BATS Chi-X Europe has changed its pricing model on its main lit order book to enhance liquidity in response to growing European trading volumes.
The new pricing model introduces a tiered system for market participants that add liquidity, with rebates varying from between 0.15 basis points (bps) to 0.25bps depending on monthly notional value traded. The new prices apply to the CXE lit order book across UK, Irish, French, Dutch, Belgian and Portuguese securities, including depositary receipts and exchange-traded funds within those listing markets.
BATS said its new prices, which will apply retrospectively from 1 April 2014, will increase competitiveness among European exchanges. In light of improved trading volumes in Europe, it modeled the changes and believes they will help encourage greater trading volumes.
For UK and Irish securities, the previous 0.15bps rebate will apply up to £1.5 billion of monthly notional value traded, with progressively larger rebates available up to 0.25bps above £4 billion. Liquidity removers will still be charged 0.3bps, while subscribers will pay £20,000 per calendar month with a 0.2bps remove charge.
A similar pricing model applies to French, Dutch, Belgian and Portuguese securities, with the starting band of 0.15bps applied to up to €2 billion monthly notional value traded and capped at 0.25bps for those trading more than €4.25 billion.
Mark Hemsley, CEO of BATS Chi-X Europe, said: “Throughout our short history, BATS Chi-X Europe has driven exchange competition and challenged rival business models.
“By introducing pricing tiers, we give our customers the flexibility to benefit from the trend towards greater trading volumes across Europe. Our goal, as always, is to improve the quality of our markets and enhance the overall liquidity available to all trading participants.”
It’s other order books will see no change to their existing pricing, but BATS said it would keep all pricing under review and look to adjust it if it believes it can further improve trading conditions for participants.