BATS Trading has announced plans to launch in Europe, putting further pressure on traditional exchanges.
Their aim is to capitalise on the opening of the European markets to
new execution and trading venues, such as Chi-x, Smartpool, Turquoise,
Virt-x, MarkitBOAT, Rainbow and more. Something that has been actively
promoted by the implementation of Europe’s Markets in Financial
Instruments Directive, MiFID, in November 2007.
BATS announcement should strike a little bit of fear into some of the traditional and new players.
way of example, some traditional US players dismissed BATS as a ‘few
servers in a trailer park’ and yet they are now competing head-to-head
with NASDAQ and the NYSE.
According to BATS, they now claim
that they trade 8% to 10% of all US equities, which is phenomenal
considering that they only launched two years ago. Maybe their success
is due to the fact that their trailer park servers are designed to
handle high-speed, high-volume and anonymous algorithmic trading, and
that’s what everyone wants these days isn’t it?
Equally, being backed
by Deutsche Bank, JPMorgan Chase, Credit Suisse, Lehman Brothers,
Merrill Lynch and Morgan Stanley should stand them in good stead.
Maybe this is why they are likley to be granted full exchange status
from the SEC.If they do the same in Europe, then whoever thought MiFID was a damp squib will have to think again.