BATS Chi-X Europe brings competition to Turkey
European trading venue BATS Chi-X Europe is set to expand into Turkey, starting on 3 November. The move is the first time a competitor has entered the Turkish market to take on Borsa Istanbul. It is also BATS’ first new market since it took over Chi-X in 2011 – and the company’s first venture into an emerging market.
BATS will offer trading on Istanbul’s BIST30 index, which consists of the most liquid stocks in the Turkish market. Many of the names on the list are Turkish banks such as Garanti Bank, Yapi Kredi, IS Bank which have a long history. Others are from successful industry sectors such as telecoms and auto manufacture such as Turk Telekom and auto manufacturers such as Tofas Turk Otomobil Fabrikasi.
A spokesperson for BATS cited several reasons for launching in Turkey, chief among them the strong macroeconomic case. Turkey’s BIST100 index rose by 13% in 2014, while the country’s strong economic record over the last decade has gained the country significant interest from international investors. BATS said that its decision to launch in Turkey rather than any other country was driven by feedback from banks and brokers, who had specifically asked for the Turkish market. The market is one of the fastest growing in Europe with €319bn traded in 2013.
BATS also added that the regulatory environment in Turkey is favourable for a new entrant. Turkey has reformed its capital markets law over the last few years and has adopted the European Union’s MiFID standards and definitions, including recognition for multilateral trading facilities. BATS will extend its existing interoperable post trade model to trades in Turkish securities, with participants being able to choose from EuroCCP, LCH.Clearnet and SIX x-clear as their CCP. Trades will be settled in the domestic Central Securities Depositary, Takasbank on a T+2 settlement cycle.
“We make it possible to trade over 3,800 of Europe’s most liquid securities on a single platform, and the addition of Turkey extends that unique model even further across the continent,” said Mark Hemsley, chief executive at BATS Chi-X Europe. “Not only is Turkey the first market we’ve added since the 2011 merger of BATS and Chi-X, but it’s also our first emerging market and we’re looking forward to bringing the efficiencies and competition we have created elsewhere in Europe to Istanbul.”