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BATS Software Glitch Unrelated to Flash Crash: CEO

Monday, 26 Mar 2012 | 11:10 AM ET

Although BATS Global Marketsexperienced a high-profile trading blunder on Applethat forced the exchange to withdraw its initial public offering on Friday, the company’s CEO and president remains positive about its market structure.

Simon Smith | Vetta | Getty Images

“I think when you actually go into the market on a regular basis, you can have confidence that your order’s going to get executed and returned to you very quickly,” said Joe Ratterman, BATS’ chief executive. “The flash crash was two years ago — this is unrelated to that.”

Due to a software glitch, BATS executed a trade of 100 Apple shares in error that caused the tech company’s shares to fall sharply, which triggered a circuit breaker on its stock. Apple shares were halted temporarily before they resumed trading minutes later.

Ratterman told CNBC that trading in general is more price-effective than it used to be, and that the markets are more efficient today than before.

Although BATS’ founder and current board director, Dave Cummings, said the exchange could still go public in the second quarter, Ratterman said the company has no additional plans yet.

“We have to regroup and we have to earn back some confidence, and we need to reconvene with our Board, and we’ll figure out what the next steps are,” he said.

BATS CEO on IPO Withdrawal
Insight on why BATS Global Markets was forced to withdraw its IPO due to a computer glitch, with Joe Ratterman, BATS CEO.

BATS’ withdrew its IPO mid-Friday due to an erosion of investor confidence, Ratterman said.

“We knew that we couldn’t open our market back up for our stock in a fair and orderly fashion because investor confidence had eroded and as an issuer, we decided that it was best in their interest and the trading community at large to pull the IPO,” he said.

Following the system issues, Ratterman said the company reached out to the U.S. Securities and Exchange Commission within minutes. BATS will be following up with the SEC later this week as well.

Ratterman said he did not think traders would be more hesitant to route orders through BATS in the future but that it would need to earn back its clients’ trust after Friday’s malfunction.

“These things happen to everybody, and hopefully we’ve handled it the way our investors and customers would expect,” he said.

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