BATS Chi-X Europe

BATS Chi-X Europe was a London-based pan-European equity trading venue created through the combination of Chi-X Europe and BATS Europe. It operated primarily as an order-driven market for equities and exchange-traded funds listed on traditional European exchanges, including the London Stock Exchange, Frankfurt Stock Exchange, Euronext markets and OMX venues. Its business model emphasized electronic execution, low latency, competitive pricing and access to a broad set of European securities. The business originated with Chi-X Europe, which was established by Instinet and launched in 2007 in anticipation of the European Union's Markets in Financial Instruments Directive, or MiFID. MiFID opened the European equity-trading environment to alternative venues and helped weaken the historic dominance of incumbent national exchanges. Chi-X Europe was the first pan-European equities multilateral trading facility to launch under this new competitive framework. Its ownership later expanded to include a consortium of financial institutions such as BNP Paribas, Citadel, Citigroup, Credit Suisse, Fortis, GETCO Europe, Goldman Sachs, Merrill Lynch, Morgan Stanley, Optiver, Société Générale and UBS. BATS Europe was established by the United States-based electronic exchange operator BATS Global Markets in 2008 and began operating on 31 October of that year. It developed into one of Europe's largest alternative trading venues, ranking behind Chi-X Europe by 2010. In February 2011, BATS Global Markets agreed to acquire Chi-X Europe for $300 million. The proposed transaction was referred by the UK's Office of Fair Trading to the Competition Commission in June 2011 because of concerns about whether the merger could materially reduce competition. The Competition Commission cleared the transaction in November 2011, and the acquisition closed on 30 November 2011; some accounts identify the operational acquisition as completing on 1 December. The combined venue was led by Mark Hemsley, formerly chief executive of BATS Europe. It brought together trading in approximately 1,800 securities across 25 indices and 15 European countries. The two technology platforms were integrated by April 2012, after which Chi-X Europe customers were migrated to the BATS Europe platform. During the period after the combination, BATS Chi-X Europe was frequently the largest pan-European cash-equities venue by value traded. Its reported market share exceeded 25% in December 2011 and was approximately 24.6% in April 2012. The venue initially operated as a multilateral trading facility under the supervision of the UK's Financial Services Authority and subsequently the Financial Conduct Authority. In May 2013 it received Recognised Investment Exchange status from the FCA. This enabled it to operate a regulated market for primary listings in addition to its existing secondary-market trading activities. The company also participated in European market infrastructure initiatives, including the planned consolidation of major cash-equities clearing operations. In 2013 it announced that it would take a 25% stake in EuroCCP, the clearing house that emerged from the proposed combination of Europe's leading cash-equities clearing providers. BATS Chi-X Europe later introduced investor-facing market-data initiatives, including a free UK index series announced in 2016. The series included the Bats UK 100, positioned as an alternative to established UK equity benchmarks and made available with real-time information to private and retail investors. The BATS Chi-X Europe name was subsequently superseded as the European business became part of Cboe's European market infrastructure following Cboe Holdings' acquisition of BATS Global Markets in 2017. The historical brand is therefore treated as defunct, although much of its trading operation continued under successor Cboe Europe businesses.

BATS Chi-X Europe emerged from two independent electronic trading venues created during the liberalization of European equity markets. Chi-X Europe was founded by Instinet and launched in 2007, ahead of the implementation of MiFID's competitive framework. It was designed as a pan-European multilateral trading facility, allowing market participants to trade securities listed on incumbent exchanges while competing on execution speed, operating costs and access. Chi-X Europe's ownership eventually broadened to include a group of major financial institutions. The venue gained substantial market share, particularly in liquid UK equities, and became one of the principal challengers to the London Stock Exchange and other national exchanges. Its growth continued despite management changes: Peter Randall left the chief executive role in 2009, and Alasdair Haynes became chief executive later that year. Chief operating officer Hirander Misra left in 2010. The business introduced additional trading functionality, including the Chi-Delta dark book in 2009, and reported several profitable quarters by the middle of 2010. BATS Europe was established by BATS Global Markets in 2008. Mark Hemsley was appointed chief executive and Paul O'Donnell chief operating officer, and the venue commenced operations on 31 October 2008. By 2010, BATS Europe had become the second-largest multilateral trading facility in Europe behind Chi-X Europe. BATS Global Markets subsequently agreed in February 2011 to acquire Chi-X Europe for $300 million. The proposed transaction underwent UK competition review. The Office of Fair Trading referred it to the Competition Commission in June 2011 to examine whether the merger might substantially lessen competition. The Competition Commission approved the transaction in late November, and BATS closed the acquisition on 30 November 2011. The combined enterprise adopted the BATS Chi-X Europe identity and was led by Mark Hemsley. The consolidated venue covered approximately 1,800 stocks across 25 indices and 15 European countries in early 2012. It recorded more than one-quarter of pan-European equity trading in December 2011 and approximately 24.6% in April 2012, according to the historical account of the business. The technology integration was completed by April 2012, when Chi-X customers were migrated to the BATS Europe platform. The venue's regulatory position also developed. It operated as an FCA-authorized multilateral trading facility under the MiFID framework and was subject to supervision intended to reflect the significance of large alternative venues. In May 2013, the FCA granted Recognised Investment Exchange status. This allowed BATS Chi-X Europe to operate a regulated market supporting primary listings as well as its existing secondary-market activities. BATS Chi-X Europe also became involved in market infrastructure beyond trading. In March 2013, it announced that it would take a 25% stake in EuroCCP, a clearing business associated with the planned combination of two major European cash-equities clearing providers. In 2016, it announced a free UK index series with real-time information for private and retail investors, including the Bats UK 100. The brand's independent existence ended after Cboe Holdings acquired BATS Global Markets in 2017. The European operations were subsequently incorporated into Cboe's European businesses and the BATS Chi-X Europe name ceased to be the principal operating brand. Its legacy is the expansion of competition in European equity trading, the normalization of pan-European electronic execution and the development of alternative-market infrastructure alongside traditional exchanges.

