LONDON Oct 7 BATS Chi-X Europe, the largest
alternative trading venue in the region, said on Tuesday it
plans to launch a pan-European listings business in November.
The company, a subsidiary of U.S. exchange operator BATS
Global Markets, said two BlackRock iShares
exchange-traded funds (ETFs) will be the first products to trade
on the exchange.
ETFs are essentially mutual funds that trade on exchanges
like individual securities and carry lower fees than mutual
They have become increasingly popular among retail investors
seeking cheap access to indexes without having to buy
BATS Chi-X Europe, which was granted investment exchange
status by the British financial regulator in May, hopes its new
listing business can further boost the $350 billion European ETF
market, which lags behind its $1.5 trillion U.S. counterpart.
Traditionally European ETFs have been issued and traded on
one or more national stock exchanges. A trade is settled in the
national securities depository of the country in which it is
If an investor based in one country wants to buy or sell an
ETF listed in another, he or she must have depository accounts
in both countries, keep each account updated with any changes in
the positions and follow post-trading rules in both
BATS Chi-X Europe Chief Executive Mark Hemsley said the
pan-European exchange will make trading ETFs more efficient, as
trades can be cleared in one venue and settled in a depository
designated by the ETF issuer.
The end result will be greater liquidity in European ETFs
and lower costs, he said.
Hemsley added that the new business puts BATS in a unique
competitive space versus national exchanges like the London
Stock Exchange and Germany's Deutsche Boerse,
which also list ETFs.
"It's difficult for incumbent exchanges because they can
only offer what they have been offering ... nationally oriented
sets of listings," Hemsley said.
"We've got fairly unique attributes in terms of being a
pan-European business and a RIE (Registered Investment Exchange)
status, which together are reasonably difficult to replicate."