Item 1. Business

The following description of the business should be read in conjunction with the information included elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2018. This description contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from the results discussed in the forward-looking statements due to the factors set forth in “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Overview

Cboe Global Markets, Inc. is one of the world’s largest exchange holding companies, offering cutting-edge trading and investment solutions to investors around the world. The Company is committed to relentless innovation, connecting global markets with world-class technology, and providing seamless solutions that enhance the customer experience.

Cboe offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S. and European equities, exchange-traded products (“ETPs”), global foreign exchange (“FX”) and multi-asset volatility products based on the VIX Index, the world’s barometer for equity market volatility. Cboe’s trading venues include the largest options exchange in the U.S. and the largest stock exchange by value traded in Europe. In addition, the Company is one of the largest stock exchange operators by volume in the U.S. and a leading market globally for ETP trading.

The Company reports the results of its operations in five business segments: Options, U.S. Equities, Futures, European Equities and Global FX. Our operating revenues consist primarily of transaction fees, regulatory fees, market data fees and connectivity fees. We also generate revenue from both the calculation and dissemination of index values and from the licensing of our proprietary products. Transaction fee revenues are generated on the contracts or shares traded on our exchanges. In 2018, approximately 68.6% of our net revenues were transaction fee revenues.

Our principal executive offices are located at 400 South LaSalle Street, Chicago, Illinois 60605, and our telephone number is (312) 786-5600. Our web site is www.cboe.com. Information contained on or linked through our web site is not incorporated by reference into this Annual Report on Form 10-K.

Our Business

Cboe Options was founded in 1973 as a non-stock corporation owned by its members. Cboe Options was the first organized marketplace for the trading of standardized, exchange-traded options on equity securities. In 2004, CFE began operations as a futures exchange. Cboe Global Markets was incorporated in the State of Delaware on August 15, 2006. In June 2010, Cboe Options demutualized, Cboe Options, CFE and C2 became wholly-owned subsidiaries of Cboe Global Markets and Cboe Global Markets completed its initial public offering. In October 2010, C2 initiated operations. As described in further detail below, on February 28, 2017, the Company completed the acquisition of Bats. Following the acquisition, on October 16, 2017, we changed our legal name from CBOE Holdings, Inc. to Cboe Global Markets, Inc. On September 17, 2018, we voluntarily delisted our common stock from Nasdaq Global Select Market and transferred the listing to Cboe BZX Exchange.

On February 28, 2017, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2016 (the “Merger Agreement”), by and among Cboe Global Markets, Bats, CBOE Corporation, a Delaware corporation and a wholly-owned subsidiary of Cboe (“Merger Sub”), and Cboe Bats, LLC (formerly CBOE V, LLC), a Delaware limited liability company and a wholly-owned subsidiary of Cboe (“Merger LLC”), Cboe completed the Merger of Merger Sub with and into Bats and the subsequent merger (the “Subsequent Merger”) of Bats with and into Merger LLC. As a result of the Merger, Bats became a wholly-owned subsidiary of Cboe. In connection with the Merger, the Company issued approximately 30 million shares of Cboe Global Markets common stock and paid approximately $956 million in cash. The Company entered into a term loan agreement and completed a notes offering, as described below, securing $1.65 billion to finance the cash portion of its acquisition of Bats as well as the repayment of Bats’ existing indebtedness.

The Merger significantly expanded the Company’s product lines across multiple asset classes, broadened its geographic reach with pan-European equities, added global FX markets and diversified its business mix with significant non-transactional revenue streams.

As a result of the Merger, in 2017 the Company began reporting five business segments: Options, U.S. Equities, Futures, European Equities, and Global FX. Prior to this, the Company operated as a single reportable business segment as of December 31, 2016.

	·		Options. The Options segment includes our options exchange business, which lists for trading (i) options on market indexes (“index options”), including the VIX Index and SPX, mostly on an exclusive basis, (ii) non-exclusive "multiply-listed" options, such as options on the stocks of listed individual corporations (“equity options”) and (iii) options on other ETPs, such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETN”). These options trade on Cboe Options, C2, BZX and EDGX. Cboe Options is our primary options market and offers trading in listed options through a single system that integrates electronic trading and traditional open outcry trading on our trading floor in Chicago. This integration of electronic trading and traditional open outcry trading into a single exchange is known as our Hybrid trading model. C2, BZX and EDGX are our all-electronic exchanges that also offer trading in listed options, and typically operate with different market models and fee structures than Cboe Options. It also includes market data revenue generated from the U.S. tape plans and from the sale of associated proprietary market data.

	·		U.S. Equities. The U.S. Equities segment includes listed cash equities and ETP transaction services that occur on BZX, BYX, EDGX and EDGA. It also includes ETP listings, market data revenue generated from the U.S. tape plans, and from the sale of proprietary market data, routing services, connectivity fees and advertising activity from ETF.com.

	·		Futures. The Futures segment includes the business of our futures exchange, CFE, which lists futures on the VIX Index, corporate bond indexes and bitcoin and other futures products. It also includes market data revenue generated from the sale of associated proprietary market data.

	·		European Equities. The European Equities segment includes the pan‑European listed cash equities transaction services, ETPs, exchange‑traded commodities, and international depository receipts that occur on the RIE, operated by Cboe Europe Equities. It also includes the listed cash equities and ETPs routed transaction services that occurred through Cboe Chi-X Europe, as well as the listings business where ETPs can be listed on Cboe Europe Equities. Cboe Europe Equities operates two lit books, a periodic auctions book, a Large In Scale trading negotiation facility and two dark books on its MTF, and operates one lit book and one dark book on its RM. On its MTF books, Cboe Europe Equities offers trading in listed cash equity securities from 18 European markets. It also includes market data revenue generated from the sale of associated proprietary market data.

	·		Global FX. The Global FX segment includes institutional FX services on the Cboe FX platform, which offers an independent, transparent electronic marketplace structure where institutional buyers and sellers worldwide can trade spot FX directly, either anonymously or on a disclosed basis with each other. The Global FX segment also includes non-deliverable forward FX transactions executed on Cboe SEF.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 17 - Segment Reporting to the notes to our Consolidated Financial Statements for discussion of revenues, and operating income (loss) by business segment. Certain areas within our segments operate globally. For information regarding risks related to our international operations see “Risk Factors.”

The following chart illustrates volume and notional value for Options (Cboe Options, C2 Options, BZX Options and EDGX Options); Futures (CFE); U.S. Equities (BZX Equities, BYX Equities, EDGA Equities, EDGX Equities); European Equities; and Global FX (Cboe FX) for the periods indicated (which includes information prior to the acquisition of Bats):

		Annual Volumes
		2018			2017			2016
Options ADV (in millions)			7.9			6.9			4.5
U.S. Equities ADV (in billions)			1.4			1.3			1.6
Futures ADV (in thousands)			300.0			294.8			238.8
European Equities touched ADNV (€ in billions)			10.4			9.4			10.6
Global FX ADNV ($ in billions)			37.4			29.5			26.9

ADV= average daily volume

ADNV= average daily notional value

Competitive Strengths

We have established ourselves as a global leader and innovator in our industry. We believe we are well positioned to further enhance our leadership position through several key competitive strengths:

	·		Innovative Products and Services. We are structured and committed to deliver a differentiated experience to our customers, through our offering of innovative proprietary products, order types, risk management tools and other products and services. We have also worked closely and collaboratively with market participants to introduce new products and services to meet the evolving needs of the industry, and we plan to continue these efforts. Products we have developed include index options, equity options, options and futures on the VIX Index and other volatility indexes, short duration options, including Weeklys, FLexible EXchange Options (“FLEX options”) and options strategy benchmark indexes. We have also developed products that enable our customers to monitor their order handling on our markets in real‑time, such as our user dashboard and latency reports. We were the first U.S. options exchange to trade options during non-U.S. trading hours, offering extended trading hours in our exclusive proprietary products. We also connect with a growing customer base through trading and educational resources, including resources available through our website, the world-renowned Cboe Options Institute, participating at industry trade shows and industry forums.

