Hello, and welcome to the Cboe Global Markets 2020 Third Quarter Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Debbie Koopman. Ms. Koopman, please go ahead.

Thank you. Good morning. And thank you for joining us for our third quarter earnings conference call. On the call today Ed Tilly, our Chairman, President and CEO will discuss the quarter and provide an update on our strategic initiatives; then Brian Schell, our Executive Vice President, CFO and Treasurer will provide an overview of our financial results and provide updated 2020 guidance. Following their comments, we will open the call to Q&A. Also joining us for Q&A will be our Chief Operating Officer, Chris Isaacson; and our Chief Strategy Officer, John Deters. In addition, I would like to point out that this presentation will include the use of slides. We will be showing the slides and providing commentary on each. A downloadable copy of the slide presentation is available on the Investor Relations portion of our website. During our remarks, we will make some forward-looking statements, which represent our current judgment on what the future may hold. And while we believe these judgments are reasonable, these forward-looking statements are not guarantees of future performance and involve certain assumptions risks and uncertainties. Actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statements. Please refer to our filings with the SEC for a full discussion of the factors that may affect any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise after this conference call. During the course of the call this morning, we'll be referring to non-GAAP measures as defined and reconciled in our earnings materials. Now, I'd like to turn the call over to Ed Tilly.

Thank you, Debbie. Good morning, and thank you for joining us today. I hope everyone continues to remain safe and healthy, as the pandemic continues to take its toll around the globe. I'm pleased to report solid financial results for the third quarter of 2020 at Cboe Global Markets, where we continue to advance our strategic growth plan to strengthen our product line across asset classes and geographies, broaden our customer reach, diversify our business mix, with recurring revenue and leverage our superior technology. Thanks to this ongoing disciplined approach, we were well positioned to navigate market conditions that left many institutional investors on the sidelines. Much as we saw in the previous quarter, our third quarter results were driven by increased trading volumes in cash equities and multi-listed options, fueled by growth in retail trading. We also saw continued growth in our recurring proprietary non-transactional revenues. Last quarter, I highlighted our strategy to strengthen our U.S. Equities business through new markets and new trading mechanisms, such as retail priority and periodic auctions. Growing retail participation helped drive a 26% year-over-year increase in U.S. equities trading for the quarter. Volume and retail priority orders which we launched last year on Cboe Edgx, represented nearly 23% of total volume and helped propel the exchange to record market share last quarter of 6.8%. We believe we are uniquely positioned to define the state of the art in Equities trading through product and market innovation. We took significant steps towards realizing that vision with the third quarter completion of our acquisition of MATCHNow and with our recently announced plans to acquire BIDS Trading. MATCHNow you will recall is Canada's largest alternative trading system. I'm pleased to say, we are well on track with its integration, which enables us to expand our equities offering,…

Thanks, Ed, and good morning, everyone. I hope everyone and their families are remaining safe and healthy. And I'd also like to thank my fellow Cboe associates for their continued hard work and dedication in advancing Cboe's growth initiatives. Let me remind everyone that unless specifically noted, my comments relate to 3Q 2020 and as compared to 3Q 2019 and are based on our non-GAAP adjusted results. While earnings declined year-over-year, we reported solid financial results for the quarter. Again highlighting the diversification of our revenue streams and the contributions from our investments, reinforcing our strategic initiatives. Our net revenue decreased 1% with net transaction fees down 8% and non-transaction revenue up 1%. Adjusted operating expenses increased 13% driven by our acquisitions. Adjusted EBITDA of $192 million was down 8%. And finally, our adjusted diluted earnings per share decreased 14% to $1.11 reflecting a higher effective tax rate. We grew our quarterly recurring revenue stream of proprietary market data and access to capacity fees by 14% compared to third quarter 2019 exceeding our prior guidance of mid to high single digits. This increase includes organic growth of 10% and $5 million attributed to our acquisitions. The organic growth reflects 11% growth in access capacity fees and 8% in proprietary market data revenue, driven by increased demand for historical data sales and subscriptions. Growth in new accounts and strong uptake on new data set offerings. The organic growth of proprietary market data and access capacity fees continue to be driven by incremental subscriptions and units accounting for 87% and 86% of the growth this quarter respectively. In our last call, we also noted that certain floor broker access capacity fees were reinstated following the reopening of our trading floor on June 15th. This resulted in higher access capacity fees in 3Q…

Thanks Brian. [Operator Instructions] Pete?

