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What changed in Cboe Global Markets's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cboe Global Markets's 2023 and 2024 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 2024 report.

+654 added−772 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-16)

Top changes in Cboe Global Markets's 2024 10-K

654 paragraphs added · 772 removed · 512 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

163 edited+56 added−104 removed120 unchanged
Biggest changeFollowing the recent executive transitions, one of the new CEO’s top areas of focus is to develop talent and spend time on succession planning. ​ 31 Table of Contents Employees As of December 31, 2023, we employed 1,647 individuals in the following locations: ​ ​ ​ Location ​ Number of Employees United States ​ 1,107 United Kingdom ​ 186 Netherlands ​ 125 Canada ​ 80 Australia ​ 78 Philippines ​ 30 Japan ​ 26 Singapore ​ 9 Hong Kong ​ 5 Switzerland ​ 1 Of these employees, 595 were involved in technology operations and 185 were involved in direct support of trading operations.
Biggest changeEmployees As of December 31, 2024, we employed 1,685 individuals in the following locations: Location Number of Employees United States 1,113 United Kingdom 197 Netherlands 137 Australia 86 Canada 79 Philippines 29 Japan 28 Singapore 9 Hong Kong 6 Switzerland 1 Of these employees, 605 were involved in technology operations and 195 were involved in direct support of trading operations.
In addition, bills are sometimes introduced in the U.S. Congress that could also potentially impact equity market structure and adversely impact our volumes and operations. See “Risk Factors” for more information. Volume Based Pricing Proposal On October 18, 2023, the SEC released a proposed rule that would impact the way in which volume based discounts are applied (“Volume Based Proposal”).
In addition, bills are sometimes introduced in the U.S. Congress that also could potentially impact equity market structure and adversely impact our volumes and operations. See “Risk Factors” for more information. Volume Based Pricing Proposal On October 18, 2023, the SEC released a proposed rule that would impact the way in which volume based discounts are applied (“Volume Based Proposal”).
If CFE or Cboe SEF fails to comply with applicable laws, rules or regulations, it may be subject to censure, fines, cease-and-desist orders, suspension of its business, removal of personnel or other sanctions, including revocation of CFE’s designation as a contract market or Cboe SEF’s designation as a swap execution facility.
If CFE or Cboe SEF fails to comply with applicable laws, rules or regulations, it may be subject to: censure, fines, cease-and-desist orders, suspension of its business, and removal of personnel or other sanctions, including revocation of CFE’s designation as a contract market or Cboe SEF’s designation as a swap execution facility.
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.
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. 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.
Services include aggregated equity and derivative market statistics, theoretical values, trading indicators, portfolio and margin risk, scenarios, and historical data from Cboe’s markets as well as third-party consolidated data. o Front-End Platforms. Cboe provides multiple trading solutions and services including Cboe Silexx, LiveVol Pro, FT Options and Trade Alert. o Connectivity.
Services include aggregated equity and derivative market statistics, theoretical values, trading indicators, portfolio and margin risk, scenarios, and historical data from Cboe’s markets as well as third-party consolidated data. ◦ Front-End Platforms. Cboe provides multiple trading solutions and services including Cboe Silexx, LiveVol Pro, FT Options, and Trade Alert. ◦ Connectivity.
Emerging Technologies We are exploring the potential use of new technologies, such as artificial intelligence (“AI”), machine learning, blockchain, distributed ledger technology, quantum computing, tokenization, the cloud, and other emerging technologies to potentially help drive new products, increase productivity, improve our self-regulatory oversight responsibilities, and increase automation of tasks.
Emerging Technologies We are exploring the potential use of new technologies, such as artificial intelligence (“AI”), machine learning, blockchain, distributed ledger technology, quantum computing, the cloud, and other emerging technologies to potentially help drive new products, increase productivity, improve our self-regulatory oversight responsibilities, and increase automation of tasks.
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.
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. Index Provider Relationships The Company has long-term business relationships with several providers of market indices.
CFE and Cboe Digital Exchange are also members of the Joint Audit Committee (“JAC”), which is a representative committee of the U.S. futures exchanges and regulatory organizations which participate in a joint audit and financial surveillance program that has been approved and is overseen by the CFTC.
CFE, Cboe SEF, and Cboe Digital Exchange are also members of the Joint Audit Committee (“JAC”), which is a representative committee of the U.S. futures exchanges and regulatory organizations which participate in a joint audit and financial surveillance program that has been approved and is overseen by the CFTC.
In addition to market data, access services include all access and capacity products including connectivity, terminal and other equipment rights, maintenance services, trading floor space and permits for the opportunity to trade. ● Cboe Global Indices. Services include index creation, calculation, licensing, and data dissemination.
In addition to market data, access services include all access and capacity products including connectivity, terminal and other equipment rights, maintenance services, trading floor space, permits for the opportunity to trade, and telecommunications services. • Cboe Global Indices. Services include index creation, calculation, licensing, and data dissemination.
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.
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, • indices based on Bitcoin 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.
Cboe Options, C2, BZX, and EDGX are also parties to the Options Listing Procedures Plan, which sets forth the procedures that the options exchanges must follow to list new options. Cboe Options, BZX, BYX, EDGA, and EDGX are also parties to the NMS plan for the selection and reservation of securities symbols.
Cboe Options, C2, BZX, and EDGX are also parties to the Options Listing Procedures Plan, which sets forth the procedures that the options exchanges must follow to list new options. Cboe Options, BZX, EDGA, and EDGX are also parties to the NMS plan for the selection and reservation of securities symbols.
Additionally, portions of promissory notes related to the funding of the implementation and operation of the CAT may not be collectible, including if the SEC finds that the SROs/Plan Participants did not satisfy any of the financial accountability milestones.
Portions of promissory notes related to the funding of the implementation and operation of the CAT may not be collectible, including if the SEC finds that the SROs/Plan Participants did not satisfy any of the financial accountability milestones.
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.
To maintain and strengthen our pledge to 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.
Cboe is committed to applying our Equal Employment Opportunity Policy to all employment practices that impact the terms and conditions of employment including, but not limited to, hiring, evaluation, discipline, promotion, training, compensation, transfer, and termination. Actively nurturing and maintaining a diverse and inclusive culture at Cboe is a core imperative.
Cboe is committed to applying our Equal Employment Opportunity Policy to all employment practices that impact the terms and conditions of employment including, but not limited to, hiring, evaluation, discipline, promotion, training, compensation, transfer, and termination. Actively nurturing and maintaining an inclusive culture at Cboe is a core imperative.
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.
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.
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.
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, 2024. This description contains forward-looking statements that involve risks and uncertainties.
As part of the regulatory program, each of our Exchanges and CFE have rules pertaining to their respective disciplinary processes. U.S. Regulatory Agreements The Exchanges and CFE have entered into agreements under which third parties have agreed to perform regulatory functions on behalf of our markets (e.g., RSAs).
As part of the regulatory program, each of our Exchanges and CFE have rules pertaining to their respective disciplinary processes. U.S. Regulatory Agreements The Exchanges and CFE have entered into agreements under which third parties have agreed to perform regulatory functions on behalf of our markets (e.g., regulatory services agreements).
Data and Access Solutions The Data and Access Solutions business provides an offering of market data and information solutions products across multiple asset classes and geographic regions that are designed to suit our customers’ diverse needs. The Data and Access Solutions business consists of three product groups: ● Market Data and Access Services.
Cboe Data Vantage The Cboe Data Vantage business provides an offering of market data and information solutions products across multiple asset classes and geographic regions that are designed to suit our customers’ diverse needs. The Cboe Data Vantage business consists of three product groups: • Market Data and Access Services.
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.
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. Australian Securities Industry Cboe Australia is subject to comprehensive regulation and oversight by ASIC.
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.
Previously, she was Executive Vice President, Global Head of Cboe Data Vantage (f/k/a 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.
The Futures segment includes transaction services provided by CFE, a fully electronic futures exchange, which includes offerings for trading of VIX futures and other futures products, the licensing of proprietary market data, as well as access and capacity services. ● Global FX.
The Futures segment includes transaction services provided by CFE, a fully electronic futures exchange, which includes offerings for trading of VIX futures and other futures products, the licensing of proprietary market data, as well as access and capacity services.
We expect that the disaster recovery facilities can be up and running in a short period of time and in certain instances we work with our market participants to try to quickly reopen marketplaces.
We expect that, in certain instances, the disaster recovery facilities can be up and running in a short period of time and in certain instances we may also work with our market participants to try to quickly reopen marketplaces.
However, there are review clauses contained in the legislation which provide a further opportunity to review the effectiveness of the transparency regime, at which point, potential changes may have a material adverse effect on our business, financial condition and operating results. See “Risk Factors” for more information. 21 Table of Contents Compliance U.S.
However, there are review clauses contained in the legislation which provide a further opportunity to review the effectiveness of the transparency regime, at which point, potential changes may have a material adverse effect on our business, financial condition, and operating results. See “Risk Factors” for more information. Compliance 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.
Regulatory Environment and Compliance Various aspects of our business are subject to regulation by the SEC, CFTC, FINRA, 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.
The VIX Index (as defined below), although not directly tradable, is based on the mid-point of real-time 11 Table of Contents quotes of SPX options and is designed to reflect investors’ consensus view of future 30-day expected stock market volatility. The VIX Index methodology provides the basis for the creation of VIX options and futures.
The VIX Index (as defined below), although not directly tradable, is based on the mid-point of real-time quotes of SPX options and is designed to reflect investors’ consensus view of future 30-day expected stock market volatility. The VIX Index methodology provides the basis for the creation of VIX options and futures.
Moreover, even in the largely unregulated spot FX market, this movement towards additional trading standards and norms is highlighted by the publication of the FX Global Code in 2017 by the Global Foreign Exchange Committee, reflecting principles of good conduct for the wholesale FX market, and whose publication may lead to additional oversight in the global FX market.
Moreover, even in the largely unregulated spot FX market, this movement towards additional trading standards and norms is highlighted by the publication of the FX Global Code in 2017 by the Global Foreign Exchange Committee, and re-affirmed in 2021, reflecting principles of good conduct for the wholesale FX market, and whose publication may lead to additional oversight in the global FX market.
As a designated contract market, Cboe Digital Exchange is required to comply with the applicable core principles and regulations under the CEA, as is Cboe Clear Digital as a derivatives clearing organization.
As a designated contract market, Cboe Digital Exchange is required to comply with the applicable core principles and regulations under the CEA, as is Cboe Clear U.S. as a derivatives clearing organization.
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.
Cboe Europe Equities and Derivatives utilize the same state-of-the-art, real-time surveillance system that is used in 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.
The approved CAT Funding Model contemplates two categories of CAT fees calculated based on the “executed equivalent shares” of transactions in eligible securities: (i) CAT fees assessed by CATLLC to Industry Members who are CAT Executing Brokers (the brokers responsible for executing each side of the transaction) to recover a portion of historical CAT costs previously paid to CATLLC by the Plan Participants; and (ii) CAT fees assessed by CATLLC to CAT Executing Brokers and Plan Participants to fund prospective CAT costs.
The approved CAT Funding Model contemplates two categories of CAT fees calculated based on the “executed equivalent shares” of transactions in eligible securities: (i) CAT fees assessed by CATLLC to Industry Members who are CAT Executing Brokers (the brokers responsible for executing each side of the transaction) to recover a portion of historical CAT costs previously funded by monies loaned to CATLLC by the Plan Participants; and (ii) CAT fees assessed by CATLLC to CAT Executing Brokers and Plan Participants to fund prospective CAT costs.
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.
Cboe Digital does not maintain any digital assets, 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 U.S. maintains its own operating funds in separate bank accounts from its customer funds.
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
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. 28 Table o f Contents
Cboe Trading is a routing broker-dealer used by our four U.S. equities exchanges and our four U.S. options exchanges, including the electronic platform portion of Cboe Options. Cboe Trading’s clearing firms are Wedbush Securities, Inc. (“Wedbush”) and Morgan Stanley & Co. LLC (“Morgan Stanley”).
Cboe Trading is a routing broker-dealer used by our four U.S. equities exchanges and our four U.S. options exchanges, including the electronic platform portion of Cboe Options. Cboe Trading’s clearing firms are Wedbush Securities, Inc. (“Wedbush”) and Morgan Stanley & Co.
Although the new rules do not appear likely to have a near term material impact, the new rules may have a long term material impact on our business, financial condition and operating results if, for example, there is a reduction of overall volumes, liquidity, or market share on Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA.
Although the proposed new rules do not appear likely to have a potential near term material impact, the new rules, if adopted as-is, may have a long term material impact on our business, financial condition, and operating results if, for example, there is a reduction of overall volumes, liquidity, or market share on Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA.
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.
Employee Engagement and Pulse Surveys, Town Halls and an Open-Door Policy In 2024, Cboe conducted our seventh 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.
If Cboe Digital Exchange or Cboe Clear Digital fails to comply with applicable laws, rules or regulations, it may be subject to censure, fines, cease-and-desist orders, suspension of its business, removal of personnel or other sanctions, including revocation of Cboe Digital Exchange’s designation as a contract market or Cboe Clear Digital’s designation as a derivatives clearing organization.
If Cboe Digital Exchange or Cboe Clear U.S. fails to comply with applicable laws, rules or regulations, it may be subject to censure, fines, cease-and-desist orders, suspension of its business, removal of personnel or other sanctions, including revocation of Cboe Digital Exchange’s designation as a contract market or Cboe Clear U.S.’s designation as a derivatives clearing organization.
The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”).
The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, including exchange traded funds, exchange traded notes, and exchange traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”).
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.
As of December 31, 2024, our four options exchanges compete with 14 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.
Digital Assets Cboe Digital Exchange is a designated contract market, and Cboe Clear Digital is a derivatives clearing organization, each of which is subject to the oversight of the CFTC and to a variety of ongoing regulatory and reporting responsibilities under the CEA.
Digital Assets Cboe Digital Exchange is a CFTC-registered designated contract market, and Cboe Clear U.S. is a CFTC-registered derivatives clearing organization, each of which is subject to the oversight of the CFTC and to a variety of ongoing regulatory and reporting responsibilities under the CEA.
The segment includes transaction services for U.S. government securities executed on the Cboe Fixed Income fully electronic trading platform. ● Digital. 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.
The segment includes transaction services for U.S. government securities executed on the Cboe Fixed Income fully electronic trading platform. • Digital. The Digital segment includes a regulated futures exchange (Cboe Digital Exchange) and a regulated clearinghouse (Cboe Clear U.S.), as well as revenue generated from the licensing of proprietary market data and from access and capacity services.
Adam Inzirillo . Mr. Inzirillo is our Executive Vice President, Global Head of Data and Access Solutions, a position he has held since October 2023. Previously, he served as Senior Vice President, Head of North American Equities since 2020, and Senior Vice President, Head of U.S. Equities since September 2019. Prior to joining Cboe, Mr.
