFinder assessment and workshop to learn about their leadership style and how to empower Cboe associates based on their natural strengths.
The Board of Directors of Cboe and global senior leaders participated in a Clifton StrengthsFinder assessment and workshop to learn about their leadership style and how to empower Cboe associates based on their natural strengths.
She also previously served as Chief Financial Officer, Europe of Bats’ subsidiary Bats Europe Limited since February 2014 and was employed by Bats in the financial area since 2011. Prior to that, she held various positions at Ernst & Young LLP from 2001 to 2011. Ms.
She also previously served as Chief Financial Officer of Cboe Europe from 2014 to 2018 and was employed by Bats in the financial area since 2011. Prior to that, she held various positions at Ernst & Young LLP from 2001 to 2011. Ms.
We also offer VIX Weeklys options and futures, mini VIX futures, and nearly 24x5 trading in VIX options and futures to provide investors with additional tools to trade volatility. Proprietary Indices We also calculate and disseminate proprietary indices that are licensed for use by third parties or are used as the basis for other proprietary products.
We also offer the 1-Day Volatility Index (VIX1D), VIX Weeklys options and futures, mini VIX futures, and 24x5 trading in VIX options and futures to provide investors with additional tools to trade volatility. Proprietary Indices We also calculate and disseminate proprietary indices that are licensed for use by third parties or are used as the basis for Cboe proprietary products.
See “Risk Factors” for more information regarding Cboe Digital. 18 Table of Contents Regulatory Environment and Compliance Various aspects of our business are subject to regulation by the SEC, CFTC, FINRA, the New York Department of Financial Services (“NYDFS”), various state regulators, the Canadian SRO, the Canadian Securities Administrators (and, in particular, the Ontario Securities Commission or “OSC”), the Australian Securities & Investments Commission (“ASIC”), JFSA, JSDA, ESMA, FCA, the Central Bank of the Netherlands (“DNB”), AFM, and other international regulatory authorities where our exchanges or Cboe Clear Europe may be authorized to act as foreign exchanges or provide clearing services, and market participants may be subject to regulation by the SEC, CFTC, FINRA, National Futures Association (“NFA”), FCA, Board of Governors of the Federal Reserve, U.S.
Regulatory Environment and Compliance Various aspects of our business are subject to regulation by the SEC, CFTC, FINRA, the New York Department of Financial Services (“NYDFS”), various state regulators, CIRO, the Canadian Securities Administrators (and, in particular, the Ontario Securities Commission or “OSC”), the Australian Securities & Investments Commission (“ASIC”), JFSA, JSDA, ESMA, FCA, the Central Bank of the Netherlands (“DNB”), AFM, Bank of England, and other international regulatory authorities where our exchanges or Cboe Clear Europe may be authorized to act as foreign exchanges or provide clearing services, and market participants may be subject to regulation by the SEC, CFTC, FINRA, National Futures Association (“NFA”), FCA, Board of Governors of the Federal Reserve, U.S.
Digital Asset Legislation Members of U.S. Congress have introduced various bills related to the regulation of digital assets, however no legislation has been passed and the details of any potential legislation remain to be discussed and agreed.
See “Risk Factors” for more information. Digital Asset Legislation Members of U.S. Congress have introduced various bills related to the regulation of digital assets, however no legislation has been passed and the details of any potential legislation remain to be discussed and agreed.
Our Australian customers include trading participants of Cboe Australia, which are Australian registered investment dealers, and certain clients of those dealers. Our Japanese customers include participants of Chi-Alpha, Chi-Select, Chi-Match and Kai-X, which are Japanese registered broker-dealers, and certain clients of those dealers.
Our Australian customers include trading participants of Cboe Australia, which are Australian registered investment dealers, and certain clients of those dealers. Our Japanese customers include participants of Cboe-Alpha, Cboe-Select, Cboe-Match and Cboe BIDS Japan, which are Japanese registered broker-dealers, and certain clients of those dealers.
We license their indices, including on an exclusive basis, as the foundation for indices, index options and other products. The Company also acquires interests in and agrees to work jointly with key providers to develop new products and services that are expected to capitalize on our core competencies and diversify our sources of revenue.
We license their indices, including on an exclusive basis, as the foundation for indices, index options and other products. The Company also agrees to work jointly with key providers to develop new products and services that are expected to capitalize on our core competencies and diversify our sources of revenue. Of particular note are the following: ● S&P Global.
Prior to that, she served as Chief Executive Officer of Livevol, Inc. from 2013 to 31 Table of Contents 2015 and as its Chief Strategy Officer from 2010 to 2013. Prior to that, she served as Founder of Thales LLC from 2006 through 2010. Ms. Clay holds a B.S. degree from University of Colorado-Boulder. John F. Deters. Mr.
Prior to that, she served as Chief Executive Officer of Livevol, Inc. from 2013 to 2015 and as its 32 Table of Contents Chief Strategy Officer from 2010 to 2013. Prior to that, she served as Founder of Thales LLC from 2006 through 2010. Ms. Clay holds a B.S. degree from University of Colorado-Boulder. Stephanie Foley . Ms.
As a licensed money transmitter and an entity subject to the BitLicense regulatory regime, Cboe Clear Digital is subject to, among other things, the Bank Secrecy Act, restrictions and requirements with respect to the investment of customer funds and use and safeguarding of customer funds and crypto assets, and bonding, net worth, customer notice and disclosure, reporting and recordkeeping requirements applicable to the company and control persons, and inspection and examination by state regulatory agencies.
As a licensed money transmitter and an entity subject to the BitLicense regulatory regime, Cboe Clear Digital is subject to, among other things, the Bank Secrecy Act, restrictions and requirements with respect to the investment of customer funds and use and safeguarding of customer funds and crypto assets, and bonding, net worth, customer notice and disclosure, reporting and recordkeeping requirements applicable to the company and control persons, and inspection and examination by state regulatory agencies. 23 Table of Contents Europe Cboe Europe is located in London and is subject to regulation in the UK and to certain European regulations.
In order to support our efforts and those of our market participants to comply with applicable law and our exchange rules, we developed a regulatory program to monitor market activity on our exchanges. All of our Exchanges and CFE are participants in the Intermarket Surveillance Group (“ISG”).
In order to support our efforts and those of our market participants to comply with applicable law and our exchange rules, we developed a regulatory program to monitor market activity on our exchanges. All of our Exchanges, CFE, and Cboe Digital Exchange are participants in various cooperative and regulatory information sharing agreements, including in the Intermarket Surveillance Group (“ISG”).
More specifically, the Women’s Initiative is comprised of three committees that target areas where its membership strives to promote change, such as networking events, building a formal mentorship program and an advocacy group aimed at gathering input on topics of importance for its membership. This outreach helps shape the planning and focus for the Initiative.
More specifically, the Women’s Initiative is comprised of three committees that target areas where its membership strives to promote change, such as networking events, mentorship, and building an advocacy group aimed at gathering input on topics of importance for its membership.
It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively.
It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively, along with equities transactions that occur on the BIDS Trading platform in Australia and Japan.
The Company’s Board of Directors recognizes that operating in a socially responsible manner helps promote the long-term interests of our organization, stockholders, associates, industry and community. ● Promoting Transparency and Efficient Capital Markets – We maintain a comprehensive regulatory program in support of providing trusted markets and integrity in the marketplace. ● Environmental Performance – The financial services industry has a unique, impactful role in supporting society’s transition to a net-zero economy and we recognize the need to do our part.
The Company’s Board of Directors recognizes that operating in a socially responsible manner helps promote the long-term interests of our organization, stockholders, associates, industry and community. ● Promoting Transparency and Efficient Capital Markets – We maintain a comprehensive regulatory program in support of providing trusted markets and integrity in the marketplace. ● Environmental Performance – We recognize the need to do our part in supporting the environment.
We believe that we compete favorably with respect to these factors through a variety of methods, including: ● offering access to a broad array of products and services, including proprietary products and market data; ● offering fee schedules and pricing models that both attract order flow and provide incentives to liquidity providers; ● providing advanced technology that offers broad functionality, low latency, fast execution, ease of use, scalability, reliability and security; ● offering efficient, transparent and liquid marketplaces; ● offering deep and liquid markets with opportunities for price improvement; ● offering broad trading platform access in the EU; ● maintaining close relationships with customers; and ● providing customers with a comprehensive source of information on options and ETPs as well as extensive options education. 15 Table of Contents In our proprietary products, we compete against other futures exchanges and swap execution facilities that offer similar products, as well as against financial market participants that offer similar over-the-counter derivatives.
We believe that we compete favorably with respect to these factors through a variety of methods, including: ● offering access to a broad array of products and services, including proprietary products and market data; ● offering fee schedules and pricing models that both attract order flow and provide incentives to liquidity providers; ● providing advanced technology that offers broad functionality, low latency, fast execution, ease of use, scalability, reliability and security; ● offering efficient, transparent and liquid marketplaces; ● offering deep and liquid markets with opportunities for price improvement; ● offering broad trading platform access in the EU; ● offering efficient and transparent clearing services designed to help maximize netting opportunities; ● maintaining close relationships with customers; and ● providing customers with a comprehensive source of information on options and ETPs as well as extensive options education.
The VIX methodology provides the basis for the creation of VIX options and futures. The final settlement value of VIX derivatives is determined on their expiration date through a Special Opening Quotation (“SOQ”) of the VIX Index.
The final settlement value of VIX options and futures is determined on their expiration date through a Special Opening Quotation (“SOQ”) of the VIX Index.
Cboe Europe Equities and Derivatives utilizes the same state-of-the-art, real-time surveillance system is used on the U.S. to monitor trading and market activities on BZX, BYX, EDGA, and EDGX.
Cboe Europe Equities and Derivatives utilizes the same state-of-the-art, real-time surveillance system is used on the U.S. to monitor trading and market activities on BZX, BYX, EDGA, and EDGX. Cboe Clear Europe utilizes proprietary risk management software to monitor settlement and funding flows.
Similarly, our equities’ customers in Europe are European Union (“EU”) regulated brokerage and proprietary trading firms, as well as sponsored access clients of these brokerage firms and certain non-EU regulated and unregulated direct access participants. Cboe Clear Europe clears equities, equity like instruments from 18 European markets and from the United States.
Similarly, our equities’ customers in Europe are European Union (“EU”) regulated brokerage and proprietary trading firms, as well as sponsored access clients of these brokerage firms and certain non-EU regulated and unregulated direct access participants. Cboe Clear Europe clears equities, equity like instruments traded on 47 European trading segments.
Griebenow is a certified public accountant and holds a bachelor’s degree in accounting from the University of Northern Iowa. Corporate Social Responsibility The Company recognizes that operating in a socially responsible manner helps promote the long-term interests of our investors, associates, customers, community members, and all other stakeholders with whom we live and work.
Wilkinson is a certified public accountant and holds master’s and bachelor's degrees in accounting from the University of Missouri – Columbia. 33 Table of Contents Corporate Social Responsibility The Company recognizes that operating in a socially responsible manner helps promote the long-term interests of our investors, associates, customers, community members, and all other stakeholders with whom we live and work.
The remaining 802 employees provide business development, financial, regulation, human resources, compliance, legal, planning and research, administrative, and managerial support. 30 Table of Contents We have five building engineers that are covered by a collective bargaining agreement, which expires on June 30, 2023, with the International Union of Operating Engineers Local 399, AFL-CIO.
The remaining 867 employees provide business development, financial, regulation, human resources, compliance, legal, planning and research, administrative, and managerial support. We have three building engineers that are covered by a collective bargaining agreement, which expires on March 31, 2024, with the International Union of Operating Engineers Local 399, AFL-CIO.
The North American Equities segment also includes ETP and corporate listings on NEO, ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, and applicable market data and related revenue generated from the consolidated tape plans, the licensing of proprietary equities market data, routing services, and access and capacity services. ● Europe and Asia Pacific.
The North American Equities segment also includes listing services on Cboe Canada Inc., corporate and ETP listings on BZX, applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary equities market data, routing services, and access and capacity services. ● Europe and Asia Pacific.
Cboe Japan also offers two fully electronic non-displayed markets, Chi-Match, which matches VWAP orders during pre-market hours and Kai-X, which utilizes a price-time market model aiming for primary market mid-point trades.
Cboe Japan also offers two fully electronic non-displayed markets, Cboe-Match, which matches volume-weighted average price (“VWAP”) orders during pre-market hours and Cboe BIDS Japan, which utilizes a price-time market model aiming for primary market mid-point trades.
Our equities and options customers in the United States include trading permit holders and members of Cboe Options, C2, BZX, BYX, EDGX, and EDGA, which are SEC-registered broker-dealers, and the customers of those broker-dealers. Our Canadian equities customers include subscribers of MATCHNow and members of NEO, which are Canadian registered investment dealers, and certain clients of those dealers.
Our equities and options customers in the United States include trading permit holders and members (as applicable) of Cboe Options, C2, BZX, BYX, EDGX, and EDGA, which are SEC-registered broker-dealers, and the customers of those broker-dealers. Our Canadian equities customers include members of Cboe Canada Inc., which are Canadian registered investment dealers.
See “Risk Factors” for more information. Equity Market Structure In December 2022, the SEC released four proposals that could impact equity market structure: (1) Disclosure of Order Execution Information (Rule 605); (2) Regulation NMS Amendments: Tick Size, Access Fees, and Transparency; (3) Regulation Best Execution; and (4) Proposed Rule to Enhance Order Competition.
United States Equity Market Structure In December 2022, the SEC released four proposals that could impact equity market structure: (1) Disclosure of Order Execution Information (Rule 605); (2) Regulation NMS Amendments: Tick Size, Access Fees, and Transparency; (3) Regulation Best Execution; and (4) Proposed Rule to Enhance Order Competition. These proposals have been noticed for public comment.
The Exchanges remain responsible for the regulation of their TPHs, 25 Table of Contents members and marketplaces, and retain the authority for bringing disciplinary actions against their TPHs and members, although FINRA performs certain disciplinary-related functions on behalf of the Exchanges.
The Exchanges remain responsible for the regulation of their TPHs, members and marketplaces, and retain the authority for bringing disciplinary actions against their TPHs and members, although FINRA performs certain functions on behalf of the Exchanges. The Exchanges also perform certain regulatory and disciplinary-related functions in-house.
Our senior management team continues to hold the commitment to an open-door policy and encourages the free flow of information and communication in furtherance of active transparency. With the global pandemic, our ability to tap into the voice of our employees was critically important. We conducted regular pulse surveys to gauge sentiment in making critical decisions.
Our senior management team continues to hold the commitment to an open-door policy and encourages the free flow of information and communication in furtherance of active transparency. With the recent executive transitions, our ability to tap into the voice of our employees was critically important and we conducted a pulse survey to gauge sentiment.
Actual results could differ significantly from the results discussed in the forward-looking statements due to the factors set forth in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Overview Cboe Global Markets, Inc., a leading provider of market infrastructure and tradable products, delivers cutting-edge trading, clearing and investment solutions to market participants around the world.
Actual results could differ significantly from the results discussed in the forward-looking statements due to the factors set forth in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Overview Cboe Global Markets, Inc., the world's leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world.
We also have associate resource groups, such as the Cboe Women’s Initiative, the Diversity Leadership Council, the Veterans Initiative and PRISM+ (People Respecting Individuality and Sexuality in Markets). ● The Cboe Women’s Initiative works toward its mission: to increase representation, strengthen voices, and build a culture of opportunity and advancement for the women of Cboe .
We also have associate resource groups, including the Cboe Women’s Initiative, the Diversity Leadership Council, the Veterans Initiative, PRISM+ (People Respecting Individuality and Sexuality in Markets), Cboe UNIDOS, Asian and Pacific Islanders Network (APIN) and Black Equity and Allyship in Markets (BEAM). ● The Cboe Women’s Initiative works toward its mission: to increase representation, strengthen voices, and build a culture of opportunity and advancement for the women of Cboe.
Management believes that we have strong relationships with our employees, and we have never experienced a work stoppage. Information about our Executive Officers Set forth below is information regarding our executive officers: Name Age Position Edward T.
Management believes that we have strong relationships with our employees, and we have never experienced a work stoppage. Information about our Executive Officers Set forth below is information regarding our executive officers: Name Age Position Fredric J. Tomczyk ​ 68 ​ Chief Executive Officer Catherine R.
To maintain and strengthen our efforts in this area, we also review the critical touchpoints across the employee journey with Cboe to keep a level playing field, from the talent selection, promotion, leadership development and succession planning processes and make adjustments, as necessary, to ensure opportunity parity across the Company.
To maintain and strengthen our pledge to equity, diversity and inclusion and to keep a level playing field, we regularly review key touchpoints across the employee journey with Cboe., from the talent selection, promotion, compensation, leadership development, and succession planning processes and make adjustments, as necessary, to help ensure opportunity parity across the Company.
We plan to increase access to data products and trading solutions, provide unrivaled transaction capabilities, have a global presence in the highest value markets, and develop indices and products to meet growing environmental, social, and governance (“ESG”) needs.
We plan to increase access to data products and trading solutions, provide unrivaled transaction capabilities, and have a global presence in the highest value markets.
We recognize the need to provide ongoing, timely, and constructive performance feedback. Cboe has designed a Performance Management Program that drives the professional development of our employees while also providing fair and equitable rewards and recognition.
Cboe has designed a Performance Management Program that drives the professional development of our employees while also providing fair and equitable rewards and recognition.
We aim to seamlessly integrate across ecosystems to increase efficiency and better serve our customers. We leverage industry-leading technology, apply a non-siloed integration approach to expand ecosystems and fuel our flywheel and generate strong free cash flow as we improve operating efficiency.
We aim to unlock the value, capabilities, and efficiencies of our ecosystems to increase efficiency and utilize our client coordination model to better serve our customers. We leverage industry-leading technology, apply a non-siloed integration approach to expand ecosystems and fuel our flywheel and generate strong free cash flow as we improve operating efficiency.
In addition, regulation governing the authorization and supervision of Central Securities Depositories (“CSDR”) was approved in September 2014, with the publication of most “Level 2” Regulatory Technical Standards in March 2017, with implementation in March 2019.
In addition, regulation governing the authorization and supervision of Central Securities Depositories (“CSDR”) was approved in September 2014, with the publication of most “Level 2” Regulatory Technical Standards in March 2017, with implementation in March 2019. Rules in relation to the calculation and collection of cash penalties have come in to force in February 2022.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur markets and clearinghouses have experienced occasional systems failures and delays in the past and in the future our systems may fail, in whole or in part, or may operate slowly, causing one or more of the following: ● unanticipated disruption in service to our participants; ● failures or delays during peak trading times or times of unusual market volatility; ● slower response times and delays in trade execution, clearing and processing; ● incomplete or inaccurate accounting, recording, clearing or processing of trades; and ● distribution of inaccurate or untimely market data to participants who rely on this data in their trading activity. 43 Table of Contents Any of these events may cause: ● a loss in transaction, clearing or other fees due to the inability to provide services for a time; ● requests by market participants or others that we reimburse them for financial loss, either within the constraints of the limited liability provisions of our exchanges’ rules or in excess of those amounts; ● trading and clearing volumes to diminish on our markets and clearinghouse due to dissatisfaction with the platforms; and ● one or more of our regulators to investigate or take enforcement action against us.
Biggest changeAny of these events may cause: ● a loss in transaction, clearing or other fees due to the inability to provide trading in our exclusively listed proprietary products or provide services for a time; ● requests by market participants or others that we reimburse them for financial loss, either within the constraints of the limited liability provisions of our exchanges’ rules or in excess of those amounts; ● trading and clearing volumes to diminish on our markets and clearinghouse due to dissatisfaction with the platforms; and ● one or more of our regulators to investigate or take enforcement action against us.
