BATS Global Markets Files for a New IPO Aiming to Raise $100 million

The company shares that its electronic FX unit Hotspot intends to begin offering forwards, swaps and options.

Global stock markets, options and foreign exchange operator BATS Global Markets has filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC) just a day after the Federal Reserve raised interest rates. With the uncertainty about when the central bank will make its first move to the upside out of the way, BATS Global Markets is aiming to raise $100 million.

Delving into the company’s S-1 form reveals that Morgan Stanley and Citigroup will be acting as the the underwriters’ representatives. The company will get listed on its own stock exchange- BATS- which currently represents about 21.1 per cent of the U.S. stock market.

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Aside from the representatives mentioned above, the underwriters of the IPO will be Merrill Lynch, Pierce, Fenner & Smith, Credit Suisse Securities, Goldman Sachs, J.P. Morgan Securities, Jefferies LLC, Barclays, Nomura & Sandler O’Neill & Partners, L.P.

Key Metrics of BATS Global Markets and Hotspot

BATS Global Markets is featuring in its IPO filing some crucial data – trade execution has represented about 44.7 per cent of the firm’s revenues, with the remaining 55.3 per cent being non-transaction revenues. The firm holds second place amongst U.S. exchange operators and is the biggest in the European Union.

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The company’s net revenues for the first nine months of 2015 amounted to $285.8 million, which is an increase of 27.7 per cent when compared to last year. In 2014, the company generated a total of $307.5 million in net revenues. The EBITDA margin of operations until September 30th, 2015 amounted to 60.4 per cent, which compares with 54.1 per cent for the first nine months of 2014.

The company has recently expanded its reach into foreign exchange after acquiring the electronic communications network (ECN) Hotspot FX from KCG. The company is currently holding about 11.5 per cent of the market when compared to all other venues that are publicly reporting their foreign exchange markets transaction volumes.

Details About Hotspot Plans

The company has provided some details about its plans when it comes to its foreign exchange unit. After the launch of the new matching engines in New York and London, the firm is getting ready to start offering non-spot FX trading instruments.

With the majority of the $5 trillion a day turnover on FX markets coming outside of the spot market, BATS Global Markets intends to start offering FX forwards, FX swaps and FX options.

Hotspot is also intended to expand its capabilities when it comes to supporting additional automation and algorithmic trading to increase market penetration into certain client segments.

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