Hemsley to lead BATS Chi-X Europe; Haynes to step down

US market operator BATS Global Markets will appoint Mark Hemsley as CEO of BATS Chi-X Europe, the pan-European multilateral trading facility (MTF) that will be created following the merger of MTFs Chi-X Europe and BATS Europe.

Alasdair Haynes, currently CEO of Chi-X Europe, will depart after a transition period, once its acquisition by BATS Global Markets is complete. He joined Chi-X Europe in late 2009 as CEO to lead the company through its transition from a subsidiary of Instinet Holdings to an independent company. During the following 12 months he oversaw it becoming the only MTF to achieve a full year of profitability, which consequently led to it becoming a takeover target.

Hemsley joined BATS Europe in 2008 as CEO and is also a senior vice president of BATS Global Markets. He will continue to report to Joe Ratterman, president and CEO of BATS Global Markets.

In February, BATS Global Markets entered an agreement to purchase Chi-X Europe, under which the two companies will combine to form BATS Chi-X Europe. The transaction is expected to close in Q2 this year, pending regulatory approval. The deal, the terms of which have not been disclosed, is believed to value Chi-X Europe at US$360 million and BATS Global Markets at US$1.2 billion.

Hemsley will initially head both BATS Europe and Chi-X Europe, assuming the role of CEO for the combined BATS Chi-X Europe entity following the transfer of business. The full BATS Chi-X Europe management team will be announced at a later date.

According to data provider Thomson Reuters, the two MTFs combined had a 22.3% share of pan-European equity trading by volume, the second largest behind the London Stock Exchange Group, whose London Stock Exchange, Turquoise and Borsa Italiana markets had a combined market share in March of 23.5%, and ahead of NYSE Euronext's Paris, Amsterdam, Brussels, Lisbon and NYSE Arca markets which took a 17.24% share.

“I believe we have a tremendous opportunity ahead of us with BATS Chi-X Europe,” said Hemsley. “Utilising the best of both companies, we aim to create an even more competitive organisation which will continue to lead the way in pan-European equity trading.”

The combined entity plans to run two separate displayed order books, partly to limit the risk of market share leakage, which could occur given that both MTFs currently share many of the same trading members. By operating two separate order books, the combined entity is unlikely to leak much market share from market participants that might otherwise look to diversify their order flow from a single BATS-Chi-X order book.

In addition, both firms continue to expand their offerings. On 29 March BATS Global Markets, which has approximately 11% market share in US equity trading, announced plans to open a US listing venue in Q4 2011, and it is expected to follow suit in Europe.

Meanwhile Chi-X Europe has said it will offer derivatives trading, based on indices developed by Russell Investments, the US-based investment services and equity indices.