We also compete against certain multi-listed options products, such as SPY, which offer some of the features of our proprietary products, such as SPX. To attract market share, we may offer “inverted” pricing specials or no-transaction fee trading from time to time, per various fee schedules across our equities exchanges.
We also compete against certain multi-listed options products, such as SPY options, which offer some of the features of our proprietary products, such as SPX options. To attract market share, we may offer “inverted” pricing specials or no-transaction fee trading from time to time, per various fee schedules across our equities exchanges.
Collectively, these safeguards and measures or those of our third-party providers, including any cloud technologies, may prove inadequate to prevent the attendant risk posed by cybersecurity incidents, subjecting us to contractual restrictions, liability and damages, loss of business, penalties, unfavorable publicity, and increased scrutiny by our regulators, and materially impacting our business, financial condition and operating results.
Collectively, these safeguards and measures or those of our third-party providers, including any cloud technologies, may prove inadequate to prevent the attendant risk posed by cybersecurity incidents, subjecting us to contractual restrictions, liability and damages, loss of business, penalties, unfavorable publicity, increased scrutiny by our regulators, and materially impacting our business, financial condition and operating results.
In addition, Cboe Clear Europe entered into a € 1.25 billion committed syndicated multicurrency revolving and swingline credit facility that is available to be drawn by Cboe Clear Europe towards (a) financing unsettled amounts in connection with the settlement of transactions in securities and other items processed through Cboe Clear Europe’s clearing system and (b) financing any other liability or liquidity requirement of Cboe Clear Europe incurred in the operation of its clearing system, however we can give no assurance that this facility will be sufficient to meet all such obligations or sufficiently mitigate Cboe Clear Europe’s liquidity risk to meet its payment obligations when due.
Cboe Clear Europe entered into a €1.25 billion committed syndicated multicurrency revolving and swingline credit facility that is available to be drawn by Cboe Clear Europe towards (a) financing unsettled amounts in connection with the settlement of transactions in securities and other items processed through Cboe Clear Europe’s clearing system and (b) financing any other liability or liquidity requirement of Cboe Clear Europe incurred in the operation of its clearing system, however we can give no assurance that this facility will be sufficient to meet all such obligations or sufficiently mitigate Cboe Clear Europe’s liquidity risk to meet its payment obligations when due.
Summary of Risk Factors The following is a summary of the key risks and uncertainties described below that we believe are material to us at this time: ● the loss of our right to exclusively list and trade certain index options and futures products; ● economic, political and market conditions; ● compliance with legal and regulatory obligations; ● price competition and consolidation in our industry; ● decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; ● legislative or regulatory changes or changes in tax regimes; ● our ability to protect our systems and communication networks from security vulnerabilities and breaches; ● our ability to attract and retain skilled management and other personnel, including compensation inflation; ● increasing competition by foreign and domestic entities; ● our dependence on and exposure to risk from third parties; ● global expansion of operations; ● factors that impact the quality and integrity of our indices; ● our ability to manage our growth and strategic acquisitions or alliances effectively; ● our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; ● our ability to minimize the risks, including our credit and default risks, associated with operating a European clearinghouse; ● our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; ● misconduct by those who use our markets or our products or for whom we clear transactions; ● challenges to our use of open source software code; ● our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; ● our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; ● damage to our reputation; ● the ability of our compliance and risk management methods to effectively monitor and manage our risks; ● restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; ● our ability to maintain an investment grade credit rating; ● impairment of our goodwill, long-lived assets, investments or intangible assets; ● the impacts of pandemics; ● litigation risks and other liabilities; and ● operating a digital asset business, and clearinghouse, including the expected benefits of our Cboe Digital acquisition, cybercrime, changes in digital asset regulation, losses due to digital asset custody, and fluctuations in digital asset prices.
Summary of Risk Factors The following is a summary of the key risks and uncertainties described below that we believe are material to us at this time: ● the loss of our right to exclusively list and trade certain index options and futures products; ● economic, political and market conditions; ● compliance with legal and regulatory obligations; ● price competition and consolidation in our industry; ● decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; ● legislative or regulatory changes or changes in tax regimes; ● our ability to protect our systems and communication networks from security vulnerabilities and breaches; ● our ability to attract and retain skilled management and other personnel; ● increasing competition by foreign and domestic entities; ● our dependence on and exposure to risk from third parties; ● global expansion of operations; ● factors that impact the quality and integrity of our and other applicable indices; ● our ability to manage our growth and strategic acquisitions or alliances effectively; ● our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; ● our ability to minimize the risks, including our credit, counterparty, investment, and default risks, associated with operating a European clearinghouse; ● our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; ● misconduct by those who use our markets or our products or for whom we clear transactions; ● challenges to our use of open source software code; ● our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; ● our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; ● damage to our reputation; ● the ability of our compliance and risk management methods to effectively monitor and manage our risks; ● restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; ● our ability to maintain an investment grade credit rating; ● impairment of our goodwill, long-lived assets, investments or intangible assets; ● the impacts of pandemics; ● litigation risks and other liabilities; and ● operating a digital asset business, and clearinghouse, including the expected benefits of our Cboe Digital acquisition, cybercrime, changes in digital asset regulation, losses due to digital asset custody, and fluctuations in digital asset prices.
Factors that may affect the price of digital assets include: ● Total digital assets in existence; ● Global digital assets supply and demand; ● Investors’ expectations with respect to the rate of inflation of fiat currencies; ● Digital asset market fragmentation and consolidation; ● Fiat currency withdrawal and deposit policies of digital asset trading platforms and liquidity of such markets; ● Interruptions in service from, bankruptcy of, or failure of major digital asset trading platforms; ● Cyber theft of digital assets from online digital asset wallet providers, or news of such theft from such providers, or theft from individual digital asset wallets; ● Investment and trading activities of hedge funds and other large digital asset investors; ● Monetary policies of governments, sanctions, trade restrictions, currency devaluations and revaluations; ● Regulatory measures, if any, that restrict or facilitate the ability to buy, sell or hold digital assets or use digital assets as a form of payment; ● Availability and popularity of businesses that provide digital asset-related services; ● Maintenance and development of the open-source software protocol of the digital asset network; ● Global or regional political, economic or financial events and uncertainty; ● Manipulative trading activity on digital asset trading platforms, which are largely unregulated; ● The adoption of digital assets as a medium of exchange, store-of-value or other consumptive asset and the maintenance and development of the open-source software protocol of the applicable digital asset; ● Forks in the applicable digital asset network; ● Consumer preferences and perceptions; ● An active derivative market for digital assets; and ● Fees associated with processing a transaction of digital assets and the speed at which such transactions are settled. ​ Volatility and unexpected price movements may be a factor in whether customers maintain their deposits on Cboe Digital Exchange.
Factors that may affect the price of digital assets include: ● total digital assets in existence; ● global digital assets supply and demand; ● investors’ expectations with respect to the rate of inflation of fiat currencies; ● digital asset market fragmentation and consolidation; ● fiat currency withdrawal and deposit policies of digital asset trading platforms and liquidity of such markets; ● interruptions in service from, bankruptcy of, or failure of major digital asset trading platforms; ● cyber theft of digital assets from online digital asset wallet providers, or news of such theft from such providers, or theft from individual digital asset wallets; ● investment and trading activities of hedge funds and other large digital asset investors; ● monetary policies of governments, sanctions, trade restrictions, currency devaluations and revaluations; ● regulatory measures, if any, that restrict or facilitate the ability to buy, sell or hold digital assets or use digital assets as a form of payment; ● availability and popularity of businesses that provide digital asset-related services; ● maintenance and development of the open-source software protocol of the digital asset network; ● global or regional political, economic or financial events and uncertainty; ● manipulative trading activity on digital asset trading platforms, which are largely unregulated; 59 Table of Contents ● the adoption of digital assets as a medium of exchange, store-of-value or other consumptive asset and the maintenance and development of the open-source software protocol of the applicable digital asset; ● forks in the applicable digital asset network; ● consumer preferences and perceptions; ● an active derivative market for digital assets; and ● fees associated with processing a transaction of digital assets and the speed at which such transactions are settled. ​ Volatility and unexpected price movements may be a factor in whether customers maintain their deposits on Cboe Digital Exchange.
While other types of assets held in a similarly-segregated manner have been deemed not to be part of the custodian’s bankruptcy estate under various regulatory regimes, bankruptcy courts have not yet considered the appropriate treatment of custodial holdings of digital assets, and any such determination may be highly fact-specific.
While other types of assets held in a similarly-segregated manner have been deemed not to be part of the custodian’s bankruptcy estate under various regulatory regimes, bankruptcy courts have not yet fully considered the appropriate treatment of custodial holdings of digital assets, and any such determination may be highly fact-specific.
Despite Cboe Digital’s efforts, through contractual terms and account set up, to structure customer accounts and wallets in a manner that reinforces customer ownership of the assets, there can be no assurance that courts will not consider such assets as part of Cboe Digital’s or an Cboe Digital custodian’s bankruptcy estate.
Despite Cboe Digital’s efforts, through contractual terms and account set up, to structure customer accounts and wallets in a manner that reinforces customer ownership of the assets, there can be no assurance that courts will not consider such assets as part of Cboe Digital’s or a Cboe Digital custodian’s bankruptcy estate.
Moreover, even if digital assets ultimately are not treated as part of Cboe Digital’s or an Cboe Digital custodian’s bankruptcy estate, the lack of precedent and the fact-dependent nature of the determination could delay the return of such digital assets to customers or result in the return of all or a portion of the cash value of the digital assets rather than the digital assets themselves.
Moreover, even if digital assets ultimately are not treated as part of Cboe Digital’s or a Cboe Digital custodian’s bankruptcy estate, the lack of precedent and the fact-dependent nature of the determination could delay the return of such digital assets to customers or result in the return of all or a portion of the cash value of the digital assets rather than the digital assets themselves.
The bulk of this revenue is attributable to our SPX options and VIX options and futures. As a result, our revenues less cost of revenues are dependent in large part on the exclusive licenses we hold for these products and our ability to maintain our exclusive proprietary rights in the VIX methodology and related products and indices.
The bulk of this revenue is attributable to our SPX options and VIX options and futures. As a result, our revenues less cost of revenues are dependent in large part on the exclusive licenses we hold for these indices and our ability to maintain our exclusive proprietary rights in the VIX Index methodology and related products and indices.
The volume of trading and clearing transactions and the demand for our products and services are directly affected by economic, political and market conditions in the U.S., Europe and elsewhere in the world that are beyond our control, including: ● economic, political and geopolitical market conditions; ● broad trends in business and finance; ● concerns over inflation levels and recessions; ● wavering institutional or retail confidence levels; ● government or central bank actions, such as changes in government fiscal and monetary policy and foreign currency exchange rates; ● other legislative and regulatory changes; 35 Table of Contents ● the availability of short-term and long-term funding and capital; ● the perceived attractiveness of the U.S., European, Canadian, Australian or Japanese capital markets; ● the availability of alternative investment opportunities; ● changes in the level of trading activity in underlying instruments; ● changes and volatility in the prices of securities; ● changes in the volume of foreign currency transactions; ● changes in supply and demand for currencies; ● movements in currency exchange rates; ● the level and volatility of interest rates; ● changes in the financial strength of market participants; ● consolidation among market participants and market data subscribers; ● unforeseen market closures, suspensions of open outcry trading or other disruptions in trading and clearing; and ● disruptions due to terrorism, war, extreme weather events, pandemics or other catastrophes.
The volume of trading and clearing transactions and the demand for our products and services are directly affected by economic, political and market conditions in the U.S., Europe and elsewhere in the world that are beyond our control, including: ● economic, political and geopolitical market conditions; ● broad trends in business and finance; ● concerns over inflation levels and recessions; ● wavering institutional or retail confidence levels; 36 Table of Contents ● government or central bank actions, such as changes in government fiscal and monetary policy and foreign currency exchange rates; ● other legislative and regulatory changes; ● the availability of short-term and long-term funding and capital; ● the perceived attractiveness of the U.S., European, Canadian, Australian or Japanese capital markets; ● the availability or perceived attractiveness of alternative investment opportunities or indices; ● changes in the level of trading activity in underlying instruments; ● changes and volatility in the prices of securities; ● changes in the volume of foreign currency transactions; ● changes in supply and demand for currencies; ● movements in currency exchange rates; ● the level and volatility of interest rates; ● changes in the financial strength of market participants; ● consolidation among market participants and market data subscribers; ● unforeseen market closures, suspensions of open outcry trading or other disruptions in trading and clearing; and ● disruptions due to terrorism, war, extreme weather events, pandemics or other catastrophes.
In addition to the risks related to our exclusive licenses, if we are unable to retain exclusive proprietary rights in the VIX methodology and related products and indices, our volatility products could be subject to multiple listing which could have a material adverse effect on us.
In addition to the risks related to our exclusive licenses, if we are unable to retain exclusive proprietary rights in the VIX Index methodology and related products and indices, our volatility products could be subject to multiple listing which could have a material adverse effect on us.
Substantial amounts of the collateral, and any amounts drawn under this facility, may be at risk if a clearing participant defaults on its obligations to our clearinghouse and its margin and default fund deposits are insufficient to meet its obligations.
Substantial amounts of the collateral, and any amounts drawn under this facility, may be at risk if a clearing participant defaults on its obligations to our clearinghouse and its margin, default and interoperability fund deposits are insufficient to meet its obligations.
Various issues may give rise to reputational risk, including issues relating to: ● the representation of our business in the media; ● the quality and benefits of using our proprietary products, including the reliability, integrity and functionality of our transaction-based business and index calculations and the accuracy of our market data; ● the ability to execute our business plan, key initiatives or new business ventures and the ability to keep up with changing customer demands and regulatory initiatives; ● our regulatory compliance and our enforcement of compliance on our customers; ● the accuracy of our customer billing, financial statements, and other financial and statistical information; ● the quality of our corporate governance structure; ● the quality of our disclosure controls and internal controls over financial reporting, including any failures in supervision; ● the integrity and performance of our computer and communications systems; ● the ability to successfully complete technology migrations; 44 Table of Contents ● the failure to successfully expand into new asset classes, such as the digital asset space or U.S.
Various issues may give rise to reputational risk, including issues relating to: ● the representation of our business in the media; ● the quality and benefits of using our proprietary products, including the reliability, integrity and functionality of our transaction - based business and index calculations and the accuracy of our market data; ● the ability to execute our business plan, key initiatives or new business ventures and the ability to keep up with changing customer demands and regulatory initiatives; ● our regulatory compliance and our enforcement of compliance on our customers; ● the accuracy of our customer billing, financial statements, and other financial and statistical information; ● the quality of our corporate governance structure; ● the quality of our disclosure controls and internal controls over financial reporting, including any failures in supervision; ● the integrity and performance of our computer and communications systems; ● the ability to successfully complete technology migrations; ● the failure to successfully expand into new asset classes, such as the digital asset space or U.S.
The value of our licenses to exclusively list securities index options and futures also depends on the continued ability of index owners to require licenses for the trading of options and futures based on their indices.
The value of our licenses to exclusively list index options and futures also depends on the continued ability of index owners to require licenses for the trading of options and futures based on their indices.
For additional credit risks related to our clearinghouse operations, see the Risk Factor “Our clearinghouse operations expose us to associated risks, including credit, liquidity, market and other risks related to the defaults of clearing participants and other counterparties.” In addition, with respect to orders Cboe Trading routes to other markets for execution on behalf of our customers, Cboe Trading is exposed to counterparty credit risk in the case of failure to perform on the part of our routing and clearing firms that are involved in processing equities and options transactions on our behalf, as well as failure on the part of such brokers to pass back any transactional rebates.
For additional credit risks related to our clearinghouse operations, see the Risk Factor “Our clearinghouse operations expose us to associated risks, including credit, liquidity, market and other risks related to the defaults of clearing participants and other counterparties and risks related to investing of collateral” In addition, with respect to orders Cboe Trading routes to other markets for execution on behalf of our customers, Cboe Trading is exposed to counterparty credit risk in the case of failure to perform on the part of our routing and clearing firms that are involved in processing equities and options transactions on our behalf, as well as failure on the part of such brokers to pass back any transactional rebates.
Furthermore, our investment in Cboe Digital entails numerous risks, including risks relating to our ability to: ​ ● manage the complexity of its business model to stay current with the industry; ● successfully enter categories and markets in which it may have limited or no prior experience; ● successfully develop and integrate products, systems or personnel into its business operations; and ● maintain required licenses and regulatory approvals for its business. ​ 54 Table of Contents In addition, certain market participants acquired minority ownership interests in Cboe Digital and intend to serve as partners in the growth of the business.
Furthermore, our investment in Cboe Digital entails numerous risks, including risks relating to our ability to: ​ ● manage the complexity of its business model to stay current with the industry; ● successfully enter categories and markets in which it may have limited or no prior experience; ● successfully develop and integrate products, systems or personnel into its business operations; and ● maintain required licenses and regulatory approvals for its business. ​ In addition, certain market participants acquired minority ownership interests in Cboe Digital and intend to serve as partners in the growth of the business.
As discussed above, the implementation of MDIR or the new equity market structure proposals could cause Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA, to require additional resources to comply with the new rules, and may have a material impact on our business, financial condition, and operating results, including if, for example, there are lower SIP plan revenues or we must reduce the fees or access fee caps we charge.
As discussed above, the implementation of MDIR or the new equity market structure proposals could cause Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA, to require additional resources to comply with the new rules, and may have a material impact on our business, financial condition, 38 Table of Contents and operating results, including if, for example, there are lower SIP plan revenues or we must reduce the fees or access fee caps we charge.
Further, changes in trading behavior, impacts to trading behavior due to market disruptions, temporary suspensions of open outcry trading, temporary regulatory measures and other future developments caused by the effects of a pandemic, including a re-occurrence of cases and the emergence of variants, could impact trading volumes and the demand for our products, market data and services, which could have a material 46 Table of Contents adverse effect on our business, financial condition, operating results and cash flows and could heighten many of the other risks described herein.
Further, changes in trading behavior, impacts to trading behavior due to market disruptions, temporary suspensions of open outcry trading, temporary regulatory measures and other future developments caused by the effects of a pandemic, including a re-occurrence of cases and the emergence of variants, could impact trading volumes and the demand for our products, market data and services, which could have a material adverse effect on our business, financial condition, operating results and cash flows and could heighten many of the other risks described herein.
If our systems cannot expand to cope with increased demand or otherwise fail to perform, as a result of a number of potential causes, including technical failure, natural disasters, extreme weather events, flooding, fraud or security attacks that we cannot predict or prevent, and cannot be replaced in a sufficiently short time period, we could experience unanticipated disruptions in service, slower response times and delays in the introduction of new products and services.
If our systems cannot expand to cope with increased demand or otherwise fail to perform, as a result of a number of potential causes, including technical failure, natural disasters, extreme weather events, flooding, fraud or security attacks that we cannot predict or prevent, and cannot be replaced in a sufficiently short time period, we could experience unanticipated 44 Table of Contents disruptions in service, slower response times and delays in the introduction of new products and services.
Further, our FX NDF business may also be adversely affected by proposed regulatory changes to the rules governing swap execution facilities. It is also possible that there will be additional legislative and regulatory changes or efforts in the environment in which we operate, or plan to operate, our businesses.
