Cboe’s David Howson Talks Product Innovation and International Expansion at FIA Boca Conference

Apr 11, 2024

John Lothian

John Lothian

Executive Chairman and CEO

David Howson, Global President of Cboe Global Markets, spoke with John Lothian News in a video from FIA Boca 2024 as part of our Industry Leaders series sponsored by Wedbush. He shared Cboe’s global vision for 2024, saying the exchange is at an “inflection point” in its growth and is building out its global securities and derivatives network.  “Last year we migrated Australia and Japan on to Cboe’s uniform technology platform,” he said.

Cboe will lean into its strengths, which are its global technology platform and global footprint, as well as product innovation, Howson said, adding, “The exchange will be pushing out new innovations this year and thinking about how capital efficiency can be brought to the markets.”

The company will also be looking to pull more international flow into its core volatility complex, he said. They will be thinking about global trading hours 24/5 and new innovations such as the Russell Tuesday-Thursday contracts, the extension of MSCI, or more collaborations with S&P Dow Jones Indexes, as well as dispersion index futures, which the exchange hopes to launch in 2025. 

He talked about the opportunities in the 24-hour equity trading cycle, where he said “global demand is super interesting.”  He added that if you look at the volatility complex alone, about 25% of the trading takes place during non-U.S. hours. “But then if you look at SPX options and VIX options, only 2 or 3% of trading takes place in those global trading hours, and less than 1% for VIX options,” he said. The barriers the Cboe is focusing on are jurisdictional approvals as well as getting data – most importantly, getting data internationally to customers so they can then train their models and think about engaging in Cboe’s volatility complex, he added. 

He said what Cboe hears from its customers internationally is that they would prefer an on-exchange, transparent, US-style market structure with a single capital pool to interact with, and that is what Cboe is deploying with Cboe Europe Derivatives. 

The Asia Pacific region is really a region of individual countries to access, Howson said. The exchange is looking for regional approvals and getting its data through to those customers. “And when you finally look at the regulatory regime around the world, there are many similarities, but a humongous number of differences,” he said, “and Cboe’s job really is to provide customer solutions to that evolving market landscape.”

JLN asked him about the new senior executives Cboe’s CEO, Fred Tomczyk, put in place last year and how the Cboe is developing talent and management succession. Howson said the Cboe is looking to collaborate between business departments and serve its customers in an increasingly joined and coherent manner, and that “the succession plan plays well into that from the grassroots level all the way up to executives. We have a very intentional and systematic succession planning, career path and career development plan for high potential individuals and associates,” he said, adding, “So if people are interested out there, they can look at the Cboe’s career sites to see what’s available.”

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