Nice to see the row over Europe’s consolidated tape has been given a good old stir by
BATS Chi-X as the market was at risk of subsuming to apathy. The problem is that whilst everyone wants a consolidated tape, they want it for different reasons. The point that BATS Chi-X is making is that the fees being charged by incumbent exchanges are
simply too high. This is a tricky one to call as it’s not easy to identify the exact costs involved in the production of market data, or how the incumbents reinvest (as they claim) the profits they make selling it. What is certain, however, is that whatever
incumbents were charging before (when they were the dominant trading venues), it should be less today as they are no longer the only source of price information you need. If you can only provide half the picture, shouldn’t that be reflected in the fees you
charge? The move by BATS Chi-X is clever for two reasons. First it brings this point neatly into the spotlight, and second it is a great way for it to introduce its own market data fees whilst still claiming the moral high ground.
As BATS-Chi-X’s market share of European equities continues to grow, I am sure we can expect it to flex its muscles further.
Let’s just hope that it doesn’t go too far and the whole cycle starts again with new Davids emerging to challenge the new Goliaths – the only difference being that these incumbents will be pan-European rather than national.