CBOE Holdings discloses settlement talks with SEC
CHICAGO (AP) — Exchange operator CBOE Holdings Inc. is in talks with federal regulators to resolve an investigation of its oversight of firms that trade on the exchanges.
CBOE Holdings is the parent of the Chicago Board Options Exchange and the CBOE Futures Exchange. In financial data released Friday the company estimated it may have to pay $5 million to settle the issue with the Securities and Exchange Commission. That amount has been set aside as an expense for the fourth quarter.
Chicago-based CBOE said it is in "ongoing settlement discussions" with the SEC staff but no agreement has yet been reached.
The company disclosed a year ago that the SEC was investigating its supervision of activities on the exchanges. SEC spokesman Kevin Callahan declined to comment.
CBOE also said Friday that fourth-quarter net income rose 25 percent amid a 4 percent increase in revenue from transaction fees and gains from higher-profit financial products. The company posted net income of $39.7 million, or 45 cents a share, in the October-December quarter, up from $31.3 million, or 35 cents a share, in the fourth quarter of 2011.
Operating revenue rose 8 percent, to $130.1 million.
Analysts expected 42 cents per share on revenue of $127.9 million.
Under the system of regulation of commodities and securities trading firms, the SEC has broad oversight over much of the firms' trading but leaves day-to-day monitoring to exchange operators like CBOE and CME Group Inc., and to the securities industry's self-policing organization, the Financial Industry Regulatory Authority.
Shares of CBOE rose 5 cents to $34.35 in afternoon trading.