Cboe Global Markets (CBOE) 10-K risk factor changes: FY2019 vs FY2018

[removed: Loss] [added: Loss] of our right to exclusively list and trade certain index options and futures could have a material adverse effect on our financial [removed: performance.][added: performance.]

We hold exclusive licenses to list securities index options on the S&P 500 Index, the Russell 2000 Index, as well as others, granted to us by the owners of such [removed: indexes] [added: indices] and based on which we have developed our proprietary VIX methodology.

In [removed: 2018,] [added: 2019,] approximately [removed: 64.7%] [added: 64.8%] of our net transaction fees (defined below) were generated by futures and index options, the overwhelming majority of which were generated by our exclusively-licensed products [added: (e.g., SPX options)] and products based on the VIX [removed: methodology.][added: methodology (e.g., VIX options and futures).]

The bulk of this revenue is attributable to our [removed: S&P 500 Index] [added: SPX] options and VIX [removed: Index] options and futures.

As a result, our net revenues are dependent in large part on the exclusive licenses we hold for these products and our ability to maintain our exclusive [added: proprietary rights in the] VIX [removed: methodology.][added: methodology and related products and indices.]

In the first event, we would be subject to multiple listing in the trading of what is now an [removed: exclusive] index [removed: product,] [added: product traded by us on an exclusive basis,] which could result in a loss of market share and negatively impact our profitability.

In addition to the risks related to our exclusive licenses, if we are unable to retain exclusive proprietary rights in the VIX [removed: methodology,] [added: methodology and related products and indices,] our volatility products could be subject to multiple [removed: listing,] [added: listing] which could have a material adverse effect on us.

The E.U. has adopted legislation [removed: commonly referred to as MiFIR that will require] [added: affecting providers and users of benchmark indices in] the [removed: person with proprietary rights] [added: E.U. MiFIR requires benchmarks used] to [added: value] a [removed: benchmark] [added: financial instrument in the E.U.] to [removed: provide] [added: be made available on a] non-discriminatory [removed: access to that benchmark] [added: basis] to [added: all E.U.] trading venues and central counterparty clearing houses for the purposes of trading and clearing.

[removed: Licenses to the benchmark] [added: As a result, owners of such benchmarks] must [removed: be provided] [added: provide licenses] on fair, reasonable and non-discriminatory terms.

[removed: In addition, the E.U. implemented at the beginning of 2018 legislation known as the Benchmark Regulation that may impact the ability of European investors to trade our U.S. benchmark products if they are not recognized, authorized, endorsed or deemed equivalent in the E.U.] While similar legislation to MiFIR has not been proposed in the U.S., if it were passed, it could cause us to lose [removed: exclusivity in] our [added: exclusive rights to list and trade] internally developed and licensed index products.

Furthermore, our competitors may succeed in [added: developing, offering and] providing a market for the trading of index-based or volatility products that are economically similar to those that we [removed: offer.][added: offer and they may become successful and take away volume from our products.]

The value of our [removed: exclusive] licenses to [added: exclusively] list securities index options and futures also depends on the continued ability of index owners to require licenses for the trading of options and futures based on their [removed: indexes.][added: indices.]

[removed: Although we and the index owners have prevailed in legal actions challenging our rights] to [removed: exclusively license indexes, we may be subject to] changes in the law or other actions taken in the future that might impede our ability to exclusively offer trading in certain index options and futures.

[removed: General] [added: General] economic conditions and other factors beyond our control could significantly reduce demand for our products and services and harm our [removed: business.][added: business.]

| | [removed: · |] [added: ●] | economic, political and geopolitical market conditions; |

| | [removed: · |] [added: ●] | broad trends in business and finance; |

| | [removed: · |] [added: ●] | concerns over inflation and wavering institutional or retail confidence levels; |

| | [removed: · |] [added: ●] | government or central bank actions, such as changes in government fiscal and monetary policy and foreign currency exchange rates; |

| | [removed: · |] [added: ●] | other legislative and regulatory changes; |

| | [removed: · |] [added: ●] | the availability of short-term and long-term funding and capital; |

| | [removed: · |] [added: ●] | the perceived attractiveness of the U.S. or European capital markets; |

| | [removed: · |] [added: ●] | the availability of alternative investment opportunities; |

| | [removed: · |] [added: ●] | changes in the level of trading activity in underlying instruments; |

| | [removed: · |] [added: ●] | changes and volatility in the prices of securities; |

| | [removed: · |] [added: ●] | changes in the volume of foreign currency transactions; |

| | [removed: · |] [added: ●] | changes in supply and demand for currencies; |

| | [removed: · |] [added: ●] | movements in currency exchange rates; |

| | [removed: · |] [added: ●] | the level and volatility of interest rates; |

| | [removed: · |] [added: ●] | changes in the financial strength of market participants; |

| | [removed: · |] [added: ●] | consolidation among market participants and market data subscribers; |

| | [removed: · |] [added: ●] | unforeseen market closures or other disruptions in trading; and |

| | [removed: · |] [added: ●] | disruptions due to terrorism, war, extreme weather events or other [removed: catastrophes] [added: catastrophes.] |

[removed: We] [added: We] operate in a highly regulated industry and may be subject to censures, fines and other legal proceedings if we fail to comply with legal and regulatory [removed: obligations.][added: obligations.]

Cboe Options, C2, BZX, BYX, [removed: EDGX] [added: EDGX,] and EDGA are registered national securities exchanges and self-regulatory organizations (“SROs”), and, as such, are subject to comprehensive regulation by the SEC.

CFE is a [removed: designated contract market (“DCM”),] [added: DCM] and Cboe SEF is a [removed: swap execution facility (“SEF”),] [added: SEF,] each registered with the CFTC and subject to comprehensive regulation by the CFTC.

Failure to comply with these SRO responsibilities could result in potential sanctions or fines and a negative impact on Cboe’s reputation [removed: or] [added: and/or] branding.

Our European business is subject to regulatory oversight in the U.K. by the [removed: U.K. Financial Conduct Authority (“FCA”), which] [added: FCA and in the Netherlands by the AFM, which,] through the “passporting” [removed: regime] [added: regime,] provides authorization to carry on business in other Member States of the E.U. and the European Economic Area in accordance with the applicable E.U. legislation and regulation to which our European business is subject.

If a regulatory authority makes a finding of [removed: non‑compliance,] [added: non-compliance,] conditional fines could be imposed, and our licenses could be revoked.

While we have entered into agreements under which [removed: FINRA] [added: FINRA,] with respect to our options and equities exchanges, and [removed: NFA] [added: NFA,] with respect to our [added: futures exchange, provide certain regulatory services, we retain ultimate responsibility for the regulation of our TPHs and members.]

Our ability to comply with applicable laws and rules is largely dependent on the establishment and maintenance of appropriate systems and procedures, our ability to attract and retain qualified personnel, the ability of FINRA and NFA to perform under the [removed: regulatory services agreements] [added: RSAs, the ability of FINRA to transition to us any other potential responsibilities under its revised RSA, our ability to complete the new additional responsibilities for regulating our TPHs] and [added: members and] our oversight of the work done by FINRA and NFA.

Further, in 2018, the E.U. implemented the E.U. Benchmark Regulation, which regulates users, data providers and calculators of benchmarks (“administrators”) in the E.U., and among other things, prohibits use of benchmarks in connection with a financial instrument unless the administrator is deemed to be subject to an equivalent regulatory regime and the benchmark is registered in an E.U. member state.

These regulations and other emerging regulatory regimes around the world may impact international customers’ interest in or ability to trade index-based products listed on our U.S. exchanges, as well as impact our expansion activities to establish foreign trading of our index-based products and our ability to license proprietary indices for use outside of the U.S.

Although we and the index owners have prevailed in legal actions challenging our rights to exclusively license indices, we may be subject

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We have begun to perform internally more of the regulatory services that FINRA used to handle.

In light of these responsibilities, some courts have held that SROs are immune to certain private causes of action relating to the performance of these regulatory functions.

There is a risk that some courts may not apply this immunity doctrine to all claims.

There is also a risk that legislative or regulatory developments may change the application of this immunity doctrine.

Limitations on the application of the immunity doctrine could result in an increased exposure to litigation, and increase liability and/or other legal expenses.

Further under the Commodity Exchange Act, CFE and Cboe SEF may be subject to litigation alleging that they have acted in bad faith.

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market data subscribers or due to a decline in professional subscriptions as a result of staff reductions in the financial services industry or otherwise.

See “Legal Proceedings” for more information.

