Leading equity trading venue BATS Chi-X Europe has no immediate plans to develop a listings business, but may begin with exchange traded funds (ETFs), which have proved successful on its US sister exchange, the firm’s CEO has said.
Despite UK regulator, the Financial Conduct Authority, granting BATS Chi-X Europe’s Regulated Investment Exchange (RIE) status earlier this month, it will maintain focus on its trading, not listing, activities.
The approval of RIE status this month means the venue can issue new equity instruments and facilitate trading by asset managers mandated only to execute on RIE venues – such as some pension funds – which is expected to boost trading volumes.
“We’re not going to rush into the issuance business in Europe and we still see our chief role as facilitating competitive equity trading in the region,” Mark Hemsley, CEO of BATS Chi-X Europe, told theTRADEnews.com.
However, Hemsley said client demand may entice the venue to list specific instruments, such as ETFs in the future.
“We don’t have any immediate plans to list ETFs or corporates. However, the announcement of our new RIE status has led to a number of inquiries from issuers who are interested in our plans and capabilities,” he said.
BATS Chi-X Europe is owned by BATS Global Markets, which operates the BYX and BZX exchanges in the US. In 2010, BATS launched a primary listings business on the BZX Exchange and in January 2012 launched ETF listings with seven ETFs, which this month reached 19 in total. In April, BZX Exchange had the lowest effective spread in 15 of the top 25 exchange-traded products, according to the exchange’s own figures.
“The US based ETFs listings business has been very successful. Based on this, and the inquiries we received from issuers, we are looking at which aspects of our US experience can be applied to the specific requirements in Europe,” Hemsley said.