Fred Tomczyk: Maybe I’ll start with the second one, first. So, I always remember for the first time I became a CEO and I was pretty young that my Board was very clear to me that my job priority one on my first day in the job was to plan for my own succession. And so, clearly, that’s going to be a focus here in terms of making sure we have the talent in the organization that we need and then we have the leadership and the place is set up for our orderly succession. In my experience, when you surround yourself with really good people and I’ve got a good team around here. Basically business becomes easier when you’re fighting, when you don’t have good people and good leadership in the organization, things got harder. But you should assume that I’m going to continue to work on developing the talent and the team around me as they grow into their jobs and hopefully more bigger jobs.
And when the time comes for me to step down when someone’s ready, then, I’ll be the first one to say, I hand it over to my successor. With respect to Cboe ownership, I would emphasize these rumors have come and gone over the years. Having said that, I don’t think Cboe is more for sale today than it was two months ago or three months ago. We’re just continuing most important thing for us is keep our heads down and stay focused on running our business and we’ll deal with anything that comes at us in due course.
Owen Lau: Thanks a lot.
Operator: Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.
Alex Blostein: Hey, good morning everybody. Thanks for the question. I was hoping we could spend a couple of minutes and just again to some of the expense trends you highlighted both for the year and maybe get your own thoughts into ‘24. The specific area I was hoping to kind of double point into the consolidated audit trail. I know it’s been a pretty big drag on expenses for you guys this year. Just curious how do you see that evolving. There’s obviously things that come out of the SEC that could make this better for Cboe and others next year and beyond? So, maybe again help us frame the cat sort of costs drag this year. How you are thinking about it for next year? And your early thoughts for ‘24 expenses. Thanks.
Jill Griebenow : You bet. If I could just jump in and I’ll take this one. As you really see there has been I guess some noise with the CapEx here and we will see and we’ve taken a look and firmed up our guidance, as we head into the fourth quarter. You do notice that we that core cost – for the cat cost built into our core expenses and that’s really a function of the funding model being recently approved coupled with the fact that the CAT in a cycle build stage. So we’re just again getting that into our core expense base and really looking to see that moderate as it relates to 2024, too early to comment on that. We will share full year projections with you in February of next year. But again, for 2023, as we communicated today we did trim our expense guidance and that our core expense growth looking to come in at about an 8% growth over 2022.
Operator: Our next question comes from Brian Bedell with Deutsche Bank. Your line is open.
Brian Bedell: Great. Thanks very much for taking my question. Welcome Fred. Great to hear your voice again and congrats to Ken, as well. My question maybe focus on Europe, actually just in terms of, I guess a two-part question, just bigger picture there. How important is the development of the consolidated tape to the overall European strategy? And then weaving in the derivatives part of that I guess, do you view that as a separate, completely separate strategy for your overall European business. And then, are you still looking for, I think you were trying to get to the $25 million annualized revenue run rate, I think exiting 2025. I just want to see if that’s still a plan on the derivatives?
Fred Tomczyk: Thanks very much for the question. Yeah, we’ve been huge proponents of the last decade of the benefits that a consolidated tape would bring Europe, clearly hugely beneficial for the US marketplace. So that single pane of glass of the globe into the equity markets. And then the fixed income markets in Europe is something we’ve really been pushing for. The recent developments show reasonably good structure coming through there is some consolidated tape, which we are very interested in I may even think about whether or not we would want to be the provider of that consolidated tape. And not likely to see an actual tape come through though till about 2026 given the way the process grown. So really important, really for that overall capital markets in Europe.
And as the PAN European exchange of the Pan European Clearing House, we really fit the comeback capital markets union model, very, very well that. I just don’t care what the derivatives market in many ways when you think about our approach being a PAN-European approach. Once again a single stop shop there enabling us to offer greater capital efficiency and let on the transparent on the model that with the Cboe Europe having the ability to access all of the CSDs around and provide a more cleaner and capital-efficient, post-trade solution. And then when we think about the prognosis for the business and how we’re going. You mentioned that that guide that we’ve got single stock options coming in a couple of weeks. And as that begins, we gain traction we will be able to take a look at how that’s building and consider the revenue profile, growth profile as that comes into that.
Brian Bedell: Okay, great. Thank you very much.
Operator: Our next question comes from Kyle Voigt with KBW. Your line is open.
Kyle Voigt: Hi. Good morning, maybe just a question on pricing. You noted the ability to raise price in areas where you’re clearly providing incremental value, which recently was a case in the Access Solutions business. But kind of porting that thinking over to the transaction side of the business, you’re clearly providing significantly more value in SPX and zero DT specifically, given the volume growth we’ve seen this year, I guess, under the contract with S&P can you remind us how much flexibility you have to make pricing changes across that SPX complex? And is this something that you be considering heading into 2024?
Fred Tomczyk: Thanks a lot. Excellent question. And we’ve, if I give you a little walk around the arc of pricing, we’ve got in Q3, 59% came from organic subscription and unit growth there. And so, when we think generally about pricing across the data franchise, we are really focusing on distribution and really great opportunity, particularly, over in Asian-Pacific and in EMEA to sell our data products there. We saw 39% of the growth in Q3 coming from outside of Americas. We see a good runway there. So focus predominantly on distribution and broadening access. We’ve got consistent pipes to deliver our data revenue – come out of revenue there, again 78% or nearly 80% of that revenue is coming internationally. So, good runway there.
Surprising but so, we could use when moving across the scale, really it’s about that runway of new users. But we are talking about the competitive markets that we go in for the transactional basis, that’s really looking to maximize the revenue per contract, the market share and the market quality down. That’s a, that’s still where teams have hooked down to a. fine art. And then when we come to the proprietary products there, the answer is yes. We can adjust the pricing of the trading of SPX options as we need to, but when you think look back to my earlier answer, that momentum was seen in that growth. At the moment it’s continuing and its broadened the adoption and as Chris mentioned fabulous opportunity there in global trading hours as we again look to that international capability.
And also think about those retail brokers coming through into next year. So, pricing is right priced at the moment. It’s cost-effectively placed to build liquidity, manage risk in that complex or something that in general we will look though to see where we can enhance some value in the same the pockets there, but broadly. But again that’s about expanding the access and distribution.
John Deters : Kyle, this is John. Just to be clear. We don’t have any constraints on any of our partnership relationships even beyond S&P in terms of being able to respond to the market environment with the correct pricing approach.
