BATS Chi-X Europe to launch pan-European listings business

Reuters

LONDON, Oct 7 (Reuters) - BATS Chi-X Europe, the largestalternative trading venue in the region, said on Tuesday itplans to launch a pan-European listings business in November.

The company, a subsidiary of U.S. exchange operator BATSGlobal Markets, said two BlackRock iSharesexchange-traded funds (ETFs) will be the first products to tradeon the exchange.

ETFs are essentially mutual funds that trade on exchanges like individual securities and carry lower fees than mutualfunds.

They have become increasingly popular among retail investorsseeking cheap access to indexes without having to buy underlying securities.

BATS Chi-X Europe, which was granted investment exchangestatus by the British financial regulator in May, hopes its newlisting business can further boost the $350 billion European ETFmarket, which lags behind its $1.5 trillion U.S. counterpart.

Traditionally European ETFs have been issued and traded onone or more national stock exchanges. A trade is settled in thenational securities depository of the country in which it isexecuted.

If an investor based in one country wants to buy or sell anETF listed in another, he or she must have depository accountsin both countries, keep each account updated with any changes inthe positions and follow post-trading rules in bothjurisdictions.

BATS Chi-X Europe Chief Executive Mark Hemsley said thepan-European exchange will make trading ETFs more efficient, astrades can be cleared in one venue and settled in a depositorydesignated by the ETF issuer.

The end result will be greater liquidity in European ETFsand lower costs, he said.

Hemsley added that the new business puts BATS in a uniquecompetitive space versus national exchanges like the LondonStock Exchange and Germany's Deutsche Boerse,which also list ETFs.

"It's difficult for incumbent exchanges because they canonly offer what they have been offering ... nationally orientedsets of listings," Hemsley said.

"We've got fairly unique attributes in terms of being apan-European business and a RIE (Registered Investment Exchange) status, which together are reasonably difficult to replicate."

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