In addition, as discussed above, in January 2020, the SEC issued for public comment the Proposed Order that would require U.S. equities exchanges and FINRA to develop and file a new consolidated data plan.

If a final order were to be issued, it may have a negative impact on the market data fees we charge and there could be a negative impact on our revenues.

Banks are required to adopt SA-CCR by January 1, 2022, but may do so as early as April 1, 2020.

In addition, high frequency trading has been the subject of private litigation and we are party to one such matter.

The new European legislation may impact our expansion activities of our U.S. benchmark products in Europe, and may reduce the volume on our US options and futures exchanges from international customers.

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futures exchange, provide certain regulatory services, we retain ultimate responsibility for the regulation of our TPHs and members.

For example, if we are unable to fulfill our obligations under the consent orders with the SEC with respect to Cboe Options and C2, it may have a significant adverse impact on our business, financial condition and operating results.

In light of those responsibilities, courts have held that SROs are immune from damages for some civil claims related to actions that are incident to their regulatory responsibilities.

There is a risk that a court might not adopt the immunity doctrine, and whether a court that recognizes the doctrine would apply it to a claim depends on the nature of the claim.

In addition, the continued growth of high frequency trading has been the subject of private litigation and regulatory enforcement actions alleging that high frequency trading firms have received unfair advantages at the expense of other traders.

High frequency trading accounts for a meaningful percentage of the daily volume in the U.S. and European equity markets, and these actions and other efforts to slow trading could lead to a reduction in trading volumes, negatively impacting all trading markets, including our business.

Additionally, in September 2018, the SEC held a roundtable on market data and market access to discuss a number of topics, including market data revenue received by exchanges.

MiFID came into effect in 2007 regulating the market for execution services within European listed cash equity securities.

MiFID has been superseded and enhanced by MiFID II and MiFIR, which were implemented at the beginning of 2018.

Spot FX market participants have seen an increasing number of law enforcement actions and regulatory inquiries into their business practices, resulting in the publication of the Global Code as a means to reach global consensus on standards of good conduct in the wholesale FX market.

The governmental bodies and regulatory organizations that regulate parts of the spot FX market may enact, propose and may consider legislative and regulatory initiatives and may adopt new or revised laws and regulations.

A failure to migrate our information technology systems successfully following the Merger or a material disruption in our information technology systems could adversely affect our business, financial condition and operating results.

We rely extensively on our information technology systems.

The failure of information technology systems to operate effectively, difficulty in migrating our information technology systems, inconsistencies in standards, controls, procedures and policies and problems with transitioning to upgraded or replacement systems could adversely impact our business, financial condition and operating results.

In addition, a number of our TPHs are not connected to Bats’ technology platforms and must complete the process of connecting to these platforms as part of the migration.

Although we have successfully migrated CFE and C2 to the Bats’ technology platforms, the process of migrating Cboe Options may take longer, cost more and provide fewer synergies than initially anticipated.

There may also be new regulations adopted during the transition period that require systems changes, which could divert attention away from migration process and cause delays.

To the extent this occurs, the anticipated benefits of the Bats acquisition may be reduced or delayed or may never come to fruition.

Although our combined management team has experience with migrating other businesses and CFE and C2 to Bats’ technology platform, there are certain portions of our Cboe Options business, such as open outcry trading that have not yet been supported by Bats’ technology platform.

We currently expect to complete the migration of Cboe Options by October 7, 2019.

However, we may not be able to successfully achieve the transition on the timetable currently contemplated, and the transition may not be successful, have inadequate performance or could encounter various difficulties and unexpected issues.

Any delays, trading disruptions or issues that we encounter in the transition could have a material adverse effect on our businesses and could negatively affect our reputation, which in turn could have a material adverse effect on our overall business, results of operations and financial condition, as well as impair customer confidence in our product offerings and overall services or be subject to heightened regulatory scrutiny.

Additionally, as of the date of this filing, we believe that a number of the suspected stolen servers may have contained a limited amount of firm-specific trading data from in or before 2017, but we did not find evidence that the servers or devices contained personally identifiable information.

We also maintain and continue to enhance measures for tracking and appropriately disposing of technology equipment hardware during technology updates and migrations.

| In 2018, approximately 64.7% of our net transaction fees were generated by options and futures that were cleared through OCC. |

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We expect to benefit from the integration experience of certain employees who were formerly Bats personnel.

Additionally, certain of our information technology employees will be important to retain during the migration period to effectively manage our technology platforms and to assist in the process of migrating our systems to the Bats’ technology platform.

Many of these employees have extensive knowledge and experience in highly technical and complex aspects of Cboe Command.

Because of the complexity and risks associated with our business and the specialized knowledge required to conduct this business effectively, and because the growth in our industry has increased demand for qualified personnel, many of our employees could find employment at other companies if they chose to do so, particularly if we fail to continue to provide competitive levels of compensation.

Also, our employees may experience uncertainty about their future roles until integration strategies following the Merger are executed.

These circumstances may adversely affect our ability to retain key personnel.

We also must continue to motivate employees and maintain their focus on our strategies and goals.

Doing so may be difficult due to the uncertainty and challenges associated with post-merger integration.

In addition, if these personnel were to leave or we are unable to recruit highly qualified personnel, we may experience increased difficulty in the integration process, synergy realization, maintenance of the current technology platform and may not be able to adequately replace such personnel, which could have a material adverse effect on our overall business, results of operations and financial condition.

On June 23, 2016, the U.K. voted to leave the E.U. in a referendum (the “Brexit Vote”).

On March 29, 2017, the U.K. invoked Article 50 with its notice to leave the E.U. The terms and the exact timing of the U.K.’s exit from the E.U. (“Brexit”) remain unclear, although it is unlikely to be completed before March 29, 2019.

In preparation for Brexit, Cboe Europe Equities is planning to establish a new venue in Amsterdam and has applied to the Netherlands Authority for the Financial Markets to become a Regulated Market in the Netherlands.

[removed: Management's] [added: _Management’s] Discussion and Analysis of Financial Condition and Results of Operations [removed: ("MD&A")] [added: (__“__MD&A__”__)] should be read in conjunction with the consolidated financial statements of the Company and the notes thereto included in Item 8 of this Annual Report on Form 10-K.

[removed: See "Risk Factors" and "Forward-Looking Statements" above.][added: See_ _“__Risk Factors__”_ _and_ _“__Forward-Looking Statements__”_ _above._]

[removed: Overview][added: Overview]

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 [removed: products,] [added: products (“ETPs”),] global foreign exchange [added: (“FX”)] and multi-asset volatility products based on the [removed: VIX,] [added: VIX Index, recognized as] the world’s [removed: barometer for] [added: premier gauge of U.S.] equity market volatility.

[added: Cboe’s subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S.] In addition, the Company [removed: is] [added: operates] one of the largest [added: equities] stock [removed: exchange operators in the U.S.] [added: exchanges] by [removed: volume] [added: value traded in Europe] and [added: is] a leading market globally for ETP [added: listings and] trading.

The Company is headquartered in Chicago with offices in Kansas City, New York, London, San Francisco, [added: Amsterdam,] Singapore, Hong Kong, and Ecuador.

[removed: Business Segments][added: Business Segments]

[removed: As a result of the Merger, in 2017, we began reporting] [added: The Company reports] five [added: business] segments: Options, U.S. Equities, Futures, European Equities, and Global FX.

[removed: We have] [added: The Company has] aggregated all of [removed: our] [added: its] corporate costs and eliminations, as well as other business ventures, within Corporate Items and Eliminations; however, operating expenses that relate to activities of a specific segment have been allocated to that segment.

[added: Options.] Our [removed: Options] [added: options] segment includes [removed: trading of] listed [added: options on] market [removed: indexes (index options),] [added: indices (“index options”),] mostly on an exclusive basis, as well as on non-exclusive [removed: "multiply-listed"] [added: “multi-listed”] options, such as options on the stocks of individual corporations [removed: (equity options)] [added: (“equity options”)] and options on [removed: other exchange-traded products (ETP options),] [added: ETPs,] such as exchange-traded funds [removed: (ETF options)] [added: (“ETFs”)] and exchange-traded notes [removed: (ETN options) that occur on Cboe Options, C2, BZX and EDGX.][added: (“ETNs”).]

[removed: Our] [added: U.S. Equities. The] U.S. Equities segment includes [removed: trading of] listed [removed: cash] equities and ETP transaction services that occur on BZX, BYX, [removed: EDGX] [added: EDGX,] and EDGA.

It also includes the listings business where ETPs [removed: and the Company are] [added: can be] listed on [removed: BZX.][added: RMs.]

