An outage at BATS Europe that knocked out trading on the multilateral trading facility (MTF) for the entire day did not result in a major liquidity shift to other alternative venues, with brokers simply turning off access to the MTF.
Total trading on BATS Europe yesterday reached €262 million, compared to its previous day’s total of
€1.62 billion, according to data from technology vendor Fidessa. Chi-X Europe, which is now owned by BATS Europe’s parent company, BATS Global Markets, traded €6.6 billion on 6 December, compared to €6.7 billion the previous day, while Turquoise, the London Stock Exchange-owned MTF, traded €1.8 billion on Tuesday compared to €1.77 billion on Monday.
“Market volumes were lower yesterday due to broader market conditions. However, we did see incrementally lower volumes in the market from some market participants that arbitrage between trading venues,” commented Adam Toms, co-global head of electronic trading at Nomura. “The impact on broader client trading was minimal as we simply disabled access to BATS on our smart order router.”
Total trading volumes across Europe reached €33.1 billion on Tuesday, compared to €32.8 billion on Monday and €38.9 billion on 2 December, according to the Fidessa data.
According to BATS Europe, a third-party hardware failure at 09.36 GMT caused the MTF to halt all trading.
Although the issue was resolved soon after, BATS took the decision to suspend trading for the remainder of the day after discovering discrepancies caused by the irregular nature of the system failure.
Trading on Chi-X Europe was unaffected by the incident. BATS Europe started trading as normal this morning.
“Once these limited data discrepancies were detected, we decided that trading on the BATS Europe platform would remain halted through today’s trading session,” said Mark Hemsley, chief executive of BATS Europe and Chi-X Europe. “We believe this was the most responsible course of action in order to ensure trade data integrity and an orderly market.
“We strongly regret today’s issue, particularly the interruption in trading for participants. A forensic examination has been initiated and further information will be disclosed after a full analysis is conducted,” he added.
The outage is ill-timed for BATS’ as it has just closed the deal to buy Chi-X Europe and is currently planning the migration of the company’s lit and dark order books onto its core technology platform.