BATS Global Markets

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BATS Global Markets, Inc
Type Stock exchange
Location Lenexa, Kansas, United States
Founded June 2005
Owner BATS Global Markets Inc.,
Key people CEO: Joe Ratterman;[1]
President: William O'Brien;[2]
Chairman: Paul Atkins[1]
Currency United States dollar
Volume 1B shares (Jan 2009)
Indexes BATS (withdrawn)

BATS Global Markets is a stock exchange based in Lenexa, Kansas, United States, a suburb of Kansas City. BATS was founded in June 2005 as an electronic communication network (ECN) and its name stands for Better Alternative Trading System.[3]


United States
BATS BZX Exchange, Inc.[4]
BATS BYX Exchange, Inc.[5]
BATS Trading Limited (BATS Chi-X Europe)[6]

United States[edit]

In the United States BATS operates two stock exchanges, the BZX Exchange and the BYX Exchange (The BATS Exchanges), which currently account for about 10-12% of all U.S. equity trading on a daily basis. BZX and BYX are different chiefly because of their pricing structure and the BZX is almost four times bigger than the BYX.[5] BATS is the third largest stock exchange operator in the United States.[7]

In November 2008, BATS converted its ECN to a national securities exchange, BZX, which allowed BATS to participate in and earn market data fees from the United States consolidated tape plans, reduce its clearing costs and operate a primary listings business. In February 2010, BATS expanded into a new asset class by offering trading of listed equity options on BZX. In October 2010, BATS launched BYX, a second national securities exchange for trading listed cash equity securities. BATS launched a primary listings business in the United States on its BZX Exchange in December 2010 and launched its first listings of seven ETFs in January 2012.[8]

With BYX, BATS offered a different pricing model than its larger market, BZX.[9]


BATS entered the European equities markets in 2008, with the launch of BATS Europe, a pan-European multilateral trading facility (MTF).[10]

In February 2011, BATS Global Markets agreed to buy Chi-X Europe, a competitor and largest pan-European MTF at the time, for $300 million. The deal was referred by the Office of Fair Trading to the Competition Commission in June 2011 for further investigation to "determine whether a substantial lessening of competition is probable as a result of the anticipated merger". However, the Competition Commission approved the transaction in late November 2011, leading to BATS closing the deal on 30 November 2011. In April 2011, BATS Global Markets confirmed that Mark Hemsley, CEO of BATS Europe, will be appointed CEO of the combined entity following BATS’ acquisition of Chi-X Europe. By April 2012 the technology integration between the two platforms was complete and Chi-X Europe customers were migrated onto the BATS Europe platform.[11][12][13][14][15]

From January to June 2012, BATS Chi-X Europe was ranked as the largest pan-European equities trading venue in terms of value traded, according to the Federation of European Stock Exchanges.[16]


The company was founded by David Cummings, a computer programmer. Cummings said he was inspired to start the company after observing Archipelago Holdings be acquired by the New York Stock Exchange and Instinet be acquired by NASDAQ within a week of each other in 2005. After the launch of BATS, other brokerage firms, hedge funds and other clients became involved with the company. Cummings publicized the BATS service by sending emails to companies highlighting the niche that could be carved out by trading on platforms other than the big two—NASDAQ and NYSE.[17] The niche that he sought for the company was for it to be "a neutral, private, broker-dealer owned, semi-profitable utility" with no party owning more than 20 percent.[18] He noted that the consolidation of the New York Stock Exchange and NASDAQ eliminated competition and they raised prices for their services. The BATS system was intended to charge less.[19] Among the items it did to draw customers was to offer free listings to companies with shares that traded a certain amount each day.[20]

Cummings stepped down in 2007 and was replaced by Joe Ratterman who had been associated with the company from the start. Cummings said in his resignation, "As BATS prepares to become an exchange, my ownership of a broker-dealer precludes me from serving in management". Cummings returned to his position as CEO at Tradebot.[18][21] Under the leadership of Joe Ratterman, in March 2008, BATS entered the European equities markets by establishing a multilateral trading facility (MTF) to compete on a pan-European basis against the incumbent securities exchanges. BATS Europe was formally launched in October 2008.[8]

Initial public offering[edit]

The company attempted to go public on March 23, 2012, as the first listing on its own exchange, but later withdrew the IPO the same day due to a disastrous glitch in the company's trading systems. The glitch resulted in BATS’ stock price falling from the original $16 offering price to as low as 4¢ a share. Three erroneous Apple trades on the BATS exchange triggered a circuit breaker which temporarily halted trading in that stock. Those trades were later canceled. BATS halted stocks on its exchange that were affected by the glitch and included stocks with ticker symbols beginning with letters A to BFZZZ. It later reopened trading in the affected symbols but decided to withdraw the BATS stock offering.[22][23][24]

Following the failed IPO, the BATS board of directors decided to separate the roles of chairman and CEO. Joe Ratterman had previously held both roles. Ratterman received the “unanimous support” of the directors to keep the positions of CEO and president.[25] In July 2012, BATS named Paul Atkins, a former U.S. Securities and Exchange commissioner, to the role of non-executive chairman of its board of directors.[26]

System issue[edit]

In January 2013, BATS admitted that what it called a "system issue" had generated problems with more than 400,000 trades, going back as far as 2008. Specifically, it admitted that prices had been executed that were “equal to or less than the so-called national best bid and offer price”, in violation of Reg NMS.[27]

Notable officers[edit]