[removed: Our] [added: European Equities. The] European Equities segment includes [removed: trading of pan‑European] [added: the pan-European] listed equities transaction services, ETPs, [removed: exchange‑traded] [added: exchange traded] commodities, and international depository receipts that occur on [removed: the RIE,] [added: MTFs] operated by [added: Cboe Europe Equities.]

[removed: Global FX.][added: | Global FX: | ​ | | ​ | ​ | | ​ | ​ | | | ​ | | ​ |]

[added: Global FX.] Our Global FX segment includes institutional FX [added: trading] services [added: that occur] on the Cboe FX platform, as well as non-deliverable forward FX transactions [removed: executed] [added: offered for execution] on Cboe [removed: SEF.][added: SEF, as well as revenue generated from the sale of proprietary market data and from access and capacity services.]

[added: General] Factors Affecting Results of [removed: Operations][added: Operations]

| | [removed: · |] [added: ●] | trading volumes on our proprietary products such as VIX options and futures and SPX options; |

| | [removed: · |] [added: ●] | trading volumes in listed [removed: cash] equity securities and ETPs in both the U.S. and Europe, volumes in listed equity options, and volumes in institutional FX [removed: trading, all of which are driven primarily by overall macroeconomic conditions;] [added: trading;] |

| | [removed: · |] [added: ●] | the demand for the U.S. tape plan market data distributed by the Securities Information Processors (SIPs), which determines the pool size of the industry market data revenue we receive based on our market share; |

| | [removed: · |] [added: ●] | the demand for information about, or access to, our markets, which is dependent on the products we trade, our importance as a liquidity center and the quality and pricing of our data and access [added: and capacity] services; |

| | [removed: · |] [added: ●] | consolidation [added: and expansion] of our customers and competitors in the [removed: industry,] [added: industry;] |

| | [removed: · |] [added: ●] | continuing pressure in transaction fee pricing due to intense competition in the United States and Europe; [removed: and] |

| | [removed: · |] [added: ●] | regulatory changes relating to market structure and increased capital requirements, and those which affect certain types of instruments, transactions, pricing structures, capital market participants or reporting or compliance requirements, including any changes resulting from Brexit. |

A number of significant structural, political and monetary issues continue to confront the global economy, and instability could return at any time, resulting in an increased level of market volatility, increased trading volumes and [removed: a return of] [added: greater] uncertainty.

[removed: Components] [added: Components] of [removed: Revenues][added: Revenues]

[removed: Transaction Fees][added: Transaction Fees]

[removed: Access Fees][added: Access and Capacity Fees]

Access [added: and capacity] fees represent fees assessed for the opportunity to trade, including fees for trading-related functionality [removed: and connectivity] across all [removed: segments.][added: segments, terminal and other equipment rights, maintenance services, trading floor space and telecommunications services.]

[removed: They] [added: These fees] are billed monthly in accordance with the Company’s published fee schedules and recognized on a monthly basis when the performance obligation is met.

[removed: Exchange Services and Other] [added: Professional] Fees [added: and Outside Services]

Facilities, systems services and other fees are generally monthly fee-based, although certain services are influenced by trading volume or other defined metrics, [added: while] others are based solely on demand.

[removed: Market] [added: Market] Data [removed: Fees][added: Fees]

[removed: Regulatory Fees][added: Regulatory Fees]

Regulatory fees primarily represent fees collected by the Company to cover the Section 31 fees charged to the Exchanges under the authority of the SEC (Cboe Options, C2, BZX, BYX, [removed: EDGX] [added: EDGX,] and EDGA) and are charged by the SEC.

Consistent with industry practice, the fees charged to customers are based on the fee set by the SEC per notional value of the transaction executed on the Company’s [removed: markets and calculated and billed monthly.][added: markets.]

[removed: These fees are recognized in the U.S. Equities and Options segments and as] [added: As] the [removed: exchanges] [added: Exchanges] are responsible for the ultimate payment to the SEC, the [removed: exchanges] [added: Exchanges] are considered the principals in these transactions.

Regulatory fees also include the options regulatory fee [removed: (ORF)] [added: (“ORF”)] charged to customers which supports the Company’s regulatory oversight function in the Options [removed: segment.][added: segment, as well as other miscellaneous regulatory fees and fines, and cannot be used for non-regulatory purposes.]

[removed: Other Revenue][added: Other Revenue]

[removed: Components] [added: Components] of Cost of [removed: Revenues][added: Revenues]

[removed: Liquidity Payments][added: Liquidity Payments]

_A detailed comparison of the Company’s 2018 operating results to its 2017 operating results can be found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the Company’s 2018 Annual Report on Form 10-K filed February 22, 2019 at www.sec.gov._

The Company is committed to defining markets to benefit its participants and drive the global marketplace forward through product innovation, leading edge technology and seamless trading solutions.

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, known as our Hybrid trading model, which integrates electronic trading and traditional open outcry trading on our trading floor in Chicago.

C2, BZX, and EDGX are our all-electronic options exchanges, and typically operate with different market models and fee structures than Cboe Options.

The Options segment also includes applicable market data revenue generated from the U.S. tape plan, the sale of proprietary market data, index licensing, and access and capacity services.

This segment also includes ETP listings on BZX, the Cboe Global Markets, Inc. common stock listing, applicable market data revenue generated from the U.S. tape plans, the sale of proprietary market data, routing services, access and capacity services and advertising activity from ETF.com.

Futures. Our Futures segment includes the business of our futures exchange, CFE, which includes offerings for trading VIX futures and other futures products, as well as revenue generated from the sale of proprietary market data and from access and capacity services.

Cboe Europe Equities operates lit and dark books, a periodic auctions book, and a Large-in-Scale (“LIS”) trading negotiation facility.

Cboe NL, launched in October 2019, operates similar business functionality that is offered by Cboe Europe, other than LIS, and provides for trading only in European Economic Area symbols.

Cboe Europe Equities also includes revenue generated from the sale of proprietary market data and from access and capacity services.

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| | ● | significant fluctuations in foreign currency translation rates or weakened value of currencies resulting from Brexit; and |

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These fees are calculated and billed monthly and are recognized in the U.S. Equities and Options segments.

benefits to those clients.

Overview


| (1) | These are Non-GAAP figures for which reconciliations are provided below. |

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| Total revenues | ​ | $ | 2,496.1 | ​ | $ | 2,768.8 | ​ | $ | (272.7) | ​ | (9.8) | % |

| Operating income | | ​ | 537.2 | | ​ | 599.4 | | ​ | (62.2) | | (10.4) | % |

| Income tax provision | | ​ | 130.6 | | ​ | 146.0 | | ​ | (15.4) | | (10.5) | % |

| Net income | ​ | $ | 370.8 | ​ | $ | 425.2 | ​ | $ | (54.4) | | (12.8) | % |

| EBITDA(1) | ​ | $ | 715.8 | ​ | $ | 810.3 | ​ | $ | (94.5) | | (11.7) | % |

| Adjusted EBITDA(1) | ​ | $ | 784.1 | ​ | $ | 840.4 | ​ | $ | (56.3) | | (6.7) | % |

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| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | 2019 | | | | | | | | | | | | | |

The Company is committed to relentless innovation, connecting global markets with world-class technology, and providing seamless solutions that enhance the customer experience.

Cboe’s trading venues include the largest options exchange in the U.S. by volume and the largest stock exchange by value traded in Europe.

On February 28, 2017, pursuant to the Agreement and Plan of Merger, dated as of September 25, 2016, Cboe acquired Bats Global Markets, Inc. The year ended December 31, 2017 includes financial results for Bats for the period from March 1, 2017 through December 31, 2017.

We previously operated as a single reportable business segment as of December 31, 2016.

Segment performance is primarily based on operating income (loss).

Options.

It also includes the listed equity and ETP options routed transaction services that occur on Cboe Trading.

U.S. Equities.

Futures.

Our Futures segment includes trading of futures on the VIX Index and bitcoin, and other products that occur on CFE, our all-electronic futures exchange.

European Equities.

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.

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To facilitate trading, the Company offers technology services, terminal and other equipment rights, maintenance services, trading floor space, trading floor connectivity and telecommunications services.

Trading floor and equipment rights are generally on a month-to-month basis.

The comparability of our results of operations between reported periods is impacted by the acquisition of Bats on February 28, 2017.

Operating results and other financial metrics for U.S. Equities, European Equities and Global FX represent activity for the ten months ended December 31, 2017.