Further, our FX NDF business may also be adversely affected by proposed regulatory changes to the rules governing swap execution facilities. It is also possible that there will be additional legislative, regulatory, and enforcement changes, priorities or efforts in the environment in which we operate, or plan to operate, our businesses.
As of December 31, 2022, we have investment grade credit ratings from S&P Global Ratings (A-) and Moody’s Investor Service (A3). Ratings from credit agencies are not recommendations to buy, sell or hold our securities, and each rating should be evaluated independently of any other rating.
As of December 31, 2023, we have investment grade credit ratings from S&P Global Ratings (A-) and Moody’s Investor Service (A3). Ratings from credit agencies are not recommendations to buy, sell or hold our securities, and each rating should be evaluated independently of any other rating.
An interruption or 40 Table of Contents malfunction in or the cessation or impairment of an important service by a third party or disruption of a third party’s operations could cause us to halt trading in some or all of our products or our services, make us unable to conduct other aspects of our business, cause us to experience the loss of a significant number of market participants or cause us to experience a significant reduction in trading activity on our options and futures markets, each of which could have a material adverse effect on our business, financial condition and operating results.
An interruption or malfunction in or the cessation or impairment of an important service by a third party or disruption of a third party’s operations could cause us to halt trading in some or all of our products or our services, make us unable to conduct other aspects of our business, cause us to experience the loss of a significant number of market participants or cause us to experience a significant reduction in trading activity on our options and futures markets, each of which could have a material adverse effect on our business, financial condition and operating results.
Further, the regulatory and legislative framework is unsettled with respect to many forms of digital assets, which means that federal or state regulators or legislators may in the future curtail or prohibit the acquisition, use or redemption of certain digital assets. Ownership of, holding or trading in certain digital assets may become subject to sanction.
Further, the regulatory and legislative framework is unsettled with respect to many forms of digital assets, which means that federal or state regulators or legislators may in the future curtail or prohibit the acquisition, use or redemption of certain digital assets. Ownership of, holding or trading in certain digital assets may become subject to litigation.
Cboe Japan is subject to regulatory oversight in Japan by the JFSA and the JSDA. BIDS Trading is a registered broker-dealer subject to regulatory oversight in the U.S. by the SEC and FINRA and is intended to be maintained as an independently managed and operated trading venue, separate from and not integrated with the SROs.
Cboe Japan is subject to regulatory oversight in Japan by the JFSA and the JSDA. BIDS Trading is a registered broker-dealer subject to regulatory oversight in the U.S. by the SEC and FINRA and is maintained as an independently managed and operated trading venue, separate from and not integrated with the SROs.
The roles and responsibilities of departing executive 38 Table of Contents officers and employees will need to be filled either by existing or new officers and employees, which may require us to devote time and resources to identifying, hiring and integrating replacements for the departed executives and employees that could otherwise be used to pursue business opportunities, which could have a material adverse effect on our overall business, financial condition and operating results.
The roles and responsibilities of departing executive officers and employees will need to be filled either by existing or new officers and employees, which may require us to devote time and resources to identifying, hiring and integrating replacements for the departed executives and employees that could otherwise be used to pursue business opportunities, which could have a material adverse effect on our overall business, financial condition and operating results.
The occurrence of any event that reduces the amount of market data fees that we receive, whether as a result of fee reductions, fewer members subscribing to the U.S. tape plans or other market data offerings, declines in market share, trading volumes, or notional volumes, or regulatory changes may have a direct negative impact on our business, financial condition, and operating results.
The occurrence of any event that reduces the amount of market data fees that we receive, whether as a result of fee reductions, fewer members subscribing to the U.S. tape plans or other market data offerings, lack of new products, declines in market share, trading volumes, or notional volumes, or regulatory changes may have a direct negative impact on our business, financial condition, and operating results.
We may be required to expend significant resources in the event of any real or threatened breaches in security or system failures, including to protect against threatened breaches, to alleviate harm caused by an actual breach, and to address any reputational harm or litigation or regulatory liability.
We may be required to expend significant resources in the event of any real or threatened breaches in security, including to protect against threatened breaches, to alleviate harm caused by an actual breach, and to address any reputational harm or litigation or regulatory liability.
If FINRA CAT LLC or its third-party service providers stop providing services or provide inadequate services, we and the other SROs may not be able to recover costs related to the implementation of CAT, incur penalties for delays of implementation, incur related litigation and other expenses, or incur regulatory liability including enforcement action by the SEC or limitations placed upon our markets.
If FINRA CAT LLC or its third-party service providers stop providing services or provide inadequate services, we and the other SROs may not be able to recover costs related to the implementation of CAT, incur penalties for delays of implementation, incur related litigation and other expenses, or incur regulatory liability including 41 Table of Contents enforcement action by the SEC or limitations placed upon our markets.
These exchange rate differences would affect the translation of our non-U.S. results of operations and financial condition into U.S. dollars as part of our consolidated financial statements. See Note 16 (“Segment Reporting”) for additional information about the Company’s geographic exposure. ​ We and our licensors may not be able to protect our respective intellectual property rights.
These exchange rate differences would affect the translation of our non-U.S. results of operations and financial condition into U.S. dollars as part of our consolidated financial statements. See Note 16 (“Segment Reporting”) for additional information about the Company’s geographic exposure. ​ 43 Table of Contents We and our licensors may not be able to protect our respective intellectual property rights.
These risks include: ​ ● fluctuations in currency exchange rates; ● complying with extensive and complex compliance requirements, regulations and oversight by regulators other than our primary functional regulators; ● difficulties in staffing and associated costs in managing multiple international locations; ● general economic, social, and political conditions; ● protectionist laws and business practices that favor local businesses in some countries; ● reduced protection for intellectual property rights in some countries; ● different technology platforms; ● language and cultural differences; ● potentially adverse tax consequence; and ● natural disasters and extreme weather events that may impact global operations differently. ​ If we are unable to manage the complexity of our global operations successfully, or if the risks above become substantial for us, our financial performance and operating results could suffer.
These risks include: ​ ● fluctuations in currency exchange rates; ● complying with extensive and complex compliance requirements, regulations and oversight by regulators other than our primary functional regulators; ● difficulties in staffing and associated costs in managing multiple international locations; ● general economic, social, and political conditions, including the conflicts in Eastern Europe and the Middle East; ● protectionist laws and business practices that favor local businesses in some countries; ● reduced protection for intellectual property rights in some countries; ● different technology platforms; ● language and cultural differences; ● potentially adverse tax consequence; and ● natural disasters and extreme weather events that may impact global operations differently. ​ If we are unable to manage the complexity of our global operations successfully, or if the risks above become substantial for us, our financial performance and operating results could suffer.
Impacts of a pandemic could also have a material adverse effect on our business, financial condition, operating results and cash flows . A pandemic, such as the COVID-19 pandemic, may have significant impacts on economies around the world.
A pandemic, such as the COVID-19 pandemic, and its effects may have significant impacts on economies around the world. Impacts of a pandemic could also have a material adverse effect on our business, financial condition, operating results and cash flows . A pandemic, such as the COVID-19 pandemic, may have significant impacts on economies around the world.
Also, our ability to fund capital expenditures and return capital to stockholders may depend on the amount of capital committed related to lines of credit granted by the Company to our subsidiaries in connection with their regulatory capital requirements.
Also, our ability to fund capital expenditures and return capital to stockholders may depend on the amount of capital held due to regulatory capital requirements and the amount of capital committed related to lines of credit granted by the Company to our subsidiaries in connection with their regulatory capital requirements.
Liability could also result from disputes over the terms of a trade executed on one of our markets, claims that a system failure or delay cost a 51 Table of Contents customer money, claims we entered into an unauthorized transaction or claims that we provided materially false or misleading statements in connection with a transaction.
Liability could also result from disputes over the terms of a trade executed on one of our markets, claims that a system failure or delay cost a customer money, claims we entered into an unauthorized transaction or claims that we provided materially false or misleading statements in connection with a transaction.
If these subsidiaries are not profitable, or even if they are and they determine to retain their profits for use in their businesses, we will be unable to pay dividends to our stockholders. 53 Table of Contents Certain provisions in our organizational documents and governing law could prevent or delay a change of control.
If these subsidiaries are not profitable, or even if they are and they determine to retain their profits for use in their businesses, we will be unable to pay dividends to our stockholders. Certain provisions in our organizational documents and governing law could prevent or delay a change of control.
Our clearinghouse operations expose us to associated risks, including credit, liquidity, market and other risks related to the defaults of clearing participants and other counterparties. ​ We are subject to risks related to operating our clearinghouse, Cboe Clear Europe, including the risks of failing to meet strict business continuity requirements and regulatory oversight, risks of default by clearing participants and counterparties, due to bankruptcy, lack of liquidity, operational failure or other reasons, and the risks associated with the adequacy of participants’ margin and default funds.
Our clearinghouse operations expose us to associated risks, including credit, liquidity, market and other risks related to the defaults of clearing participants and other counterparties, and risks related to investing of collateral. ​ We are subject to risks related to operating our clearinghouse, Cboe Clear Europe, including the risks of failing to meet strict business continuity requirements and regulatory oversight, risks of default by clearing participants and counterparties, due to bankruptcy, lack of liquidity, operational failure or other reasons, the risks associated with the adequacy of participants’ margin, default and interoperable funds, and risks related to investing of such funds.
As a result of the Company’s annual impairment analysis, completed in the fourth quarter of 2022, in which all reporting units estimated fair value exceeded their carrying value, we do not consider our goodwill and indefinite-lived intangibles to have a significant risk of additional impairment.
As a result of the Company’s annual impairment analysis, completed in the fourth quarter of 2023, in which all reporting units estimated fair value exceeded their carrying value, we do not consider our goodwill and indefinite-lived intangibles to have a significant risk of impairment.
The current deadline for recognition in the UK is December 31, 2024, and may be extended by His Majesty’s Treasury in the future in increments of 12 months each.
The current deadline for recognition in the UK is December 31, 2025, and may be extended by His Majesty’s Treasury in the future in increments of 12 months each.
While the Consolidated Data Plan order must be resubmitted by SEC, the plan may have a negative impact on the applicable market data revenues that we receive that are generated from such new plan. 37 Table of Contents We believe Cboe Europe Equities and Derivatives currently offers market data to customers on a non-discriminatory basis at a reasonable cost.
While the Consolidated Data Plan order must be resubmitted by SEC, the plan may have a negative impact on the applicable market data revenues that we receive that are generated from such new plan. We believe Cboe Europe Equities and Derivatives currently offers market data to customers on a non-discriminatory basis at a reasonable cost.
The FX Global Code was published in 2017 and sets forth standards of conduct agreed by market participants and central banks on a global basis to apply to the wholesale FX market, and the effect of its publication on conduct and future regulation 48 Table of Contents continues to evolve.
The FX Global Code was published in 2017 and sets forth standards of conduct agreed by market participants and central banks on a global basis to apply to the wholesale FX market, and the effect of its publication on conduct and future regulation continues to evolve.
Cboe Digital does not commingle its own corporate assets with the customer digital assets in the omnibus wallets, other than corporate assets that are held in omnibus wallets to facilitate customer transactions relating to the digital assets contained in the omnibus wallet, including in order to pay customary transaction fees and expenses.
Cboe Digital does not hold its own corporate assets together with the customer digital assets in the omnibus wallets, other than corporate assets that are held in omnibus wallets to facilitate customer transactions relating to the digital assets contained in the omnibus wallet, including in order to pay customary transaction fees and expenses.
As discussed above, the Company previously recorded goodwill impairment charges related to Cboe Digital, resulting in decreases in the carrying value of Cboe Digital. Prices of digital assets have fluctuated widely for a variety of reasons and may continue to experience significant price fluctuations.
The Company previously recorded goodwill impairment charges related to Cboe Digital, resulting in decreases in the carrying value of Cboe Digital. Prices of digital assets have fluctuated widely for a variety of reasons and may continue to experience significant price fluctuations.
No guarantee can be given that the collateral provided will at all times be sufficient or provide absolute assurance against us experiencing financial losses from defaults by the participants or counterparties on their obligations.
No guarantee can be given that the collateral provided will at all times be sufficient, maintain its value, or provide absolute assurance against us experiencing financial losses from defaults by the participants or counterparties on their obligations.
If the BIDS Trading ATS were to be deemed to be a “facility” of our registered national securities exchanges, certain exchange regulations could be extended to the BIDS Trading ATS, which could have a material adverse impact on BIDS Trading’s business model.
If the BIDS Trading ATS were to be deemed to be 51 Table of Contents a “facility” of our registered national securities exchanges, certain exchange regulations could be extended to the BIDS Trading ATS, which could have a material adverse impact on BIDS Trading’s business model.
There is no assurance that we will maintain such credit 52 Table of Contents ratings, since credit ratings may be lowered or withdrawn entirely by a rating agency if, in its judgment, the circumstances warrant. If a rating agency were to downgrade our rating below investment grade, our borrowing costs could increase.
There is no assurance that we will maintain such credit ratings, since credit ratings may be lowered or withdrawn entirely by a rating agency if, in its judgment, the circumstances warrant. If a rating agency were to downgrade our rating below investment grade, our borrowing costs could increase.
If 55 Table of Contents any such risks or other risks materialize, the development and growth of digital assets may be significantly affected and, as a result, our Cboe Digital business, operating results and financial condition could be adversely affected.
If any such risks or other risks materialize, the development and growth of digital assets may be significantly affected and, as a result, our Cboe Digital business, operating results and financial condition could be adversely affected.
Cboe Digital follows best practices designed to restrict unauthorized access by individuals in jurisdictions where it is impermissible to trade digital assets.
Cboe Digital follows best practices designed to restrict unauthorized access by individuals or entities in jurisdictions where it is impermissible to trade digital assets.
If the amount of trading volume on our Exchanges, Cboe Digital Exchange, CFE, BIDS Trading, NEO, and MATCHNow, notional value traded on Cboe FX, Cboe SEF, Cboe Europe Equities and Derivatives, Cboe Australia, and Cboe Japan or clearing volumes at Cboe Clear Europe or Cboe Clear Digital decrease, we are likely to see a decrease in fees.
If the amount of trading volume on our Exchanges, Cboe Digital Exchange, CFE, BIDS Trading, Cboe Canada Inc., notional value traded on Cboe FX, Cboe SEF, Cboe Europe Equities and Derivatives, Cboe Australia, and Cboe Japan or clearing volumes at Cboe Clear Europe or Cboe Clear Digital decrease, we are likely to see a decrease in fees.
We are also subject to federal and state anti-money laundering and counter-terrorism financing laws and regulations. In addition, as we expand the Cboe Digital business to new products and services, we will come under the jurisdiction of additional regulators - both with respect to jurisdiction and subject matter.
As a money service business, we are also subject to federal and state anti-money laundering and counter-terrorism financing laws and regulations. In addition, as we expand the Cboe Digital business to new products and services, we may come under the jurisdiction of additional regulators - both with respect to jurisdiction and subject matter.
Because Cboe Digital does not have a trading entity for proprietary or liquidity trading purposes, Cboe Digital maintains its own digital assets only to facilitate customer trading. Cboe Digital does not currently pledge, rehypothecate, or invest customer digital assets although its customer agreements and rulebook permit it to do so in the future.
Because Cboe Digital does not have a trading entity for proprietary or liquidity trading purposes, Cboe Digital maintains its own digital assets only to facilitate customer trading. Cboe Digital does not currently pledge, rehypothecate, or invest customer digital assets although its customer agreements and rulebook permit it to do so in the 58 Table of Contents future.
The technology upon which we rely, including that of our service providers, may be vulnerable to security vulnerabililities or breaches that could harm our business and our role in the global marketplace puts us at heightened risk relative to other public companies.
The technology upon which we rely, including that of our service providers, may be susceptible to security vulnerabilities or breaches that could harm our business and our role in the global marketplace puts us at heightened risk relative to other public companies.
In addition, as discussed above, the SEC approved a Consolidated Data Plan to replace the three equity data plans that govern the dissemination of real-time, consolidated market data for NMS stocks.
In addition, the SEC approved a Consolidated Data Plan to replace the three equity data plans that govern the dissemination of real-time, consolidated market data for NMS stocks.
There is no guarantee the collateral deposited will continue to maintain its value, and the use of digital assets as collateral may introduce additional 58 Table of Contents volatility in value.
There is no guarantee the collateral deposited will continue to maintain its value, and the use of digital assets as collateral may introduce additional volatility in value.
Certain jurisdictions may impose restrictions on individual’s ability to trade specific certain digital assets or at all.
Certain jurisdictions may impose restrictions on the ability to trade specific certain digital assets or at all.
The Chief Executive Officer of BIDS Trading is expected to lead BIDS Trading as an independent business within Cboe, reporting into an independent committee of the Board of Directors of Cboe Global Markets. If a regulatory authority makes a finding of non-compliance, conditional fines could be imposed, and our licenses could be revoked.
The Chief Executive Officer of BIDS Trading leads BIDS Trading as an independent business within Cboe, reporting into an independent committee of the Board of Directors of Cboe Global Markets. If a regulatory authority makes a finding of non-compliance, conditional fines could be imposed, and our licenses could be revoked.
As the parent company for SROs, other markets, and a clearinghouse, we are responsible for maintaining markets that comply with securities and futures laws, SEC, FCA, AFM, DNB, Canadian SRO, OSC, ASIC, JFSA, JSDA, ESMA, and CFTC regulations and the rules of the respective exchanges, markets and clearinghouse. 50 Table of Contents We have methods to identify, monitor and manage our risks.
As the parent company for SROs, other markets, and a clearinghouse, we are responsible for maintaining markets that comply with securities and futures laws, SEC, FCA, AFM, DNB, CIRO, OSC, ASIC, JFSA, JSDA, ESMA, and CFTC regulations and the rules of the respective exchanges, markets and clearinghouse. We have methods to identify, monitor and manage our risks.
Digital assets of customers (but not Cboe Digital) are commingled in the omnibus wallets, and Cboe Digital maintains the records of the amount and type of digital asset owned by each of its customers in omnibus wallets.
Digital assets of customers (but not Cboe Digital) are held together in the omnibus wallets, and Cboe Digital maintains the records of the amount and type of digital asset owned by each of its customers in the omnibus wallets.
As discussed above, the E.C. published provisions for a consolidated tape for the EU, which is expected to be implemented in late 2023 or early 2024. As proposed, these provisions may have a material impact on our business, financial condition and operating results if, for example, we must reduce the fees we charge for market data.
As discussed above, the E.C. published provisions for a consolidated tape for the EU, which is expected to be implemented in 2026. As proposed, these provisions may have a material impact on our business, financial condition and operating results if, for example, we must reduce the fees we charge for market data.
These proposals have been noticed for public comment. If adopted as-is or additional proposals or changes to the existing equity market structure proposals emerge, we could experience market technology changes, incur additional compliance costs, experience negative impacts on our volumes, liquidity, and fees, all of which could have a material adverse effect on our business, financial condition and operating results.
If adopted as-is or additional proposals or changes to the existing equity market structure proposals emerge, we could experience market technology changes, incur additional compliance costs, experience negative impacts on our volumes, liquidity, and fees, all of which could have a material adverse effect on our business, financial condition and operating results.
In addition, until the SEC approves a funding model that shares the cost of the CAT between the SROs and industry members, the SROs may continue to incur additional significant costs, or result in not being able to collect on the promissory notes related to the funding of the implementation and operation of the CAT.
In addition, until the funding model that shares the cost of the CAT between the SROs and industry members is implemented, the SROs may continue to incur additional significant costs, or result in not being able to collect on the promissory notes related to the funding of the implementation and operation of the CAT .
