BATS Chi-X Europe is now offering fully interoperable clearing on exchange-traded funds (ETFs) traded on the exchange.
Interoperable clearing means market participants will be able to select either EuroCCP, LCH.Clearnet or SIX X-Clear to clear their ETF trades. The move brings BATS’ ETF offering in line with other equity trading on its order book.
Since launching ETFs in October 2013, BATS has said it wants to fix inefficiencies in the European ETF market. The addition of interoperable clearing for ETFs will enable investors to net their ETF trades on BATS with those on other venues.
Guy Simpkin, head of business development at BATS, said, “The European ETF market is around a tenth of the size of its US equivalent, and changes to simplify market structure will enable it to grow in size and efficiency. We pursued our Registered Investment Exchange license, which is now a year old, with the explicit intention of improving the European ETF market and the momentum we’ve achieved so far reflects our commitment to reform this critical element of the market.”
Interoperability is also being offered to market participants trading OTC using the exchange trade reporting function of BATS’ BXTR service. There are currently five ETFs listed on BATS.