The Battle Over Index Options

摘要

An industry source reminded me ecently that major events happen in the financial industry for three reasons: fear, greed and regulation. I disagree. In today's equity and options world, competition is emerging as the major catalyst for change. As everyone knows, there are two important court cases circulating in the industry right now (and a third could be brewing) that are fighting against allowing exchanges to hold exclusive rights to proprietary products. Industry executives say exclusive licenses are necessary to reward innovation. Though inventors of index products should be rewarded for their efforts, I believe that there should be a time limit on exclusive listings, and licensing fees should not be used to block competition. As each of these cases illustrates, incumbents don't share my views.