BATS Exchange may enter FX and UST


BATS the US exchange operator, that is preparing for IPO, stated in their amended SEC filings (page 6), that they were  considering an expansion into new instruments such as US treasury securities and other fixed income products, FX and US derivatives.

BATS has great technology, and following last years merger with the Multi Trading Facility (MTF) CHI-X in Europe, traded 24.6% worth of pan-European equity trading last month, making it the region’s largest trading venue, according to figures from data vendor Thomson Reuters.

It will be interesting to see whether BATS look to enter FX, and target the HFTs shops, who make up the bulk of the FX volumes on the CME.

Extract from SEC filing below

  • Expand into New Asset Classes and Broaden Our Geographic Reach. We plan to continue to expand into new asset classes and new countries where we see opportunities to leverage our technology platform to capture market share. We are currently considering a variety of opportunities, including the trading of U.S. Treasury securities and other fixed income products, foreign exchange, U.S. futures, and other derivative products, and expansion into Brazil and Canada. We are currently a party to a memorandum of understanding with Claritas, a Brazilian asset management firm, to explore opportunities in the Brazilian market, including the potential creation of a new exchange in Brazil. Our goal is to enter at least two new markets by the end of 2014.
  • Leverage Chi-X Europe Acquisition. We believe that our acquisition of Chi-X Europe, which we completed on November 30, 2011, will further our position as a leading transatlantic exchange operator and will solidify us as a preeminent pan-European trading venue. We expect to benefit from synergies as a result of the acquisition, including the transition of Chi-X Europe to our trading platform, which we expect to be completed during the second quarter of 2012. We believe the combination will improve our competitive position, enhance our profitability through scale and cost efficiencies and provide us additional opportunities to influence European market structure developments for the benefit of our customers, including through registering as an exchange, which we intend to pursue in 2012.
  • Pursue Strategic Opportunities. We intend to seek additional opportunities to grow through strategic alliances or acquisitions that are complementary to our business or that enable us to enter new markets or provide new products or services. Our focus will be on opportunities that we believe can enhance or benefit from our technology platform, provide significant market share and profitability and are consistent with our corporate culture. We believe that the establishment of a public trading market for our common stock will enhance our ability to pursue strategic opportunities by providing a currency with which to execute future acquisitions.

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