BATS Gets SEC Go-Ahead to Launch Second Options Marketplace

“…And we have liftoff,” as BATS Global has gotten the A-OK from the Securities and Exchange Commission to open its second options trading venue, EDGX Options.

Launch of the EDGX Options system is tentatively set for Monday, November 2, BATS said.

The actual SEC Approval Order from the SEC can be found here.

EDGX Options will be based on a customer priority/pro rata allocation model and is designed to complement its BZX Options market, the exchange operator’s first U.S. options market which had a 10.8% market share in July, which is a pure price-time priority market. The launch of EDGX Options will enable BATS to compete for a new segment of order flow that does not trade on the price-time markets that BATS currently operates.

“We are pleased to receive approval from the SEC to launch EDGX Options and we are looking forward to making our mark in a new segment of the options market,” said Bryan Harkins, executive vice president and head of U.S. Markets at BATS. “Two-thirds of U.S. options market volume is executed on exchanges with a pro rata model and we believe we can help make markets better for participants in this segment of the market through our innovative technology, operating efficiency, market-leading pricing, and first-class customer service.”

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EDGX Options will be located in the Equinix NY5 data center along with the other BATS U.S. equities and option markets and its newly acquired institutional foreign exchange ECN, Hotspot. The technical specifications for the EDGX Options are available on the EDGX Options information page on the BATS website, and members can begin connecting to the new market on August 17, 2015. BATS will be offering numerous testing opportunities leading up to the planned launch date as outlined in the EDGX Options Roadmap and Schedule.

BATS said in a release that it expects that all of the industry’s multiply-listed options will be available for trading on EDGX Options. EDGX Options will leverage BATS’ proprietary technology, including customer connectivity, messaging protocols, quotation and execution engine, order router, data feeds and infrastructure. This approach will minimize the technology effort required for existing Exchange Members to begin trading on EDGX Options.