Since the start of the year, CBOE has posted job listings on its website seeking a chief compliance officer, a deputy chief regulatory officer and a chief examiner plus two other examiners, all of whom have compliance responsibilities. In the prior five months, it only sought two lower-level examiners. A spokeswoman declined to comment on the hiring.
Last month, CBOE, the biggest U.S. options exchange, disclosed in a government filing that the SEC is “investigating CBOE's compliance with its obligations as a self-regulatory organization under the federal securities laws.” CBOE said at the time that it was cooperating with the probe and “conducting its own review of its compliance.”
The self-regulatory system that prevails in the financial exchange industry has been criticized following the October demise of MF Global Holdings Inc., which was overseen partly by Chicago futures exchange CME Group Inc. Regulators and industry players alike have been mulling over how the system might be adjusted following MF Global's loss of as much as $1.6 billion in customer funds.
Two top regulatory executives have left CBOE this month. Most recently, Linda Gerdes, head of the market regulation department, exited. Last week, Patrick Fay, a senior vice president with compliance duties, resigned after reports that he had been put on administrative leave.
CBOE shareholder Charles Sorsby said he suspects CBOE is being proactive in adding to its compliance personnel in the face of the federal probe. He didn't have any details related to the investigation.
“Anytime regulators are in your business, you want to be totally proactive in satisfying whatever their requirements are,” said Mr. Sorsby, who leads Sorsby Financial Corp. in Chicago and still owns most of the shares he received two years ago when he converted his five CBOE seats to common stock.
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