CBOE looks for authority to keep trading floors open during disasters

Recent filing to SEC proposes more powers for exchange to continue operating during disaster recovery periods.

The Chicago Board Options Exchange (CBOE) is seeking authority from the US regulator to continue operating in the event of a physical disaster, system failures or other unusual circumstances.

In a recent filing to the Securities and Exchange Commission (SEC), CBOE proposed to temporarily operate its floor-based, open outcry trading platforms “to preserve [its] ability to conduct business.”

It explained an extension of authority during disaster recovery periods would also “help preserve the exchange’s ability to continuously provide a fair and orderly market.”

Currently, CBOE is allowed to operate in a screen-based only environment if the trading floor becomes inoperable.

CBOE is also looking for permission to deactivate systems considered nonessential in the event of a malfunction or ‘security intrusion’.

The proposed rule changes “will increase confidence in the markets and encourage wider participation in the markets and greater investments,” CBOE said.

It added that further authority will ensure traders “participate in, and provide necessary liquidity to, the market to ensure that the exchange functions in a fair and orderly manner in the event of a significant systems failure, disaster.”