Inzirillo is our Executive Vice President, Global Head of Cboe Data Vantage (f/k/a Data and Access Solutions), a position he has held since October 2023. Previously, he served as Senior Vice President, Head of North American Equities since 2020, and Senior Vice President, Head of U.S. Equities since September 2019. Prior to joining Cboe, Mr.
Cboe Trading is considered a facility of each of the Exchanges and is subject to the rules of the Exchanges. The Exchanges are responsible for enforcing Cboe Trading’s compliance with their rules, including to ensure 24 Table of Contents Cboe Trading is not given preferential treatment.
Cboe Trading is considered a facility of each of the Exchanges and is subject to the rules of the Exchanges. The Exchanges are responsible for enforcing Cboe Trading’s compliance with their rules, including to ensure Cboe Trading is not given preferential treatment.
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.
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.
Cboe subsidiaries also serve collectively as a leading market globally for exchange-traded products (“ETPs”) listings and trading. ​ The graphic below provides a brief overview of Cboe’s history: ​ 8 Table of Contents Our Business ​ Cboe reports on the following six business segments: ● Options.
Cboe subsidiaries also serve collectively as a leading market globally for exchange-traded products (“ETPs”) listings and trading. The graphic below provides a brief overview of Cboe’s history: 7 Table o f Contents Our Business Cboe reports on the following six business segments: • Options.
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.
The North American Equities segment also includes corporate listing services on Cboe Canada Inc., ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, and 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 Clear Europe is also recognized as a foreign central counterparty in Switzerland, which allows it to provide services to Swiss Clearing Participants and SIX Swiss Exchange AG. Much of the UK and Dutch financial services regulation originates from the EU.
Cboe Clear Europe is also recognized as a foreign central counterparty in Switzerland, which allows it to provide services to Swiss Clearing Participants and SIX Swiss Exchange AG. Cboe NL is also subject to regulation by ESMA. Much of the UK and Dutch financial services regulation originates from the EU.
If the SEC does not grant extensions and finds that the SROs/Plan Participants did not satisfy the related last financial accountability milestone, it could result in the SROs/Plan Participants not being able to recover certain costs associated with this final sub-phase, which amount of unrecoverable costs may increase for additional delays.
If the SEC does not grant extensions and finds that the SROs/Plan Participants did not satisfy the related last financial accountability milestone, it could result in the SROs/Plan Participants not being able to recover certain amounts loaned to CATLLC to fund CAT costs associated with this final sub-phase, which the amount of unrecoverable costs may increase for additional delays.
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.
Prior to that, she served as Chief Executive Officer of Livevol, Inc. from 2013 to 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 the University of Colorado-Boulder. Stephanie Foley . Ms.
In addition, Cboe and its applicable subsidiaries operate separate trading and/or clearing platforms, as applicable, for BIDS Trading, certain Cboe Canada Inc. order books, Cboe Digital, Cboe Clear Europe, and Global FX. Our trading platforms have generally experienced very low operational downtime and low latency.
In addition, Cboe and its applicable subsidiaries operate separate trading and/or clearing platforms, as applicable, for BIDS Trading, certain Cboe Canada Inc. order books, Cboe Digital Exchange, Cboe Clear U.S., Cboe Clear Europe, and Cboe FX. Our trading platforms have generally experienced very low operational downtime and low latency.
The allowance for notes receivable credit losses associated with the CAT is calculated using a methodology that is primarily based on the structure of the notes and various potential outcomes under the CAT Funding Model. See Note 23 (“Commitments, Contingencies, and Guarantees”) for more information.
The allowance for notes receivable credit losses associated with the CAT is calculated using a methodology that is primarily based on the structure of the notes and various potential outcomes under the CAT Funding Model. See Note 23 ("Commitments, Contingencies, and Guarantees") for more information.
Mr. Tomczyk holds a B.S. degree in Applied Economics & Business Management from Cornell University and is a Fellow of the Institute of Chartered Accountants of Ontario. Catherine R. Clay . Ms. Clay is our Executive Vice President, Global Head of Derivatives, a position she has held since October 2023.
Mr. Tomczyk holds a B.S. degree in Applied Economics & Business Management from Cornell University and is a Fellow of the Institute of Chartered Accountants of Ontario. 26 Table o f Contents Catherine R. Clay . Ms. Clay is our Executive Vice President, Global Head of Derivatives, a position she has held since October 2023.
In addition, the Company operates Cboe Europe, one of the largest stock exchanges by value traded in Europe, and owns Cboe Clear Europe, a leading pan-European equities and derivatives clearinghouse, BIDS Holdings, which owns a leading block-trading ATS by volume in the U.S., and provides block-trading services with Cboe market operators in Europe, Canada, Australia, and Japan, Cboe Australia, an operator of trading venues in Australia, Cboe Japan, an operator of trading venues in Japan, Cboe Digital, an operator of a U.S. based digital asset spot market and a regulated futures exchange, Cboe Clear Digital, an operator of a regulated clearinghouse, and Cboe Canada Inc., a recognized Canadian securities exchange.
In addition, the Company operates Cboe Europe, one of the largest equities exchanges by value traded in Europe, and owns Cboe Clear Europe, a leading pan-European equities and derivatives clearinghouse, BIDS Holdings, which owns a leading block-trading ATS by volume in the U.S., and provides block-trading services with Cboe market operators in Europe, Canada, Australia, and Japan, Cboe Australia, an operator of trading venues in Australia, Cboe Japan, an operator of trading venues in Japan, Cboe Clear U.S., an operator of a regulated clearinghouse, and Cboe Canada Inc., a recognized Canadian securities exchange.
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.
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 strategic framework review, our ability to tap into the voice of our employees was critically important and we conducted a pulse survey to gauge sentiment.
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.
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 hybrid work to childcare and elder care, that our employees faced throughout 2024.
In addition, our data and access solutions face competition from other securities exchanges, technology companies, third-party market data providers, and information and software vendors, which have their own substantial market data distribution capabilities that serve as alternative means for receiving open market data feeds instead of connecting directly to our exchanges or trading venues.
In addition, Cboe Data Vantage faces competition from other securities exchanges, technology companies, third-party market data providers, and information and software vendors, which have their own substantial market data distribution capabilities that serve as alternative means for receiving open market data feeds instead of connecting directly to our exchanges or trading venues.
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.
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 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.
Also, see “Risk Factors” for more information regarding the consolidated data plan order. Cboe Options, C2, BZX, and EDGX are also parties to the Options Order Protection and Locked/Crossed Market Plan, which is designed to prohibit trade-throughs and avoid locked/crossed markets.
See “Risk Factors” for more information regarding the consolidated data plan order. 22 Table o f Contents Cboe Options, C2, BZX, and EDGX are also parties to the Options Order Protection and Locked/Crossed Market Plan, which is designed to prohibit trade-throughs and avoid locked/crossed 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. ● 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 the Cboe Global Indices Feed ("CGIF") 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: ◦ Data and Market Analytics.
The current UK regulatory system was established by the Financial Services Act 2012 (“FSA12”), which amended the Financial Services and Markets Act 2000. The legislation replaced the previous financial services regulator, the Financial Services Authority, with three new bodies: The Financial Policy Committee (“FPC”), The Prudential Regulation Authority, and the FCA.
The current UK regulatory system was established by the Financial Services Act 2012 (“FSA12”), which amended the Financial Services and Markets Act 2000. The legislation replaced the previous financial services regulator, the Financial Services 19 Table o f Contents Authority, with three new bodies: The Financial Policy Committee (“FPC”), The Prudential Regulation Authority, and the FCA.
The SEC, SROs and state securities commissions may conduct proceedings which can result in injunctions or other sanctions, censures, fines, the issuance of cease and desist orders or the suspension or expulsion of a broker-dealer, its officers or employees.
The SEC, SROs and state securities commissions may conduct proceedings which can result in injunctions or other sanctions, 20 Table o f Contents censures, fines, the issuance of cease and desist orders, or the suspension or expulsion of a broker-dealer, its officers, or employees.
This leadership training program has helped to expand on the development of our high potential leaders, further strengthening the leadership bench and accelerating readiness of this key talent pool. Cboe has held several succession planning discussions with the Compensation Committee and Board of Directors to plan for the fulfillment of essential roles, such as the CEO and other senior officers.
This leadership training program has helped to expand on the development of our high potential leaders, further strengthening the leadership bench and accelerating readiness of this key talent pool. 25 Table o f Contents Cboe has held multiple succession planning discussions with the Compensation Committee and Board of Directors to plan for the fulfillment of essential roles, such as the CEO and other senior officers.
While the global FX market has experienced a shift from competing interbank platforms to ECNs, the electronification of the spot and NDF FX market may encounter resistance from customers that still prefer to utilize the phone, instant chats, terminals and key banking relationships for price discovery and trading.
While the global FX market has experienced a shift from competing interbank platforms to ECNs, the electronification of the spot and NDF FX market may encounter resistance from customers that still prefer to utilize the phone, instant chats, terminals and key banking relationships for price discovery and trading. Furthermore, levels of electronification of the FX market have remained relatively static.
We have the exclusive right to offer exchange-listed options contracts in the United States on the S&P 500 Index, the S&P 100 Index, the S&P 500 ESG Index, and the S&P Select Sector Indices as a result of a licensing arrangement with S&P Dow Jones Indices, LLC (“S&P”).
We have the exclusive right to offer exchange-listed options contracts in the United States on the S&P 500 Index, the S&P 100 Index, the S&P 500 ESG Index, and the S&P Select Sector Indices as a result of a licensing arrangement with S&P.
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.
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 listed options industry is extremely competitive.
Order and trade data is required to be reported to the CAT central repository the following day by each SRO (a “Plan Participant”) and broker-dealer (an “Industry Member”), along with certain customer and account information by each Industry Member.
Order and trade data is required to be reported to the CAT central repository the following day by each SRO/Plan Participant and broker-dealer (an “Industry Member”), along with certain customer and account information by each Industry Member.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 16 (“Segment Reporting”) in the notes to our consolidated financial statements for discussion of revenues and certain operational and financial metrics, and operating income (or loss) by business segment. Certain activities within our segments operate globally.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, Note 4 ("Revenue Recognition"), and Note 16 ("Segment Reporting") in the notes to our consolidated financial statements for discussion of revenues and certain operational and financial metrics, and operating income (or loss) by business segment. Certain activities within our segments operate globally.
We also offer zero days to expiry (0-DTE) products, Mini- and Nano-SPX options, FLEX- and FLEX micro-SPX options, and SPX Weeklys options, which have settlements on Mondays, Tuesdays, Wednesdays, Thursdays, Fridays and on the last trading day of each month and 24x5 trading in SPX options.
We also offer zero days to expiry (0-DTE) products, Long Term Equity AnticiPation Securities (LEAPs), Mini- and Nano-SPX options, FLEX- and FLEX micro-SPX options, and SPX Weeklys options, which have settlements on Mondays, Tuesdays, Wednesdays, Thursdays, Fridays and on the last trading day of each month and 24x5 trading in SPX options.
Isaacson ​ 45 ​ Executive Vice President, Chief Operating Officer Patrick Sexton ​ 59 ​ Executive Vice President, General Counsel and Corporate Secretary Allen Wilkinson ​ 36 ​ Senior Vice President, Chief Accounting Officer ​ Fredric J. Tomczyk. Mr. Tomczyk is our current Chief Executive Officer and director. He has served as our CEO since September 2023. Mr.
Isaacson 46 Executive Vice President, Chief Operating Officer Patrick Sexton 60 Executive Vice President, General Counsel and Corporate Secretary Allen Wilkinson 37 Senior Vice President, Chief Accounting Officer Fredric J. Tomczyk. Mr. Tomczyk is our current Chief Executive Officer and director. He has served as our CEO since September 2023. Mr.
In addition to our ongoing offering of online courses on diverse topics through our corporate university, CboeU, employees can participate in the CboeLearns hybrid program focused on virtual classroom instruction combined with work application and CboeLive, which is focused on business topics to foster organizational-wide knowledge sharing and education. Leadership is another critical element of our success at Cboe.
In addition to our ongoing offering of online courses on diverse topics through our corporate university, CboeU, employees can participate in our "Strive for Growth" programs focused on virtual classroom instruction combined with work application and CboeLive, which is focused on business topics to foster organizational-wide knowledge sharing and education. Leadership is another critical element of our success at Cboe.
We use market data from the trading of the MSCI EAFE and MSCI Emerging Markets index options (among other inputs) to calculate volatility indices and several versions of BuyWrite and PutWrite strategy indices.
We use 12 Table o f Contents market data from the trading of the MSCI EAFE and MSCI Emerging Markets index options (among other inputs) to calculate volatility indices and several versions of BuyWrite and PutWrite strategy indices.
(acquired by S&P Global in 2022), we have a worldwide license through August 23, 2025 to offer options and futures on indices designed to reflect values of investment grade and high-yield U.S. corporate bonds. Unless either party elects otherwise, this agreement auto-renews for successive two-year periods.
We have a worldwide license through August 22, 2025 to offer futures, options, and options on futures on indices designed to reflect values of investment grade and high-yield U.S. corporate bonds. Unless either party elects otherwise, this agreement auto-renews for successive two-year periods.
OTC Derivatives, Central Counterparties and Trade Repositories Regulation (EU) No 648/2012 of the European Parliament and of the Council of July 4, 2012 on OTC derivatives, central counterparties and trade repositories (the “European Market Infrastructure Regulation” or “EMIR”) sets out rules relating to over-the-counter (“OTC”) derivatives markets, central counterparties and trade repositories.
See “Risk Factors” for more information. Europe OTC Derivatives, Central Counterparties and Trade Repositories Regulation (EU) No 648/2012 of the European Parliament and of the Council of July 4, 2012 on OTC derivatives, central counterparties and trade repositories (the “European Market Infrastructure Regulation” or “EMIR”) sets out rules relating to over-the-counter (“OTC”) derivatives markets, central counterparties and trade repositories.
Following the publication of the FX Global Code regulators are taking a new look at the spot FX market, and any decision to impose new regulations may affect our spot FX business line.
Following the publication of the FX Global Code regulators continue to take a closer look at the spot FX market, and any decision to impose new regulations may affect our spot FX business line.
Human Capital Management Cboe has a robust human capital management program in place focused on equal opportunities including diversity, equity and inclusion (“DEI”), performance and career development, health and well-being, comprehensive benefits, training, talent acquisition, and succession planning.
Human Capital Management Cboe has a robust human capital management program in place focused on equal opportunities including performance and career development, talent management, health and well-being, inclusivity, culture, comprehensive benefits, training, talent acquisition, and succession planning.
Each of Cboe Digital Exchange and Cboe Clear Digital has surveillance and regulatory operations and procedures to monitor and enforce compliance by trading privilege holders with Cboe Digital Exchange rules, and by participants with Cboe Clear Digital rules.