Yes. Thank you. [Operator Instructions] And the first question comes from Rich Repetto with Piper Sandler.

Good morning, Ed and team. I guess my question is going to be on equities. And you talked about the lower RPC in the third quarter. And I guess we can back into some of the monthly reportings that September was particularly low. Could you talk about I guess what the strategy was with the RPC, MEMEX fully launched yesterday still not even 1%. But -- and can you also update us on what the takeaway so far what you learned in regards to MEMEX and are the two related here the RPC and MEMEX?

Hey, good morning, Rich. Thanks for joining. Thanks for the question.

Hey, Chris.

Yes, they just rolled out all their symbols yesterday. So as we've said before, we expect strong competition from them going forward. But as we're always doing, we're optimizing our net revenue capture as well as our market share and the changes we made for September were to grow our market share to better compete with off exchange trading as well as other exchange operators. It's had the desired impact. We're up almost a full percentage point. EDGX is setting new records with retail priority. And we expect MEMEX will continue to be competitive and we're going to be very competitive, but optimizing that revenue capture. And as Brian mentioned in his prepared remarks, we've already adjusted pricing in October and likely will be in November as well. This is as you know a very dynamic market very competitive and we'll be adjusting capture and pricing to remain competitive. We like the business. And we think the innovations we brought to the market with retail priority Quote Depletion Protection, Cboe Market Close. We think we're in great stead there. I'm quite excited about periodic auctions as well. As soon as we get SEC approval.

So we should see a rebound in that RPC in October. Is that what you're saying Chris?

Yes. We're adjusting always what's the appropriate capture versus the market share. So you can -- not going to predict what the capture will be, but we're going to optimize for net revenue over the long term, which market share and capture obviously are probably two key ingredients.

Okay. Thanks very much, Chris.

Thank you. And the next question comes from Dan Fannon with Jefferies.

Hi. This is James Steele filling in for Dan. Good morning. My question is on the access and capacity fees. If I heard correctly, it sounded like you're increasing the growth expectation there. I know that you mentioned investor education and, there're some new products there. So I was just hoping you could distill what you're most excited about and what the reason for the uptick in guidance is?

So, this is Brian. I will -- I would say, it's a continuing trend. I mean, I think what we're seeing is, we've been seeing this growth for several years in this category. And it's coming from across the business. It's coming within options; it's coming within equities, as we continue to compete aggressively. I think as people are realizing, both the value of what's coming out of the exchange, as well as the enhanced market data that we're able to drive demand from our customers. I will say that, with the acquisitions within our Information Solutions group is that, we're seeing continued increased demand as we pull that together, that's just continuing that positive momentum and where we see that demand for that data. So it's a continuing trend that we've actually been seeing in the last few years within everything that we've been doing across all the asset classes. And we don't necessarily have a projection for the growth rates beyond this year yet, as we continue to evaluate our pipeline, but we still are very excited about that category. It is relatively small for us, but continuing to grow. And I would say that's definitely something we continue to be excited about.

Thank you.

Thank you. And the next question comes from Ken Worthington with JPMorgan.

Hi. Thank you for taking my question. Can you talk about retail distribution for Cboe futures and proprietary options? Are there opportunities to expand distribution for these areas? And you continue to highlight investor education, is this more retail or institutional education and how much does education move the needle in terms of driving trading activity?

Well, great questions. Let me start and then we can -- with the second part of the question on education, always important for us in the options institute in the way we've redesigned that in the reference I had in prepared remarks, was really what we're doing on webinars. We're setting them up. We've had two already. And those are aimed more professional, so it's a financial professional webinar. The first was managing global risk exposure and the second was shielding against downturns. So couldn't be more timely. And we had 550 registered for those two new webinars. So that's kind of the focus. And, of course, we have the opportunity to teach-in real time. And this market know better example of how to use our proprietary mix of products in managing for downturns and global risk. So that's kind of a sense of the focus for us on institutional. And then, retail, super important for us and we've referenced now the last two quarters and it couldn't be more clear in multi-list options, for example, and of course in U.S. equities, just the influence over retail adoption in this new environment. We think there's a great opportunity to take the success and the interest that retail has had in equities and to teach the basic properties of trading derivatives. So if you look at the newest entrants in retail equities, there's no exposure and access for many of those new accounts into Cboe's proprietary product stack. That's not acceptable for us. So with education and making things bite sized, think our small launch of Mini VIX that's the push from now all through next year. So we're going to hit the potential on two fronts. Definitely on the institutional side, with differently constructed educational seminars. In retail, it's back to basics. If you're trading short term low premium products or delta one we can teach you how to change the risk profile by introducing derivatives. That's the goal.

