Good morning, everyone. My name is Ken Hill, and I'm the Head of Investor Relations at Cboe Global Markets. I have the pleasure of trying to fill the very large shoes of Deborah Koopman, who will be retiring from the role at the end of her 14-year career here at Cboe. Debbie is someone I've thoroughly enjoyed working with, both when I was a sell-side analyst covering Cboe since the IPO, and today as a colleague. I've learned so much from Debbie about the firm over the past few months. What I'll say I learned the most, though, is that when you're setting your retirement date, you definitely schedule that before and not after all the work that goes into preparing for an Investor Day. I think that speaks to the hard work that Debbie does and how much she loves this company.
Thank you, Debbie, for all your work here. I also wanna thank you all for showing up and those of you joining us on the webcast. Little more than five months ago, I was in a seat many of you are in, an outsider looking in to gain a better perspective as to what this group here at Cboe is trying to do. Really excited today because I've had the chance to interact with this entire management team. They're incredible. Today, we get to lay out our vision for the firm in a way we never have before, in much more granular detail. As for the agenda, first, we're gonna hear from Ed Tilly on our strategic vision. Chris Isaacson is gonna cover our core strengths and competitive differentiators, what makes Cboe Cboe. David Howson will speak to how we scale into new markets.
Catherine Clay will provide a thorough overview and outlook for our Data and Access Solutions business. After a short break, we'll have a panel discussion to delve into the outlook for proprietary products at Cboe. Brian Schell will provide a financial overview before Ed gives his closing remarks, and we move into Q&A with the entire team. Before we get into the day, I have to read our standard disclosures. During our remarks, we'll make some forward-looking statements which represent our current judgment on what the future may hold. 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 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 event. I would like to point out this presentation will include the use of slides. We will show the slides and provide commentary on each one. A downloadable copy of the slide presentation is available on the investor relations portion of our website. During the event this morning, we will be referring to non-GAAP measures as defined and reconciled in our materials. With that, I'd like to get the day started by bringing up our Chairman, President, and CEO, Ed Tilly. Ed.
Thanks, Ken. Welcome everyone. Thanks for joining us today, both in person and virtually. It is great to see so many familiar faces in person again. As most of you know, it's been quite a while since we hosted Investor Day, 10- years to be exact. Some have asked us, "Why now?" We chose this time because we believe Cboe Global Markets is at a critical inflection point in its next phase of growth, and we wanted to take this time to amplify and clarify our vision and strategy for the company and outline the opportunities we see to deliver continued growth and value for our shareholders. The last several years have been incredibly exciting as we've evolved our business to address changing market dynamics and answer the needs of our customers.
We've done this by broadening our geographic reach and extending access to our unique set of products and services around the globe while remaining a leader in capital markets innovation. We've got an incredible team in place here at Cboe, and you'll hear from many of our leaders today. Let me begin with what drives us every day. Cboe began 48 years ago with the creation of the first listed options market in the U.S. The innovation that led us to create a brand-new market against all odds is what continues to fuel and inspire us as we write the next chapter for Cboe Global Markets. Today, we are the only truly global market infrastructure provider, operating markets and delivering services around the world and around the clock every day of the week.
We look to capitalize on our unique position as we strive to build one of the world's largest global derivatives and securities networks while creating value for our customers as well as our shareholders. Key to our success has been and remains passionately serving our clients, and something I'll touch on further in a bit, and you will hear throughout our presentations today. We have an incredible, diverse team of associates around the world delivering on our vision, supporting our clients, and helping make Cboe a leader in the marketplace. As we broaden our global footprint, we have unmatched opportunity to evolve the Cboe network. Our recipe for success is simple: innovate, integrate, and grow. Cboe's innovative spirit has led to the creation of multiple new products and services throughout our history.
That drive continues today as evidenced by our plans to launch Nanos, reenter the digital asset market, and expand our Data and Access Solutions business, all of which you'll hear more about throughout the morning. We have a proven track record of seamlessly integrating across our ecosystem for both organic and inorganic initiatives. We take a non-siloed approach, folding each of our acquisitions or new products and services into the Cboe Global Network. This approach creates workflow efficiencies for customers, harmonizing technology and access points, creating a better experience for them. This strategy also creates operating efficiencies alongside strong cashflow generation, a hallmark of the exchange business model. We have proven ourselves capable operators, growing both organically and inorganically. We have leveraged M&A to gain a foothold in key markets and asset classes.
Just yesterday, we announced our plans to acquire NEO, a leading securities exchange in Canada, expanding our presence in this key market. We have also recently acquired Chi-X Asia Pacific to expand our geographic footprint into Australia and Japan. We've also built new markets from the ground up, launching our European derivatives business two months ago. Key factors to any growth initiatives are expansion and diversification of our revenue opportunity set. Our global scale gives us unmatched ability to efficiently scale and expand our business in new ways. As we position ourselves for future growth, we remain closely attuned to the industry trends that are impacting our customers and driving demand. Several themes have emerged that are reshaping trading and capital markets. First, markets are more globalized. Subsequently, our customer base is more global. We believe this global customer base wants access to multi-asset trading capabilities.
They are looking for efficiencies and a consistent experience trading across asset classes and geographies. The recent rise in engagement from retail customers has been unprecedented. We believe this new generation of retail investors is here to stay, and we are identifying new ways to engage with this new customer. We have released new products offerings, such as mini-sized options and futures contracts, complemented by new educational resources geared specifically for this audience. As our customers engage with markets around the world, high-quality data is critical. It's all about the data. Data is the fuel that drives trading in our markets and products. From the retail customer to firms executing sophisticated trading strategies, high-quality data is paramount. Through both acquisitions and organic growth, we have expanded our Data and Access Solutions business to better serve our global customer base.
Cathy Clay, who is leading this group, will share more about our future vision later this morning. ESG-focused investing has become front and center in our markets, as investors want access to sustainable finance solutions. As stewards of our markets, exchanges play an important role in advancing ESG efforts. ESG is also a top priority for our customers and associates, who expect leadership and action in addressing today's ESG. We are listening and continuously working on a path to further advance our ESG initiatives. As we look more specifically at our customer base, we note that the Cboe customer has evolved dramatically over the years. We now look to meet the needs of a growing group of constituents across a number of different touchpoints. Who is the Cboe customer today? We service banks, market makers, and liquidity providers, broker-dealers, institutions, and retail investors.
While each of their individual needs may be different, each relationship helps inform the Cboe ecosystem, strengthening the breadth and depth of our product development to meet their future needs. The top-tier firms within each of these customer segments operate in a global capacity, and they desire that their industry partners do as well. At the heart of everything we do, we remain focused on client-driven solutions. We listen to our customers to develop and deploy smart, innovative products and services to address their challenges and support efficient markets. A few examples of recent customer-centric innovations include continued investment in existing footholds. Later today, you'll hear from our global derivatives business leaders, Ade Cordell, Arianne Criqui, and Rob Hocking, about how we are supporting customers with new innovation in the global derivatives market. New geographic focus, for example, our expansion into Asia Pacific and new asset classes like crypto.
As I mentioned before, our goal is to further expand our ecosystem of market infrastructure and tradable products as we continue to build one of the world's largest and most comprehensive global derivatives and securities networks. We have proven ourselves as a nimble and efficient operators of securities markets around the globe. More importantly, we see securities markets as the foundational element, table stakes in creating products and services that span the equities and derivatives landscape. Our transactional expertise allows us to create, package, and distribute a host of market data, analytics, and index products. Having recognized benchmark indices allows us to, in turn, develop additional tradable products and new markets for these products to trade, creating a virtuous cycle of transaction and non-transaction growth at Cboe.
By leveraging our technological expertise, customer relationships, and capital markets capabilities, we advance our businesses up the value ladder, unlocking revenue opportunities along the way. Later in today's presentation, David Howson will walk you through the creation and growth of our European business up the value ladder. A decade ago, we were a tiny equity market in Europe, and through organic and inorganic investments, we are now one of the largest pan-European equities market and clearinghouse operators with a robust market data offering and newly launched derivatives market. The growth and development of this business is a blueprint for success for markets that we enter around the globe. As we execute on our playbook, working through cash equities, data, and derivatives, we end with a virtuous cycle of revenue generation.
Applying this flywheel across our global network, we create new opportunities to reach more customers and create more products and data. You'll see this flywheel many times throughout our presentation today, and you'll hear from our leaders about its power. It moves our business forward and is the blueprint that enables continuous innovation and growth. Our value ladder and flywheel highlight how we have evolved our portfolio over time, opening up new addressable markets and revenue opportunities along the way. Our corporate evolution commenced with the acquisition of Bats Global Markets in 2017. Our journey since has been powered by robust and innovative organic growth and strategic M&A, broadening our addressable market across geographies and asset classes, and diversifying our revenue streams across transaction and non-transaction sources. For example, we're targeting more than 150 million retail customer accounts for Nanos.
Through M&A, we've added many new markets and asset classes, including our expected move into crypto, which gives us a combined addressable market cap of nearly $75 trillion. Our DNA capabilities amplify our market opportunity with over $37 billion in addressable revenue. We believe this expansion will not only continue to unlock additional revenue opportunities, but also make our revenue base more durable over time. There is significantly more TAM to capture across trading, data, and products, and we are well-positioned to capitalize on these opportunities. Today, you'll hear from the team about three strategic growth drivers for Cboe: data and analytics, global derivatives, and digital assets. While there are numerous others, we want to concentrate on the areas we believe have the greatest potential to drive growth longer term. Earlier, I mentioned several key trends shaping our industry, and these growth drivers support these trends.
As the trading environment becomes more globalized, customers want greater efficiency in market infrastructure and services, and our goal is to align our business to address these client needs for global data and analytics. We believe our Data and Access Solutions group has the ability to further grow our base of recurring non-transaction revenue, and we're excited about the continued evolution of this business. We anticipate Data and Access Solutions organic revenues to grow at 7%-10% annually over the next three to five years. Since we launched the first listed options market in the U.S. 48- years ago, we have continued to define this market around the world. We also continue to expand access to our proprietary products franchise globally through new initiatives such as our planned launch of 24/5 trading later this month.
Global customers want access to tools to manage risk, and we are finding new ways to deliver access to meet their needs. We remain committed to investing in education and product development to service the growing retail market. Last month, we announced plans to launch Nanos, a first-of-its-kind options contract designed to make trading more accessible for the retail trader. We are very excited about the many initiatives in the works with the derivatives franchise and anticipate that collectively, they will contribute 2%-4% of the total organic net revenue growth over the next three to five years. We see huge potential in the digital asset market, and we were excited to announce our planned acquisition of ErisX. ErisX will provide Cboe with spot trading, data, derivatives, and clearing capabilities for digital assets through its regulated futures exchange and clearinghouse.
Chris Isaacson will share our vision and strategy for cementing our place in this rapidly growing sector in a moment. While this is a new asset class, we can apply our blueprint for success, operating trusted, transparent, regulated markets to this experience, and it's very exciting. It's an exciting opportunity for Cboe as we look to remove frictions and take a meaningful share of what we believe will be an industry that is expected to grow at an annual rate at least 25% over the next five years. We expect these initiatives to help us strengthen our position as one of the world's largest global derivatives and securities networks. As Cboe expands its operation on a global scale, we're equally committed to being a local partner in the communities in which we live and work.
We recognize that operating in a socially responsible manner helps promote the long-term interests of our investors, associates, customers, and community members. Cboe recently became a founding member of the United Nations Sustainable Stock Exchanges initiative. We believe this network will provide a powerful platform to share ideas and engage in important dialogue on how derivative exchanges can support greater sustainability. We also continue to collaborate with our index partners to explore the introduction of ESG derivatives products. Last year, we launched S&P ESG Index Options, and we've recently expanded our MSCI partnership to include additional ESG indices. We will continue to listen, learn, and leverage our standing as a global market operator to promote positive change and initiatives in support of ESG.
This is an exciting time at Cboe as we continue to execute on our strategy and initiatives aimed at accelerating growth and value creation as we innovate, integrate, and grow. We have leading positions and strong momentum in many of our businesses, and we're investing in areas where we can gain share or enhance our value proposition. You'll hear more about many of those initiatives throughout the presentation this morning, and then we'll all come together at the end of the session to address your questions. I'd now like to turn it over to Chris Isaacson for a discussion on Cboe's core strengths and competitive differentiators.
Gabby, are we ready? Well, thank you, Ed, and welcome everyone again. It's great to have you joining us and see some familiar faces in person, and thanks for those who joined virtually as well. I wanna talk today about what makes Cboe Cboe. I wanna answer the question, what are Cboe's core strengths, and what differentiates us competitively? As Ed mentioned, we're building one of the world's largest derivatives and securities networks. What does that network look like today? How do we build it? How are we growing it? Well, both today and tomorrow, at our foundation, we're a technology-enabled business. Our best-in-class technology powers all our markets, data platform, and investment solutions. Our technology and the team that builds and continuously improves it allows us to operate at unrivaled efficiency, effectiveness, and global scale. The foundation is extraordinarily strong.
We've had 100% uptime across all of our markets, all of our equities, options, and futures markets in 2020 and year to date in 2021. During some of the most volatile market conditions in modern history. All of this while seamlessly handling trillions of orders and billions of executions in this year alone. Over $100 billion in value daily in some of the most highly regulated markets around the globe. 23 markets to be exact, overseen by 18 regulators across four asset classes. We embrace appropriate regulation to operate trusted, inclusive markets globally. The unified platform that powers our global network enables us to innovate, integrate, and grow, providing greater access, efficiency, and scale. How do we innovate? We're agile, and we respond quickly to customer feedback and challenges to deliver trading, access, and data solutions.
I'll provide a few examples in a moment of how we've innovated through change to maximize opportunities. This agility that enables innovation is underpinned by weekly software releases across all of our markets. This cadence allows us to respond rapidly to customer feedback and iterate toward optimal solutions. As Ed mentioned, we're a proven integrator of technology and acquisitions. In many ways, Cboe is a dramatically different company today than it was almost five years ago when I joined as part of the Bats acquisition. We've closed nine transactions in that time period and have announced three further M&A transactions in recent weeks. We approach the integration of technology and teams holistically, avoiding silos and inefficiency while maximizing synergies, both revenue and cost. The scalable nature of our technology platform enables this efficient integration, and our global team executes effectively with tremendous focus, discipline, and drive.
