11
DIY Investor Magazine
/
September 2016
Bats is now applying this methodology to its market
data business and the indices will be calculated using
its own market data; in addition to these 18 UK indices
there are plans to launch benchmark alternatives to
commonly used European indices in late 2016.
‘What we’re saying here is, the level of our pricing is
aggressive, the commercial structures with brokers and
fund managers are flexible and simplified, the data is
real time and that is great for their customers and their
own usage,’ Mr Hemsley said about the launch.
Indices are a particularly attractive business for
exchanges, and they offer the possibility of having
exchange-traded funds (ETF) built from a particular
index, such as an ETF based on the BUK100, for
example.
Bats has won significant business from New York Stock
Exchange and Nasdaq to become the number one
listing venue for exchange-traded funds in the US and
when asked about an ETF based on the UK indices Mr
Hemsley said ‘We would definitely like to see that. We
have already put that into the licensing structure, and
the pricing structure.’
Bats’ entry into areas where FTSE is a strong brand
such as the large-cap arena, could mean some funds
switching benchmarks (witness the WMA’s recently
announced switch from FTSE Russell to MSCI), or
could see the creation of a new crop of products based
upon the new indices and delivering more choice to the
investor.
Quoted in FT Adviser, Gavin Hayes, managing director
of Whitechurch Securities said: ‘I welcome competition
in the market, with Bats looking to undercut the high
charges that FTSE imposes on institutions quoting its
indices and in providing real-time pricing to all investors
free of charge through media outlets.’ Paul Chavasse,
head of investment at wealth manager and fund house
Rathbones, told FT Adviser that an extra provider
should benefit end-investors given the potential for
stale products in a one-company situation: ‘Bats is
providing a comprehensive, robust and low-cost set of
real-time indices to end investors. This will offer more
depth to the market for data provision, giving clients the
information they need to help build and monitor their
portfolios better.’
‘The current crop of bond and portfolio indices are not
always what clients need. [Bats Europe’s launches]
could stimulate examination of products to get better
[products] for clients. If Bats did not enter the market
now then I am not convinced [innovation] would have
come.’ There is no denying the challenge that Bats
faces given the pre-eminence that FTSE has enjoyed
over three decades. However, its launch is in response
to a very real demand from a disgruntled user base and
its solution is an innovative one that brings benefits to
all market participants and in particular to its lifeblood –
the DIY investor.
In the next issue we will be looking at the ways in which
Bats indices are being deployed and get the reaction
from brokers, media partners and asset managers.
Visit
for real-
time data and more information including the rules,
methodology and FAQs.
A LONG TERM COMMITMENT TO MATERIALLY
REDUCING COSTS FOR ALL INVESTORS
THE LEVEL OF OUR PRICING IS AGGRESSIVE, THE
COMMERCIAL STRUCTURES WITH BROKERS AND
FUND MANAGERS ARE FLEXIBLE AND SIMPLIFIED’