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| Total revenues | | $ | 2,768.8 | | $ | 2,229.1 | | $ | 539.7 | | 24.2 | % |

| Operating income | | | 599.4 | | | 371.9 | | | 227.5 | | 61.2 | % |

| Net income | | $ | 425.2 | | $ | 400.6 | | $ | 24.6 | | 6.1 | % |

| EBITDA(1) | | $ | 810.3 | | $ | 564.0 | | $ | 246.3 | | 43.7 | % |

| Adjusted EBITDA(1) | | $ | 840.4 | | $ | 662.3 | | $ | 178.1 | | 26.9 | % |

The following is a reconciliation of net income (loss) allocated to common stockholders to EBITDA and Adjusted EBITDA:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 2017 | | | | | | | | | | | | | |

| Net income (loss) allocated to common stockholders | $ | 214.0 | $ | 23.4 | $ | 126.2 | $ | 9.9 | $ | (13.0) | $ | 36.2 | $ | 396.7 |

| Interest | | — | | — | | — | | — | | — | | 41.3 | | 41.3 |

| Income tax provision (benefit) | | 39.4 | | 80.0 | | — | | (0.5) | | 0.2 | | (185.3) | | (66.2) |

| Depreciation and amortization | | 53.2 | | 80.5 | | 1.5 | | 25.5 | | 30.3 | | 1.2 | | 192.2 |

| EBITDA | | 306.6 | | 183.9 | | 127.7 | | 34.9 | | 17.5 | | (106.6) | | 564.0 |

| Adjusted EBITDA | $ | 312.0 | $ | 183.9 | $ | 127.7 | $ | 34.9 | $ | 18.5 | $ | (14.7) | $ | 662.3 |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Net income allocated to common stockholders | | $ | 422.1 | | $ | 396.7 |

| Amortization of purchased intangibles | | | 160.6 | | | 142.6 |

| Accelerated stock-based compensation | | | — | | | 9.1 |

[removed: Foreign] [added: Foreign] Currency Exchange Rate [removed: Risk][added: Risk]

[removed: As a result of the acquisition of Bats, we expanded our] [added: Our] operations in Europe and [removed: Asia, and] [added: Asia] are subject to [added: increased] currency translation risk as revenues and expenses are denominated in foreign currencies, primarily the British pound, Singapore dollar, Hong Kong dollar, and the Euro.

We also have de minimis exposure to other foreign currencies, including the Swiss Franc, Norwegian Kroner, Swedish [removed: Krona,] [added: Krona] and Danish Kroner.

For the year ended December 31, [removed: 2018,] [added: 2019,] our exposure to foreign-denominated revenues and expenses is presented by primary foreign currency in the following table:

| [added: ​] | [added: ​] | [removed: Year Ended] [added: Year Ended] | | | | [added: ​] |

| [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [removed: British] [added: British] | [added: ​] |

| [added: ​] | | [removed: Euro (1)] [added: Euro (1)] | | [added: ​] | [removed: Pound (1)] [added: Pound (1)] | [added: ​] |

| [added: ​] | | [removed: (in] [added: (in] millions, [removed: except] [added: except] | | | | [added: ​] |

| [added: ​] | | [removed: percentages)] [added: percentages)] | | | | [added: ​] |

| Foreign denominated % of: | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |

| Operating expenses | [added: ​] | 0.2 | % | [added: ​] | [removed: 2.7] [added: 5.5] | % |

| Impact of 10% adverse currency fluctuation on: | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |

| Operating expenses | [added: ​] | 0.1 | [added: ​] | [added: ​] | [removed: 1.3] [added: 1.0] | [added: ​] |

| [removed: |] (1) | [removed: |] An average foreign exchange rate to the U.S. dollar for the period was used. |

[removed: Equity Risk][added: Equity Risk]

The assets and liabilities of our European business are denominated in British [removed: pounds.][added: pounds or Euros.]

Our primary exposure to this equity risk as of December 31, [removed: 2018] [added: 2019] is presented by foreign currency in the following table:

| [added: ​] | [added: ​] | [removed: British] [added: British] | |

| [added: ​] | | [removed: Pound (1)] [added: Pound (1)] | |

| [added: ​] | | [removed: (in millions)] [added: (in millions)] | |

| Net equity investment in Cboe Europe | | $ | [removed: 705.9] [added: 727.9] |

| Impact on consolidated equity of a 10% adverse currency fluctuation | | [removed: $] [added: ​] | [removed: 70.6] [added: 72.8] |

| [removed: |] (1) | [removed: |] Converted to U.S. dollars using the foreign exchange rate of British pounds [removed: into] [added: per] U.S. [removed: dollars] [added: dollar] as of December 31, [removed: 2018.] [added: 2019.] |

[removed: Credit Risk][added: Credit Risk]

We limit our exposure to credit risk by [added: considering such risk when] selecting the counterparties with which we make investments and execute agreements.

We do not have counterparty credit risk with respect to trades matched on our exchanges in the [removed: U.S] [added: U.S.] and Europe.

With respect to listed [removed: cash] equities, we deliver matched trades of our customers to the NSCC without taking on counterparty risk for those trades.

NSCC acts as a central counterparty on all [added: equity] transactions occurring on BZX, BYX, EDGX and EDGA and, as such, guarantees clearance and settlement of all of our matched equity trades.

With respect to [removed: orders,] [added: orders] Cboe Trading routes to other markets for execution on behalf of our customers, Cboe Trading is exposed to some counterparty credit risk in the case of failure to perform on the part of our clearing firms, Morgan Stanley [removed: & Co. LLC (Morgan Stanley)] or [removed: Wedbush Securities, Inc. (Wedbush Securities).][added: Wedbush.]

Morgan Stanley and Wedbush [removed: Securities] guarantee trades until one day after the trade date, after which time NSCC provides a guarantee.

Thus, Cboe Trading is potentially exposed to credit risk to the counterparty to a trade routed to another market center between the trade date and one day after the trade date in the event that Morgan Stanley or Wedbush [removed: Securities] fails.

Credit difficulties or insolvency, or the perceived possibility of credit difficulties or insolvency, of one or more larger or [added: more] visible market participants could also result in market-wide credit difficulties or other market disruptions.

Our potential exposure to credit losses on these transactions is represented by the receivable balances in our [removed: consolidated] balance sheet.

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

As of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] our cash and cash equivalents and financial investments were [removed: $310.8] [added: $300.3] million and [removed: $190.8] [added: $310.8] million, respectively, of which [removed: $72.9] [added: $85.1 million] and [removed: $44.9] [added: $72.9] million is held outside of the United States in various foreign subsidiaries in [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: $1.225 billion] [added: $875.0 million] in outstanding debt, of which [removed: $950] [added: $650.0] million relates to our [removed: senior notes,] [added: Senior Notes,] which bear interest at fixed interest rates.

The remaining amount outstanding of [removed: $275.0] [added: $225.0] million relates to the Term Loan Agreement, which bears interest at fluctuating rates and, therefore, subjects us to interest rate risk.

A hypothetical 100 basis point increase in [removed: long-term] interest rates relating to the amounts outstanding under the Term Loan Agreement as of December 31, [removed: 2018] [added: 2019] would decrease annual pre-tax earnings by [removed: $2.8] [added: $2.3] million, assuming no change in the composition of our outstanding indebtedness.

As of December 31, [removed: 2018,] [added: 2019,] there were no outstanding borrowings under our Revolving Credit Agreement.

See Note [removed: 13, Debt,] [added: 13 (“Debt”)] to the consolidated financial statements for a discussion of debt agreements.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | December 31, 2019 | | | | ​ |

| Revenues | ​ | 0.3 | % | ​ | 4.0 | % |

| Cost of revenues | ​ | 0.1 | % | ​ | 1.4 | % |

| Revenues | $ | 0.3 | ​ | $ | 4.3 | ​ |

| Cost of revenues | ​ | 0.1 | ​ | ​ | 0.6 | ​ |

| --- | --- |

| ​ | ​ | ​ | ​ |

| --- | --- |

| | | | | | | |

| | | December 31, 2018 | | | | |

| Revenues | | 1.2 | % | | 3.3 | % |

| Cost of revenues | | 0.7 | % | | 1.5 | % |

| Revenues | | 3.6 | | | 8.1 | |

| Cost of revenues | | 1.3 | | | 2.0 | |

| --- | --- | --- | --- |

| | | | |

[removed: The] [added: _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, [removed: 2018.][added: 2019.]

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 [removed: 10-K.][added: 10-K._]

[removed: Overview][added: Overview]

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 [removed: (“FX”)] [added: (“FX”),] and multi-asset volatility products based on the VIX Index, [added: recognized as] the world’s [removed: barometer for] [added: premier gauge of U.S.] equity market volatility.

