ICAP and BATS collaboration sees €212 billion of trades

ICAP routed €212 billion of notional trades from its cleared equity basket through Bats’ ETR.

ICAP has routed €212 billion of notional trades through Bats Exchange Trade Reporting (ETR) since the launch of ICAP’s cleared equity basket solution in April 2015.

Bats Europe and ICAP launched the equity basket, which enables cash equity baskets to be traded anonymously on-exchange and cleared, to “deepen liquidity.”

Users submit equity trades through ICAP’s multilateral trading facility (MTF), which are then routed to Bats’ ETR tool to be reported and cleared through the central counterparty.

Following the referendum result in the UK on 24 June, ICAP claims it routed 80% of its exchange for physical (EFP) business to Bats’ ETR.

Typically, ICAP said it routes approximately 60%, and the firm expects the trend to continue amid bank balance sheet constraints and reduction of OTC counterparty risk.

Deputy chief executive officer of global broking Europe at ICAP, Garry Stewart, said: “The take-up of our combined solution demonstrates the market interest for fully cleared, on exchange trading in traditional OTC brokered markets.”

Mark Hemsley, chief executive officer of Bats Europe, added that the collaboration “helps improve market safety by reducing counterparty risk.”

Since the launch, 21 trading firms have gone live on the EFP solution, with a further 10 expected to connect this year.