Each of Cboe Digital Exchange and Cboe Clear U.S. has surveillance and regulatory operations and procedures to monitor and enforce compliance by trading privilege holders with Cboe Digital Exchange rules, and by clearing members with Cboe Clear U.S. rules.
Equal Opportunity, Diversity, and Pay Equity Cboe believes in a culture of diversity and inclusion that promotes creativity, collaboration and innovation, which is critical to the success of our business and defining the markets of tomorrow.
Equal Opportunity and Inclusion Cboe believes in an inclusive culture that promotes creativity, collaboration and innovation, which is critical to the success of our business and defining the markets of tomorrow.
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.
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 (“Tick Size/Access Fee Cap”); (3) Regulation Best Execution; and (4) Proposed Rule to Enhance Order Competition.
We use the market data from the trading of options on the S&P 500 Index and S&P 100 Index for the creation of Cboe volatility indices, such as the Cboe Volatility Index (“VIX Index”), and to create tradable products on those volatility indices . o IHS Markit. Under our licensing agreement with IHS Markit Ltd.
We use the market data from the trading of options on the S&P 500 Index and S&P 100 Index for the creation of Cboe volatility indices, such as the Cboe Volatility Index (“VIX Index”), and to create tradable products on those volatility indices . ◦ Markit Indices.
Access to our markets and trading rights and privileges depend upon the nature of the customer, such as whether the individual or firm is (or is eligible to become) a trading permit holder, trading privilege holder, member, participant, or subscriber of one of our markets. Competition The industry in which we operate is intensely competitive.
Access to our markets and trading rights and privileges depend upon the nature of the customer, such as whether the individual or firm is (or is eligible to become) a trading permit holder, trading privilege holder, member, participant, or subscriber of one of our markets.
If the SEC were to determine any financial accountability milestone was not met, it may limit the SROs’/Plan Participants’ recovery of certain costs.
If the SEC were to determine any financial accountability milestone was not met, it may limit the SROs’/Plan Participants’ recovery of certain loans previously advanced to CATLLC to fund CAT costs.
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.
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 MiFIR and Directive 2014/65/EU on markets in financial instruments (“MiFID II”). The legislative phase of the review is now complete and revised MiFIR rules came into effect on March 28, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSummary 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.
Biggest changeSummary 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; • factors that impact the quality and integrity of our and other applicable indices; • our ability to manage our global operations, 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 our clearinghouses; • 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 our business interests and our regulatory responsibilities; • the loss of key customers or a significant reduction in trading or clearing volumes by key customers; • 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; and • litigation risks and other liabilities.
We run the risk that our TPHs, members, participants, other persons who use our markets or our products, other persons for whom we clear transactions, our employees or those with which we have business relationships may engage in fraud, market or product manipulation, or other misconduct, which could result in regulatory and legal sanctions and penalties and serious harm to our reputation, especially because we are the parent company of SROs.
We run the risk that our TPHs, members, participants, other persons who use our markets or our products, other persons for whom we clear transactions, our employees or those with which we have business relationships may engage in fraud, market or product manipulation, or other misconduct, which could result in regulatory and legal sanctions and penalties and serious harm to our reputation, especially because we are the parent company of SROs and other markets.
These regulations and other emerging regulatory regimes around the world may impact international customers’ interest in or ability to trade index-based products listed on our U.S. exchanges, as well as impact our expansion into foreign trading of our index-based products and our ability to license proprietary indices for use outside of the U.S.
These regulations and other potential emerging regulatory regimes around the world may impact international customers’ interest in or ability to trade index-based products listed on our U.S. exchanges, as well as impact our expansion into foreign trading of our index-based products and our ability to license proprietary indices for use outside of the U.S.
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 €1.20 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.
Our indebtedness may also increase future borrowing costs, and the covenants pertaining thereto may also limit our ability to repurchase shares of our common stock, increase dividends or obtain additional financing to fund working capital, capital expenditures, acquisitions or general corporate requirements.
Our indebtedness may also increase future borrowing costs, and the covenants pertaining thereto may also limit our ability to repurchase shares of our common stock, issue dividends, increase dividends or obtain additional financing to fund working capital, capital expenditures, acquisitions or general corporate requirements.
We compete with a number of entities on several different fronts, including the cost, quality and speed of our trade execution, functionality and ease of use of our trading and clearing platforms, range of our products and services, our technological innovation and adaptation and our reputation.
We compete with a number of entities and markets on several different fronts, including the cost, quality and speed of our trade execution, functionality and ease of use of our trading and clearing platforms, range of our products and services, our technological innovation and adaptation and our reputation.
Management of legal, compliance, and regulatory risk, among other risks, requires policies and procedures to properly monitor and manage risk. Additionally, as we continue to integrate the technology, associates, and processes of recent acquisitions, we may not be able to identify additional risks.
Management of legal, compliance, and regulatory risk, among other risks, requires policies and procedures to properly monitor and manage risk. Additionally, as we continue to integrate the technology, associates, and processes of acquisitions, we may not be able to identify additional risks.
We believe that demand for our products is based in part on market perception of the quality and integrity of these indices. The quality and integrity of these indices are dependent on the ability of index providers, including us, to maintain the index.
We believe that demand for our products is based in part on market perception of the quality and integrity of these indices. The quality and integrity of these indices are dependent on the ability of index providers, including us, to properly maintain the indices.
Treasuries, or new geographies; ● security breaches, including any unauthorized delivery of proprietary data to third parties; ● management of our outsourcing relationships, including our relationship with FINRA and NFA; ● any misconduct or fraudulent activity by our employees, especially senior management, or other persons formerly or currently associated with us; ● our listings business and our enforcement of our listing rules; and ● any negative publicity surrounding the ETPs that we serve as the listing destination.
Treasuries, or new geographies; • security breaches, including any unauthorized delivery of proprietary data to third parties; • management of our outsourcing relationships, including our relationship with FINRA and NFA; • any misconduct or fraudulent activity by our employees, especially senior management, or other persons formerly or currently associated with us; • our listings business and our enforcement of our listing rules; and • any negative publicity surrounding the corporate equities or ETPs that we serve as the listing destination.
Further, in 2018, the EU implemented the EU Benchmark Regulation, which regulates users, data providers and calculators of benchmarks (“administrators”) in the EU, and among other things (subsequent to the transitional period applicable to third country benchmark administrators) prohibits use of benchmarks provided by administrators outside the EU in connection with EU financial instruments unless the administrator is deemed to be subject to an EU equivalent regulatory regime or the benchmark is endorsed or recognized in the EU.
In 2018, the EU implemented the EU Benchmark Regulation, which regulates users, data providers and calculators of benchmarks (“administrators”) in the EU, and among other things (subsequent to the transitional period applicable to third country benchmark administrators) currently prohibits use of benchmarks provided by administrators outside the EU in connection with EU financial instruments unless the administrator is deemed to be subject to an EU equivalent regulatory regime or the benchmark is endorsed or recognized in the EU.
In recent years, certain industry groups have objected to the ability of exchanges to charge for certain market data products. In addition, the SEC and some media have scrutinized market data and market access.
In recent years, certain industry groups have objected to the ability of exchanges to charge for certain market data products. In addition, the SEC and some media have scrutinized market data and market access products and fees.
The SEC and CFTC have broad powers to audit, investigate and enforce compliance and to punish noncompliance by, as applicable, SROs, DCMs and SEFs pursuant to applicable laws, rules and regulations.
The SEC and CFTC have broad powers to audit, investigate and enforce compliance and to punish noncompliance by, as applicable, SROs, DCOs, DCMs and SEFs pursuant to applicable laws, rules and regulations.
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.
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.
If any of our index providers, including us, are unable to maintain the quality and integrity of indices, or if any of the index providers or service providers, including us, fail to perform their obligations under the agreements, trading in these products, and therefore transaction fees we receive, may be materially adversely affected or we may not receive the financial benefits of the agreements that we negotiated.
If any of our index providers, including us, are unable to maintain the quality and integrity of indices, or if any of the index providers or service providers, including us, fail to perform their obligations under the agreements, trading in derivative products, and therefore transaction fees we receive, may be materially adversely affected or we may not receive the financial benefits of the agreements that we negotiated.
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.
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 non-transaction fee trading from time to time, per various fee schedules across our equities exchanges.
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.
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 U.S. decrease, we are likely to see a decrease in fees.
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.
As discussed above, the implementation of MDIR or the equity market structure rules and 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.
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.
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.
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.
As of December 31, 2024 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 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.
As a result of the Company’s annual impairment analysis, completed in the fourth quarter of 2024, 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.
We depend on a number of service providers, including clearing organizations such as OCC, NSCC, DTC, CDS, LCH, Cboe Clear Europe, and Cboe Clear Digital, our wholly-owned subsidiaries, JSCC, ASX Clear Pty Ltd, and SIX x-clear; securities information processors such as the CTA, UTP Securities Information Processor and OPRA; regulatory and other service providers such as FINRA and OCC; the hosts of our data and disaster recovery centers; and various vendors of communications and networking products and services.
We depend on a number of service providers, including clearing organizations such as OCC, NSCC, DTC, CDS, LCH, Cboe Clear Europe, and Cboe Clear U.S., our wholly-owned subsidiaries, JSCC, ASX Clear Pty Ltd, and SIX x-clear; securities information processors such as the CTA, UTP Securities Information Processor and OPRA; regulatory and other service providers such as FINRA and OCC; the hosts of our data and disaster recovery centers; and various vendors of communications and networking products and services.
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.
No guarantee can be given that the collateral or other assets 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 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.
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 an index provider from which we have a license or a service provider with respect to proprietary products fails to maintain the quality and integrity of their indices or fails to perform under our agreements with them, if we fail to maintain the quality and integrity of our proprietary indices or indices and other values that we calculate as an index provider, or if customer preferences change, the revenues that are generated from the trading of proprietary products or the calculation and dissemination of index values may suffer.
If an index provider from which we have a license or a service provider with respect to proprietary products fails to maintain the quality and integrity of their indices or fails to perform under our agreements with them, if we fail to maintain the quality and integrity of our proprietary indices or indices and other values that we calculate for customers, or if customer preferences change, the revenues that are generated from the trading of proprietary products or the calculation and dissemination of index values may suffer.
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.
As the parent company for SROs, other markets, and clearinghouses, 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 clearinghouses. We have methods to identify, monitor and manage our risks.
Further under the CEA, CFE, Cboe SEF and Cboe Digital Exchange may be subject to litigation alleging that they have acted in bad faith. We also could be exposed to liability to regulators or other governmental authorities even in situations where immunity would bar a civil claim.
Further under the CEA, CFE, Cboe SEF, Cboe Clear U.S. and Cboe Digital Exchange may be subject to litigation alleging that they have acted in bad faith. We also could be exposed to liability to regulators or other governmental authorities even in situations where immunity would bar a civil claim.
Further, on October 18, 2023, the SEC released the Volume Based Proposal and, although the new rules do not appear likely to have a near term material impact, the new rules may have a long term material impact on our business, financial condition and operating results if, for example, there is a reduction of overall volumes, liquidity, or market share on Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA.
Further, on October 18, 2023, the SEC released the Volume Based Proposal and, although the proposed new rules do not appear likely to have a potential near term material impact, the new rules, if adopted as-is, may have a long term material impact on our business, financial condition, and operating results if, for example, there is a reduction of overall volumes, liquidity, or market share on Cboe’s equities exchanges, BZX, BYX, EDGX, and EDGA.
For example, we are subject to on-going legal disputes that could result in the payment of fines, penalties or damages and could expose us to additional liability in the future.
For example, we are subject to on-going legal and tax disputes that could result in the payment of fines, interest, penalties or damages and could expose us to additional liability in the future.
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.
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 methodology that provides the basis for VIX options and futures.
We are not aware of any of these vulnerabilities having a material impact on our business, financial condition or operating results to date. However, we cannot provide assurance that any future vulnerabilities, internal control weaknesses, or events that 39 Table of Contents may be experienced will not be material.
We are not aware of any of these vulnerabilities having a material impact on our business, financial condition or operating results to date. However, we cannot provide assurance that any future vulnerabilities, internal control weaknesses, or events that may be experienced will not be material.
Our ability to comply with applicable laws and rules is largely dependent on the establishment and maintenance of appropriate systems and procedures, our ability to attract and retain qualified personnel, the ability of FINRA and OCC to perform under their respective RSAs, the ability of FINRA and OCC to transition to us any other potential responsibilities under their respective RSAs, our ability to complete the new additional responsibilities for regulating our TPHs and members and our oversight of the work done by FINRA and OCC.
Our ability to comply with applicable laws and rules is largely dependent on the establishment and maintenance of appropriate systems and procedures, our ability to attract and retain qualified personnel, the ability of FINRA and OCC to perform under their respective regulatory services agreements, the ability of FINRA and OCC to transition to us any other potential responsibilities under their respective regulatory services agreements, our ability to complete the new additional responsibilities for regulating our TPHs and members and our oversight of the work done by FINRA and OCC.
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.
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, but not limited to, tariffs, changes in government fiscal and monetary policy, or 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 indices, such as the S&P 500 index, or 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 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.
The FX Global Code was published in 2017, and re-affirmed in 2021, 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.
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.
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.
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.
Furthermore, our competitors may succeed in developing, offering and providing a market for the trading of index-based or volatility products, such as new options products on indices or ETFs, that are economically similar to those that we offer and they may become successful and take away volume from our products.
OCC, our clearinghouse for U.S. options and futures, is recognized as a third country CCP by the EU and is currently operating under the UK’s temporary recognition regime. Although the UK has not issued any equivalency determination with respect to U.S. CCPs, OCC has submitted its application for permanent recognition in the UK.
OCC is recognized as a third country CCP by the EU and is currently operating under the UK’s temporary recognition regime. Although the UK has not issued any equivalency determination with respect to U.S. CCPs, OCC has submitted its application for permanent recognition in the UK.
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.
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 businesses 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; 38 Table o f Contents • 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 SFT or U.S.
While we have experienced in the past, and we expect to continue to experience, cybersecurity threats and events of varying degrees, we are not aware of any of these threats or events having a material impact on our business, financial condition or operating results to date, however we cannot assure you that we will not experience future threats or events that may be material.
While we have experienced in the past, and we expect to continue to experience, cybersecurity threats and events of varying degrees, including events impacting personally identifiable information, we are not aware of any of these threats or events having a material impact on our business, financial condition or operating results to date, however we cannot assure you that we will not experience future threats or events that may be material.
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.
The President 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.
Any of these factors, individually or collectively, could have a material adverse effect on our business, financial condition and operating results by causing a substantial decline in the financial services markets and reducing trading and clearing volumes and demand for market data. Our business may be adversely affected by price competition.
Any of these factors, individually or collectively, could have a material adverse effect on our business, financial condition, and operating results by causing a substantial decline in the financial services markets and reducing trading and clearing volumes and demand for market data. 30 Table o f Contents Our business may be adversely affected by price competition.
