NEW YORK (Reuters) - BATS Trading Inc., a fast-growing electronic trading platform in U.S. equities, is considering a move into the London market, its chief executive said on Wednesday.
Speaking at the Reuters Exchanges and Trading Summit in New York, BATS CEO Dave Cummings said the company’s investors and clients suggested the expansion and BATS is now thinking seriously about the London move.
Cummings said Kansas City-based BATS would look at the “playing field” in London and at how it could be better than what’s on offer.
But Cummings cautioned: “We should not go into that market if we don’t think we could get 10 to 30 percent (market share) in a small number of years.”
Cummings said BATS, launched in January 2006, considers Nasdaq Stock Market Inc. (NDAQ.O) its most direct competitor.
BATS attracted attention earlier this year with its “January Effect” pricing schedule, which featured an aggressive month-long pricing plan in which BATS set a daily volume record of 322 million shares on a day it handled over 13 percent of Nasdaq-listed volume.
Cummings said BATS was aware of the global forces at work in the exchange and trading sector and was starting to think about other asset classes and locations, with London the most logical step.
A wave of consolidation has drawn investors to financial exchanges and valuations in the sector have soared.
Trans-Atlantic deals like the NYSE Euronext NYX.N merger and an offer for the International Securities Exchange ISE.N by Deutsche Boerse (DB1Gn.DE) have pushed exchanges into the spotlight.
And the rejection by shareholders of London Stock Exchange (LSE.L) to a hostile takeover bid by Nasdaq has not dimmed the largest U.S. electronic stock market’s appetite for deals.
In a thinly veiled reference to Nasdaq’s unsuccessful bid, Cummings said BATS would not try go to into the London market as an “angry American” trying to buy a national treasure.
Any BATS move on the London market could involve finding a local partner, Cummings said.
Indeed, Cummings said BATS jokingly sent LSE chief executive Clara Furse a baseball bat to help her fend off the unwanted advances from Nasdaq.
“We are not looking to flip this ... we are not looking to go public,” said Cummings. Asked if ultimately BATS would go public, Cummings replied: “Ten years or more down the road, who knows?”
He said BATS was not looking to be taken over but would consider any merger that would make sense.
BATS said in March that Merrill Lynch & Co. MER.N had invested in the company, joining investment banks Credit Suisse Group CSGN.VX, Lehman Brothers LEH.N and Morgan Stanley (MS.N).