Bats Europe bemoans slow progress on clearing

* Bats Europe frustrated by lack of clearing progress

* Hopeful this will change this month

* Chief executive happy with market share

By Luke Jeffs

LONDON, Nov 1 (Reuters) - A lack of competition among Europe's clearing houses is holding back growth of the region's equity market, the chief executive of ultra-fast trading platform Bats Europe said on Monday.

Trading firms and exchanges are keen to offer clients a choice of providers in the hope competition will force fees lower -- but the clearers have yet to deliver what is known in the industry as interoperability.

"The lack of progress in the clearing landscape around interoperability has been a major frustration for us," said Mark Hemsley, the chief executive of Bats Europe.

"The lack of competition is holding back the growth of the European equity market."

Bats Europe, owned by a group of investment banks and high-frequency traders, has built a 6 percent European market share since its launch two years ago, according to data from Thomson Reuters.

Bats Europe and its trading rivals Chi-X Europe, the London Stock Exchange (LSE.L) and NYSE Euronext (NYX.N), tend to use one clearing house. Doing business with more than one would be too complicated, meaning the clearers have virtual monopolies on those businesses.

Four of the region's main clearing houses - LCH.Clearnet, EMCF, EuroCCP and SIX x-clear - were late last year working to create the links needed to enable competition.

But British, Dutch and Swiss regulators stepped in at the eleventh hour, telling the clearers to delay the launch because they were concerned about systemic risk.

The four firms said two weeks ago they were confident the regulators will drop their objections, and Hemsley said the industry expected implementation next year.

Clearing houses act as central counterparties (CCPs) to trades conducted on an exchange or alternative platform, ensuring that individual firms are not on the hook in the event of a default by a counterparty.

The value of CCPs was underlined after the collapse of Lehman Brothers in September 2008 since when U.S. and European regulators have been passing into law rule changes that require a broader range of asset types to use clearing houses. (Editing by David Cowell)