Great. Thank you.

Thanks Ken.

Thank you. And the next question comes from Mike Carrier with Bank of America.

Good morning. Thanks for taking the question. Brian, just on the expense update that's helpful. Just given many of the moving parts including the core with just the revenue backdrop you've got the acquisitions and then some possible normalization of T&E post COVID. I know it's early, but can you provide us maybe some early thoughts on just how you're thinking about 2021? Thanks.

Yes. No, good question and something that we expect to come up. We're still in the middle of our 2021 business planning process and it really is too early to provide that guidance. But I do leave you with a couple of thoughts though -- as we've done in the past and including this year, we're going to execute against the plan to grow the business and make adjustments along the way as the conditions warrant. And our organization has done a great job of this historically. We know the expense base will grow in 2021 with the run rate of the expenses from the acquisitions as you've noted. And in 2020 we've already said that we are going to grow our derivatives effort in Europe. But again at the end of the day, our goal is to grow the business make the right investments for long-term shareholder value and really balance that expense discipline, while remaining flexible enough to take advantage of a changing environment opportunities that may present themselves. So like I said look for a little bit more clarity on the next call.

Got it. Thanks.

Thank you. And the next question comes from Alex Kramm of UBS.

Yeah. Hey. Good morning, everyone. Just quickly on BIDS. You mentioned that you will run this as an independent entity but clearly Cboe should have some sort of vision for this asset. So just wondering what you think you can bring to the table there? What kind of improvements do you think you can make both on the efficiency side on the cost side, but also then where can you maybe impact market structure where they may have been hindered in the past where you can do something better and gain share here? Thanks.

Thanks, Alex. I'll give -- I'll start it off and I'll invite Chris to jump in. When we say independent to be clear it is independent in the U.S. equities market. And so for us that's really access for the first time to the 40% of the U.S. equities market that's trading off exchange. So that's the goal there. So that independent stops at the border. And our ability to continue to work in Europe with BIDS as we have on LIS that is not encumbered, it will not be run separately nor will the expansion beyond the U.S. be run independently. So the strategies that I mentioned in our prepared remarks allows us to move into Canada that will be strategically looking at how block trading and the BIDS offering can move into other geographies. So I want to be really clear. We are very mindful of the guidance that we received from the SEC. That is super important for us to comply with all that guidance and the U.S. operation will be independent. Chris anything to add on BIDS its ability to scale up and now having the technology and influence and all of the history with Dave Howson and the team in Europe any other comments on BIDS?

Yes. I'd just say, I mean, Alex we're super excited about. There's nearly 500 investment managers that are connected to BIDS. And as I've mentioned it will be an independently run business from a U.S. securities perspective, but we're excited about the opportunities outside of that jurisdiction. As I mentioned Canada, LIS in Europe has been a great success working with Dave Howson. Tim Mahoney has a great team. We also obviously, we highlighted the FX growth we've seen this quarter and over the past years since we purchased that entity back in 2015. So we see Nexus across additional geographies as well as additional asset classes for these nearly 500 investment managers. So quite excited. We're very mindful of the restrictions and the independence we need as it relates to U.S. securities but excited outside of that.

Alex, this is John. One thing I'd just add to that is that this is a network business. And so as we expand internationally with it every new user that we add internationally increases the value of the entire experience for all the other users. We learned that very directly through our relationship in Europe. And we think we have quite a bit of opportunity to continue doing that as we grow the business in other geographies.

Very helpful. Thank you.

Thank you. And the next question comes from Brian Bedell with Deutsche Bank.