	·		Leading Proprietary Technology. Bats’ leading proprietary technology was designed in-house to optimize reliability, speed, scalability and versatility. The trading technology platforms have experienced very low operational downtime and have low latency. We believe that this reliability, capacity and speed gives our customers an additional incentive to use our platforms to mitigate trade execution risk, especially in times of extreme market volatility. We plan to further utilize Bats’ leading proprietary trading technology for trading in all of our equities, options and futures markets, which is expected to enhance reliability, speed, efficiency, versatility, resiliency and scalability and result in uniformity of customer experience across all of our markets. C2 and CFE were migrated to Bats’ trading platform on February 25, 2018 and May 14, 2018, respectively. We expect to migrate Cboe Options to Bats’ trading platform on October 7, 2019.

	·		Leading Market Position, Reputation and Brand. We are a leading global operator of securities exchanges and other electronic markets and have a strong market share in the markets we serve. Cboe Options, the largest U.S. options exchange, based on both contract volume and notional value, and one of the largest options exchanges in the world, is an options market leader. As the creator of listed options and other significant products in the listed options industry, including the VIX Index and VIX futures and options, Cboe is a leading brand name in the options and volatility space. In U.S. listed cash equities, we are one of the largest three exchange operators, with a market share of 18.4% of the overall U.S. equity market for the year ended December 31, 2018. In European-listed equities, we execute the largest notional value of pan-European equities traded by a single market operator, with a market share of 22.3% of European trading in the securities available for trading on Cboe Europe Equities for the year ended December 31, 2018. In addition, we have a substantial presence in the

spot FX markets, with a 15.1% market share of the publicly reported institutional spot FX markets for the year ended December 31, 2018. The combination of our attractive market positions, the quality of our markets and the expertise of our teams have enabled us to grow our market share across most of our markets.

	·		Strategic Relationships and Partnerships. We have entered into licensing agreements with index providers under which we have rights to create volatility indexes and offer options and futures products on their indexes. We have also formed partnerships with key providers to develop new products and services. See “Proprietary Products-Strategic Relationships.”

Growth Strategy

Our mission is “to power your potential to stay ahead of an evolving market” and is brought to life through: (1) relentless innovation to expand our diverse offering for investors around the world, (2) cutting-edge technology to connect customers to global markets, and (3) seamless solutions to enhance the customer experience through insights, education, data, analytics and more. We expect to further grow our business and increase our revenues and profitability by following our mission and pursuing the following growth strategies:

	·		Expand Our Customer Base. The acquisition of Bats expanded our customer base through geographic expansion and broader product offerings and leveraged alliances that complement our core business. We intend to continue our efforts to grow the use of our products domestically and internationally, by intensifying our business development efforts to target new institutional investors and retail investors and to inform them about how to trade our products, especially our proprietary products. With our expanded sales team through the Bats acquisition, we are able to increase our cross selling efforts and reach a larger group of potential customers domestically and internationally. We also intend to continue to offer investor education and a wide breadth of educational resources for both institutional and retail customers through the Cboe Options Institute and through our comprehensive website, as well and through our presence at industry trade shows and participation in industry forums. We have expanded, and intend to continue growing, our educational offerings, including through the Cboe Risk Management Conferences (“RMC”), which are held annually in the United States, Europe and Asia. Cboe Europe also expanded access in 2018 to securities listed in Czech Republic, Hungary and Poland.

	·		Develop Innovative Products and Services. We are continuing to explore the development of index and other high margin derivative products to trade on our exchanges. We intend to license and create proprietary intellectual property to develop proprietary products that meet the needs of the derivatives industry, both through strategic relationships and internally developed products, while continuing to diversify our product line across asset classes. In addition, as market share and volumes on our exchanges and trading platforms continue to rise, we believe that additional proprietary market data, analytics and connectivity revenues can be generated while continuing to offer competitive pricing across all of our segments. In 2018, we continued to leverage relationships to extend our product offering by launching new products, such as futures on corporate bond indexes. The MiFID II (defined below) solutions that we implemented in 2018, Periodic Auctions and Cboe Large-In-Scale, have seen strong adoption from our clients searching for MiFID II compliant solutions.

	·		Grow U.S. Equities by Expanding Listings. We were the number one market by continuous trading volume for ETPs in 2018. We believe this trading market share leadership can be used to attract new ETP listings or transfers of existing ETPs listed on other exchanges in both the United States and Europe. In 2018, Cboe added to its U.S. market 61 new ETPs and 12 transfers. In addition to generating more revenues from increased trading volume in ETPs, we believe listing ETPs offers the opportunity to generate incremental fees from opening and closing auctions, as well as value‑added market data and analytics. In Europe, we are capitalizing on changes to regulatory transparency requirements that encourage ETP trading to migrate to regulated exchange markets like Cboe Europe Equities. We also expect continued global industry expansion in ETP launches, trading volumes and assets, which we hope will create additional opportunities for us to serve issuers, liquidity providers and investors.

	·		Offer Compelling Economic Models. We have designed our fees and pricing models to provide benefits to market participants that concentrate their overall trading activity, which we believe encourages market participants to increase their business with us. In our proprietary products, we offer discounts and incentives to certain participants based on relative volume and the use of selected strategies. In multiply-listed products and cash equities trading, we offer incentive programs to attract order flow to help our market participants manage both the fixed and transaction-based costs of trading. We regularly review the fees and pricing models for all of our exchanges to provide an industry-leading economic offering.

	·		Continue to Enhance Our Leading Edge Technology. We recognize that the opportunity to participate in the growth of the equities and derivatives market will be driven in great part by the trading functionality and technology capabilities that an exchange offers to market participants. We intend to use our strong in-house development capabilities and continued investment to further enhance and develop the functionality and capacity of our trading systems. See “Technology.”

	·		Evaluate Strategic Opportunities. We evaluate strategic opportunities that we believe will enhance stockholder value. We specifically look for strategic opportunities beyond our current businesses that will capitalize on our core competencies and diversify our sources of revenue. We continue to form new alliances with various partners that leverage our strengths and enable us to diversify our product and business lines across new regions and asset classes.

Proprietary Products

In addition to our exchanges providing a marketplace and listing venue for the trading of securities and derivatives that meet criteria established in the rules of their respective exchanges, we also offer trading in products and licenses based on our own proprietary indexes and index methodologies. These include volatility index products based on various broad-based market indexes (such as the S&P 500, the S&P 100 and the Russell 2000), volatility indexes based on ETFs and individual stocks (such as the Cboe S&P 500 Implied Correlation Index and the Cboe S&P 500 Smile Index) and options strategy benchmarks (such as BuyWrite, PutWrite and Collar indexes based on the S&P 500 and Russell 2000 and BuyWrite indexes based on other broad-based market indexes). Our most frequently traded products are SPX options and VIX options and futures. In addition to any transaction fee revenue generated on products created based on these indexes, we have licensed others to use some of these indexes to create products and have entered into agreements whereby we have granted to others the rights to sub-license certain indexes. We generate revenue from both the calculation and dissemination of index values and from the licensing of our proprietary indexes.

These proprietary products are built both through our in-house research and development staff and our strategic relationships and license agreements with index providers. The following is a discussion of our strategic relationships and additional detail on our most frequently traded products, including SPX options and VIX options and futures.

Strategic Relationships

The Company has long-term business relationships with several providers of market indexes. We license their indexes, including on an exclusive basis, as the foundation for indexes, index options and other products. The Company also acquires interests in and forms partnerships with key providers to develop new products and services that are expected to capitalize on our core competencies and diversify our sources of revenue. Of particular note are the following:

	·		S&P 500, S&P 100, S&P Select Sector Indexes. We have the exclusive right to offer options contracts on the S&P 500 Index, the S&P 100 Index and the S&P Select Sector Indexes as a result of a licensing arrangement with S&P Dow Jones Indices, LLC (“S&P”). Our license with S&P is through December 31, 2033, with an exclusive license to trade options on the S&P 500 Index through December 31, 2032. We are also authorized to use the S&P 500 Index and S&P 100 Index for the creation of Cboe volatility indexes, such as the VIX Index, and tradable products on those volatility indexes.

