BATS Global Markets Inc., one of the three main stock-exchange
operators in the U.S., made aggressive moves against its
competitors on Thursday as it seeks to gain market share in trading
of options and exchange-traded funds.
In the morning, the company announced it would launch an options
market, called EDGX Options, in November of this year. The new
exchange is designed to directly compete with options exchanges run
by Nasdaq OMX Group Inc. and International Securities Exchange.
Later Thursday, BATS said it had hired a senior New York Stock
Exchange officer to run BATS's global exchange-traded funds
business.
Laura Morrison served for eight years as NYSE's senior vice
president for global index and exchange-traded products. At BATS,
she will be a senior vice president and global head of
exchange-traded products, the company said.
"BATS is firing on all cylinders," said Chris Concannon,
president and CEO of the company, in an interview. "Expect more to
come."
NYSE declined to comment.
Mr. Concannon has made some big changes at BATS since joining in
November.
In January, Mr. Concannon and Joe Ratterman, BATS's chairman,
successfully negotiated the acquisition of the currency-trading
venue Hotspot for $365 million from KCG Holdings Inc.
The purchase was fueled by a belief at BATS that more currencies
will trade on exchanges as regulatory pressures force changes in
the global foreign-exchange market, which saw average daily trading
of $5.3 trillion in 2013, according to the Bank for International
Settlements.
BATS, based in Lenexa, Kan., was founded in 2005 by
high-frequency trader Dave Cummings to serve as a cheaper
alternative to the dominant NYSE and Nasdaq exchanges. It has seen
its trading of equities and options steadily grow over the past
decade.
After merging with competitor Direct Edge Holdings LLC last
year, BATS has consistently ranked as the second biggest stock
market by market share in the U.S. BATS Chi-X Europe, owned by
BATS, is the biggest stock exchange in Europe.
Since 2012, BATS also has focused on building up its
exchange-traded funds business. ETFs are baskets of stocks that
trade on exchanges like a single security. They have emerged as a
popular, cheaper alternative to mutual funds for some
investors.
BATS is home to 31 ETFs, all of which it has launched since
2012, while NYSE and Nasdaq have more than 1,000 listed on their
exchanges.
"We are still just in the first couple of innings of ETF growth
and we're expecting a lot more," Mr. Concannon said on
Thursday.
Mr. Concannon arrived at BATS just as it was facing a period of
turbulence.
His predecessor, William O'Brien, was forced to leave BATS in
July 2014. A key reason for his departure was BATS's decision to
settle allegations with regulators that two exchanges run by Direct
Edge before the merger failed to disclose important information
about how their markets functioned. Before the merger, Mr. O'Brien
was CEO of Direct Edge.
In January, BATS agreed to pay $14 million to the Securities and
Exchange Commission in what was the largest fine ever levied by a
regulator against a stock exchange.
Write to Bradley Hope at bradley.hope@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
