TRADING VENUES

Mark Hemsley. After the merger

Mark Hemsley has a new role following CBOE’s $3.4 billion acquisition of Bats. The TRADE’s online editor, John Bakie, caught up with the new president for Europe at CBOE Holdings about the takeover and plans for the future.

By John Bakie john.bakie@strategic-i.com July 10, 2017 11:15 AM GMT

When I first met Mark Hemsley four years ago he was CEO of Bats Chi-X Europe, an equities multilateral trading facility (MTF) that had become the single largest trading venue by volume in Europe. However, in the relatively short time since, that MTF has become a regulated exchange, branched out into exchange traded funds (ETFs), foreign exchange (FX) and launched a post-trade reporting service.

The rise of its European business mirrored the rapid success of its US parent Bats Global Markets, founded as an alternative trading system in 2005. It too has seen huge growth that has enabled it to rival much older exchange operators such as NYSE and Nasdaq.

In March this year, Bats once again began a new chapter in its development after it was acquired by Chicago-based derivatives exchange CBOE for $3.4 billion. The TRADE met up with Hemsley to get an idea of how the new, enlarged group is going to look and what its key priorities will be as MiFID II approaches.

Hemsley, now president, Europe at CBOE Holdings, says that integration of the two businesses is already underway.

“It is early days but the main thing we’ve already done is have the CBOE derivatives team in Europe join us in our London office. This means we can introduce them better to out significant customer base in both equities and FX,” he explains.

By bringing the CBOE team in to work alongside their Bats colleagues at such an early stage, the firm is hopeful it will create a two-way dialogue that benefits both sides of the business.

“The CBOE side has been educating the team about the company’s derivatives offer, not just the leading VIX and S&P products buy a range of other derivatives that CBOE offers. Meanwhile we are helping them to get to grips with the complex market structure issues in Europe, particularly MiFID II.”

“We’re organising ourselves with product managers who understand their particular areas. We have the trade desk team which is all local here in London, while FX is very much a global product and derivatives are being handled out of Chicago and Kansas.”

But merely expanding the client databases of the two firms is not in and of itself a reason for two of the biggest names in their respective fields to merge, Hemsley says there is a lot more than this behind the logic of the acquisition.

“The merger enables us to offer a wider products set but it also gives CBOE a much bigger footprint outside of North America, access to the world of FX and equities and of course the Bats technology which CBOE is adopting.”

He is also hopeful the combined group will able to pool its resources to make a big push into Asia, where both firms currently have a relatively small presence, though Hemsley stresses it is growing. The FX offering in particular will be vital as part its strategy to become a truly global operation and to realise its ambitions in the Asian markets.