If ETF trades received enough traction across Europe on the BATS Chi-X Europe model, the European ETF industry, which has been lagging behind the U.S. market, could begin to experience greater volume activity. Currently, ETF exchange volumes in Europe represent around 4.8% of total European equity volumes, whereas U.S.-listed ETFs account for over 20% of daily reported volumes, reports Leland Clemons for Financial News.
Additionally, BATS employs the Competitive Liquidity Provider (CLP) program to incentivise market makers, or authorized participants, to augment liquidity in ETFs on the exchange – market makers help create and redeem ETF shares, which help bolster efficiency in the ETF market.
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.