The Chicago Board Options Exchange is joining the other options exchanges in a new entity, the Options Regulatory Surveillance Authority, that is intended to serve as a central organization to facilitate collaboration in insider trading surveillance and investigations for the U.S. options industry.

The formation of ORSA is expected to enhance the effectiveness and efficiency of regulation of the U.S. options market system, as well as that of each of the individual options markets, by facilitating the sharing of regulatory resources and information. ORSA was jointly created by the six U.S. options exchanges: CBOE, American Stock Exchange LLC, Boston Stock Exchange, International Securities Exchange, NYSE Arca Inc. (formerly the Pacific Exchange) and Philadelphia Stock Exchange.

The exchanges participating in ORSA have entered into regulatory service agreements with the CBOE to conduct the co-ordinated surveillance efforts through the insider trading surveillance system it developed. Although the CBOE will conduct the insider trading surveillance and investigations for ORSA operations, the six exchanges will share equal authority in regulation, and will jointly plan, develop, and operate ORSA’s regulatory systems and facilities to monitor for insider trading violations.

“We are very honored to lead ORSA’s coordinated surveillance efforts on behalf of the U.S. options exchanges. This is a tremendous endorsement of CBOE’s state-of-the-art surveillance systems and dedicated regulatory staff,” said Timothy Thompson, CBOE senior vice president and chief regulatory officer. “It is paramount that investors have the utmost confidence in financial markets and, with the creation of ORSA, the U.S. options industry is strengthening the regulatory oversight of its markets even further.”

The ORSA plan developed by the options exchanges has just been published by the SEC for public comment, and requires SEC approval.