We are subject to increased financial and reputational risks if there is a failure to develop and launch one or more of the anticipated products resulting from this acquisition, or if the development or launch of a new product is unsuccessful.
We are subject to increased financial and reputational risks if there is a failure to develop and launch one or more of the anticipated products, or if the development or launch of a new product is unsuccessful.
We hold exclusive licenses to list securities index options on the S&P 500 Index, the Russell 2000 Index, as well as others, granted to us by the owners of such indices, and additionally hold exclusive rights to our proprietary VIX 34 Table of Contents methodology that provides the basis for VIX options and futures.
We hold exclusive licenses to list securities index options on the S&P 500 Index, the Russell 2000 Index, and other indices granted to us by the owners of such indices, and additionally hold exclusive rights to our proprietary VIX Index 35 Table of Contents methodology that provides the basis for VIX options and futures.
If the amount of trading volume on our markets or clearing volume decreases, or the product mix shifts to lower revenue products, our revenues from transaction and clearing fees will most likely decrease. In 2022, approximately 68.1% of our revenues less cost of revenues were generated by our transaction and clearing-based business.
If the amount of trading volume on our markets or clearing volume decreases, or the product mix shifts to lower revenue products, our revenues from transaction and clearing fees will most likely decrease. In 2023, approximately 71.2% of our revenues less cost of revenues were generated by our transaction and clearing-based business.
With respect to routed U.S. equity transactions, Cboe Trading has counterparty credit risk exposure to Wedbush and Morgan Stanley related to clearing until the day following the trade date. Cboe Trading uses Wedbush to clear trades routed through affiliates of Credit Suisse Securities (USA) LLC as well as for trades routed directly to other exchanges and optionally dark pools.
With respect to routed U.S. equity transactions, Cboe Trading has counterparty credit risk exposure to Wedbush and Morgan Stanley related to clearing until the day following the trade date. Cboe Trading uses Wedbush to clear trades routed through affiliates of Bank of America Corporation as well as for trades routed directly to other exchanges and optionally dark pools.
Some of our other liability risks arise under the laws and regulations relating to the tax, employment, intellectual property, anti-money laundering, technology export, cybersecurity, foreign asset controls, foreign corrupt practices, employee labor and employment areas, including anti-discrimination and fair-pay laws and regulations.
Some of our other liability risks arise under the laws and regulations relating to the tax, employment, intellectual property, anti-money laundering, technology export, cybersecurity, foreign asset controls, foreign corrupt practices, employee labor and employment areas, including anti-discrimination and fair-pay laws and regulations, and the businesses of companies listed on any of our exchanges.
In 2022, approximately 60.7% of our net transaction and clearing fees were generated by options and futures that were cleared through OCC. ● OPRA, UTP Securities Information Processor and the CTA consolidate options and equities market information, respectively, such as last sale reports and quotations.
In 2023, approximately 69.2% of our net transaction and clearing fees were generated by options and futures that were cleared through OCC. ● OPRA, UTP Securities Information Processor and the CTA consolidate options and equities market information, respectively, such as last sale reports and quotations.
With respect to Canadian equities, we deliver reports of matched trades of our customers to CDS, which acts as a central counterparty on all transactions occurring on MATCHNow and NEO and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades.
With respect to Canadian equities, we deliver reports of matched trades of our customers to CDS, which acts as a central counterparty on all transactions occurring on Cboe Canada Inc. and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades.
There is a risk that some courts may not apply this immunity doctrine to all claims. There is also a risk that legislative or regulatory developments may change the application of this immunity doctrine. Limitations on the application of the immunity doctrine could result in an increased exposure to litigation, and increase liability and/or other legal expenses.
There is also a risk that legislative or regulatory developments may change the application of this immunity doctrine. Limitations on the application of the immunity doctrine could result in an increased exposure to litigation, and increase liability and/or other legal expenses.
Changes in regulation by the SEC, CFTC, FCA, Central Bank of the Netherlands (“DNB”), AFM, IIROC, Canadian SRO, OSC, ASIC, JFSA, JSDA, other foreign regulators or other government action, including SEC approval of rule filings by other SROs or entities, including OCC, could materially affect our markets, products and clearinghouse.
Changes in regulation by the SEC, CFTC, FCA, Central Bank of the Netherlands (“DNB”), AFM, CIRO, OSC, ASIC, JFSA, JSDA, other domestic and foreign regulators or other government action, including approval by these regulators of rule filings or initiatives by other SROs or entities, including OCC, could materially affect our markets, products and clearinghouse.
In 2021 we purchased Cboe Asia Pacific, a holding company of alternative market operators in Australia and Japan, and in 2020, we purchased Hanweck and the assets of FT Options, which are providers of risk analytics market data, the assets of Trade Alert, a real-time alerts and order flow analysis service provider, Cboe Clear Europe, an operator of a European clearinghouse, and MATCHNow, an operator of an equities ATS in Canada.
In 2021 we purchased Cboe Asia Pacific, a 47 Table of Contents holding company of alternative market operators in Australia and Japan, and in 2020, we purchased Hanweck and the assets of FT Options, which are providers of risk analytics market data, the assets of Trade Alert, a real-time alerts and order flow analysis service provider, Cboe Clear Europe, an operator of a European clearinghouse, and TriAct Canada Marketplace LP, which at the time was an operator of an equities ATS in Canada called MATCHNow.
Differences in the calculations from methodologies described in published materials or incorrect calculations of spot VIX Index values or our other spot volatility indices, including those instances that we announced on July 30, 2021, or the failure to implement any planned remedial changes may result in the loss of perceived quality and integrity of our indices, loss of demand for our products, increased potential for investigations and enforcement proceedings, increased potential for failure to perform our obligations under agreements concerning our products or in our capacity as an index provider, and increased exposure to third party claims and related litigation expenses, which could have a material adverse effect on our business, financial condition and operating results.
Differences in the calculations from methodologies described in published materials or incorrect calculations of our indices, including those instances that we announced on July 30, 2021, or the failure to implement any planned remedial changes may result in the loss of perceived quality and integrity of our indices, loss of demand for our products, increased potential for investigations and enforcement proceedings, increased potential for failure to perform our obligations under agreements concerning our products or in our capacity as an index provider, and increased exposure to third party claims and related litigation expenses, which could have a material adverse effect on our business, financial condition and operating results. 42 Table of Contents We may not effectively manage our growth, which could materially harm our business, financial condition and operating results.
We selectively explore acquisition opportunities and strategic alliances relating to other businesses, products or technologies. We may not be successful in integrating other businesses, products or technologies with our business. Any such transaction also may not produce the results we anticipate, which could materially adversely affect our business, financial condition and operating results.
We may not be successful in integrating other businesses, products or technologies with our business. Any such transaction also may not produce the results we anticipate, which could materially adversely affect our business, financial condition and operating results. We selectively explore and pursue acquisition and other opportunities to strengthen our business and grow our Company.
Furthermore, our competitors may succeed in developing, offering and providing a market for the trading of index-based or volatility products that are economically similar to those that we offer and they may become successful and take away volume from our products.
Furthermore, our competitors may succeed in developing, offering and providing a market for the trading of index-based or volatility products, such as cash settled index options or options on ETFs, that are economically similar to those that we offer and they may become successful and take away volume from our products.
These systems and networks may be subject to various cybersecurity incidents, improper or inadvertent access to or disclosure of confidential, commercially sensitive, or personally identifiable information, data theft, corruption or destruction, cyber-attack, ransomware, supply chain attack, denial of service attack, malware and other security problems, as well as acts of terrorism, attacks by threat actors including criminal groups, political activist groups and nation-state actors, attacks in connection with geopolitical activity such as the war between Russia and Ukraine, natural disasters, human error, criminal insider activity, employee error, power loss, service provider, market participant or third-party disruptions or security breaches and other events that are beyond our control.
These systems and networks may be subject to various cybersecurity incidents such as improper or inadvertent access to or disclosure of confidential, commercially sensitive, or personally identifiable information, data theft, corruption or destruction, ransomware, supply chain attack, denial of service attack, malware and other security problems, as well as acts of terrorism, attacks by threat actors including criminal groups, political activist groups and nation-state actors, attacks in connection with geopolitical activity such as the conflicts in Eastern Europe and the Middle East, criminal insider activity, employee error, service provider, market participant or third-party disruptions or security breaches and other events that are beyond our control.
See below for additional risks related to our digital asset clearinghouse, Cboe Clear Digital. ​ To mitigate the credit risks related to defaults of clearing participants and other counterparties, including the market risk that we would only be able to close out a defaulting participant’s positions at a loss, there are minimum participation criteria to become a clearing participant and clearing participants are required to provide collateral to cover the margin requirement and default fund contributions.
To mitigate the credit risks related to defaults of clearing participants and other counterparties, including the market risk that we would only be able to close out a defaulting participant’s positions at a loss, there are minimum participation criteria to become a clearing participant and clearing participants are required to provide collateral to cover the margin requirement and default fund contributions.
We and our licensors may have to rely on litigation to enforce our intellectual property rights, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity.
We and our licensors may have to rely on litigation to enforce our intellectual property rights, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity. We and our licensors may not be successful in this regard.
We face the risk of intervention by regulatory authorities, including extensive examination and surveillance activity. In the case of actual or alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative proceedings that may result in penalties, settlements or civil lawsuits, including by customers, or third parties, for damages, which may be substantial.
In the case of actual or alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative proceedings that may result in penalties, settlements or civil lawsuits, including by customers, or third parties, for damages, which may be substantial.
The secure and reliable operation of our technology, including our computer systems and communications networks, and those of our service providers, market participants and other third-parties, is a critical element of our operations.
The secure and reliable operation of our technology, including our computer systems and communications networks, and those of our service providers, market participants, investments, and other third parties, is a critical element of our operations or our business, financial condition or operating results.
There is substantial competition for qualified and capable personnel, particularly in the technology space, which may make it difficult for us to retain and recruit qualified employees in sufficient numbers. This competition has continued due to employee resignations, tighter supply of available labor, compensation inflation, as well as the growth of new asset classes such as the digital asset space.
There is substantial competition for qualified and capable personnel, particularly in the technology space, which may make it difficult for us to retain and recruit qualified employees in sufficient numbers. This competition has continued due to tighter supply of available labor and compensation inflation.
With respect to options, all contracts traded on our exchanges must be cleared through clearing members of OCC. At December 31, 2022, there were 118 TPHs that are clearing members of OCC. Two clearing members accounted for approximately 61.3% of transaction and other fees collected through OCC in 2022.
With respect to options, all contracts traded on our exchanges must be cleared through clearing members of OCC. At December 31, 2023, there were 117 TPHs that are clearing members of OCC. Three clearing members accounted for approximately 79.6% of transaction and other fees collected through OCC in 2023.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur principal properties as of December 31, 2022 are listed in the table below: ​ ​ ​ ​ Location ​ Classification Owned/Leased Lease Expiration ​ Approximate Size 400 South La Salle Street, Chicago, Illinois ​ Former global headquarters and office space; prior trading floor ​ Owned* ​ N/A ​ 300,000 sq. ft. 433 W.
Biggest changeOur principal properties as of December 31, 2023 are listed in the table below: ​ ​ ​ ​ Location ​ Classification Owned/Leased Lease Expiration ​ Approximate Size 400 South La Salle Street, Chicago, Illinois ​ Former global headquarters and office space; prior trading floor ​ Owned* ​ N/A ​ 300,000 sq. ft. 433 West Van Buren Street, Chicago, Illinois ​ New global headquarters and office space ​ Leased ​ August 2035 ​ 185,000 sq. ft. 8050 Marshall Drive, Lenexa, Kansas ​ Office space ​ Leased ​ February 2027, with two 5 year renewal options ​ 62,000 sq. ft. 141 West Jackson Boulevard, Chicago, Illinois ​ Trading floor and office space ​ Leased ​ October 2032 ​ 40,000 sq. ft.
Gustav Mahlerplein 73-83, Amsterdam, Netherlands ​ Office space ​ Leased ​ January 2032 ​ 29,500 sq. ft. 17 State Street, New York, New York ​ Office space ​ Leased ​ April 2024, with one 5 year renewal option ​ 22,000 sq. ft. 11 Monument Street, London, United Kingdom ​ Principal UK office space ​ Leased ​ March 2027, with one 5 year renewal option ​ 21,000 sq. ft.
Gustav Mahlerplein 73-83, Amsterdam, Netherlands ​ Office space ​ Leased ​ January 2032 ​ 29,500 sq. ft. 17 State Street, New York, New York ​ Office space ​ Leased ​ December 2027 ​ 22,000 sq. ft. 11 Monument Street, London, United Kingdom ​ Principal UK office space ​ Leased ​ March 2027, with one 5 year renewal option ​ 21,000 sq. ft. 1 Farrer Place, Sydney 2000 Australia ​ Office space ​ Leased ​ December 2026 ​ 18,000 sq. ft.
Strawinskylaan 1847 Amsterdam, Netherlands ​ Office space ​ Leased ​ August 2023 ​ 8,000 sq. ft. 65 Queen Street West Toronto, Ontario, Canada ​ Office space ​ Leased ​ June 2028 ​ 8,000 sq. ft. 1 Farrer Place, Sydney 2000 Australia ​ Office space ​ Leased ​ December 2026 ​ 7,000 sq. ft. ​ *Through our wholly-owned subsidiary, Cboe Building Corporation, we own the building that was previously the global headquarters.
One Liberty Plaza, New York, New York ​ Office space ​ Leased ​ May 2027 ​ 8,500 sq. ft. 65 Queen Street West Toronto, Ontario, Canada ​ Office space ​ Leased ​ June 2028 ​ 8,000 sq. ft. ​ *Through our wholly-owned subsidiary, Cboe Building Corporation, we own the building that was previously the global headquarters.
Rockwell Business Center Sheridan, Sheridan Street Corner United Street, Highway Hills Mandaluyong City 1550 Philippines ​ Office space ​ Leased ​ December 2023 ​ 10,500 sq. ft. 111 S. Wacker Drive, Suite 4730, Chicago, IL ​ Office space ​ Leased ​ January 2024 ​ 9,500 sq. ft.
Rockwell Business Center Sheridan, Sheridan Street Corner United Street, Highway Hills Mandaluyong City 1550 Philippines ​ Office space ​ Leased ​ November 2028 ​ 10,500 sq. ft.
As a result of the Merger, there was a reduction in employee workspace needed in Chicago, which led to the decision to market for sale the former headquarters location.
As a result of the Merger, there was a reduction in employee workspace needed in Chicago, which led to the decision to market for sale the former headquarters location. The building is currently classified as held for sale. See Note 7 (“Property and Equipment, Net”) of the consolidated financial statements included herein for further information.
The secondary data center for Cboe Europe is in Park Royal, London. We operate a back-up location for our London operations in the United Kingdom. See Note 7 (“Property and Equipment, Net”) and Note 24 (“Leases”) to the consolidated financial statements included herein for further information.
See Note 7 (“Property and Equipment, Net”) and Note 24 (“Leases”) to the consolidated financial statements included herein for further information. ​ 62 Table of Contents
Generally, our properties are not earmarked for use by a particular segment. Instead, most of our properties are used by two or more segments. We also anticipate that suitable additional or alternative space will be available at commercially reasonable terms for future expansion to the extent necessary.
We believe that our properties are in good operating condition and adequately serve our current business operations. Generally, our properties are not earmarked for use by a particular segment. Instead, most of our properties are used by two or more segments.
Removed
Van Buren Street, Chicago, Illinois ​ New global headquarters and office space ​ Leased ​ August 2035 ​ 185,000 sq. ft. 8050 Marshall Drive, Lenexa, Kansas ​ Office space ​ Leased ​ February 2027, with two 5 year renewal options ​ 62,000 sq. ft. 8050 Marshall Drive, Lenexa, Kansas ​ Office space ​ Leased ​ May 2023 ​ 18,500 sq. ft. 141 W.
Added
We also anticipate that suitable additional or alternative space will be available at commercially reasonable terms for future expansion to the extent necessary. Our primary data center in the United States is in Secaucus, New Jersey, and its disaster recovery center is in Chicago, Illinois.
Removed
Jackson Boulevard, Chicago, Illinois ​ New trading floor and office space ​ Leased ​ October 2032 ​ 40,000 sq. ft.
Added
In Europe, our primary data center is in Slough, England and the secondary data center is in Park Royal, London. In Asia Pacific, our primary data centers are in Tokyo, Japan and Sydney, Australia and secondary data centers are located in Osaka City, Japan and Sydney, Australia.
Removed
One Liberty Plaza, New York, New York ​ Office space ​ Leased ​ May 2027 ​ 8,500 sq. ft.
Removed
The Company classified the associated land, building, 59 Table of Contents and certain furniture and equipment of the former headquarters location as held for sale, performed an impairment assessment, and ceased depreciation effective May 1, 2019, as the Company anticipated selling the property held for sale in less than twelve months.
Removed
However, due to the time elapsed since active marketing for sale of the building commenced, the Company reclassified the property to held and used, effective May 1, 2021, and the building was once again subject to depreciation.
Removed
On April 28, 2022, the Company signed a non-binding letter of intent with an entity interested in purchasing the property, though in the quarter ended September 30, 2022, negotiations with this entity were terminated. The Company has continued discussions with other potential buyers.
Removed
At this time the Company has no indications that the property’s classification or carrying value needs to be updated as of December 31, 2022. The property is subject to depreciation as of December 31, 2022. We believe that our properties are in good operating condition and adequately serve our current business operations.
Removed
Our disaster recovery sites in the United States are located in Chicago, Illinois, Kansas City, Missouri, and Secaucus, New Jersey. In addition, we have agreements with a primary data center in Secaucus, New Jersey and a secondary data center in Chicago, Illinois. In Europe, our primary data center is in Slough, England.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Cboe incorporates herein by reference the discussion set forth in Note 21 (“Income Taxes”) and Note 23 (“Commitments, Contingencies, and Guarantees”) of the consolidated financial statements included herein. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 60 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings Cboe incorporates herein by reference the discussion set forth in Note 21 (“Income Taxes”) and Note 23 (“Commitments, Contingencies, and Guarantees”) of the consolidated financial statements included herein. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 63 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2022, the Company had $217.9 million of availability remaining under its existing share repurchase authorizations. ​ 61 Table of Contents Purchase of common stock from employees During the fiscal quarter ended December 31, 2022, we purchased shares from employees in connection with the settlement of employee tax withholding obligations arising from the vesting of restricted stock units and restricted stock awards.
Biggest changeAs of December 31, 2023, the Company had $384.0 million of availability remaining under its existing share repurchase authorizations. ​ 64 Table of Contents The table below shows the purchases of equity securities by the Company which settled during the three months ended December 31, 2023, reflecting the purchase of common stock under the Company's share repurchase program: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Value of Shares that May ​ ​ ​ ​ ​ ​ ​ as Part of Publicly ​ Yet Be Purchased Under ​ ​ Total Number of ​ Average Price ​ Announced Plans ​ the Plans or Programs Period Shares Purchased Paid per Share or Programs (in millions) October 1 to October 31, 2023 ​ — ​ $ — ​ — ​ $ 389.8 November 1 to November 30, 2023 ​ — ​ ​ — ​ — ​ ​ 389.8 December 1 to December 31, 2023 ​ 33,507 ​ ​ 173.59 ​ 33,507 ​ ​ 384.0 Total ​ 33,507 ​ $ 173.59 ​ 33,507 ​ ​ ​ ​ ​ Purchase of common stock from employees During the fiscal quarter ended December 31, 2023, we purchased shares from employees in connection with the settlement of employee tax withholding obligations arising from the vesting of restricted stock units and restricted stock awards.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share Repurchase Program In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations, for a total authorization of $1.6 billion.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share Repurchase Program In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations, for a total authorization of $1.8 billion.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock The Company’s common stock is listed on Cboe BZX under the trading symbol CBOE. As of January 31, 2023, there were approximately 124 holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock The Company’s common stock is listed on Cboe BZX under the trading symbol CBOE. As of January 31, 2024, there were approximately 116 holders of record of our common stock.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our common stock, the index and the peer groups on December 31, 2017, and its performance is tracked on an annual basis through December 31, 2022.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our common stock, the index and the peer groups on December 31, 2018, and its performance is tracked on an annual basis through December 31, 2023.