	·		FTSE Russell Indexes. Under our license agreement with the London Stock Exchange Group’s leading global index franchises, Frank Russell Company and FTSE International Limited (together “FTSE Russell”), we have the exclusive right in the United States to offer options on more than two dozen FTSE Russell indexes, which represent a diverse group of domestic and global equities with international appeal. We offer options on the Russell 2000, Russell 1000, Russell 1000 Value, Russell 1000 Growth, FTSE Emerging Markets, FTSE 100 and FTSE China 50 Indexes.

	·		MSCI. We have the exclusive right in the United States to offer options on six of MSCI’s indexes, as a result of a licensing arrangement with MSCI Inc. We currently offer options on two of these indexes, the MSCI EAFE and the MSCI Emerging Markets Indexes.

	·		Dow Jones Industrial Average ("DJIA"). We have the exclusive right during standard U.S. trading hours to offer options contracts on the DJIA and certain other Dow Jones indexes through December 31, 2033 as a result of a licensing arrangement with DJI Opco, LLC. We are also authorized to use these indexes to create Cboe volatility indexes and trade options, futures and other products on these indexes.

	·		Cboe Vest. We have a majority equity investment in Cboe Vest Financial Group, Inc. (“Cboe Vest”), an investment manager focused on Target Outcome Investment strategies. Cboe Vest offers mutual funds, including Cboe Vest S&P 500 Buffer Protect Strategy Fund and Cboe Vest Defined Distribution Strategy Fund.

SPX Options

The S&P 500 Index is an index comprised of 500 large-cap U.S. listed companies. It is one of the most commonly followed indexes, and is considered a bellwether for the U.S. economy. The options we offer on the S&P 500 Index are exclusive to Cboe and contribute substantially to our volumes and transaction fees. Because of its status as a bellwether, SPX is traded in a number of different trading strategies by customers with different goals, including pension funds hedging their equity exposure by buying put options, asset managers seeking enhanced returns by selling covered call options and hedge funds using risk-managed strategies to capture so-called “risk premia” embedded in option prices. We also offer SPX Weeklys options, which we believe that traders are using to fine tune the timing of hedging strategies and maximize the risk premium in strategies that involve the sale of options, such as covered call writing.

Volatility Trading

Cboe pioneered the volatility trading space with its introduction of futures on the VIX Index in 2004 and options on the VIX Index in 2006. The VIX Index is based on real-time prices of options on the S&P 500 Index and is designed to reflect investors’ consensus view of future 30-day expected stock market volatility. Since we started offering these products, we have seen trading from a number of different customer segments utilizing a number of different trading strategies, including hedging extreme stock market declines, also known as “tail risk” hedging, and risk-managed strategies that seek to capture the relative price changes of expected volatility at different times in the future. We also offer VIX Weeklys options and futures to provide investors with opportunities and tools to trade volatility over a shorter term.

Trading volumes in options and futures on the VIX Index may be especially sensitive to market volatility, with increases in volume generally occurring along with spikes in volatility. While we believe that there will be continued intrinsic growth in our volatility products, significant changes in the levels of market volatility may significantly impact volumes in these products.

Listing

Cboe serves as a listing destination for ETPs in the U.S. and Europe. In 2018, Cboe’s market specifically structured and designed for ETP issuers and their investors added 61 listings and won 23 percent of all new U.S. ETP listings. There are now 290 ETPs globally listed on Cboe from 55 different issuers. We offer fully‑automated opening, closing and halt reopening auctions for our listed securities, which are designed to maximize the efficiency of the price discovery process.

Cboe also offers issuers the choice of a more traditional market maker program referred to as the Cboe Lead Market Maker (“LMM”) program on Cboe BZX and the Cboe Europe Equities Liquidity Provider Program (“LPP”) on Cboe Europe Equities. An LMM has certain quoting obligations and for meeting those enhanced obligations, Cboe pays the LMM an enhanced rebate for executions against its displayed orders in the issuer’s security and charges a reduced fee when the LMM executes against other orders in the issuer’s security. Under the LPP, Cboe Europe Equities offers three programs designed for participants that wish to provide liquidity by posting and maintaining executable quotes within certain set parameters with the result of providing liquidity on a regular and ongoing basis. Cboe BZX also offers the Cboe Liquidity Management Provider (“LMP”) Program (“LMP Program”). The LMP Program is a rewards-based program that incentivizes liquidity providers to make a better market in ETPs. Incentives are based on an LMP’s quote quality in the Cboe LMP Program securities, which include all Cboe-listed ETPs and certain non-Cboe-listed ETPs.

Market Data

We derive a portion of our revenue from market data fees from U.S. tape plans, including Unlisted Trading Privileges (“UTPs”), the Consolidated Tape Association (“CTA”) and OPRA. Fees, net of plan costs, from UTP, CTA, and OPRA are allocated and distributed to plan participants like us according to their share of tape fees based on a formula, required by Regulation NMS, which may take into account both trading and quoting activity.

We also provide a robust offering of market data products across multiple asset classes and geographic regions that are designed to suit our customers’ diverse needs. Products include real-time depth of book quotation information, auction and complex option information, top of book quotes and trades, last sale information, consolidated equity feeds, real-time index values, and trade reporting facility information. We also provide analytics services and historical information for our markets through multiple data services.

Our Models

To meet various market demands we utilize a variety of market and pricing models. Cboe Options utilizes various models in different listed options classes, with different combinations of customer priority, participation rights and pro-rata, modified pro-rata or price-time priority depending on the product. We have adopted a pro-rata model on listed equity options trading on C2 and EDGX. Cboe Options and EDGX Options utilize a “classic” pricing model that charges a fee to market makers and a portion of that fee is then provided back to customers’ brokers (known as payment for order flow). The classic pricing model also provides customers with rebates and volume incentive programs and charges fees to non-customers. In our proprietary products, we assess transaction fees on all participants, with the amount of the fee based on the market participant’s role and the origin of the underlying order, and subject to discounts based on relative volume or trading strategies.

CFE utilizes a price-time priority model for VIX futures and clients are charged transaction fees that vary depending on the type of market participant on whose behalf a trade is made and on whether the trade is executed through CFE’s central limit order book, or is a block trade. CFE also has rebate schedules for VIX futures that provide rebates for satisfying designated trading volume thresholds and has also adopted a maker–taker fee structure for weekly VIX futures.

We have adopted a price-time priority model and “maker-taker” and “taker-maker” pricing models in certain of our markets. Under our “maker-taker” pricing model, on BZX (for both listed cash equity securities and listed equity options), EDGX (for listed cash equity securities) and C2 (options), a customer posting an order on our book (the “liquidity maker”) is paid a rebate for an execution occurring against that order, a customer executing against an order resting on our book (the “liquidity taker”) is charged a fee. We generate a substantial portion of our operating income from the difference between the “maker” rebate and the “taker” fee. Although customers must pay a fee to access that liquidity, that fee is explicitly disclosed and charged to all customers on a non-discriminatory basis. Conversely, the BYX and EDGA listed cash equity securities “taker-maker” pricing model provides that a liquidity taker will be paid a rebate, and the liquidity maker will be charged a fee. In Europe, following the implementation of MiFID II, rebates are no longer generally available unless they are tied to a market making scheme or specific service. Cboe Europe Equities is therefore moving away from its traditional maker-taker pricing model to one where a participant must meet certain performance criteria to earn rebates.

The Cboe FX platform uses a price‑firmness-time priority model and clients are charged either a flat or tiered commission rate based upon the notional amount traded on the platform.

Our exchanges also charge fees for the opportunity to trade or access our exchanges, including fees for trading-related functionality. To facilitate trading, we also charge fees for certain technology services, terminal and other equipment rights, maintenance services, trading floor space and telecommunications services.

