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BATS Opens European Platform
October 31, 2008
The BATS Europe multilateral trading facility (MTF) began its phased introduction today, trading ten equities on the FTSE 100 index. The London-based arm of BATS Trading says that by Nov. 19 it will offer the most liquid stocks listed on the London Stock Exchange, Euronext and Deutsche Borse’s Xetra platform.
One week earlier, Kansas City-based BATS started another rollout, transitioning from an electronic communications network to an exchange. That process, which began with two symbols, is expected to be complete by Nov. 6. BATS applied to the Securities and Exchange Commission for exchange status in November 2007 and obtained approval Aug. 18.
“Similar to our U.S. counterpart, in Europe we expect to offer a deep pool of liquidity, superior technology, aggressive pricing and industry-leading customer service,” Mark Hemsley, chief executive of BATS Europe, told Securities Industry News. “Each of these is critical to our success and has played a significant role in becoming the third-largest market center in the U.S. less than three years after launch.”
BATS Europe’s platform “is about 95 percent the same as the U.S. system,” said Hemsley. BATS is well known for its innovative fee and rebate pricing schedule, and the European platform will continue that tradition, he added.
Calling it a “milestone in the history of BATS and an important day for the European market as well,” Hemsley said in a statement that the company is anticipating “bringing greater efficiency and reliability to traders in Europe, following our mission of making markets better.”
The launch of BATS Europe follows consortium-owned Turquoise’s in August and Nasdaq OMX Europe’s last month as MTFs proliferate under the European Union’s Markets in Financial Instruments Directive, which on Nov. 1 will have been in effect for a year. “The opening of BATS in Europe is another example of the rapidly changing nature of the post-MiFID European marketplace,” said Larry Tabb, founder and CEO of Tabb Group. Europe “is beginning to look a lot like the U.S. market, where there are multiple high-speed, linked markets serving traditional investors and market makers but increasingly propelled by newer electronic liquidity providers.”
In June, BATS announced it had selected Fortis’ European Multilateral Clearing Facility (EMCF) subsidiary as its clearer. Since then, the Dutch government has taken control of EMCF in the bailout of its faltering parent, and Nasdaq OMX Group has agreed to buy a 22 percent stake in the clearing provider. “We’re comfortable with the stability of EMCF and, as we’ve said all along, our participants and the competitive landscape will dictate how clearing unfolds over time,” Hemsley said.
EMCF also handles clearing for Nasdaq OMX’s MTF and Instinet-backed Chi-X Europe. Peter Randall, chief executive of Chi-X Europe, which began operations in March 2007, said his venue “welcomes the launch in Europe of BATS and believes that they will help to further highlight the improved execution quality, lower costs and faster speeds offered to European investors by MTFs.”
