Bats Europe is to license technology from US block trading venue Bids to launch a new service for the European equity market.
Bats LIS (Large in Scale), which is subject to regulatory approval, is an indication of interest (IOI) negotiation and execution platform that will allow market participants to negotiate large blocks in European equities without revealing their intentions to the wider market, says the exchange operator.
The platform is designed to provide support for a designated broker model and brings together the block flow of both the buy and the sell-side, allowing for greater crossing opportunities. IOI disclosure and interaction is controlled by the buy-side dealer via customisable trading tools, including minimum block size and counterparty scorecarding and filtering based on past trading behaviour.
Mark Hemsley, CEO of Bats Europe, says: “We’ve listened to the buy-side community in Europe and understand their unique challenges in trading large blocks of stock and we believe that our new LIS service will help them better execute their large in scale trading activity. Bats LIS provides the buy-side with a MiFID II compliant platform that offers IOI protection tools and full control over their IOI until execution to protect against information leakage.”
Under MiFID II, which is scheduled to come into effect on 3 January 2018, large in scale trading will benefit from one of the waivers enabling market participants to negotiate trades without the need for pre-trade transparency, thus protecting firms wishing to conduct business in large blocks from unfavourable market movements based on information made available in the market.
Hemsley says Bats Europe will commence a phased go-live for Bats LIS by the end of the year. Pricing details will be shared closer to launch date.