Bats Chi-X Europe Bolsters Interoperable Clearing

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Bats has long been involved in discussions over clearing efficiency.

Bats Chi-X Europe has announced that it will extend its interoperable clearing program to include exchange-traded funds (ETFs) and exchange-traded products (ETPs).

Participants on the venue will now be able to choose between EuroCCP, LCH.Clearnet or Six X-Clear to clear trades on Bats's order book. The extension allows ETF and ETP trades to be netted with other product types, in an effort to increase cost efficiencies. Participants using the group's BXTR reporting service for over-the-counter trades will also be allowed to use interoperable clearing.

"As the original architects of the interoperable clearing model, we are encouraged that regulators have realised its huge potential in reducing cost and increasing market efficiency in the European ETF and ETP market, which equates to meaningful reform and is long overdue," says Guy Simpkin, head of business development at Bats. "The European ETF market is around a tenth of the size of its US equivalent, and changes to simplify market structure will enable it to grow in size and efficiency. We pursued our Registered Investment Exchange license, which is now a year old, with the explicit intention of improving the European ETF market and the momentum we've achieved so far reflects our commitment to reform this critical element of the market."

The service will be available from June 21, 2014.

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