The table below represents repurchases made by or on behalf of us or any “affiliated purchaser” of our common stock during the fiscal quarter ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Average price paid Period ​ purchased ​ per share October 1 to October 31, 2022 ​ — ​ $ — November 1 to November 30, 2022 ​ 658 ​ ​ 122.63 December 1 to December 31, 2022 ​ — ​ ​ — Total ​ 658 ​ ​ 122.63 ​ ​ 62 Table of Contents Stockholder Return Performance Graph The following graph compares the cumulative total return provided to stockholders on our common stock since December 31, 2017 against the return of the S&P 500 Index and a customized peer group that includes CME Group Inc., Intercontinental Exchange Inc., and Nasdaq, Inc.
The table below represents repurchases made by or on behalf of us or any “affiliated purchaser” of our common stock during the fiscal quarter ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Average price paid Period ​ purchased ​ per share October 1 to October 31, 2023 ​ — ​ $ — November 1 to November 30, 2023 ​ 243 ​ ​ 176.66 December 1 to December 31, 2023 ​ 52 ​ ​ 134.03 Total ​ 295 ​ ​ 169.18 ​ ​ 65 Table of Contents Stockholder Return Performance Graph The following graph compares the cumulative total return provided to stockholders on our common stock since December 31, 2018 against the return of the S&P 500 Index and a customized peer group that includes CME Group Inc., Intercontinental Exchange Inc., and Nasdaq, Inc.
Under the program, for the year ended December 31, 2022, the Company repurchased 876,238 shares of common stock at an average cost per share of $115.20, totaling $100.9 million. Since inception of the program through December 31, 2022, the Company has repurchased 18,948,367 shares of common stock at an average cost per share of $70.30, totaling $1.3 billion.
Under the program, for the year ended December 31, 2023, the Company repurchased 661,721 shares of common stock at an average cost per share of $126.80, totaling $83.9 million. Since inception of the program through December 31, 2023, the Company has repurchased 19,610,088 shares of common stock at an average cost per share of $72.21, totaling $1.4 billion.
Comparison of Cumulative Total Return of the Company, Peer Groups, Industry Indices and/or Broad Markets COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Cboe Global Markets, Inc., the S&P 500 Index and a Peer Group ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/17 ​ 12/18 ​ 12/19 ​ 12/20 ​ 12/21 ​ 12/22 Cboe Global Markets, Inc. ​ 100.00 ​ 79.40 ​ 98.59 ​ 77.72 ​ 110.54 ​ 108.15 S&P 500 ​ 100.00 ​ 95.62 ​ 125.72 ​ 148.85 ​ 191.58 ​ 156.88 Peer Group ​ 100.00 ​ 116.15 ​ 141.44 ​ 162.74 ​ 223.96 ​ 183.42 ​ 63 Table of Contents
Comparison of Cumulative Total Return of the Company, Peer Groups, Industry Indices and/or Broad Markets COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Cboe Global Markets, Inc., the S&P 500 Index and a Peer Group ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/18 ​ 12/19 ​ 12/20 ​ 12/21 ​ 12/22 ​ 12/23 Cboe Global Markets, Inc. ​ 100.00 ​ 124.16 ​ 97.88 ​ 139.21 ​ 136.20 ​ 196.64 S&P 500 ​ 100.00 ​ 125.72 ​ 148.85 ​ 191.58 ​ 156.88 ​ 198.13 Peer Group ​ 100.00 ​ 122.67 ​ 142.87 ​ 197.23 ​ 162.00 ​ 182.70 ​ 66 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(6) Adjusted diluted earnings per share represents adjusted earnings divided by diluted weighted average shares outstanding. 71 Table of Contents The following is a reconciliation of net income (loss) allocated to common stockholders to EBITDA and adjusted EBITDA (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ Options North American Equities Europe and Asia Pacific Futures Global FX Digital Corporate Total Net income (loss) allocated to common stockholders ​ $ 478.1 ​ $ 125.9 ​ $ 22.8 ​ $ 12.8 ​ $ 9.1 ​ $ (369.7) ​ $ (44.9) ​ $ 234.1 Interest expense (income), net ​ — ​ (0.4) ​ 8.0 ​ — ​ (0.4) ​ — ​ 49.2 ​ 56.4 Income tax provision (benefit) ​ 260.7 ​ 20.5 ​ 6.8 ​ 42.4 ​ 0.1 ​ (119.0) ​ (13.6) ​ 197.9 Depreciation and amortization ​ 26.5 ​ 74.1 ​ 37.0 ​ 2.6 ​ 21.9 ​ 4.7 ​ — ​ 166.8 EBITDA ​ 765.3 ​ 220.1 ​ 74.6 ​ 57.8 ​ 30.7 ​ (484.0) ​ (9.3) ​ 655.2 Acquisition-related costs ​ — ​ 3.9 ​ 3.6 ​ — ​ — ​ 9.5 ​ 2.9 ​ 19.9 Impairment of investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 10.6 ​ ​ 10.6 Loan forgiveness ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (1.3) ​ ​ — ​ ​ (1.3) Gain on investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (7.5) ​ ​ (7.5) Goodwill impairment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 460.9 ​ ​ — ​ ​ 460.9 Investment establishment costs ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 3.0 ​ ​ 3.0 Change in contingent consideration ​ ​ — ​ ​ (5.2) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (5.2) Adjusted EBITDA ​ $ 765.3 ​ $ 218.8 ​ $ 78.2 ​ $ 57.8 ​ $ 30.7 ​ $ (14.9) ​ $ (0.3) ​ $ 1,135.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ ​ Options North American Equities ​ Europe and Asia Pacific ​ Futures ​ Global FX ​ Digital ​ Corporate ​ Total Net income (loss) allocated to common stockholders ​ $ 364.7 ​ $ 133.5 ​ $ 18.6 ​ $ 34.9 ​ $ 2.6 ​ $ — ​ $ (27.0) ​ $ 527.3 Interest expense, net ​ — ​ — ​ 12.4 ​ — ​ — ​ — ​ 35.0 ​ 47.4 Income tax provision (benefit) ​ 171.3 ​ 22.1 ​ 26.5 ​ 30.9 ​ — ​ — ​ (23.7) ​ 227.1 Depreciation and amortization ​ 29.4 ​ 75.7 ​ 35.1 ​ 2.9 ​ 24.3 ​ — ​ — ​ 167.4 EBITDA ​ 565.4 ​ 231.3 ​ 92.6 ​ 68.7 ​ 26.9 ​ — ​ (15.7) ​ 969.2 Acquisition-related costs ​ 0.3 ​ 2.8 ​ 1.4 ​ — ​ — ​ — ​ 11.1 ​ 15.6 Impairment of investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5.0 ​ ​ 5.0 Change in contingent consideration ​ ​ — ​ ​ (2.7) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (2.7) Adjusted EBITDA ​ $ 565.7 ​ $ 231.4 ​ $ 94.0 ​ $ 68.7 ​ $ 26.9 ​ $ — ​ $ 0.4 ​ $ 987.1 ​ The following is a reconciliation of net income allocated to common stockholders to adjusted earnings (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Net income allocated to common stockholders ​ $ 234.1 ​ $ 527.3 Amortization ​ 124.3 ​ 126.6 Acquisition-related costs ​ 19.9 ​ 15.6 Impairment of investment ​ ​ 10.6 ​ ​ 5.0 Loan forgiveness ​ ​ (1.3) ​ ​ — Gain on investment ​ ​ (7.5) ​ ​ — Goodwill impairment ​ ​ 460.9 ​ ​ — Investment establishment costs ​ ​ 3.0 ​ ​ — Change in contingent consideration ​ ​ (5.2) ​ ​ (2.7) Increase (release) of tax reserves ​ ​ 48.5 ​ ​ (5.4) Tax effect of adjustments ​ (143.7) ​ (31.8) Deferred tax re-measurements ​ ​ (2.0) ​ ​ 14.6 Net income allocated to participating securities ​ ​ (1.8) ​ ​ (0.4) Adjusted earnings ​ $ 739.8 ​ $ 648.8 ​ ​ 72 Table of Contents The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2022 compared to the year ended December 31, 2021: ​ 73 Table of Contents The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments.
Biggest change(6) Adjusted diluted earnings per share represents adjusted earnings divided by diluted weighted average shares outstanding. ​ 74 Table of Contents The following is a reconciliation of net income (loss) allocated to common stockholders to EBITDA and adjusted EBITDA (in millions) for the year ended December 31, 2023 and 2022, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ Options North American Equities Europe and Asia Pacific Futures Global FX Digital Corporate Total Net income (loss) allocated to common stockholders ​ $ 572.6 ​ $ 104.1 ​ $ 20.4 ​ $ 52.4 ​ $ 23.9 ​ $ (34.1) ​ $ 18.2 ​ $ 757.5 Interest expense (income), net ​ (0.1) ​ (1.4) ​ 4.8 ​ — ​ — ​ (2.0) ​ 49.1 ​ 50.4 Income tax provision (benefit) ​ 275.7 ​ 14.8 ​ 6.8 ​ 33.4 ​ 0.5 ​ (10.4) ​ (34.6) ​ 286.2 Depreciation and amortization ​ 30.1 ​ 69.4 ​ 30.7 ​ 2.0 ​ 18.4 ​ 7.4 ​ — ​ 158.0 EBITDA ​ 878.3 ​ 186.9 ​ 62.7 ​ 87.8 ​ 42.8 ​ (39.1) ​ 32.7 ​ 1,252.1 Acquisition-related costs ​ — ​ 0.8 ​ 0.8 ​ — ​ — ​ 1.0 ​ 4.8 ​ 7.4 Impairment of investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1.8 ​ ​ 1.8 Income from investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (2.1) ​ ​ (2.1) Change in contingent consideration ​ ​ — ​ ​ (7.5) ​ ​ (6.9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (14.4) Adjusted EBITDA ​ $ 878.3 ​ $ 180.2 ​ $ 56.6 ​ $ 87.8 ​ $ 42.8 ​ $ (38.1) ​ $ 37.2 ​ $ 1,244.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ ​ Options North American Equities ​ Europe and Asia Pacific ​ Futures ​ Global FX ​ Digital ​ Corporate ​ Total Net income (loss) allocated to common stockholders ​ $ 478.1 ​ $ 125.9 ​ $ 22.8 ​ $ 12.8 ​ $ 9.1 ​ $ (369.7) ​ $ (44.9) ​ $ 234.1 Interest expense (income), net ​ — ​ (0.4) ​ 8.0 ​ — ​ (0.4) ​ — ​ 49.2 ​ 56.4 Income tax provision (benefit) ​ 260.7 ​ 20.5 ​ 6.8 ​ 42.4 ​ 0.1 ​ (119.0) ​ (13.6) ​ 197.9 Depreciation and amortization ​ 26.5 ​ 74.1 ​ 37.0 ​ 2.6 ​ 21.9 ​ 4.7 ​ — ​ 166.8 EBITDA ​ 765.3 ​ 220.1 ​ 74.6 ​ 57.8 ​ 30.7 ​ (484.0) ​ (9.3) ​ 655.2 Acquisition-related costs ​ — ​ 3.9 ​ 3.6 ​ — ​ — ​ 9.5 ​ 2.9 ​ 19.9 Impairment of investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 10.6 ​ ​ 10.6 Loan forgiveness ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (1.3) ​ ​ — ​ ​ (1.3) Gain on investment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (7.5) ​ ​ (7.5) Goodwill impairment ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 460.9 ​ ​ — ​ ​ 460.9 Investment establishment costs ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 3.0 ​ ​ 3.0 Change in contingent consideration ​ ​ — ​ ​ (5.2) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (5.2) Adjusted EBITDA ​ $ 765.3 ​ $ 218.8 ​ $ 78.2 ​ $ 57.8 ​ $ 30.7 ​ $ (14.9) ​ $ (0.3) ​ $ 1,135.6 75 Table of Contents ​ The following is a reconciliation of net income allocated to common stockholders to adjusted earnings (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Net income allocated to common stockholders ​ $ 757.5 ​ $ 234.1 Amortization of acquisition-related intangibles ​ 116.6 ​ 124.3 Acquisition-related costs ​ 7.4 ​ 19.9 Impairment of investment ​ ​ 1.8 ​ ​ 10.6 Loan forgiveness ​ ​ — ​ ​ (1.3) Gain on investment ​ ​ — ​ ​ (7.5) Income from investment ​ ​ (2.1) ​ ​ — Goodwill impairment ​ ​ — ​ ​ 460.9 Investment establishment costs ​ ​ — ​ ​ 3.0 Change in contingent consideration ​ ​ (14.4) ​ ​ (5.2) (Release) increase of tax reserves ​ ​ (6.0) ​ ​ 48.5 Valuation allowances ​ ​ (2.7) ​ ​ — Deferred tax re-measurements ​ ​ 1.1 ​ ​ (2.0) Tax effect of adjustments ​ (30.7) ​ (143.7) Net income allocated to participating securities ​ ​ (0.4) ​ ​ (1.8) Adjusted earnings ​ $ 828.1 ​ $ 739.8 ​ ​ 76 Table of Contents The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2023 compared to the year ended December 31, 2022: ​ 77 Table of Contents The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2023 compared to the year ended December 31, 2022 (continued from previous page): ​ ​ ​ 78 Table of Contents The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments.
The Options segment includes options on market indices (“index options”), as well as on the stocks of individual corporations (“equity options”), and options on ETPs, such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”), which are “multi-listed” options and listed on a non-exclusive basis.
The Options segment includes options on market indices (“index options”), as well as on the stocks of individual corporations (“equity options”) and on ETPs such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”), which are “multi-listed” options and listed on a non-exclusive basis.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
(2) EBITDA margin represents EBITDA divided by revenues less cost of revenues.
Net Cash Flows Used in Investing Activities During the year ended December 31, 2022, net cash used in investing activities primarily consisted of acquisitions, net of cash acquired of $708.3 million, purchases of available-for-sale financial investments of $104.7 million, and purchases of property and equipment and leasehold improvements of $59.8 million, partially offset by proceeds from maturities of available-for-sale financial investments of $51.2 million.
During the year ended December 31, 2022, net cash used in investing activities primarily consisted of acquisitions, net of cash acquired of $708.3 million, purchases of available-for-sale financial investments of $104.7 million, and purchases of property and equipment and leasehold improvements of $59.8 million, partially offset by proceeds from maturities of available-for-sale financial investments of $51.2 million.
INTRODUCTION Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows: ● Executive Summary – Includes an overview of the Company’s business; a description of notable recent developments, current economic, competitive and regulatory trends relevant to our business; the Company’s current business strategy; and the Company’s primary sources of operating and non-operating revenues and expenses. ● Results of Operations – Includes an analysis of the Company’s 2022 and 2021 financial results and a discussion of any known events or trends which are likely to impact future results. ● Liquidity and Capital Resources – Includes a discussion of the Company’s future cash requirements, capital resources, and financing arrangements. ● Critical Accounting Estimates – Provides an explanation of accounting estimates which may have a significant impact on the Company’s financial results and the judgments, assumptions, and uncertainties associated with those estimates. ● Recent Accounting Pronouncements – Includes an evaluation of recent accounting pronouncements and the potential impact of their future adoption on the Company’s financial results.
INTRODUCTION Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows: ● Executive Summary – Includes an overview of the Company’s business; a description of notable recent developments, current economic, competitive and regulatory trends relevant to our business; the Company’s current business strategy; and the Company’s primary sources of operating and non-operating revenues and expenses. ● Results of Operations – Includes an analysis of the Company’s 2023 and 2022 financial results and a discussion of any known events or trends which are likely to impact future results. ● Liquidity and Capital Resources – Includes a discussion of the Company’s future cash requirements, capital resources, and financing arrangements. ● Critical Accounting Estimates – Provides an explanation of accounting estimates which may have a significant impact on the Company’s financial results and the judgments, assumptions, and uncertainties associated with those estimates. ● Recent Accounting Pronouncements – Includes an evaluation of recent accounting pronouncements and the potential impact of their future adoption on the Company’s financial results.
The cash deposits made by clearing participants are recorded in the consolidated balance sheet as current assets with equal and offsetting current liabilities. See Note 14 (“Clearing Operations”) to the consolidated financial statements for additional information on Cboe Clear Europe and Cboe Clear Digital and the margin deposits and clearing funds.
The cash deposits made by clearing participants are recorded in the consolidated balance sheet as current assets with equal and offsetting current liabilities. See Note 14 (“Clearing Operations”) to the consolidated financial statements for additional information on Cboe Clear Europe and Cboe Clear Digital and the margin deposits, clearing funds, and interoperability funds.
Stock-based compensation is a non-cash expense related to equity awards. Stock-based compensation can vary depending on the quantity and fair value of the award on the date of grant and the related service period.
Stock-based compensation is a non-cash expense related to employee equity awards. Stock-based compensation can vary depending on the quantity and fair value of the award on the date of grant and the related service period.
Future debt obligations and statutory provisions, among other things, may limit, or in some cases prohibit, our ability to pay dividends. Share Repurchase Program In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations, for a total authorization of $1.6 billion.
Future debt obligations and statutory provisions, among other things, may limit, or in some cases prohibit, our ability to pay dividends. Share Repurchase Program In 2011, the Board of Directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and subsequently approved additional authorizations, for a total authorization of $1.8 billion.
(5) Adjusted earnings is defined as net income adjusted for amortization of purchased intangibles, acquisition-related costs, impairment of investment, gain on investment, investment establishment costs, impairment of goodwill, loan forgiveness, certain tax reserve changes, deferred tax re-measurements, change in contingent consideration, and net income or loss allocated to participating securities, net of the income tax effects of these adjustments.
(5) Adjusted earnings is defined as net income adjusted for amortization of purchased intangibles, acquisition-related costs, impairment of investment, gain on investment, investment establishment costs, goodwill impairment, loan forgiveness, income from investments, certain tax reserve changes, deferred tax re-measurements, change in contingent consideration, and net income or loss allocated to participating securities, net of the income tax effects of these adjustments.
Our financial investments include deferred compensation plan assets as well as investments with original or acquired maturities longer than three months but that mature in less than one year from the balance sheet date and are recorded at fair value. As of December 31, 2022, financial investments primarily consisted of U.S. Treasury securities and deferred compensation plan assets.
Our financial investments include deferred compensation plan assets as well as investments with original or acquired maturities longer than three months but that mature in less than one year from the balance sheet date and are recorded at fair value. As of December 31, 2023, financial investments primarily consisted of U.S. Treasury securities and deferred compensation plan assets.
C2 Options, BZX Options, and EDGX Options are all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options. The Options segment also includes applicable market data fees generated from the consolidated tape plans, the licensing of proprietary options market data, index licensing, and access and capacity services. North American Equities.