[added: Cboe’s subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S.] In addition, the Company [removed: is] [added: operates] one of the largest [added: equities] stock [removed: exchange operators] [added: exchanges] by [removed: volume] [added: value traded] in [removed: the U.S.] [added: Europe] and [added: is] a leading market globally for ETP [added: listings and] trading.

The Company reports the results of its operations in five business segments: Options, U.S. Equities, Futures, European [removed: Equities] [added: Equities,] and Global FX.

Our operating revenues consist primarily of transaction fees, [removed: regulatory] [added: access and capacity] fees, market data fees and [removed: connectivity] [added: regulatory fines and] fees.

In [removed: 2018,] [added: 2019,] approximately [removed: 68.6%] [added: 62.9%] of our net revenues were transaction fee revenues.

[removed: Our Business][added: Our Business]

[added: Originally known as the Chicago Board Options Exchange,] Cboe Options was founded in 1973 as a non-stock corporation owned by its members.

In June 2010, Cboe Options demutualized, Cboe [removed: Options, CFE] [added: Options] and [removed: C2] [added: CFE] became wholly-owned subsidiaries of Cboe Global [removed: Markets] [added: Markets,] and Cboe Global Markets completed its initial public offering.

In October 2010, [removed: C2] [added: C2, the Company’s second options exchange,] initiated operations.

[removed: The Merger] [added: On February 28, 2017, the Company completed the acquisition of Bats, which] significantly expanded the Company’s product lines across [removed: multiple] asset classes, broadened its geographic reach with pan-European equities, added global FX [removed: markets and] [added: market,] diversified its business mix with significant non-transactional revenue [removed: streams.][added: streams and increased the Company’s options exchanges from two to four with the addition of BZX and EDGX exchanges.]

| | [removed: ·] | [removed: | 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, [removed: BZX] [added: BZX,] and EDGX. Cboe Options is our primary options market and offers trading in listed options through a single [removed: system that] [added: system, known as our Hybrid trading model, which] integrates electronic trading and traditional open outcry trading on our trading floor in Chicago. [removed: This integration of electronic trading and traditional open outcry trading into a single exchange is known as our Hybrid trading model.] C2, [removed: BZX] [added: BZX,] and EDGX are our all-electronic [removed: exchanges that also offer trading in listed options,] [added: options exchanges,] and typically operate with different market models and fee structures than Cboe Options. [removed: It] [added: The Options segment] also includes [added: applicable] market data revenue generated from the U.S. tape [removed: plans and from] [added: plan,] the sale of [removed: associated] proprietary market [removed: data.] [added: data, index licensing, and access and capacity services.] |

| | [removed: · |] [added: ●] | [removed: U.S. Equities.] [added: U.S. Equities.] The U.S. Equities segment includes listed [removed: cash] equities and ETP transaction services that occur on BZX, BYX, [removed: EDGX] [added: EDGX,] and EDGA. [removed: It] [added: This segment] also includes ETP [removed: listings,] [added: listings on BZX, the Cboe Global Markets, Inc. common stock listing, applicable] market data revenue generated from the U.S. tape plans, [removed: and from] the sale of proprietary market data, routing services, [removed: connectivity fees] [added: access] and [added: capacity services and] advertising activity from ETF.com. |

| | [removed: · |] [added: ●] | [removed: Futures.] [added: Futures.] The Futures segment includes the business of our futures exchange, CFE, which lists [added: VIX futures,] futures on [removed: the VIX Index,] corporate bond [removed: indexes and bitcoin] [added: indices, futures on AMERIBOR,] and other futures products. It also includes market data revenue generated from the sale of [removed: associated] proprietary market [removed: data.] [added: data and from access and capacity services.] |

| | [removed: · |] [added: ●] | [removed: European Equities.] [added: European Equities.] The European Equities segment [removed: includes] [added: covers securities from 18 European markets including] the [removed: pan‑European listed cash equities] [added: U.K. and includes] transaction [removed: services,] [added: services on listed equities,] ETPs, [removed: exchange‑traded] [added: exchange-traded] commodities, and international depository receipts that occur on [removed: the RIE,] [added: MTFs] operated by Cboe Europe Equities. It also includes the [removed: 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 [removed: Cboe Europe Equities.] [added: its RMs.] Cboe Europe Equities operates [removed: two] lit [removed: books,] [added: and dark pools,] a periodic auctions book, [added: and] a [removed: Large In Scale] [added: Large-in-Scale (“LIS”)] trading negotiation [removed: facility and two dark books on its MTF, and] [added: facility. Cboe NL, launched in October 2019,] operates [removed: one lit book and one dark book on its RM. On its MTF books,] [added: similar business functionality to that which is offered by] Cboe [removed: Europe Equities offers] [added: Europe, other than LIS, and provides for] trading [added: only] in [removed: listed cash equity securities from 18] European [removed: markets. It] [added: Economic Area symbols. Cboe Europe Equities] also includes market data revenue generated from the sale of [removed: associated] proprietary market [removed: data.] [added: data and from access and capacity services.] |

| | [removed: · |] [added: ●] | [removed: Global FX.] [added: 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 [removed: executed] [added: offered for execution] on Cboe [removed: SEF.] [added: SEF, as well as revenue generated from the sale of proprietary market data and from access and capacity services.] |

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 17 [removed: - Segment Reporting] [added: (“Segment Reporting”)] to the notes to our Consolidated Financial Statements for discussion of revenues, and operating income (loss) by business segment.

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

| [added: ​] | [added: ​] | [removed: Annual Volumes] [added: Annual Volumes] | | | | | | | |

| [added: ​] | [added: ​] | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | |

| Options [added: total contracts] ADV (in millions) | [added: ​] | [added: ​] | [removed: 7.9] [added: 7.3] | [added: ​] | [added: ​] | [removed: 6.9] [added: 7.9] | [added: ​] | [added: ​] | [removed: 4.5] [added: 6.9] |

| U.S. Equities [added: total touched shares] ADV (in billions) | [added: ​] | [added: ​] | [removed: 1.4] [added: 1.2] | [added: ​] | [added: ​] | [removed: 1.3] [added: 1.4] | [added: ​] | [added: ​] | [removed: 1.6] [added: 1.3] |

| Futures ADV (in thousands) | [added: ​] | [added: ​] | [removed: 300.0] [added: 249.0] | [added: ​] | [added: ​] | [removed: 294.8] [added: 300.0] | [added: ​] | [added: ​] | [removed: 238.8] [added: 294.8] |

| European Equities [added: matched and] touched ADNV (€ in billions) | [added: ​] | [added: ​] | [removed: 10.4] [added: 7.7] | [added: ​] | [added: ​] | [removed: 9.4] [added: 10.4] | [added: ​] | [added: ​] | [removed: 10.6] [added: 9.4] |

| Global FX ADNV ($ in billions) | [added: ​] | [added: ​] | [removed: 37.4] [added: 32.3] | [added: ​] | [added: ​] | [removed: 29.5] [added: 37.4] | [added: ​] | [added: ​] | [removed: 26.9] [added: 29.5] |

[removed: Competitive Strengths][added: Competitive Strengths]

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

| | [removed: · |] [added: ●] | [removed: Innovative] [added: Innovative] Products and [removed: Services.] [added: Services.] We are structured and committed to deliver a differentiated experience to our [removed: customers,] [added: 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, [added: VIX] options and [added: futures, and options and] futures on [removed: the VIX Index and] other volatility [removed: indexes,] [added: indices,] short duration options, including Weeklys, FLexible EXchange Options (“FLEX options”) and options strategy benchmark [removed: indexes.] [added: indices.] We have also developed products that enable our customers to monitor their order handling on our markets in [removed: real‑time,] [added: 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, [removed: participating at] industry trade [removed: shows and] [added: shows,] industry [removed: forums.] [added: forums and a comprehensive marketing and communications program.] |

| | [removed: · |] [added: ●] | [removed: Leading] [added: Leading] Proprietary [removed: Technology. Bats’] [added: Technology. Our] leading proprietary technology was designed in-house to optimize reliability, speed, scalability and versatility. [removed: The] [added: CFE, C2, and Cboe Options were migrated to our current] trading [removed: technology platforms have experienced] [added: platform on February 25, 2018, May 14, 2018, and October 7, 2019, respectively. As a result, we now offer customers a single uniform trading experience across our equities, options, and futures markets. Our platform has demonstrated] very low operational downtime and [removed: have low latency. We] [added: latency, which we] believe [removed: that this reliability, capacity and speed] gives our customers an additional incentive to use our [removed: platforms] [added: platform] to mitigate trade execution risk, especially in times of extreme market volatility. [removed: 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.] |

