Cboe Global Markets is a very different company today than it was the last time people gathered together at FIA Boca, said Catherine Clay, the company’s executive vice president, global head of data and access solutions. Cboe has made a number of strategic fintech acquisitions in recent years, acquiring Hanweck Associates, a real-time risk analytics company, FT Options, a portfolio management platform, and TradeAlert, a distributor of market intelligence, in 2020, and acquiring the Canadian fintech company NEO and the digital asset spot market ErisX in 2021.
Clay was with Cboe through all of these acquisitions. JLN spoke with Clay at FIA Boca 2022, which was held in person for the first time since the covid pandemic. “With our data and access solutions, we are in full growth mode, which shouldn’t be a surprise to anyone who has followed the trajectory of our global markets,” Clay said. With the MATCHNow and NEO acquisitions as well as Chi-X in Australia and Japan, “Cboe Global has expanded to be the largest global exchange network. We’re really just aligning the data and the analytics business along that global expansion,” Clay said.
The exchange now operates equity data in 22 countries around the world, she added.
One thing the exchange was very conscious of when expanding globally is that clients want a lot of the friction taken out of their global trading experience, Clay said. Clients have so many venues to connect to and different formats, feed styles and risk analytics. “We thought we could really simplify this for all our global clients,” she said. “Certainly there is an integration play always when you do these types of things and it starts with a very solid technology stack.”
Discipline around integrating new platforms and technology into the exchange’s scalable trading technology is one of Cboe’s strengths, Clay added. “We have a road map to integrate both the Canadian exchanges and Australia and Japan over the next couple of years to be on a single trading stack.”
In 2020 when Cboe acquired Hanweck, FT Options and Trade Alert, Clay said, “Those were key acquisitions to fill Cboe Global’s product gap for its clients.” The “heavy lift” of integrating the technologies from those companies over the past two years is pretty much in the rear view mirror now, she said. “That gives us time to think about how we are going to combine the products and thoughtfully bring these systems and products together for a single solution.”
The exchange added digital assets to its mix in December 2021 when it signed an exclusive licensing agreement with CoinRoutes, a trading software firm that provides a suite of algorithmic trading tools for digital assets, FX and derivatives.
CoinRoutes is a smart order router within the crypto space, Clay said. “They move a lot of institutional flow to various exchanges around the world, accommodating the need for liquidity in the sometimes illiquid crypto markets.”
She added that it’s very difficult in nascent markets like cryptocurrency to identify the price you should be getting filled at. “If I have five bitcoin, where should I get that amount of notional off in the marketplace? [CoinRoutes is] bringing some price discovery through their data and we are already redistributing that data,” she said. The exchange can also offer ErisX data through Cboe’s global cloud offering – not just equities, derivatives, indices and FX, but crypto data through that one access point.
Clients really want things simplified for them, Clay said.