Remote Market Maker is a new class of CBOE membership designed to allow individual market makers and member organizations to engage in market making at CBOE from any location, thereby adding additional liquidity and depth to CBOE's markets.

The Remote Market Maker program is the latest initiative in the continuing evolution of CBOE's highly successful Hybrid Trading System, which was introduced in June 2003. RMMs will be able to stream quotes and trade electronically from any location off the trading floor and join Electronic Designated Primary Market Makers (e-DPMs), which were introduced on July 21, 2004, as the second new membership class of remote market makers. Initially, there will be 58 Remote Maker Makers participating in the program and it is expected that in the future additional individuals and organizations will become part of the program as it rolls out. CBOE received approval from the Securities and Exchange Commission (SEC) for the rules governing this new membership class on March 24, 2005.

"CBOE's Hybrid Trading System is a revolutionary trading model which distinguishes CBOE from other exchanges, and has, as billed, married the best features of both electronic trading and open outcry into a unique trading model," said CBOE Chairman and CEO William J. Brodsky. "To date, the results have been dramatic. Hybrid has added a tremendous amount of liquidity and depth to our markets, along with providing increased access for investors."

The Remote Market Maker and e-DPM designations were created to expand the benefits of the CBOE Hybrid Trading System by enabling a wider range of market participants to access the trading system. RMM and e-DPM quotes and liquidity are consolidated with those of the in-crowd market participants' resulting in a more robust marketplace with an expanded universe of market participants providing unparalleled liquidity for investors.

"The addition of Remote Market Makers will add another powerful dimension to our trading model, with obvious benefits for traders and customers alike. We commend CBOE's market making community for meeting the challenges that we faced to get to this point. The benefits of Hybrid are becoming more apparent to our customers, and our members, everyday," said CBOE Vice Chairman Edward T. Tilly.

Initially, it is expected that RMMs will quote in the top 602 Hybrid-enabled options classes, with the rollout beginning April 26, 2005 and continuing over a three-month period. Registered RMMs will be able to create individual, customized class appointments, called Virtual Trading Crowds (VTCs) which will allow them to cover a range of classes of their own choosing, irrespective of the location of a class on the CBOE trading floor. CBOE has tiered and weighted eligible options classes based on trading volume, and RMMs can compose their VTCs based on this scale. RMMs will be required to have a CBOE membership(s) commensurate with the number and weighting of classes chosen.

CBOE developed its Hybrid Trading System to further blend the speed and efficiency of electronic trading with the benefits of a floor-based, auction market. Currently, all of CBOE's 1,691 equity options and an additional 24 index options classes are available for trading via the Hybrid Trading System, which was launched on June 12, 2003.