| | [removed: · |] [added: ●] | [removed: Leading] [added: Leading] Market Position, Reputation and [removed: Brand.] [added: 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 [removed: futures] [added: options] and [removed: options,] [added: futures,] Cboe is a leading brand name in the options and volatility space. In U.S. listed [removed: cash] equities, we are [removed: one of] the [added: third] largest [removed: three] exchange [removed: operators,] [added: operator,] with a market share of [removed: 18.4%] [added: 16.3%] of the overall U.S. [removed: equity] [added: equities] market for the year ended December 31, [removed: 2018.] [added: 2019.] In European-listed equities, we [removed: execute] [added: are one of] the largest [added: pan-European exchange operators based on executed] notional value of pan-European [removed: equities traded by a single market operator,] [added: equities,] with a market share of [removed: 22.3%] [added: 20.2%] of European trading in the securities available for trading on Cboe Europe Equities for the year ended December 31, [removed: 2018.] [added: 2019.] In addition, we have a substantial presence in the [added: spot FX markets, with a 15.2% market share of the publicly reported institutional spot FX markets for the year ended December 31, 2019.] |

| | [removed: · |] [added: ●] | [removed: Strategic] [added: Strategic] Relationships and [removed: Partnerships.] [added: Partnerships.] We have entered into licensing agreements with index providers [removed: under] which [removed: we have] [added: typically grant us the] rights to create volatility [removed: indexes and] [added: indices,] offer options and futures products on their [removed: indexes.] [added: indices and use the market data from the trading of options on various products to calculate a number of proprietary indices.] We have also formed partnerships with key providers to develop new products and services. See “Proprietary Products-Strategic Relationships.” |

[removed: Growth Strategy][added: Growth Strategy]

Our mission is [removed: “to power your potential] to [removed: stay ahead] [added: lead the industry in defining the markets] of [removed: an evolving market”] [added: today] and [removed: is brought to life] [added: tomorrow] through: (1) relentless innovation to expand our diverse offering for investors around the world, (2) [removed: cutting-edge] [added: leading edge] technology to connect customers to global markets, and (3) seamless solutions to enhance the customer experience through insights, education, data, [removed: analytics and more.]

| | [removed: · |] [added: ●] | [removed: Develop] [added: Develop] Innovative Products and [removed: Services.] [added: Services.] We [removed: are continuing] [added: continue] 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 [removed: internally developed products,] [added: internal development,] while continuing to diversify our product line across asset classes. [removed: In addition, as market share and volumes on our exchanges and trading platforms continue to rise, we] [added: We] believe that additional proprietary market data, [removed: analytics] [added: analytics,] and [removed: connectivity] [added: access and capacity] revenues can be generated while continuing to offer competitive pricing across all of our segments. In [removed: 2018,] [added: 2019,] we continued to leverage relationships to extend our product offering by launching [added: or extending existing] new [removed: products,] [added: products or services,] such as [removed: futures] [added: Monday expiring options] on [removed: 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] [added: XSP,] our [removed: clients searching for MiFID II compliant solutions.] [added: mini-SPX option contract, SPX option expirations related to the 2020 presidential election, development of a future on AMERIBOR, a Cboe Closing Cross to provide post-close trading services at Cboe Europe and developing new benchmarks on MSCI Emerging Markets and EAFE indices.] |

| | [removed: · |] [added: ●] | [removed: Offer] [added: Offer] Compelling [removed: Economic Models.] [added: Models.] We have designed our [removed: fees] [added: market] 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 [removed: multiply-listed] [added: multi-listed] products and [removed: 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 [removed: fees] [added: market] and pricing models for all of our exchanges to provide an industry-leading economic offering. [added: In 2019, we introduced a small retail broker distribution program for U.S. equities market data at discounted rates, order book priority for retail investors on EDGX, and a new lead market maker incentive program for the Cboe Listed ETP Marketplace.] |

| | [removed: · |] [added: ●] | [removed: Continue] [added: Continue] to Enhance Our Leading Edge [removed: Technology.] [added: 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. [added: With the completion of the multi-exchange technology migration, we intend to redirect our technology efforts to building new value added technologies, such as the development of a state-of-the-art research and data platform.] See “Technology.” |

| | [removed: · |] [added: ●] | [removed: Evaluate] [added: Evaluate] Strategic [removed: Opportunities.] [added: Opportunities.] We [added: continually] evaluate strategic opportunities that we believe [removed: will] [added: could] enhance stockholder value. We specifically look for strategic opportunities beyond our current businesses that [removed: will] [added: can] 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. |

[removed: Proprietary Products][added: Proprietary Products]

The Company is committed to defining markets to benefit its participants and drive the global marketplace forward through product innovation, leading edge technology and seamless trading solutions.

Cboe Global Markets reports on the following five business segments:

| | ● | Options. Our options exchange business lists for trading (i) options on market indices (“index options”), including VIX and SPX options, mostly on an exclusive basis, (ii) non-exclusive “multi-listed” options on the stocks of listed individual corporations (“equity options”), and (iii) non-exclusive “multi-listed” options on ETPs, such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”). These options trade on |

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analytics and more.

| | ● | Grow Existing Proprietary Products. We plan to continue our efforts to grow the use of our proprietary products, including SPX options and VIX options and futures, by expanding the customer base and increasing existing customers’ product usage. In 2019, we redeployed our customer outreach efforts to further penetrate global market participants by realigning our sales team with specialists targeting asset managers, hedge funds, U.S. insurance companies and pension funds. We also continue to take steps to enhance the risk management tools and information available to our customers, aimed at arming them with information to make more informed trading decisions and gain capital efficiency. Furthermore, we continue to penetrate new markets. In 2019, Cboe Options and CFE were permitted in Switzerland and Spain to market our products to existing or potential customers in those jurisdictions, as well as permit investors in those jurisdictions to directly access Cboe Options and CFE to trade our products. We also plan to continue to enrich and expand our educational content to educate market participants, which is integral to growing our proprietary products. |

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These include:

| | ● | volatility index products based on various broad-based market indices, such as the S&P 500, the S&P 100, and the Russell 2000, |

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| | ● | correlation or volatility indices based on ETFs and individual stocks, such as the Cboe Crude Oil ETF Volatility Index, the Cboe Gold ETF Volatility Index, the Cboe Equity VIX on Apple, and the Cboe Equity VIX on Amazon, |

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| | ● | interest rate volatility indices, such as the Cboe/CBOT 10-year U.S. Treasury Note Volatility Index and the Cboe Interest Rate Swap Volatility Index and |

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Accordingly, we generate revenue from proprietary indices by distributing them for reference purposes, using them as the basis for proprietary products and licensing them for use for third-party indices and products.

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We also offer SPX Weeklys options, which have settlements on Mondays, Wednesdays, Fridays and on the last trading day of each month.

We believe these additional expirations provide customers with more precision when hedging overall portfolio risk.

The VIX methodology provides the basis for the creation of VIX options and futures.

The settlement value of VIX derivatives is based on traded prices of SPX options.

Under the LMM program, an LMM has certain quoting obligations and for meeting those enhanced obligations, Cboe pays the LMM a daily stipend that varies depending on the average aggregate daily auction volume in the ETPs assigned to such LMM.

Also, LMMs transact for free in the closing auction in their assigned ETPs.

The Company is committed to relentless innovation, connecting global markets with world-class technology, and providing seamless solutions that enhance the customer experience.

Cboe’s trading venues include the largest options exchange in the U.S. and the largest stock exchange by value traded in Europe.

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.

As described in further detail below, on February 28, 2017, the Company completed the acquisition of Bats.

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.

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.

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| | | | | | | | | | |

We have established ourselves as a global leader and innovator in our industry.

| 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. |

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| | · | | 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. |

| | · | | 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. |

We generate revenue from both the calculation and dissemination of index values and from the licensing of our proprietary 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. |

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.

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.

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.

To meet various market demands we utilize a variety of market and pricing models.

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.

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.

on the other options exchanges.

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.

Cboe incorporates herein by reference the discussion set forth in Note [removed: 21] [added: 22] (“Income Taxes”) and Note [removed: 23] [added: 24] (“Commitments, Contingencies, and [removed: Guarantees– Legal Proceedings”)] [added: Guarantees”)] of the consolidated financial statements included herein.

_Transaction Fee Pilot_

In December 2018, the SEC approved a transaction fee pilot in national market system (“NMS”) stocks (the “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.

On February 15, 2019, the Company filed a Petition for Review in the Court of Appeals for the D.C. Circuit (the “D.C. Circuit”) asserting the pilot is unlawful.