Our innovative spirit and integration capabilities allow us to grow, both organically and inorganically, to expand our serviceable opportunity set. For instance, we've grown from only three markets to 23 markets in the last five years. We already have three more markets planned to come online in the first half of next year, organically with the launch of U.S. Treasuries and inorganically with the acquisition of ErisX and the NEO Exchange announced yesterday. Our unified platform drives growth as we've integrated the data and access coming from all of our markets with LiveVol, Hanweck, FT Options, and Trade Alert under Cathy Clay as we form the Data and Access Solutions Group earlier this year. This unified platform is enabling and driving sustainable non-transaction revenue. The Cboe Global Cloud is providing greater ubiquitous access to our high-value data.
This platform also provides the ability for our associates to grow with us, giving upward and lateral mobility, helping them develop their careers while staying at Cboe versus needing to go elsewhere to find new challenges and realize growth. The platform powers all parts of our flywheel, spot and cash markets, data, derivatives, across asset classes, across products, across regions around the world. The platform and people at Cboe are agile and customer-driven. This allows us to anticipate and embrace change to turn it into opportunities. There are countless examples of this over Cboe's history, but I will highlight just a few. The first, moving from the floor to hybrid options trading in 2003. Many thought that the floor would go away altogether, but the floor has not just survived, but it's actually thrived with hybrid trading.
We'll be opening a new trading floor across the street from our current trading floor in the middle of 2022. The second example I'll give here is with the changes that came with Regulation NMS, where organically, Bats and Direct Edge were formed, as standalone companies, and then Bats purchased Direct Edge to build an extremely strong U.S. equities franchise. Finally, we saw the massive changes coming with MiFID II and Brexit in Europe. We prepared for all the outcomes so that we could provide customer-driven solutions, which has allowed us not to just survive these tectonic shifts, but thrive, as seen by our growing European equities business at multi-year market share highs and the recent launch of European derivatives.
There are certain to be future material changes across our business that may come from regulatory reviews of market structure around the world and existing asset classes, as well as defining new asset classes like digital assets. We are prepared to grow through these changes because our platform and our people are ready. Our recent launch of Cboe Global Cloud is an excellent example of utilizing technology solutions to increase access for new and existing data products to new customers around the world. Prospective customers may not have access to one of our global data centers, but they have an internet connection, and they can now benefit from our data. Our data is unique, as we're the only truly global equities exchange data offering on the planet, with the addition of Australian and Japanese data with the acquisition of Chi-X Asia Pacific.
We plan to continue to add new datasets to the Cboe Global Cloud now that the foundation is laid. You can see the timeline for the addition of new data as we expand access to new customers and new regions. Again, the platform, in collaboration with leading cloud provider, Amazon Web Services, is efficient and scalable. This will help allow us to increase our serviceable opportunity set to tap into the tremendous and growing TAM for data. You'll hear more from Cathy on Data and Access Solutions later this morning. I also want to discuss our plans to use our core strengths and competitive differentiators to reenter the digital asset market through the planned acquisition of ErisX, which we announced late last month. Importantly, ErisX will provide Cboe with spot trading, data, derivatives, and clearing capabilities for digital assets through its regulated futures exchange and clearinghouse all in one transaction.
As the appetite for ownership of digital assets continues to grow, we believe Cboe can play a guiding role in shaping the trajectory of this revolutionary market. Today, we are at a critical inflection point. We're seeing strong retail demand, institutional interest, market growth, and the mainstreaming of digital assets, even within traditional financial firms. As a leading provider of global market infrastructure and tradable products, we can bring the knowledge, structure, and transparency of our trusted markets to the digital asset space. The demand and excitement for digital assets is driven by the unique market structure and freedom it affords, and we want to maintain that innovative spirit while providing the regulatory framework and structure that many market participants desire.
We're taking a different path than the first time we entered the space, as we have secured support from a tremendous group of industry leaders who are aligned with our vision and want to shape and define this asset class, both now and for the future. These industry leaders bring different perspectives and expertise from retail brokers, crypto leading firms, global liquidity providers, and sell side banks. They are expected to form a digital advisory committee tasked with advising us on the ongoing development of our digital asset business, Cboe Digital. These industry leaders include DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial, and Webull. Additionally, certain members of the digital advisory committee intend to acquire minority ownership interests in Cboe.
We are confident that together with ErisX CEO, Tom Chippas, and his team and our incredible partner group, we can not only meet the growing demand for institutional retail trading solutions, but also push the boundaries of digital asset innovation and unlock its next phase of growth. This next phase of growth in digital assets is extremely exciting and fast-paced. With ErisX, we're acquiring an entire ecosystem consistent with our flywheel. Spot trading, data, derivatives, and clearing all in one step. According to publicly available reports, the digital asset market is conservatively expected to grow at an annual rate of at least 25% over the next 5 years. We expect to see the digital asset class turnover reach greater than $1 trillion per day by the end of the decade. Further, derivatives trading in digital assets is at a very early stage.
We are optimally positioned to define the customer experience, the market structure, and the regulatory framework. While much of the market focus today is on the transactional opportunity, we also see tremendous potential to generate and provide benchmark crypto data that is currently opaque and untimely in many instances. Further, blockchain technology has the potential to materially disrupt, in a positive way, much in the financial ecosystem, from payment systems to clearing and settlement, to market data. We embrace this disruption as it will ultimately provide for a more sustainable financial future, especially as barriers to entry for traditional financial players are removed and efficiencies emerge to the benefit of market participants. This is a unique point in time for this asset class and some of the underlying technology, and we intend to capitalize on the change as we've done throughout our history.
I'd like to leave you with a couple key takeaways. First, we leverage our unified platform to grow. We're able to innovate, integrate, and grow, both organically and through M&A with exceptional efficiency at scale. We're expanding customer access and distribution with more products, more data, more time zones across more customers, enabling ubiquitous access by reducing barriers and growing stronger customer relationships. Cboe Global Cloud is a prime example of this. Our scale, unified platform, and tremendous global team allow us to be globally consistent and locally optimized, enabling us to rapidly address the changing needs of our customers in a consistent, locally relevant way. Second, the pending acquisition of ErisX is our latest ecosystem play. In one step, we complete the flywheel of spot trading, derivatives, and clearing with exceptional partners committed to help us define the digital asset class for the future.
It leverages all our core competencies. Now I'd like to hand it over to David Howson to describe how we're growing and expanding globally into new markets and asset classes.
Thanks. Thanks very much, Chris. My name is David Howson, and I run the Europe and Asia Pacific businesses for Cboe. For those of you who don't know me, a bit of background about myself. Originally, I started off in the late nineties in what would today be called a fintech firm, delivering vast amounts of data and trading system solutions to a derivatives open outcry exchange in the City of London. Which is why it's always great to come back to Chicago to see that liquidity formation and open outcry floor just down the street from here.
From there, I was stationed with various banks and exchanges throughout Europe and the U.S., including migrating Milan Stock Exchange systems, as well as a stint in the U.S. with Nasdaq between 2003 and 2006, whereby we had various acquisitions and prepared for the Reg NMS evolution within the U.S. From there, I returned to Europe to be a founding member of a European stock exchange with a driving force to create innovative solutions to bring opportunities from the MiFID I regulations in Europe. In 2013, I joined Bats Europe as the COO, and I'm going to come back to the rest of that growth story later on.
Certainly, I hope you can see the themes developing here of M&A, customer-led financial technology solutions and innovation, which have been part of my career, and really a part of the story we're about to talk about today. By now, you should be under no illusion that Cboe is a global company. The team here is infused and excited that collectively we've been able to build an unrivaled presence in all of the highest value markets open to competition across the world. Before I dive into where we are today in Cboe, just a refresher on why does this scale matter? Why does the breadth matter to Cboe? Well, as I touched upon, our customers are increasingly global. They're looking for coherent global offerings to be able to optimize their services and their businesses towards their clients.
Also regional customers get to benefit here from the scale and access that our solutions provide them. It's an opportunity for us to bring our highly successful Cboe products and services to other regions and asset classes around the globe. In particular, it's a real opportunity for us to unlock incremental value by bringing uniformity to customers. That uniformity of access to markets and products, uniformity of access to data that Chris spoke about, and Cathy will extend upon with Cboe Global Cloud and our truly global equities marketplace. Then finally, uniform access to trading protocols. Those innovative market structure solutions we see around the world, we can bring to other regions. Think about Periodic Auctions coming to the U.S. Think about the BIDS network extending into Canada and Asia Pacific.
That is why we're excited that from our current standing, we have an unmatched growth trajectory within our peer group. Now specifically to the business lines. Our equities business has a meaningful presence in the U.S., Canada, Europe, and Asia Pacific. No other exchange operator can boast such a global offering. BIDS. Underpinning the equities offering is BIDS. We acquired BIDS in 2020, but the relationship partnership began in 2016 in Europe, when we were able to get closer to the asset owners globally. Close, in fact, that the BIDS desktop solution sits on the desk of the traders within the buy side firms and integrates with those OMS systems, bringing us within workflow of the trading desks around the world.
As a result, BIDS is the number one block trading platform in the U.S., and in October, we were number one in Europe with our block trading offering Cboe LIS. We're well underway with expansion plans to Canada and Asia-Pacific, I'll talk about in a moment. As you think about that global network, you can see the opportunity to expand into adjacent asset classes such as derivatives. Which brings me to derivatives, the heart, the origin of Cboe. We're the largest U.S. marketplace. We're the exclusive home to the VIX and S&P options and VIX futures, and we're really excited to recently announce the extension of our agreement to be able to offer options on MSCI's global indices until 2031.
We've got our extended offering in Europe into European equity index derivatives, and also we're going to be expanding their access to our proprietary products around the globe with the 24/5 trading hours. Moving on to FX. FX has always been a global asset class. The global FX platform offers a comprehensive suite of trading services to meet the diverse needs of the FX trading community. This includes one of the largest platforms, the Spot FX platform, where we had a record market share in Q3 of this year with 17%. A growing part of the FX business is our NDF platform, our Cboe SEF. We had record market share in Q3, and in September, we saw trading days in excess of $1 billion, and in October, an ADV of $900 million.
From there, an extension into an adjacency and asset class on-the-run U.S. Treasuries, U.S. Treasuries. The FX team plans, subject to regulatory approval, to launch a differentiated trading platform for that dealer-to-dealer network. The liquidity curation and the quantitative approach to data and analytics, it brings the opportunity to improve the outcomes for liquidity providers and all of order flow providers alike. Of course, last but not least, a truly global asset class, ErisX. It gives an entry point into digital spot data derivatives and the clearing and settlement element of this, expanding asset class. How do we think about the opportunity set? Well, we've reached our position in all of these asset classes and geographies through M&A, combined with customer-led organic initiatives. This approach is what leads to the sustainable value creation opportunities.
M&A has given us an immediate footprint in new regions with established businesses and access to local teams, local expertise, and those relationships. Chris talked about our framework of innovation, integration, and customer-led growth. Sustainable value creation through M&A is only as good as the organic growth that surrounds it. The success of our European business is a playbook for this, which we look to replicate in other regions, Canada, Asia-Pacific. Our regional businesses are at different stages on the value ladder shown here. While we have more mature businesses in the U.S. and Europe across derivatives and equities, we see significant growth opportunities and healthy revenue synergies across Asia-Pacific and Canada. Our goal is to create a self-sustaining ecosystem and a consistent service to our global client base.
Let's take a look at some of our recent geographic expansions and see the immediate opportunities that we see for growth in line with our key strategic priorities. We're focusing on cash equities initially, and as you see, each geography has different characteristics, but all are underpinned by strong fundamentals, a strong retail participation, and each of them is within the top 10 markets globally when measured by ADV. Looking first at Asia-Pacific, through a single deal, we're able to get access to the remaining two markets open to competition around the world. Each of these two marketplaces, Japan and Australia, have innovative product offerings which really are appreciated by their customer base. We've got a great opportunity to bring the BIDS network here.
Australia boasts a vibrant block market, but lacks the conditional offering and the network that BIDS is able to bring to it. In Japan, the institutional flow brought by BIDS will complement that retail flow to create a richer and more diverse trading pool for customers at large. Both Japan and Australia benefit from strong non-transaction revenues and a good runway when compared to their competitors within the region. Also, really compelling to us was the underlying regulatory tailwinds, the best execution questions being asked by the regulators, and the operational resilience questions being asked by the regulators are of key opportunity point for Australia and Japan, who are very well placed to execute on delivering resilience and best execution opportunities to our clients.
Finally, in Japan and Australia, the 24/5 VIX and S&P options trading hours extensions to be able to access these products during the trading day in this region has really opened up a new dimension for us. Now moving to Canada. The planned acquisition of NEO announced yesterday is a great scale-up for us in Canada. We've got the registered securities exchange there with NEO, and also a collective market share in excess of 16%. That leaves us vying for the number two position in Canada on a day-to-day basis. Again, with NEO, we add more innovative market structure offerings to our clients. When you think about the technology re-platforming, that gives an opportunity to transport those trading protocols elsewhere in the world where our customers see value in them.
NEO is different in that it has a growing ETP and corporate listings business. That's going to help inform us how we grow our listings business globally, and particularly when you look across and see the listings business in Australia, you can see opportunities for growth and access to capital for our customers around the world. NEO, again, with those listings, that unique data to those unique listings brings a non-transaction revenue opportunity, and you'll be getting the thread here very soon, BIDS. BIDS in Canada as well. Expanding that network really gives you that opportunity to really bring meaningful growth through that network business. Underpinning that, as Chris talked to us about earlier, all of these businesses will leverage Cboe's proprietary technology and benefit from the operational efficiencies and the agility that Chris talked about.
As I just mentioned, the opportunity to add new trading protocols across regions. That's a pretty broad opportunity set. There's commonalities between acquisitions, these acquisitions, and our existing businesses. We've got a proven playbook we've talked about for integration, innovation, and growth to unlock the value in these regions. Let's take a look at how we've done that in Europe. We've got two exchanges in Europe, two trade reporting facilities. Our U.K. venue came in 2008. The Dutch venue came in 2019 in answer to the Brexit changes, and also allowing us to extend into the European derivatives offering. That leaves us with the number one market share in equities. Meaningful market share in equities in Europe. Through that, we get broad data coverage, a diversified product set, including an index suite, generating strong non-transaction revenues.
EuroCCP here is a key acquisition. It's a highly aligned business with the same pan-European ethos and the approach to innovation, open access, customer-driven change and choice to clearing as we take, took before that as Cboe Europe to our other business lines. Combined with our exchange, it unlocked the opportunity for both businesses to diversify into offering Cboe's equity derivatives products. Now let's drill down a little bit further into the evolution and point out some key highlights. What this slide shows you is that strategic acquisitions in tandem with organic customer-led innovation have been the cornerstones of our success in Europe and formulate our blueprint elsewhere. Indeed, Europe is our longest standing geographic expansion in 2008.
