Cboe Europe

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Cboe Europe
Founded	2011
Headquarters	London
Key People	David Howson, CEO
Products	Pan-European Stock Market, Multilateral Trading Facility
Website	markets.cboe.com/europe/equities/

Cboe Europe (formerly Bats Europe) was formed when the two leading pan-European multilateral trading facilities, BATS Trading Europe and Chi-X Europe, combined in November of 2011. Chi-X Europe was acquired by BATS Global Markets, of which BATS Trading Europe was a subsidiary. BATS Chi-X Europe was promoted to exchange status by the Financial Conduct Authority in May 2013.

Bats Europe was acquired by CBOE Holdings as part of Cboe's acquisition of Bats Global Markets in February 2017. It was renamed Cboe Europe following the acquisition, and it is a wholly owned subsidiary of Cboe Global Markets, Inc. Cboe Europe is one of the largest pan-European stock market and trade reporting facility operators, with venues in both the UK (Cboe UK) and the EU (Cboe NL).

Cboe Europe is an order-driven pan-European securities exchange that allows participants to trade securities listed in major European markets. The exchange's pan-European offering covers all the components of the Euro Stoxx 50 Index, the eurozone's blue chip index.

Cboe Europe Equities offers trading in more than 6,000 securities across 18 European markets, over one platform and under one rule book. Cboe Europe also offers market data, benchmark indices and an equities block trading platform.

In addition, Cboe Europe’s leading trade reporting service, BXTR, reports the majority of over-the-counter equity market trading executed in Europe.

Connectivity and Services

Connectivity to Cboe Europe is available through a number of routes, such as network service provider, leased lines or co-location. The exchange uses the FIX protocol to enable order entry, amendments, cancellations and receipt of executions by trading participants. Market data is available either as a direct feed or via third-party vendors in a standardized format.

Main services include:

• Displayed order book
• Chi-Delta - non-displayed order book
• Chi-Vision - smart liquidity consolidation service
• Sponsored Access

Cboe Europe also offers a pan-European smart order routing (SOR) service that enable trading participants to access its order books, as well as liquidity at European exchanges, MTFs and dark pools, with a single order.

Clearing and Settlement

Clearing of trades on Cboe Europe takes place through the European Multilateral Clearing Facility (EMCF), which offers a wholesale cash market central counterparty (CCP) solution. EMCF has been the CCP for Chi-X Europe since launch.

In July 2020, Cboe completed the acquisition of the European clearing house EuroCCP, a move that set the stage for a planned launch of Cboe Europe Derivatives, an Amsterdan-based futures and options market. That exchange was launched on September 6, 2021.

Exchange for Physicals

In April 2015, BATS Chi-X Europe and ICAP announced new services designed to enable market participants to trade cleared equity index Exchange for Physical (EFP) transactions anonymously. As part of the new service, BATS enhanced its trade reporting facility, BXTR, by expanding its Exchange Trade Reporting (ETR) services to enable the cash basket of the EFP to be traded on-exchange. Transactions on the enhanced service, which is available to all participants, are facilitated via ICAP Fusion, the firm’s e-commerce portal for trading venues.

BXTR was the largest trade reporting facility in Europe. It is now Cboe Europe's trade reporting facility.

History

BATS Europe launched on Oct. 31, 2008 as a multilateral trading facility with Fortis’s European Multilateral Clearing Facility subsidiary acting as its central counterparty clearinghouse.

In 2010, BATS Europe launched a pan-European smart order routing service for access to multiple market centers, including exchanges, MTFs and dark pools, effective Feb. 15, 2010.

Chi-X Europe was created as a response to the EU’s Markets in Financial Instruments Directive (MiFID), which aimed to increase competition and drive down the cost of trading in Europe. Live trading in European equities began at Chi-X Europe on March 30, 2007. By January of 2010, around 1,200 equities and ETFs/ETCs were available for trading on Chi-X Europe. These stocks were listed in the following markets: United Kingdom; Germany; France; The Netherlands; Belgium; Switzerland; Sweden; Finland; Norway; Denmark; Austria; Italy; Portugal; Spain; Ireland. The majority of stocks in the leading indices in these markets are available for trading on Chi-X Europe. Additionally, stocks from a number of Mid cap indices are also available.