Great. Thanks. Good morning guys. Just a question going back to the non-transaction revenue growth particularly in the information solutions. Just how should we think about revenue from the analytics capabilities that you list out on slide 11 as a proportion of that proprietary market data on slide 17, is it the $5 million that has come from acquisitions, or is there more than that? And then growing that non-transaction revenue, how should we think about the growth path of access and capacity fees from other new subscriber perspective, you mentioned maybe more access through BIDS trading, for example, or expanding new services to existing customers.

Before Brian jumps in to the first part of the question, I think, Chris an update on the incredible progress we've made on integration on FT, Hanweck and Trade Alert is very important to give that some perspective, while Brian will come back and answer the first part.

Yes, absolutely. So, obviously we bought Hanweck, FT Options and Trade Alert in the first half of the year. And we knew we were getting great platforms there that we're going to add to our profitability, which Brian will cover. But the people that have stayed on those founders of those firms and added to the Cboe team, we're just extremely pleased with. And even given the pandemic, we've made great progress with our integrations frankly better than I would have expected this year. So we're seeing Hanweck driving market data for Silexx. We're seeing Hanweck data being used across the other entities. There's just a lot of great cross polonization, pollination across those entities that's now providing tremendous value to our customers. And we're just getting started there. We have a full 2021 road map. Under the Information Solutions group as we call it, just great synergies there for that entity as well as being used across Cboe and for our customers. Brian, do you want to cover the rest?

Yes. Yes. I mean, I think that's actually linked in perfectly as far as how we're thinking about it and the opportunity that really presents itself on a go-forward basis is as those groups continue to work together not only just on the cost side and how that infrastructure works together. But we're seeing it more and more on the client-facing side about how as these groups come together how we can continue to supplement those services to the clients. So like I said to the earlier question, and we love this focus on like, I said we're very excited about this. And along with the investor education elements of what this can do is we continue to see a really nice growth pattern. On the overall base, you'll see the kind of we put the metrics out as far as the overall growth. But if you look at just that microcosm within that growth we expect to see like, I said, really good growth and we see the expansion in the various analytics activities and then you going to see a real focus there. So you did -- we did note that that growth rate of the $5 million that you talked about broadly within that category, but that was mostly on the market data side from the acquisitions. But again, we're seeing growth within that group on top of the new growth that just adding it from a reporting standpoint to Cboe. You also noted on the access capacity fees. That's come from multiple areas across the organization. That is we've seen that as the demand for trading has continued to climb. And we've seen people continuing to add -- a need to add to their overall capacity. So that's where you're seeing the high 80s as a percentage of the growth coming from, I'll call it we call it subscription or numbers versus pricing changes continuing to drive that. So as people find more and more functionality and use by connecting with our platform, we're seeing that increased demand. Some of that structural say, for example with the Brexit going on in Europe, but you're also just seeing it just from higher volatility and higher volumes.

Let me just -- Brian, let me trickle back also one other point. If you think of that ISG is born here in the U.S. and the modeling that Jerry Hanweck and the team are working on and the platform that we got with Michael Ozaki. Once you solve a financial model it's portable. So it's easy for us to move all the lessons learned for one into Europe and not on an accident and launching derivatives in Europe mid next year. Worst ISG has that top of mind. So once you solve once math is math and it's portable and it's scalable. And so we see great opportunity beyond the work that we've done here. Thanks for that question.

And just a quick follow-up. The guidance that you gave on the organic growth to mid to high-single-digits, was that 2020 for that whole non-transaction side, or was that just the access fees?

That was for the whole category.

The whole category. Okay. Great, thank you.

Thank you. And the next question comes from Ari Ghosh with Credit Suisse.

Hey, good morning, everyone. I guess just another quick follow-up on ISG lines. At the time of the Hanweck and FT deal, I believe there's very little overlap that as you talked about between your core client base and the new acquisitions. So maybe do you have any numbers or stats around -- or just color on what client uptakes look like product cross-sells and other components driving this? Just curious to see how that's trends. How that’s moved over the last few months. And then, in terms of the growth, what portion of that is U.S. versus non-U.S. like you talked about, the opportunity to kind of expand on the referring side within non-U.S. customer base. Thanks, guys.