In addition, although such collateral is preferably held in European central banks, Cboe Clear Europe also holds collateral in central securities depositories and commercial banks, which can expose us to risk of default by those institutions, and invests cash collateral in accordance with its investment policy, such as in securities issued by pre-approved sovereign issuers and reverse repurchase agreements with overnight maturities, which expose us to risk of counterparty default which may result in losses and cause its clearing participants to lose confidence in our clearinghouse.
In addition, although such collateral is preferably held in European central banks, Cboe Clear Europe also holds collateral in central securities depositories, in particular in the case of other assets for SFT, and commercial banks, which can expose us to risk of default by those institutions, and invests cash collateral in accordance with its investment policy, such as in securities issued by pre-approved sovereign issuers and reverse repurchase agreements with overnight maturities, which expose us to risk of counterparty default which may result in losses and cause its clearing participants to lose confidence in our clearinghouse.
We may not be able to refinance any of our indebtedness on commercially reasonable terms, or at all.
We may not be able to refinance any of our indebtedness on commercially favorable terms, or at all.
Under Section 203 of the Delaware General Corporation Law, a Delaware corporation may not engage in any merger or other business combination with an interested stockholder for a period of three years following the date that the stockholder became an interested stockholder except in limited circumstances, including by approval of the corporation’s Board of Directors.
Under Section 203 of the Delaware General Corporation Law, a Delaware corporation may not engage in any merger or other business combination with an interested stockholder 47 Table o f Contents for a period of three years following the date that the stockholder became an interested stockholder except in limited circumstances, including by approval of the corporation’s Board of Directors.
Moreover, if we were unable to obtain required licenses, we may not be able to redesign our products, services or technologies to avoid infringement, which could materially adversely affect our business, financial condition and operating results. Misconduct by our TPHs, members, participants or others could harm us.
Moreover, if we 43 Table o f Contents were unable to obtain required licenses, we may not be able to redesign our products, services or technologies to avoid infringement, which could materially adversely affect our business, financial condition, and operating results. Misconduct by our TPHs, members, participants or others could harm us.
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.
Changes in regulation by the SEC, CFTC, FCA, 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.
This facility is expected to terminate on June 28, 2024 and we may not be able to enter into a replacement facility on commercially reasonable terms, or at all. Additionally, investment losses in excess of capital set aside by Cboe Clear Europe for counterparty risk are allocated back to clearing participants.
This facility is expected to terminate on June 27, 2025 and we may not be able to enter into a replacement facility on commercially favorable terms, or at all. Additionally, investment losses in excess of capital set aside by Cboe Clear Europe for counterparty risk are allocated back to clearing participants.
Maintenance includes ongoing index calculation, index rebalancing and dependance on index providers for a number of things, including the provision of index data. We also rely on index providers to enforce intellectual property rights against unlicensed uses of the indices and uses of the indices that infringe on our licenses.
Maintenance includes ongoing index calculation and index rebalancing, and depends on data providers for a number of things, including the timely provision of accurate input data. We also rely on index providers to enforce intellectual property rights against unlicensed uses of the indices and uses of the indices that infringe on our licenses.
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.
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, and service provider, market participant or 32 Table o f Contents third-party disruptions or security breaches.
Risks associated with the operation of Cboe Clear Digital include failing to meet strict business continuity requirements and regulatory oversight, risks of default by clearing members and counterparties due to bankruptcy, lack of liquidity, operational failure or other reasons.
Risks associated with the operation of Cboe Clear U.S. include failing to meet strict business continuity and financial resources requirements and regulatory oversight, risks of default by clearing members and counterparties due to bankruptcy, lack of liquidity, operational failure or other reasons.
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 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.
We and our licensors may not be able to prevent third parties from copying, or otherwise obtaining and using, our intellectual property without authorization, listing our proprietary or exclusively-licensed index products without licenses or otherwise infringing on our rights.
We and our licensors may not be able to prevent third parties from copying, or 36 Table o f Contents otherwise obtaining and using, our intellectual property without authorization, listing our proprietary or exclusively-licensed index products without licenses or otherwise infringing on our rights.
With respect to trades in digital assets occurring on Cboe Digital Exchange, we deliver matched trades of our customers to Cboe Clear Digital, which acts as a central counterparty on all transactions occurring on Cboe Digital Exchange and, as such, guarantees clearance and settlement of all of those matched spot and futures trades.
With respect to trades in digital asset futures occurring on Cboe Digital Exchange, we deliver matched trades of our customers to Cboe Clear U.S., which acts as a central counterparty on all transactions occurring on Cboe Digital Exchange and, as such, guarantees clearance and settlement of all of those matched futures trades.
If this technology is unavailable, as a result of a number of potential causes, including technical failure, natural disasters, extreme weather events, fraud or security attacks that we cannot predict or prevent, and cannot be replaced in a sufficiently short time period, we may be unable to operate our markets. ● We utilize a third-party cloud service provider to maintain secondary offsite backups of our and our customers’ data and to distribute real-time data, and we may utilize third-party cloud service providers in the future for additional services.
If this technology is unavailable, as a result of a number of potential causes, including technical failure, failure to successfully complete technological migrations, natural disasters, extreme weather events, fraud or security attacks that we cannot predict or prevent, and cannot be replaced in a sufficiently short time period, we may be unable to operate our markets. 34 Table o f Contents • We utilize third-party cloud service providers to maintain secondary offsite backups of our and our customers’ data and to distribute real-time data, and we may utilize third-party cloud service providers in the future for additional services.
In addition to proposed tax changes that could affect our market participants, like other corporations, we are subject to taxes at federal, state and local levels, as well as in non-U.S. jurisdictions. More specifically, some jurisdictions where we operate are implementing Pillar 2 laws to effectuate a 15% minimum tax as of January 1, 2024.
In addition to proposed tax changes that could affect our market participants, like other corporations, we are subject to taxes at federal, state and local levels, as well as in non-U.S. jurisdictions. More specifically, some jurisdictions where we operate have implemented Pillar 2 laws to effectuate a 15% minimum tax.
Additionally, we may not be able to affect such actions, if necessary, on commercially reasonable terms, or at all. Any of the foregoing consequences could materially adversely affect our business, financial condition and operating results. Deterioration in our credit profile may increase our costs of borrowing money.
Additionally, we may not be able to affect such actions, if necessary, on commercially favorable terms, or at all. Any of the foregoing consequences could materially adversely affect our business, financial condition, and operating results. 46 Table o f Contents Deterioration in our credit profile may increase our costs of borrowing money.
In particular, 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.
In particular, 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.
Additionally, cyber threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence (“AI”) and quantum computing. Our increased adoption of remote working, usage of mobile and cloud-based technologies and amount of newly acquired companies and related integrations may increase our risk for a cybersecurity incident.
Additionally, cyber threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence (“AI”) and quantum computing. Our hybrid work environment, usage of mobile, AI and cloud-based technologies and amount of newly acquired companies and related integrations may increase our risk for a cybersecurity incident.
Furthermore, failure to successfully expand into new asset classes, such as the digital asset space or U.S. Treasuries, or new geographies may materially adversely affect our growth strategy and our future profitability. Our continued growth will require increased investment by us in technology, facilities, personnel, and financial and management systems and controls.
Furthermore, failure to successfully expand into new asset classes, such as SFT, or new geographies may materially adversely affect our growth strategy and our future profitability. Our continued growth will require increased investment by us in technology, facilities, personnel, and financial and management systems and controls.
Increased competition may result in a decline in our share of trading activity and a decline in our revenues from transaction and clearing fees and market data fees, thereby materially adversely affecting our operating results.
Increased competition may result in a decline in our share of trading activity and a decline 33 Table o f Contents in our revenues from transaction and clearing fees and market data fees, thereby materially adversely affecting our operating results.
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.
With respect to options, all contracts traded on our exchanges must be cleared through clearing members of OCC. As of December 31, 2024, there were 115 TPHs that are clearing members of OCC. Three clearing members accounted for approximately 79% of transaction and other fees collected through OCC in 2024.
Damage to our reputation could cause a reduction in the trading volume of our proprietary products or on our markets or cause us to lose customers. This, in turn, may have a material adverse effect on our business, financial condition and operating results. Financial or other problems experienced by third parties could have an adverse effect on our business.
Damage to our reputation could cause a reduction in the trading volume of our proprietary products or on our markets or cause us to lose customers. This, in turn, may have a material adverse effect on our business, financial condition, and operating results.
As a for-profit business with regulatory responsibilities, we are responsible for disciplining TPHs and members for violating our rules, including by imposing fines and sanctions. This may create a conflict of interest between our business interests and our regulatory responsibilities.
As a competitive business with regulatory responsibilities, we are responsible for disciplining TPHs and members for violating our rules, including by imposing fines and sanctions. This may create competing interests between our business interests and our regulatory responsibilities.
Any such fine or revocation of a license could have a material adverse effect on our business, financial condition and operating results. The Cboe Digital futures exchange and clearinghouse are regulated by the CFTC and subject to comprehensive regulation by the CFTC.
Any such fine or revocation of a license could have a material adverse effect on our business, financial condition, and operating results. The Cboe Digital futures exchange (Cboe Digital Exchange) and clearinghouse (Cboe Clear U.S.) are regulated by 41 Table o f Contents the CFTC and subject to comprehensive regulation by the CFTC.
In addition, our business, financial condition and operating results may be materially adversely affected if we cannot successfully develop, introduce and/or market new services and products or if we need to adopt costly and customized technology for our services and products. 40 Table of Contents Furthermore, new or existing competitors may: ● respond more quickly to competitive pressures; ● develop products that compete with our products or are preferred by our customers; ● offer products and services at prices below ours to gain market share and to promote other businesses; ● develop and expand their technology and service offerings more efficiently; ● provide better, more user-friendly and more reliable technology; ● develop and incorporate more quickly new technologies, such as AI, machine learning, blockchain, distributed ledger technology, quantum computing, tokenization, the cloud, and other emerging technologies; ● take greater advantage of acquisitions, alliances and other opportunities; ● market, promote, bundle and sell their products and services more effectively; ● leverage existing relationships with customers and alliance partners more effectively or exploit brand names to market and sell their services; and ● exploit regulatory disparities between traditional, regulated exchanges and alternative markets, including over-the-counter markets, that benefit from a reduced regulatory burden and lower-cost business model.
Furthermore, new or existing competitors may: • respond more quickly to competitive pressures; • develop products that compete with our products or are preferred by our customers; • offer products and services at prices below ours to gain market share and to promote other businesses; • develop and expand their technology and service offerings more efficiently; • provide better, more user-friendly and more reliable technology; • develop and incorporate more quickly new technologies, such as AI, machine learning, blockchain, distributed ledger technology, quantum computing, tokenization, the cloud, and other emerging technologies; • take greater advantage of acquisitions, alliances and other opportunities; • market, promote, bundle and sell their products and services more effectively; • leverage existing relationships with customers and alliance partners more effectively or exploit brand names to market and sell their services; and • exploit regulatory disparities between traditional, regulated exchanges and alternative markets, including over-the-counter markets, that benefit from a reduced regulatory burden and lower-cost business model.
More specifically: ● If OCC, NSCC, DTC, CDS, LCH, Cboe Clear Europe, Cboe Clear Digital, JSCC, ASX Clear Pty Ltd, and SIX x-clear were unable to perform clearing services for existing or new products, or their clearing members were unable or unwilling to clear through them, transactions could likely not occur on our markets or there may be delays, including until clearing is moved to another clearing agency.
More specifically: • If OCC, NSCC, DTC, CDS, LCH, Cboe Clear Europe, Cboe Clear U.S., JSCC, ASX Clear Pty Ltd, and SIX x-clear were unable to allow or perform clearing services for existing or new products, change the terms of their clearing services, their clearing members were unable or unwilling to clear through them, or OCC’s technology migration is not successful, fewer transactions could occur on our markets or transactions could likely not occur on our markets or there may be delays, including until clearing is moved to another clearing agency.
In the first event, we would be subject to multiple listing in the trading of what is now an index product traded by us on an exclusive basis, which could result in a loss of market share and negatively impact our profitability. In the second event, we could lose the right to list the index product entirely.
In the first event, we would be subject to multiple listing in the trading of what is now an index product traded by us on an exclusive basis, which could result in a loss of market share and negatively 29 Table o f Contents impact our profitability.
If the amount of our trading volume decreases, including as a result of the Volume Based Proposal proposed prohibition on volume-based agency tiers, or the mix traded shifts to our lower revenue per contract products, our revenues from transaction fees will most likely decrease.
If our equities trading volume decreases, including as a result of the Volume Based Proposal's proposed prohibition on volume-based agency tiers in the equities markets, or options trading volume shifts to our lower revenue per contract products, our revenues from transaction fees will most likely decrease.
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.
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 consequences; and • natural disasters and extreme weather events that may impact global operations differently.
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.
Differences in the calculations from methodologies described in published materials or incorrect calculations of our indices 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 35 Table o f Contents 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.
Our 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 trading of our exclusively listed proprietary products or 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.
Moreover, with extended trading hours, we must operate our systems longer and have fewer non-trading hours to address any potential concerns with the systems on which we rely. 37 Table o f Contents Our 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 trading of our exclusively listed proprietary products or 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.
For risks related to Cboe Digital see also below “Risks Relating to Our Cboe Digital Business.” In addition to the requirements related to operating our U.S. markets imposed by the SEC and the CFTC, we also have certain responsibilities for regulating the TPHs and members that trade on our Exchanges.
In addition to the requirements related to operating our U.S. markets imposed by the SEC and the CFTC, we also have certain responsibilities for regulating the TPHs and members that trade on our Exchanges.
We cannot assure you that the mitigating measures, policies, safeguards and risk management procedures will be sufficient to detect problems or to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.
We cannot assure you that the mitigating measures, policies, safeguards and risk management procedures will be sufficient to detect problems or to protect us from a default or that we will not be materially and adversely affected in the event of a significant default. Computer and communications systems failures and capacity constraints could harm our reputation and our business.
Should one of these clearing members or liquidity providers exit the business or withdraw from our options exchanges, impose additional market-maker financial requirements or if market-makers were unable to transfer to another clearing member or other liquidity providers were unable to provide additional liquidity, this could create a significant disruption to the options markets, including ours.
Should one of these clearing members or liquidity providers exit the business or withdraw from our options exchanges, impose additional market-maker financial requirements or if market-makers were unable to transfer to another clearing member or other liquidity providers were unable to provide additional liquidity, this could create a significant disruption to the options markets, including ours, which could result in lower volumes on our exchanges and thereby have a material impact on our business, financial condition, and operating results.
In addition, misconduct, or market or product manipulation by, or failures of, participants on our or other exchanges may discourage trading on our Exchanges or of our products, which could reduce revenues. Potential conflicts of interest between our for-profit status and our regulatory responsibilities may adversely affect our business.