The pilot was published in the Federal Register on February 20, 2019 and was scheduled to become effective on April 22, 2019.

On March 28, 2019, the SEC granted a partial stay of the pilot, agreeing to delay implementing its fee-and-rebate and data-publication requirements until after the D.C. Circuit decides the pending challenges.

The data-

gathering requirement of the pilot’s pre-pilot period remains in effect.

On May 21, 2019, the SEC issued its notice to announce the effective period for the pre-pilot, which was designated as July 1, 2019 through December 31, 2019.

On June 3, 2019, the Company, along with other equities exchanges, filed an opening brief with the D.C. Circuit.

The SEC filed its opening brief with the D.C. Circuit on July 25, 2019, the exchanges’ reply brief was filed on August 26, 2019 and final briefs were filed on September 10, 2019.

Oral arguments were held on October 11, 2019.

The pilot may cause the Company’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, shifts in order flow away from exchanges were to occur.

The Company intends to litigate the matter vigorously.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] DC [removed: 20549][added: 20549]

[removed: Form 10-K][added: Form 10-K]

| ☒ | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018][added: 2019]

| [removed: ☐] [added: ☐] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period from [added: ____________] to [added: ____________]

[removed: Commission] [added: Commission] File [removed: No. 001-34774][added: No. 001-34774]

[removed: Cboe] [added: Cboe] Global Markets, [removed: Inc.][added: Inc.]

| [removed: Delaware] [added: Delaware] | [removed: 20-5446972] [added: 20-5446972] |

| [removed: 400] [added: 400] South LaSalle [removed: Street] [added: Street] | [added: ​] |

| [removed: Chicago, Illinois] [added: Chicago, Illinois] | [removed: 60605] [added: 60605] |

[removed: (312) 786-5600][added: (312) 786-5600]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | [added: Trading Symbol (s)] | [removed: Name] [added: Name] of Exchange on Which [removed: Registered] [added: Registered] |

| Common Stock, par value $0.01 per share | [added: CBOE] | [removed: Cboe BZX] [added: CboeBZX] |

[removed: None][added: None]

Yes ☒No [removed: ☐][added: ◻]

Yes [removed: ☐] [added: ◻] No [removed: ☒][added: ⌧]

Yes [removed: ☒] [added: ⌧] No [removed: ☐][added: ◻]

| Large accelerated filer [removed: ☒] [added: ⌧] | Accelerated filer [removed: ☐] [added: ◻] | Non-accelerated filer [removed: ☐] [added: ◻] | Smaller reporting company ☐ | Emerging growth company ☐ |

As of June 30, [removed: 2018,] [added: 2019,] the aggregate market value of the Registrant's outstanding voting common equity held by non-affiliates was approximately [removed: $11.7] [added: $11.5] billion based on the closing price of [removed: $104.07] [added: $103.63] per share of common stock.

The number of outstanding shares of the registrant's common stock as of February [removed: 15, 2019] [added: 14, 2020] was [removed: 111,596,097] [added: 110,435,193] shares of common stock.

Portions of Cboe Global Market’s Definitive Proxy Statement for the [removed: 2019] [added: 2020] Annual Meeting of Stockholders, which will be filed no later than 120 days after December 31, [removed: 2018,] [added: 2019,] are incorporated by reference in Part III.

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| [added: ​] | | [removed: [PART I](#PARTI_822414)] [added: [PART I](#PARTI_265346)] | [added: ​] |

| [Item [removed: 1.](#Item_1__Business)] [added: 1.](#Item1Busin_218680)] | | [removed: [Business](#Item_1__Business)] [added: [Business](#Item1Busin_218680)] | 7 |

| [Item 1A.](#Item1ARiskFactors) | | [Risk Factors](#Item1ARiskFactors) | [removed: 26] [added: 25] |

| [Item 1B.](#Item1BUnresolvedStaffComments_497585) | | [Unresolved Staff Comments](#Item1BUnresolvedStaffComments_497585) | [removed: 45] [added: 43] |

| [Item 2.](#Item2Properties_26633) | | [Properties](#Item2Properties_26633) | [removed: 45] [added: 43] |

| [Item 3.](#Item3LegalProceedings_399160) | | [Legal Proceedings](#Item3LegalProceedings_399160) | [removed: 45] [added: 43] |

| [Item 4.](#Item4MineSafetyDisclosures_10202) | | [Mine Safety Disclosures](#Item4MineSafetyDisclosures_10202) | [removed: 45] [added: 44] |

| | | [removed: [PART II](#PARTII_507992)] [added: [PART II](#PARTII_507992)] | |

| [Item 5.](#Item5MarketforRegistrantsCommonEquity_14) | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#Item5MarketforRegistrantsCommonEquity_14) | [removed: 46] [added: 45] |

| [Item 6.](#Item6SelectedFinancialData_274620) | | [Selected Financial Data](#Item6SelectedFinancialData_274620) | [removed: 49] [added: 48] |

| [Item 7.](#Item7MangamentsDiscussionandAnalysis_301) | | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item7MangamentsDiscussionandAnalysis_301) | [removed: 51] [added: 50] |

| [Item 7A.](#Item7AQuantitativeandQualitativeDisclosu) | | [Quantitative and Qualitative Disclosures about Market Risk](#Item7AQuantitativeandQualitativeDisclosu) | [removed: 87] [added: 79] |

| [Item 8.](#Item8FinancialStatementsandSupplementary) | | [Financial Statements and Supplementary Data](#Item8FinancialStatementsandSupplementary) | [removed: 90] [added: 82] |

| [Item 9.](#Item9ChangesinDisagreementswithAccountan) | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#Item9ChangesinDisagreementswithAccountan) | [removed: 136] [added: 126] |

| [Item 9A.](#Item9AControlsandProcedures_932099) | | [Controls and Procedures](#Item9AControlsandProcedures_932099) | [removed: 136] [added: 126] |

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or

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Yes ⌧ No ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

​

​

CBOE GLOBAL MARKETS, INC.

2019 FORM 10-K

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| | ● | "AFM" refers to the Netherlands Authority for the Financial Markets. |

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| | ● | "Cboe Europe Equities" refers to the combined businesses of Cboe Europe and Cboe NL. |

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| | ● | "Cboe NL" refers to Cboe Europe B.V., a wholly-owned subsidiary of Cboe Global Markets, Inc., the Netherlands operator of our MTF, RM, and APA. |

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| | ● | "Cboe Swiss" refers to Cboe Switzerland GmbH, a wholly-owned subsidiary of Cboe Global Markets, Inc. |

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| | ● | "ESMA" refers to the European Securities and Markets Authority. |

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10-K 1 cboe-20181231x10k.htm 10-K

| | |

or

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

2018 FORM 10-K

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| | · | | "VIX" refers to the Cboe Volatility Index methodology. |

FTSE® and the FTSE indexes are trademarks and service marks of FTSE International Limited, used under license.

| | · | | potential difficulties in our migration of trading platforms and our ability to retain employees as a result of the Merger; |

The lease on this space expires in February 2027 and contains two five-year renewal [removed: options, as well as a one-time option to terminate in November 2019 if certain contingencies under the lease are met.][added: options.]

The disaster recovery sites in the United States are located in [added: Chicago, Illinois,] Kansas City, [removed: Missouri] [added: Missouri,] and Secaucus, New Jersey.

The building is currently classified as held for sale.

See Note 9 (“Property and Equipment, Net”) of the consolidated financial statements included herein for further information.

In addition to the offices noted above, the Company has entered into two leases that will commence in 2020 for a new principal office space and new trading floor.

See Note 25 (“Leases”) of the consolidated financial statements included herein for further information.

[removed: PART II][added: PART II]

​

| Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |

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Common Stock

The Company’s common stock is listed on Cboe BZX under the trading symbol CBOE.

As of January 31, 2020, there were approximately 143 holders of record of our common stock.

Dividends

Each share of common stock, including restricted stock awards and restricted stock units, is entitled to receive dividend and dividend equivalents, respectively, if, as and when declared by the board of directors of the Company.

The Company’s expectation is to continue to pay dividends.

The decision to pay a dividend, however, remains within the discretion of the Company's board of directors and may be affected by various factors, including our earnings, financial condition, capital requirements, level of indebtedness and other considerations our board of directors deems relevant.

Future debt obligations and statutory provisions, among other things, may limit, or in some cases prohibit, our ability to pay dividends.

As a holding company, the Company’s ability to declare and continue to pay dividends in the future with respect to its common stock will also be dependent upon the ability of its subsidiaries to pay dividends to it under applicable corporate law.

