The most interesting aspect of the roll-out of Bats’ 18 indices is that it seems to have been carried out in co-ordination with a number of large companies operating within the wealth and investment industry.
Having heavyweights on board such as Hargreaves Lansdown, Rathbones and Charles Stanley Direct points to a couple of significant things.
Firstly it would suggest some level of success is assured, at least during the early days of the offering’s existence. Having these kind of companies on board already makes it a viable endeavor even if nobody else signed up.
Second, the coordinated nature indicates that the range has been created to meet a demand that has been generated already by an increasingly cost conscious investment industry.
As the industry gets squeezed harder on fees, transparency and competition intensifies, its firms will naturally look for ways to make up for any dents in their profits that result.
How successful the new offering will be in the long run is hard to predict with certainty given how entrenched the FTSE benchmarks are, but recent history hints at a bright future for the upstart and perhaps more investment service launches carried out with industry support to come.
Something that while very different has distinct parallels, is the emergence of multi-lateral trading facilities such as Chi-X Europe in 2007, which was brought under the Bats banner in 2011 and subsequently achieved Recognised Investment Exchange status in 2013.
The facility was launched by brokerage Instinet in conjunction with a group of investment banks including Citigroup, Credit Suisse, Goldman Sachs, Merrill Lynch and Morgan Stanley as a rival to the London Stock Exchange.
