The Securities and Exchange Commission has approved the planned takeover of the National Stock Exchange Inc. by the CBOE Stock Exchange LLC, which is partly owned by the Chicago Board Options Exchange.

Regulators' approval gives a green light for the union of two of the smallest U.S. stock-trading platforms, which together represent about 0.6% of daily turnover in domestic securities, according to data from BATS Global Markets.

The all-electronic CBOE Stock Exchange, or CBSX, had agreed in late September to buy the NSX, another automated market once known as the Cincinnati Stock Exchange. Their deal was patterned on the structure of larger rivals like Nasdaq OMX Group Inc. (NDAQ) and NYSE Euronext (NYX), both of which run multiple stock exchanges offering various market models and pricing schemes in a bid to lure different types of trading.

SEC officials approved rule changes related to the deal in a letter dated Dec. 29. The approval was the only major regulatory sign-off needed, according to a spokeswoman for CBOE.

Alongside the Chicago Board Options Exchange, CBSX is owned by a consortium of brokers and trading firms, including Interactive Brokers Group Inc. (IBKR), Cowen Group Inc. (COWN), Lime Brokerage Holdings LLC, Susquehanna International Group LLP, Wolverine Trading LLC, IMC Group, Allston Trading and Blue Fire Capital LLC. The CBOE is owned by CBOE Holdings Inc. (CBOE).

The NSX in recent years has worked to develop a specialty in supplying data on exchange-traded funds and notes, following a partnership deal in 2006 that saw six Wall Street banks and trading firms, including Credit Suisse (CS) and Citigroup Inc. (C), take equity stakes in the company.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

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