Just as we were looking forward to World Cup fever

beginning to assert its grip at Fidessa Towers,

target="_blank">BATS Europe has reminded everyone

that there are other prizes at stake this summer as it unveiled

the latest addition to its smart routing capability. The new

service is called

href="http://www.batstrading.co.uk/resources/press_releases/BATSEuropeAddsBATS+Routing_FINAL.pdf"

target="_blank">BATS+ Primary and builds on the

CYCLE and RECYCLE smart algos it already offers. The basic idea

is that an order comes into

href="http://www.batstrading.co.uk/"

target="_blank">BATS and then, if it fails to find a

match, those nice chaps at

href="http://www.batstrading.co.uk/"

target="_blank">BATS will forward your order on to

the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE. And, even better, they will

only charge you 0.28 bps regardless of whether your order trades

with them or at the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE.

Mark

Hemsley, CEO of

href="http://www.batstrading.co.uk/" target="_blank">BATS

Europe, confirmed that this price promotion is

scheduled to run for at least the next two months and pointed out

that it's a lower access fee than the current pricing

offered by the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE and is irrespective of order

volume.

href="http://www.batstrading.co.uk/"

target="_blank">BATS is betting that it has title="BATS market share"

href="http://fragmentation.fidessa.com/stats/exchange/BTE.html"

target="_blank">enough liquidity already to interact

with this new flow and so will not have to onward route to the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE too often. Certainly title="BATS Europe" href="http://www.batstrading.co.uk/"

target="_blank">BATS has been successful with

similar promotions in the past as some of the new flow it

attracts will stick even when the price incentive is removed. So,

if

href="http://www.batstrading.co.uk/resources/press_releases/BATSEuropeAddsBATS+Routing_FINAL.pdf"

target="_blank">BATS+ Primary does work then maybe

target="_blank">NYSE Euronext and title="Deutsche Boerse"

href="http://deutsche-boerse.com/dbag/dispatch/en/kir/gdb_navigation/home"

target="_blank">Deutsche Börse should watch out

too.

The idea of market centres onward routing

flow that they can't match is standard practice in the

US where Reg NMS compels venues to route to other destinations

offering a better price. This is in contrast to MiFID which

allows the concept of best execution to be interpreted in a wide

variety of ways by different market participants. The fact that,

in Europe, brokers and venues both offer smart or onward routing

services shows just how confused the whole situation is becoming.

This is especially true as more and more large brokers wade into

the venue space and register their own dark matching facilities

as MTFs with the

target="_blank">FSA. Unlike Reg NMS, however,

MiFID's principle-based approach doesn't

offer much help in all this. Maybe what we need are much clearer

definitions as to how participants compete for the Liquidity

World Cup.

The reaction from Paternoster

Square will be interesting, too - will the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE adjust its pricing (again) or

tough it out until its new low latency

href="http://www.londonstockexchange.com/traders-and-brokers/products-services/millennium-exchange/millennium-exchange-migration/millennium-exchange-migration.htm"

target="_blank">Millennium Exchange platform is up

and running?

Either way, whilst we debate the

merits of omitting Theo Walcott from the final squad and argue

over likely England formations, it looks like we will have to

keep an eye on

href="http://www.batstrading.co.uk/"

target="_blank">BATS' market share

too.

Finally, on the subject of prizes, thanks

to the folks at

href="http://www.waterstechnology.com/inside-market-data"

target="_blank">Inside Market Data for judging the

href="http://fragmentation.fidessa.com/fragulator/"

target="_blank">Fragulator® the title="Fidessa Fragulator® scoops 'Most Innovative' market

data award "

href="http://www.fidessa.com/newsandevents/group/archive/article_20100528.asp"

target="_blank">'Most Innovative Market Data

Project' at their awards ceremony in New York

last week. Let's just hope that the summer sees even

more silverware return to London!