In addition, misconduct, or market or product manipulation by, or failures of, participants on our or other markets may discourage trading on our Exchanges, our other markets, or of our products, which could reduce revenues. Managing our business interests and our regulatory responsibilities may adversely affect our business.
As of December 31, 2023, we had $647.9 million of senior unsecured notes due 2027, $494.8 million of senior unsecured notes due 2030, $296.4 million of senior unsecured notes due 2032, no funds outstanding under our revolving credit facility and no funds outstanding under the Cboe Clear Europe credit facility.
As of December 31, 2024, we had $648.6 million of senior unsecured notes due 2027, $495.5 million of senior unsecured notes due 2030, $296.9 million of senior unsecured notes due 2032, no funds outstanding under our revolving credit facility, and no funds outstanding under the Cboe Clear Europe Credit Facility.
See Note 8 (“Credit Losses”) and Note 9 (“Other Assets, Net”) for further information. ● We rely on third party routing and clearing firms to clear trades in U.S. listed equity securities routed by us to other markets, and to execute trades in options that we route to other markets.
See Note 8 ("Credit Losses"), Note 9 ("Other Assets, Net"), and Note 23 ("Commitments, Contingencies, and Guarantees — Legal Proceedings") for further information. • We rely on third party routing and clearing firms to clear trades in U.S. listed equity securities routed by us to other markets, and to execute trades in options that we route to other markets.
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.
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, competitors could create substantially similar volatility indices and products or list products based on Cboe volatility indices, which could have a material adverse effect on us.
We have also experienced, and we may also experience due to changes in administrations in the jurisdictions that we operate and 49 Table of Contents expansion into other asset classes, such as the digital asset space or U.S. Treasuries and geographies, an increase in rulemaking and legislation that could affect our business.
We have also experienced, and we may continue to experience due to changes in administrations in the jurisdictions that we operate and expansion into other asset classes, such as SFT, and geographies, an increase in rulemaking and legislation that could affect our business.
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.
We are subject to risks related to operating our European clearinghouse, Cboe Clear Europe, and Cboe Clear U.S., the clearinghouse through which we facilitate the clearing of cash-settled margin Bitcoin and Ether futures, 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.
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 and in the case of certain clearing participants with SFT without margin or default fund obligations, to grant Cboe Clear Europe title to or security over certain assets covering their obligations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, our internal audit team periodically engages third parties to co-source internal audits of our information security processes. We strive to utilize best practices in our information security management and follow applicable industry standards. 60 Table of Contents In support of our risk management framework, we maintain a vendor management policy and program to manage third-party risk.
Biggest changeWe engage assessors, consultants, auditors and other third parties in connection with developing and evaluating our overall risk management framework. Additionally, our internal audit team periodically engages third parties to co-source internal audits of our information security processes. We strive to utilize best practices in our information security management and follow applicable industry standards.
However, we are not aware of any of these threats or events having a material impact on our business or our business strategy, results of operations or financial condition results to date. We cannot assure you that we will not experience future threats or events that may be material.
However, we are not aware of any of these threats or events having a material impact on our business or our business strategy, results of operations or financial condition results to date. We cannot assure you that we will not experience future threats or events that may be material. Please also refer to the risk factors above for additional information.
The Risk Committee also reviews and approves any changes to the related information security and privacy program charter. Further, summaries of the proceedings from prior Risk Committee meetings are provided to the Board on a routine basis. ​ We have experienced in the past, and we expect to continue to experience, cybersecurity threats and events of varying degrees.
The Risk Committee also 48 Table o f Contents reviews and approves any changes to the related information security and privacy program charter. Further, summaries of the proceedings from prior Risk Committee meetings are provided to the Board on a routine basis.
He is currently responsible for oversight of the Company’s risk function including the enterprise risk management, information security, privacy, vendor management, and IT asset management programs. ​ Our incident response team is responsible for identifying potential cybersecurity incidents and communicating information regarding the nature and severity of the incident to senior management and others as required by the Company’s written Incident Response Plan.
Our incident response team is responsible for identifying potential cybersecurity incidents and communicating information regarding the nature and severity of the incident to senior management and others as required by the Company’s written Incident Response Plan. Cybersecurity incidents are tracked pursuant to our incident monitoring processes defined within the Incident Response Plan.
Embedded in our vendor management policy is a defined process to assess the risks related to new vendors. Vendors deemed to be high risk are re-assessed annually. These assessments include security questionnaires and reviews of Service Organization Controls (SOC) Reports, where applicable.
In support of our risk management framework, we maintain a vendor management policy and program to manage third-party risk. Embedded in our vendor management policy is a defined process to assess the risks related to new vendors. Vendors deemed to be high risk are re-assessed annually.
We have also put in place a vulnerability management program through which our systems are routinely scanned to help identify vulnerabilities and track remediation activities. ​ The Board recognizes that our business depends on the confidentiality, integrity, availability, performance, security, and reliability of our data and technology systems and devotes time and attention to the oversight of cybersecurity and information security risk.
The Board recognizes that our business depends on the confidentiality, integrity, availability, performance, security, and reliability of our data and technology systems and devotes time and attention to the oversight of cybersecurity and information security risk.
Our Chief Risk Officer’s tenure with Cboe spans 23 years, during which time he has held senior positions in information security and risk management.
Our Chief Risk Officer’s tenure with Cboe spans 24 years, during which time he has held senior positions in information security and risk management. He is currently responsible for oversight of the Company’s risk function including the enterprise risk management, information security, privacy, vendor management, and IT asset management programs.
Cboe uses a third-party service to help monitor the security posture of our vendors that process and/or store confidential Cboe information. ​ We have committees, response and management teams, and dedicated positions for managing and assessing cybersecurity risk, including a Chief Information Security Officer, a Chief Risk Officer, an Enterprise Risk Management Committee and a dedicated internal information security team.
We have committees, response and management teams, and dedicated positions for managing and assessing cybersecurity risk, including a Chief Information Security Officer, a Chief Risk Officer, an Enterprise Risk Management Committee, Computer Security Incident Response Team, Cyber Crisis Management Team, and a dedicated internal information security team.
In addition, the information technology systems of our self-regulatory organizations are subject to periodic reviews, audits, and inspections by regulatory authorities.
In addition, the information technology systems of our self-regulatory organizations are subject to periodic reviews, audits, and inspections by regulatory authorities. We also conduct diligence on cybersecurity practices in connection with our overall risk assessment when evaluating expansion into new regions, strategic opportunities, and new products.
Cybersecurity incidents are tracked pursuant to our incident monitoring processes defined within the Incident Response Plan. Potential cybersecurity incidents may also be reported to our Disclosure Committee to determine if further action and/or public disclosure is required.
Potential cybersecurity incidents may also be reported to our Disclosure Committee to determine if further action and/or public disclosure is required. We have also put in place a vulnerability management program through which our systems are routinely scanned to help identify vulnerabilities and track remediation activities.
Our Chief Information Security Officer and Chief Risk Officer have extensive experience in the industry. Our Chief Information Security Officer has over 20 years of experience leading information security programs including 12 years of experience in cybersecurity consulting, building efficient and sustainable cybersecurity programs for large, complex and heavily regulated global enterprises.
Our Chief Information Security Officer and Chief Risk Officer have extensive experience in the industry.
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We also conduct diligence on cybersecurity practices in connection with our overall risk assessment when evaluating expansion into new regions, strategic opportunities, and new products. ​ We engage assessors, consultants, auditors and other third parties in connection with developing and evaluating our overall risk management framework.
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These assessments include security questionnaires and reviews of Service Organization Controls (SOC) Reports, where applicable. Cboe uses a third-party service to help monitor the security posture of our vendors that process and/or store confidential Cboe information.
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Please also refer to the risk factors above for additional information. ​ 61 Table of Contents
Added
Our Chief Information Security Officer has over a dozen years of experience leading information security programs including, experience in cybersecurity consulting, leading strategy and the implementation of cyber defenses for several of the top online retailers in the United States, as well as serving as Chief Information Security Officer for Cboe Digital Exchange and Cboe Clear U.S.
Added
Additionally, in 2024, the Board, along with senior management and third-party advisors, participated in a cybersecurity ransomware tabletop exercise. We have experienced in the past, and we expect to continue to experience, cybersecurity threats and events of varying degrees.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeOur principal properties as of December 31, 2024 are listed in the table below: Location Classification Owned/Leased Lease Expiration Approximate Size 433 West Van Buren Street, Chicago, Illinois Global headquarters and office space Leased August 2035 185,000 sq. ft. 8050 Marshall Drive, Lenexa, Kansas Office space Leased September 2025 62,000 sq. ft. 6800 West 115th Street, Overland Park, Kansas Office space Leased May 2035 60,000 sq. ft. 141 West Jackson Boulevard, Chicago, Illinois Trading floor and office space Leased October 2032 52,000 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.
Gustav Mahlerplein 73-83, Amsterdam, Netherlands Office space Leased January 2032 29,500 sq. ft. 1 Farrer Place, Sydney 2000 Australia Office space Leased December 2026 and September 2031 29,000 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.
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.
In Europe, our primary data center is in Slough, England and the secondary data center is in Park Royal, London.
Rockwell Business Center Sheridan, Sheridan Street Corner United Street, Highway Hills Mandaluyong City 1550 Philippines ​ Office space ​ Leased ​ November 2028 ​ 10,500 sq. ft.
Rockwell Business Center Sheridan, Sheridan Street Corner United Street, Highway Hills Mandaluyong City 1550 Philippines Office space Leased November 2028 16,000 sq. ft. 65 Queen Street West Toronto, Ontario, Canada Office space Leased April and June 2028 11,000 sq. ft. One Liberty Plaza, New York, New York Office space Leased May 2027 8,500 sq. ft.
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
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. 49 Table o f Contents See Note 7 ("Property and Equipment, Net") and Note 24 ("Leases") to the consolidated financial statements included herein for further information.
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 sale of the Company’s former headquarters, including the associated land, building, and certain furniture and equipment of the former headquarters location, was completed on June 28, 2024. See Note 7 ("Property and Equipment, Net") of the consolidated financial statements included herein for further information.
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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.
Added
In May 2024, the Company entered into an agreement to amend its lease agreement for its Lenexa, Kansas office space. Additionally, in September 2024, the Company signed a new lease to secure approximately 60,000 square feet of office space in Overland Park, Kansas. See Note 24 ("Leases") of the consolidated financial statements included herein for further information.

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. ​ 63 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. Equity Access Fees Cap Challenge In December 2022, the SEC released four equity market structure proposals, including one concerning Regulation NMS Amendments: Tick Size, Access Fees, and Transparency.
Added
On October 8, 2024, the SEC promulgated Final Rules concerning Reg NMS to amend the minimum pricing increments for the quoting of certain NMS stocks, reduced the access fee caps and enhance the transparency of better priced orders (“Final Rules”).
Added
Among other things, the Final Rules reduce the access fee cap from $0.30 per 100 shares to $0.10 per 100 shares. On October 30, 2024, the Company and the Company’s equities exchanges, BZX, BYX, EDGX, and EDGA (collectively, the “Cboe equity exchanges”) and Nasdaq, Inc. filed a Petition for Review (“PFR”) in the Court of Appeals for the D.C.
Added
Circuit (the “D.C. Circuit”) appealing the Final Rules. On December 3, 2024, the Cboe equity exchanges and Nasdaq, Inc. filed a request with the SEC for a stay to delay the initial implementation date of the Final Rules, which was scheduled to occur in November 2025.
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On December 12, 2024, the SEC granted a stay of the challenged provision of the Final Rules until the litigation is resolved. Merits briefing will conclude at the beginning of the second quarter of 2025.
Added
The Final Rules, amongst other things, are expected to reduce access fee caps to a level that may inhibit our ability to incentivize liquidity on our U.S. equities exchanges, thereby resulting in a reduction in transaction fee revenue, as well as limit our ability to differentiate our fee schedule and compete with other national securities exchanges and off-exchange venues, which may have a material impact on our business, financial condition, and operating results.
Added
The Company and the Cboe equity exchanges intend to litigate the matter vigorously. OEMS Disapproval Order Challenge On February 13, 2024, Cboe Exchange, Inc. (“Cboe”) filed a proposal to adopt a new rule regarding order and execution management systems (“OEMS”).
Added
The proposed new rule provided that an exchange-affiliated OEMS that satisfies criteria (designed to ensure the OEMS is acting independently from the exchange) is not a facility of the exchange, and therefore not subject to the rule filing requirements of Section 19(b) of the Securities Exchange Act of 1934.
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The objective of the proposed rule was to improve competition within the OEMS market and ultimately benefit investors. On October 31, 2024, the SEC issued an order disapproving Cboe’s proposal. On December 26, 2024, Cboe filed a Petition for Review (“PFR”) of the SEC’s disapproval order in the Court of Appeals for the Seventh Circuit (the “7 th Circuit”).
Added
The Company and Cboe intend to litigate the matter vigorously. Item 4. Mine Safety Disclosures Not applicable. 50 Table o f Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+3 added−1 removed2 unchanged
Biggest changeComparison 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
Biggest changeComparison 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 * $100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
Dividends Each share of common stock, including restricted stock awards and restricted stock units, is entitled to receive dividend and dividend equivalents, respectively, if, as and when declared by the Board of Directors of the Company. The Company’s expectation is to continue to pay dividends.
Dividends Each share of common stock, including restricted stock units, is entitled to receive dividend and dividend equivalents, respectively, if, as, and when declared by the Board of Directors of the Company. The Company’s expectation is to continue to pay dividends.
Future debt obligations and statutory provisions, among other things, may limit, or in some cases prohibit, our ability to pay dividends.
Future debt obligations and statutory provisions, among other things, may limit or, in some cases, prohibit our ability to issue or pay dividends.
As a holding company, the Company’s ability to declare and continue to pay dividends in the future with respect to its common stock will also be dependent upon the ability of its subsidiaries to pay dividends to it under applicable corporate law. Recent Sales of Unregistered Securities Not applicable. Use of Proceeds Not applicable.
As a holding company, the Company’s ability to declare and continue to pay dividends in the future with respect to its common stock will also be dependent upon the ability of its subsidiaries to pay dividends to it under applicable corporate law. Recent Sales of Unregistered Securities Not applicable.
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.
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, 2025, there were approximately 108 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, 2018, and its performance is tracked on an annual basis through December 31, 2023.
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, 2019, and its performance is tracked on an annual basis through December 31, 2024.
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.
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, 2024: Period Total number of shares purchased Average price paid per share October 1 to October 31, 2024 6,392 $ 206.00 November 1 to November 30, 2024 226 204.98 December 1 to December 31, 2024 277 211.18 Total 6,895 $ 206.17 52 Table o f Contents Stockholder Return Performance Graph The following graph compares the cumulative total return provided to stockholders on our common stock since December 31, 2019 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.
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.
