Bats chooses Savvis to host European platform

Bats chooses Savvis to host European platform

US-based Bats Trading, the all-electronic alternative to Nasdaq and Nyse, has selected IT vendor Savvis to host its new European equities platform which it plans to launch later this year.

Kansas City-based 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 advantage of the EU's Markets in Financial Instruments Directive (MiFID) and compete with the region's exchanges.

Savvis says it will host the Bats platform at its data centre in London's Docklands. The close proximity to London's financial district can make the transaction process faster for algorithmic traders and significantly reduce latency, says the vendor.

A key part of the deal will allow Bats' customers to co-locate their platforms in the data centre and use Savvis' proximity hosting service to cut transaction times.

Savvis has hosted Bats Trading in the US since its inception in 2005 and provided proximity hosting to the platform's customers since August 2007.

Commenting on the deal, Ken Conklin, SVP, business development, Bats, says: "With the advent of the MiFID, there is real demand in Europe for access to global markets and, in order to make international trading successful, we must replicate the same speed and responsiveness we've displayed in the US."

The Bats ECN now claims an 8-10% market share in US equities. An aggressive one month pricing plan 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 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 has attracted equity investments from a number of Wall Street banks since launching in the US market two years ago. In January JPMorgan and Deutsche Bank became 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.

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