Bats Chi-X to Expand MMT

Terry Flanagan

Bats Chi-X Europe will make Market Model Typology compulsory for trade reporting in the second half of this year to allow analysis of the majority of over-the-counter European equity trading.

Mark Hemsley, chief executive officer of Bats Chi-X Europe, told Markets Media: “MMT provides a tremendous set of data for traders to assess interactable liquidity and for regulators to see why orders were executed OTC. MMT will also force exchanges to report their on-book trades in a standardised way.”

Last February the Federation of European Securities Exchanges and FIX Trading Community said that MMT has become a FIX standard to allow standardisation in data from trading or trade reporting venue and create a European consolidated post-trade tape. Bats Chi-X Europe was the first exchange to announce it would incorporate MMT.

“MMT was a big project creating a coherent for framework OTC transactions and the timing was essential for MiFID II,” Hemsley added. “There are not many times in a career that you get to do something meaningful that is praised by the buy side, sell side and regulators at the same time.”

In 2013 Bats Chi-X Europe launched BXTR, an on-and-off exchange trade reporting service.

Hemsley said a number of firms have gone live or are in the process of going live with MMT and the exchange will be verifying consolidated data with traders this quarter. “We plan to make MMT compulsory in the second half of the year, when we’ll then be able to produce reports analysing approximately 75% of European OTC equity trading,” he added.

Bats Chi-X Europe said in a statement this month that more than more than €3.7 trillion was reported to BXTR in 2014 making it the largest trade reporting facility in the region. BXTR set a monthly record last May when €410bn was reported.

Last year the exchange said it averaged a 21.6% share of pan-European trading. In December the exchange reported 22% overall market share and average daily notional value of €9.1bn.

Hemsley said: “January has been excellent as our new fee structure has come into force.” In the first 12 days of trading this month the exchange said European market share is 24.6%.

“Our Spanish market had a very solid year in 2014 and has hit the ground running in 2015,” Hemsley added. “We are focussed on growing our share which has changed how we are perceived in providing access to Spanish equities.”

The exchange said that in the month to date, market share in Spain is 22.7%, up from 18.5% in December 2014.

Bats Chi-X is looking into entering Turkey once it has solved some issues with its settlement providers. “We are looking at other countries across the European Union but we are very driven by where our customers would like to go next,” he added.

Last June the exchange listed the first exchange-traded fund with an international securities structure, pioneered by Euroclear Bank, from Blackrock’s iShares.

“We hope to see more ETF listings as there are structural problems in Europe with multiple listings,” Hemsley said. “A single pan-European listing and settlement though a single international depositary should help build liquidity and we will work hard on that.”

The European exchange also introduced trade reporting for ETFs, which is currently voluntary but will come into force under MiFID II. “There will be another update to that service in the second quarter,” Hemsley added.

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