BATS Opposes NYSE Owner's Stock-Market Reform Plan

By Bradley Hope 

BATS Global Markets Inc., one of the three big stock exchange operators, is opposed to a draft proposal by the owner of the New York Stock Exchangeto reform the U.S. stock market, its CEO said in an interview.

"Two sides are trying to come to a middle ground that leaves the investor in the cold," said Joseph Ratterman, CEO of BATS.

The plan being proposed by Intercontinental Exchange Inc., which bought NYSE Euronext Inc. for $8.2 billion last year, calls for a compromise between exchanges and Wall Street banks that trade on behalf of large investors, according to people familiar with the matter.

Under the proposal, exchanges would cut banks' trading costs to five cents per 100 shares from 30 cents per 100 shares and the banks would agree to a rule that would move more trading away from their so-called dark pools and other off-exchange venues.

Credit Suisse Group AG and Nasdaq OMX Group Inc broadly support the ICE plan, according to people familiar with the proposal.

Mr. Ratterman said the plan was "highly problematic" and would "hurt" investors by increasing costs and reducing options for trading.

"The big problem is they are proposing a one-size-fits-all approach, but it could have a perverse effect across the market," he said.

BATS, based in Lenexa, Kan., favors a "tiered" approach to exchange fees, charging less for highly traded stocks and more for less-liquid stocks, he said. The exchange operator is completely opposed to a "trade-at" rule, which would force more trading onto exchanges, he said.

NYSE, Nasdaq and BATS each handle about 20% of stock-market trades.

Write to Bradley Hope at [e-mail]

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