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BATS clarifies statement made on CNBC

This week's debate on CNBC between BATS Global Markets President William O'Brien and IEX's Brad Katsuyama caused a sensation.

Today, BATS issued a correction of a statement made by O'Brien during the interview.

The correction involved a heated discussion over what feeds Direct Edge—which was bought a short while ago by BATS—uses to price trades.

Read More Katsuyama vs. O'Brien - who won the fight?

"What do you use to price trades in your matching engine on Direct Edge?" Mr. Katsuyama asked Mr. O'Brien.

Mr. O'Brien said, "We use the direct feeds," Mr. O'Brien said.

When Mr. Katsuyama said Direct Edge used the slower SIP (Securities Information Processor), Mr. Obrien insisted they did not.

Turns out, Mr. Katsuyama was right. BATS released the following statement:

Clarification Regarding Market Data Usage

April 3, 2014

BATS Global Markets wishes to clarify the market data usage of its exchanges. With respect to routing, EDGA & EDGX use direct depth-of-book data feeds for all major exchanges, and data from the relevant securities information processor (SIP) for certain smaller exchanges.

With respect to the matching engine, EDGA & EDGX currently use the SIP, but will be transitioning to direct feeds from all major exchanges in January 2015.

BATS BZX and BYX exchanges currently use direct feeds for both routing and its matching engine from all major exchanges, and SIP data from certain smaller exchanges.

This is sensitive, because the SIP feed carries information on the markets at a slightly slower speed than direct feeds. Traders pay more to access those direct feeds. There are allegations that high-speed traders can use these faster links to trade at an advantage to those using the slower SIP lines.


  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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