Seeking growth overseas, BATS Global Markets reported new monthly market share records in Europe, capturing 9.8 percent in European Depository Receipts trading in December and set a new milestone in Spain, according to a monthly volume and year-end activity report. In December, BATS Chi-X Europe captured 15.9 percent market share in Spain’s IBEX 35 securities, up from 4.4 percent in January. In Madrid overall, BATS had 15.1 percent market share, up from 3.2 percent in December of 2012.
Now the largest stock exchange in Europe, BATS Chi-X Europe has been winning over banks and buy-side traders with its American style of trading, focused on speed, low cost and according to last week’s New York Times story. Based in Lenexa, Kansas, BATS is now hosting trading in all the major countries on the continent, and is looking to take on Canada and Japan, according to the New York Times article.
While focusing on global expansion, BATS is also set to close, pending SEC approval, on its pending merger with Direct Edge, another upstart high-speed, technology-driven exchange, during the first quarter of 2014.
“The past year was one of pivotal growth for BATS and we are excited about the opportunities before us as we move closer to the completion of the Direct Edge merger and continue to expand in Europe,” said BATS Global Markets CEO Joe Ratterman in the release. “The Direct Edge transaction combines two innovative firms to ensure long-term global competition while the steps we’ve taken in Europe as a Recognised Investment Exchange have positioned us well for both the short- and long-term,” he said.
By attaining the status of a Recognized Investment Exchange, this entitles BATS to operate a regulated market for primary listings, while making itself available to a wider universe of investors such as pension funds that are required to send client orders for stocks to an RIE.
While European equity volumes grew in 2013, the story was different in the US equities industry. BATS reported 9.9 percent market share in US equities, down from 11.9 percent in December 2012, and 2.3 percent in US options. For the year overall US equities industry volume declined three percent from 2012 to 6.2 billion shares a day vs. 6.4 billion — while European daily equities volume in markets covered by BATS Chi-X Europe rose about 5.5 percent to 32.6 billion Euros from 30.9 billion Euros.
In other moves last year, BATS Europe rolled out BXTRA, a suite of on-and-off-exchange pan European trade reporting services, which in its first month of operation became the industry leader with nearly 40 percent market share, according to Thomson Reuters. In November, it launched a pan-European listings business in November with the listing of ETFs from iShares by BlackRock and Lyxor Asset Management, a subsidiary of Societe Generale Group. In December, BATS also became one of four equal shareholders (alongside Depository Trust & Clearing Corp., ABN AMRO Clearing Bank and Nasdaq OMX) in the new pan-European clearing house EuroCCP, NV, created from the merger of EMCF and EuroCCP.