Use of Proceeds Not applicable. 51 Table o f Contents 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 $2.3 billion as of December 31, 2024.
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.
Under the program, for the year ended December 31, 2024, the Company repurchased 1,148,295 shares of common stock at an average cost per share of $177.86, totaling $204.3 million. Since inception of the program through December 31, 2024, the Company has repurchased 20,758,383 shares of common stock at an average cost per share of $78.05, totaling $1.6 billion.
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As 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.
Added
As of December 31, 2024, the Company had $679.8 million of availability remaining under its existing share repurchase authorizations. The Company did not repurchase shares under the Company's share repurchase program during the three months ended December 31, 2024.
Added
Purchase of common stock from employees During the fiscal quarter ended December 31, 2024, we purchased shares from employees in connection with the settlement of employee tax withholding obligations arising from the vesting of restricted stock units.
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Date Source: Yahoo Finance, Closing Price(s) 12/19 12/20 12/21 12/22 12/23 12/24 Cboe Global Markets, Inc. 100.00 78.83 112.12 109.69 158.37 175.40 S&P 500 100.00 155.68 200.37 164.08 207.21 259.05 Peer Group 100.00 115.32 158.19 129.34 147.30 182.20 53 Table o f 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. ​ 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.
Biggest change(5) Adjusted diluted earnings per share represents adjusted earnings divided by diluted weighted average shares outstanding. 61 Table o f 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, 2024 and 2023, respectively: Year Ended December 31, 2024 Options North American Equities Europe and Asia Pacific Futures Global FX Digital Corporate Total Net income (loss) allocated to common stockholders $ 577.5 $ 147.9 $ 24.4 $ 70.2 $ 33.2 $ (78.2) $ (14.0) $ 761.0 Interest expense (income), net (0.6) (2.4) 3.7 — (0.1) (3.7) 27.3 24.2 Income tax provision (benefit) 299.1 23.1 13.3 28.4 0.1 (28.6) (16.5) 318.9 Depreciation and amortization 27.0 58.2 29.3 2.3 13.5 2.8 (0.1) 133.0 EBITDA 903.0 226.8 70.7 100.9 46.7 (107.7) (3.3) 1,237.1 Acquisition-related costs — 0.4 0.3 — — 0.1 0.5 1.3 Change in contingent consideration — (1.0) — — — — 3.1 2.1 Loss on investments — — — — — — 31.4 31.4 Gain on sale of property held for sale (1.0) — — — — — — (1.0) Cboe Digital syndication wind down — — — — — (1.0) — (1.0) Gain on Cboe Digital non-recourse notes and warrants wind down — — — — — (1.4) — (1.4) Impairment of intangible assets — — — — — 81.0 — 81.0 Costs related to Cboe Digital wind down — — — — — 2.1 — 2.1 Adjusted EBITDA $ 902.0 $ 226.2 $ 71.0 $ 100.9 $ 46.7 $ (26.9) $ 31.7 $ 1,351.6 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 Loss on investments — — — — — — 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 62 Table o f Contents The following is a reconciliation of net income allocated to common stockholders to adjusted earnings (in millions): Year Ended December 31, 2024 2023 Net income allocated to common stockholders $ 761.0 $ 757.5 Acquisition-related costs 1.3 7.4 Amortization of acquired intangible assets 88.7 116.6 Gain on Cboe Digital non-recourse notes and warrants wind down (1.4) — Cboe Digital syndication wind down (1.0) — Change in contingent consideration 2.1 (14.4) Impairment of intangible assets 81.0 — Income from investment — (2.1) Loss on investments 31.4 1.8 Costs related to Cboe Digital wind down 2.1 — Gain on sale of property held for sale (1.0) — Tax effect of adjustments (52.2) (30.7) Release of tax reserves (8.1) (6.0) Valuation allowances 5.0 (2.7) Deferred tax re-measurements — 1.1 Net income allocated to participating securities (0.9) (0.4) Adjusted earnings $ 908.0 $ 828.1 63 Table o f Contents The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2024 compared to the year ended December 31, 2023: 64 Table o f Contents The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2024 compared to the year ended December 31, 2023 (continued from previous page): 65 Table o f Contents The following table includes operational and financial metrics for our Options, North American Equities, Europe and Asia Pacific, Futures, and Global FX segments.
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.
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 grant date and the related service period.
(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.
(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 MATCHNow and Cboe Canada and the number of trading days.
(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.
We use judgment in the evaluation of uncertain tax positions and the estimation of unrecognized tax benefits when determining the largest amount greater than 50% likely to be realized upon ultimate settlement with the taxing authority , assessing the likelihood of the benefit being realized upon settlement, and the calculating expected ultimate settlement amount.
We use judgment in the evaluation of uncertain tax positions and the estimation of unrecognized tax benefits when determining the largest amount greater than 50% likely to be realized upon ultimate settlement with the taxing authority, assessing the likelihood of the benefit being realized upon settlement, and calculating the expected ultimate settlement amount.
Net Cash Flows Used in Investing Activities During the year ended December 31, 2023, net cash used in investing activities primarily consisted of purchases of available-for-sale financial investments of $89.8 million, contributions to investments of $57.1 million, and purchases of property and equipment and leasehold improvements of $45.0 million, partially offset by proceeds from maturities of available-for-sale financial investments of $135.7 million.
During the year ended December 31, 2023, net cash used in investing activities primarily consisted of purchases of available-for-sale financial investments of $89.8 million, contributions to investments of $57.1 million, and purchases of property and equipment and leasehold improvements of $45.0 million, partially offset by proceeds from maturities of available-for-sale financial investments of $135.7 million.
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.
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, Cboe Europe Equities and Derivatives, CFE, and Cboe Digital, as cost of revenue.
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.
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 2024 and 2023 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.
We believe our future revenues and net income will continue to be influenced by a number of domestic and international economic trends, including: ​ ● trading volumes on our proprietary products such as VIX options and futures and SPX options; ● trading volumes in listed equity securities, options, futures, and ETPs in North America, Europe, and Asia Pacific, clearing volumes in listed equity securities and ETPs in Europe, volumes in listed equity options, volumes in digital assets, and volumes in institutional FX trading; ● the demand for and pricing structure of the U.S. tape plan market data distributed by the SIPs, which determines the pool size of the industry market data fees we receive based on our market share; ● consolidation and expansion of our customers and competitors in the industry; ● the demand for information about, or access to, our markets and products, which is dependent on the products we trade, our importance as a liquidity center, quality and integrity of our proprietary indices, and the quality and pricing of our data and access and capacity services; ● continuing pressure in transaction fee pricing due to intense competition in the North American, European, and Asia Pacific markets; ● significant fluctuations in foreign currency translation rates or weakened value of currencies; and ● regulatory changes and obligations relating to market structure, digital assets and increased capital requirements, and those which affect certain types of instruments, transactions, products, pricing structures, capital market participants or reporting or compliance requirements.
We believe our future revenues and net income will continue to be influenced by a number of domestic and international economic trends, including: • trading volumes on our proprietary products such as VIX options and futures and SPX options; • trading volumes in listed equity securities, options, futures, and ETPs in North America, Europe, and Asia Pacific, clearing volumes in listed equity securities, options, futures, and ETPs in Europe and volumes in institutional FX trading; • the demand for and pricing structure of the U.S. tape plan market data distributed by the Securities Information Processors ("SIPs"), which determines the pool size of the industry market data fees we receive based on our market share; • consolidation and expansion of our customers and competitors in the industry; • the demand for information about, or access to, our markets and products, which is dependent on the products we trade, our importance as a liquidity center, quality and integrity of our proprietary indices, and the quality and pricing of our data and access and capacity services; • continuing pressure in transaction fee pricing due to intense competition in the North American, European, and Asia Pacific markets; • significant fluctuations in foreign currency translation rates or weakened value of currencies; and • regulatory changes and obligations relating to market structure, increased capital or margin requirements, and those which affect certain types of instruments, transactions, products, pricing structures, capital market participants or reporting or compliance requirements.
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.
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, 2024, financial investments primarily consisted of U.S. Treasury securities and deferred compensation plan assets.
EXECUTIVE SUMMARY 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. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, FX, and digital assets, across North America, Europe, and Asia Pacific.
EXECUTIVE SUMMARY 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. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives, and FX, across North America, Europe, and Asia Pacific.
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 €1.20 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”).
EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. (3) EBITDA margin represents EBITDA divided by revenues less cost of revenues. (4) Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less cost of revenues.
EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. (2) EBITDA margin represents EBITDA divided by revenues less cost of revenues. (3) Adjusted EBITDA margin represents adjusted EBITDA divided by revenues less cost of revenues.
Above all, the Company is committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. Cboe’s subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S.
Above all, the Company is committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. Cboe’s subsidiaries include the largest options exchange and the third largest equities exchange operator in the U.S.
The Futures segment includes transaction services provided by CFE, a fully electronic futures exchange, which includes offerings for trading of VIX futures and other futures products, the licensing of proprietary market data, as well as access and capacity services. Global FX.
The Futures segment includes transaction services provided by CFE, a fully electronic futures exchange, which includes offerings for trading of VIX futures and other futures products, the licensing of proprietary market data, as well as access and capacity services.
Acquisition-Related Costs Acquisition-related costs decreased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to a decrease in general and administrative costs and retention-related compensation costs associated with prior acquisitions.
Acquisition-Related Costs Acquisition-related costs decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to a decrease in general and administrative costs and retention-related compensation costs associated with prior acquisitions.
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.
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.
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.
In addition to the debt outstanding, as of December 31, 2024, we had an additional $400 million available through our revolving credit facility, with the ability to borrow another $200 million by increasing the commitments under the facility, subject to the agreement of the applicable lenders.
RECENT ACCOUNTING PRONOUNCEMENTS See Note 3 (“Recent Accounting Pronouncements”) to the consolidated financial statements for further discussion of recently adopted and recently issued accounting pronouncements that are applicable to the Company .
RECENT ACCOUNTING PRONOUNCEMENTS See Note 3 ("Recent Accounting Pronouncements") to the consolidated financial statements for further discussion of recently adopted and recently issued accounting pronouncements that are applicable to the Company .
The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”).
The Europe and Asia Pacific segment includes the pan-European listed equities and derivatives transaction services, ETPs, including exchange traded funds, exchange traded notes, and exchange traded commodities, and international depository receipts that are hosted on MTFs operated by Cboe Europe Equities (Cboe Europe and Cboe NL equities exchanges) and Cboe Europe Derivatives (“CEDX”).
Derivatives Markets Includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other fees from the Company’s Options, Futures, Europe and Asia Pacific, and Digital segments.
Derivatives Markets Revenue aggregated into derivatives markets includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other fees from the Company’s Options, Futures, Europe and Asia Pacific, and Digital segments.
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.
The North American Equities segment also includes corporate listing services on Cboe Canada Inc., ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, and 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.
Data and Access Solutions Revenue aggregated into data and access solutions includes access and capacity fees, proprietary market data fees, and associated other revenue across the Company’s six segments.
Data Vantage Revenue aggregated into Data Vantage includes access and capacity fees, proprietary market data fees, and associated other revenue across the Company’s six segments.
Other cost of revenues primarily consists of interest expense from clearing operations, electronic access permit fees and other miscellaneous costs associated with other revenue. Components of Operating Expenses Compensation and Benefits Compensation and benefits represent our largest expense category and tend to be driven by our staffing requirements, financial performance, and the general dynamics of the employment market.
Other cost of revenues primarily consists of interest expense from clearing operations, electronic access permit fees and other miscellaneous costs associated with other revenue. 57 Table o f Contents Components of Operating Expenses Compensation and Benefits Compensation and benefits represent our largest expense category and tend to be driven by our staffing requirements, financial performance, and the general dynamics of the employment market.
In addition, the Company operates Cboe Europe, one of the largest stock exchanges by value traded in Europe, and owns Cboe Clear Europe, a leading pan-European equities and derivatives clearinghouse, BIDS Holdings, which owns a leading block-trading ATS by volume in the U.S., and provides block-trading services with Cboe market operators in Europe, Canada, Australia, and Japan, Cboe Australia, an operator of trading venues in Australia, Cboe Japan, an operator of trading venues in Japan, Cboe Digital, an operator of a U.S. based digital asset spot market and a regulated futures exchange, Cboe Clear Digital, an operator of a regulated clearinghouse, and Cboe Canada Inc., a recognized Canadian securities exchange.
In addition, the Company operates Cboe Europe, one of the largest equities exchanges by value traded in Europe, and owns Cboe Clear Europe, a leading pan-European equities and derivatives clearinghouse, BIDS Holdings, which owns a leading block-trading ATS by volume in the U.S., and provides block-trading services with Cboe market operators in Europe, Canada, Australia, and Japan, Cboe Australia, an operator of trading venues in Australia, Cboe Japan, an operator of trading venues in Japan, Cboe Clear U.S., an operator of a regulated clearinghouse, and Cboe Canada Inc., a recognized Canadian securities exchange.
Also included within routing and clearing are the Order Management System and Execution Management System (“OMS” and “EMS”, respectively) fees incurred for U.S. Equities Off-Exchange order execution, as well as settlement costs incurred for the settlement process executed by Cboe Clear Europe and Cboe Clear Digital.
Also included within routing and clearing are the Order Management System ("OMS") and Execution Management System (“EMS”) fees incurred for U.S. Equities Off-Exchange order execution, as well as settlement costs incurred for the settlement process executed by Cboe Clear Europe and Cboe Clear U.S.
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.
Debt The following summarizes our debt obligations as of December 31, 2024, 2023, and 2022 (in millions): As of December 31, 2024 2023 2022 Term Loan Agreement $ — $ — $ 305.0 3.650% Senior Notes 650.0 650.0 650.0 1.625% Senior Notes 500.0 500.0 500.0 3.000% Senior Notes 300.0 300.0 300.0 Revolving Credit Agreement — — — Cboe Clear Europe Credit Facility — — — Less unamortized discount and debt issuance costs (9.0) (10.8) (13.0) Total debt $ 1,441.0 $ 1,439.2 $ 1,742.0 At December 31, 2024, we were in compliance with the covenants of our debt agreements.
(12) Net settlement volume refers to the total number of settlements executed after netting. (13) Net fee per settlement refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.
(13) Net fee per settlement refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.
With respect to trades in digital assets occurring on Cboe Digital Exchange, we deliver matched trades of our customers to Cboe Clear Digital, which acts as a central counterparty on all transactions occurring on Cboe Digital Exchange and, as such, guarantees clearance and settlement of all of those matched spot and futures trades.
With respect to trades in digital asset futures occurring on Cboe Digital Exchange, we deliver matched trades of our customers to Cboe Clear U.S., which acts as a central counterparty on all transactions occurring on Cboe Digital Exchange and, as such, guarantees clearance and settlement of all of those matched futures trades.
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.