From a baseline of organic growth to complementary acquisitions, starting with Chi-X Europe in 2011 through to the game-changing acquisition of EuroCCP in 2020, we are now at the top rung of that value ladder we've been looking at throughout this presentation. To the timeline. We established ourselves in Europe through organic growth, starting with cash equities, our first asset class, the first step on the value ladder. We've driven growth and diversification through a customer-led product and service innovation. We've delivered incremental value through data products and other recurring revenue streams, and moved into higher margin offerings. Here's some highlights from the timeline. Subscription revenue data, the BXTR project in 2013.
With the addition of the trade reporting facility, it bolstered our data offering to really allow our customers to see one in every two trades in Europe, a meaningful offering for a well-priced data set. Innovation with customers through Chi-X, Periodic Auctions in 2015. Now today, 4% of the European market. We continue to enjoy, as pioneers of that innovation with our customers, 75% of market share of Periodic Auctions. Adam and team in North America are looking to bring a variation of Periodic Auctions to the U.S. Through the evolution up into higher margin offerings, getting closer to the asset owners, the BIDS relationship I talked about in 2016, which we acquired in 2020. That allowed us to really unlock the network business, and this is a really key point.
That network business locking into BIDS gave us a quicker route to meaningful share, and it's a pattern that we aim to repeat around the world. There's that common thread with BIDS again for you. We also displayed the agility that Chris talked about and a customer focus through our ability to navigate the regulatory changes, MiFID II and Brexit alike. Really, as we go forward, we are well-placed to do so as future changes come down the road. Finally, growth. Extending and monetizing that ecosystem. Here we are approaching the top step of that value ladder. Our index products based on our own data with the addition of EuroCCP paved the way for that diversification into equity derivatives. We're at the top now at the far right, but we're just getting started.
What you see here is the revenue generated from the equities businesses. We've now created a self-sustaining ecosystem that other regions can replicate. As I say, we're just getting started, but let's take a look at that flywheel for Europe. What we've been able to do, unlock the cash equities market. Become a leading player. We've used our own data from the cash equities exchange to build our own data products. We acquired EuroCCP not only to enhance equity clearing in Europe for ourselves and others, but to be able to launch derivatives clearing, a game changer. We use our global relationships with Cboe derivatives know-how, our market data, that cash equities in the clearinghouse to create that single access point.
This is really key for the European equity derivatives offering, a single access point to multiple country benchmarks through a single trading and a single clearing margin pool. With all that said, what should you take away from me today? Global network provides a differentiated value proposition to our customers and a unique growth trajectory for our business to the benefit of our customers and our shareholders. We draw confidence from our ability to execute on that growth path based upon our playbook and our demonstrated success in Europe in a highly competitive, mature marketplace. With that, it's my great pleasure to pass on to Cathy, who's gonna tell us more about the fascinating story of the new dimension of opportunity presented by the Data and Access Solutions segment.
Thank you so much, Dave. So great to see all of you in the audience today, these familiar faces. It's really gratifying to have you here with us today. But for those of you that I haven't met, I'd like to spend just a moment introducing myself and giving you a flavor of my background and how I got to Cboe. We'll get into how we're cultivating recurring revenues within the Data and Access Solutions division here at Cboe. I started my career in the capital markets many years ago as a derivatives market maker under Thomas Peterffy. I'm confident most of you are aware of Thomas's early leadership in bringing innovative technologies to the trading floors and the markets. I learned at a very early and formative age that technology would change everything in the markets. Looking back, I mean, boy, did it.
In fact, you know, without fail, Thomas would weave one request into his annual address to all employees at our holiday party. He would say to us, "Find a way to automate yourselves out of your job." Not exactly the holiday cheer that we would wanna hear, but it was impactful nonetheless. Now, I brought that ethos of innovation into my trading career, expanded it when I founded my own proprietary market-making firm, and accelerated it as the CEO of a San Francisco data and analytics company called LiveVol. I came to Cboe through that acquisition of LiveVol in 2015, but I have never let loose the desire to continue to innovate and to automate, although I am glad I still have this job, particularly this job.
Now, my goal today is to help you learn more about the data and access solutions division, which we call DNA, and our businesses within DNA, and the potential we see as we execute within the broader strategic objectives of Cboe as a whole. I wanna start with the opportunity. I mean, truly this is an exciting time to be a part of defining the evolution of financial markets. Technological innovation continues to shrink the world while simultaneously expanding the number of market participants, and the demographic of those participants is changing. We are just at the beginning of a massive intergenerational wealth transfer, expected to total $68 trillion over the next 25- years, propelling a new tech-savvy investing class towards data-driven solutions.
Whole forests of data continues to spring up from every corner of our lives, powering the imaginations and the systems of this new investor class. Sheer quantity of data, it doubles every three years. With an emphasis on ESG data and digital asset data, this trend shows no sign of reversing course. Global macro events and news, as you know, accelerates at accelerated rates, changing financial outlooks and investor behaviors on that global scale. The pandemic and this ongoing recovery we find ourselves in has altered trading behaviors and preferences. The evolving sensibilities of good citizenship and environmental stewardship are changing the investment landscape of the future. The rapid digitization and automation of information and processes are also main drivers of the spend that you see broken out geographically on this slide.
Advances in big data and scale computing are creating opportunities for greater efficiencies in the financial markets. Regulation has created new data requirements from customers as they conform to the ever-changing and ever complex regulatory landscape. As new technologies are applied to automate financial processes, new data sets are consumed and then created. Customers want to analyze this data in combination with other data to tease out unique insights. As a global exchange operator, Cboe's markets are producing the foundational data that powers and will continue to power systems that facilitate financial market interaction. With this structural advantage, Cboe is positioned to grab an ever larger share of this global market spend linked to indices, data, and desktop offerings. While the landscape is changing due to this pandemic, changing demographics and digitization, global exchange data continues to be core to the analytics, indices, and tools that power the market.
DNA builds on the foundation of Cboe's global exchange data with proprietary analytics and indices that aid the investor by simplifying market complexities, making our markets then more accessible and tradable to that broadening investor base. Our products are built efficiently on our integrated core technology stack, which allows us to add new asset classes and geographies quickly. This structural advantage means we can move nimbly as new client demands or market trends emerge. This is also true for our index business, built in a way that allows us to respond to the rapidly changing investment landscape, where we expect to see high growth in ESG and thematic indices, as well as new indices and benchmarks for digital assets. There is a $4 billion addressable market for us to attack.
The upward trends of passive investing and the growth in the number of ETFs and their corresponding assets under management remain strong. As this slide shows, we estimate our addressable market to be $37 billion, and industry expectations expect this TAM to grow 4%-6% per annum for the next several years. This should come as no surprise to you, but it really does highlight the significant opportunity in front of us. Now, we would not be able to attack this opportunity had we not thoughtfully stitched together the organic growth of real-time data, of access services, and our index business with the subsequent five acquisitions that we did over the past five years. LiveVol planted the first seeds of inorganic growth in 2016.
In 2017, we acquired Silexx to be our premier OEMS platform to not only serve our vital floor trading members, but also to provide access to all of our exchanges and to other exchanges through a broker agnostic model. Today, just under 3% of all cleared OCC volume is executed through Silexx. In 2020, we acquired three key firms to really build out our analytics suite and fill a gap our clients asking us to address. Now we truly do have a product set that helps our clients across the full cycle of a trade. The combination of companies gives us the potential to serve the market from end to end by combining each company's complementary strengths. We are well into our integration efforts here, streamlining, hardening, connecting our technology and our databases into an efficient, most importantly, consistent foundation.
As Ed and Chris highlighted earlier, we have a proven track record here at Cboe of seamlessly integrating across our ecosystems and eliminating silos. We are also harmonizing our product portfolio, which allows us to sell, support, and maintain our customers in much more efficient and reliable ways. We are meeting our customers where they need us to. The new integrated platform and harmonized product portfolio doesn't just benefit customers, it also benefits us. A simpler product set allows us to execute with better precision, stay focused, and scale much faster. This unified approach, it resonates with our clients and it creates resilient business relationships, and they discover that they can trust us to design and innovate with their best interests in mind. You can see the revenue trajectory on this DNA slide, and this really captures Cboe's repeatable playbook of combining strong organic growth with well integrated inorganic opportunities.
We are well-positioned to benefit from the efficiencies of this integrated business division. How do we organize ourselves in this new business division? Our team is organized around three business lines, each providing solutions to large and growing customer segments. Access and connectivity solutions include the many ways our clients connect to our exchange operations around the globe. Real-time market data from those exchange operations are the lifeblood of the markets, and as the demand to engage in our markets grows, so does the need for the connectivity and for the real-time data that they produce. As Cboe grows into a global exchange network, the need for additional access and data grows. Cboe Global Indices leads with our proprietary options strategy benchmarks. These benchmarks help inform investors on how to engage in systematic and proven options trading strategies.
Our VIX index is arguably the most referenced benchmark for U.S. market risk and underpins our VIX futures and options products. Our index business also provides third-party calculation services, where our team engages with clients closely to develop indices that represent a new benchmark or an index-linked product. Our risk and market analytics group provides the tools needed to navigate a complex marketplace. From GPU-powered margin analytics to portfolio risk products to real-time market alerting systems to our e-commerce data shop, you can think of this portfolio of products as the compass that our clients use to engage with our markets successfully. I love this slide because it shows the huge opportunity we have as we begin to expand globally. Currently, our revenues are highly concentrated in the U.S., but we believe we have tremendous opportunity to grow into EMEA and APAC in the next few years.
Our revenues are high quality. Over 95% of our revenues are recurring, with high customer retention, giving us great visibility into future earnings. Now before jumping too deeply into this next slide, which captures how we intend to grow, I wanna circle back briefly to how we are differentiated right from the beginning. We create our own proprietary data by collecting it and calculating it, deriving it from all of our exchange businesses and clearing facilities. This is a major point of differentiation for us. The more global reach we have as an exchange operator, the more proprietary data we own and have at our advantage, and we have vast histories of our proprietary source data. The demand and the value of this history is increasing as more customers adopt more machine learning and big data technologies.
With that as a backdrop, our multidimensional opportunity for growth can be captured in three distinct paths. Innovate new solutions. Integrate new asset classes. Grow globally. As I mentioned in my opening remarks, continual innovation is key to solving clients' pain points and workflow inefficiencies. Through our client engagement efforts, we learn a lot about their needs, and as a trusted partner, they look to us to help solve them. DNA touches the entire market value chain from pre-trade to at-trade to post-trade. Having this full visibility gives us insights on how to simplify the client's experience through expanded offerings. We have already begun to add new asset classes to our data repository. With the acquisition of ErisX, we now have access to proprietary crypto data. As this digital asset grows, so does the demand for the data that it will create.
Another new asset class, FX Treasuries, will begin trading on our FX Exchange, opening up yet another new asset class for us to harvest this data and proliferate it throughout our product portfolio. Finally, we are taking our product portfolio global. Walking hand in hand with our increasingly global exchange network, we will begin distributing our existing data and analytics offerings worldwide. The next step is to bring all of the data from all of our exchanges into our data products and our analytics and indices. We are already in motion to bring the new EU derivatives marketplace into our products so that more market participants can gain access to that market and use the same analytics and risk modeling tools that they are used to using in the U.S. Chi-X data is next.
The broader our reach as a global exchange operator, the broader our data and analytics will be. Most recently, our announcement yesterday that Cboe intends to acquire NEO, a next-generation equities exchange in Canada, now gives us additional access to proprietary data that combined with MATCHNow, commands a 16.5% market share of the Canadian equities universe. As we go more global, the importance of providing access to our data in a more global way really matters. That is why the Cboe Global Cloud Initiative, which Chris and Dave touched on. It is so important. Imagine allowing all of our clients around the globe to access our data through a single access point.
It is exactly the type of solution that our global clients are demanding. Now, I know this is not the first time that you've seen this slide, and I warn you, it's not going to be the last time you see it today. It is so important to emphasize the power of this complementary system that builds upon itself, creates its own momentum, and compounds the investments and efforts made in each of Cboe's businesses. DNA is a highly important part of this flywheel, creating, consuming, and deriving new data sets and analytics that then feed back directly into transactions in our cash and derivatives markets. Our global exchange data and analytics power trading strategies and risk solutions that are key to transacting in Cboe's markets, which in turn creates more data. DNA's product set improves liquidity in our markets. The improved liquidity feeds better analytics and indices.
Just as liquidity begets more liquidity, data begets more data. It truly is a virtuous cycle. Before heading into the break, I will leave you today with the image of this flywheel, I'm sure now firmly embedded in your mind with these final takeaways. DNA has significant momentum, and we are really just getting started. We are confident we will achieve a growth rate of 7%-10% organic growth over the next coming years as we attack a large and total addressable market opportunity. We have a strong product portfolio with structural tailwinds of global macro growth drivers, tightly aligned with our global exchange operations, and differentiated by the vast amounts of our own proprietary data fueling our offerings. Now you have all earned a break.
Let's take a 10-minute intermission before we head to our derivatives panel, which will start after the conclusion of our break. Thank you.
All right. I think we're gonna go ahead and get started again. Welcome back everyone from the break. The next kind of session we have here, I think is gonna be a really interesting one. We've got a great panel to delve into one of our most exciting areas, the derivative business here at Cboe Global Markets. It's an area that's really been foundational to the growth of this firm, and it continues to evolve with customer needs as well as market demands. Today, we have Arianne Criqui, Rob Hocking, and Ade Cordell, who are gonna provide an introduction of themselves, their area here at Cboe, and then some of the latest developments they're working on before we dive in deeper with the panel discussion. Arianne, would you like to introduce yourself?
Yeah. Great. Thanks, Ken. My name is Arianne Criqui. I'm Head of Derivatives and Global Client Services. My day-to-day responsibilities include overseeing the P&L, pricing, trading floor, and market structure efficiencies for our U.S. options and futures businesses. In addition, I also oversee our global derivatives, sales, and coverage effort. We structure our team to be focused on the largest global asset managers, insurance companies, pension, retail brokerage firms, and members in an effort to understand how they approach our markets, manage risk, and most importantly, continue to expand the use of options and futures. Prior to joining Cboe, I spent 18 years on the sell-side, focused on covering large asset managers and hedge funds in a traditional derivative sales trading and algorithmic capacities.
During our session today, as Ken mentioned, we're gonna focus on how we will continue to drive solutions to the marketplace to grow our global derivatives franchise while keeping our approach consistent, innovate, integrate, and grow. We know our customers the best. We do. We've delivered and will continue to deliver solutions to meet their needs, but our approach needs to be consistent, and it has been. We have to provide a comprehensive tool, a set of risk management tools with efficient functionality, drive client-driven solutions to market while expanding globally. These have been some of the keys to our success. The revenue growth progressions have shown these results. However, we're not done. We have a lot more to do. We have to pursue a relentless approach to solving our customers' needs while innovating to provide the solutions for them to enter our marketplace.
