Pan-European multilateral trading facility (MTF) BATS Chi-X Europe is in discussions with a number of index providers to include its data in some of the region's key trading benchmarks.
As part of its recently-launched market data business, BATS Chi-X Europe will now licence index providers to use its data exclusively, or combined with trading data from other venues, to calculate real-time indices.
Presently, key European indices such as the FTSE 100, DAX or EURO STOXX 50 only reflect trades that have occurred on domestic exchanges.
“Our goal is to ensure that indices used by buy-side firms and the financial media reflect trading on our market,” Mark Hemsley, CEO, BATS Chi-X Europe, told theTRADEnews.com. “While most brokers already include MTF volumes as part of smart order routing logic internally, our customers recognise that indices need to be truly pan-European in nature.”
In September, the two order books operated by BATS Chi-X Europe accounted for 23.4% of trading in the EURO STOXX 50, 28.5% of the FTSE 100, 25.3% of the DAX and 24.1% of the CAC 40.
BATS Chi-X Europe became the first alternative trading venue in Europe to begin charging for its market data at the beginning of this month. The MTF charges members up to €4,000 for level one data and up to €8,000 for level two data. Speaking at the time of the announcement, Hemsley stated the fees levied by his venue for data were part of an aggressive strategy that would put pressure on domestic exchanges to lower their data costs.
The cost of market data is cited by many market participants as one of the key barriers to the creation of a consolidated source of European post-trade data. The review of MiFID, which is currently halfway through the European legislative process, may include a provision that gives regulators the power to intervene if they believe exchanges’ market data fees are prohibitively expensive.