NEW YORK (Reuters) - Securities regulators approved BATS Global Markets’ plan to list shares and take on the NYSE and Nasdaq in one of their bread-and-butter businesses, the privately held exchange said on Tuesday.
BATS, which now only handles the trading of shares, said in a statement the Securities and Exchange Commission approved rules for its primary listings business, which is now set to launch in December.
It would be the first time in years that a newcomer challenged the globally recognized New York Stock Exchange and Nasdaq Stock Market brands. Kansas City-based BATS would target companies looking to do a U.S.-based initial public offering (IPO), or those looking to swap listing venues.
“We are excited to bring competition to the primary listings market in the U.S. as we believe there is a great opportunity to satisfy unmet needs of current and future public companies and other issuers,” BATS Chief Executive Joe Ratterman said in a statement.
Analysts however are skeptical that BATS, though backed by JPMorgan Chase & Co and Citigroup Inc and other large banks, will have much success. Companies looking to raise capital, and profiles, often turn to the traditional listing venues NYSE and Nasdaq.
“It’s a business with two very strong brands, so it’s almost impossible to break in,” said Diego Perfumo, analyst at Equity Research Desk, a Connecticut-based advisory firm specializing in exchanges.
Early last decade, alternative trading venue Archipelago tried and largely failed to challenge the listings incumbents.
Exchange parents NYSE Euronext, which eventually bought Arca, and Nasdaq OMX Group each derive about 20 percent of total revenues from listings. They offer an array of services and fees, and battle hard for high-profile names such as LinkedIn Corp, which NYSE won earlier this year.
BATS said on Tuesday it would provide “simple, competitive pricing,” and that it held a test open and close on its primary market on August 24. It did not announce any prospective listings, and has said in the past that it would not target specific sectors or regions.
Initial listing fees at BATS would be $100,000 or $50,000, based on the company’s tier, with annual fees of $35,000 or $20,000, according to the newly approved rules.
A listing venue could help BATS pitch to investors its own planned IPO, expected for early next year.
The company — which runs stock-trading venues in the United States and Europe, as well as a U.S. options exchange — is also awaiting European regulatory approval for its planned takeover of trading venue Chi-X Europe.
Reporting by Jonathan Spicer, editing by Dave Zimmerman