BATS Global Markets will aim to integrate its European multilateral trading facility (MTF) with Chi-X Europe by Q2 2012, after finally completing the deal to buy the rival MTF.
The US-based market operator first entered into a definitive agreement to purchase Chi-X Europe in February 2011, but faced a series of delays after the deal was referred to the UK’s Competition Commission.
Having now received clearance from the Competition Commission on 24 November, BATS Europe has begun planning for the migration of Chi-X Europe’s trading engine to its technology platform, which it expects to complete in Q2 2012.
Based on November figures from data vendor Thomson Reuters, BATS Europe and Chi-X Europe combined would have had a pan-European equity market share of 24.8%, making it the largest trading venue in the region.
BATS Europe’s CEO, Mark Hemsley, will initially head both MTFs before assuming responsibility for the joint entity following the transfer of business, scheduled for January 2012. A spokesperson for BATS Global Markets said Alastair Haynes, former chief executive of Chi-X Europe, is currently performing a transitional role.
“We are glad to reach this important milestone and will move expeditiously to complete the integration of Chi-X Europe,” said Hemsley, adding an integration timetable would be made available to participants before the end of the year. “We will make the transition process a smooth one so participants can soon begin to enjoy the benefits of deep liquidity, infrastructure rationalisation and product diversity that BATS Chi-X Europe will provide.”
It is anticipated BATS Chi-X Europe will retain the lit and dark order books of both platforms, letting it offer differentiated pricing tariffs and minimise market share leakage.
Additional senior management appointments will be announced at a later date. BATS Europe announced the appointment of Adam Eades as head of regulatory and legal affairs in mid-November. Eades’ appointment follows the departure of Denzil Jenkins, formerly director of regulation at Chi-X, who will join the London Stock Exchange from next year, and Anna Westbury, who left her position as BATS Europe’s regulatory head in August 2011.
“The completion of this deal joins two pioneering companies and together we will continue to be at the forefront of competition and innovation in Europe’s securities markets,” said Joe Ratterman, chairman and chief executive officer of BATS Global Markets. “By leveraging the mutual resources of BATS and Chi-X Europe, we are now even better positioned to keep Europe’s markets competitive, as well as affect market structure reforms that support competition and innovation that ultimately benefit investors at all levels.”