CBOE files for $300 million IPO

The Chicago Board Options Exchange (CBOE) filed an application with the U.S. securities regulator for an initial public offering.

CBOE, the largest U.S. options exchange by trading volume, filed form S-4 with the U.S. Securities and Exchange Commission on Thursday as a first step towards the IPO.

"There isn't another exchange out there like CBOE that would be ready to come to market," CBOE Chief Executive Bill Brodsky said.

CBOE'S long-running quest to demutualize was delayed by a legal battle with some Chicago Board of Trade members over ownership rights, which was eventually settled last year.

The settlement paved the way for the IPO plans.

CBOE's peers the Chicago Board of Trade (CBOT), the International Stock Exchange (ISE), and the New York Mercantile Exchange (NYMEX) all elected earlier this decade to go public before agreeing to takeovers by larger exchanges.

CBOE offers equity, index and Exchange Traded Fund (ETF) options, including proprietary products, such as S&P 500 options, the most active U.S. index option, and options on the CBOE Volatility Index, the world's barometer for market volatility.

The company will issue 55.8 million class A shares to current owner-members in the demutualization.

CBOE will also issue 12.2 million class B shares to one-time Chicago Board of Trade members, under terms of the settlement of a 2006 lawsuit brought by CBOT members against CBOE over ownership rights, CBOE said in a regulatory filing.

CBOE Chairman and CEO William Brodsky earned a $1.4-million salary last year and a bonus of $1.2 million. Along with other compensation of $808,967, he made a total of about $3.4 million, according to a filing with the U.S. Securities and Exchange Commission.

CBOE was founded in 1973 and only began operating on a for-profit basis at the start of 2006. The company, which has about 600 employees, had net income of $106.5 million last year on revenue of $426 million.

While net income last year slid 7.6% from $115.3 million in 2008, on revenue of $416.8 million, it had jumped almost 40% in 2008 from 2007 net income of $83.2 million.