As many of my colleagues mentioned already, the investor base continues to grow, and we need to grow with them, whether it's the institutional community and their increasing use of U.S.-listed options. For example, on this chart, you'll see '40 Act funds, how they continue to utilize U.S.-listed options more and more in their investment vehicles. Or the retail community. There's been a lot talked about that today, and even in the press, about how much growth we've seen from this investor base. Just looking at the top four retail investor firms, over 150 million accounts and growing.
Industry data shows us that only 30% of these accounts use options. We see that as tremendous opportunities for continued growth of our derivatives businesses. How are we going to evolve? How are we gonna continue to solve these needs and demands from our customer base? We're gonna leave you with three points today. The first one, unrivaled access. We are gonna continue to. You will continue to see us grow our geographical footprint as well as evolve our product suite. Cboe is leading the industry with groundbreaking 24/5 access to two of our largest proprietary products next week to meet the needs and demands from Asia-Pacific, the Middle East, and our existing customer bases. Second, customized exposure. We need to understand how our customers think about risk and what kind of unique needs they might have to manage it on an ongoing basis.
We've solved some of these, like the likes of adding more mini options and/or listing more weeklies. Even last week, you saw us list long-dated SPX options to meet the needs of insurance companies as well as asset managers who need to hedge risk in a longer date or with a longer dated tenor. Lastly, greater efficiencies. We are uniquely positioned to understand market structure and functionality and deploy efficient technology that comes in multiple different shapes and forms. One in particular, we've been really thoughtful about how we enable auctions for retail customers in our SPX product to deliver improved greater efficiencies for their execution. You've heard Chris talk about earlier today, expansion of our global trading floor.
We're uniquely positioned to deliver a state-of-the-art facility so we can continue to solve and provide the best access, most amount of liquidity for our proprietary products in a hybrid format. Lastly, at the end of next year, we're going to deliver options on futures. It is for our CFE platform. It is a gap within our offering that we're going to solve by adding this type of functionality on our futures platform. These are all customer-driven solutions that meets the needs of our customer base. By understanding their needs, we can innovate. With that, I'm gonna turn it over to Rob Hocking to talk about our long-term strategy around innovation. Rob?
Thanks, Arianne. How's the volume here in the room? Good? Okay. Sorry, ex-pit trader and microphones don't always go together. Good morning. For those of you that don't know me, my name's Rob Hocking. I'm Head of Derivatives Strategy here at Cboe. I come to Cboe by a 20+ year career on the index trading and portfolio management side of the business. Approximately 10- years at Goldman Sachs, trading index options and OTC derivatives. The second 10 at DRW, a large prop firm here in Chicago, managing their global volatility business. Now before the break, you heard how we're building one of the world's largest global derivatives and securities networks, and we're using a simple recipe to do it, innovate, integrate, and grow.
For the next couple of minutes, I wanna focus on the first ingredient, which is innovation. Cboe has a long history of innovation. Ed pointed out in his remarks that it started with being the first marketplace to introduce options. We moved on to being the first to introduce broad-based index options, the first to introduce LEAPS, FLEX options, weekly options, and then lastly, the first to really introduce volatility as an asset class with our VIX franchise. Our ability to innovate comes back to what Arianne said. We know our customers better than anyone. That's not just because of our outstanding relationships, but it's because for the three of us, as well as many on our teams, we have decades of experience actually being Cboe's customers.
It's our ability to leverage that experience that helps us be leaders in innovation across the industry. Arianne also touched on three core aspects to how we develop client solutions. That was access, exposure, and efficiencies. If I can work in reverse order, efficiencies. Having spent over 20- years trading Cboe's proprietary products, I know how important capital efficiency can be. Each business or customer has a finite amount of capital, with success determined by the return they can provide on that capital. Therefore, we build solutions with this in mind, knowing that the products and services that offer the highest return on capital will grow the fastest. We're working on initiatives like customer portfolio margin, compression, exploring cross-market clearing relationships that will free up valuable capital for our customers, thus driving higher returns, and then more reinvestment in us. Next, exposure.
The world uses our products to manage risk. Where we have been successful is analyzing that risk and developing products that make managing it easier. Think VIX. Prior to the introduction of tradable VIX futures, the only way to gain forward vol exposure was either bilaterally through a structured product in the over-the-counter market or through a large basket of SPX options. In both cases, there were considerable barriers to execution as well as high costs associated with each. By introducing VIX futures, there was now a product that replicated the exposure but simplified the experience all in a cost-effective wrapper. We follow the same approach, taking the complex and making it simple, and it becomes the foundation for how we build the more than 60 new products in our idea pipeline. Lastly, I wanna quickly touch on access.
It's been a theme throughout the day. You might have the best products in the world, but even with the highest ROI, but if our customers can't access them, they really provide little value. Two places we're particularly focused is in the retail segment with our Nanos by Cboe product announcement, and then also through global expansion with our upcoming introduction of 24/5 that Arianne touched on, and then our recent announcement of the European derivatives product launch. To dive into the last topic, I'm going to hand the conversation over to my colleague, Ade, in just a moment. Before I do, I wanna take a quick second to highlight our recent Nanos announcement and how we plan to bring the benefits of broad-based index options from Wall Street back to Main Street.
These options will be the first of their kind and provide everyday retail traders, a market segment that has grown four times in the past five years, the ability to use broad-based index options in a simple, easy, and most important, affordable way. Our target for this product is not existing users, but rather to open up the market to a completely new user, thus growing the overall pie. Someone who today might be trading fractional shares or really are aware of options but yet lack the confidence to use them, we'll provide them a simple, transparent solution on an extremely well-known benchmark, making what they've always seen the pros trade now available to them.
We're gonna dive into that, I know, more in the actual panel discussion, so I'm gonna stop there and hand it over to Ade to talk about how we're going to replicate this footprint across the globe. Ade?
Thanks, Rob. Hello, everyone. My name's Ade Cordell. I'm President of Cboe Netherlands. I joined the firm on the first of January of 2020. I spent 16- years at the Intercontinental Exchange as their Global Head of Equity Derivatives. My role here at Cboe is to develop and execute on our European derivatives strategy. I'm gonna delve into that in a little bit more detail. David earlier spoke to our successful pan-European equities business. Cathy spoke about the valuable market data driven off the back of that. Combining the two, we've been able to build a broad set of pan-European indices, of which some of those products we're launching futures and options on. That's a starting point for our European derivatives business. Question is, why are we doing it now, and where's the opportunity? I'd like to draw your attention to the chart.
If you have a look at the chart, have a look at the green and blue bars. Green and blue bars represent the value of volume traded on an annual basis in the United States, and this is equity and index options volume. The gray and black bars represent Europe. By the way, I'm including U.K. when I'm talking about Europe as well. Now have a look at what's happened since 2009 up to 2020. The growth trajectory of the United States has been stellar. I'd love to say the same in Europe. It's actually stagnated in Europe. There's been the odd year where volumes have increased, but it's pretty clear the stark difference in the value of volume trade in the two regions. The question is, look at 2009, pretty much roughly equal.
Sure, the United States was a bigger market. It's the most liquid capital market in the world. Europe wasn't lagging so far behind. What's happened since then? Why has the United States grown so rapidly and yet in Europe, little has changed? We believe there are a number of reasons for that. There's clearly been growth of retail in the United States. The market structure in the United States also allows for market participants to interact on screen and trade the liquid markets that we have available over here in the U.S. In Europe, our markets are more fragmented, and also the way options are traded is very different to the way they're traded in the U.S. There are lots of bilateral negotiations that are conducted in Europe, and liquidity on screen has pretty much disappeared over the last 11 years.
Now you've heard the phrase about liquidity begetting liquidity. That is almost certainly true, and the U.S. has demonstrated that. In Europe, that's not the case. When I'm doing pitches to end customers here in the United States, one thing happens. We go through the pitch book, I get to this particular slide, and the conversation stops. I don't need to go any further from this slide, and the reason why I don't need to go any further is the market participants understand exactly what I'm talking about. When I show them this chart, they say, "This is exactly why we don't trade Europe." The liquidity isn't there. If I want to trade or look at exposure to France. Maybe throw in a bit of Germany as well, maybe overlay that with the U.K.
That's three different markets I need to connect to, three different silos, three different exchanges, three different clearing houses. I don't get any capital efficiencies from doing that. It'd be great if I can do all of this on one market. It'd be great if that market looked more like the liquid markets of the United States, i.e., largely an onscreen driven model, where I can execute transactions electronically without having to worry about how I negotiate transactions with European participants and where I'm not familiar with the market structure. What we're about to do in Europe, and what we've launched on the sixth of September of this year, is we're actually gonna bring that U.S. market structure to Europe.
A largely onscreen driven market, which will allow market participants to trade a range of Pan-European benchmarks on one venue, clearing into one silo, EuroCCP, giving them the margin offsets and the efficiencies that they expect. This market model will closely mimic what market participants are used to trading here at Cboe in the U.S. It's the same platform, repurposed for Europe, delivered for market participants. Have a look at 2020 for a second, just to give you an idea of what that looks like. The value volume in Europe is an eighth of the size of the value traded in the United States. An eighth. The opportunity that we see here is significant. I'm pretty sure that 2021 is gonna mimic the same chart, i.e., that there'll be a spike in the U.S. and there'll be little change in Europe.
Our plans over the next few years is to bridge that gap. That's the value opportunity that we're planning to execute on. From a revenue standpoint, I'm gonna throw out a figure. Over the next three years, we believe the revenue opportunity is roughly EUR 25 million on an annual basis at the end of the three years. There'll be further growth from that point on because the plans are to bring more volumes, more products to our European venue, and as we bring those new products on, we'll also be bringing on new market participants. I'll pause there and just let you just ponder that chart for a second, and I'll hand back to Ken.
Great. Yeah, thanks for the overviews on the various components of the business there. Certainly a lot of new initiatives underway. Tying this back to what Ed said to start the day, we would expect these new derivative initiatives kind of in the hopper to generate 2%-4% annual net revenue growth over the next three to five years. What I wanna do next is dig in a little bit, provide some context that supports some of that revenue growth we've outlined here. My first question, though, is a little bit more broad, just given who we have up here on stage. I think it's also kind of key to who we are as Cboe. You're all experts helping customers manage risk. That's kind of the key product of your job.
I'm curious from your perspective, how those risk management needs have changed and evolved with the customer set, and how has our product set evolved to match those needs over time? Arianne, if you wanna kick off?
Sure. I'm happy to kick off the discussion for us. I think we're in a really unique time. A unique shift is probably a better way to put it in terms of how customers' risk appetite is changing, especially over the past 24- months. It's been remarkable. Not only in institutional investors, but retail investors truly need the opportunity to have more flexibility, access, to be able to manage their risk at all times. Studies have shown that most of the S&P's net returns have really recurred outside of U.S. trading hours. The ability for an investor to adjust a position at all hours, especially around global macro events that we've witnessed over the past five years, is more and more important. News doesn't stop when the continuous session ends. We need to make sure that we're adjusting accordingly with our investors' needs.
Quite frankly, you know, as my colleagues start to add to this point, one of the main reasons why we're expanding our access next week with 24/5 with S&P and our VIX options, our customers have asked for the ability for them to manage their risk more effectively and more efficiently with some of the most liquid proprietary products that Cboe offers.
Yeah. I would jump in there real quick and say, from my time managing risk on the desk, to Arianne's point, you know, the things that I was focused on were obviously what products and exposures were in my book, but also access to my hedge and then liquidity of my hedge. To Arianne's point, the fact that SPX and VIX are global benchmarks, that people use them to manage risk around the world. You know, right now we're seeing markets, say, in Korea, that are actually affecting the pricing of downside puts in SPX. These products have to be available, and we see tremendous growth in being able to make them available 24/5 to many participants outside U.S. market hours. Now, retail on the other hand, Arianne also touched on that. Retail's a kind of a different animal.
In that regard, there is a new customer. You know, this new retail segment now has access, more data, trading apps. They wanna manage their own financial futures but need products to be able to do that. That involves, you know, smaller price point products, things that can help them dial in exactly the exposures that they want, and that's why we're so bullish on the recent announcement of Nanos providing a product like that for this new market segment.
Let me pick up on 24/5 for a second. Arianne, you mentioned that a lot of the volatility events actually occur outside of the normal trading hours. That kind of just got me thinking. Here's a concrete example. Let's go back to June 2016. In the U.K., there's a Brexit referendum. Most of the polls were pointing to the U.K. staying in Europe. Now that market participants had put positions on expecting that to be exactly the outcome. The reality is the U.K. market had closed, the polls had closed, and then results started to drip in.
It was becoming pretty clear that actually the polls were incorrect. Now you can imagine market participants in Australia looking at the poll results coming through and thinking, "We're wrong." It'd be great to be able to manage our portfolio right now to handle what we believe is gonna happen in the morning when London wakes up, when the London markets wake up, and the markets start to roll. 24/5 allows market participants to address the needs of what they need to do to manage their portfolios, not when we're awake, but when they're awake. That's why I think it's a great thing for us to do. The market opportunity is there, and it's the right thing for us to be doing for our clients.
Yeah, Ade, I would add real quick. I'd be remiss to let you have all the fun. You know, the same thing happened in the U.S. a few months later with the election and when Trump got elected into office. I actually remember sleeping on the office floor during that whole debacle as we were trying to manage the portfolio throughout the whole event. Having 24/5 access is something that is game changing for many who are managing large portfolios, you know, across the globe.
Great. I wanna come back, Rob, to a point you talked about earlier with Nanos. I mean, this is a really exciting product here we'll be launching, meant to really help retail access, risk and manage risk a little bit better going forward. I was hoping you could kind of talk a little bit about the characteristics of Nanos, why that might resonate with the retail base a little bit, how you see maybe the trajectory building for the product, and then kind of the role education's gonna play, 'cause that's definitely an important component within the whole ecosystem there.
Definitely. I would love to. The team actually did my talking points 'cause otherwise I would take the whole 30- minutes to go through this. That's how excited at least I am about it. You know, retail investing, you've read all over and seen reports in the media. It's almost unrecognizable from three years ago. I like to always use stats 'cause I think they can be powerful. OCC recently published one that almost 39 million option contracts have traded each day in 2021, and that's up 31% from a year ago and the highest since the market's inception in 1973. Clearly this new market segment is something that everyone needs to pay attention to.