Customers

Our customers include financial institutions, institutional and individual investors and professional traders. Our equities and options customers in the United States include trading permit holders and members of Cboe Options, C2, BZX, BYX, EDGX and EDGA, which are SEC‑registered broker‑dealers, and the clients of those broker‑dealers. Our futures customers include banks, futures commission merchants, hedge funds, asset managers, proprietary trading firms and Commodity Trading Advisors. Similarly, our equities’ customers in Europe are European Union (“E.U.”) regulated brokerage and proprietary trading firms, as well as sponsored access clients of these brokerage firms, and certain non-E.U. regulated and unregulated direct access participants. Our institutional spot FX customers include banks, broker‑dealers, hedge funds, asset managers, proprietary trading firms, Commodity Trading Advisors and corporates. Access to our markets, trading rights and privileges depend upon the nature of the customer, such as whether the individual is a trading permit holder, trading privilege holder, member or participant of one of our markets.

Competition

The industry in which we operate is intensely competitive. We believe we face competition on a number of factors, including:

	·		the price, quality and speed of our trade execution;

	·		functionality and ease of use of our trading platforms;

	·		range of our products and services;

	·		integrity of our marketplaces;

	·		technological innovation and adaption; and

	·		our reputation.

We believe that we compete favorably with respect to these factors through a variety of methods, including:

	·		offering access to a broad array of products and services, including proprietary products and market data;

	·		offering fee schedules, pricing models that both attract order flow and provide incentives to liquidity providers;

	·		providing advanced technology that offers broad functionality, low latency, fast execution, ease of use, scalability, reliability and security;

	·		offering efficient, transparent and liquid marketplaces;

	·		offering deep and liquid markets with opportunities for price improvement;

	·		maintaining close relationships with customers; and

	·		providing customers with a comprehensive source of information on options and ETPs as well as extensive options education.

In our proprietary products, we compete against other futures exchanges and swap execution facilities that offer similar products, as well as against financial market participants that offer similar over-the-counter derivatives. We also compete against certain multiply-listed options products, such as options on SPY, which offer some of the market exposure of our proprietary products such as options on SPX.

The multiply-listed options industry is extremely competitive. We expect this trend to continue. The number of U.S. options exchanges that we compete with is 11 exchanges, as of December 31, 2018, in large part due to existing exchange holding companies opening new exchanges that offer different markets and pricing models on existing technology. Most of the equity options and options on ETPs listed and traded on our exchanges are also listed and traded

on the other options exchanges. In addition, the options exchanges that we compete with set fees and rebates to attract multiply-listed options business to their exchanges, which has historically reduced the net revenue per contract that we generate from multiply-listed options, and the options exchanges that we compete with structure their options businesses in partnership with established market participants, such as consolidators, and other order flow providers, to increase their volume traded.

Our U.S. listed cash equity securities and listing services compete against nine other exchanges and several alternative trading systems (“ATSs”). Market participants have multiple venues for the execution of orders, including national securities exchanges and numerous off‑exchange venues, including ATSs operating “dark pools” that do not publicly display quotations, “lit” ATSs that publicly display quotations operating as electronic communication networks, and broker‑dealers who internalize orders off‑exchange. Additionally, issuers have multiple venues for the listing of their products, including other national and regional exchanges.

The market for execution services in Europe has become significantly more competitive following the introduction of the Markets in Financial Instruments Directive (Directive 2004/39/EC) (“MiFID”). We expect that competition in pan-European trading will continue to increase in the near term, though the Directive on Markets in Financial Instruments (Directive 2014/65/EU) repealing Directive 2004/39/EC (“MiFID II”) and the Regulation on Markets in Financial Instruments (Regulation (EU) No 600/2014) (“MiFIR”) place more onerous conditions on trading venues and investment firms and restrict certain types of trading activity. New MTFs emerged that have captured significant market share from existing national exchanges. Our major competitors in Europe include national stock exchanges and other pan-European market operators as of December 31, 2018.

The spot FX market remains severely fragmented, with transparent automated marketplaces such as Cboe FX challenging a small number of similarly situated competitors. While the spot FX market recently has been experiencing a shift from competing interbank platforms to ECNs, the electronification of the spot FX market may encounter resistance from clients that still prefer to utilize the phone, instant chats, terminals and key banking relationships for price discovery and trading. Furthermore, electronification of the FX market appears to be experiencing more resistance outside the United States. The electronic spot FX market is also intensely competitive, with over 10 other venues competing for market share as of December 31, 2018.

In addition, demand for our market data faces competition from other securities exchanges, technology companies, third-party market data providers and information and software vendors, who have their own substantial market data distribution capabilities that serve as alternative means for receiving open market data feeds instead of connecting directly to our exchanges. The sale of our proprietary data products is also under competitive threat from ATSs and trading venues that offer similar products. Distributors and consumers of our market data may also use our market data as an input into a product that competes against one of our traded or cleared products.

Technology

Cboe Trading Technology

Cboe currently operates two distinct technology platforms for its equity, options and futures markets, Cboe Command and the Bats trading platform. Cboe Options is currently operating on Cboe Command. C2, CFE, BZX, BYX, EDGA, EDGX and Cboe Europe Equities all operate on the Bats platform. CFE’s migration to Bats’ trading platform was completed on February 25, 2018 and C2’s migration was completed on May 14, 2018. We also plan to utilize Bats’ leading proprietary technology by migrating trading on Cboe Options onto Bats’ trading platform which is expected to be completed on October 7, 2019. Until the migration is completed, Cboe Options is expected to continue operating on Cboe Command. In addition, Cboe operates a separate FX trading platform for Global FX.

Our trading platforms are developed, owned and operated in-house and are designed to optimize reliability, speed, scalability and versatility. Each of our exchanges provide different market models, appealing to different user bases and the trading technologies support all of them. Further, the technologies are designed to support many specialized features for each of the markets, including: dark books, trade reporting facility, systematic internalizer, Large-in-Scale, smart order routing, FLEX options, 24x5 trading and hybrid trading (combining electronic and open outcry).

Our trading platforms have experienced very low operational downtime and low latency. The trading platforms use readily available hardware, thereby minimizing capital outlays required for each new market entry. Also, in order to continue to implement new enhancements to the Bats trading platforms, new releases of software are deployed on a weekly basis in all of the applicable markets.

Disaster Recovery

We operate and maintain geographically diverse disaster recovery facilities for all of our markets. We expect that the disaster recovery facilities can be up and running in a short period of time and work with our market participants to ensure that the marketplace can be quickly reopened. We believe that our recovery time in the event of an outage is comparable to or better than that of our competitors. We regularly test our data center recovery plans and periodically carry out weekend tests using our back-up data centers, as well as an annual test with our U.S. trading participants. In Europe, we also regularly test our data center recovery plans and periodically carry out weekend tests which use our back-up data center, as well as an annual test with our European trading participants. We continue to work to improve both the availability of our technology and our disaster recovery facilities.

Routing and Clearing

OCC is the sole provider of clearing on all of our options and futures exchanges. National Securities Clearing Corporation (“NSCC”) is the sole provider of clearing on our U.S. listed cash equity exchanges. Cboe Europe Equities relies on LCH.Clearnet Group Limited (“LCH”), EuroCCP N.V., a Dutch domiciled clearing house (“EuroCCP”) and SIX x‑clear Ltd (“SIX x-clear”) to clear trades in European listed equity securities as part of an interoperable clearing model.

Cboe Trading is a routing broker-dealer used by our four U.S. equity exchanges and our BZX, C2 and EDGX exchanges for options.

Regulatory Environment and Compliance

Various aspects of our business are subject to regulation by the SEC, CFTC, FINRA, ESMA and FCA and market participants may be subject to regulation by the SEC, CFTC, FINRA, FCA, Board of Governors of the Federal Reserve, U.S. Department of the Treasury and/or foreign regulators. The following is a discussion of the more significant areas of regulation of us by the SEC, the CFTC, and certain European regulators.

Recent Developments

Laws and regulations regarding our business are frequently modified or changed to address perceived problems, new products, competition or at the request of market participants. The following is a summary of the general regulatory structure and brief discussion of recent regulatory developments that may significantly impact our business.

