The world's largest asset management firm will be the first company to list securities on a BATS Global Markets electronic venue that now competes for listings on the New York Stock Exchange and Nasdaq Stock Market.
BlackRock, which has created the world’s largest family of exchange-traded funds, has agreed to list eight new ETFs with BATS, the two firms said Thursday.
The new funds will be based on international stocks and parameters will be issued by BlackRock's iShares unit.
The iShares funds are based on MSCI indexes. The eight funds listing on BATS Exchange include:
- iShares MSCI Norway Capped Investable Market Index Fund (BATS: ENOR)
- iShares MSCI Australia Small Cap Index Fund (BATS: EWAS)
- iShares MSCI Canada Small Cap Index Fund (BATS: EWCS)
- iShares MSCI Finland Capped Investable Market Index Fund (BATS: EFNL)
- iShares MSCI Germany Small Cap Index Fund (BATS: EWGS)
- iShares MSCI India Index Fund (BATS: INDA)
- iShares MSCI India Small Cap Index Fund (BATS: SMIN)
- iShares MSCI United Kingdom Small Cap Index Fund (BATS: EWUS)
The iShares MSCI Norway Capped Investable Market Index Fund is scheduled to commence trading on BATS Exchange on January 24 and the remaining seven funds will begin trading soon after.
The announcement comes five weeks after BATS announced that firms could begin listing stocks on its Z exchange, either through initial offerings of stock to the public or transfers of existing listings from other venues.
To pull in listings, BATS last month said it would reward trading firms for putting up more competitive bids and offers in the securities of companies list on its electronic markets.
“Our competitive listing provider program is designed to incent market makers to dedicate their focus to providing liquidity and posting tight markets for an issuer, which obviously helps the issuer, but also makes markets better for all participants,” said Joe Ratterman, chairman and chief executive of BATS Global Markets in a statement issued when BATS announced its filing with the Securities and Exchange Commission.
Launched in 2005, BATS has offered rebates to traders which has helped boost its market share to about 11.5 percent of all U.S. stock trades.
The third-largest U.S. stock market operator also completed the development of a Dutch auction system for stocks that list on its BATS Z exchange.
The BATS US Equities Auction Process automatically match orders in BATS-listed securities at a single price using a Dutch auction.
In a Dutch auction, trading begins with a high asking price that is lowered until one participant is willing to accept the auctioneer's price, or a predetermined minimum acceptable price.
Only BATS-listed securities are eligible for BATS Auctions.
Coincidentally, BlackRock offers a series of mutual funds that go by the BATS acronym. The funds, known as BlackRock Bond Allocation Target Shares, are a series of fee-waived mutual funds that invest in fixed income securities.
The BATS funds are not part of the BATS announcement.
Tom Steinert-Threlkeld writes for Securities Technology Monitor.