Recent Sales of Unregistered Securities

Not applicable.

Use of Proceeds

Not applicable.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Share Repurchase Program

In 2011, the board of directors approved an initial authorization for the Company to repurchase shares of its outstanding common stock of $100 million and approved additional authorizations of $100 million in each of 2012, 2013, 2014, 2015 and 2016, $150 million in February 2018, $100 million in August 2018, and $250 million in October 2019 for a total authorization of $1.1 billion.

The Company expects to fund repurchases primarily through the use of existing cash balances.

The program permits the Company to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws.

It does not obligate the Company to make any repurchases at any specific time or situation.

Under the program, for the year ended December 31, 2019, the Company repurchased 1,420,654 shares of common stock at an average cost per share of $110.42, totaling $156.9 million.

Since inception of the program through December 31, 2019, the Company has repurchased 13,716,009 shares of common stock at an average cost per share of $58.38, totaling $800.8 million.

As of December 31, 2019, the Company had $299.2 million of availability remaining under its existing share repurchase authorizations.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | Total Number of | ​ | Approximate Dollar | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | Shares Purchased | ​ | Value of Shares that May | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | as Part of Publicly | ​ | Yet Be Purchased Under | |

| ​ | ​ | Total Number of | ​ | Average Price | | ​ | Announced Plans | ​ | the Plans or Programs | |

| Period | | Shares Purchased | | Paid per Share | | | or Programs | | (in millions) | |

| October 1 to October 31, 2019 | ​ | 480,442 | ​ | $ | 115.62 | ​ | 480,442 | ​ | $ | 313.3 |

| November 1 to November 30, 2019 | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | 313.3 |

| December 1 to December 31, 2019 | ​ | 120,000 | ​ | ​ | 117.26 | ​ | 120,000 | ​ | ​ | 299.2 |

| Total | ​ | 600,442 | ​ | $ | 115.76 | ​ | 600,442 | ​ | ​ | ​ |

Purchase of common stock from employees

During the fiscal quarter ended December 31, 2019, we purchased shares from employees in connection with the settlement of employee tax withholding obligations arising from the vesting of restricted stock units, restricted stock awards, and stock options.

The table below represents repurchases made by or on behalf of us or any “affiliated purchaser” of our common stock during the fiscal quarter ended December 31, 2019:

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| [added: ​] | [added: ​] | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | |

| [added: ​] | | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | |

| [added: ​] | [added: ​] | [removed: (in] [added: (in] millions, except per share [removed: data)] [added: data)] | | | | | | | | | | | | | |

| [removed: Consolidated] [added: Consolidated] Statements of Operations [removed: Data:] [added: Data:] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |

| Revenues: | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |

| Transaction fees | [added: ​] | $ | [removed: 1,986.9] [added: 1,716.2] | [added: ​] | $ | [removed: 1,564.9] [added: 1,986.9] | [added: ​] | $ | [removed: 509.3] [added: 1,564.9] | [added: ​] | $ | [removed: 485.3] [added: 509.3] | [added: ​] | $ | [removed: 466.9] [added: 485.3] |

| Market data fees | [added: ​] | [added: ​] | [added: 213.5 | ​ | ​ |] 204.0 | [added: ​] | [added: ​] | 164.5 | [added: ​] | [added: ​] | 33.2 | [added: ​] | [added: ​] | 30.0 | [removed: | | 30.5 |]

| Regulatory fees | [added: ​] | [added: ​] | [added: 311.7 | ​ | ​ |] 333.9 | [added: ​] | [added: ​] | 291.5 | [added: ​] | [added: ​] | 48.3 | [added: ​] | [added: ​] | 33.5 | [removed: | | 37.1 |]

| Other revenue | [added: ​] | [added: ​] | [added: 32.8 | ​ | ​ |] 33.0 | [added: ​] | [added: ​] | 26.6 | [added: ​] | [added: ​] | 13.6 | [added: ​] | [added: ​] | 19.5 | [removed: | | 14.6 |]

| Total revenues | [added: ​] | [added: ​] | [added: 2,496.1 | ​ | ​ |] 2,768.8 | [added: ​] | [added: ​] | 2,229.1 | [added: ​] | [added: ​] | 703.1 | [added: ​] | [added: ​] | 663.8 | [removed: | | 646.4 |]

| Cost of revenues: | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |

| Liquidity payments | [added: ​] | [added: ​] | [added: 964.7 | ​ | ​ |] 1,113.0 | [added: ​] | [added: ​] | 849.7 | [added: ​] | [added: ​] | 35.8 | [added: ​] | [added: ​] | 29.2 | [removed: | | 29.1 |]

| Routing and clearing | [added: ​] | [added: ​] | [added: 35.8 | ​ | ​ |] 39.1 | [added: ​] | [added: ​] | 37.6 | [added: ​] | [added: ​] | 11.1 | [added: ​] | [added: ​] | 2.3 | [removed: | | 4.1 |]

| Section 31 fees (1) | [added: ​] | [added: ​] | [removed: 302.4] [added: 271.4] | [added: ​] | [added: ​] | [removed: 260.0] [added: 302.4] | [added: ​] | [added: ​] | [removed: 11.8] [added: 260.0] | [added: ​] | [added: ​] | [removed: —] [added: 11.8] | [added: ​] | [added: ​] | — |

| Royalty fees | [added: ​] | [added: ​] | [added: 86.8 | ​ | ​ |] 97.4 | [added: ​] | [added: ​] | 86.2 | [added: ​] | [added: ​] | 78.0 | [added: ​] | [added: ​] | 70.6 | [removed: | | 66.1 |]

| Total cost of revenues | [added: ​] | [added: ​] | [added: 1,359.2 | ​ | ​ |] 1,551.9 | [added: ​] | [added: ​] | 1,233.5 | [added: ​] | [added: ​] | 136.7 | [added: ​] | [added: ​] | 102.1 | [removed: | | 99.3 |]

| Revenues less cost of revenues | [added: ​] | [added: ​] | [added: 1,136.9 | ​ | ​ |] 1,216.9 | [added: ​] | [added: ​] | 995.6 | [added: ​] | [added: ​] | 566.4 | [added: ​] | [added: ​] | 561.7 | [removed: | | 547.1 |]

| Operating expenses: | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] | [added: ​] |

| Compensation and benefits | [added: ​] | [added: ​] | [added: 199.0 | ​ | ​ |] 228.8 | [added: ​] | [added: ​] | 201.4 | [added: ​] | [added: ​] | 113.2 | [added: ​] | [added: ​] | 105.9 | [removed: | | 121.7 |]

| Depreciation and amortization | [added: ​] | [added: ​] | [added: 176.6 | ​ | ​ |] 204.0 | [added: ​] | [added: ​] | 192.2 | [added: ​] | [added: ​] | 44.4 | [added: ​] | [added: ​] | 46.3 | [removed: | | 40.0 |]

| Technology support services | [added: ​] | [added: ​] | [added: 46.2 | ​ | ​ |] 47.9 | [added: ​] | [added: ​] | 42.1 | [added: ​] | [added: ​] | 22.5 | [added: ​] | [added: ​] | 20.7 | [removed: | | 19.2 |]

| Professional fees and outside services | [added: ​] | [added: ​] | 68.3 | [added: ​] | [added: ​] | [removed: 66.0] [added: 68.3] | [added: ​] | [added: ​] | [removed: 53.1] [added: 66.0] | [added: ​] | [added: ​] | [removed: 50.1] [added: 53.1] | [added: ​] | [added: ​] | [removed: 32.0] [added: 50.1] |

| Travel and promotional expenses | [added: ​] | [added: ​] | [removed: 13.0] [added: 11.9] | [added: ​] | [added: ​] | [removed: 17.2] [added: 13.0] | [added: ​] | [added: ​] | [removed: 11.0] [added: 17.2] | [added: ​] | [added: ​] | [removed: 9.0] [added: 11.0] | [added: ​] | [added: ​] | 9.0 |

| Facilities costs | [added: ​] | [added: ​] | [added: 11.0 | ​ | ​ |] 11.5 | [added: ​] | [added: ​] | 10.3 | [added: ​] | [added: ​] | 5.7 | [added: ​] | [added: ​] | 5.0 | [removed: | | 5.7 |]

| Acquisition-related costs | [added: ​] | [added: ​] | [removed: 30.0] [added: 48.5] | [added: ​] | [added: ​] | [removed: 84.4] [added: 30.0] | [added: ​] | [added: ​] | [removed: 13.6] [added: 84.4] | [added: ​] | [added: ​] | [removed: —] [added: 13.6] | [added: ​] | [added: ​] | — |