The Chicago Board Options Exchange said on Monday it has signed an agreement with the Korea Exchange to share information and look into potential business ventures as the CBOE looks to develop its presence in Asia.
Ventures could include developing new products within a year, the Financial Times reported on Monday. One possibility could be for CBOE to trade options contracts based on a Korean economic indicator and the Korean Exchange to do likewise with U.S. economic indicators.
The agreement comes a week after the CBOE reached a tentative agreement to settle its long standing dispute with members of the Chicago Board of Trade, now part of CME Group Inc.
The settlement, if approved by CBOE members and the U.S. Securities Exchange Commission, would pave the way for the CBOE, the largest options market in the United States with one third of the market, to go public and potentially be taken over.
The CBOE is one of the last remaining member-owned exchanges in a fast consolidating industry, and a stronger Asian foothold would likely enhance the price it could fetch, which analysts estimate to be around $4 billion.
The CBOE said the memorandum of understanding does not commit the exchanges to any joint deals.
CBOE reached a similar agreement with the Taiwan Futures Exchange last year. And in May, the Korea Exchange, the second largest derivatives market in the world after CME Group, agreed with Standard and Poor's, a division of McGraw-Hill Cos Inc., to develop electronic-traded funds and index derivatives underlying global and Asian equities.
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