C2 Options, BZX Options, and EDGX Options are all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options. The Options segment also includes applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary options market data, index licensing, routing services, and access and capacity services. North American Equities.
Adjusted EBITDA is defined as EBITDA before acquisition-related costs, impairment of investment, gain on investment, investment establishment costs, impairment of goodwill, loan forgiveness, and change in contingent consideration. EBITDA and adjusted EBITDA do not represent, and should not be considered as, alternatives to net income as determined in accordance with GAAP.
Adjusted EBITDA is defined as EBITDA before acquisition-related costs, impairment of investment, gain on investment, investment establishment costs, goodwill impairment, loan forgiveness, income from investments, and change in contingent consideration. EBITDA and adjusted EBITDA do not represent, and should not be considered as, alternatives to net income as determined in accordance with GAAP.
(4) Net capture per 100 touched shares refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.
(4) Net capture per one hundred touched shares refers to transaction fees less order and execution management system (OMS/EMS) fees and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.
The variance is primarily due to the change in acquisitions, net of cash acquired, and the change in proceeds from maturities of available-for-sale financial investments, partially offset by the change in contributions to investments for the year ended December 31, 2022 compared to the year ended December 31, 2021.
The variance is primarily due to the change in acquisitions, net of cash acquired, and the change in proceeds from maturities of available-for-sale financial investments, partially offset by the change in contributions to investments for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Net Cash Flows Provided by (Used in) Financing Activities During the year ended December 31, 2022, net cash provided by financing activities primarily consisted of proceeds from the long-term debt issuance of $663.6 million, partially offset by principal repayments of long-term debt of $220.0 million, cash dividends on common stock, share repurchases, and payments of contingent consideration related to acquisitions.
During the year ended December 31, 2022, net cash provided by financing activities primarily consisted of proceeds from the long-term debt issuance of $663.6 million, partially offset by principal repayments of long-term debt of $220.0 million, cash dividends on common stock, share repurchases, and payments of contingent consideration related to acquisitions.
(5) Matched volume represents the total number of shares of equity securities and ETFs activity executed on our exchanges. (6) Net capture per 10,000 touched shares refers to transaction fees divided by the product of one-ten thousandth ADV of shares for NEO and MATCHNow and the number of trading days.
(5) Matched volume represents the total number of shares of equity securities and ETFs activity executed on our exchanges. (6) Net capture per 10,000 touched shares refers to transaction fees divided by the product of one-ten thousandth ADV of shares for Cboe Canada and MATCHNow and the number of trading days.
Data and Access Solutions Data and access solutions revenues less cost of revenues increased for the year ended December 31, 2022 compared the year ended December 31, 2021, primarily due to increases in access and capacity fees and proprietary market data fees.
Data and Access Solutions Data and access solutions revenues less cost of revenues increased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to increases in access and capacity fees and proprietary market data fees.
In accordance with FASB Accounting Standards Codification (“ASC”) 350 – Intangibles – Goodwill and 93 Table of Contents Other, we test the carrying values of goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently when events or changes in circumstances signal indicators of impairment are present.
In accordance with FASB Accounting Standards Codification (“ASC”) 350 – Intangibles – Goodwill and Other, we test the carrying values of goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently when events or changes in circumstances signal indicators of impairment are present.
Components of Cost of Revenues Liquidity Payments Liquidity payments are directly correlated to the volume of securities traded on our markets. As stated above, we record the liquidity rebates paid to market participants providing liquidity, in the case of C2, BZX, EDGX, and Cboe Europe Equities and Derivatives, and Cboe Digital, as cost of revenue.
Components of Cost of Revenues Liquidity Payments Liquidity payments are primarily correlated to the volume of securities traded on our markets. As stated above, we record the liquidity rebates paid to market participants providing liquidity, in the case of Cboe Options, C2, BZX, EDGX, and Cboe Europe Equities and Derivatives, and Cboe Digital, as cost of revenue.
See Note 23 (“Commitments, Contingencies, and Guarantees”) to the consolidated financial statements for a discussion of commitments and contingencies, Note 12 (“Debt”) for a 92 Table of Contents discussion of the outstanding debt, Note 14 (“Clearing Operations”) for information on Cboe Clear Europe and Cboe Digital’s clearinghouse exposure guarantees, and Note 24 (“Leases”) for discussion on operating leases and equipment leases.
See Note 23 (“Commitments, Contingencies, and Guarantees”) to the consolidated financial statements for a discussion of commitments and contingencies, Note 12 (“Debt”) for a discussion of the outstanding debt, Note 14 (“Clearing Operations”) for information on Cboe Clear Europe and Cboe Digital’s clearinghouse exposure guarantees, and Note 24 (“Leases”) for discussion on operating leases and equipment leases.
BYX and EDGA offer a pricing model where we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenues. Routing and Clearing Various rules require that U.S. options and equities trade executions occur at the NBBO displayed by any exchange.
BYX and EDGA offer a pricing model where we rebate liquidity takers for executing against an order resting on our book, which is also recorded as a cost of revenues. Routing and Clearing Various rules require that U.S. options and equities trade executions occur at the National Best Bid and Offer displayed by any exchange.
The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the Company to make any repurchases at any specific time or situation.
The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. It does not obligate the 96 Table of Contents Company to make any repurchases at any specific time or situation.
See “ Risk Factors ” and “ Forward-Looking Statements ” above. A detailed comparison of the Company’s 2021 operating results to its 2020 operating results can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the Company’s 2021 Annual Report on Form 10-K filed February 18, 2022 at www.sec.gov .
See “ Risk Factors ” and “ Forward-Looking Statements ” above. A detailed comparison of the Company’s 2022 operating results to its 2021 operating results can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the Company’s 2022 Annual Report on Form 10-K filed February 17, 2023 at www.sec.gov .
Cboe Europe operates lit and dark books, a periodic auctions book, and Cboe BIDS 65 Table of Contents Europe, a Large-in-Scale (“LIS”) trading negotiation facility for UK symbols. Cboe NL, launched in October 2019 and based in Amsterdam, operates similar business functionality to that offered by Cboe Europe, and provides for trading only in European Economic Area (“EEA”) symbols.
Cboe Europe operates lit and dark books, a periodic auctions book, and Cboe BIDS Europe, a Large-in-Scale (“LIS”) trading negotiation facility for UK symbols. Cboe NL, launched in October 2019 and based in Amsterdam, operates similar business functionality to that offered by Cboe Europe, and provides for trading only in European Economic Area (“EEA”) symbols.
The decision to pay a dividend, however, remains within the discretion of the Company's Board of Directors and may be affected by various factors, including our earnings, financial condition, capital requirements, level of indebtedness and other considerations our Board of Directors deems relevant.
Dividends The Company’s expectation is to continue to pay dividends. The decision to pay a dividend, however, remains within the discretion of the Company's Board of Directors and may be affected by various factors, including our earnings, financial condition, capital requirements, level of indebtedness and other considerations our Board of Directors deems relevant.
The metrics listed for Canadian Equities in the table below include NEO as a result of the acquisition completed during 2022. Therefore, the metrics shown in the table below in Canadian Equities do not include NEO for the periods preceding the acquisition.
The metrics listed for Canadian Equities in the table below include Cboe Canada as a result of the acquisition completed during 2022. Therefore, the metrics shown in the table below in Canadian Equities do not include Cboe Canada for the periods preceding the acquisition.
Digital. The Digital segment includes Cboe Digital, an operator of a U.S. based digital asset spot market and a regulated futures exchange, and Cboe Clear Digital, a regulated clearinghouse, as well as revenue generated from the licensing of proprietary market data and from access and capacity services.
The Digital segment includes a U.S. based digital asset spot market, a regulated futures exchange, and a regulated clearinghouse, as well as revenue generated from the licensing of proprietary market data and from access and capacity services.
Net cash flows provided by operating activities were $651.1 million and $596.8 million for the years ended December 31, 2022 and 2021, respectively.
Net cash provided by operating activities was $651.1 million and $596.8 million for the years ended December 31, 2022 and 2021, respectively.
As such, actual results may differ from these estimates and lead to a revaluation of our goodwill and indefinite-lived intangible assets.
As such, actual results may differ from these estimates and lead to a revaluation of our goodwill, indefinite-lived intangible assets, and/or our reporting units.
In the near term, we expect that our cash from operations and availability under the Revolving Credit Facility, and potentially participating in future financing transactions to obtain additional capital will meet our cash needs to fund our operations, capital expenditures, interest payments on debt, debt repayments, such as under the Term Loan Agreement, which matures on December 15, 2023, any dividends, potential strategic acquisitions, opportunities for common stock repurchases under the previously announced program, and payouts related to the unfavorable decision in the Section 199 litigation.
In the near term, we expect that our cash from operations and availability under the Revolving Credit Facility, and potentially participating in future financing transactions to obtain additional capital will meet our cash needs to fund our operations, capital expenditures, interest payments on debt, debt repayments, any dividends, potential strategic acquisitions, opportunities for common stock repurchases under the previously announced program, and payouts related to the unfavorable decision in the Section 199 litigation.
With respect to Canadian equities, we deliver matched trades of our customers to The Canadian Depository for Securities, which acts as a central counterparty on all transactions occurring on MATCHNow and NEO and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades.
With respect to Canadian equities, we deliver matched trades of our customers to The Canadian Depository for Securities, which acts as a central counterparty on all transactions occurring on Cboe Canada Inc. and, as such, guarantees clearance and settlement of all of our matched Canadian equities trades.
These activities primarily include interest earned on the investing of excess cash, interest expense related to outstanding debt facilities, dividend income, income and unrealized gains and losses related to investments held in a trust for the Company’s non-qualified retirement and benefit plans, realized gains and losses related to the Company’s previously held minority investments, equity earnings or losses from our investments in other business ventures, impairment of the Company’s investments, investment establishment costs associated with new business ventures, and loan forgiveness provided under the SBA’s Paycheck Protection Program (“PPP”).
These activities primarily include interest earned on the investing of excess cash, interest expense related to outstanding debt facilities, income and unrealized gains and losses related to investments held in a trust for the Company’s non-qualified retirement and benefit plans, including non-employee director deferred compensation, realized gains and losses related to the Company’s previously held minority investments, income earned related to the Company’s minority investments, equity earnings or losses from our investments in other business ventures, impairment of the Company’s investments, investment establishment costs associated with new business ventures, and loan forgiveness provided under the Small Business Administration ("SBA") Paycheck Protection Program (“PPP”).
Debt ​ The following summarizes our debt obligations as of December 31, 2022, 2021 and 2020 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2022 2021 2020 Term Loan Agreement ​ $ 305.0 ​ $ 160.0 ​ $ 70.0 3.650% Senior Notes ​ 650.0 ​ 650.0 ​ 650.0 1.625% Senior Notes ​ ​ 500.0 ​ ​ 500.0 ​ ​ 500.0 3.000% Senior Notes ​ ​ 300.0 ​ ​ — ​ ​ — Revolving Credit Agreement ​ ​ — ​ ​ — ​ ​ — Cboe Clear Europe Credit Facility ​ ​ — ​ ​ — ​ ​ — Less unamortized discount and debt issuance costs ​ ​ (13.0) ​ ​ (10.7) ​ ​ (16.1) Total debt ​ $ 1,742.0 ​ $ 1,299.3 ​ $ 1,203.9 ​ At December 31, 2022, we were in compliance with the covenants of our debt agreements.
Debt ​ The following summarizes our debt obligations as of December 31, 2023, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2023 2022 2021 Term Loan Agreement ​ $ — ​ $ 305.0 ​ $ 160.0 3.650% Senior Notes ​ 650.0 ​ 650.0 ​ 650.0 1.625% Senior Notes ​ ​ 500.0 ​ ​ 500.0 ​ ​ 500.0 3.000% Senior Notes ​ ​ 300.0 ​ ​ 300.0 ​ ​ — Revolving Credit Agreement ​ ​ — ​ ​ — ​ ​ — Cboe Clear Europe Credit Facility ​ ​ — ​ ​ — ​ ​ — Less unamortized discount and debt issuance costs ​ ​ (10.8) ​ ​ (13.0) ​ ​ (10.7) Total debt ​ $ 1,439.2 ​ $ 1,742.0 ​ $ 1,299.3 ​ At December 31, 2023, we were in compliance with the covenants of our debt agreements.
Equities exchanges. ​ Data and Access Solutions Data and access solutions revenue increased for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to increases in access and capacity fees and proprietary market data fees.
Data and Access Solutions Data and access solutions revenue increased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to increases in access and capacity fees and proprietary market data fees.
In addition to the debt outstanding, as of December 31, 2022, we had an additional $400.0 million available through our revolving credit facility, with the ability to borrow another $200.0 million by increasing the commitments under the facility.
In addition to the debt outstanding, as of December 31, 2023, we had an additional $400.0 million available through our revolving credit facility, with the ability to borrow another $200.0 million by increasing the commitments under the facility, subject to the agreement of the applicable lenders.
Equities - Exchange: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ADV: ​ ​ ​ ​ ​ ​ Total touched shares (in billions) (1) ​ 1.7 ​ 1.7 ​ — (1) % Market ADV (in billions) ​ 11.9 ​ 11.4 ​ 0.5 4 % Market share ​ ​ 13.6 % ​ 14.2 % ​ (0.6) % ​ * U.S.
Equities - Exchange: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ADV: ​ ​ ​ ​ ​ ​ Total touched shares (in billions) (1) ​ 1.5 ​ 1.7 ​ (0.2) (12) % Market ADV (in billions) ​ 11.0 ​ 11.9 ​ (0.9) (7) % Market share ​ ​ 12.8 % ​ 13.6 % ​ (0.8) % ​ * U.S.
Digital The foll owing summarizes revenues less cost of revenues, operating expenses, operating loss, EBITDA, and EBITDA margin for our Digital segment (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ ​ Year Ended ​ ​ Year Ended ​ ​ ​ December 31, ​ ​ December 31, ​ ​ 2022 2022 Revenues less cost of revenues ​ $ (0.4) ​ ​ * % Operating expenses ​ 491.0 ​ ​ * % Operating income (loss) ​ $ (491.4) ​ ​ * % EBITDA (1) ​ $ (484.0) ​ ​ * % EBITDA margin (2) ​ * % ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
Digital The foll owing summarizes revenues less cost of revenues, operating expenses, operating loss, EBITDA, and EBITDA margin for our Digital segment (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2023 2022 Change 2023 2022 Revenues less cost of revenues ​ $ (5.3) ​ ​ $ (0.4) ​ * % ​ * % ​ * % Operating expenses ​ 41.4 ​ ​ 491.0 ​ (92) % ​ * % ​ * % Operating loss ​ $ (46.7) ​ ​ $ (491.4) ​ 90 % ​ * % ​ * % EBITDA (1) ​ $ (39.1) ​ ​ $ (484.0) ​ 92 % ​ * % ​ * % EBITDA margin (2) ​ * % ​ * % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
We have excluded from the contractual obligations listed below $543.0 million in cash margin deposits and clearing funds related to Cboe Clear Europe and Cboe Clear Digital. Clearing participants of Cboe Clear Europe are required to make deposits to a clearing fund.
We have excluded from the contractual obligations listed below $848.8 million in margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and Cboe Clear Digital. Clearing participants of Cboe Clear Europe are required to make deposits to a clearing fund.
Organic net revenue has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, ​ 2022 ​ 2021 ​ Revenues less cost of revenues $ 1,741.7 ​ $ 1,476.1 ​ Recent acquisitions: ​ ​ ​ ​ ​ ​ Acquisition revenues less cost of revenues $ (28.7) ​ $ — ​ Organic net revenue $ 1,713.0 ​ $ 1,476.1 ​ ​ (2) EBITDA is defined as income before interest, income taxes, depreciation and amortization.
Organic net revenue has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, ​ 2023 ​ 2022 ​ ​ (in millions) ​ (in millions) ​ Revenues less cost of revenues $ 1,918.0 ​ $ 1,741.7 ​ Recent acquisitions: ​ ​ ​ ​ ​ ​ Acquisition revenues less cost of revenues $ (7.6) ​ $ — ​ Organic net revenue $ 1,910.4 ​ $ 1,741.7 ​ ​ (2) EBITDA is defined as income or loss before interest, income taxes, depreciation and amortization.
For the year ended December 31, 2022, operating income for the Options segment increased $202.5 million compared to the year ended December 31, 2021 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses.
For the year ended December 31, 2023, operating income for the Options segment increased $110.8 million compared to the year ended December 31, 2022 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses.
On an ongoing basis, the Company evaluates its estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty.
Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to areas that require a significant level of judgment or are otherwise subject to an inherent degree of uncertainty.
The change in net cash flows provided by operating activities was primarily due to the adjustment for goodwill impairment and the change in Section 31 fees payable, partially offset by the change in net income, the change in restricted cash and cash equivalents, driven by margin deposits and clearing funds related to Cboe Clear Europe, the change in benefit for deferred income taxes, and the change in accounts receivable. 89 Table of Contents Net cash provided by operating activities was $67.8 million higher than net income for the fiscal year ended December 31, 2021.
The change in net cash flows provided by operating activities was primarily due to the change in net income, the change in restricted cash and cash equivalents, driven by margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe, and the change in benefit for deferred income taxes, partially offset by the adjustment for goodwill impairment and the change in Section 31 fees payable. 94 Table of Contents Net cash provided by operating activities was $416.1 million higher than net income for the fiscal year ended December 31, 2022.
See “Cash Flow” below for further discussion. Our cash and cash equivalents held outside of the United States in various foreign subsidiaries totaled $226.1 million and $185.9 million as of December 31, 2022 and 2021, respectively. The remaining balance was held in the United States and totaled $206.6 million and $156.0 million as of December 31, 2022 and 2021, respectively.
See “Cash Flow” below for further discussion. Our cash and cash equivalents held outside of the United States in various foreign subsidiaries totaled $244.3 million and $226.1 million as of December 31, 2023 and 2022, respectively. The remaining balance was held in the United States and totaled $298.9 million and $206.6 million as of December 31, 2023 and 2022, respectively.
The Company has licenses with the owners of the S&P 500 Index, S&P 100 Index and certain other S&P indices, FTSE Russell indices, the DJIA, MSCI, and certain other index products. This category also 67 Table of Contents includes fees related to the dissemination of market data related to S&P indices and other products through Cboe Streaming Market Indices (“CSMI”).
The Company has licenses with the owners of the S&P 500 Index, S&P 100 Index and certain other S&P indices, FTSE Russell indices, the DJIA, MSCI, and certain other index products. This category also includes fees related to the dissemination of market data related to S&P indices and other products through Cboe Global Indices Feed (“CGIF”).
Cash Flow The following table summarizes our cash flow data for the years ended December 31, 2022, 2021 and 2020 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ 2022 2021 2020 Net cash provided by operating activities ​ $ 651.1 ​ $ 596.8 ​ $ 1,458.8 Net cash used in investing activities ​ (835.1) ​ (352.7) ​ (430.5) Net cash provided by (used in) financing activities ​ 81.7 ​ (200.3) ​ (201.7) Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents ​ (10.0) ​ (9.1) ​ 1.6 (Decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents ​ $ (112.3) ​ $ 34.7 ​ $ 828.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2022 2021 2020 Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 432.7 ​ $ 341.9 ​ $ 245.4 Restricted cash and cash equivalents (margin deposits and clearing funds) ​ ​ 530.3 ​ ​ 745.9 ​ ​ 812.1 Restricted cash and cash equivalents (included in other current assets) ​ ​ 4.2 ​ ​ 4.4 ​ ​ — Customer bank deposits (included in margin deposits and clearing funds) ​ ​ 12.7 ​ ​ — ​ ​ — Total ​ $ 979.9 ​ $ 1,092.2 ​ $ 1,057.5 ​ Net Cash Flows Provided by Operating Activities During the year ended December 31, 2022, net cash provided by operating activities was $416.1 million higher than net income.