Data Vantage Data Vantage revenues less cost of revenues increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to increases in access and capacity fees and proprietary market data fees.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations ( “ MD&A ” ) is provided to assist the reader in understanding the results of operations, liquidity and capital resources, and critical accounting estimates and policies through the eyes of our management team.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided to assist the reader in understanding the results of operations, liquidity and capital resources, and critical accounting estimates and policies through the eyes of our management team.
The following discussion should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included in Item 8 of this Annual Report on Form 10-K. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements.
The following discussion should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included in Item 8 of this Annual Report on Form 10-K. The following discussion contains forward-looking statements. Actual results could differ materially from the results discussed in the forward-looking statements. See “Risk Factors” and “Forward-Looking Statements” above.
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.
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, any dividends, potential strategic acquisitions, and opportunities for common stock repurchases under the previously announced program.
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.
Segment performance is primarily based on operating income (loss). 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.
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.
Data Vantage Data Vantage revenue increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to increases in access and capacity fees and proprietary market data fees.
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.
The change in net cash flows provided by operating activities was primarily due to the change in net income, the change in 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 impairment of goodwill and the change in Section 31 fees payable.
Net Cash Flows (Used in) Provided by Financing Activities During the year ended December 31, 2023, net cash used in financing activities primarily consisted of principal payments of the current portion of long-term debt of $305.0 million, cash dividends on common stock of $223.5 million, and share repurchases of $83.9 million.
Net cash flows used in financing activities totaled $656.1 million for the year ended December 31, 2023, and primarily consisted of principal payments of the current portion of long-term debt of $305.0 million, cash dividends on common stock of $223.5 million, and share repurchases of $83.9 million.
Net cash flows provided by operating activities were $1,075.6 million and $651.1 million for the years ended December 31, 2023 and 2022, respectively.
Net cash flows provided by operating activities were $1,100.6 million and $1,075.6 million for the years ended December 31, 2024 and 2023, respectively.
We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry. Other companies may calculate organic net revenue differently than we do.
We believe that investors may find this non-GAAP measure useful in evaluating our performance compared to that of peer companies in our industry. Other companies may calculate adjusted earnings differently than we do.
Together with adjusted cash, we had nearly $1.0 billion available to fund our operations, capital expenditures, potential acquisitions, debt repayments and any dividends, net of minimum regulatory capital requirements of $145.7 million , which are subject to potential applicable regulatory restrictions and approvals and potential associated tax costs, as of December 31, 2023.
Together, with adjusted cash, we had approximately $1.3 billion available to fund our operations, capital expenditures, potential acquisitions, debt repayments and any dividends, net of minimum regulatory capital requirements of $166.7 million , which are subject to potential applicable regulatory restrictions and approvals and potential associated tax costs, as of December 31, 2024.
A number of significant structural, political and monetary issues, global conflicts continue to confront the global economy, and instability could continue, resulting in an increased or subdued level of inflation, market volatility, potential recessions, supply chain constraints, changes in trading volumes, greater uncertainty, inflationary increases in our expenses, such as compensation inflation, and increased costs and uncertainties related to CAT and the ability to collect on the promissory notes related to the funding of CAT may have an adverse effect on our financial results. 69 Table of Contents Components of Revenues The components of revenues are described below: Cash and Spot Markets Revenue aggregated into cash and spot markets includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other revenue from the Company’s North American Equities, Europe and Asia Pacific, Global FX, and Digital segments.
A number of significant structural, political, monetary, and global conflicts continue to confront the global economy, and instability could continue, resulting in an increased or subdued level of: inflation, market volatility, potential recession, supply chain constraints and costs, trading volumes, uncertainty, expenses, and increased costs and uncertainties related to CAT and the ability to collect on the promissory notes related to the funding of CAT, may have an adverse effect on our financial results. 56 Table o f Contents Components of Revenues Cash and Spot Markets Revenue aggregated into cash and spot markets includes associated transaction and clearing fees, the portion of market data fees relating to associated U.S. tape plan market data fees, associated regulatory fees, and associated other revenue from the Company’s North American Equities, Europe and Asia Pacific, Global FX, and Digital segments.
For the year ended December 31, 2023, operating income for the Global FX segment increased $15.9 million compared to the year ended December 31, 2022 primarily due to a decrease in operating expenses, coupled with an increase in revenues less cost of revenues.
For the year ended December 31, 2024, operating income for the Global FX segment increased $8.5 million compared to the year ended December 31, 2023 primarily due to a decrease in operating expenses, coupled with an increase in revenues less cost of revenues.
For the year ended December 31, 2023, operating income for the Futures segment increased $30.9 million compared to the year ended December 31, 2022 primarily due to a decrease in operating expenses, coupled with an increase in revenues less cost of revenues.
For the year ended December 31, 2024, operating income for the Futures segment increased $12.8 million compared to the year ended December 31, 2023 primarily due to an increase in revenues less cost of revenues, coupled with a decrease 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.
For the year ended December 31, 2024, operating income for the Options segment increased $27.1 million compared to the year ended December 31, 2023 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses.
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.
Cash Flow The following table summarizes our cash flow data for the years ended December 31, 2024, 2023, and 2022 (in millions): For the Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 1,100.6 $ 1,075.6 $ 651.1 Net cash used in investing activities (141.8) (55.1) (835.1) Net cash (used in) provided by financing activities (495.0) (656.1) 81.7 Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents (95.1) 52.8 (10.0) Increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents $ 368.7 $ 417.2 $ (112.3) As of December 31, 2024 2023 2022 Reconciliation of cash, cash equivalents, and restricted cash and cash equivalents: Cash and cash equivalents $ 915.3 $ 543.2 $ 432.7 Restricted cash and cash equivalents (included in margin deposits, clearing funds, and interoperability funds) 841.4 834.8 530.3 Restricted cash and cash equivalents (included in cash and cash equivalents) 5.0 — — Restricted cash and cash equivalents (included in other current assets) — 5.1 4.2 Customer bank deposits (included in margin deposits, clearing funds, and interoperability funds) 4.1 14.0 12.7 Total $ 1,765.8 $ 1,397.1 $ 979.9 Net Cash Flows Provided by Operating Activities During the year ended December 31, 2024, net cash provided by operating activities was $335.7 million higher than net income.
Other revenue increased primarily due to an increase in operating interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned in accordance with its investment policy. See Note 14 (“Clearing Operations”) for additional information.
Other revenue increased primarily due to an increase in interest income attributable to Cboe Clear Europe as a result of the changing interest rate environment, coupled with additional interest earned in accordance with the change in its investment policy. See Note 14 ("Clearing Operations") for additional information on Cboe Clear Europe's investment policy.
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.
The cash deposits made by clearing participants are recorded in the consolidated balance sheets 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 U.S. and the margin deposits, clearing funds, and interoperability funds.
Total rent expense related to current and former lease obligations for the years ended December 31, 2023, 2022 and 2021 totaled $34.5 million, $30.0 million and $25.6 million, respectively. I n addition to our lease obligations, we have contractual obligations related to certain operating leases, data and telecommunications agreements, and our long-term debt outstanding.
Total rent expense related to current and former lease obligations for the years ended December 31, 2024, 2023, and 2022 totaled $37.1 million, $34.5 million, and $30.0 million, respectively. In addition to our lease obligations, we have contractual obligations related to certain operating leases, data and telecommunications agreements, and our long-term debt outstanding.
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.
We have excluded from the contractual obligations listed below $845.5 million in margin deposits, clearing funds, and interoperability funds related to Cboe Clear Europe and Cboe Clear U.S. Clearing participants of Cboe Clear Europe are required to make deposits to a clearing fund.
(9) Trades cleared refers to the total number of non-interoperable trades cleared. (10) Fee per trade cleared refers to clearing fees divided by number of non-interoperable trades cleared. (11) European Equities market share cleared represents Cboe Clear Europe’s client volume cleared divided by the total volume of the publicly reported European venues.
(10) Fee per trade cleared refers to clearing fees divided by number of non-interoperable trades cleared. (11) European Equities market share cleared represents Cboe Clear Europe’s client volume cleared divided by the total volume of the publicly reported European venues. (12) Net settlement volume refers to the total number of settlements executed after netting.
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.
Net cash flows used in investing activities were $141.8 million and $55.1 million for the years ended December 31, 2024 and 2023, respectively.
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.
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.
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.
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 Cboe U.S. equities exchanges.
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.
Digital The following summarizes revenues less cost of revenues, operating expenses, operating loss, operating margin, EBITDA, and EBITDA margin for our Digital segment (in millions, except percentages): Percentage of Total Revenues Year Ended December 31, Percent Change Year Ended December 31, 2024 2023 2024 2023 Revenues less cost of revenues $ (2.0) $ (5.3) 62 % *% *% Operating expenses 110.4 41.4 167 % *% *% Operating loss $ (112.4) $ (46.7) (141) % *% *% Operating margin *% *% * * * EBITDA (1) $ (107.7) $ (39.1) (175) % *% *% EBITDA margin (2) *% *% * * * ____________________________________________________________________ * Not meaningful (1) See footnote (1) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
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.
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.
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.
Europe and Asia Pacific The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA and EBITDA margin for our Europe and Asia Pacific segment (in millions, except percentages): Percentage of Total Revenues Year Ended December 31, Percent Change Year Ended December 31, 2024 2023 2024 2023 Revenues less cost of revenues $ 220.2 $ 190.2 16 % 68 % 68 % Operating expenses 178.5 157.5 13 % 55 % 56 % Operating income $ 41.7 $ 32.7 28 % 13 % 12 % Operating margin 18.9 % 17.2 % * * * EBITDA (1) $ 70.7 $ 62.7 13 % 22 % 22 % EBITDA margin (2) 32.1 % 33.0 % * * * ____________________________________________________________________ * Not meaningful (1) See footnote (1) 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, 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.
The following summarizes changes in certain operational and financial metrics for the year ended December 31, 2024 compared to the year ended December 31, 2023: Year Ended December 31, Increase/ (Decrease) Percent Change 2024 2023 (in millions, except percentages, trading days, and as noted below) Options: Average daily volume (ADV) (in millions of contracts): Market ADV 48.5 44.2 4.3 10 % Total touched contracts (1) 14.9 14.6 0.3 2 % Multi-listed contract ADV 10.9 10.8 0.1 0 % Index contract ADV 4.1 3.8 0.3 8 % Number of trading days 252 250 2 1 % Total Options revenue per contract (RPC) (2) $ 0.293 $ 0.276 $ 0.017 6 % Multi-listed options RPC (2) 0.063 0.060 0.003 6 % Index options RPC (2) 0.902 0.893 0.009 1 % Total Options market share 30.8 % 33.1 % (2.3) % * Multi-listed options market share 24.5 % 26.8 % (2.3) % * North American Equities: U.S.
See Note 12 (“Debt”) for additional information regarding the PPP. RESULTS OF OPERATIONS The following are summaries of changes in financial performance and include certain non-GAAP financial measures. Management uses these non-GAAP measures internally in conjunction with GAAP measures to help evaluate our performance and to help make financial and operational decisions.
RESULTS OF OPERATIONS The following are summaries of changes in financial performance and include certain non-GAAP financial measures. Management uses these non-GAAP measures internally in conjunction with GAAP measures to help evaluate our performance and to help make financial and operational decisions.
For the year ended 89 Table of Contents December 31, 2023, operating income for the North American Equities segment decreased $28.6 million compared to the year ended December 31, 2022 primarily due to an increase in operating expenses, coupled with a decrease in revenues less cost of revenues .
For the year ended December 31, 2024, operating income for the North American Equities segment increased $50.6 million compared to the year ended December 31, 2023 primarily due to a decrease in operating expenses, coupled with an increase in revenues less cost of 76 Table o f Contents revenues.
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.
Global FX The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA and EBITDA margin for our Global FX segment (in millions, except percentages): Percentage of Total Revenues Year Ended December 31, Percent Change Year Ended December 31, 2024 2023 2024 2023 Revenues less cost of revenues $ 77.6 $ 73.5 6 % 97 % 98 % Operating expenses 44.4 48.8 (9) % 56 % 65 % Operating income $ 33.2 $ 24.7 34 % 42 % 33 % Operating margin 42.8 % 33.6 % * * * EBITDA (1) $ 46.7 $ 42.8 9 % 58 % 57 % EBITDA margin (2) 60.2 % 58.2 % * * * ____________________________________________________________________ * Not meaningful (1) See footnote (1) 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.
North American Equities The following summarizes revenues less cost of revenues, operating expenses, operating income, operating margin, EBITDA and EBITDA margin for our North American Equities segment (in millions, except percentages): Percentage of Total Revenues Year Ended December 31, Percent Change Year Ended December 31, 2024 2023 2024 2023 Revenues less cost of revenues $ 383.8 $ 365.3 5 % 25 % 27 % Operating expenses 215.2 247.3 (13) % 14 % 18 % Operating income $ 168.6 $ 118.0 43 % 11 % 9 % Operating margin 43.9 % 32.3 % * * * EBITDA (1) $ 226.8 $ 186.9 21 % 15 % 14 % EBITDA margin (2) 59.1 % 51.2 % * * * ____________________________________________________________________ * Not meaningful (1) See footnote (1) to the table under “Overview” above for a reconciliation of net income to EBITDA, and management’s reasons for using such non-GAAP measures.
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 .
A detailed comparison of the Company’s 2023 operating results to its 2022 operating results can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the Company’s 2023 Annual Report on Form 10-K filed February 16, 2024 at www.sec.gov.
(“BOA”), which delivers the matched trades to the NSCC. BOA guarantees the trade until one day after the trade date, after which time the NSCC provides a guarantee. In the case of failure to perform on the part of Wedbush or Morgan Stanley on routed transactions for our U.S.
BOA guarantees the trade until one day after the trade date, after which time the NSCC provides a guarantee until the trade settles. In the case of failure to perform on the part of Wedbush or Morgan Stanley on routed transactions for our U.S. Equities exchanges, we provide the guarantee to the counterparty to the trader.
We have presented organic net revenue because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our operating financial performance before the effects of acquisitions. We also believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies.
We have presented adjusted earnings because we consider it an important supplemental measure of our performance and we use it as the basis for monitoring our own core operating financial performance relative to other operators of exchanges. We also believe that it is frequently used by analysts, investors and other interested parties in the evaluation of companies.
Derivatives Markets Derivatives markets revenue increased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in transaction and clearing fees, partially offset by a decrease in regulatory fees.
Derivatives Markets Derivatives markets revenue increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in regulatory fees, coupled with an increase in transaction and clearing fees.
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.
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 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.
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.
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.
The variance is primarily due to the change in proceeds from maturities of available-for-sale financial investments, purchases of available-for-sale financial investments, and purchases of property and equipment and leasehold improvements, partially offset by the change in contributions to investments for the year ended December 31, 2024 compared to the year ended December 31, 2023.
