Software Firm Sues Seven Options Exchanges and Clearinghouse
February 3, 2010
SFB Systems, a Thorofare, N.J.-based firm specializing in options symbology software, filed suit Wednesday against seven U.S. options exchanges and the Options Clearing Corp. for allegedly re-using elements of its flagship computer program for managing options symbols in creating a rival system.
The seven exchanges are the International Securities Exchange, the Chicago Board Options Exchange, the Boston Options Exchange Group (BOX); NYSE Euronext’s NYSE Arca; NYSE Amex; the Nasdaq Stock Market and Nasdaq OMX Phlx.
The lawsuit, filed in U.S. District Court for the Southern District of New York in Manhattan, alleges that the exchanges and OCC, the Chicago-based clearinghouse for U.S. listed options, created a derivative version of SFB Market System’s Symbol Manager, misrepresented their intentions regarding their business relationship with SFB and improperly claimed ownership of software and products owned by the company.
SFB, founded in 1994, says that Symbol Manager is used by the U.S. options exchanges to manage and generate options series data. It ensures that the exchanges have consistent options symbols. Symbol Master is also used by the exchanges and market participants as a centralized repository for options symbology and reference data.
The OCC and BOX declined to discuss the suit on the grounds they do not comment on pending litigation. The NYSE, Nasdaq OMX, CBOE and ISE also declined to comment.
A top SFB executive declined comment when asked by Securities Industry News whether any of the code of concern in Symbol Manager or Symbol Master is patented.
The lawsuit comes amidst exhaustive preparations by the options industry to meet a February 12 deadline to begin switching from the current 5 character symbols used to identify U.S. listed options contracts with a 21-character description.