I would say the past nine plus months, we've been studying it, and we've been getting to know it, and we've been conducting surveys and focus groups. What these surveys have showed us is that 75% of people that are familiar with options actually would trade them if it could be done at a lower price point. 71% of people that are actually trading options wished they actually had fewer choices. They're overwhelmed by too many options out there, too many different choices and wanted that simplified. The theme was clear. You know, customers want access, but it needs to be simple and easy to use.
Our answer to that demand is Nanos by Cboe, and this is going to be a one mult contract based on the Mini-SPX Index. We're going to offer four expirations with five strikes per expiration. If you think of the total number of strikes available, you're looking at around 20 for this new retail segment to choose from. Now, that's in contrast to the SPX, where there's over 5,000 strikes today. You can see, we're trying to make this simple and easy to use. Lastly, a 1 mult on a one-tenth reduced index level equates to an at-the-money option of around $5 for the total investment. What you see on the screen, $5, you lift that's what you pay, that's what gets deducted from your account.
Now, that's in contrast to, say, a SPY product, which has the same index level, but with the 100 multiplier, you're looking at a $5 screen price actually equating to a $500 one contract price when it hits your account. Or in SPX terms, that's a $5,000 one contract price. Once again, make it easier to access, make it at a price point where people can learn with it and have fun with it, and that's what our goal is. To Ken's point, that only kind of gets us partway there. We also need to and we are heavily invested in the education component. We've talked about that this is a new user to options, so education becomes key to make them comfortable with using them going forward.
We will be, in the upcoming months, offering on-demand courses, videos, articles, all through our Options Institute, the education arm here at Cboe. Additionally, we're exploring concepts like office hours. That would be where somebody could call in and actually talk to a live instructor or live teacher and walk through the questions they have because we feel, you know, when you're new to something, having that high touch point, being able to talk to an actual person could be the difference between them trading and not trading. We're exploring those concepts. We're bouncing them off the market, seeing what people have to say because all of us up here know firsthand how important education was, being that we were novices at one point before we entered the industry. We're heavily invested there.
Just kind of thinking about the product, though, from a different angle here. Retail is obviously the end user for a Nanos-like product, but it takes the whole ecosystem of market participants to really make this product work. Arianne, I'm hoping you can comment maybe a little bit on what you're hearing from market makers, liquidity providers, any of the retail brokers out there as we kind of get closer to this launch here.
Yeah, no. Rob, I have to correct just one second. Not just you are excited, we're all excited for this product launch. That being said, yeah, thanks, Ken. I think that's a great question. It's an opportunity for us to continue to evolve, talk to new users, talk to new entry-level traders who want or are interested in trading options. Very exciting for us. That being said, from a distribution perspective, when I talk about the retail firms, we're focused on all of them, but we're focused on talking to them about how this product caters to their investors, how it caters to the changing demographics that they might have to expand their distribution effort and speak to the new entry-level trader.
We are really focused on some of the most rapidly growing retail platforms, and in particular, excited to announce that Webull, one of these new retail platforms growing at a rapid pace, has committed to being there day one for our Nanos launch early next year. Equally as important, on the liquidity providing side, we're having very similar conversations. These conversations have been as exciting as when we're having the conversations with the retail broker platforms. They understand the product. They see why we're making these shifts, groundbreaking shifts in terms of how we want to create a new access point for derivatives. Some of the largest SPX, XSP liquidity providers have committed to also being there day one when we go live early next year.
Great. Thanks for that information there. I wanted to switch up a little bit and talk, you know, we've heard a lot about the new growth initiatives at Cboe, but we also have a very foundational SPX and VIX core proprietary franchise here. I was hoping you guys can maybe speak to the dynamics you're seeing in those products. Is this market becoming more saturated today, or are you seeing things that make you a little bit more excited here going forward?
Yeah, I'm happy to jump in there again, Ken, just to talk about on the customer and the distribution side of things. I think that this plays into a couple points that I made earlier on in my initial remarks. Customers' involvement and exposure in the U.S.-listed options marketplace is growing rapidly. I wanna provide a couple statistics on how we think about our growth, the addressable market, and how we see it expanding as people try to deploy more capital with our proprietary products in particular. I'd like to focus on two areas on the institutional side. One, the insurance companies, where I see a couple statistics. One, fixed income annuities have grown 11% year-over-year and are expected to grow 16% by 2023.
Similarly, on the structured annuity sales side, they're up 100% over the first six months of this year. That total notional in that product, in particular, to be hedged in 2021 could exceed more than $105 billion. On the pension side, just speaking to the U.S. pensions, and that's called the state pensions and ERISA plans, have approximately $3 trillion of assets that are in AUM that have equity exposure, with an average, most importantly, underfunded status of 60%-70%. If I just pause there, and I think about the amount of capital, the amount of AUM that is exposed to the marketplace, you think quickly about how they need to protect, hedge, and think thoughtfully about managing their risk in the U.S. markets or even globally.
Those create opportunities for us to have these customers utilize our products to hedge their exposure more effectively. Now, switching over to the retail investor base, Rob talked a lot about these stats when he went over our new launch of Nanos. I like to key in on one as it pertains to. Many people know that the OCC volumes continues to set records up 31% year-over-year. A lot of that growth has come from the retail investor base. It's exciting for us to see more and more retail investors utilize the U.S.-listed options place to express a view or commit capital. What we've seen, though, is that not all of these retail firms offer all of derivatives products. They might not offer futures, they might not offer proprietary products.
What we're doing is we're uniquely positioning ourselves to educate investors, educate these platforms about the uses of these products and the ability for them to be thoughtful about offering them to their customer base. We do view that some of these faster-growing platforms will continue to add our products in the coming year, just like Webull did about two weeks ago by enabling SPX VIX onto their platform. We've already seen some adoption from that platform, which has been quite exciting.
Yeah, I think if you look at the numbers Arianne quoted, obviously it shows a lot of room for growth. Before the panel came up, I looked at basically the notional USD tied to open interest in the SPX and just compared that to the overarching, you know, global equity market, and it's still just a fraction. Like, we have so much room to grow. How are we doing that with products? There's one in particular that I wanna highlight, and that's our Customer Portfolio Margin initiative that I mentioned earlier. This one's unique in that, well, one, I'll say we're working on this and we're reliant on partners. We're working on this with both OCC and the regulators, and we hope to bring it to market in the second half of 2022.
What's interesting about this one is, one, the market participants aren't going to really have to do anything to receive the benefits. This is all more behind the scenes on how you use margin and how actually the models around managing risk free up capital for each of these firms to reinvest back in the market. Today, if you were to look at SPX and VIX, and I know this all too well 'cause I used to bug Ed about it every time as a customer saying, "Hey, we really need to get this fixed." If you look at the two portfolios, and let's say you're long exposure, market exposure in SPX, and you're short associated market exposure in VIX and you're offsetting.
Right now, the way the system's set up is you have to fund those two positions fully as if there's no basically offset between the two. If you're long one, they look at your worst risk-based scenario, and let's say you have to fund that with $5 million. You look at VIX and what's my worst scenario? Maybe it's the opposite scenario of what the SPX one is, but it's also, I gotta fund that with $5 million. Collectively, this portfolio that has little risk, you're funding with, say, $10 million. With the introduction of customer portfolio margining and looking at those two products holistically and paring down the risk, we're now going to only have to charge, say, $3 million for that entire portfolio, freeing up $7 million for customers to reinvest back in the market.
That can come in better liquidity, which would be incredibly valuable as we hit turbulent markets like we did around the COVID pandemic, 'cause now people have more capital to provide liquidity, which becomes paramount. Freeing up this extra capital. You start to get a multiplier on it with your volumes around SPX and VIX.
Let me just touch on that portfolio margining piece a second. It kinda talks to the point I was trying to make in my introductory remarks about our plans for Europe, where I think I gave an example of you might have exposure to a French product today, you might want exposure to a German product today, but in essence, you're actually fully funding those exposures in two different clearing houses, two different exchanges. I just think about what we're planning for Europe, doubling down on our Pan-European ethos. Effectively saying, if you want to trade Europe, you should be able to trade Europe, all of Europe, on one platform, getting the portfolio margin efficiencies that market participants quite frankly deserve. We're starting off with just six products today.
If we're gonna have this conversation in a year's time, those six products will have expanded to more countries. We don't cover Italy today, we will do. We don't cover Spain today, we will do. Sweden is coming. Each of these new benchmarks that we bring on board also brings along a national champion in that particular country, i.e. a firm that understands that market. There's been inbound to Cboe about offering those country benchmarks on our platform. Kind of talks to the portfolio margining point. Apologies for interrupting, Rob.
No, I mean, I can't overstress the impact that this can have. Specifically, I think in Europe, it's a differentiator among all the incumbent exchanges, because when you can pull that together and risk manage and get the offsets all at one clearing firm, it makes a massive difference in your overall strategy and effectiveness. Now, Ken, I have one more, but I don't know how we're doing on time, so you let me know.
Go for it.
All right. This one's a little bit more of a longer-term product that we're working on, and it's just in the introductory phase right now. I wanted to highlight it here, and it's dispersion futures. Similar to what we've done with VIX, which I talked about earlier, it's making complex into something more simple, increasing access to the strategy. We wanna do the same with dispersion. For those that aren't familiar with dispersion, it's a strategy where typically you're selling a basket of index options, say on SPX, versus buying single name equity options in, of that index and arbing the two. As you can imagine, with large baskets of options and cross-market, this can be very complex and hard to execute. That's why primarily they're done, I would say, in the structured products market over the counter.
We wanna bring that to the listed space with a simple future that allows you access and opens up this strategy really to a lot more market participants. It has two massive benefits in my opinion. One is it grows our existing SPX complex because we now have more demand to trade listed SPX. Where you get the multiplier is it also creates sticky volume in the highly competitive multi-list space, which becomes very interesting. It makes Cboe kind of a differentiator amongst what is there 16 different exchanges now for multi-list. We're really excited about this. Like I said, this is a little bit more of a long term. We hope to maybe bring it out at the end of 2022. I wanted to put it on everybody's radar screen.
Thanks for that, Rob. Now we're a little bit over on time, but I wanna squeeze in one more question 'cause it's important with ESG. This is a topic that comes up so much now with investor base from my seat in particular. I'm sure it comes up within your seats as well. I was hoping to get your thoughts on, you know, how clients are really assessing the ESG environment today and how we're working to meet those needs, 'cause it's becoming much more of an important component for them. Hoping to start with Ade, just given you're here in Europe, and I think you're, I guess, a little bit further ahead than we are here in the U.S.
Thanks, Ken. I would certainly agree that Europe has been ahead, but I'd say they've been ahead in terms of demanding ESG-related products. In the conversations that I'm having with market participants, two things come up all the time. Will you have an ESG offering? And two, will you be bringing a VIX product to Europe as well? Let me address the ESG one in particular, since that's a question. My response to them is that Cboe already has ESG products on our U.S. platform. For Europe, I have to highlight a couple of things. One, we're new, we're two months old. I would love us to have an ESG product right now, but it's not the right time. We need to launch the products that we've got, build on those, and in our conversations with market participants, this is the other thing that comes out.
They effectively say, "We want an ESG product," but the market hasn't actually coalesced around any particular ESG benchmark. You ask 10 different firms what they'd want, guess what? You're gonna get 10 different answers around what they'd ideally like to see. The opportunity is significant. But at the moment for Europe, something will be coming from us, but just not yet. Where I believe there is significant demand is actually in the U.S. Perhaps, Arianne, you can speak to that.
Yeah, Ade, I'm happy to add there and happy to talk about the whole ecosystem and how we're thinking about it, especially in the States. I'd like to touch upon a couple things that even Ed, as well as Catherine and David mentioned early on with regards to our value ladder. I think it really frames our ESG initiatives quite well. It's really, you know, one, emphasizing our commitment to ESG on the transactional side, and it will continue to expand as we think thoughtfully about each component of that value ladder. It starts with our position with our ESG ETPs. Cboe is actively growing our ETP listings with over $15 billion of AUM tied to our ETP products listed at Cboe. It doesn't just start there and stop there.
Cathy, in her strong leadership and innovation around data access and index services, will allow us to further expand on this ESG ecosystem. Talking to what Ade mentioned, ESG is relatively new in the derivatives space. We do list an S&P ESG index option that just recently was listed this past year. Again, as Ade said, there's really no common ground for our investors about how much they're planning to invest over the next five to 10- years. We do know there's an increasingly important commitment for them in their portfolio strategies. Speaking to the U.S. component and the U.S. asset managers and how we think about transaction revenue and growth within this asset class, these investors have been slower to adopt than the European investor base.
as we have more and more conversations with a few of the largest asset managers, they're starting to say that we need to make sure that we're starting to pivot, increase our capital allocation to these strategies even as early as next year in 2022. that kind of is how we are framing out that value ladder, especially as we see that growth going forward.
Yeah, I would add real quickly. From the product standpoint, you know, the derivative markets are gonna play a huge role in how people manage ESG-related risks. I think it's a fluid discussion, as Arianne and Ade both highlight, on how people are assessing those risks and the impacts they have around managing risk around ESG-related topics. We're in a great position to be able to drive impact here. We obviously, as they've mentioned, we have our existing product in the S&P ESG Index, but we also have great relationships and great partners. You know, we have the S&P, we have the recent announcement with MSCI. We also have relationships with Morningstar and FTSE Russell, all of which we're working with to come up with the right products that help participants manage ESG the way they need to manage it with and drive impact.
Great. I think we'll leave the discussion there. Arianne, Rob, Ade, thanks so much for the time today. Next up is gonna be Brian Schell providing the financial overview for the morning, tying everything together. Thank you.
Good morning, good afternoon. For those maybe in the back of the room, I'll try to speak up 'cause I know the fan speed's been a little wiggy as far as the noise level, so, hopefully you can hear the comments okay as well. I don't quite have that pit voice, Rob, so I'll do my best. Again, I am really excited to be here today, especially in person, and more importantly, to be part of a leadership team that is so passionate about our vision, our strategy, and opportunity to deliver shareholder value. Following today's presentations, I hope you walk away with confidence in our plan and ability to deliver on the opportunities ahead of us. Why? Well, from a financial standpoint, Cboe has several value creation drivers. First, our solid track record of operating performance, revenues, earnings, free cash flow.
Second, a strong and flexible balance sheet. Third, a clear and disciplined approach to capital allocation. You've heard a lot about how Cboe has changed over the last five years, so I wanted to provide some financial context to that. Before I get started, let me just provide some background on that as far as the 2021 results reflect the annualization of our third quarter year-to-date results. However, the historical results reflect GAAP numbers unless otherwise noted. Since 2016, Cboe's delivered 5-year compound annual growth rate of 21%. While this growth is attributed to many factors, the standout metric is the growth of recurring non-transaction revenue, which grew 26% on a compound annual growth rate basis over that same five year timeframe. What is even more impressive, assuming you like earnings, is the 22% compound annual growth rate of adjusted EBITDA.