Yes, it’s a great question. This is Chris. I mentioned this a little bit in previous remarks. But I guess when we got these platforms, where there was little overlap from the customer base, which is one of the surprises during diligence. And now that we've we're well into integration. We're seeing uptake across the different products within ISG, within Information Solutions. One of the stories here is Trade Alert, which was one of the smaller ones, we -- actually we've seen great uptake in a work-from-home environment, where the demand for data both real-time and historical has been growing dramatically. Also for instance, with the entity we already had LiveVol, we've been able to put more data into DataShop and we've seen DataShop subscriptions grow dramatically also. And then, another thing that would be worth mentioning is here, it's called Cboe fills, which is the one benchmark Cboe co price that we are creating with the new platforms and people that we brought on, especially the likes of Jerry Hanweck and Michael Ozaki to provide that one pristine benchmark Cboe price. So we see great cross-pollination in that group and bringing all of them together. So it's one unified platform presented as information solutions to our customers. But real good growth with additional data sets on DataShop for historical data, real-time alerting data from Trade Alert, and then continued nice uptake with Hanweck and FT. John, what else would you like to add there?

Yeah. Thanks Chris. Thanks Ari. It's a great question. And you think back, I mean we did these three ISG-related acquisitions more or less concurrently with a vision that they fit together fill gaps in our existing offering. And so, to Chris' point, we saw a lot of opportunity not only to weave together the capabilities, to create a comprehensive product offering but to also cross sell. And there are plenty of great examples of that, one quite recent example, a large Boston-based global broker. We're able to get in there consult with them in terms of what their needs are. And then, as a result of that offer, a suite of products -- portfolio analytical products, pricing products with Cboe Fios, market alerts products with Trade Alert, that are just powerful. We don't think they're really matched by anyone else in the business when it comes to equity derivatives. The other thing I'd mention is really interesting that we've seen and it was a thesis we had here is that you grow the ISG product set. And then it grows your legacy capabilities as well. So we've seen, call it, a 16% uptick in the utilization in terms of the user numbers of our legacy LiveVol platform as a result of putting these pieces together.

Great color guys, thank you.

Thank you. And the next question comes from Jeremy Campbell with Barclays.

Hey, thanks. Ed, you guys got a lot of irons in the fire. You've been very active around deal flow, developing new products, creating new data and analytics, and expanding geographies. You providing, Chris, all cover quite a bit of ground here with some great color in the prepared remarks and earlier Q&A, but just wanted to kind of maybe zoom out to the highest level here. What parts of the core business or new initiatives are you guys most excited about and would want to highlight to an investor base that seems on the hunt for sustainable or structural top line growth?

Yeah. I think, I'd go back to one of the first questions, and I think what perhaps the industry has not valued highly enough until it became just so obvious this year is the power of retail and the power of the new user. And it always starts in Delta One. And for us in the U.S. that's U.S. equities. So if we look globally at where our reach is and always a little bit better lucky than smart at times. When you start with table stakes as an exchange operator, if you look at equities you've got to be in equity. And from there you're introduced to the first and earliest movers. And if you have derivatives to back it up that's where it gets really exciting, and when we look in the U.S. We've missed that. The new retail came in, came in in a very, very big way letter rally, led new subscriptions, new subscribers, all electronic platforms every boat rises with the new retail. From a derivatives perspective that's completely new, new ground. Those new retail traders are not in the derivatives yet. And as one of the largest growing and fastest-growing doesn't have access yet to Cboe's proprietary product set. For us are we light up, this is absolutely new opportunity and it starts with education and teaching the basics of derivatives. And then we look across, I said, the better lucky than smart, we are obviously moving in from Europe with our base in pan-European equities the ability to launch derivatives in one Clearing house EuroCCP, with broad exposure on country risk across Europe, I think our timing is really, really good. I'm really excited about the way this is coming together and the prospect of converting some of those new retail accounts into derivatives and then showing what we can do by importing, a model that is very successful in U.S. and derivatives into Europe. So I think that's what you'll hear us really focus on over the next months. And all of that is a headwind of institutions being on the sideline. So if we get any normalcy, we get through an election, some clarity on the pandemic and vaccine, I think you'll see institutions reengage, but that's just coming with the territory. That's the macro event that we can't affect, but it all comes together in an ecosystem that's incredibly powerful and we're very excited about the prospects in the months to come.

