LONDON (Reuters) – BATS Global Markets is sticking with a plan to move its Chi X platform, Europe’s largest share trading venue, to its own technology, after a software bug forced the exchange operator to take the embarrassing step of pulling its own listing last week.
The pledge to press ahead with its technology plan comes days after the glitch which caused mayhem in US stock markets and called into question BATS’s challenge to incumbent stock exchanges, as well as the stability of high speed trading.
BATS, an acronym for “Better Alternative Trading System,” suspended trading in BATS shares and alerted investors to “system issues” around mid morning in New York.
The erroneous trades were later voided and late on Friday BATS said it would cancel its initial public offering and return money to investors who had bought its shares.
Still, BATS Europe, wholly owned by BATS Global Markets, said it would switch Chi X Europe, which is the venue for about one fifth of all share trading in the region, to its technology platform next month, on schedule.
“We plan to move ahead with the Chi X Europe migration to BATS technology on April 30 as scheduled and yesterday completed the first dress rehearsal with no issues,” a spokeswoman for BATS Chi X Europe said on Sunday.
BATS Europe wants to move Chi X Europe, which it bought three months ago for about $300 million, to its own, in house developed platform to make Chi X faster and cut its cost of technology maintenance.
The spokeswoman stressed Friday’s software bug was found in technology related to changes it had made to enable its Initial public offering in the United States, and trading in Europe was not impacted.
In 2006, Mr Cummings told a local Kansas City business newspaper, “Make no mistake, our long term plan is to be one of the three largest equity markets in the United States.”.
REPUTATIONAL DAMAGETrading analysts said on Sunday the Chi X technology migration was unlikely to be affected by the software glitch as neither Chi X nor BATS Europe support IPOs.
“we suspect this problem was linked to the fact that they had to introduce a whole load of new code for the Initial public offering, an area in which they are relatively inexperienced,” said Niki Beattie, chief executive of consultancy The Market Structure Partners.
BATS technology has performed well in Europe and BATS Europe has had fewer major technology glitches than some of the region’s largest exchanges, Beattie added.
But Simmy Grewal, senior analyst at research house Aite Group, said the reputation of the BATS platform had suffered a huge blow.
“Events on Friday will have massive implications going forward, as BATS looks to move into listings and futures trading in Europe,” she said.
She also questioned where the pulled Initial public offering left BATS investors, which include Citigroup Inc (C.
Founded in 2005, and headed by 45 year old Joe Ratterman, BATS has captured about 11 percent of US equity market volume and is now the third largest platform in that market, after the NYSE Euronext (NYX.
The two exchanges had about a quarter of European share trading on their systems at the time.
Oliver Ilie is a business journalist based in Sydney, Australia. Oliver has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Oliver spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.