Bats Global Markets Inc. plans to expand its European stock market, one of the region’s biggest, by opening a listings business for exchange-traded funds from BlackRock Inc. (BLK)’s iShares division.
The trading platform will next month list the iShares MSCI Emerging Markets (IEEM) UCITS ETF and iShares MSCI World Minimum Volatility UCITS ETF, Bats Chi-X Europe Chief Executive Officer Mark Hemsley said during an interview. BlackRock’s iShares is the world’s largest provider of exchange-traded funds.
“We’ve been looking at the ETF business in Europe for some time,” Hemsley said in the interview. “Given we are a pan-European business we are trying to create a pan-European product and attract flow and liquidity into the security from across Europe. We will be competing aggressively on listing fees,” he said, adding that Bats will publish prices soon.
Bats already runs a listings business in the U.S., serving as the home market for 20 iShares ETFs. Its attempt to grow that division by offering company listings failed in March 2012, when Lenexa, Kansas-based Bats couldn’t get its own shares trading following the company’s initial public offering.
The exchange owner’s attempt to build out the European unit comes as it seeks to expand its U.S. market share by merging with Direct Edge Holdings LLC. Bats handled about 21 percent of all stock trading in Europe during the past five days, more than any other exchange operator except London Stock Exchange Group Plc, according to data compiled by Bats.
Guy Simpkin, head of business development in Europe, will lead the exchange’s efforts to win listings in the region.
Bats plans to encourage ETF trading by rewarding traders who facilitate transactions by providing quotes, he said. European trading of ETFs lags behind the U.S., providing room for growth, Simpkin said.
ETF transactions in Europe are valued at $2.6 billion a day on average, or 0.75 percent of assets within the securities, he said, citing data from ETFGI LLP. In the U.S., $54 billion of daily trading represents 3.9 percent of assets, the data show.
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