Great. Thank you.

Thank you. And the next question comes from Chris Harris with Wells Fargo.

A question on M&A. In a number of the exchange deals, we've seen over the years, market share of the acquired asset actually ended up going down after those deals closed. So what are you guys doing or can do to prevent this sort of situation from happening with MATCHNow and BIDS?

Well, let me start with BIDS. And part of the independence in the U.S. we refer to that really from a regulatory perspective. But not being a dis-intermediating platform is super important. So the relationships with the buy side and the sell-side is intact. That's very, very important to us. It is very, very important to the model. It is the success of that model. We are mindful of that relationship and are not getting in the middle of those relationships. That's super important. And I think that goes a long way to maintaining that share. I think with MATCHNow a little different answer picking up the breadth of Cboe and being part of a North American view on equities, really broadens the reach for MATCHNow, but I'll turn it over to Chris for a couple of thoughts on both.

It's a great question, and not every integration or acquisition has gone well for exchanges, but in our history the Cboe plus Bats combined history. So we've done this a few times with the purchase of CIX in Europe able to maintain and grow market share. The purchase of Direct edge able to maintain and grow market share there. So, we've done this a few times, the most recently last year finishing the Bats integration and all the while maintaining growing market share in multi list. So I think that we have a track record here. If you have to stay close to your customers, it starts with the customer. You can't just simply replace a platform. You need to make sure you're delivering value to them and bringing them along, and they see the value of that platform. So we need to use that same playbook these entities also.

Hi. This is John. I'd just add that, with BIDS in particular, we really do. And this is -- it should be said this is true of all of our M&A activity. We look within that framework of asset class and geographic expansion and getting closer to our customers. We look for areas of clear secular growth. And when you talk about workflow enabled customer-centric networks. That is a clear area of secular growth. So we don't see this being a market share attrition question. This is a question of growing that network like we described earlier. Specifically on MATCHNow that's a business that, is in a more competitive area. We're aware of that. We were aware of it, when we acquired the asset. Market share is down a little bit, this year, because of new rules that IRC implemented up in Canada for small size trades. We were aware of that. A long-term growth prospects, of that business however, really are more centered on larger scale trades. And connectivity with platforms like, BIDS. So we see some real, real strong opportunity for growth and market share, in that platform over time.

Thank you. And the next question comes from Kyle Voigt with KBW.

Hi. Good morning. Just maybe a follow-up on the U.S. cash equities discussion. Should we really think about this 14% or 15% market share figure, as being a floor that you're willing to defend with pricing? And can you just talk about, how important is to defend some minimum level of market share? In other words, if you dip below that level, does it start to reduce client demand for data, or connectivity, or other products?

Yeah. So you can see we were aggressive in changing price in September. And we continue to adjust Kyle, as we move forward. Market share does matter to us. Obviously there's SIP revenue and other things that come along with that and critical mass on the equities business. And we're really pleased with the results of these recent pricing changes. Intraday with continuous trading we're number two in equities, this month of October. So, yeah there is a critical mass of market share, we want to maintain and grow. And we're going to be aggressive. But as I said, in the opening kind of question -- answer to the question was we're going to optimize that revenue in the long-term.

Thank you. And the next question comes from Owen Lau with Oppenheimer.

Good morning. And thank you for taking my questions. Could you please give us an update of your trading floor situation? What's the progress of adding more capabilities? And getting the approval to allow us to trade complex products remotely? Thank you.

Chris, do you want to start with, what we've just done on expansion?

Yeah. Yes. So actually in September, we expanded the trading for. We obviously, we reopened it in the latter half of June. And then, we expanded in September. So we're nearly back to 100% capacity of what we had pre-COVID, in a modified format, socially distance, safety first. But pleased with that ready for the obviously election volatility, we expect next week. And we remain committed. We're working with the SEC on a virtual trading floor solution. We have a filing out there. I hope to get approved soon that would allow us to go purely virtual if -- in the hopefully low likelihood that we would have to close the floor again, due to COVID outbreak or other reasons. So, that's truly from a business continuity perspective. And we're quite excited about that, also on the long-term opportunities, as we optimize it.