Cash Flow The following table summarizes our cash flow data for the years ended December 31, 2023, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, ​ 2023 2022 2021 Net cash provided by operating activities ​ $ 1,075.6 ​ $ 651.1 ​ $ 596.8 Net cash used in investing activities ​ (55.1) ​ (835.1) ​ (352.7) Net cash (used in) provided by financing activities ​ (656.1) ​ 81.7 ​ (200.3) Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents ​ 52.8 ​ (10.0) ​ (9.1) Increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents ​ $ 417.2 ​ $ (112.3) ​ $ 34.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2023 2022 2021 Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 543.2 ​ $ 432.7 ​ $ 341.9 Restricted cash and cash equivalents (margin deposits, clearing funds, and interoperability funds) ​ ​ 834.8 ​ ​ 530.3 ​ ​ 745.9 Restricted cash and cash equivalents (included in other current assets) ​ ​ 5.1 ​ ​ 4.2 ​ ​ 4.4 Customer bank deposits (included in margin deposits, clearing funds, and interoperability funds) ​ ​ 14.0 ​ ​ 12.7 ​ ​ — Total ​ $ 1,397.1 ​ $ 979.9 ​ $ 1,092.2 ​ Net Cash Flows Provided by Operating Activities During the year ended December 31, 2023, net cash provided by operating activities was $314.2 million higher than net income.
It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively.
It also includes the ETP listings business on RMs and clearing activities of Cboe Clear Europe, as well as the equities transaction services of Cboe Australia and Cboe Japan, operators of trading venues in Australia and Japan, respectively, along with equities transactions that occur on the BIDS Trading platform in Australia and Japan.
Net cash flows used in investing activities were $835.1 million and $352.7 million for the years ended December 31, 2022 and 2021, respectively.
Net cash flows used in investing activities were $55.1 million and $835.1 million for the years ended December 31, 2023 and 2022, respectively.
The North American Equities segment also includes listing services on NEO Exchange, ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, applicable market data fees generated from the consolidated tape plans, the licensing of proprietary equities market data, routing services, and access and capacity services. Europe and Asia Pacific.
The North American Equities segment also includes listing services on Cboe Canada Inc., corporate and ETP listings on BZX, applicable market data fees revenues generated from the consolidated tape plans, the licensing of proprietary equities market data, routing services, and access and capacity services. Europe and Asia Pacific.
Net cash flows provided by (used in) financing activities were $81.7 million and ($200.3) million for the years ended December 31, 2022 and 2021, respectively.
Net cash flows (used in) provided by financing activities were ( $656.1) million and $81.7 million for the years ended December 31, 2023 and 2022, respectively.
This evaluation is based on factors including historical experience, such as the conclusions of examinations by tax authorities, changes in tax laws or rates, new examination activity, and results of any related legal processes.
Judgments and Uncertainties On an ongoing basis, the Company evaluates its tax estimates and judgments. This evaluation is based on factors including historical experience, such as the conclusions of examinations by tax authorities, changes in tax laws or rates, new examination activity, and results of any related legal processes.
North American Equities The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our North American Equities segment (in millions, except percentages) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2022 2021 Change 2022 2021 Revenues less cost of revenues ​ $ 378.9 ​ ​ $ 362.5 ​ 5 % ​ 23 % ​ 23 % Operating expenses ​ 232.3 ​ ​ 206.4 ​ 13 % ​ 14 % ​ 13 % Operating income ​ $ 146.6 ​ ​ $ 156.1 ​ (6) % ​ 9 % ​ 10 % EBITDA (1) ​ $ 220.1 ​ ​ $ 231.3 ​ (5) % ​ 13 % ​ 15 % EBITDA margin (2) ​ 58.1 % ​ 63.8 % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
North American Equities The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our North American Equities segment (in millions, except percentages) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2023 2022 Change 2023 2022 Revenues less cost of revenues ​ $ 365.3 ​ ​ $ 378.9 ​ (4) % ​ 27 % ​ 23 % Operating expenses ​ 247.3 ​ ​ 232.3 ​ 6 % ​ 18 % ​ 14 % Operating income ​ $ 118.0 ​ ​ $ 146.6 ​ (20) % ​ 9 % ​ 9 % EBITDA (1) ​ $ 186.9 ​ ​ $ 220.1 ​ (15) % ​ 14 % ​ 13 % EBITDA margin (2) ​ 51.2 % ​ 58.1 % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
With respect to Japanese equities, we deliver matched trades of our customers to the Japanese Securities Clearing Corporation, which acts as a central counterparty on all transactions occurring on Cboe Japan and, as such, guarantees clearance and settlement on all of our matched trades in Japan. CRITICAL ACCOUNTING ESTIMATES The preparation of consolidated financial statements in conformity with U.S.
With respect to Japanese equities, we deliver matched trades of our customers to the Japanese Securities Clearing Corporation, which acts as a central counterparty on all transactions occurring on Cboe Japan and, as such, guarantees clearance and settlement on all of our matched trades in Japan.
We have aggregated all corporate costs, as well as other business ventures, within Corporate Items and Eliminations as those activities should not be used to evaluate a segment’s operating performance.
We have aggregated all corporate costs, as well as other business ventures, within Corporate Items and Eliminations as those activities should not be used to evaluate a segment’s operating performance. All operating expenses that relate to activities of a specific segment have been allocated to that segment.
The Global FX segment includes institutional FX trading services that occur on the Cboe FX fully electronic trading platform, non-deliverable forward FX transactions (“NDFs”) offered for execution on Cboe SEF and Cboe Swiss, transaction services that occur on the electronic trading system for U.S government securities executed by Cboe Fixed Income, as well as revenue generated from the licensing of proprietary market data and from access and capacity services.
The Global FX segment includes institutional FX trading services that occur on the Cboe FX fully electronic trading platform, non-deliverable forward FX transactions (“NDFs”) offered for execution on Cboe SEF, as well as revenue generated from the licensing of proprietary market data and from access and capacity services.
See Note 12 (“Debt”) to the consolidated financial statements for further information. Cboe Clear Europe also has a €1.25 billion committed syndicated multicurrency revolving and swingline credit facility agreement with Cboe Clear Europe as borrower and the Company as guarantor of scheduled interest and fees on borrowings (but not the principal amount of any borrowings) (the “Facility”).
Cboe Clear Europe also has a €1.25 billion committed syndicated multicurrency revolving and swingline credit facility agreement with Cboe Clear Europe as borrower and the Company as guarantor of scheduled interest and fees on borrowings (but not the principal amount of any borrowings) (the “Facility”).
Access and capacity fees increased primarily due to increased logical and physical port fees in the Options and North American Equities segments driven by an increase in subscribers, coupled with an increase in access and membership fees across the Europe and Asia Pacific and Options segments driven by an increase in subscribers.
Access and capacity fees increased primarily due to increased physical port fees in the Options, North American Equities, and Europe and Asia Pacific segments and increased logical port fees in the Options, North American Equities, and Global FX segments, both driven by an increase in subscribers and pricing.
The impact of, and any associated risks related to, these estimates on our business operations is discussed throughout "Management's Discussion and Analysis of Financial Condition and Results of Operations." For a detailed discussion on these estimates and other accounting policies, see Note 2 (“Summary of Significant Accounting Policies”) to the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
The impact of, and any associated risks related to, these estimates on our business operations is discussed throughout "Management's Discussion and Analysis of Financial Condition and Results of Operations." For a detailed discussion on these estimates and other accounting policies, see Note 2 (“Summary of Significant Accounting Policies”) to the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. 98 Table of Contents Goodwill and Other Intangible Assets Description Our acquisitions of Bats, Silexx Financial Systems, LLC (“Silexx”), Livevol, Inc.
Global FX The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our Global FX segment (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2022 2021 Change 2022 2021 Revenues less cost of revenues ​ $ 67.9 ​ ​ $ 57.6 ​ 18 % ​ 99 % ​ 99 % Operating expenses ​ 59.1 ​ ​ 54.9 ​ 8 % ​ 86 % ​ 94 % Operating income ​ $ 8.8 ​ ​ $ 2.7 ​ 226 % ​ 13 % ​ 5 % EBITDA (1) ​ $ 30.7 ​ ​ $ 26.9 ​ 14 % ​ 45 % ​ 46 % EBITDA margin (2) ​ 45.2 % ​ 46.7 % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
Global FX The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our Global FX segment (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2023 2022 Change 2023 2022 Revenues less cost of revenues ​ $ 73.5 ​ ​ $ 67.9 ​ 8 % ​ 98 % ​ 99 % Operating expenses ​ 48.8 ​ ​ 59.1 ​ (17) % ​ 65 % ​ 86 % Operating income ​ $ 24.7 ​ ​ $ 8.8 ​ 181 % ​ 33 % ​ 13 % EBITDA (1) ​ $ 42.8 ​ ​ $ 30.7 ​ 39 % ​ 57 % ​ 45 % EBITDA margin (2) ​ 58.2 % ​ 45.2 % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2022 compared to the year ended December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ Percent ​ ​ 2022 2021 (Decrease) Change ​ ​ ​ (in millions, except percentages, trading days, and as noted below) ​ Options: ​ ​ Average daily volume (ADV) (in millions of contracts): ​ ​ ​ ​ Market ADV ​ 41.1 ​ ​ 39.2 ​ ​ 1.9 5 % Total touched contracts (1) ​ 13.6 ​ ​ 12.1 ​ ​ 1.5 13 % Multi-listed contract ADV ​ ​ 10.8 ​ ​ 10.1 ​ ​ 0.7 ​ 7 % Index contract ADV ​ 2.8 ​ ​ 2.0 ​ ​ 0.8 44 % Number of trading days ​ ​ 251 ​ ​ 252 ​ ​ (1) (0) % Total Options revenue per contract (RPC) (2) ​ $ 0.234 ​ $ 0.192 ​ $ 0.042 22 % Multi-listed options RPC (2) ​ ​ 0.063 ​ ​ 0.067 ​ ​ (0.004) (6) % Index options RPC (2) ​ ​ 0.879 ​ ​ 0.832 ​ ​ 0.047 6 % Total Options market share ​ ​ 33.2 % ​ 30.8 % ​ 2.4 % ​ * Multi-listed options market share ​ ​ 28.2 % ​ 27.1 % ​ 1.1 % ​ * North American Equities: ​ ​ ​ ​ ​ ​ U.S.
The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2023 compared to the year ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ Percent ​ ​ 2023 2022 (Decrease) Change ​ ​ ​ (in millions, except percentages, trading days, and as noted below) ​ Options: ​ ​ Average daily volume (ADV) (in millions of contracts): ​ ​ ​ ​ Market ADV ​ 44.2 ​ ​ 41.1 ​ ​ 3.1 8 % Total touched contracts (1) ​ 14.6 ​ ​ 13.6 ​ ​ 1.0 7 % Multi-listed contract ADV ​ ​ 10.8 ​ ​ 10.8 ​ ​ — ​ 0 % Index contract ADV ​ 3.8 ​ ​ 2.8 ​ ​ 1.0 33 % Number of trading days ​ ​ 250 ​ ​ 251 ​ ​ (1) (0) % Total Options revenue per contract (RPC) (2) ​ $ 0.276 ​ $ 0.234 ​ $ 0.042 18 % Multi-listed options RPC (2) ​ ​ 0.060 ​ ​ 0.063 ​ ​ (0.003) (5) % Index options RPC (2) ​ ​ 0.893 ​ ​ 0.879 ​ ​ 0.014 2 % Total Options market share ​ ​ 33.1 % ​ 33.2 % ​ (0.1) % ​ * Multi-listed options market share ​ ​ 26.8 % ​ 28.2 % ​ (1.4) % ​ * North American Equities: ​ ​ ​ ​ ​ ​ U.S.
Industry market data fees decreased primarily due to a decrease in U.S. tape plan revenue as a result of a 1% decline in market share on the U.S.
Industry market data fees decreased primarily due to a decrease in U.S. tape plan revenue driven by a 1% decline in market share on the U.S. Equities exchanges.
Share repurchases are repurchased to the Company’s Treasury stock and ultimately retired or they are available to be redistributed. Under the program, for the year ended December 31, 2022, the Company repurchased 876,238 shares of common stock at an average cost per share of $115.20, totaling $100.9 million.
Share repurchases are repurchased to the Company’s Treasury stock and ultimately retired or they are available to be redistributed. Under the program, for the year ended December 31, 2023, the Company repurchased 661,721 shares of common stock at an average cost per share of $126.80, totaling $83.9 million.
For the year ended December 31, 2022, operating income for the Europe and Asia Pacific segment decreased $17.9 million compared to the year ended December 31, 2021 primarily due to an increase in operating expenses, partially offset by an increase revenues less cost of revenues.
For the year ended December 31, 2023, operating income for the Europe and Asia Pacific segment decreased $5.4 million compared to the year ended December 31, 2022 primarily due to a decrease in revenues less cost of revenues, partially offset by a decrease in operating expenses.
Access and capacity fees increased primarily due to increased logical and physical port fees in the Options and North American Equities segments driven by an increase in subscribers, coupled with an increase in access and membership fees across the Europe and Asia Pacific and Options segments, also driven by an increase in subscribers.
Access and capacity fees increased primarily due to increased physical port fees in the Options, North American Equities, and Europe and Asia Pacific segments and increased logical port fees in the Options, North American Equities, and Global FX segments, both driven by an increase in subscribers and pricing.
The effective tax rate for the year ended December 31, 2022 was 45.7%, compared to a rate of 30.0% for the year ended December 31, 2021.
The effective tax rate for the year ended December 31, 2023 was 27.3%, compared to a rate of 45.7% for the year ended December 31, 2022.
Europe and Asia Pacific The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our Europe and Asia Pacific segment (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2022 2021 Change 2022 2021 Revenues less cost of revenues ​ $ 196.1 ​ ​ $ 183.9 ​ 7 % ​ 74 % ​ 77 % Operating expenses ​ 158.0 ​ ​ 127.9 ​ 24 % ​ 60 % ​ 53 % Operating income ​ $ 38.1 ​ ​ $ 56.0 ​ (32) % ​ 14 % ​ 23 % EBITDA (1) ​ $ 74.6 ​ ​ $ 92.6 ​ (19) % ​ 28 % ​ 39 % EBITDA margin (2) ​ 38.0 % ​ 50.4 % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
Europe and Asia Pacific The following summarizes revenues less cost of revenues, operating expenses, operating income, EBITDA and EBITDA margin for our Europe and Asia Pacific segment (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues ​ ​ Year Ended ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ Percent ​ ​ December 31, ​ 2023 2022 Change 2023 2022 Revenues less cost of revenues ​ $ 190.2 ​ ​ $ 196.1 ​ (3) % ​ 68 % ​ 74 % Operating expenses ​ 157.5 ​ ​ 158.0 ​ (0) % ​ 56 % ​ 60 % Operating income ​ $ 32.7 ​ ​ $ 38.1 ​ (14) % ​ 12 % ​ 14 % EBITDA (1) ​ $ 62.7 ​ ​ $ 74.6 ​ (16) % ​ 22 % ​ 28 % EBITDA margin (2) ​ 33.0 % ​ 38.0 % ​ * ​ ​ * ​ ​ * ​ * Not meaningful (1) See footnote (2) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
Goodwill and Other Intangible Assets Description Our acquisitions of Bats, Silexx Financial Systems, LLC (“Silexx”), Livevol, Inc. (“LiveVol”), Hanweck, FT Options, Trade Alert, MATCHNow, BIDS Holdings, Cboe Asia Pacific, Cboe Digital, and NEO resulted in the recording of goodwill and other intangible assets, while our acquisition of Cboe Clear Europe, resulted in a bargain purchase gain and other intangible assets.
(“LiveVol”), Hanweck, FT Options, Trade Alert, BIDS Holdings, Cboe Asia Pacific, Cboe Digital, and Cboe Canada Inc. resulted in the recording of goodwill and other intangible assets, while our acquisition of Cboe Clear Europe, resulted in a bargain purchase gain and other intangible assets.
The new Cboe Europe Derivatives venue offers futures and options based on Cboe Europe equity indices. This segment also includes Cboe Europe, Cboe NL, CEDX, Cboe Australia, and Cboe Japan revenue generated from the licensing of proprietary market data and from access and capacity services. Futures.
Cboe Europe Derivatives, a pan-European derivatives platform launched in September 2021, offers futures and options based on Cboe Europe equity indices, and single stock options. This segment also includes Cboe Europe, Cboe NL, CEDX, Cboe Australia and Cboe Japan revenue generated from the licensing of proprietary market data and from access and capacity services. Futures.
The majority of cash held outside the United States is available for repatriation, but under current law, could subject us to additional United States income taxes, less applicable foreign tax credits. See Note 18 (“Regulatory Capital”) for information regarding cash held for purposes of regulatory capital requirements.
The majority of cash held outside the United States is available for repatriation, but under current law, could subject us to additional United States income taxes, less applicable foreign tax credits.
Equities - Off-Exchange: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ADV: ​ ​ ​ ​ ​ ​ Total touched shares (in millions) (1) ​ 90.4 ​ 83.0 ​ 7.4 9 % U.S.
Equities - Off-Exchange: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ADV: ​ ​ ​ ​ ​ ​ Total touched shares (in millions) (1) ​ 78.0 ​ 90.4 ​ (12.4) (14) % U.S.
Goodwill Impairment Goodwill impairment consists of charges to impair goodwill of our reporting units if the carrying value exceeds the implied fair value. ​ 68 Table of Contents Other Expenses Other expenses represent costs necessary to support our operations that are not already included in the above categories, including, but not limited to the impairment of digital assets held presented in intangible assets, net as part of the ordinary operations of the Digital segment and changes in contingent consideration.
Other Expenses Other expenses represent costs necessary to support our operations that are not already included in the above categories, including, but not limited to the impairment of digital assets held presented in intangible assets, net as part of the ordinary operations of the Digital segment and changes in contingent consideration.
Routing and Clearing Routing and clearing fees decreased for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to a decrease in routed shares on the U.S.
Equities exchanges and a decline in multi-listed options market share. Routing and Clearing Routing and clearing fees decreased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to a decrease in routed shares on the U.S.
The change in net cash flows provided by operating activities was primarily due to the change in restricted cash and cash equivalents, driven by margin deposits and clearing funds related to Cboe Clear Europe, as well as the change in Section 31 fees payable, partially offset by the change in accounts receivable, the change in net income, the change in the bargain purchase gain, and the change in provision for deferred income taxes for the year ended December 31, 2021 compared to the year ended December 31, 2020.
The change in net cash flows provided by operating activities was primarily due to the adjustment for goodwill impairment and the change in Section 31 fees payable, partially offset by the change in net income, the change in restricted cash and cash equivalents, driven by margin deposits and clearing funds related to Cboe Clear Europe, the change in benefit for deferred income taxes, and the change in accounts receivable.
Equities net capture, partially offset by a 1% decrease in total touched shares on U.S. Equities exchanges and a decrease in industry market data fees as a result of a decrease in U.S. tape plan revenue due to a 1% decline in market share on the U.S. Equities exchanges.
