Bats Global Markets is acquiring Hotspot FX, an institutional spot foreign exchange market, from KCG Holdings as it seeks further expansion into non-equity trading businesses.

Hotspot’s FX expertise and reputation, along with its technology excellence and global presence, will make for a powerful combination and enable BATS “to have a meaningful and significant impact on the direction of the FX market in the years to come,” Bats CEO Joe Ratterman said in a release.

Hotspot’s average daily volume in the fourth quarter was $31.7 billion, an increase of about 20% from the first half of 2014. Turnover for the global FX market was estimated at $5.3 trillion in 2013.

Getco management had explicitly stated at the time of its Knight acquisition that Hotspot would eventually be sold, noted research firm Aite Group.

“Bats has done a good job in promoting electronic trading of cash equities, rather than listed equity options,” said Howard Tai, senior analyst in Institutional Securities & Investments at Aite Group. “So one would expect, given the support this exchange receives from a core group of highly sophisticated electronic market makers and proprietary trading firms, that they should succeed in promoting further electronification of spot FX markets going forward via the Hotspot trading venue.”

One question is whether Bats will retain the bulk of the current Hotspot management team post acquisition, and whether it will keep the main center of FX operations out of Jersey City, or move them over to Lenexa, Kansas, where Bats’ headquarters is located, added Tai.

The deal invites further M&A activity with exchanges going shopping for the larger or most promising OTC eFX venues, said Javier Paz, senior analyst in Wealth Management at Aite Group. “The latter now have a nice exit strategy at attractive valuations, and may also look at an acquisition as way to grow the business by partnering with the right exchange.”