That's great. Thank you.

Thank you. And the next question comes from Chris Allen with Compass Point.

Good morning, guys. I just wanted to ask another quick one on, BIDS. I understand the opportunity to expand in other asset classes or regions. But I believe BIDS 100% of revenue is driven by the U.S. So I'm just wondering like, what it brings to the table from the U.S. business when you have to run basically separate liquidity pools. Any color on there would be helpful.

Chris, I'll just clarify. 100% is actually not driven by the U.S. There's actually with the partnership coming from Europe, there is a substantial portion that's also coming from there. I think the -- I think its 15-ish-percent that's already coming from our European operations. So just -- again, just to clarify that from that perspective.

And can you restate the second part of the question then? Chris?

Sure. Yes. No, I was wondering just what it brings to the table in the U.S. and, Brian, I said 100%, because then going off your slide deck it's a $42 million in North American equity. So, apologies, if I got that wrong, but --

No, no. It's okay. So – yes. Go ahead.

Just to clarify, Ed, from a reporting segment standpoint, it's going to stay there. But from where it's source working with the European operations, that where it is. So, sorry, that's just a minor clarification. That's going to stay in that North American Equities business as far as how we report it, but a portion of that is actually coming from the work with our European Equities group. So just to clear.

Yes. And, Chris, in terms of the U.S. I mean this is a platform that operates in the off exchange ATS space. It's a very fragmented space. The competition tends to be, in terms of independent platforms, small subscale platforms. And we believe BIDS is really -- it's the largest. We believe it's the winner there. We believe it will continue to be. One of the drivers behind that? It's not just the great operations that Tim and his team have established, but also the special relationships with the broker community through the sponsored access model, which will continue in place. Effectively, the brokers operate as our distributed sales force for that business and it rewards all parties to the network. So we feel good about its positioning in the U.S. and its ability to expand there, as we work to expand the global penetration.

Thanks, Guys

Thank you. And the next question is the follow-up, Rich Repetto with Piper Sandler.

Yes. Hi, guys, again. On the very first question, I thought I understood the answer, but I got a couple of emails. I guess, it wasn't clear. But, Chris, are we talking -- in October, are we expecting a rebound in equity RPC?

Yes, Rich. As I said, we don't -- we're not going to guide to RPC -- exact RPC, but we're optimizing capture, but ultimately optimizing net revenue. So we're adjusting price every – in almost every month, as we want to remain competitive and grow share but optimize net revenue overall. So I'm not going to answer specifically, which way or direction it's going, but we're pleased with the market share growth and we'll optimize capture on net revenue.

Got it. Okay. And I got one other follow-up since we're in the follow-up mode here. Ed, on slide nine you talked about the volatility in September, October being whatever, double that or much higher than prior collection periods, I guess. I guess the question, I think you'd addressed this a little bit. But does this -- I think most expect this will be more volatile. But is this telling us anything about -- afterwards about the situation where we've got sort of a stalemate views. Is there any change to the longer-term outlook, I guess, on the VIX futures the index -- the proprietary products, based on the volatility picture right now?

Yes. Great question. So, yes, the point we made was this is as uncertain as marked by the gap between the first two months if we were back in September and looking at the September October, which was really trying to highlight the election and now with October expired, looking at the next month. And then, over the term structure, the backwardation that you're very familiar with, as unusual as that is, the entire curve is high and very, very high over time. So the election in and out of itself is the short-term cause and there’s big blip until we know what administration, what policies are going to carry us out into the New Year. But, importantly, we're not done with uncertainty. And in my prepared remarks that you referred to, the uncertainty around COVID, its continued effect on the globe and that is going to go to top of mind right after we have an administration in the U.S. So the effect then for us is when do institutions, who have been on the sidelines and looking how to reengage in this market, how do they do that? That uncertainty looks like it's going to persist for some time. But some normalcy after the election, at least, allows you to start preparing for years ahead and reengaging in different ways. So that was really the point of the call out on the election and the unusually high spike between -- in the election effect, if I can rephrase that.

Thank you. And as it was the last question I would like to return the floor to management for any closing comments.

Thanks Keith. That does complete our call this morning. We appreciate your interest in Cboe and we'll be available for any follow-up today. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.