This reflects our ability to deploy our highly efficient operating model and core capabilities as outlined by Chris towards our organic and inorganic growth initiatives. Now I'd like to spend some time reviewing the composition of our revenues and sources of our revenue growth. Our public filings provide an in-depth view of Cboe's financial statements, including our segment reporting that is still important to management. Today, I like to present that net revenue information aggregate in a slightly different way, one that aligns to the Cboe ecosystem that we've spent so much time discussing this morning. We grouped our net revenues in three broad categories: cash and spot markets, Data and Access Solutions, and derivatives. Now there are several important trends I'll highlight. First, and most obvious, we look far different today than we did in 2016.
Our business mix has gone from more than three-quarters of our revenues coming from derivatives net transaction revenue to less than half, at 44%. Second, as I noted on the previous slide, the Data and Access Solutions revenue base has grown more rapidly and in a greater nominal amount than the other two categories, evidencing the importance of Cboe's efforts in this area. Third, our global cash and spot markets franchise has continued to perform extremely well despite it being one of the most competitive asset classes in the world. Again, I believe this speaks to the innovation, integration, and growth focus of the leaders in this business and how we leverage our core capabilities. Finally, coming back to derivatives, more specifically our VIX and SPX proprietary products.
My guess is that no one would have predicted in 2016 that if Cboe were to more than double its revenues in five years with an even higher adjusted EBITDA margin, that it could have been without a proportionate growth in our VIX and SPX franchise. The VIX and SPX contracts continue to be the leading proprietary products in the volatility asset class and continues to be a very important part of our growth strategy as we look to expand access. Through the many initiatives you've heard about, increased trading hours, trading platforms, and education, as well as different contract sizes, we are much more than that. Now, continuing the theme of demonstrating a proven track record of strong operating performance, I'd like to talk about the growth of our free cash flow, where it comes from, and how we think about its utilization for the benefit of shareholders.
With a five-year CAGR of 31%, our free cash flow has outpaced our revenues and our earnings. Our primary driver is the strong conversion of our healthy revenue growth. The reason we are able to convert such a high portion of our revenues to cash is anchored in our core competencies and key strengths. We have high margins, not because we're restrictive on expenses, but rather we, one, operate on a unified technology platform, producing efficiency of cost and support, not only for us, but for our customers. We, two, operate on a global network, allowing us to efficiently create more access, again, to new and existing products and services to new or existing geographies. These two points reflect the financial outcome of our long-term approach to technology.
The incremental contribution of revenues when delivered on an existing platform approaches nearly 100%, regardless if it is transaction or non-transaction revenue. From an M&A perspective, the savings delivered from redundant or inefficient platforms is significant, as many of you know from the savings generated from Cboe's acquisition of Bats. It's also worth noting that our incentive compensation, short-term and long-term, as set by our board, is tied to growth. If we do not grow in line with those targets, our incentive payouts are adjusted accordingly since they are aligned with these targets. We believe this alignment is important for growing shareholder value. My last point on this topic, and it might be obvious, is that the ability to and history of generating strong free cash flows is a key enabler to utilizing our balance sheet strategically.
As we pursue M&A, the combination of our existing low leverage, ability to access the debt capital markets at a low cost, and the future ability to then de-lever quickly provides significant flexibility financing a transaction that enhances overall shareholder value. As stewards of our shareholder capital, we believe in providing a clear and transparent framework for making capital allocation decisions and the results of those decisions. Our approach has been unwavering since the IPO in 2010, so I will proudly sound a bit repetitive to long-term Cboe shareholders. One of our top priorities is to invest in organic growth opportunities. We want to invest in products and services that are differentiated and meet customer demands. These opportunities tend to have the highest ROIs over time, given the limited amount of incremental capital needed, again, reflective of our operating efficiency.
The recently announced organic initiatives do not collectively require a significant amount of incremental capital, and we are optimistic about their long-term profitability potential. On the M&A front, we only pursue opportunities that are strategically aligned with our vision. Over the last five years, it has been a significant source of growth and resulted in significant shareholder value. Given the strong free cash flows, we are also committed to returning capital to shareholders. Since our IPO, we've increased annual dividend each year, and it remains a priority to do so going forward. In general, we grow the dividend as Cboe grows. Finally, we return excess capital through share repurchases, on an opportunistic basis and subject to liquidity needs. During the last five years, our capital usage has been relatively balanced, with a preference for M&A reflecting a strong growth mentality.
The return of capital has also been fairly balanced between dividends and share repurchases. Foundational to our capital allocation philosophy is a financial profile that maintains investment-grade status. This helps to ensure an efficient borrowing cost should we need access to the debt capital markets. We would be willing to increase our leverage ratio above historical levels on a short to medium-term basis if doing so is expected to add significant shareholder value. We have demonstrated the ability to rapidly reduce from an elevated leverage ratio through a combination of earnings growth. The three year average of our return on invested capital is 13%. We believe that our disciplined investment approach delivers long-term profitable growth for Cboe shareholders. As we calculated, our 2020 return on invested capital is also higher than our North American exchange peers.
This is not in and of itself the only benchmark to measure success, but it does demonstrate our unique positioning, strategy, and overall capital allocation decisions are producing stronger results. Historically, we have maintained internal financial performance metrics and return on invested capital thresholds for organic investments and M&A transactions. We've decided to share them publicly today to enhance the transparency of the framework for making capital allocation decisions as we move forward. Overall, our threshold for investment is to generate at least a 10% return on capital within a three to five year time frame. What exactly is our framework for generating high ROI? Fortunately, I happen to know someone who knows a little bit about that framework. After listening to today's presentations, you will no doubt hear all the same elements. First, customer demand, especially for organic products and services, we start at the customer level.
For example, is there customer demand? Is there a problem we're solving? Are we providing incremental value or efficiency? We evaluate how the investment will leverage Cboe's core competencies. For example, does it expand our global network? Does it provide incremental access, efficiency, functionality or help? Are there revenue or cost synergies if added to the Cboe network? Next, we evaluate if the investment increases the total addressable market to Cboe. For example, is it a new geography or asset class? Does it address a new segment of the market? Does it increase the size of the market, or does it take the market share from an inefficient offerings? Finally, model the size of the investment as well as the long-term profitability and cash flow potential. For example, what is the overall revenue growth potential in every scenario in between?
Are there synergies to be achieved? What do we need to do to enable margin expansion? Are there any ongoing investment needs? Each of the transactions we've either closed on or announced were analyzed through this framework. They all leverage one or more of Cboe's core competencies, increase our addressable market, and should yield a return on invested capital of at least 10% in the next three to five years. We believe that we have a proven, repeatable acquisition strategy, one that delivers long-term profitable growth and long-term shareholder value. We had a record year in 2020, setting new highs for net revenues and adjusted earnings. In 2021 year to date, net revenues and adjusted earnings are higher than 2020 year to date results, which are currently higher than our original targets.
In addition, as I'm sure you know, the fourth quarter volumes are off to a strong start. Based on this momentum and incremental growth plans we have in place for the future, we are increasing our three to five year annual revenue growth rate targets, organic total revenue growth to 5%-7%, and organic Data and Access Solutions revenue growth to 7%-10%. Each of the presenters today have given you a couple of key points they hope you'll take away from their portion of the presentation, and I'm no different. First, our proven track record of success should provide confidence in our ability to deliver upon our plans. Our value creation drivers reside in our operating performance, balance sheet strength and flexibility, and capital allocation philosophy and framework. Second, we increased our revenue guidance, and by we, I mean the leadership team. They are confident.
We are confident in driving the revenue growth of Cboe. The increased guidance stems from our existing mix of revenues and our high conviction revenue growth opportunities. On the expense front, similar to our guidance at the start of 2021 and all of our subsequent earnings calls, our short-term expense growth rate will continue to be elevated due to the annualization of expenses from newly acquired companies, as well as from incremental investments. Bottom line, our results reflect our evolution to capture the opportunities in the past, but I believe we are just getting started. Now, I'd like to turn it back over to Ed for closing remarks.
Thank you, Brian. As we highlighted numerous times throughout the day, our ecosystem of cash, data, and derivatives will power the Cboe engine moving forward. You've heard from several members of our executive team about how we are innovating, integrating, and growing across geographies, asset classes, and revenue streams. As Chris Isaacson mentioned, we are leveraging our core strengths and technological advantages to fuel growth across our platform. David Howson showed you the blueprint we use for geographic expansion, leveraging the power of our ecosystem. Catherine Clay provided a thorough overview of our Data and Access Solutions business, poised for solid growth in years ahead. Our derivatives team walked through some of the most exciting initiatives we have in the pipeline to provide greater access to customers and innovative new products to the market. Brian just walked you through how we allocate capital to create value for shareholders.
Lastly, I want to touch on our top strategic priorities at the firm leaving today. In Data and Access Solutions, we are targeting three to five year organic revenue growth of 7%-10% annually. Derivatives initiatives expected to contribute 2%-4% of total organic net revenue growth over the medium term. In the digital assets market, we plan to take meaningful share of an industry growing at a greater than 25% CAGR. We are well-positioned to move into attractive and expanding addressable markets across all of our businesses, and we couldn't be more excited about the opportunity set in front of us today. We know we have provided a lot of information today on our businesses and details around the future growth initiatives. Now I'd like to ask the management team to come to the front and host a Q&A session.
While everybody's getting set up here, I just wanna say, we'll be taking questions within the room, so raise your hand. Debbie will be walking around with a mic. We see you, Rich. We know.
Rich's hand did beat Adam.
It did. It was first in line there, so you're in the queue first. Otherwise on the web, we are taking questions as well. Use the functionality there. I'll be reading those in the back of the room.
I'm ready when you are, Debbie. Our first question comes from Rich Repetto.
I got a bunch of questions. I'll just take one and focus in on something that just sorta caught my ear. Rob, on the cross-margining. If this is a big opportunity, and what I thought you said was futures will be able to be cross-margined with derivatives, and they're all cleared at the OCC. Number one, did you get the OCC to sign off? When would this start? 'Cause it could push proprietary product trading volume. Then if so, why do we, you know, we get 2%-4% net growth. This is as big as what you say it is. Aren't we sort of conservative on that growth rate for the derivative trading?
Yeah, great questions. With regards to the cross-margining piece, right now, VIX futures and SPX options are both cleared at OCC. What it really comes down to is a modeling question of how their risk models look at those two. Where the regulatory piece comes in is we have to get permission from effectively the CFTC and SEC to allow futures to sit in a cross-margining securities account. That's not allowed today. That's the regulatory piece. So far, we've gotten positive feedback, and we're fairly deep into that discussion with the regulators. They see the need, they see the benefits of freeing up this capital, mainly for liquidity provision back in times when the market needs them. It will be effectively getting the regulators to sign off on allowing this.
Then OCC, and by signing off, all they're signing off on is OCC's new model to account for these things this way. Once that goes into place, those that have accounts won't really have to do anything. These accounts will just now be run with a different margin model, and that extra capital will be obviously freed up without them having to actively do anything. On the 2%-4%, I usually let Brian handle the growth stuff. I guess I would say, you know, we are dependent on external parties. I think some of that comes from just historically knowing that those different pieces move slow and trying to account for that.
Okay, I'll just one follow-up directly on that. I won't buy. There's already precedent out there, say, at the DTC with Treasury Futures. I'm not saying it's big, but so I'm trying to see why there's such a huge breakthrough if it is occurring not at OCC, but it's occurring at another clearinghouse. If there is some cross-margining, it's not a super lot, but there is some efficiencies being a llowed, I guess.
Well, I guess what our models are running is basically looking at this. You can actually use Eurex as an example. I kinda go back to my trading days on this. Eurex's Prisma system looks at a similar product set with Euro Stoxx options and V2X options and futures, which is their VIX equivalent. When they dump this into an applied portfolio margining with regards to the model, it freed up, I wanna say, Ade, you might even be able to help me with this. It was between 70%-80% extra capital that were now being accounted for in the way this is risk modeled. It's just not done today.
While there might be precedent in other markets, it's just currently not being done, and where you gotta have the regulators step in is. It has to do with basically default management. If you default on a future that's housed and regulated by the CFTC, how does the SEC account for that and liquidation costs and all of that. It becomes kind of just a puzzle putting that all together, but once you do, the benefits can be big.
Are you gonna announce me, or do I have to announce myself?
You know what, I should. What's your... You have a new.
It's Alex Kramm, UBS. Thank you. Why don't I start with Cathy? I guess two-part question on the 7%-10% growth. One, pretty simplistically, you know, how do you think that algorithm breaks down between, you know, new clients, new products, pricing, and whatever else you wanna throw in there? And then secondarily, you showed us that that TAM, $42 billion, I think it was. But clearly you're not really in all of those businesses today. Just wondering if you've maybe defined something like, I don't know, if this is a serviceable TAM or whatever you wanna call it, where you look at what are all the clients that we're going after, what are all the products that we can sell them, and what would that number be, where you then arrive. That's another topic. Thanks.
All right, Alex Kramm from UBS. I'll start with the $37 billion TAM, I think the number that was on the slide. We look at that TAM as actually something that we plan to be in and be addressable to us. If you think back to what I talked about in the presentation, there is ample room for us, within our breadth of offering already across the entire value chain in the markets to expand our offerings into the gaps that our clients identify for us. We really are just a very small part of that addressable TAM for us.
To the first part of your question, when we think about attacking that total addressable market opportunity, I mean, you really have to think, first of all, about the synergies that have just already occurred simply by the fact that we've brought this group together into one unified division. Before DNA was created, I think back in March it was, these real-time businesses and the access and capacities and all of the more analytics businesses, data and access business, were very separate businesses.
We're already seeing the benefits of removing those silos and having the businesses work together, not just from a technology efficiencies perspective, but also from a sales perspective and the cross-selling we're able to do because now we're sharing a lot of information about each other's client lists and getting in the door to those clients and expanding the wallets of those clients with all of our offerings. If you think about, again, you go back to how concentrated our revenues are in the United States right now. The opportunity for us to take our product set as is, off the shelf, to these other geographies in the world is really tremendous, and we are spending a lot of time thinking about our sales efforts and how we approach sales.
