Bats Europe Steps Up Competition With LSE With Price Promotion For U.K.
Bats Europe, Europe’s second-largest alternative stock trading market, stepped up a campaign to win U.K. business by starting a pricing promotion a month after London Stock Exchange Group Plc changed its fees to win orders.
Starting today, London-based Bats Europe will charge all customers 0.28 basis points to remove liquidity from either their order book or LSE. The firm’s Bats Plus price promotion is on LSE-listed stocks and means the multilateral trading facility will assume the charge if an order is executed on its rival. LSE charges 0.29 basis points as a minimum to those who take liquidity.
“What we are offering is access to that same pool of liquidity at lower price and to all customers,” said Paul O’Donnell, chief operating officer of Bats Europe, in an interview. “You send us an order and it scans our dark pool, then the Bats Europe lit book and then the LSE book. If you are going to the LSE anyway we’ll charge you less.” The price promotion will run to the end of July.
Together with other so-called multilateral trading facilities, including Chi-X Europe Ltd., the region’s biggest alternative trading system, the company is fighting to take business from traditional exchanges such as LSE, Deutsche Boerse AG and NYSE Euronext. LSE changed the fees it charged high frequency traders on May 4, seeking to lure more business from them. The exchange bought Sri Lankan technology-services company MillenniumIT to overhaul its technology and compete better and is moving to a new trading system in September.
Lure Traders
Bats Europe cut fees for both NYSE Euronext and LSE stocks in 2009 to lure traders. The company, which started in October 2008, has said it aims to raise its market share to as much as 10 percent of European trading by the end of 2010. Missouri- based Bats Global Markets owns Bats Europe and the U.S. Bats Exchange Inc. traders.
For the FTSE 100 this year, 4.9 percent of trades occurred on Bats Europe. LSE accounted for 42 percent of trading in the biggest stocks listed on its market with its Turquoise unit drawing 2.4 percent. Chi-X drew about 15 percent and 35 percent was over-the-counter, according to the Bloomberg Fragmentation Score.
To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net
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