Bats Europe Launches New Index Series in FTSE 100 Challenge

Europe’s largest stock exchange has launched a series of real-time benchmark indices.

Stock exchange group Bats Europe has today launched a series of UK-focused benchmark index series in which it is hoping to attract business away from the FTSE 100.

The new index will be free of charge to retail investors.

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Bats, which joined the Wilshire 5000 Total Market IndexSM in May, has launched 18 different indices covering large to small cap securities and 12 industry sectors. The indices were developed in consultation with investors and index users and are aimed at offering a robust and trustworthy alternative to incumbent providers.

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Bats UK 100 Index

The indices will provide accurate and reliable index data, transparently calculated and valued using Bats’ market data, and are understood to closely correlate with the FTSE 100, although it has its own methodology and will update firms in the index on a quarterly basis. Hence, it will not always have exactly the same constituents or the same moves as the older index.

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The new index will be free of charge to retail investors and will also be available live, unlike the FTSE which is delayed by 15 minutes to non-paying customers.

Institutions including asset managers and banks will have to pay for the product, but as Bats has its own data from trades on its own exchange, it is looking to undercut the FTSE on price.

Mark Hemsley, CEO of Bats Europe, commented: “As anyone watching financial markets will know, a lot can happen in fifteen minutes and by giving investors an accurate, immediate view of precisely where the market is moving, we can help them make better informed trading and investment decisions. Throughout our history, we’ve sought to make markets better, and more cost-efficient, for investors and traders. This is a first and very important step in improving index provision in Europe.”

Regulation

Bats Europe will apply the same regulatory rigour to its index business that it applies across the 15 markets it operates in as a Recognised Investment Exchange.

The exchange will take account of, and follow, the relevant International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks for its indices. As with all index providers, Bats Europe will apply to its regulator, the Financial Conduct Authority (FCA), for approval as a Benchmark Administrator under the incoming Benchmark Regulation.

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