US trading venue operator BATS Global Markets has received approval from the Securities and Exchange Commission to launch its primary listings business.
The new service, which will launch in December 2011 on BZX, one of two US stock exchanges operated by BATS, will provide issuers with an additional venue for initial public offerings (IPOs), stock listing transfers and dual-listed stocks. NYSE Euronext and Nasdaq OMX are currently the only two markets for listing US stocks. According to consultancy Dealogic, there have been 49 IPOs on Nasdaq OMX so far this year with a value of US$7.34 billion, compared to 54 IPOs on NYSE Euronext which had a value of US$26.19 billion.
BATS plans to differentiate its listing service from NYSE Euronext and Nasdaq OMX in terms of customer service and visibility of stock ownership across the fragmented US market environment.
Tier one issuers, i.e. larger firms, that want to list on BZX will have to pay US$100,000 upon applying to the exchange, while smaller, tier two firms will be charged US$50,000. The annual fee for tier one firms is US$35,000 and US$20,000 for tier two firms.
BATS is currently working with members and market data service providers to provide the technical specifications necessary to interact with its new primary market, including the market open and market close auction process.
“We are excited to bring competition to the primary listings market in the US as we believe there is a great opportunity to satisfy unmet needs of current and future public companies and other issuers,” said Joe Ratterman, president and chief executive of BATS Global Markets. “Creating a competitive alternative to the incumbent exchanges that brings simple, competitive pricing and superior technology coupled with our world-class customer support, will drive innovation in this market and allow issuers more choice.”