Eric Swanson, who worked at the Securities and Exchange Commission as a lawyer from 1996 to 2006, and subsequently at Ameriprise Financial as Vice President of Regulatory Strategy, is the Senior Vice President, General Counsel, and Secretary of BATS, which he joined as General Counsel in January 2008.[28]

In 2014, company president William O'Brien disputed assertions in the book Flash Boys: A Wall Street Revolt. He was quoted in the New York Times as saying about the book's author, "Michael Lewis clearly has a blind side, as we’ve just discovered". O'Brien was "referring to a previous work by the journalist", the paper reported.[29] O'Brien's Twitter account was active[30] and he engaged in a "heated debate on live TV" with Lewis on CNBC[31] in the first days of the book's release and after an appearance by Lewis on 60 Minutes.[32]

See also[edit]


  1. ^ a b Tom Steinert-Threlkeld (2012-07-17). "BATS Names Former SEC Commissioner as Chairman". Retrieved 2012-08-29. 
  2. ^ Management, Retrieved 2014-04-01.
  3. ^ "Capitalists of the Prairie", Newsweek, 2008-09-12 
  4. ^ "BATS Global Markets". BATS Global Markets. 2012-07-03. Retrieved 2012-08-29. 
  5. ^ a b "BATS Exchange". Retrieved 2012-08-14. 
  6. ^ "BATS Chi-X Europe". Retrieved 2012-08-29. 
  7. ^ McLaughlin, Tim (2012-03-23). "BATS' core business solid, future growth uncertain". Reuters. Retrieved 2012-03-27. 
  8. ^ a b "Amendment #5 to S-1". Retrieved 2012-09-06. 
  9. ^ Peter Chapman and James Ramage (2010-11-24). "Exchanges Sharpen Their Offerings". Retrieved 2012-09-06. 
  10. ^ "US trading system BATS to open European platform". Reuters. 2008-03-31. Retrieved 2012-09-06. 
  11. ^ "Bats wins final approval to buy Chi-X Europe". Retrieved 2012-09-06. 
  12. ^ "BATS Tries to Reboot Its IPO". Institutional Investor. 2012-05-09. Retrieved 2012-09-06. 
  13. ^ "Bats Europe CEO to run Bats Chi-X, Haynes departs". Reuters. Retrieved 2012-09-06. 
  14. ^ Schmerken, Ivy (2012-05-01). "BATS Europe Completes Tech Migration of Chi-Ex - Wall Street & Technology". Retrieved 2012-09-06. 
  15. ^ Jeffs, Luke. "Bats wins regulatory support to buy Chi-X Europe". Reuters. Retrieved 2012-09-06. 
  16. ^ Antoine Gattolliat (2012-08-21). "FESE - Statistics & Market Research - Statistics - European Equity Market Report". Retrieved 2012-09-06. 
  17. ^ "BATS Trading CEO Cummings likes being the catalyst - Kansas City Business Journal". Retrieved 2012-03-27. 
  18. ^ a b Massaro, Kerry (2007-06-29). "Dave Cummings Steps Down As BATS CEO/Prez". Advanced Trading. Archived from the original on 3 February 2010. Retrieved 2012-03-27. 
  19. ^ Grant, Justin. "Dave Cummings: Market Maker". Advanced Trading. Retrieved 2012-03-27. 
  20. ^ "BATS founder says exchange should renew IPO in 2Q". CBS News. Retrieved 2012-03-27. [dead link]
  21. ^ Spicer, Jonathan. "BATS founder pushes for IPO despite "freak" glitch - Yahoo! News". Retrieved 2012-03-27. [dead link]
  22. ^ Olivia Oran, Jonathan Spicer, Chuck Mikolajczak and Carrick Mollenkamp (23 March 2012). "BATS exchange withdraws IPO after stumbles". Reuters. Retrieved 24 March 2012. 
  23. ^ Bremner, Brian (23 March 2012). "The Bats Affair: When Machines Humiliate Their Masters". Bloomberg Businessweek. Retrieved 24 March 2012. 
  24. ^ Rooney, Ben (23 March 2012). "BATS Global Market shares are halted after IPO - BATS: Well, this is awkward". CNN ( Retrieved 24 March 2012. 
  25. ^ Mehta, Nina. "Bats CEO Cedes Chairman Role as Board Said to Delay IPO". Bloomberg. Retrieved 2012-09-06. 
  26. ^ "BATS appoints ex-SEC commissioner as non-executive chairman". Reuters. Retrieved 2012-09-06. 
  27. ^ Schmerken, Ivy (10 January 2013). "Another Technical Issue From BATS Rattles Confidence". Advanced Trading. Retrieved 15 January 2013. 
  28. ^ "BATS Exchange | Management Team". BATS Trading. September 11, 2001. Retrieved February 15, 2013. 
  29. ^ Merced, Michael de la, and William Alden, "Scrutiny for Wall Street’s Warp Speed", New York Times, March 31, 2014. Retrieved 2014-04-01.
  30. ^ William O'Brien, Twitter. Retrieved 2014-04-01.
  31. ^ Patel, Sital S., "‘Epic’ debate on high-frequency trading between Michael Lewis, Brad Katsuyama and William O’Brien", MarketWatch, April 1, 2014. Link to CNBC "Katsuyama vs. O'Brien - who won the fight?". Retrieved 2014-04-01.
  32. ^ Sorkin, Andrew Ross, "Fault Runs Deep in Ultrafast Trading", New York Times, March 31, 2014. With link to CBS program (run on 3/30/14) embedded. Retrieved 2014-04-01.

External links[edit]