United States

Transaction Fee Pilot

In December 2018, the SEC approved a transaction fee pilot in national market system (“NMS”) stocks (the “transaction fee pilot”). The pilot will subject stock exchange transaction fee pricing, including maker-taker fee-and-rebate pricing models, to new temporary pricing restrictions across two test groups, and require the exchanges to prepare data to be submitted to the SEC. The pilot includes a test group that will prohibit rebates and linked pricing, as well as a test group that will impose a cap of $0.0010 for removing or providing displayed liquidity. Once commenced, the pilot will last for up to two years with an automatic sunset at one year unless extended by the SEC.

The transaction fee pilot may cause Cboe’s equities exchanges, BZX, BYX, EDGX and EDGA, to require additional resources to comply with or challenge the pilot and it may have a material impact on our business, financial

condition and operating results if, for example, order flow shifts away from exchanges were to occur. See Note 23 (“Commitments, Contingencies, and Guarantees—Legal Proceedings”) for more information.

Europe

MiFID Review

The overarching objective of MiFID II and MiFIR is to further the stability, integrity, transparency and efficiency of E.U. financial markets, as well as to enhance investor protection. MiFID II and MiFIR began to apply in January 2018. This legislation has resulted in a significant change in the E.U. regulatory landscape for trading and clearing. Cboe Europe Equities and its customers have incurred significant costs related to the implementation of these requirements and may continue to incur additional costs as the regulation evolves through further guidance or legislation.

Capital Markets Union

The E.C. has highlighted one of its top priorities as being the establishment of a fully functioning, well‑regulated Capital Markets Union by 2019. In February 2015, the E.C. adopted a Green Paper outlining its possible scope and highlighting five short‑term priority areas, including securitization, updating the Prospectus Directive, Small and Medium Enterprise (“SME”) credit information, private placements and finalization of the European Long Term Investment Funds. An Action Plan of concrete steps was set out in September 2015, and an update of the list of initiatives was published in September 2016. This remains an ongoing project for the E.C., which may result in additional regulation or legislation.

Orderly Markets

ESMA has implemented “Guidelines on systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities.” The purpose of the guidelines is to ensure common, uniform and consistent application of MiFID and the Market Abuse Directive as they apply to the systems and controls required of: (i) trading platforms and investment firms in an automated trading environment; and (ii) trading platforms and investment firms in relation to the provision of direct market access and sponsored access. These requirements will be further enhanced by MiFID II and MiFIR and the Market Abuse Regulation (“MAR”) which came into effect on July 3, 2016. MAR extends the scope of the market abuse framework to new markets, new behaviors and new platforms.

OTC Derivatives, Central Counterparties and Trade Repositories

The European Market Infrastructure Regulation sets out new rules relating to OTC derivatives markets, central counterparties and trade repositories. The new rules introduce a reporting obligation for OTC derivatives markets, a clearing obligation for eligible OTC derivatives markets, measures to reduce counterparty credit and operational risk for bilateral OTC derivatives markets, CCPs, and trade repositories, and rules on the establishment of interoperability between CCPs. The regulation became effective in August 2012, with the first obligations effective beginning in March 2013. In addition, a new regulation governing the authorization and supervision of Central Securities Depositories was approved in September 2014, with the publication of most “Level 2” Regulatory Technical Standards in March 2017, for implementation in March 2019, and a recovery and resolution framework is currently being considered for CCPs.

Compliance

U.S. Securities Industry

Federal securities laws have established a two-tiered system for the regulation of securities exchanges and market participants. The first tier consists of the SEC, which has primary responsibility for enforcing federal securities laws. The second tier consists of self-regulatory organizations (“SROs”), which are non-governmental entities that must register with and are regulated by the SEC. Cboe Options, C2, BZX, BYX, EDGX, and EDGA (the “Exchanges”) are SROs, each registered under Section 6 of the Exchange Act of 1934, as amended (“Exchange Act”) as a “national securities exchange,” and are subject to oversight by the SEC.

SROs are an essential component of the regulatory scheme of the Exchange Act for providing fair and orderly markets and protecting investors. To be registered as a national securities exchange, an exchange must successfully undergo an application and review process with the SEC prior to beginning operations. Among other things, the SEC must determine that the SRO has the ability to comply with the Exchange Act and to enforce compliance by its members and persons associated with its members with the provisions of the Exchange Act, the rules and regulations thereunder and the rules of the exchange.

In general, an exchange SRO is responsible for operating its trading platforms consistent with its rules, and regulating its members through the adoption and enforcement of rules governing the business conduct of its members. The rules of the exchange must also assure fair representation of its members in the selection of its directors and administration of its affairs and, among other things, provide that one or more directors be representative of issuers or investors and not be associated with a member of the exchange or with a broker or dealer. Additionally, the rules of the exchange must be adequate to ensure fair dealing and to protect investors and may not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.

As registered national securities exchanges, virtually all facets of our Exchange operations are subject to the SEC’s oversight, as prescribed by the Exchange Act. The Exchange Act and the rules thereunder impose on us many regulatory and operational responsibilities, including record keeping and the day-to-day responsibilities for market operations and broker-dealer oversight. Furthermore, as SROs, the Exchanges are potentially subject to regulatory or legal action by the SEC or other interested parties. The SEC also has broad enforcement powers to censure, fine, issue cease-and-desist orders, prohibit us from engaging in some of our businesses, suspend or revoke our designation as a registered securities exchange or remove or censure any of our officers or directors who violate applicable laws or regulations. For example, on June 11, 2013, Cboe Options and C2 entered into a consent order with the SEC, under which Cboe Options and C2 were censured, ordered to cease and desist from violating certain sections of the Exchange Act, paid a fine of $6 million and agreed to complete certain undertakings. We have certified to the completion of these undertakings and are also required to certify until 2019. In addition, on January 12, 2015, EDGX and EDGA entered into a consent order with the SEC, under which EDGX and EDGA were censured, ordered to cease and desist from violating certain sections of the Exchange Act, paid a fine of $14 million and agreed to complete certain undertakings. We have certified to the completion of these undertakings and are no longer required to certify.

As part of its regulatory oversight, the SEC conducts periodic reviews and inspections of exchanges, and the Exchanges have been subject to such routine reviews and inspections. To the extent such reviews and inspections result in regulatory or other changes, we may be required to modify the manner in which we conduct our business, which may adversely affect our business. We collect certain fees to cover Section 31 fees charged to the Exchanges by the SEC and certain fees derived from our regulatory function and fines in connection with our disciplinary proceedings. The Exchanges are responsible for the ultimate payment of Section 31 fess to the SEC. Additionally, under the rules of each of our options exchanges, as required by the SEC, any revenue derived from the regulatory fees and fines cannot be used for non-regulatory purposes.

Section 19 of the Exchange Act also provides that we must submit to the SEC proposed changes to any of the Exchanges’ rules, including revisions of their certificates of incorporation, bylaws, or other governing documents of the SROs or their parent companies. The SEC will typically publish the proposal for public comment, following which the SEC may approve or disapprove the proposal, as it deems appropriate. Certain categories of rule changes, like fee changes, can be effective on filing, but the SEC retains the ability to suspend or reject such filings within a prescribed period of time.

Futures and Swaps Industry-CFE and Cboe SEF

The operations of each of CFE and Cboe SEF are subject to regulation by the CFTC under the Commodity Exchange Act. The Commodity Exchange Act generally requires that futures trading in the United States be conducted on a designated contract market and, in some cases, requires swaps trading to be conducted on swap execution facility (“SEF”) or designated contract market (“DCM”). The Commodity Exchange Act and CFTC regulations establish criteria for an exchange to be designated as a contract market on which futures and futures options contracts may be traded, and for a trading platform to be designated as a swap execution facility on which certain swaps may be traded. Designation

as a contract market or swap execution facility for the trading of a specified futures or swaps contracts is non-exclusive. This means that the CFTC may permit additional exchanges or trading platforms to be contract markets or swap execution facilities for trading the same or similar contracts.

