Bats to launch in Europe

Bats to launch in Europe

US-based Bats Trading, the all-electronic alternative to Nasdaq and Nyse, has confirmed it is planning to launch its platform in Europe later this year and compete with the region's domestic stock exchanges.

The Kansas City-based market operator is forming a European division and establishing a data centre for the London area. The firm says it will recruit the executive team for the European venture by hiring from the local talent pool.

Bats is looking to launch its ECN - which is designed to handle high-speed, high-volume and anonymous algorithmic trading for broker-dealers - in the autumn to take on region's exchanges.

The Bats ECN launched in the US in January 2006 and now claims a 8-10% market share in US equities. An aggressive one month pricing plan introduced in January 2007 helped drive trade volumes and forced both Nasdaq and Nyse to adjust their fees.

On 23 January 2008 the Bats ECN crossed the one billion volume mark for the first time, finishing the day with more than 1.18 billion shares. Bats said it on the day it touched roughly 11.3% of all Nasdaq-listed volume, 10.4% of Amex-listed volume and 8.0% of Nyse-listed shares.

Bats is now looking to replicate this success in Europe by targeting algorithmic traders that need low-latency systems.

In a statement on its European launch, Bats CEO, Joe Ratterman, says: "We're very excited to reach this point and are prepared for all the hard work it is going to take to grow a European market centre."

"It's critical for us to approach this initiative with a strong base of support and we're proud to have the backing of our group of broker-dealer owners," he adds.

Bats has attracted equity investments from a number of Wall Street banks since launching in the US market two years ago. In January the firm said JPMorgan and Deutsche Bank has become the latest firms to invest in the business. Merrill Lynch, Morgan Stanley, Credit Suisse, Lehman Brothers and Citi and also taken stakes in the company.

The firm has also filed an application with the US Securities and Exchange Commission (SEC) to become a fully licensed securities exchange and has hired Eric Swanson - who served at the SEC from 1996-2006 - as general counsel to work on its application.

Bats says it will name the London-based executives that will head its European project shortly. The firm has also retained London law firm Speechly Bircham, which has extensive experience in the financial services industry.

Comments: (0)