BATS Europe, the multilateral trading facility (MTF) owned by US exchange group BATS Trading, has started trading 10 UK-listed securities today – almost one year after MiFID went live. MiFID came into force on 1 November 2007, permitting the formation of alternative trading venues for European equities.
The 10 launch stocks are Barclays, BG Group, BHP Billiton, BP, HSBC, Lloyds TSB, Royal Bank of Scotland, Rio Tinto, Royal Dutch Shell and Vodafone. BATS is the fourth displayed order book MTF to launch in Europe, following Chi-X Europe, Turquoise and Nasdaq OMX Europe.
The first transaction on the new platform was executed by Credit Suisse Advanced Execution Services. Naseer Al-Khudairi, co-head of cash trading, said: “We wish BATS Europe every success in their attempts to establish themselves as a premier execution venue in Europe. Since their US launch in June 2005, BATS has shown phenomenal growth by providing cutting-edge technology and attracting significant liquidity to their platform.”
As with other MTFs, BATS Europe employs a maker-taker pricing model. It has matched Chi-X’s pricing, charging 0.3 basis points for taking liquidity and paying a 0.2 bps rebate for posting liquidity. This makes BATS Europe cheaper than Turquoise, but more expensive than Nasdaq OMX Europe, which has recently adjusted both its fee and rebate to 0.25 bps as part of a pricing promotion – effectively making trading on the platform free.
BATS Europe will now embark on a phased launch, culminating in full trading of all London Stock Exchange, Euronext and Xetra-traded stocks on 19 November.
BATS’ arrival in Europe has been hotly anticipated. Its US incarnation succeeded in grabbing significant market share when it launched as an electronic communications network (ECN) back in January 2006, despite being one of the later ECNs to set up. The platform currently has a US market share of 12%, and is aiming for 15% by the end of the year.
Last Friday BATS US went live as an exchange, having converted from an ECN. It will start trading all US-listed securities by 6 November.