North American Equities Yearly Recap and Look Ahead

2021 was a busy and exciting year for Cboe’s North American Equities team and 2022 is already looking to be much the same. With that, I wanted to share some highlights from last year and provide a look ahead at our plans for this year.

Growth in Cboe’s Equities Offerings

We hit the ground running at the start of 2021, completing the acquisition BIDS Trading. While the BIDS Trading business remains separate from our traditional equities business in the U.S., we are excited to leverage the innovative BIDS technology in Canada. BIDS has successfully powered Cboe’s European block trading platform for a number of years. The continuous growth of the platform is testament to the power of BIDS technology and will serve as the template for implementation in Canada.

In June, we announced plans to launch BIDS Canada in February, combining industry-leading block trading capabilities from MATCHNow and BIDS to create an enhanced market center for block-sized liquidity for buy-side and sell-side participants. Notably, 2021 was our first full year with MATCHNow in the Cboe network and what a year it was. Our North American Equities team has benefited tremendously from the addition of the MATCHNow team and we are excited to further integrate our products and services with the upcoming technology migration.

Later, in November, we announced our plans to acquire NEO. We are thrilled to add NEO to our global network, which will enable Cboe to provide a more fulsome Canadian equities offering, operating the NEO Exchange, a national securities exchange with trading, listings and other services, in addition to MATCHNow. More on that later.

New Trading Trends

Throughout the year our team was frequently impressed with and inspired by the explosive growth of retail trading. Retail traders have shaken up the markets, opening the doors for new products, trading mechanisms and education. The Retail Priority trading mechanism on Cboe EDGX® is an example of how we can democratize markets and encourage retail participation. Our North American Equities Execution Consulting Team also kept their finger on the pulse with a series of retail-focused analyses. Their studies: A Deep Dive into US Equities Trading Venues, The Lasting Results of an Unprecedented Market Environment, Interlisted Trading Trends and Opportunities and most recently, How Meme Stocks Impact Options Trading, tell the story of how retail trading has changed over time and how markets are adapting as a result. Check out all of our analyses from the year on Cboe Insights.

Enhanced Accessibility

Across asset classes and geographies, market accessibility became paramount in 2021. To make U.S. equities trading more widely available, we adjusted early trading hours on Cboe EDGX to begin at 4 a.m. We made this change based on customer feedback and the growth in retail trading — a trading community more likely to trade outside of regular trading hours. We are excited about the growth in retail trading and wanted to ensure the Cboe platform retail traders use most — EDGX — meets their needs.

Additionally, we enhanced collaboration with our Market Data team to help connect our customers to data that will enable them to make more informed trading decisions. Cboe One Feed market data — which includes direct access to EDGX quote and trade data — as well as the EDGX market data feeds were updated to support the new early trading hours, so EDGX traders have access to key insights across products. Plus, our Market Data team launched Cboe Global Cloud in November to further expand market data access.

A Record Setting Year

And last but not least, several new records were set in MATCHNow’s Conditional Order Book in 2021, most recently reaching a record 20,570,300 single-counted shares, a $619,318,527 notional value, in November. We are proud to lead the evolution of non-displayed liquidity in Canada and help our clients access midpoint block liquidity through MATCHNow.

What’s Next

2022 is already shaping up to be another excellent year for Cboe North American Equities. We plan to launch Periodic Auctions in the U.S. on Cboe BYX® Exchange soon, pending regulatory approval, and made testing available in the certification environment on January 12. Cboe’s U.S. Periodic Auctions were created to establish an on-exchange alternative to the growth of off-exchange liquidity. Periodic Auctions will offer a new price forming auction for investors seeking liquidity, including but not limited to block size transactions, during the course of the trading day.

On February 1, we will migrate MATCHNow to Cboe technology, creating a unified trading experience across Cboe’s North American markets. We also plan to launch BIDS Canada, bringing to the region an enhanced block trading service based on a successful model first introduced in Europe. This new Canadian offering will combine industry-leading block trading capabilities from MATCHNow and BIDS to create an enhanced market center for block-sized liquidity for buy-side and sell-side participants.

And finally, in the first half of 2022 we plan to complete our acquisition of NEO, strengthening our North American Equities Offering. This strengthened offering is expected to drive more trading activity on Cboe markets and improve efficiencies and opportunities for investors and capital-raisers in both Canada and the U.S.

Thank you for trusting Cboe Global Markets to meet your equities trading needs. We value your business and will strive to continue delivering innovative solutions in 2022. If you have any questions or feedback about existing products and offerings or our upcoming plans, please don’t hesitate to reach out to me or a member of my team.

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