Just recently, you may have seen the announcement in September. We brought Bo Chung, an industry veteran in sales and relationship management on a global scale from S&P, where he had a very long and storied career. He's going to lead our global sales team, and we're hiring in Europe, and we're hiring in APAC in order to take our current product offerings and start selling those in a more global way. Then the next step, as I think I mentioned in the presentation, was as we expand as a global exchange operator, that is going to give us access to so much more data to just bring automatically into our product offerings. It's really just bringing more data into our mathematical models and our different risk tools that we offer.
The final step would be to bring the exchange data that were not actually our data into our offerings to fully serve that global client base. Whether you argue against the $37 billion addressable TAM, we really think that the opportunity is huge because we really are just here in the United States right now. To take all of this, including our index business global, you know, we really think that that's something we can attack there.
No breakdown of the algo. I don't know if it's for Brian instead. It's fine. I can move on.
Oh, you want to break down more about the pricing and.
Yeah, exactly.
We don't have a lot of ideas to raise pricing right now. We think our products are priced fairly and priced accordingly. We really think the expansion will come from the cross-selling to our different clients already and then adding new clients in the different geographies. That's really where we see the potential is the new client adds in new parts of the world.
That price point has been part of the offering as well, not just the richness of the data, the analytics, and the value it creates, but also that price point and where we are.
Daniel Fannon from Jefferies. I guess following up, Brian, just, you know, the expense commentary. You obviously had elevated expenses now, as you said, as you were investing. If we think about all of the growth initiatives you're outlining, these are multi-year in a kind of opportunities. What is a normalized level of expense growth if we were to, you know, if you think out multiple years and what, you know, outside of obviously M&A and some of the inorganic side of that?
Fair question. I would say we're not right now can give you, "Here's what 2022 looks like, here's what 2023 looks like." As far as more context and how we're thinking about it, and we kind of look at our long-range models and what that portends to be is. And I say this with the caveat that you know Cboe and that we will adjust the investment and expense level, to some extent to how we're doing on the top line as well and how we're succeeding those revenues grow or not, right? As far as the success goes. Just always keep that in the back of your mind that we will adjust accordingly, but with a commitment to that investment and those new initiatives.
I will say, as far as we look for that term right now, we talked about, obviously, we'll have to account for the annualization of any acquisitions that come in mid-year, and we pro forma that out. As we look kind of going forward, we in February of 2021, we laid out, I'll call it that waterfall that talked about that pro forma-ization and then the investments as far as we laid out the European derivatives investment, we laid out the other investments. I would say that is exactly the same type of context to think about it going forward.
At the time, we were not 100% sure as far as the stickiness of how much of that was going to be, you know, we'll call it CapEx or OpEx or how much of that was going to be, you know, continuing to hit, say, the P&L versus the balance sheet. More and more of that we're seeing is hitting the income statement. Again, I think we've managed that over time. I would expect to see that framework on a go-forward basis again as we continue to see the success of those revenue growth. With again, that revenue growth number from early 2021 to where we are today, I think is significantly higher based on a lot of where all of you have raised your numbers.
Good morning. Paul Goldberg, Bloomberg Intelligence. Question in the cloud, and it's a two-part question, I think. One is, are you ever considering putting the trading part of the business on the cloud? So clearing has been here for some extent. The second part of the question, in terms of globally, I'm looking at the slide where you talked about Australia, Japan, Canada, and it's all in the non-trade, non-transactional businesses. So how does it help you integrate and grow faster globally?
I'll take the first question, maybe hand the second one to Dave. We obviously are partnering with Amazon Web Services with Cboe Global Cloud, putting our data there. Regarding clearing, we own a clearing entity, obviously, EuroCCP, that's currently on-prem. With the acquisition of ErisX, their clearing house is actually 100% in AWS as well. We already have data and clearing there. None of the cloud providers, frankly, are ready yet for markets that require microsecond or nanosecond precision and multicast and the protocols that our customers expect completely in the cloud. There will likely come a day where that happens, and we'll be prepared with whichever cloud provider we think has the best offering for us. Again, it'll be customer-driven. We're customer-driven solutions here.
If that's what our customers want, that's what we indeed will do. The speed of light will remain the speed of light, and therefore, proximity to matching will make a difference whether or not those servers are in a cloud or a co-located data center that we lease from somebody else. A lot of exciting things with Cboe Global Cloud because it we get access to a whole new set of users that currently don't have any access or very limited access to our data. That's what we're most excited about right now.
Thanks, Chris. Can I ask you to clarify the second part of that question for me? I wasn't quite sure the thrust of it.
Question is, does it help you integrate things? Does it help you expand in those markets faster? Is it just a physical help faster and cheaper way to put technology, integrate with your existing systems and so on?
Absolutely, yes, sir. Apologies. It's that uniformity point. Again, it's bringing the data into the cloud so that anybody anywhere in the world, to Cathy's point and Chris's point, with an internet connection can get to that data. That was really the point of the Cboe Cloud point, on that slide, really to show that there is a roadmap, other datasets will get added in time to really expand and add value to that overall offering of cloud-delivered data at Cboe.
Stephanie Ma from Morgan Stanley. I have a follow-up on the data and access revenue outlook. How should we think about acquisitions, contribution from acquisitions layering into the run rate here, and also potential incremental data monetization opportunities from ErisX, Trading Technologies or Neo?
I'll start with that. As far as our outlook incorporates what is closed right now as far as the transactions goes. All of that, I think the team laid out, Cathy, David, Chris, all laid out where we see as that transaction business grows, the DNA business grows, and as the DNA business grows, that continues to feed the transaction business. I think we continue to keep that in mind, and then we think their opportunity expands on top of that as those new opportunities are layered in into the Cboe network.
Cathy, why don't you pick up on the crypto aspect of information? You've started already, even before ErisX, on the importance of distributing data in crypto assets, and then with the plan after ErisX, how that comes together even more fully.
Yeah, sure, Ed. You know, we were already thinking about crypto even before the ErisX acquisition, and we engaged in an early partnership, an exclusive partnership with CoinRoutes to bring in their real price crypto data. Now remember, CoinRoutes is a smart order router in the crypto space, and their goal is to execute notional amounts of different coins to different exchanges. Their algorithms produce nice data around where an actual notional amount of coin can be executed. For example, if you're looking to buy five Bitcoin, they're going to be able to calculate this real price, including the exchange fees, in this calculation about where that actual real price of crypto execution should transact. We have an exclusive right to this data to use in our product offerings and our derived data offerings and our indices.
We were down the path, and we'll soon be releasing some indices using this data going forward. That just feeds into what Ed is talking about. Now, with ErisX, this gives us that whole flywheel ecosystem of proprietary data that's going to come off of that digital asset exchange and clearing facility that then we can now incorporate into our entire DNA product suite. We're also talking to other crypto data providers that have more on-chain data that allow us to, I think, really bring a full 360 view to the crypto space. Having this relationship with CoinRoutes and now having our own ErisX exchange under our umbrella really provides us this full visibility into the crypto space. We're already getting started on thinking about ways to bring that crypto data into all of our offerings.
This question is for Ed. Why didn't you get a $1 billion investment from Amazon? I mean.
Actually, that's a great question for Chris.
How about three? First, I'm remiss, you guys have done a great job. The message has been, you know, coordinated and well integrated. You talked about this, the Nanos offering, the retail offering, and actually the numbers show November's at 43.5 million contracts. It's setting a record in November. I guess the first part of the question goes to Ed. Can you go back through why you think, you know, there's been a change in this risk paradigm that's sustainable of the retail investor that's gonna keep it going? Then the second part of it is, again, tied to the retail. Okay, you got Webull signed up, but still, you know, what about the Robinhoods? What about the thinkorswim's? You know, the other big option, retail option drivers, I guess.
Yeah, Arianne, I'll turn to you in a bit, on the after Webull, what's next and why I think the engagement with TD thinkorswim is pretty phenomenal right now, Rich. It informs us how to develop new products. Nanos is exactly an output of the engagement of new retail. When we say new retail, I think Rob made the point, it's very, very important to us. That comes with education. The sustainability of that investment, we think, is not just single name, but it has to be incorporated into the ability to manage a broader portfolio. That's the smaller investment size that we see with Nano. Hedging should be for every investor all the time. Education teaches that new investor how to take small notional amounts in the broader U.S. market. Very, very important.
Can't wait to tell you and show you how that evolves over time. It is because we've watched the experience of a TD, for example, a thinkorswim platform, on how that retail platform has been engaging in our proprietary product set. Arianne, let's start with the observations of the SPX and then move to Webull and then where we'll find and keep engaging with Robinhood.
Hello. There we go. Okay, sorry about that. No, just starting with our largest proprietary product with SPX and the growth from the retail community has been really impressive, not similar to the institutional community. When I think about the retail community and how they've evolved, and we think about it, taking it back to Ed's point on the education side and why we think it's sustainable and continuing to grow, what you see is these retail investors, and Rob alluded to the data on one lots. What we see is maybe those one lots, then we see a return customer come back and just trade a two lot, and then they trade a four lot and a seven lot, and we start to see that aggregate size grow from that customer, that retail platform.
What happens, which also makes it even more stickier for us, where it might not just be meme related, it's them understanding or getting educated and understanding the risk of a levered product, they start to trade spreads. What you start to see is they understand not only directional trading, but then spread trading. When that starts to happen, you have an investor for life. They understand the risk, and they understand the leverage. Taking that down, that ecosystem then maybe is more of a sophisticated retail investor. Now what are we talking about? New emerging traders, new emerging entrants who might be involved in fractional shares. They understand a smaller equity share. How do we kind of think about it from an options perspective is a one lot or one multiplier type of option.
That allows a different access point for maybe an investor who maybe don't trade an option contract before, and then they can enter into that marketplace. When we think about the distribution effort, there's probably 40-50, I'm probably getting this number wrong, retail platforms-.
Out there that are actively involved in the U.S. securities marketplace. I think I mentioned a decent portion of them offer equities. The next portion of them might offer equities and options, and then some might also offer futures. What we have to do is we have to think about educating these new applications on a derivatives product, partnering with them to educate their sales force to say, how are we going to, one, enable, provide the technology clear, levered product or a cash-settled index option. Then secondly, we think about if they have an option contracts or options that are available on their platform, it might be a 100 multiplier. There might be some technology changes that they need to implement, meaning taking it from a 100 multiplier to one multiplier.
It's not just one, you know, one solution that we need to do to get the next fast-growing retail platform. There's an evolution that needs to happen. One is an education evolution that we expect to conquer over the course of the year. Two, we might help with their implementation about changing maybe the multiplier within their platform. They might, by the second quarter or the third quarter, be able to provide access. Then lastly, educating that retail investor on why this product makes sense for a new derivatives trader. There's a couple parts to it as we think about that universe of retail investors on how they're going to start to provide access to nanos, which will be over the course of the next couple of years.
Rob, anything to add?
Yeah, Rich, I would add one thing. It's, I think why you're seeing this demand is this idea of access and access to data. There's now trading apps that you know, in less than 8 hours you can be up and running and trading. You know, what was the catalyst for that? Maybe it was the pandemic. I don't know. Most likely it was. I think of companies like DoorDash, and I think prior to the pandemic, the idea of ordering my dinner and having it show up at my house was kind of foreign to me and wasn't really gonna do it. Now pandemic drove that. Now it happens, and I'm like, "Wow, this is great.
I'm gonna keep doing this even if the pandemic is on the back end of, you know, not being really relevant anymore." This idea of access is why I think this investor's here to stay and here to stay for the long run. As Arianne points out, I think right now, you know, being that we're very close to when we announced this, that we're bringing Nanos to market, now is the steps where we're lining up all of those. Webull was the first mover. They were very quick to respond, but we are actively having conversations with the rest of them. All of this will be maybe unlike, you know, an institutional product where I think liquidity drives demand more. In this, that customer demand is what's going to drive this product.
Now it's getting the visibility and saying, "Hey, we're gonna come out with this. Do you, one, understand it and two, look at the benefits from it?" Then hearing from the end users saying, "Yep, this is something we want to trade.
My one thing is our customers. They wanna offer multi-asset solutions. If you look at the digital advisory committee we're putting together for Cboe Digital, it includes a lot of these retail firms, some of the crypto-first firms. As we talk to them about Nanos, we're also talking to them about crypto and all the products and tradable products and data we can offer. It's not just a myopic focus on one product or service.
John Bush with Credit Suisse. I had a question on ErisX, kind of a two-part question here. As a U.S.-based entity, how are you navigating the developing regulatory backdrop concerning digital assets? The second part is, I just wanted you to expand a little bit more on how ErisX spot and derivatives offering is differentiated from the current market providers.
Let me start with regulation, Chris, because it was one of the key drivers in our investment. Cboe has had an investment in ErisX since Don and Tom dreamt it up. We have embraced the highly regulated markets and the influence we think, and the transparency and reliability and safety and trust in regulated markets. Very important for us. As the U.S. regulators look into crypto and as the oversight becomes more and more clear, we think we'll be part of defining that process. Very important to us. As you'll know, part of the structure that Chris can touch on and John can touch on is that our partners, the ones interested in investing in ErisX with us, want to provide their customers that uniform experience regardless of asset class.
That means regulation too, because with regulation comes trust. That's kind of view on regulation, but I think importantly, Chris and John, a couple more comments specific to ErisX.
Yeah. What makes it unique is we looked at the addition to the regulation-first approach they've taken with CFTC and all the state regulators. They have spot trading derivatives on the same platform integrated with clearing. That's a unique setup if you look at the different players that are in the space. And there's also a margin futures application before the CFTC that we'll likely modify, and we're being actively transparent with the CFTC and other regulators on our plans going forward as we plan the course, plus the great partner group that Ed mentioned and we've mentioned previously. We think it's a unique asset. While there's relatively modest volumes today, the bones are very, very good. The foundation is laid very well for growth.
Yeah. Thanks, Chris. What I'd add on there is that we really have a seamless technology stack with ErisX that was designed from the ground up to do exactly this thing. What you find in competing platforms out there, it's a range of things. In some cases, they're somewhat cobbled together platforms in order to kind of quickly get to market. Served its purpose, but I think the market's moved on a bit.
In other cases, you see bits of the ecosystem meant to deliver a service direct to retail. That looks different from the stack that we're providing. It's really a wholesale stack with these partners. There's a familiarity there with what we're providing to these partners, where they rely on the infrastructure provider, which we will be as Cboe Digital, and they do what they do best, which is service the customer front line, educate, onboard, customer acquire, et cetera. There's this division of roles that really serves us well in other asset classes. We're excited about that. Last thing I'll say on ErisX is kind of going back to the point about the opportunity set. Derivatives are very important. Spot is important. Again, it's worth mentioning the data.