• 2017

  European business transitions into Cboe

  [1]BATS Chi-X Europeen.wikipedia.org

  Following Cboe Holdings' acquisition of BATS Global Markets, the European operation moves into the Cboe organization and the BATS Chi-X Europe brand is superseded.

• 2016

  Bats UK 100 index series announced

  [1]BATS Chi-X Europeen.wikipedia.org

  The company announces a free UK index family with real-time information for private and retail investors.

• 2013

  Recognised Investment Exchange authorization

  [1]BATS Chi-X Europeen.wikipedia.org

  The FCA grants Recognised Investment Exchange status, enabling regulated-market operations for primary listings.

• 2013

  EuroCCP investment announced

  [1]BATS Chi-X Europeen.wikipedia.org

  BATS Chi-X Europe announces a 25% stake in the planned EuroCCP clearing entity.

• 2012

  Trading-platform integration completed

  [1]BATS Chi-X Europeen.wikipedia.org

  The two platforms are integrated and Chi-X customers are migrated to the BATS Europe platform.

• 2011

  BATS agrees to acquire Chi-X Europe

  [1]BATS Chi-X Europeen.wikipedia.org

  BATS Global Markets announces the $300 million acquisition, which is later cleared by UK competition authorities.

• 2011

  Acquisition closes

  [1]BATS Chi-X Europeen.wikipedia.org

  BATS completes the acquisition of Chi-X Europe on 30 November, creating the combined BATS Chi-X Europe business.

• 2009

  Chi-Delta dark book introduced

  [1]BATS Chi-X Europeen.wikipedia.org

  Chi-X Europe adds a dark-book trading service to its electronic execution offering.

• 2008

  BATS Europe launches

  [1]BATS Chi-X Europeen.wikipedia.org

  BATS Global Markets launches its European alternative equity-trading venue on 31 October.

• 2007

  Chi-X Europe launches

  [1]BATS Chi-X Europeen.wikipedia.org

  Instinet-backed Chi-X Europe begins operating as a pan-European multilateral trading facility.

A technology-led, low-latency and lower-cost alternative to incumbent European stock exchanges, serving institutional and professional market participants across multiple national equity markets.

• Pan-European equity exchange · 2011

  BATS Chi-X Europe equities market

  The core service was an electronic, order-driven market for trading shares listed on European primary exchanges. It provided cross-border access to securities in multiple national markets and competed with traditional exchanges through low-latency technology, competitive fees and centralized order matching.

• Dark trading venue · 2009

  Chi-Delta

  Chi-Delta was a dark-book service introduced by Chi-X Europe in 2009. It provided a non-displayed liquidity environment alongside the firm's visible order-book activity, giving institutional participants another mechanism for executing eligible European equity orders.

• Equity index · 2016

  Bats UK 100

  The Bats UK 100 was part of a UK index series announced in 2016. The initiative was intended to provide a free alternative source of UK equity-index information, including real-time information aimed at private and retail investors.

• Exchange listing service · 2013

  Regulated-market listing services

  After receiving Recognised Investment Exchange status from the FCA in 2013, the business was authorized to operate a regulated market for primary listings in addition to its multilateral trading facility and secondary-market services.

• 2016

  Launch a free UK index seriesProduct launch

  Background

  Index products and timely market information were important tools for broadening a trading venue's visibility beyond professional execution clients.

  Action taken

  The company announced a free UK index series with real-time information, including the Bats UK 100.

  Aftermath

  The initiative expanded the brand's market-data and investor-information activities, although later product continuity under the historical brand is unclear.

  Source

• 2013

  Take a stake in EuroCCPM&A

  Background

  European cash-equities clearing providers were planning a combination intended to create the EuroCCP entity.

  Action taken

  BATS Chi-X Europe announced that it would acquire a 25% stake in EuroCCP.

  Aftermath

  The decision extended the company's role from trading-venue operation into post-trade market infrastructure.

  Source

• 2013

  Expand into regulated-market operationStrategy

  Background

  The venue had previously operated as a multilateral trading facility and sought authorization to support a broader range of exchange activities.

  Action taken

  The FCA granted Recognised Investment Exchange status in May 2013.

  Aftermath

  BATS Chi-X Europe could operate a regulated market for primary listings alongside its existing MTF activities.

  Source

• 2012

  Consolidate the two technology platformsStrategy

  Background

  The combined business needed to reduce operational duplication and provide customers with a unified trading architecture after the acquisition.

  Action taken

  BATS Chi-X Europe completed the technology integration and migrated Chi-X Europe customers onto the BATS Europe platform.

  Aftermath

  The combined venue operated through a single principal platform while retaining broad pan-European market coverage.

  Source

• 2011

  Acquire Chi-X EuropeM&A

  Background

  Chi-X Europe and BATS Europe were the two leading alternative pan-European equity venues, and combining them offered scale in technology, liquidity and market coverage.

  Action taken

  BATS Global Markets agreed to acquire Chi-X Europe for $300 million. The transaction was referred for UK competition review and subsequently approved.

  Aftermath

  The acquisition closed in November 2011 and produced the BATS Chi-X Europe business, which later integrated the two trading platforms.

  announced acquisition value. $300 million (2011)

  Source

1. 1BATS Chi-X Europeen.wikipedia.org
2. 2Financial Conduct Authorityfca.org.uk