BATS sees opportunities in NYSE/Nasdaq offer

* Expects regulators may not allow monopoly on listings

* Experts see BATS, others as small company outlet

By Ben Berkowitz

NEW YORK, April 1 (Reuters) – Regulators might not allow a
combined Nasdaq and New York Stock Exchange to keep all their
listings, which could create opportunities for other exchanges,
a senior executive at BATS Global Markets said on Friday.

BATS, owned by major Wall Street banks and trading firms,
said earlier this week it submitted draft rules to regulators
to become a primary U.S. market, which would allow them to
start listing stocks. [ID:nN29271038]

The exchange does not expect to start listing stocks until
at least the fourth quarter, but some companies are already
looking to BATS as a potential alternative if Nasdaq OMX Group
Inc (NDAQ.O: Quote, Profile, Research) and IntercontinentalExchange Inc (ICE.N: Quote, Profile, Research) succeed
in their $11.3 billion offer for NYSE Euronext (NYX.N: Quote, Profile, Research).
[ID:nL3E7F11TO].

“There’s an opportunity where maybe the regulators wouldn’t
allow all the listings to go into single company,” Ken Conklin,
a senior vice president and head of business development at
BATS, said in an interview. “It’s hard to tell what the
regulators are going to think, but we would obviously watch
pretty closely.”

Conklin said it was too soon to say whether BATS would
oppose the merger if asked as part of a regulatory review.

BATS is owned by many of the world’s largest banks,
including JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) and Credit Suisse Group
AG (CSGN.VX: Quote, Profile, Research) and by trading firms such as Lime Brokerage.

The Kansas City-based company is not planning to target
specific sectors or regions for its listing, although many
expect it to offer a venue for smaller-capitalization firms.

“Most of the IPOs going today are much higher than $50
million market cap, so we really have a challenge in the IPO
market in the U.S.,” said Jeff Morgan, CEO of the National
Investor Relations Institute. “As these new competitors come
in, they may be able to create a model where they can bring
back some of these IPOs, which may be positive for U.S.
markets.”

Conklin said there was merit in the argument, but also said
it was too soon to discount the power a combined NYSE and
Nasdaq would have, regardless of the size of a listing
company.

“Let’s remember BATS is starting a listings business. There
would be a monopoly and they would certainly be able to wield
monopoly power for quite some time,” he added.
(Reporting by Ben Berkowitz; editing by Andre Grenon)

BATS sees opportunities in NYSE/Nasdaq offer