Chi-X Europe was the first Multilateral Trading Facility (MTF) to challenge traditional bourses including Deutsche Boerse AG, London Stock Exchange Group Plc and NYSE Euronext by offering lower fees and faster trading. It was owned by a consortium of global financial institutions following Instinet's strategy of rewarding the largest users of the platform with the opportunity to purchase equity stakes. The consortium included BNP Paribas, Citadel, Citigroup, Credit Suisse, Fortis, GETCO Europe Ltd, Goldman Sachs, Instinet, Merrill Lynch, Morgan Stanley, Optiver, Société Générale, and UBS. While Chi-X Europe was developed and launched by Nomura subsidiary Instinet, it is not a part of Instinet's Chi-X Global subsidiary, which was created a year later.

BATS Chi-X Europe launched its pan-European listings business in November 2013 with trading in two exchange-traded funds. The new ETF products are the iShares MSCI Emerging Markets UCITS ETF and the iShares MSCI World Minimum Volatility UCITS ETF. iShares is the ETF platform of asset manager BlackRock.

On April 3, 2014, the exchange said it had started offering tiered pricing to its customers, meaning a sliding scale of rebates to customers placing orders to trade on its platform and savings to customers who accept the orders. The move was designed to recapture market share from competitors the London Stock Exchange and NYSE Euronext, which already offered tiered pricing.

In September 2014 BATS announced a partnership with independent exchange BX Swiss that allows it to offer cross-listings for ETFs and trade reporting services for Swiss stocks.

Also in 2014, BATS Chi-X Europe started trading in Turkey's most liquid stocks.

BATS Chi-X Europe introduced a block-trading initiative in the second half of 2015 in advance of the European MiFID II rules that will restrict dark-pool trading. The regulations, which took effect in 2017, were set up to cap trading away from public exchanges except for the biggest orders. BATS' European arm had been part of a consortium of banks and asset managers developing a block trading venue, but later removed itself to launch its own venue.

In 2015 the exchange introduced continuous auctions for share trading, allowing investors to trade large blocks of shares without worrying about being fastest to market. Auctions are typically held at the beginning and end of the trading day but BATS was the first to offer them throughout the day. The new order book was set to go live on October 19, 2015.

In early 2017 Bats Europe teamed up with the financial information provider FactSet to launch two new indices designed to provide insight into the impact of Brexit ahead of Article 50 being triggered by the UK government. Dubbed the Bats Brexit 50/50 indices, they are designed to act as barometers for assessing how Brexit will affect UK companies by analyzing the performance between those that generate a large portion of revenues from the UK.

In March of 2017 the company launched Bats LIS, a buy-side focused block trading service for the European equity market.

In 2019, Cboe Europe announced that Cboe Europe B.V., its new subsidiary based in Amsterdam, received authorization from the Dutch Ministry of Finance to operate a Regulated Market (RM), Multilateral Trading Facility (MTF) and Approved Publication Arrangement (APA), regulated by the Dutch Authority for the Financial Markets (AFM). Cboe also continued to operate its Recognised Investment Exchange (RIE) in the UK, offering the same services at both entities. Post-Brexit, Cboe plans to make all EEA-listed symbols available for trading on the Netherlands venue, while UK and Swiss-listed symbols will trade on the UK venue.

In July 2021, Cboe Europe received regulatory approval to launch Cboe Europe Derivatives, an Amsterdam-based futures and options market, on September 6, 2021.

In January 2022, Cboe Europe and EuroCCP partnered with the commission-free platform Freetrade to give retail investors in the UK access to the pan-European markets, beginning with German and Finnish listed stocks. They said they plan to extend access to include Austria, Belgium, Netherlands, Portugal and Sweden.

Key People

• David Howson, Chief Executive Officer (as of January 2020)
• Mark Hemsley, Former Chief Executive Officer (retired in February 2020)
• Adam Eades, President, Cboe Europe BV, Chief Legal and Regulatory Officer
• Jerry Avenell, Co-Head of Sales

Resources

• FSA Registration

Related articles:

• Chi-X Europe Says Volumes Almost Doubled in Second Quarter (Bloomberg, 12 July 2010)
• My corporate jet is easyjet: meet the platform boss taking on the LSE (City AM, 18 May 2010)
• Het is nog steeds David tegen Goliath (De Tijd, 26 May 2010)
• MTFs’ index campaign gains widespread support (The Trade, 1 April 2010)
• The winds of change at Chi-X Europe (Finextra, 30 March 2010)
• Uppstickaren pressar Stockholmsbörsen (Svenska Dagbladet, 18 March 2010)
• Competitors’ rates must fall further – Chi-X’s Haynes (The Trade, 15 February 2010)
• Chi-X Europe CEO plans to keep low-fee strategy] (Reuters, 15 February 2010)
• Chi-X overtakes NYSE Euronext as second busiest European equities market (Financial News, 20 Jan 2010)