BATS Chi-X Europe seeks to extend Spanish gains

Pan-European multilateral trading facility (MTF) BATS Chi-X Europe has again extended its Spanish pricing promotion, after becoming the first alternative venue to grab over 5% equity market share in the country.

The promotion – which covers trading, clearing and settlement costs on the Chi-X Europe order book – will now run beyond its current end of June expiry date until the end of September.

Under the promotion, the rebate for passive executions in all IBEX 35 stocks will be 0.3 basis points, instead of the standard 0.2 bps. Participants that trade in excess of €200 million per calendar month will also have their gross central counterparty clearing fees and settlement costs (for a maximum of two settlements per stock) refunded for six selected securities.

The six stocks qualifying for the post-trade cost reduction comprise Banco Santander, BBVA, Iberdrola, Inditex, Repsol and Telefonica.

The promotion was first implemented in October 2011, before BATS Global Markets completed its acquisition of Chi-X Europe. The MTF accounted for 5.37% of trading in Spanish blue chip stocks last month.

Liquidity in Spanish stocks has taken longer to materialise that other European markets because of complex post-trade issues that previously required alternative venues to establish a relationship with the local central securities depository. While these restrictions have been lifted, settlement fees are higher for MTFs compared to the domestic exchange and the settlement cycle is longer in Spain compared to other European markets.