What was the rationale behind the deal?
JD: It diversifies our product offering, so we
extend beyond US equity derivatives and into US
and European stocks, exchange-traded funds
(ETFs), and also US, European and Asian FX
trading. That is a very powerful diversification for
us because those types of products have very little
overlap with what we do today. We hope to be
reaching new customers through their association
with Bats’ current product offerings.
What areas of the deal excite you the most?
JD: One opportunity for us is access to the vast
ETF market and ways to interact with that product set. For example, we could use our existing
index provider partnerships and marry those
with Bats’ listing venues in the US and Europe.
We believe that passive investing is currently
the largest investing trend. We believe investors
will trade the package that makes the most sense
for them, whether it is because of the way their
infrastructure is set up or it is cheaper for them,
so we don’t want to force them to trade in a
futures/options package if an ETF is the best way
to fit that passive strategy. This deal, given Bats’
position as a growing listing venue and the largest
exchange for ETF trading, allows us to speak to
that customer base.
In addition, it opens up new index opportunities. We have an active custom index business,
and we are very excited about bringing that capability to the Bats customer base, the issuers and
sponsors of ETFs that Bats has such fantastic
“We hope to be reaching
new customers through their
association with Bats’ current