New BATS strategy sources liquidity from LSE
BATS Europe, the pan-European multilateral trading facility (MTF) operated by BATS Global Markets, has released a new onward routing strategy that will initially target liquidity on the London Stock Exchange (LSE).
The BATS+ Primary routing strategy will initially hunt for liquidity on BATS Europe’s integrated order book up to the specified limit price of the order, using the MTF’s inbuilt smart order router. Any shares that remain unexecuted will be sent to the primary market as an immediate or cancel order to look for any further fills up to the limit price. The new strategy is currently only available for UK-listed securities.
The initial cost for using the BATS+ Primary strategy is 0.28 basis points. BATS Europe has also brought down the fees for its existing routing strategies, CYCLE and RECYCLE, to 0.28 bps. Both CYCLE and RECYCLE, which send orders to user-specified external venues before leaving residual orders on either the MTF’s integrated book or re-routing them to external markets, previously charged 0.5 bps for routing orders to lit venues and 0.3 bps for dark venues.
“BATS+ Primary is designed for participants to gain access to BATS Europe and primary market liquidity with lower access fees and no minimum volume requirements,” said Paul O’Donnell, chief operating officer, BATS Europe. “Participants can expect further smart order routing enhancements in the near future.”
Last September, the MTF introduced an inverted price promotion for UK stocks that rebated passive liquidity providers 0.4 bps and charged liquidity takers 0.2 bps. During the promotion, BATS Europe’s share of FTSE 100 stocks increased from 4.11% in August to 7.21% in September, according to its own figures.
According to data vendor Thomson Reuters, BATS Europe traded 4.86% of total pan-European liquidity in May, including an 8.8% share of FTSE 100 securities.