William Brodsky, chief executive officer of the Chicago Board Options Exchange, today became the first executive from a derivatives market to take over as chairman of the World Federation of Exchanges.
Mr. Brodsky's inauguration, which was hosted by NYSE Euronext in Paris, is the latest sign that securities and derivatives can no longer be treated as isolated markets at a time when Washington lawmakers are pondering putting all trading under one regulatory umbrella.
The 15-member WFE board elected Mr. Brodsky who heads the world's largest options exchange in October, succeeding Massimo Capuano, CEO of Borsa Italiana, Milan.
No doubt, the WFE used to be a pure stock-exchange federation, Mr. Brodsky told reporters at press briefing in January New York. But last year, futures exchanges CME Group Inc., Chicago, and IntercontinentalExchange Inc., Atlanta, joined the WFE as full members.
Although we used to have stock or derivatives exchanges, but the fact is that, today, they are combined, Mr. Brodsky said to explain the evolution of the non-profit trade group, which represents 56 member exchanges and 54 affiliate and correspondent markets.
International exchange groups such as New York-headquartered NYSE Euronext, the parent of the Liffe derivatives exchange in London, or Deutsche Boerse AG, which co-founded the Eurex AG futures market in Frankfurt, have diversified their listings to leverage their resources and better serve investors. Smaller exchanges around the world have also merged securities and futures operations.
It became obvious to exchanges that you could not separate derivatives from cash markets, said Mr. Brodsky, whose own exchange group also includes the CBOE Stock Exchange and the CBOE Futures Exchange, which just experienced a banner year as the home of derivatives contracts on the VIX, the CBOE Volatility index.
Most exchanges in the options business are more than options exchanges, Mr. Brodsky noted, referring to his U.S. competitors, such as Nasdaq OMX Group Inc., New York, which also owns more than one exchange model.