Concannon to Replace Ratterman as BATS CEO, Ratterman Becomes Chairman

In a series of dominoes falling, Concannon replaces Joe Ratterman, who has been the exchange operator's CEO since 2007.

Ratterman will take back over as chairman of the board, replacing Paul Atkins, who will continue working at his consulting firm, Patomak Global Partners. Ratterman ceded his role as chairman following its stalled initial public offering (IPO) bid in 2012.

"We are at a unique point in our company history where we are experiencing high watermarks in market share and profitability, and we are also poised for significant future growth and expansion globally," said Ratterman, in a statement. "I see this as a good opportunity to change the nature of my role at BATS and take on the chairman responsibilities, and I'm pleased to pass the baton to a leader as qualified, talented and dedicated as Chris. He has already proven to be a great addition to the BATS team and I have no doubt that he will take the company to new heights."

A spokesperson for BATS tells Sell-Side Technology that Concannon will remain in New York, but will spend "a large portion of his time" in the Kansas City, Mo. office, which is where Ratterman resides, working side by side with the staff there.

IPO Next?

According to a Reuters report, Concannon said that making another go at an IPO bid "is a logical next step...but it's not something we are planning at the moment."

Meanwhile, the Wall Street Journal is reporting that "the company [is preparing] to take another stab at an IPO, according to people familiar with the matter."

Concannon joined Nasdaq as its president on December 15, 2014. He was previously at Virtu Financial, serving as the market maker and high-frequency trading firm's chief operating officer for five years. Before that, he spent six years at Nasdaq as executive vice president of transaction services.

"I came to BATS last year after getting to know the company as a competitor, customer and board member and immediately felt it was a great fit," said Concannon, in a statement. "It's unique to become CEO of an organization with so many transformative opportunities on the horizon and I'm excited to build on the amazing track record assembled in such a short period of time. I look forward to great times ahead with my BATS colleagues as we grow together and expand our global presence."

When he joined BATS, Concannon was basically replacing former president William O'Brien, who abruptly left the company last July. O'Brien was the exchange operator's president after Direct Edge completed its merger with BATS on Jan. 31, 2014. He had been CEO of Direct Edge since 2007, but left soon after a heated debate on CNBC with author Michael Lewis and IEX founder Brad Katsuyama in which he defended his exchange's practices regarding high-frequency trading.

The argument generated international headlines. It's still unclear if he left due to pressure from that event, but Ratterman, who had held the CEO and president roles from June 2007 through Jan. 2014, took back over the role of president, in addition to keeping his CEO post—more quietly.

Big Shoes

Concannon, who became BATS president in December 2014, has big shoes to fill.

When Ratterman first took over as CEO, the exchange ─ then known as BATS Trading, had 25 employees working out of a single office in Kansas City, Mo. According to the company, BATS is now the largest stock exchange in Europe; the second-largest exchange in the US; and operates an options market that has doubled in size in the past year.

Last month it was announced that BATS had agreed to buy Hotspot FX, the institutional spot Foreign Exchange (FX) market and property of KCG Holdings, for $365 million. Hotspot FX has a client base of 220 banks, market makers, hedge funds and institutions, and who registered $31.7 billion in average daily volume in Q4 2014. Subject to regulatory approval, the deal is expected to be closed in the first half of 2015.

Also last month, BATS announced that the migration of Direct Edge's two stock exchanges ─ EDGA and EDGX ─ into its proprietary technology platform had been completed.

And finally, BATS has also agreed to settle a case with the US Securities and Exchange Commission (SEC) over the way order types were described by Direct Edge on its exchanges for $14 million.

The penalty is the largest ever levied by the US equity market watchdog against an exchange operator, and relates to issues at Direct Edge prior to its acquisition by BATS.