CFE is a designated contract market, and Cboe SEF is a swap execution facility, each of which is subject to the oversight of the CFTC and to a variety of ongoing regulatory and reporting responsibilities under the Commodity Exchange Act. As a designated contract market, CFE is required to comply with the applicable core principles and regulations under the Commodity Exchange Act, as is Cboe SEF as a swap execution facility. Each of CFE and Cboe SEF has surveillance and regulatory operations and procedures to monitor and enforce compliance by trading privilege holders with CFE rules, and by participants with SEF rules, as applicable. If CFE or Cboe SEF fails to comply with applicable laws, rules or regulations, it may be subject to censure, fines, cease-and-desist orders, suspension of its business, removal of personnel or other sanctions, including revocation of CFE’s designation as a contract market or Cboe SEF’s designation as a swap execution facility.

Europe

Our European stock exchange, Cboe Europe Equities, is located in London and subject to regulation in the United Kingdom and to certain European regulations. Cboe Europe Equities has applied to the Netherlands Authority for the Financial Markets to become a Regulated Market in the Netherlands. The application is expected to be decided by the end of the first quarter of 2019. The current United Kingdom regulatory system was established by the Financial Services Act 2012 (“FSA12”), which amended the Financial Services and Markets Act 2000 (“FSMA”). The legislation replaced the previous financial services regulator, the Financial Services Authority, with three new bodies: The Financial Policy Committee (“FPC”), The Prudential Regulation Authority (“PRA”), and the FCA. The FPC is a committee of the Bank of England and sets policy for financial regulation. It is made up of the Governor and other senior figures within the Bank, along with the chief executives of the PRA and FCA and senior industry figures. The PRA is responsible for the prudential regulation of banks, insurance companies and other systemically important institutions. Financial conduct of markets, including activity on, and the operation of, markets is regulated by the FCA, which is an independent non‑governmental body, given statutory powers by the FSA12. The FCA has three statutory objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the U.K. financial system; and to promote effective competition in the interests of consumers in the markets for financial services. The FCA is accountable to Her Majesty’s Treasury Ministers and, through them, to Parliament.

FSMA, as amended by FSA12, governs the regulation of financial services and markets in the U.K. Under Section 19 of FSMA, any person who carries on a regulated activity in the U.K. must be authorized by the appropriate authority or exempt. Recognized bodies, which include exchanges and clearing houses, are exempt. Breach of Section 19 may be a criminal offense and punishable on indictment by a maximum term of two years imprisonment and/or a fine. The FSMA (Regulated Activities) Order 2001 which is secondary legislation under FSMA, details regulated activities and specified investments.

Once a firm is authorized or recognized by the FCA, it is required to meet the standards set out in its Handbook of Rules and Guidance and to supply the FCA with information so that the FCA can monitor the firm’s business. The FCA supervises the firm according to the risks that it poses to the FCA’s statutory objectives.

Much of the U.K. financial services regulation originates in the European Union. On November 1, 2007, MiFID, which replaced the Investment Services Directive, came into force, and was implemented by EEA member states. MiFID aims to harmonize European financial services businesses by setting out provisions governing organizational and conduct of business requirements that apply to firms and the requirements applicable to RMs (for example, stock exchanges) and MTFs. MiFID also aims to facilitate cross‑border business by extending the concept of “passporting,” which allows firms authorized to carry on business in one EEA member state to carry on business in other EEA member states.

As an RIE that operates both an RM and an MTF, Cboe Europe Equities is required to comply with the relevant U.K. requirements as set out in the FCA Handbook, including, where applicable, relevant European Directives and Regulations, as implemented, or which apply directly in the U.K. These requirements include organizational

requirements, capital resources requirements and the specific requirements for RMs and MTFs. MiFID sets out requirements for RMs and MTFs with respect to the establishment of transparent and non‑discretionary rules and procedures governing access and for fair and orderly trading and the efficient execution of orders, as well as to facilitate the efficient settlement of transactions conducted on RMs and MTFs and monitoring compliance with the rules. The regulatory functions required of Cboe Europe Equities by MiFID are performed by in‑house staff. Cboe Europe Equities utilizes the same state‑of‑the‑art, real‑time surveillance system that we use to monitor trading and market activities on BZX, BYX, EDGA and EDGX.

MiFID has been updated, and the new legislation, known as MiFID II and MiFIR, was implemented January 3, 2018 and generally tightens the requirements placed on both exchanges and investment firms. In particular, use of certain waivers from pre‑trade transparency are capped as a percentage of total market volume and a general trading obligation requires almost all equity trades to be conducted on a duly registered trading venue. Furthermore, MiFID II and MiFIR extend mandatory transparency requirements to non‑equity markets, such as fixed income.

Global FX

While the global institutional spot FX market remains largely unregulated, the enactment of the Dodd Frank Act and its related regulations in the United States and the ongoing implementation of MiFID II and MiFIR in Europe have impacted the regulatory landscape for currency derivative products. For example, certain standardized currency derivative products are required to trade on an organized trading venue such as an SEF or DCM in the United States or on an MTF or OTF in Europe. Moreover, even in the largely unregulated spot FX market, this movement towards additional trading standards and norms is highlighted by the publication of the FX Global Code in 2017 by the Global Foreign Exchange Committee, reflecting principles of good conduct for the wholesale FX market (the “Global Code”), and whose publication may lead to additional oversight in the global FX market.

Broker‑Dealer

Cboe Trading is a registered broker‑dealer regulated by the SEC, FINRA, other SROs of which it is a member and various state securities regulators. Cboe Trading currently operates as the routing broker‑dealer for sending orders from the BZX, BYX, C2, EDGX and EDGA exchanges to other venues for execution, including routing orders among BZX, BYX, C2, EDGX and EDGA. Cboe Trading does not currently serve as the routing broker-dealer for Cboe Options. Cboe Trading is considered a facility of BZX, BYX, C2, EDGX and EDGA and is subject to the rules of these exchanges. BZX, BYX, C2, EDGX and EDGA are responsible for enforcing Cboe Trading’s compliance with their rules, including to ensure Cboe Trading is not given preferential treatment.

Cboe Trading is subject to SEC and SRO rules and, as a registered broker-dealer, regulations concerning all aspects of its business, including trading practices, order handling, best execution, anti‑money laundering, handling of material non‑public information, safeguarding data, reporting, record retention, market access and the conduct of its officers, employees and other associated persons. The SEC, SROs and state securities commissions may conduct proceedings which can result in injunctions or other sanctions, censures, fines, the issuance of cease and desist orders or the suspension or expulsion of a broker‑dealer, its officers or employees. The SEC and FINRA impose certain minimum capital requirement rules that require notification when a broker‑dealer’s net capital falls below certain predefined criteria, dictate the ratio of debt to equity in the regulatory capital composition of a broker‑dealer, constrain the ability of a broker‑dealer to expand its business under certain circumstances and impose certain requirements that may have the effect of prohibiting a broker‑dealer from distributing or withdrawing capital.

Cboe Global Markets

Certain aspects of Cboe Global Markets are also subject to SEC and FCA oversight, including certain ownership and voting restrictions on its stockholders. The focus of the SEC’s regulation of Cboe Global Markets is to assure fair representation of members in the selection of the directors of the Exchanges, public participation in the governance of the Exchanges and that the Exchanges can satisfy their regulatory responsibilities under the Exchange Act. Furthermore, the SEC requires that Cboe Global Markets give due regard to the preservation of the independence of the self-regulatory function of the Exchanges and to Cboe Global Markets’ obligations to investors and the general public. The

SEC also requires that Cboe Global Markets not take any actions that would interfere with the effectuation of any decisions by the board of directors of any of the Exchanges relating to its regulatory functions or the structure of the market that it regulates or that would interfere with the ability of such Exchange to carry out its responsibilities under the Exchange Act. To the extent that Cboe Global Markets’ business activities involve or relate to the Exchanges, the officers and directors of Cboe Global Markets may be deemed to be officers and directors of the exchanges for purposes of and subject to oversight under the federal securities laws. Accordingly, the SEC may exercise direct supervision and disciplinary authority over certain Cboe Global Markets’ activities and those activities may be subject to SEC approval and, in some cases, public notice and comment.

