Chicago Option Exchange Gets Y2K

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Posted at 10:11 p.m. PST Thursday, January 7, 1999

Chicago Options Exchange ends merger plan

BY DAVID BARBOZA New York Times

CHICAGO -- The Chicago Board Options Exchange on Thursday abandoned its planned merger with the Pacific Stock Exchange, attributing the decision to pressing technological issues and lingering antitrust questions.

The merger, formulated last July, would have linked the world's largest options exchange with a technologically savvy regional stock exchange, allowing the combined outfit to better compete in the rapidly consolidating world of financial exchanges.

Just a year ago, the American Stock Exchange and the National Association of Securities Dealers, which operates the Nasdaq stock market, united in the largest financial market combination ever, and at a time when electronic trading is racing to the forefront, many of the largest financial exchanges are searching for ways to lower costs and to upgrade operations.

But officials at the Chicago Board Options Exchange said Wednesday that their exchange simply did not have the time nor the resources to follow through on the planned merger. Technical staffers are grappling with Y2K, or year 2000, questions. Chicago officials also said they were planning their own electronic trading system to compete with the International Securities Exchange.

Late Thursday, William J. Brodsky, chairman of the Chicago exchange, issued a release saying the canceled merger had little to do with the merits of the plan or the Pacific Stock Exchange. But the Justice Department's request for information and other pressing matters meant that ``we must focus our efforts on other time sensitive issues.''

The Pacific Stock Exchange also issued a release, simply saying that it had been informed Thursday of the decision by the Chicago exchange. Officials there had no other comment and did not say whether the Pacific would seek another partner.

While antitrust questions were cited, officials in Chicago said the burden of answering those inquiries simply made it more difficult to devote resources to expand trading capacity and work on other matters. But there was not a sense that the merger would have been halted by Justice Department officials. Justice Department officials declined to comment.

``When we began negotiating with the Pacific Exchange we thought we'd have it done in a year,'' said Carol Kennedy, a Chicago exchange spokeswoman. ``But now we have Y2K and we have to expand capacity and switch to decimals. We just had a full plate.''

Other officials at the exchange said the planned merger also posed difficulties. The Pacific is in San Francisco and it was unclear how the two units would be merged, and what would happen to the stock trading operation. The Pacific has also long planned to build a new $150 million center in the San Francisco Bay area.

-- Diane J. Squire (sacredspaces@yahoo.com), January 08, 1999

Answers

Whoa! So they have finally figured out the plate is full huh... next step for them is to find out that the only thing on the plate, or at the very least the biggest thing on the plate, is that little tiny 2-digit year thingy.

-- Rob Michaels (sonofdust@net.com), January 08, 1999.

It's a great pity the Nazis at Brussels didn't hold off on the Euro to allow Europe to attack y2k head on.

Result = now they will not make it, no chance whatsoever.

Toast.

-- Andy (2000EOD@prodigy.net), January 08, 1999.