US-based exchange operator BATS Global Markets currently has two new US exchanges in the works, but will soon turn its attentions to its next move, possibly away from home territory, according to Randy Williams, the firm’s vice president of US sales and communications.
BATS is scheduled to launch a US options exchange in Q1 next year, and has recently announced plans to launch a second US equities exchange, BYX, to complement the existing BATS Exchange. BATS expects BYX to start operating in Q2 next year. The firm also operates lit and non-displayed pools in Europe.
“We have got our hands full with the options exchange and the new equities exchange, but it will not be long before we are pushing into something else,” Williams told theTRADEnews.com. “We are still in the process of moving ahead as aggressively as possible to take our market model to as many asset classes and geographies as we can. There is a lot of demand out there for efficient trading platforms that offer aggressive pricing and that are very customer-centric.”
BATS is likely to look at entering markets such as Canada and Brazil, for example, and trading asset classes beyond equities in Europe. “There are so many different things that we need to drill down on in all those areas to see what is the next move for us,” said Williams.
The launch of BYX mirrors the strategy of BATS’ biggest rivals in the US equities market, Direct Edge, Nasdaq and the New York Stock Exchange, all of which operate dual equities platforms. “The new exchange allows us to do some different things on the pricing front to give customers more flexibility,” said Williams. The pricing for BYX has yet to be determined and is unlikely to be announced until shortly before the exchange’s launch.
While the new exchange will offer different pricing to the existing BATS Exchange, the intention is not necessarily to attract a different type of customer or a specific type of order flow.
“Approximately 215-220 firms trade on BATS Exchange every day,” said Williams. “We think we can get the same companies to trade on BYX, but with some different pricing we hope we can encourage them to trade more.”
BYX will use the same trading technology, location and connectivity as BATS Exchange.
BATS Exchange’s matched market share of US equities trading was 9.98% in August, making it the third-largest exchange and the fourth-largest equities trading platform. BATS Europe’s market share of pan-European equities trading for the same month was 2.66%, making it the third-largest displayed MTF.