In addition, Cboe Global Markets indirectly holds all of the issued share capital and voting rights in Cboe Europe Equities and its wholly owned subsidiary, Cboe Chi-X Europe. As a result, we and any person who holds, or has voting power with respect to, 10% or more of the outstanding shares of Cboe Global Markets common stock is subject to certain regulatory requirements under U.K. law, such as filing a change in control notice with the FCA when acquiring indirect control in an FCA entity.

U.S. Regulatory Responsibilities

Our U.S.-based exchanges are responsible for assessing the compliance of their TPHs or members, including Cboe Trading, with the respective exchange’s rules and the applicable rules of the SEC and/or CFTC. The main activities that the exchanges, as applicable, are required to monitor for the purpose of compliance with these rules include:

	·		surveillance designed to detect violations of exchange trading rules;

	·		surveillance designed to detect violations of other SEC and/or CFTC rules;

	·		the further investigation of matters deemed to be problematic;

	·		the investigation of complaints about possible rule violations brought by customers, TPHs, members or other SROs; and

	·		the examination of TPHs or members, including Cboe Trading, for compliance with rules such as those related to net capital, books and records, market access and other matters related to the TPHs’ exchange business functions.

In order to ensure market integrity, we regulate and monitor our TPHs’ and members’ trading activities by using both our employees and third parties under RSAs. See “Regulatory Agreements” below. Providing effective regulation is important for attracting and retaining the confidence and participation of market-makers, broker-dealers and institutional and retail investors.

We expend considerable time, financial resources and effort to ensure that the exchanges’ rules and regulations conform to regulatory best practices within the securities and futures exchange industries and within the regulatory regime overseen by the SEC and CFTC, our primary regulators. In order to support our efforts and those of our market participants to comply with applicable law and our exchange rules, we developed a regulatory program to monitor market activity on our exchanges.

All of our Exchanges and CFE are participants in the Intermarket Surveillance Group (“ISG”). ISG is an international information-sharing cooperative governed by a written agreement that provides for a comprehensive surveillance sharing arrangement. In addition to the agreement for confidential information sharing, the ISG provides a framework for the coordination of regulatory efforts among exchanges trading securities, commodity futures and related products to address potential intermarket manipulations and trading abuses.

As part of the regulatory program, each of our Exchanges and CFE have rules pertaining to their respective disciplinary processes.

U.S. Regulatory Agreements

The Exchanges and CFE have entered into agreements under which third parties have agreed to perform regulatory functions on behalf of our markets, (i.e., RSAs). As discussed below, in addition, in certain other instances for our

Exchanges, a third party has assumed the regulatory responsibility under Rule 17d-1 or Rule 17d-2 under the Exchange Act, while in others, we retain the regulatory responsibility for the activities.

Regulatory Services Agreement with FINRA

The Exchanges have entered into agreements with FINRA under which FINRA has agreed to provide regulatory services to the Exchanges. Under these agreements, FINRA performs certain regulatory functions on behalf of the Exchanges. The Exchanges remain responsible for the regulation of their TPHs, members and marketplaces, and retain the authority for bringing disciplinary actions against their TPHs, members, although FINRA performs various disciplinary-related functions on behalf of the Exchanges.

Regulatory Services Agreements with NFA and OCC

The National Futures Association (“NFA”) performs regulatory functions on behalf of CFE pursuant to an RSA with CFE. CFE retains overall responsibility for the regulation of its marketplace. In addition, OCC also performs certain regulatory functions on behalf of CFE pursuant to an RSA with CFE. CFE also performs certain regulatory functions in-house. Whether performed under an RSA or in-house, CFE also remains responsible for bringing disciplinary actions. CFE is also a party to cooperative and regulatory information sharing agreements with other SROs and is a member of the ISG, described above.

Rule 17d-1 Designations and Rule 17d-2 Agreements

Section 17(d) of the Exchange Act and the related Exchange Act rules permit SROs to allocate certain regulatory responsibilities to avoid duplicative oversight and regulation. Under Exchange Act Rule 17d-1, the SEC designates one SRO to be the designated examining authority (“DEA”) for each broker-dealer that is a member of more than one SRO. The DEA is responsible for the regulatory oversight of the Exchange Act’s financial responsibility rules pertaining to that broker-dealer. Cboe Options is the DEA for several of its TPHs. Cboe Trading’s assigned DEA is FINRA.

Exchange Act Rule 17d-2 permits SROs to enter into agreements, commonly called Rule 17d-2 agreements, which are approved by the SEC and concern the enforcement of rules applicable to all of those SROs and relating to TPHs and members those SROs have in common. The Exchanges have entered into certain bi-lateral Rule 17d-2 agreements under which FINRA is allocated responsibility for enforcing certain federal securities laws and certain Exchange rules that are common with FINRA rules. The Exchanges have entered into certain other multi-party Rule 17d-2 agreements that allocate responsibility among the participating SROs, which may include the Exchanges, for ensuring that their allocated common members comply with certain rules governing, among other items, options sales practices, expiring exercise declarations, options position limits and large options position reporting and position adjustments.

National Market System Plans

We are member participants of several NMS plans. Cboe Options, C2, BZX, and EDGX are member exchanges in OPRA, which is the designated securities information processor for market information that is generated through the trading of exchange-listed securities options in the United States, and it disseminates certain core trading information, such as last sale reports and quotations. Cboe Options, BZX, BYX, EDGA and EDGX also participate in the CTA and the Nasdaq Unlisted Trading Privileges Plan, which perform analogous services for the U.S. equities market. NYSE Technologies acts as the “processor” for OPRA and CTA. Nasdaq acts as the processor for the Nasdaq Unlisted Trading Privileges Plan.

Cboe Options, C2, BZX and EDGX are also parties to the Options Order Protection and Locked/Crossed Market Plan (the “Distributive Linkage”), which is designed to prohibit trade-throughs and avoid locked/crossed markets. Cboe Options, C2, BZX and EDGX are also parties to the Options Listing Procedures Plan, which sets forth the procedures that the options exchanges must follow to list new options. Cboe Options, C2, BZX, BYX, EDGA and EDGX are also parties to the NMS plan for the selection and reservation of securities symbols.

Under the Options Regulatory Surveillance Authority Plan (“ORSA Plan”), U.S. securities options exchanges are permitted to act jointly in the administration, operation and maintenance of a regulatory system for the surveillance, investigation and detection of the unlawful use of undisclosed, material information in trading in one or more of their markets. The ORSA Plan is intended to enhance the effectiveness and efficiency with which the exchanges regulate their respective markets and to avoid duplication of certain regulatory efforts. FINRA operates the ORSA Plan facility.

The consolidated audit trail NMS plan (“CAT”) involves the creation of a comprehensive audit trail of orders that enhances the ability to efficiently and accurately track all activity in Regulation NMS securities in the U.S. markets. Upon final implementation of the provisions of the CAT, data will be required to be reported to a central repository the following day by each SRO and broker-dealer. On November 15, 2016, the SEC approved the CAT. In 2017, Thesys CAT LLC (“Thesys”), a subsidiary of Thesys Technologies, LCC, was selected as the plan processor with the responsibility to build and operate the CAT. There is a phased implementation through 2021. The first phase was required to go live on November 15, 2017, but failed to go live on that date. The CAT went live in November 2018, at which time we began initial reporting to the CAT. The current CAT plan processor, Thesys, is expected to be replaced by a new plan processor. The second phase is scheduled to go live November 15, 2019, however, such deadline might be impacted as a result of engaging a new plan processor. While the funding of the CAT is ultimately expected to be provided by both the execution venues (which includes us) and industry members, until the SEC approves a funding model, the funding to date has solely been provided by the execution venues. The funding by the execution venues has been done in exchange for promissory notes expected to be repaid once such industry member fees are collected. Until the SEC approves a funding model that shares the cost of the CAT between the execution venues and industry members, the execution venues may continue to incur additional significant costs, including as a result of engaging a new plan processor, or result in the uncollectibility of promissory notes related to the funding of the implementation and operation of the CAT.

