BATS Readies Consolidated BATS-Direct Edge Feed

The exchange will offer two iterations of the new service, dubbed BATS One Feed, both covering equities from BATS' BZX and BYX markets and Direct Edge's EDGX and EDGA markets: BATS One Summary Feed, which delivers the aggregate top prices across all four markets plus last sale data; and BATS One Premium Feed, which provides the top and last sale prices, plus five levels of aggregate depth across the markets.

"As we said coming out of the merger, we're going to leverage our scale and market size to develop new products... [and] this is the first product that leverages the combined liquidity across our four equities exchanges," says Bryan Harkins, executive vice president and head of US Markets at BATS. "We are aggregating our four equities markets into a single feed that gives clients the most relevant quotes and a summary snapshot across all four markets."

BATS filed for Securities and Exchange Commission approval of the feed last week, and intends to roll it out Aug. 1, but will only begin charging fees on Oct. 1, to give subscribers time to correctly integrate the feed with their own systems.

The feed will be available immediately from BATS' datacenter in CenturyLink Technology Solutions' (formerly Savvis') NJ2 facility and the former Direct Edge datacenter in Equinix's NY5 facility, before the exchange also makes the data accessible to Chicago-based subscribers via CenturyLink's CH4 datacenter and Equinix's CH1 facility, then via Equinix's NY4 datacenter in the first quarter of next year.

The feeds will be available via both TCP/IP and Multicast data transmission formats, along with a Gap Request Proxy service for Multicast clients to request retransmission of mixed messages. The Summary feed requires bandwidth of 100 Megabits per second (Mbps), while the Premium feed requires 250 Mbps.

Officials say the feeds are designed not to replace or cannibalize existing BATS and Direct Edge data products, but rather to appeal to a new audience of users, such as retail brokers, investment banks, media companies and trading platform providers by providing a cheaper alternative to comparable solutions offered by other exchanges. BATS will charge an internal distribution fee of $10,000 and $15,000 per month for Summary and Premium, respectively, and an external distribution fee of $2,500 and $5,000 per month (with per user fees of $10 and $15 for professional users and $0.25 and $0.50 for non-professional users), and enterprise fees of $50,000 and $100, 000, respectively.

"There will be a variety of users: some people just want summary quotes─that is, top of book and last sale. Or firms may want data but have limited bandwidth. And there are vendors that are just looking to provide an indicative quote, such as for use by a website or by back-office personnel," Harkins says. "But for those who want full depth of book and every last order so they understand their place in the queue... this would not be suitable."

Officials say the exchange will consider making the BATS One Feed of US data available to clients in Europe via a regional datacenter, depending on demand from the region.