BATS Europe, the pan-European multilateral trading facility owned by US exchange operator BATS, has added a new routing strategy, RECYCLE, to its smart order router (SOR).
BATS Europe’s CYCLE strategy was launched in January, when the firm introduced its routing capabilities.
Orders that are not completely filled as part of the CYCLE routing strategy, which targets one venue at a time, are posted to BATS Europe’s integrated book until matched or cancelled. RECYCLE will route any residual orders from the CYCLE process to external venues from the BATS Europe integrated book when updated quotes on those venues ‘lock’ (i.e. match) or ‘cross’ (i.e. improve on) those orders.
Users can specify whether RECYCLE routes to external venues when their quotes either lock or cross the order, or only when they cross the order.
Like CYCLE, RECYCLE charges 0.5 basis points for routing to displayed venues and 0.3 bps for routing to non-displayed platforms.
BATS Europe is currently one of only two displayed trading venues in Europe to offer a smart order routing service, the other being Nasdaq OMX Europe. Turquoise may soon be able to offer routing capabilities following its purchase by the London Stock Exchange (LSE) and planned merger with Baikal, the LSE’s dark trading and liquidity aggregation initiative. Baikal launched its smart order routing function in June 2009.
BATS Europe had a 4.2% market share of trading turnover across Europe in February 2010, according to data vendor Thomson Reuters.