Equities exchanges and an 11% decrease in U.S. Equities exchanges net capture, coupled with a decline in market data fees as a result of a decrease in U.S. tape plan revenue due to a 1% decline in market share on the U.S.
Operating Income As a result of the items above, operating income for the year ended December 31, 2022 was $489.6 million, compared to operating income of $805.9 million for the year ended December 31, 2021, a decrease of $316.3 million.
Operating Income As a result of the items above, operating income for the year ended December 31, 2023 was $1,057.9 million, compared to operating income of $489.6 million for the year ended December 31, 2022, an increase of $568.3 million.
We believe our cash from operations and the availability under our Revolving Credit Facility will meet any long-term needs unless a significant acquisition or acquisitions are identified, in which case we expect that we would be able to borrow the necessary funds and/or issue additional shares of our common stock to complete such acquisition(s). ​ 88 Table of Contents Cash and cash equivalents includes cash in banks and all non-restricted, highly liquid investments with original maturities of three months or less at the time of purchase.
We believe our cash from operations and the availability under our Revolving Credit Facility will meet any long-term needs unless a significant acquisition or acquisitions are identified, in which case we expect that we would be able to borrow the necessary funds and/or issue additional shares of our common stock to complete such acquisition(s).
Operating expenses increased $30.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily due to increases in compensation and benefits, other expenses, technology support services, facilities costs, depreciation and amortization, and travel and promotional expenses.
Operating expenses increased $75.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to increases in compensation and benefits, technology support services, and travel and promotional expenses.
The Facility was amended on June 30, 2022, which extended the term of the facility through June 29, 2023. Please refer to Note 12 (“Debt”) for further information on the amendment. Our long-term cash needs will depend on many factors, including an introduction of new products, enhancements of current products, the geographic mix of our business and any potential acquisitions.
The Facility was amended on June 29, 2023, which extended the term of the facility through June 28, 2024. Our long-term cash needs will depend on many factors, including an introduction of new products, enhancements of current products, capital needs of our subsidiaries, the geographic mix of our business and any potential acquisitions.
Professional Fees and Outside Services Professional fees and outside services consist primarily of consulting services, which include supplemental staff activities primarily related to systems development and maintenance, legal, regulatory and audit, and tax advisory services.
Professional Fees and Outside Services Professional fees and outside services consist primarily of consulting services, which include supplemental staff activities primarily related to systems development and maintenance, legal, regulatory and audit, and tax advisory services, as well as compensation paid to non-employee directors, including stock-based compensation and deferred compensation.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThis fee covers Cboe Clear Europe’s costs but also acts as a deterrent as required by Regulation (EU) No 236/2012 on short selling, together with certain aspects of credit default swaps. Cboe Clear Digital sets minimum financial requirements on custodian institutions and any clearing member that may expose the clearinghouse to credit risk.
Biggest changeCboe Clear Digital sets minimum financial requirements on custodian institutions and any clearing member that may expose the clearinghouse to credit risk. The financial strength of custodians and such clearing members are monitored routinely.
The assets and liabilities of our European businesses are denominated in British pounds or Euros. The assets and liabilities of our Canadian businesses are denominated in Canadian dollars. The assets and liabilities of our Asia Pacific businesses are denominated in Hong Kong dollars, Australian dollars, Japanese Yen, or Philippine Pesos.
The assets and liabilities of our European businesses are denominated in British pounds or Euros. The assets and liabilities of our Canadian businesses are denominated in Canadian dollars. The assets and liabilities of our Asia Pacific businesses are denominated in Australian dollars, Japanese Yen, Singapore dollars, Hong Kong dollars, or Philippine Pesos.
As of December 31, 2022, Cboe Digital does not expect a material loss concerning credit risk on any member participant, custodian, or settlement bank. ● Liquidity Risk - Liquidity risk is the risk Cboe Clear Europe may not be able to meet its payment obligations in the right currency, in the right place and at the right time.
As of December 31, 2023, Cboe Digital does not expect a material loss concerning credit risk on any member participant, custodian, or settlement bank. ● Liquidity Risk - Liquidity risk is the risk Cboe Clear Europe may not be able to meet its payment obligations in the right currency, in the right place and at the right time.
Our potential exposure to credit losses on these transactions is represented by the receivable balances in our balance sheet. Our customers are financial institutions whose ability to satisfy their contractual obligations may be impacted by volatile securities markets. The Company is exposed to further credit risk through our clearing operations.
Our potential exposure to credit losses on these transactions is represented by the receivable balances in our balance sheet. Our customers are financial institutions whose ability to satisfy their contractual obligations may be impacted by volatile securities markets. The Company is exposed to further credit and investment risk through our clearing operations.
For the year ended December 31, 2022, our exposure to foreign-denominated revenues less cost of revenues and expenses is presented by primary foreign currency in the following table (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2022 ​ ​ ​ British ​ ​ ​ ​ ​ Australian ​ ​ ​ Pounds (1) ​ ​ Euros (1) ​ ​ Dollars (1) ​ Foreign denominated % of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues less cost of revenues ​ ​ 3.4 % ​ ​ 3.7 % ​ ​ 1.6 % Operating expenses ​ ​ 2.5 % ​ ​ 4.3 % ​ ​ 2.6 % Impact of 10% adverse currency fluctuation on: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues less cost of revenues ​ $ 6.2 ​ ​ $ 6.3 ​ ​ $ 2.4 ​ Operating expenses ​ ​ 3.2 ​ ​ ​ 4.9 ​ ​ ​ 2.8 ​ (1) An average foreign exchange rate to the U.S. dollar for the period was used.
For the year ended December 31, 2023, our exposure to foreign-denominated revenues less cost of revenues and expenses is presented by primary foreign currency in the following table (in millions, except percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2023 ​ ​ ​ British ​ ​ ​ ​ ​ Australian ​ ​ ​ Pounds (1) ​ ​ Euros (1) ​ ​ Dollars (1) ​ Foreign denominated % of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues less cost of revenues ​ ​ 5.7 % ​ ​ 3.3 % ​ ​ 2.1 % Operating expenses ​ ​ 8.9 % ​ ​ 6.6 % ​ ​ 4.8 % Impact of 10% adverse currency fluctuation on: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues less cost of revenues ​ $ 11.0 ​ ​ $ 6.4 ​ ​ $ 3.9 ​ Operating expenses ​ ​ 7.6 ​ ​ ​ 5.7 ​ ​ ​ 4.1 ​ (1) An average foreign exchange rate to the U.S. dollar for the period was used.
Cboe Digital’s valuation 97 Table of Contents governance framework includes numerous controls and other procedural safeguards that are intended to maximize the quality of fair value measurements. New products and valuation techniques are reviewed and approved by senior management. Cboe Digital’s valuation process for digital assets are fair value estimates that are also validated by the finance control function independently.
Cboe Digital’s valuation governance framework includes numerous controls and other procedural safeguards that are intended to maximize the quality of fair value measurements. New products and valuation techniques are reviewed and approved by senior management. Cboe Digital’s valuation process for digital assets are fair value estimates that are also validated by the finance control function independently.
Fluctuations in currency exchange rates may create volatility in our 95 Table of Contents reported results as we are required to translate foreign currency reported statements of financial condition and operational results into U.S. dollars for consolidated reporting.
Fluctuations in currency exchange rates may create volatility in our reported results as we are required to translate foreign currency reported statements of financial condition and operational results into U.S. dollars for consolidated reporting.
We do not have counterparty credit risk with respect to institutional spot FX trades occurring on our platform because Cboe FX is not a counterparty to any FX transactions. All transactions occurring on our platform occur bilaterally between 96 Table of Contents two banks or prime brokers as counterparties to the trade.
We do not have counterparty credit risk with respect to institutional spot FX trades occurring on our platform because Cboe FX is not a counterparty to any FX transactions. All transactions occurring on our platform occur bilaterally between two banks or prime brokers as counterparties to the trade.
See Note 12 (“Debt”) to the consolidated financial statements for a discussion of debt agreements. ​ 98 Table of Contents
See Note 12 (“Debt”) to the consolidated financial statements for a discussion of debt agreements. ​ 105 Table of Contents
We are also exposed to changes in interest rates as a result of borrowings under our Revolving Credit Agreement and the Cboe Clear Europe Credit Facility, as these facilities bear interest at fluctuating rates. As of December 31, 2022, there were no outstanding borrowings under our Revolving Credit Agreement or Cboe Clear Europe Credit Facility, respectively.
We are also exposed to changes in interest rates as a result of borrowings under our Revolving Credit Agreement and the Cboe Clear Europe Credit Facility, as these facilities bear interest at fluctuating rates. As of December 104 Table of Contents 31, 2023, there were no outstanding borrowings under our Revolving Credit Agreement or Cboe Clear Europe Credit Facility, respectively.
As of December 31, 2022 and 2021, our cash and cash equivalents and financial investments were $524.4 million and $379.0 million, respectively, of which $226.1 million and $185.9 million is held outside of the United States in various foreign subsidiaries in 2022 and 2021, respectively. The remaining cash and cash equivalents and financial investments are denominated in U.S. dollars.
As of December 31, 2023 and 2022, our cash and cash equivalents and financial investments were $600.7 million and $524.4 million, respectively, of which $244.3 million and $226.1 million is held outside of the United States in various foreign subsidiaries in 2023 and 2022, respectively. The remaining cash and cash equivalents and financial investments are denominated in U.S. dollars.
To help mitigate market risk, Cboe Clear Europe collects collateral from clearing participants to cover for the probable loss during normal market conditions, together with contributions to the clearing fund to cover losses if a default occurred during extreme but plausible market conditions.
To help mitigate market risk, Cboe Clear Europe collects collateral on an end of day and intraday basis from clearing participants to cover for the probable loss during normal market conditions, together with contributions to the clearing fund to cover losses if a default occurred 103 Table of Contents during extreme but plausible market conditions.
The business model is such that Cboe Digital earns digital assets and at times may accumulate positions that are subject to market risk. Customer positions do have market risk based on daily activity and settlement prices. On a regular basis, we review and evaluate changes in the status of our counterparties’ creditworthiness.
The business model is such that Cboe Digital earns digital assets and at times may accumulate positions that are subject to market risk. Customer positions do have market risk based on daily activity and settlement prices.
Our primary exposure to this equity risk as of December 31, 2022 is presented by foreign currency in the following table (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ British ​ ​ ​ Canadian ​ Pounds (1) ​ Euros (1) ​ Dollars (1) Net equity investment in Cboe Europe Equities and Derivatives, Cboe Clear Europe, MATCHNow, and NEO $ 579.5 ​ $ 145.8 ​ $ 402.3 Impact on consolidated equity of a 10% adverse currency fluctuation ​ 58.0 ​ ​ 14.6 ​ ​ 40.2 (1) Converted to U.S. dollars using the foreign exchange rate of British pounds per U.S. dollar, Euros per U.S. dollar, and Canadian dollars per U.S. dollar, respectively, as of December 31, 2022.
Our primary exposure to this equity risk as of December 31, 2023 is presented by foreign currency in the following table (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ British ​ ​ ​ Canadian ​ Pounds (1) ​ Euros (1) ​ Dollars (1) Net equity investment in Cboe Europe Equities and Derivatives, Cboe Clear Europe, and Cboe Canada $ 633.6 ​ $ 175.9 ​ $ 531.7 Impact on consolidated equity of a 10% adverse currency fluctuation ​ 63.4 ​ ​ 17.6 ​ ​ 53.2 (1) Converted to U.S. dollars using the foreign exchange rate of British pounds per U.S. dollar, Euros per U.S. dollar, and Canadian dollars per U.S. dollar, respectively, as of December 31, 2023.
Besides potential defaults of clearing participants, the main credit risk faced by the clearinghouse is exposure to clearing participants when a trade fails to settle. To help mitigate this risk, a fail fee is charged to discourage late settlements.
Besides potential defaults of clearing participants, the main credit risk faced by the clearinghouse is exposure to clearing participants when a trade fails to settle. To help mitigate this risk, a fail fee is charged to discourage late settlements. This fee covers Cboe Clear Europe’s costs but also acts as a deterrent as required by applicable settlement efficiency regulation.
The financial strength of custodians and such clearing members are monitored routinely. Furthermore, Cboe Digital requires clearing members to post collateral or other forms of financial guarantee and their trading activities are subject to pre-trade checks enforced by Cboe Digital Exchange and administered by Cboe Clear Digital.
Furthermore, Cboe Digital requires clearing members to post collateral (full or margined, depending on the product eligible for clearing) or other forms of financial guarantee and their trading activities are subject to pre-trade checks 102 Table of Contents enforced by Cboe Digital Exchange and administered by Cboe Clear Digital.
Foreign Currency Exchange Rate Risk Our operations in Europe, Canada and Asia are subject to increased currency translation risk as revenues and expenses are denominated in foreign currencies, primarily the British pound, Canadian dollar, Euro, Australian dollar, and Japanese Yen.
Foreign Currency Exchange Rate Risk Our operations in Europe, Canada and Asia are subject to increased currency translation risk as revenues and expenses are denominated in foreign currencies, primarily the British pound, Euro, Australian dollar, and Canadian dollar. 100 Table of Contents We also have de minimis exposure to other foreign currencies, including the Japanese Yen, Philippine Peso, Singapore dollar, and Hong Kong dollar.
If counterparties, which receive shares against payment, are unable to settle, an overnight liquidity need arises. The overnight liquidity is typically very short term, and is usually limited to a few days. ● Custody Risk – Cboe Digital holds customer’s digital clearing assets custodially through self-custody and it’s accounts with custodians.
If counterparties, which receive shares against payment, are unable to settle, an overnight liquidity need arises. The overnight liquidity is typically very short term, and is usually limited to a few days.
Credit losses such as those described above could adversely affect our consolidated financial position and results of operations. Any such effects to date have been minimal. Interest Rate Risk We have exposure to market risk for changes in interest rates relating to our cash and cash equivalents, financial investments, and indebtedness.
On a regular basis, we review and evaluate changes in the status of our counterparties’ creditworthiness. Credit losses such as those described above could adversely affect our consolidated financial position and results of operations. Any such effects to date have been minimal.
As of December 31, 2022, we had $1,742.0 million in outstanding debt, of which $1,437.3 million relates to our Senior Notes, which bear interest at fixed interest rates.
As of December 31, 2023, we had $1,439.2 million in outstanding debt, all of which relates to our Senior Notes, which bear interest at fixed interest rates. Changes in interest rates will have no impact on the interest we pay on fixed-rate obligations.
Removed
We also have de minimis exposure to other foreign currencies, including the Swiss Franc, Norwegian Kroner, Swedish Krona, Danish Kroner, Singapore dollar, Hong Kong dollar, and Philippine Peso.
Added
With respect to U.S. government securities transactions, we deliver matched trades to FICC’s GSD without taking on counterparty risk for those trades. FICC GSD acts as a central counterparty on all U.S. government securities transactions occurring on Cboe Fixed Income and, as 101 Table of Contents such, guarantees clearance and settlement of all of those matched trades.
Removed
Changes in interest rates will have no impact on the interest we pay on fixed-rate obligations. $304.7 million of the outstanding debt relates to the Term Loan Agreement, which bears interest at fluctuating rates and, therefore, subjects us to interest rate risk.
Added
On June 5, 2023, the CFTC approved an amended order of registration for Cboe Clear Digital to clear digital asset futures on a margined basis for futures commission merchants. The new products launched January 12, 2024.
Removed
The overnight Treasury repurchase market underlying SOFR has experienced and may experience disruptions from time to time, which may result in unexpected fluctuations, including potentially higher rates, in SOFR.
Added
Cboe Clear Digital monitors its liquidity requirements closely and maintains funds and assets in a manner which attempt to minimize the risk of loss or delay in the access by the clearinghouse to such funds and assets. For example, only allowing highly liquid USD denominated assets to be posted as collateral.
Removed
A hypothetical 100 basis point increase in interest rates relating to the amounts outstanding under the Term Loan Agreement as of December 31, 2022 would decrease annual pre-tax earnings by $3.0 million, assuming no change in the composition of our outstanding indebtedness.
Added
Cboe Clear Digital may not be able to meet its payment obligations in a timely manner in the event of delay in payment or default by a clearing member.
Added
Cboe Clear Europe entered into a €1.25 billion committed syndicated multicurrency revolving and swingline credit facility that is available to be drawn by Cboe Clear Europe towards (a) financing unsettled amounts in connection with the settlement of transactions in securities and other items processed through Cboe Clear Europe’s clearing system and (b) financing any other liability or liquidity requirement of Cboe Clear Europe incurred in the operation of its clearing system, however we can give no assurance that this facility will be sufficient to meet all such obligations or sufficiently mitigate Cboe Clear Europe’s liquidity risk to meet its payment obligations when due. ● Custody Risk – Cboe Digital holds customer digital clearing assets through accounts with third party custodians and, in the case of hot and warm wallets, through self-custody.
Added
Cboe Clear Digital is also exposed to market risk in the event that a clearing participant defaults and the market prices of the securities in its open positions have moved adversely so the clearinghouse can only close out the participant’s obligations at a loss or the clearing participant has already realized trading losses in excess of the collateral at the time of default or the combination of the two.
Added
Cboe Clear Digital collects collateral on an end of day and intraday basis from clearing participants that are clearing margin eligible futures contracts. Cboe Clear Digital only allows collateral in USD at this time. Cboe Clear Digital maintains pre-funded resources to cover probable losses during normal market conditions due to default of clearing participants.
Added
Cboe Clear Digital clearing members clearing spot digital assets mostly operate on a fully funded basis. Cboe Clear Digital may allow certain well qualified members to trade in the spot market without fully funding their accounts. Cboe Clear Digital collects collateral from such members to cover probable losses under extreme but plausible market conditions as determined by Cboe Clear Digital.
Added
The adequacy of such collateral is routinely reviewed. ● Investment Risk – Cboe Clear Europe as of December 31, 2023 held $834.6 million of clearing member margin deposits, clearing funds, and interoperability funds which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks.
Added
Effective August 14, 2023, Cboe Clear Europe enacted changes in its rules, and is able to invest the cash collateral received in the form of interoperability fund deposits from clearing participants in certain investments, typically securities issued by pre-approved sovereign issuers and reverse repurchase agreements with overnight maturities.
Added
When investments are made in accordance with the policy, Cboe Clear Europe receives the amount of investment earnings and pays the clearing participants those earnings minus a set basis point cost of collateral.
Added
Cboe Clear Europe is able to direct the investment of the cash interoperability fund deposits received from the clearing participants within the program parameters and receive an economic benefit from those investments. See Note 14 (“Clearing Operations”) for more information.
Added
In the event that a sovereign government or reverse repurchase agreement counterparty defaults, the value we hold as collateral might not be sufficient to cover our capital requirements in the event of defaults.
Added
While Cboe Clear Europe seeks to achieve a reasonable rate of return which may generate interest income for clearing participants, Cboe Clear Europe is primarily concerned with preservation of capital and managing the risks associated with these deposits.
Added
As Cboe Clear Europe passes on interest revenues (minus costs) to the clearing members, this could include negative or reduced yield due to market conditions.
Added
While Cboe Clear Europe has policies and procedures that strive to help ensure that clearing participant collateral is protected, Cboe Clear Europe cannot absolutely assure that these measures and safeguards will be sufficient to protect margin deposits, clearing funds, and interoperability funds from a default or that we will not be materially and adversely affected in the event of a significant default.
Added
Interest Rate Risk We have exposure to market risk for changes in interest rates relating to our cash and cash equivalents, financial investments, and indebtedness.

Other CBOE 10-K year-over-year comparisons