Bats chooses Fortis for European clearing

Bats chooses Fortis for European clearing

US ECN operator Bats Trading has recruited Dutch-Belgian banking group Fortis to provide clearing services for its new European trading facility, which is slated for launch in September.

Fortis's European Multilateral Clearing Facility (EMCF) unit has been appointed as a central counterparty (CCP) for Bats' European platform.

Mark Hemsley, chief executive, Bats Europe, says: "We're pleased to announce this key milestone in our 2008 launch program in Europe. The EMCF provides a proven pan-European clearing capability."

The new contract win for EMCF comes a month after the Fortis unit was selected to provide clearing for Nasdaq OMX's new pan-European trading platform, which is also expected to launch in September. Fortis also provides clearing and settlement for Instinet's Chi-X Europe facility.

Jan Booij, MD, EMCF says the deal with Bats is "evidence of our strategy which is based on the simple principles of reliability, price competition and quality of service".

Kansas-based Bats said in March that it would form a European division and launch its ECN - which is designed to handle high-speed, high-volume and anonymous algorithmic trading for broker-dealers - to take advantage of the EU's Markets in Financial Instruments Directive (MiFID) and compete with the region's exchanges.

In April the firm named former Euronext Liffe MD Mark Hemsley chief executive and Morgan Stanley veteran Paul O'Donnell chief operating officer of the London-based unit. It has also selected IT vendor Savvis to host its European platform at its data centre in London's Docklands.

Bats launched in the US in January 2006 and now claims a 10% market share in US equities. In January 2007 it launched a one month aggressive pricing plan that helped drive trade volumes and forced both Nasdaq and Nyse to adjust their fees. The firm is now looking to replicate this success in Europe.

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