Merrill Lynch has become the latest Wall Street firm to invest in Missouri-based ECN operator Bats Trading. Terms of the investment were not disclosed.
In a short statement Bats says Merrill Lynch has made a minority investment in its business.
The Bats ECN is designed to handle high-speed, high-volume and anonymous algorithmic trading for broker-dealers.
Since its launch in January 2006 a number of brokers have invested in the Bats system including Morgan Stanley, Lehman Brothers and more recently Credit Suisse.
The Merrill deal is just one a series of investments made by banks in small ECNs and regional electronic exchanges and is further evidence that Wall Street firms increasingly view these trading venues as alternatives to the more-established markets run by Nasdaq and Nyse.
Bats says it averaged daily volume of 307 million shares in February, touching about 13.3% of Nasdaq-listed volume and matching about 9.2%. The ECN has recently expanded its offering to include Nyse-listed securities.
In a separate move the Bats ECN has selected telecomms outfit Yipes Enterprise Services to provide Ethernet connectivity services to its electronic trading platform.
Under the deal Bats will offer Yipes as a high-speed, low latency access alternative for new and existing clients.
Commenting on the move Bats CEO, Dave Cummings, says:: "Low latency levels are critical for any connectivity into our network, as is an understanding of the service demands of high-speed algorithmic trading. With markets moving faster and faster, our clients expect trade executions that can keep pace effectively and consistently."
John Panzica, Yipes general manager, financial services, says the Ethernet network delivers high speed, reliability and low latency levels vital to an ECN such as Bats at a lower total cost.
By selecting Yipes, Bats also becomes part of the Yipes FinancialConnect! platform - a network of more than 350 exchanges, proprietary trading platforms, brokerages, hedge funds, institutional investors, and investment managers. Yipes clients can now access the Bats ECN via the network.