Banque Nationale de Paris-said Tuesday it would purchase Cooper Neff, a Philadelphia-based options trader and market maker.

With the acquisition, BNP, will become one of the top three options traders in the United States, according to Philippe Bordenave, head of BNP global markets. The others are units of NationsBank Corp. and Swiss Bank.

The $250 billion-asset BNP, which operates 26 trading rooms around the world, will acquire about 80% of Cooper Neff now. The remainder -- an equity index market-making operation based in Chicago -- will be acquired next year. Pending regulatory approval, the deal is expected to be closed by the end of the year. The price was not disclosed.

"Our weak point was the U.S. market," Mr. Bordenave said from London Tuesday. "The U.S. is where options were born. It is a necessity to create an alliance with an established options house in the U.S."

BNP is one of several French financial institutions that have been aggressively expanding options trading and derivative-related operations in this country.

Last month, the Federal Reserve Board authorized Fimat Futures USA, a subsidiary of Societe Generale, to execute and clear commodity trades.

Credit Lyonnais is expanding its U.S. trading operations. Credit Agricole is doubling its New York-based trading staff and recently obtained Fed approval to broker nonfinancial commodities derivatives through its Chicago-based Credit Agricole Futures Inc. subsidiary.

Greater Reach

According to Roy Neff, a founding partner of Cooper Neff, the alliance with BNP gives his company a larger geographical reach.

It also opens new markets. Mr. Neff noted that his firm now trades only in listed options.

"We've been looking for OTC access for a long time," he said. "We also will get increased geographical access to do what we do well in overseas markets."

Mr. Neff said he now expects to compete with the major U.S. players on an equal footing.

"With BNP we get their credit rating and customer base," he said. "The implications for the other banks is that we hope to meet all of our customers' needs. It's whatever the market will bear."

Risk-Control Philosophy

Richard Cooper, the other founding partner of Cooper Neff, said risk control "is a kind of religion" for the firm, and that BNP shares the philosophy.

"We're not speculators using derivatives," he said. "We're market makers using risk management. One of the good things to come out of this deal is a bigger cushion to absorb any potential losses."

BNP's Mr. Bordenave said derivatives will become a common risk-management tool.

"Derivatives ... will become as common as futures are now," he said.

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