need to establish any additional
legal and regulatory jurisdiction
The feedback from our clients after we announced our
intentions after the referendum
result was very positive. They
liked that we were quick off the
mark in making the statement.
We aren’t scratching our
heads and wondering whether
we should change our business
model. We thought about our
plans and we are committed to
being a pan-European exchange.
Our assumptions on MiFID
II when we looked at Brexit, was
that it will still happen on time.
It will likely be in place a year
before article 50 is instigated or
takes effect, and being MiFID II
compliant will be a strong argument for ensuring the UK has
access to the single market.
HM: What problems do you
see in post-MiFID II world?
MH: I think the biggest change
will be felt on the non-equities
side, particularly in some of the
commodities, fixed income, and
possibly even the derivatives
Those have not yet been
exposed to the level of transparency required within the regulatory framework.
There are a lot of businesses
that have been through MiFID
I and are reasonably familiar
with the framework and what
they have to do, but if you are in
an environment which has not
been regulated, then it’s a big
project for those organisations.
Bats is used to this and
instead have looked at the
opportunities, like the large-in-scale and dark pool caps, which
led to the launch of our Bats LIS
platform and periodic auctions.
Both our periodic auctions
and Bats LIS have been built
with MiFID II and available
now, because we think people
will not wait until the deadline
before moving into that mode.
A lot of our launches come
from clients who can see where
their businesses are going. We
have had very good feedback
from those who use our indices,
for example, and our customers want us to add more to the
series, which is something we
are looking to do.
HM: The announcement of
Bats LIS was quickly followed
by Euronext’s block trading
platform launch. What were
your thoughts on that?
MH: The way the Euronext ini-
tiative appears to work is that
you can put large-in-scale trades
onto its lit order book, and Bats
has had that capability since the
It sounds like new order
types, rather than our BIDS
Trading partnered platform, so
I don’t actually think there is
much innovation or anything
new happening there.
Our platform is a software
facility for putting together indications of interest that link to
the exchanges and the brokers
for execution, and to the post-trade environment – but it is a
MiFID II will see an uptake
in block trading with more
pressure on broker crossing
networks, and so less crossing
with the brokers. The buy-side is
consistently calling for new and
innovative trading capabilities.
It is definitely stimulated by
MiFID II, and there will certainly be fewer places to trade
that do not require pre-trade
I expect to see more block
trading taking place on the
facilities we are putting together
post-MiFID II, but at the same
time we are answering a call
which is there now and that is
why we are launching Bats LIS
this year instead of next. n
n “Bats Europe is a pan-European exchange and we are committed to being that in a post-Brexit environment.”