Bats Global Markets, Inc. (Bats: BATS) just reported 2016 highlights, including the April initial public offering, the September CBOE transaction announcement and continued strength across all of its markets, led by record full-year U.S. Options market share and U.S. ETF listings growth.
- IPO: In April, Bats completed its IPO on Bats Exchange of 15,295,000 shares of common stock for $19.00 per share.
- CBOE Transaction: In September, Bats entered into a transaction agreement with CBOE Holdings under which CBOE will acquire Bats to create one of the largest market operators around the globe. The acquisition valued the equity market capitalization of Bats at approximately $3.2 billion as of the date of announcement. The transaction remains subject to customary closing conditions.
- U.S. Options: Bats set a new annual market share record of 11.1% for its U.S. Options business, up from 9.6% in 2015. In addition, Bats had record market share in equity options, of 12.5% and record market share in single leg equity options, of 17.4%.
- ETF Listings & Trading: Bats welcomed 85 ETF listings to its U.S. market, an increase of 145% over 2015. During the year, the company captured 30% of all new ETF listings and 17% of ETF switches from other markets. In December, Bats welcomed 27 funds from eight providers to its U.S. market and, as of January 9th, there are now 144 ETFs listed on Bats in the U.S., from 24 different issuers.
- U.S. Equities: Bats also reported record U.S. Equities average daily matched volume of 1.52 billion shares in 2016 with 20.6% market share vs. 21.1% in 2015.
- Europe Equities: Bats’ European Equities reported 22.9% market share in 2016 vs. 24.4% in 2015, remaining the #1 stock market in Europe. Also, BXTR remained the largest trade reporting facility in Europe with more than €4.8 trillion in transactions reported in 2016.
- Global FX: In Global FX, Hotspot grew market share to 12.5% over 2016 from 11.5% in 2015 and the platform reported a record on November 9th, with more than $64 billion traded.
2016 Highlights:
U.S. Equities
- Bats reported 20.6% U.S. Equities market share for 2016 vs. 21.1% in 2015.
- Bats worked with Nasdaq and NYSE to strengthen U.S. equity markets through the harmonization of key functions
- Bats unveiled the Community Policing Program for its U.S. Equities and Options exchanges in July. The program is designed to further enhance the company’s capabilities in monitoring markets. Related, Bats received approval from the Securities and Exchange Commission (SEC) for the Bats Client Suspension Rule in February. The new rule assists the company in taking swifter action to prohibit manipulative behavior on the Bats Exchanges.
U.S. Options
- Bats reported record average daily volume of 1.75 million contracts with 11.1% U.S. Options market share for 2016 vs. 9.6% in 2015.
- Bats successfully migrated BZX Options to the company’s next generation matching engine in October. Both Bats’ options markets – BZX and EDGX – now operate on the latest proprietary technology.
- Bats announced plans to launch the Bats Auction Mechanism (BAM), new functionality that provides price improvement opportunities for orders sent to EDGX Options. The new service officially launched on January 4, 2017.
ETF Listing and Trading
- Bats welcomed 17 new issuers to its U.S. market in 2016, and the company now has 23 issuers that maintain listings on the Bats ETF Marketplace.
- Bats acquired ETF.com, a provider of ETF data, news and analysis. The transaction closed on April 1st and ETF.com is now an independent subsidiary of Bats. In December, Dave Nadig was appointed CEO of ETF.com.
- Bats received approval from the SEC to adopt generic listings standards for actively managed ETFs. The new standards allow qualifying ETFs to follow an expedited path through the regulatory approval process, helping issuers bring innovative funds to the market more quickly.
- In July, Bats announced a liquidity management provider (LMP) program to incentivize ETP liquidity providers to trade on Bats. In addition, the company further plans to boost its ETP market incentive plan for market makers who play pivotal role throughout lifecycle of ETPs, regulatory approval pending.
European Equities
- Bats’ European Equities business traded €2.7 trillion over 2016 with 22.9% market share vs. 24.4% in 2015.
- BXTR remained the largest trade reporting facility in the region with more than €4.8 trillion in transactions reported in 2016.
- Bats launched a new block trading service for the European equity market called Bats LIS, powered by BIDS Trading. The service rolled out to Bats direct participants in December and will complete its rollout in February 2017 with direct access for the buyside.
- Bats successfully launched a new Indices business in June with the introduction of a UK-focused benchmark index series, comprised of 18 different indices. In December, Bats expanded the product line with eight new indices for the French, German, Italian and Swiss markets bringing the total number of European indices managed by Bats to 26.
Global FX
- Hotspot reported record volume on November 9th, with over $64 billion traded on the platform.
- Average daily notional value on Hotspot’s London matching engine remained steady at $2.0 billion in December, equating to 8.3% of overall volume available on the platform.
- Bats acquired Javelin Swap Execution Facility, closing the deal on November 1. The acquisition accelerates Bats’ plans to offer the trading of non-deliverable forwards for the FX market.
- Bats Hotspot introduced outright deliverable forwards to its market in November.
- Bats Hotspot launched Hotspot Link, a new services that allows customers to build private liquidity pools.
- Technology upgrades made to the Hotspot platform have reduced latency by approximately 400 microseconds. Average latency is now under 150 microseconds.