During the year ended December 31, 2021, net cash used in financing activities primarily consisted of cash dividends paid on common stock of $193.3 million and share repurchases of $81.3 million, partially offset by proceeds from long-term debt of $110.0 million. 95 Table of Contents Financial Assets The following summarizes our financial assets excluding margin deposits, clearing funds, and interoperability funds as of December 31, 2023, 2022 and 2021 (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2023 2022 2021 Cash and cash equivalents ​ $ 543.2 ​ $ 432.7 ​ $ 341.9 Financial investments ​ 57.5 ​ 91.7 ​ 37.1 Less deferred compensation plan assets ​ ​ (36.7) ​ ​ (27.5) ​ ​ (28.0) Less cash collected for Section 31 fees ​ ​ (30.5) ​ ​ (93.7) ​ ​ (25.9) Adjusted cash (1) ​ $ 533.5 ​ $ 403.2 ​ $ 325.1 (1) Adjusted cash is a non-GAAP measure and represents cash and cash equivalents plus financial investments, minus deferred compensation plan assets and cash collected for Section 31 fees.
Net cash flows provided by financing activities totaled $81.7 million for the year ended December 31, 2022, and primarily consisted of proceeds from long-term debt issuance of $663.6 million, partially offset by principal payments of long-term debt of $220.0 million, cash dividends on common stock, share repurchases, and payments of contingent consideration related to acquisitions. 82 Table o f Contents Financial Assets The following summarizes our financial assets excluding margin deposits, clearing funds, and interoperability funds as of December 31, 2024, 2023, and 2022 (in millions): As of December 31, 2024 2023 2022 Cash and cash equivalents $ 920.3 $ 543.2 $ 432.7 Financial investments 110.3 57.5 91.7 Less deferred compensation plan assets (40.3) (36.7) (27.5) Less cash collected for Section 31 fees (110.8) (30.5) (93.7) Adjusted cash (1) $ 879.5 $ 533.5 $ 403.2 ________________________________________________________ (1) Adjusted cash is a non-GAAP measure and represents cash and cash equivalents plus financial investments, minus deferred compensation plan assets and cash collected for Section 31 fees.
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.
Operating Income As a result of the items above, operating income for the year ended December 31, 2024 was $1,098.4 million, compared to operating income of $1,057.9 million for the year ended December 31, 2023, an increase of $40.5 million.
Regulatory fees decreased primarily due to a 36% decrease in the Section 31 fee rate, from an average of $16.26 per million dollars of covered sales for the year ended December 31, 2022 to an average rate of $10.35 per million dollars of covered sales for the year ended December 31, 2023.
Regulatory fees increased primarily due to a 94% increase in the Section 31 fee rate, from an average of $10.35 per million dollars of covered sales for the year ended December 31, 2023 to an average rate of $20.08 per million dollars of covered sales for the year ended December 31, 2024.
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.
For the year ended December 31, 2024, operating income for the Europe and Asia Pacific segment increased $9.0 million compared to the year ended December 31, 2023 primarily due to an increase in revenues less cost of revenues, partially offset by an increase in operating expenses.
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.
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, 2024, the Company repurchased 1,148,295 shares of common stock at an average cost per share of $177.86, totaling $204.3 million.
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”).
These activities primarily include interest earned on the investing of excess cash, commitment fees and 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 related to lease modifications, realized gains related to the Company’s previously 58 Table o f Contents 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 gains and losses relating to the dissolution of the Cboe Digital syndication.
Revenues less cost of revenues increased $186.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in net transaction and clearing fees driven by a 33% increase in index options ADV, an increase in proprietary market data fees, and increases in physical and logical port fees, partially offset by an increase in royalty fees driven by an increase in trading volumes of licensed products and increases in royalty fee rates and a 6% decrease in multi-listed options net capture.
Revenues less cost of revenues increased $90.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to an increase in net transaction and clearing fees, driven by an 8% increase in index options ADV, a 6% increase in multi-listed options RPC, and a 1% increase in index options RPC, coupled with an increase in logical and physical port fees, partially offset by an increase in royalty fees due to an increase in the trading volumes of licensed products.
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.
Routing and Clearing Routing and clearing fees decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to a decrease in routed shares on the Cboe options exchanges.
See Note 12 (“Debt”) and Note 25 (“Subsequent Events”) to the consolidated financial statements for further information.
See Note 12 ("Debt") and Note 25 ("Subsequent Events") to the consolidated financial statements for further information.
(7) Matched ADNV represents the average daily notional value of shares or contracts executed on our exchanges. (8) Net capture per matched notional value refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days.
(8) Net capture per matched notional value refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days. (9) Trades cleared refers to the total number of non-interoperable trades cleared.
We have presented EBITDA and adjusted EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies.
EBITDA and adjusted EBITDA do not represent, and should not be considered as, alternatives to net income as determined in accordance with GAAP. We have presented EBITDA and adjusted EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

31 edited+1 added−12 removed34 unchanged
Biggest changeCboe 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.
Biggest changeCboe Clear Europe entered into a €1.20 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 has no reason to believe it will incur any expense associated with potential liability in connection with storage of digital assets because it liquidated all digital assets held on behalf of customers as of September 30, 2024 and no longer holds customer digital clearing assets through accounts with third-party custodians or through self-custody. • Valuation Risk - Cboe Digital was previously exposed to risk with respect to digital asset prices and valuations which were largely based on the supply and demand for those digital assets in financial markets; however, the Company is no longer exposed to material digital asset valuation risk due to the liquidation of digital assets held by Cboe Digital as of September 30, 2024. • Market Risk - Cboe Clear Europe 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.
We have implemented policies and procedures to measure, manage and monitor and report risk exposures, which are reviewed regularly by management and our Board of Directors.
We have implemented policies and procedures to measure, manage, monitor, and report risk exposures, which are reviewed regularly by management and our Board of Directors.
See Note 12 (“Debt”) to the consolidated financial statements for a discussion of debt agreements. Liquidity Risk We are exposed to liquidity risk under certain circumstances in relation to the cross-acceleration and cross-default provisions within the Term Loan Agreement and the Revolving Credit Agreement as a result of the Company, as guarantor, entering into the Cboe Clear Europe Credit Facility.
See Note 12 ("Debt") to the consolidated financial statements for a discussion of debt agreements. Liquidity Risk We are exposed to liquidity risk under certain circumstances in relation to the cross-acceleration and cross-default provisions within the Term Loan Agreement and the Revolving Credit Agreement as a result of the Company, as guarantor, entering into the Cboe Clear Europe Credit Facility.
See Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations ”) for the table summarizing the changes in certain operational and financial metrics for more information. Equity Risk Our investment in European, Canadian, and Asia Pacific operations is exposed to volatility in currency exchange rates through translation of our net assets or equity to U.S. dollars.
See Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) for the table summarizing the changes in certain operational and financial metrics for more information. Equity Risk Our investment in European, Canadian, and Asia Pacific operations is exposed to volatility in currency exchange rates through translation of our net assets or equity to U.S. dollars.
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.
As of December 31, 2024, 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.
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.
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 during extreme but plausible market conditions.
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.
Cboe Clear U.S. 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.
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.
Cboe Clear U.S. is also exposed to market risk in the event that a clearing participant defaults and the market prices of 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.
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.
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.
Cboe 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.
Cboe Clear U.S. 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.
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.
With respect to U.S. government securities transactions, we deliver matched trades to FICC 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 such, guarantees clearance and settlement of all of those matched trades.
The translation of these non-U.S. dollar statements of financial condition into U.S. dollars for consolidated reporting results in a cumulative translation adjustment, which is recorded in accumulated other comprehensive income, net within stockholders' equity on our consolidated balance sheet.
The translation of these non-U.S. dollar statements of financial condition into U.S. dollars for consolidated reporting results in a cumulative translation adjustment, which is recorded in accumulated other comprehensive loss, net within stockholders' equity on our consolidated balance sheets.
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.
Cboe Clear U.S. 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.
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.
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, 2024, there were no outstanding borrowings under our Revolving Credit Agreement or Cboe Clear Europe Credit Facility, respectively.
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.
Furthermore, Cboe Clear U.S. 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 enforced by Cboe Digital Exchange and administered by Cboe Clear U.S.
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.
On June 5, 2023, the CFTC approved an amended order of registration for Cboe Clear U.S. (formerly, Cboe Clear Digital) to clear digital asset futures on a margined basis for futures commission merchants. The new products launched January 11, 2024.
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.
As of December 31, 2024, we had $1,441.0 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.
For example, holding funds with a central bank where possible or making only short-term investments serves to help reduce liquidity risks. Liquidity is mainly required for securities settlement.
For example, holding funds with a central bank where possible or making only short-term investments serves to help reduce liquidity risks. Liquidity is 88 Table o f Contents mainly required for securities settlement.
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.
As of December 31, 2024 and 2023, our cash and cash equivalents and financial investments were $1,030.6 million and $600.7 million, respectively, of which $301.3 million and $244.3 million is held outside of the United States in various foreign subsidiaries in 2024 and 2023, respectively. The remaining cash and cash equivalents and financial investments are denominated in U.S. dollars.
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.
Our primary exposure to this equity risk as of December 31, 2024 is presented by foreign currency in the following table (in millions): Euros (1) British Pounds (1) Canadian Dollars (1) Net equity investment in Cboe Europe equities and derivatives, Cboe Clear Europe, and Cboe Canada Inc. $ 198.3 $ 636.4 $ 521.8 Impact on consolidated equity of a 10% adverse currency fluctuation 19.8 63.6 52.2 ________________________________________________________ (1) Converted to U.S. dollars using the foreign exchange rate of Euros per U.S. dollar, British pounds per U.S. dollar, and Canadian dollars per U.S. dollar, respectively, as of December 31, 2024.
See Note 12 (“Debt”) to the consolidated financial statements for a discussion of debt agreements. ​ 105 Table of Contents
See Note 12 ("Debt") to the consolidated financial statements for a discussion of debt agreements. 90 Table o f Contents
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.
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. 89 Table o f Contents On a regular basis, we review and evaluate changes in the status of our counterparties’ creditworthiness.
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.
We also have de minimis exposure to other foreign currencies, including the Singapore dollar, Philippine Peso, and Hong Kong dollar. 86 Table o f Contents For the year ended December 31, 2024, 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, 2024 Euros (1) British Pounds (1) Canadian Dollars (1) Foreign denominated % of: Revenues less cost of revenues 5.7 % 2.9 % 1.4 % Operating expenses 7.1 % 8.4 % 3.8 % Impact of 10% adverse currency fluctuation on: Revenues less cost of revenues $ 11.9 $ 6.1 $ 3.0 Operating expenses 6.9 8.2 3.7 ________________________________________________________ (1) An average foreign exchange rate to the U.S. dollar for the period was used.
Thus, Cboe Trading is potentially exposed to credit risk to the counterparty to a trade routed to another market center between the trade date and one day after the trade date in the event that Morgan Stanley or Wedbush fails.
Thus, Cboe Trading is potentially exposed to credit risk to the counterparty to a trade routed to another market center until the trade has been processed and validated by the NSCC in the event that Morgan Stanley or Wedbush fails.
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.
Foreign Currency Exchange Rate Risk Our operations in Europe, Canada, and Asia Pacific are subject to increased currency translation risk as revenues and expenses are denominated in foreign currencies, primarily the Euro, British pound, Canadian dollar, Australian dollar, and Japanese Yen.
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.
Cboe Clear U.S. collects collateral on an end of day and intraday basis from clearing participants that are clearing margin eligible futures contracts. Cboe Clear U.S. only allows collateral in USD at this time.
Thus, BIDS Trading is potentially exposed to credit risk to the counterparty between the trade date and one day after the trade date in the event BOA fails. With respect to Australian equities and derivatives, we deliver matched trades of our customers to ASX Clear Pty Ltd and ASX Settlement Pty Ltd.
Thus, BIDS Trading is potentially exposed to credit risk to the counterparty to an equity trade routed to another market center until the trade as been processed and validated by the NSCC on the trade date. With respect to Australian equities and derivatives, we deliver matched trades of our customers to ASX Clear Pty Ltd and ASX Settlement Pty Ltd.
The BIDS Trading ATS platform delivers matched trades to BOA, which delivers the matched trades to the NSCC. BOA guarantees the trade until one day after the trade date, after which time the NSCC provides a guarantee.
The BIDS Trading ATS platform delivers matched trades to BOA, which delivers the matched trades to the NSCC. BOA guarantees the trade until the trade has been submitted to and validated by the NSCC, after which time NSCC 87 Table o f Contents provides a guarantee until the trade settles.
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.
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.
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.
Cboe Clear U.S. maintains pre-funded resources to cover probable losses during normal market conditions due to default of clearing participants. • Investment Risk – Cboe Clear Europe as of December 31, 2024 held $841.4 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.
Morgan Stanley and Wedbush guarantee trades until one day after the trade date, after which time NSCC provides a guarantee. The BIDS Trading ATS platform delivers matched trades to BOA, which delivers the matched trades to the NSCC.
Morgan Stanley and Wedbush guarantee trades until the trade has been submitted to and validated by NSCC, after which time NSCC provides a guarantee until the trade settles (T+1).
Removed
Cboe Digital’s custody strategy is designed to maximize liquidity and efficient access to assets by making those assets readily available. Cboe Digital monitors its cash and the digital asset balances it maintains with custodians.
Added
The Company maintains cash at various regulated financial institutions and brokerage firms which, at times, may be in excess of the depository insurance limits. The Company’s management regularly monitors these institutions and believes that the potential for future loss is remote.
Removed
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.
Removed
If private keys are lost or destroyed, this could prevent the ability to transfer the corresponding digital asset. Security breaches, computer malware, and computer hacking attacks have been a prevalent concern in digital asset markets. Cboe Digital has committed to securely store digital assets it holds on behalf of users.
Removed
As such, Cboe Digital may be liable to its users for losses arising from theft or loss of user private keys.
Removed
Cboe Digital has no reason to believe it will incur any expense associated with such potential liability because (i) it has no known or historical experience of claims to use as a basis of measurement, (ii) it accounts for and continually verifies the amount of digital assets within its control, and (iii) it has established security around custodial private keys to minimize the risk of theft or loss. ● Valuation Risk - Cboe Digital is exposed to risk with respect to digital asset prices and valuations which are largely based on the supply and demand for those digital assets in financial markets.
Removed
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.
Removed
Independent price verification is performed by finance control through benchmarking fair value estimates with observable market prices or other independent sources.
Removed
Reasonably designed controls and governance framework are in place and are intended to help ensure quality third-party pricing sources were used. ● Market Risk - Cboe Clear Europe 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.
Removed
To help ensure an orderly market, Cboe Digital maintains digital assets to support its clearing operations which may be subject to significant changes in value and therefore exposed to market risk with the fluctuation in market prices. Cboe Digital monitors this risk on a daily, weekly and monthly basis.
Removed
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.
Removed
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.
Removed
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.

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