Think about the bar charts that Brian showed and how the rest of our business kind of breaks down. You see the kind of maturity there. Ultimately, when you get to a place of penetration and maturity, you expect to see data contribute significantly more, derivatives contributing significantly more. Over time, that's our expectation for this platform as well.
Kenneth.
Wanted to take one from the web here.
All right.
Owen Lau from Oppenheimer wants to know, how should we think about the priority of Cboe over the next 12-18 months? Will you prioritize integration over M&A? And how do you balance expansion versus execution? There's also a related question in the queue I'll tie into this. How do you ensure the technology resources aren't stretched as acquisitions are integrated into the current technology stack?
Let me start with the first part of the question, and I'll move on to Chris and Dave on integration and the technology stack. The priority has been as we look out across the globe, we need to be in geographies that allow for competition. That has been the path that we've followed. We think our advantage running this technology stack that Chris and Dave will touch on gives us the foothold being primarily equities, but the roadmap that Dave laid out was from equities, we get to go up that value ladder to derivatives, indices, derived data, and second derivatives. We really like the progression and think right now this is a pretty good time to integrate the companies that we've bought.
As you all know, sometimes the timing on M&A is. We are not driving that timing. Our eyes are still wide open for opportunities to expand our core business of matching buyers and sellers, the traditional exchange business. We love it. From the DNA, I think you've heard from Cathy, the M&A over the last years has given us a really good position to grow this business. I would say that is in integration mode now and working and integrating and bringing those deals to market in a complete way is really what we're undergoing there. I'd say the priority for the next 12-18 is integration, but our eyes are open. Then how do we maintain the quality of and as we expand the set? I think Chris and Dave would be great.
I think as Ed said, our priority is integration, but our eyes are open. As we integrate, we are also growing. We're growing the business and revenues as we laid out today, but we're growing the team also where we see a need for that. Every deal we look at, every integration we look at, we say, "Do they have the adequate amount of people we need in order to scale this business for the long term?" We don't wanna be short-term, short-termist in the way we think. We wanna build this thing for the long term with the right people. We've done that over our history, and we're doing that now with each known integration as we plan. 'Cause each one's a bit different. We have a playbook, but we adjust the playbook.
I'll let Dave maybe talk about Chi-X Asia or whatever else.
Yeah. Thanks, Chris. Yeah, as you say, the playbook is well established. When you look at the assets recently from NEO, MATCHNow, and Chi-X Asia Pacific, they're all exchanges, they're all trading venues, so we know well it's in our lifeblood. We've resourced into that, as Chris said. We're able to therefore deploy ourselves very well across the segments. In particular, coming back to that crucial BIDS network extension, BIDS has its own technology staff, its own technology stack, and so is able to parallelize a lot of this work with this as we go through this. We're able to plan for that.
As we talked about, the organic growth that surrounds that M&A is absolutely crucial, and we're executing on organic growth initiatives with these assets prior to any technology migration and alongside it. When we come through the other side of the tech migrations, according to the roadmap, we're ready to go. We're ready to go with technology and trading protocols that customers want. We're ready with that uniformity of data access, those data feeds into the cloud. Really, we get off to a good start. It's not a case of doing an integration and then thinking about what. It's really that continuous flow of organic growth in between those strategic M&As.
While the question was inorganic, I think it's important in what we learn from our organic expansion. I think, Ade, good intel, while we leaned heavily on the derivatives knowledge we have here in the U.S., in order to come to market in U.S. derivatives, it's not just the technology stack, but it is leaning on the lessons learned in the U.S. market. Maybe just a little bit of insight on how it wasn't just technology and the team coming together in order to launch European derivatives.
Thanks for that, Ed. In launching European derivatives, it's got European in front of it. The effort was global without a shadow of a doubt. The client base is largely gonna be driven from the U.S., and so our U.S. sales force needed to be involved throughout that entire process. The technology is largely rolled out across our U.S. options platforms, so our U.S. development teams were involved. In rolling that out to Europe, however, you can't just take what you have in the U.S. and just plug and play it in Europe. There needs to be tweaks to it. It needs to be made for a European audience, albeit you're looking at the U.S. market structure that you want to impose. Impose is perhaps too strong a word, but that's the model that you want for Europe. Ultimately, clients love what we're doing. I mentioned that chart.
Get stuck there all the time, and clients say, "You deliver this. This is exactly what we've been after." It's been a global effort. Ultimately, very excited about the opportunity ahead.
Thanks, Andy. Alex.
Thank you. This one is for the proprietary product panel, I guess. You certainly gave some, I guess, industry stats, I think particularly on insurance and pension that seem like there's a growing market there. I'm curious if you can bring it back to any sort of other metrics that you can point to that you've been executing against that. Forget retail for a second. We've exhausted that discussion. On the institutional side, you know, when you think about maybe I know you can't see your clients as direct as other exchanges can, but you have boots on the ground.
Just curious if you can point to maybe how many new clients you've potentially added internationally, or what customer groups you have added the most, new participants, asset managers, insurance you added on there, broker-dealers, banks. Just give us a little bit of flavor 'cause we sometimes struggle with, like, what is the structural growth that you're talking about actually happening, and are you executing against it? Thank you.
Great question, Alex. We appreciate it, and I enjoy talking about this because the growth is real. I think we think about it in a couple different ways. There's obviously the investor type, and that's, let's start in the customer capacity on the institutional side. We alluded to the growth not only in pensions, but insurance. But that's just kind of, as I mentioned, U.S.-based, North American-based. As we think about this, we've had to make steps to expand geographically, our geographical approvals in several European countries, traditional European countries where we might not have been able to market.
Now, obviously, with 24/5 and being able to go to APAC and even in the Middle East, we're looking first and foremost at the hedge funds and institutions in those areas and even within, like, the super sovereigns within Australia, where historically we've heard that they do appreciate deploying capital, but maybe that the access has been challenged or that they might have had to explore other ways to deploy capital to hedge that risk. We do view that addressable market is fairly sizable outside of the U.S. jurisdiction. That's the institutional asset manager side.
I think that we will continue to even provide other proprietary products or the other proprietary products that we offer allow for our institutional communities not only to deploy capital in SPX or in VIX, but we're seeing that growth being recognized right now in MSCI, FTSE Russell, as well, and even iBoxx, if I speak to another futures product. There's growing demand in all of these in these proprietary products in the existing institutional community, but more so on the non-North American or the non-domestic institutional community. Where we've also seen some pretty impressive growth as I switch into a non-customer capacity, and I look at our market makers. Our market makers have really increased their footprint within our liquidity ecosystem.
We've had multiple new members join, whether they're providing or they're formally on our floor, or they're providing quotes from an electronic capacity. They might be very strategically focused on futures or strategically focused on equities, where they've seen the growing demand and volumes year over year, especially in U.S. listed options, where they find that they need to be involved in our products and particularly our proprietary trading products. I think to put a stat around it, we have, I think it's probably about 50 or 60 new spots in our new trading floor. All of those spots have been taken, and they're represented by new market makers and existing participants that need more seats.
That's even from a non-transactional side, where we're seeing incremental growth, not only from a transaction perspective, but a non-transactional perspective from that market maker capacity. Yep.
Sorry, just one. Anything else, since you just gave a good stat, maybe any other stats from a sales perspective that you could say when you started here, I forget, two years, three years, maybe your sales organization was talking to X people on an ongoing basis, now that number is Y. I mean, again, just any other help that you could give us, maybe from a sales perspective that implies that there's just more market participants today.
I think we probably could speak to the size of the team. I think when I got here, the size of the team was focused primarily on North America and a smaller team within Europe, and one physical person in Asia. We've probably added five people to that team because of where we're focused on the growing demand. The growing demand had been adding another person or two within North America. Growing demand had also come from the sell side as well as the-.
Market maker capacity in North America, so we've added bodies there. Subsequently, we've added an additional person within Europe, and we're in the process of hiring someone within Asia. Actually, two people, because we need to increase that footprint because the demand has been overwhelmed. I would say, when I started, we're talking about, you know, a team of about 10, we're moving to 15, and that will allow us to really exploit what we're seeing as incoming demand for our proprietary products.
Ade?
Yeah, I wouldn't mind just adding one segment to this, which is European market makers. Certainly when I'm speaking to U.S. participants, European market makers, when I show them that chart again, actually has another effect, which is, "Wow, I actually didn't realize that the U.S. market was that big. Yes, we knew it's big. It's the largest capital markets in the world, but actually there are opportunities for us as well." European market makers, we're getting inbound from those who want to be active in the U.S. options market. It's just one point I thought.
Thank you.
I'd add to that.
Rich.
First I wanna give a shout-out to Ade. I remember him when he was in that other uniform.
Ah.
I recognize him now. Good to see you again. My questions get harder as they go on. You, Dave, you talked about using the European blueprint for going to Canada, Asia and Australia. When you like, maybe I'm looking at this too narrow-minded about equities, but when you look at these European, highly fragmented, one regulatory, not you know, not a single nationalist, but you got the whole European Union. You look at the other markets, Canada, Japan, Australia, highly nationalistic, you know, non-fragmented. What's, you know. Is the playbook a little bit more different than what you, what you sorta compared to Europe, or how am I. Am I too narrow-minded?
I would never call you narrow-minded. The important thing to think about here is that market structure as well as the regulatory themes and tailwinds. I'll talk about APAC and perhaps I'll hand over to Adam from a North American perspective to focus on Canada in particular. That playbook is really strikingly similar. It's always tailored to the local region. Look at Japan and Australia. We get those boots on the ground that we talked about. That's the local market expertise. As you point out, both Japan and Australia are highly domestic, home-biased markets, very focused on what's good for Australia and Japan, of course. Why not?
With those two independent competitors that we now own in those jurisdictions, we are the alternative in Australia. We are the only independent venue in Japan. When we think about those themes of best execution, operational resilience and the products, those trading protocols we can bring to the region, when I look at the spreads in Australia and Japan, I think midpoint, I think Periodic Auctions, great, I think BIDS. Those playbooks or those protocols and the technology is exactly the same. Different regulation, different setup, but actually the market needs, the customer needs are there. The great thing about the point on the global customer base, when we talk to the global banks, brokers and market makers, we talk to them about bringing BIDS and they think, "Well, Japan and Australia are two markets in my portfolio.
How can I leverage the technology that I've done once many times across the world?" That's really that playbook of really meeting those client needs in the different regions. Same thing for market makers. Again, liquidity schemes that we think about that we have in Europe, again, could well apply in a multi-market context in Australia and Japan. Really many opportunities there. Then, a couple of points from me on Canada. Again, highly competitive and mature market, but we've proven we do pretty well in those circumstances. We love the innovation of NEO. We love the listings business that they've got there.
Really, again, with that technology migration and those local boots, those local relationships on the ground, we see ourselves with a great opportunity to really leverage that scale, that independence that we've got, those great relationships globally to say, "Hey, it's worth deploying some of your resources to do this, run with this new innovation in this, in this new geography.
Adam?
Yeah, I think one thing I'd like to add to that is if you heard the common theme here is around like global transaction network and so what we've been doing is having a lot of dialogue with our folks in Australia and Japan, for example. Retail is a large contingent in each of those markets, and can we leverage some of the products and services that we've launched here in the U.S. and bring those to those markets? Vice versa, we've also done that, for example, with Periodic Auctions, right? We recently received approval for that in the U.S., so that's something that's worked well in Europe, we'll look to bring to the U.S.
When you think about the synergies between Canada and the U.S., there's a lot of institutional and sell-side accounts that have Canadian holdings that wanna trade into Canada and vice versa. There's a lot of Canadian accounts that have southbound business that can route to the U.S. We'll leverage those relationships, draw upon our global network, and figure out products and services that work well in all those regions and bring them to each of those markets.
Rich, just one more point on this because it's really a very fundamental driver of our strategy. You're picking up on it, and it crosses many of our lines here. We've observed certain phenomenon in our markets, and we're just responding to them. I think, you know, we walked through the client types and really the top tier clients in each of those categories are operating globally right now. We're responding to that demand, and it's overwhelmingly positive. It's forthcoming with feedback in terms of how we can operate the markets, what tools that these clients have seen in Europe or North America could be brought to bear in these other markets, such that you kind of see an acceleration of opportunity, the more markets you're in.
It may be the case that in Canada or Japan, you may never see a market structure where you've got half a dozen competitors or more like you have in Europe or the U.S. Maybe it only bears two. But two is a very important number, and for many market participants, that's significantly better than one. When you have a day-long outage, for example, which happens on occasion, it can happen to the best of market operators, if there's no real sound backup for that market, that's a problem for the entire economy of the market, and we're here to answer that need.
Okay. Ken.
I wanna take one more from the web before we kind of break for lunch here. This one hasn't come up a ton today, but can you talk about an announcement to enter U.S. Treasuries dealer-to-dealer market? How do you plan to take share, and how do you think about the value proposition there?
Chris and Dave?
Yeah. I'll start, and maybe Dave can finish up here. I mean, U.S. Treasuries is a market we've looked at for years and thought, "What is the right way to enter this massive market that continues to grow?" It is highly competitive, and we looked at it and said, "What is something unique we could bring to the market?" Dave mentioned in his remarks that we're going to bring the BIDS platform that we've deployed very successfully and seen a lot of growth within FX that really brings large-sized orders together with dealer-to-dealer, with curated liquidity using data and analytics, to make sure we're curating that liquidity and experience to reduce market impact. It's not an also-ran sort of offering.
This is very, very purpose-built for what we see as a great need in U.S. Treasuries. That's why we're excited about it. It's also, you know, if you think about return on invested capital. We like to grow things organically in addition to all the M&A you've heard us talk about. This is a great organic effort for us that's relatively low spend with a really nice upside for the low spend.
I think you definitely covered it there, Chris. Thematically, when you think about it, as Brian touched on, we only enter new markets or offer new services when we think we've got a differentiator, when we've got a differentiation, some added value we can bring to the customers at the end of the day. It's that customer-led innovation again, and certainly, the FX team have the technology, the customer reach, as well as that differentiated, liquidity curation piece, which is gonna be fundamental to the dealer-to-dealer community to improve those market participant outcomes.
Great. Well, I think on behalf of the management team, it has been great to spend time with all of you in person and those of you virtual. We appreciate the time and the interest in Cboe. I know, Ken, you've got a couple of words to wrap up, but thank you all. Really, really appreciate giving us the time.
Hit that about three times, I just wanted to thank everybody who showed up in person for the event today. I know we covered a lot of really great information, and it's the first time we've done one in 10- years, so a lot has changed over that time period. Clearly, if you guys have questions after the event, feel free to reach out, Debbie and myself, management team. We can get whomever we need to in the mix there. I just wanted to thank everybody for participating and, for the group here, we'll move on to lunch. Thanks everyone.