NEW YORK — BATS Global Markets received regulatory approval Friday to operate a second U.S. stock exchange, a move that will enable the company to offer more pricing options as it tries to take more market share from key rivals.
BATS expects to launch the new U.S. stock exchange called BATS Y-Exchange, or BYX, in October as part of its expansion efforts. The company also is weighing a push into financial futures, according to chief executive Joe Ratterman.
Kansas City, Mo.-based BATS, founded in 2005, is prepping the new share-trading platform as it matures from an upstart electronic market to a broader-based exchange company, developing an options market and new ventures in listings and stock indexing.
The BYX will enable BATS to charge different fees for stock trading than on its first stock exchange. The company hopes BYX will help broaden its appeal among institutional investors and trading firms targeting a variety of strategies.
The pricing of fees and rebates has become a deciding factor in exchanges’ arms race for order flow, as many traders route their orders to exchanges with lower access fees or higher rebates. It can be difficult to make that pricing attractive with just one exchange.
With an additional exchange, “what we’re looking to do is provide that range of different prices for our customers,” said Ratterman.Ratterman said having a second stock exchange will also enable BATS to experiment with different ways to handle orders.