Intellectual Property

We own or have rights to a number of intellectual property assets, including trademarks, service marks, domain names, trade names, copyrights, trade secrets and patents. While the majority of our intellectual property is protected under U.S. law, we have many intellectual property assets protected by laws in Europe, Asia and other parts of the world. We license some intellectual property assets to other entities. We attempt to protect our intellectual property rights, while respecting the legitimate intellectual property rights of others.

Employees

As of December 31, 2018, we employed 842 individuals, 730 of whom are based in the United States, 92 of whom are located in London, 15 of whom are located in Ecuador, 1 of whom is located in Switzerland, 1 of whom is located in Hong Kong, and 3 of whom are located in Singapore. Of these employees, 297 were involved in technology or operations and 115 were involved in direct support of trading operations. The remaining 430 employees provide business development, financial, regulation, human resources, compliance, legal, planning and research, administrative and managerial support.

We have 8 building engineers that are covered by a collective bargaining agreement, which expires on May 31, 2021, with the International Union of Operating Engineers Local 399, AFL-CIO. Management believes that we have strong relationships with our employees, and we have never experienced a work stoppage.

Executive Officers of Cboe Global Markets

Set forth below is information regarding our executive officers:

Name		Age		Position
Edward T. Tilly		55		Chairman of the Board, President and Chief Executive Officer
Christopher A. Isaacson		40		Executive Vice President and Chief Operating Officer
Brian N. Schell		53		Executive Vice President, Chief Financial Officer and Treasurer
John Deters		48		Executive Vice President, Chief Strategy Officer and Head of Multi-Asset Solutions
Bryan Harkins		42		Executive Vice President, Co-Head of Markets Division
Mark S. Hemsley		56		Executive Vice President, President Europe
Andrew Lowenthal		57		Executive Vice President, Co-Head of Markets Division
Patrick Sexton		54		Executive Vice President, General Counsel and Corporate Secretary
Jill Griebenow		39		Senior Vice President, Chief Accounting Officer

Edward T. Tilly. Mr. Tilly is our Chairman, President and Chief Executive Officer. Mr. Tilly has served as our President since January 2019, Chairman since February 2017 and as CEO and director since May 2013. Prior to becoming CEO, Mr. Tilly served as President and Chief Operating Officer from November 2011, and Executive Vice Chairman from August 2006 until November 2011. He was a member of CBOE from 1989 until 2006, and served as Member Vice Chairman from 2004 through July 2006. He holds a B.A. degree in Economics from Northwestern University.

Christopher A. Isaacson. Mr. Isaacson is our Executive Vice President and Chief Operating Officer, a position he has held since January 2019. Previously he was our Executive Vice President and Chief Information Officer, a position he was appointed to upon the Company’s acquisition of Bats. Prior to that, he served as Bats' Executive Vice President and Global Chief Information Officer since February 2014 and he has held other various senior leadership positions since 2005. Prior to being one of the founders of Bats, Mr. Isaacson was a software developer at Tradebot Systems, Inc. from 2003 to 2005. Mr. Isaacson serves on the board of directors of the OCC. Mr. Isaacson holds a B.S. degree in information systems with a minor in math from Nebraska Wesleyan University and an M.B.A. degree from the University of Nebraska-Lincoln.

Brian N. Schell. Mr. Schell is our Executive Vice President, Chief Financial Officer and Treasurer, a position he has held since January 2018. Previously, he was Deputy Chief Financial Officer of the Company’s subsidiary Cboe Exchange, Inc., a position he was appointed to upon the Company’s acquisition of Bats. Prior to that, he served as Chief Financial Officer of Bats since March 2011. Prior to joining Bats, he held various senior leadership positions at H&R Block Inc., as well as various positions at the FDIC, KPMG and JP Morgan. Mr. Schell holds a B.B.A. degree with an emphasis in finance from the University of Notre Dame and an M.B.A. degree from The George Washington University.

John Deters. Mr. Deters is our Executive Vice President, Chief Strategy Officer and Head of Multi-Asset Solutions. He has served as our Head of Multi-Asset Solutions since 2018 and as Chief Strategy Officer since December 2013. Prior to joining Cboe in 2013, Mr. Deters was most recently a Vice President and Investment Banker of Financial Institutions Group, Investment Banking at Barclays from 2008 to 2013. Mr. Deters holds a B.A. degree from Wheaton College, an M.B.A. degree from the University of Chicago, and a J.D./M.S. dual degree from Georgetown University Law Center.

Bryan Harkins. Mr. Harkins is our Executive Vice President, Co-Head of Markets Division, a position he has held since March 2018. Previously, he was Head of Equities and Global FX of the Company’s subsidiaries, a position he was appointed to upon the Company’s acquisition of Bats. Prior to that, he served as Executive Vice President, Head of U.S. Markets of Bats since January 2014. Prior to the Direct Edge acquisition by Bats in January 2014 when Mr. Harkins first joined Bats, Mr. Harkins served as Chief Operating Officer of Direct Edge, where he worked since 2007. Mr. Harkins holds a B.A. degree from the University of Notre Dame and an M.B.A. degree from New York University's Stern School of Business.

Mark S. Hemsley. Mr. Hemsley is our Executive Vice President, President Europe, a position he was appointed to upon the Company’s acquisition of Bats. Previously, he served as Bats Europe Limited’s Executive Vice President, Chief Executive Officer since November 2011 and as Chief Executive Officer and Chairman from 2008 to 2011. Prior to joining Bats, Mr. Hemsley founded Belvedere Hill Limited, a corporate advisory firm, where he worked from 2005 to 2008, and is currently a non-shareholder director. Mr. Hemsley holds an M.B.A. degree from City University Business School.

Andrew Lowenthal. Mr. Lowenthal is our Executive Vice President, Co-Head of Markets Division, a position he has held since March 2018. Previously, he was Senior Vice President, Head of Global Derivatives of the Company’s subsidiary Cboe Exchange, Inc. from March 2017 to March 2018 and Senior Vice President, Business Development of Cboe Exchange, Inc. from September 2016 to March 2017. He has also held various positions with increasing responsibility and oversight in the business development area since joining the Company in 1983. Mr. Lowenthal attended the University of Michigan and holds a B.S. degree from DePaul University and an M.B.A. degree from DePaul University.

Patrick Sexton. Mr. Sexton is our Executive Vice President, General Counsel and Corporate Secretary, a position he has held since March 2018. Previously, he was Deputy General Counsel of the Company’s subsidiary Cboe Exchange, Inc. He has served in that capacity since July 2013 and has acted as legal, regulatory and compliance counsel with increasing responsibility and oversight since joining the Company in 1997. Mr. Sexton holds a B.A. degree from the University of Notre Dame and a J.D. degree with honors from Notre Dame Law School.

Jill Griebenow. Ms. Griebenow is our Senior Vice President, Chief Accounting Officer, a position she has held since August 2018. Previously, she served as Chief Financial Officer, Europe of the Company's subsidiary Cboe Europe Limited, a position she was appointed to upon the Company’s acquisition of Bats. She also previously served as Chief Financial Officer, Europe of Bats’ subsidiary Bats Europe Limited since February 2014 and was employed by Bats in the financial area since 2011. Prior to that, she has also held various positions at Ernst & Young LLP. Ms. Griebenow is a certified public accountant and holds a bachelor's degree in accounting from the University of Northern Iowa.

Available Information

Our website is www.cboe.com. The Company files annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act. The Company makes available, free of charge, on its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. The Company's reports filed with, or furnished to, the SEC are also available on the SEC's website at www.sec.gov.

In addition, we have posted on our website the charters for our (i) Audit Committee, (ii) Compensation Committee, and (iii) Nominating and Governance Committee, as well as our Code of Business Conduct and Ethics and Corporate Governance Guidelines. We will provide a copy of these documents without charge to stockholders upon written request to Investor Relations, Cboe Global Markets, Inc., 400 South LaSalle Street, Chicago, Illinois 60605. Our website and information included in or linked to our website are not part of this Form 10-K.