BATS Chi-X Europe (BATS), the largest stock exchange in Europe and part of the parent group BATS Global Markets, has restructured its trading tariffs to incentivize more consolidated price formation, according to a BATS statement.
The new trading tariffs from BATS represent a bid to foster deeper liquidity as the exchange continues its agenda to fortify the European marketplace for exchange-traded funds and products (ETFs/ETPs).
BATS boasts nearly $1.67 billion (€1.5 billion) in ETF volume on its order books across Europe, coupled with nearly twice as much traded over-the-counter (OTC). Overall, the majority of activity is clustered in approximately forty ETFs that focus principally on commodities and blue-chip indices.
As a result, BATS will introduce separate rebates and tariff charges for participants trading ETFs and ETPs in the CXE Lit Book, its largest single order book the exchange presently operates. Consequently, the exchange aims to capture a higher proportion of market share and entice more OTC activity amongst European market participants.
Finally, BATS is also slated to initiate a free offering of ETF listings beginning on June 1, 2015.
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According to Mark Hemsley, CEO, in a recent statement on the tariffs, “Over the past two years we’ve worked very hard to improve market structure for the benefit of ETF trading and investing in Europe. The market is significantly undersized – a quarter of the US’s AUM and 12% of the value traded in the US1 – which is a direct result of highly fragmented liquidity and settlement that harm the development of even the biggest ETFs.
In the U.S., BATS is the leading market for trading of ETFs and has a stated objective of being the #1 ETF listings marketplace. Notwithstanding the significant issues inhibiting the European ETF market at present, these aims are global, and our continued innovation around ETF pricing is a significant next step in the right direction.”
“With the addition of Laura Morrison as Global Head of Exchange-Traded Products to our existing team, the ETF industry as a whole should expect future initiatives from BATS to improve the global marketplace for exchange-traded instruments,” he added.
Earlier this month, BATS Chi-X Europe revealed its volumes for the month ending April 2015, illustrating its best month to date for its US Options market, according to a recent BATS statement.