BATS-Direct Edge Merger Receives Anti-Trust Clearance

The proposed merger between securities exchange operator BATS Global Markets and rival Direct Edge Holdings LLC passed an anti-trust review by the U.S. Justice Department.

BATS Global Markets and Direct Edge Holdings, today received clearance from the U.S. Department of Justice for any anti-trust issues today for the proposed merger of the two electronic exchange groups.

Specifically, BATS and Direct Edge received notification of the termination of the waiting period under the Hart-Scott –Rodino Antitrust improvements Act of 1976, a set of amendments to the anti-trust laws of the United States.

[For more on Will the BATS-Direct Edge Merger Raise the Stakes for Rival Exchanges?, see Ivy Schmerken's related story.]

According to Wikipedia: The HSR Act provides that parties must not complete certain mergers, acquisitions or transfers of securities or assets, including grants of executive compensation, until they have made a detailed filing with the U.S. Federal Trade Commission and Department of Justice and waited for those agencies to determine that the transaction will not adversely affect U.S. commerce under the antitrust laws.

The anti-trust review by the Justice Department clears the way for BATS and Direct Edge to seek other regulatory approvals.

“We appreciate the thoughtful attention that the Department of Justice gave to this deal. We are now focused on obtaining the final regulatory approvals and executing on our plan to combine our two organizations to bring enhanced competition to the markets in which we operate,” commented Joe Ratterman, CEO of BATS Global Markets in the release.

The proposed deal with Jersey City-based Direct Edge was announced in late August. The new entity would keep the BATS name and Kansas headquarters. Both exchange operators are seeking to combine their securities trading operations to create a larger venue that would compete on a more level playing field with the New York Stock Exchange and Nasdaq Stock Market. Both BATS and Direct Edge are known for innovations in technology for high-speed electronic trading.

The completion of the transaction is subject to approval from the U.S. Securities and Exchange Commission. Pending final regulatory approvals, the transaction is expected to close during the first half of 2014.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio