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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on December 15, 2015

Registration No. 333-            


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



BATS GLOBAL MARKETS, INC.
(Exact Name of Registrant as Specified in Its Charter)



DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
  6200
(Primary Standard Industrial
Classification Code Number)
  46-3583191
(I.R.S. Employer
Identification Number)

8050 Marshall Drive, Suite 120
Lenexa, Kansas 66214
(913) 815-7000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)



Eric Swanson, Esq.
Executive Vice President, General
Counsel and Secretary
BATS Global Markets, Inc.
8050 Marshall Drive, Suite 120
Lenexa, Kansas 66214
(913) 815-7000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)



Copies to:

Deanna L. Kirkpatrick, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
(212) 450-4000

 

Gregory A. Fernicola, Esq.
Phyllis G. Korff, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000

         Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

         If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

         If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



       
 
Title of Each Class of Securities
to Be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee

 

Common Stock, par value $0.01 per share

  $100,000,000   $10,070

 

(1)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act.

(2)
Includes offering price of shares that the underwriters have the option to purchase.

         The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS (Subject to Completion)

Issued December 15, 2015

              Shares

LOGO

BATS Global Markets, Inc.

COMMON STOCK



        BATS Global Markets, Inc. is offering            shares of common stock, and the selling stockholders identified in this prospectus are offering            shares of common stock. We will not receive any proceeds from the sale of common stock by the selling stockholders in this offering. This is the initial public offering of our shares, and no public market exists for our shares. We anticipate that the initial public offering price will be between $            and $            per share.

        Upon completion of this offering, our principal investors will collectively own approximately      % of our common stock. See "Principal and Selling Stockholders."

        We intend to list the common stock on BATS Exchange, Inc. (BZX) under the symbol "BATS."



        Investing in our common stock involves risks. See "Risk Factors" beginning on page 17.



PRICE $            A SHARE

       
 
 
  Per Share
  Total
 

Price to public

  $               $            
 

Underwriting discounts and commissions(1)

  $               $            
 

Proceeds to BATS

  $               $            
 

Proceeds to selling stockholders

  $               $            

 

(1)
We have agreed to reimburse the underwriters for certain expenses. See "Underwriters (Conflicts of Interest)."

        We have granted the underwriters the option to purchase an additional            shares of common stock. The underwriters may exercise this option at any time within 30 days from the date of this prospectus.

        The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the shares of common stock to purchasers on                    , 2016.



Morgan Stanley   Citigroup

BofA Merrill Lynch              Credit Suisse              Goldman, Sachs & Co.              J.P. Morgan

Jefferies                     Barclays              Nomura        Sandler O'Neill + Partners, L.P.

                    , 2016


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TABLE OF CONTENTS



 
  Page  

Prospectus Summary

    1  

The Offering

    10  

Summary Historical and Pro Forma Financial and Operating Data

    12  

Risk Factors

    17  

Special Note Regarding Forward-Looking Statements

    48  

Recent Acquisitions

    49  

Unaudited Selected Pro Forma Financial Data

    51  

Use of Proceeds

    58  

Dividend Policy

    58  

Capitalization

    59  

Dilution

    60  

Selected Financial and Operating Data

    61  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    65  

Business

    131  

Regulation

    156  

Management

    168  

Executive Compensation

    176  

Certain Relationships and Related Transactions

    199  

Principal and Selling Stockholders

    203  

Description of Capital Stock

    204  

Material U.S. Federal Tax Considerations for Non-U.S. Holders

    211  

Shares Eligible for Future Sale

    214  

Underwriters (Conflicts of Interest)

    216  

Validity of Common Stock

    225  

Experts

    225  

Where You Can Find More Information

    225  

Appendix

    226  

Index to Consolidated Financial Statements

    F-1  

        We, the selling stockholders and the underwriters have not authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We, the selling stockholders and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We, the selling stockholders and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, or other earlier date stated in this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

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PROSPECTUS SUMMARY

        This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including the "Risk Factors" section and the financial statements and the notes to those statements included in this prospectus.

        In this prospectus, unless the context otherwise requires, "BATS," the "company," "we," "us" and "our" refer to BATS Global Markets, Inc. (or prior to the acquisition of Direct Edge Holdings LLC, or Direct Edge, in January 2014, BATS Global Markets Holdings, Inc.) and its consolidated subsidiaries: BZX, BYX, EDGX and EDGA (each, a national securities exchange), BATS Trading, Inc. (a U.S. broker-dealer), BATS Trading Limited (a U.K. operator of our multilateral trading facility and our Regulated Market, under its Recognised Investment Exchange status, and known as "BATS Chi-X Europe"), Chi-X Europe Limited (a stand-alone U.K. broker-dealer) and BATS Hotspot (operator of our institutional spot foreign currency, or FX, market). We have defined certain industry-related and other terms in a glossary appended to this prospectus. Please see the glossary for our definition of "market share" and other terms.

Our Company

        We are a leading global operator of securities exchanges and other electronic markets enabled by world-class technology. We provide trade execution, market data, trade reporting, connectivity and risk management solutions to brokers, market makers, asset managers and other market participants, ultimately benefiting retail and institutional investors across multiple asset classes. Our principal objective is to improve markets by maximizing efficiency and mitigating trade execution risk for market participants. Our asset class focus currently comprises listed cash equity securities in the United States and Europe, listed equity options in the United States and institutional spot FX globally, as well as exchange-traded products, or ETPs, including exchange-traded funds, or ETFs, in the United States and Europe. Trade execution comprised 44.7% of our revenues less cost of revenues, and market data and connectivity, or non-transaction revenues, comprised 55.3% of our revenues less cost of revenues for the nine months ended September 30, 2015.

        We are the second largest exchange operator in U.S. listed cash equity securities trading by market share, the largest exchange operator of ETFs and other ETPs by market share, and the largest European exchange operator as measured by notional value traded. In addition, for each of the four consecutive months ended November 30, 2015, we were the largest equities market operator globally as measured by notional value traded. Moreover, during 2015 we operated the fastest growing market in the United States for exchange traded options as measured by market share.

        We improve markets by maximizing efficiency and mitigating trade execution risk, in part by offering low-cost, innovative pricing and low-latency trade execution enabled by resilient and robust proprietary technology. For example, during the three months ended September 30, 2015, our net capture, including auctions, in the U.S. equities market was approximately 40% of the rate reported by NASDAQ Group's U.S. equities operations and Intercontinental Exchange's New York Stock Exchange, or NYSE, operations, while our net capture, including auctions, in the European listed equity securities market was approximately 54% of the rate reported by the London Stock Exchange's European equities operations. During the third quarter of 2015, our net capture in the U.S. listed equity options market was 6% to 20% of the rate reported by the Chicago Board Options Exchange, or CBOE, NYSE Arca, NYSE MKT, NASDAQ Options Market and NASDAQ PHLX.

        We develop, own and operate the BATS trading platforms, which deploy our proprietary technology designed to offer some of the fastest and most reliable trading systems available. Our diverse exchange platforms are designed to facilitate price discovery by encouraging the quoting of competitive displayed, or lit, prices, but also offer opportunities to post undisplayed, or dark, trading

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interest on our U.S. and European order books. The core offerings and products driving our volume and leading market positions include:

    U.S. Listed Cash Equity Securities.  In the United States, we operate four national securities exchanges, BZX, BYX, EDGX and EDGA. All four BATS exchanges trade listed cash equity securities and ETPs, while offering different pricing alternatives. BZX also serves as a listing destination for ETPs.

    European Listed Cash Equity Securities.  In Europe, BATS Chi-X Europe operates both a Multilateral Trading Facility, or MTF, and a Regulated Market, or RM, under its Recognised Investment Exchange, or RIE, status. BATS Chi-X Europe operates two lit books, a periodic auctions book and two dark books on its MTF and operates one lit book and one dark book on its RM. On these books, we offer trading in listed cash equity securities from within 23 European indices and 15 major European markets, in addition to ETFs, exchange-traded commodities and international depositary receipts.

    U.S. Listed Equity Options.  In the United States, each of BZX and EDGX also operates a market for trading listed equity options.

    Global FX.  We operate separate New York and London area matching engines that offer access to trading in more than 60 currency pairs and gold and silver bullion.

        For the nine months ended September 30, 2015, we had a 21.1% share of the overall U.S. equity market, a 22.4% share of the trading of ETPs and a 9.9% share of the U.S. equity options market. In Europe, for the nine months ended September 30, 2015, we had a 24.2% share of European trading in the securities available for trading on BATS Chi-X Europe. In addition, we had $27.8 billion average daily notional value, or ADNV, in our Global FX segment from the BATS Hotspot Acquisition on March 13, 2015 to September 30, 2015. Globally, for the nine months ended September 30, 2015, we had an 11.5% share of the publicly reported institutional spot FX market.

        Our revenue consists primarily of transaction fees, regulatory fees, market data fees and port fees. On a consolidated basis, our revenues less cost of revenues were $285.8 million for the nine months ended September 30, 2015, which represents a 27.7% increase from the $223.8 million generated for the nine months ended September 30, 2014. Non-transaction revenues were 55.3% of revenues less cost of revenues for the nine months ended September 30, 2015. On a consolidated basis, we generated $307.5 million in revenues less cost of revenues for the year ended December 31, 2014. Adjusting for growth through acquisitions, our organic compound annual growth rate of revenues less cost of revenue for the last four years was 12.8%. For the nine months ended September 30, 2015, our Normalized EBITDA margin was 60.4%, an increase from 54.1% for the nine months ended September 30, 2014. We use the non-GAAP measure of Normalized EBITDA margin to measure our performance. Normalized EBITDA margin is a non-GAAP measure that is reconciled to net income in the section titled "—Summary Historical and Pro Forma Financial and Operating Data."

Our History

        We were formed in 2005 as an alternative to the NYSE and the NASDAQ Stock Market, or NASDAQ, in response to increased consolidation among U.S. listed cash equity market centers. Since our founding, we have achieved the following milestones:

    January 2006: Launched our electronic communication network, or ECN, a type of alternative trading system, or ATS, which initially focused on the trading of NASDAQ-listed securities.

    May 2006: Began trading in American Stock Exchange (now NYSE MKT)-listed securities and, in February 2007, NYSE-listed securities.

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    March 2008: Entered the European markets by launching an MTF to compete on a pan-European basis against the incumbent securities exchanges, formally launching BATS Chi-X Europe, then known as BATS Europe, in October 2008.

    November 2008: Converted our ECN to a national securities exchange, BZX, which allowed us to participate in, and earn market data fees from, the U.S. tape plans, reduce our clearing costs and operate a primary listings business.

    February 2010: Expanded into a new asset class by offering trading of listed equity options on BZX.

    October 2010: Launched BYX, a second national securities exchange for trading listed cash equity securities.

    November 2011: Acquired Chi-X Europe and it became a wholly-owned subsidiary and changed its name to BATS Chi-X Europe.

    December 2011: Launched a primary listings business in the United States on BZX.

    May 2013: Received approval from the United Kingdom regulators to convert our pan-European MTF into an RIE, and in December 2013, BATS Chi-X Europe acquired a 25% interest in European Central Counterparty N.V., or EuroCCP, the largest equities central clearing counterparty in Europe.

    January 2014: Acquired Direct Edge Holdings LLC, or the Direct Edge Acquisition, which included the two exchanges, EDGX and EDGA.

    March 2015: Acquired Hotspot FX Holdings, LLC, or the BATS Hotspot Acquisition, which owned KCG Hotspot FX LLC, the operator of an electronic trading platform for institutional spot FX, or the BATS Hotspot Platform.

    November 2015: Launched EDGX Options successfully.

Industry Developments

        Significant regulatory and technological developments have transformed the markets in which we operate and have been the primary drivers of our growth and development:

    U.S. Listed Cash Equity Securities.  Several regulatory developments, together with innovations in technology and improvements in the speed of communication, have fundamentally changed the way U.S. listed cash equity markets operate. Notable developments that encouraged the creation of alternative markets, like our original ECN, included:

    the adoption of the "order handling" rules in 1996, which facilitated the growth of ECNs as alternatives to national securities exchanges for displaying and executing orders;

    the adoption of Regulation ATS in 1998, which provides an exemption from exchange registration for ATSs that comply with certain conditions;

    the move to decimal pricing in 2000, which resulted in narrower trading spreads, providing automated market makers with an advantage over traditional market makers; and

    the adoption of Regulation NMS in 2005, which provided price protection for each exchange's best displayed quotes that are electronically accessible for immediate trade execution, and resulted in a dramatic shift to electronic trading as exchanges automated their trading systems to take advantage of this price protection.

    European Listed Cash Equity Securities.  The implementation of the Market in Financial Instruments Directive, or MiFID, in 2007 marked a fundamental change in the European market

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      for trading listed cash equity securities. MiFID was designed to increase competition in pan-European trading and authorized the creation of MTFs. In particular, to create competition among markets, MiFID abolished the "concentration rule," which required firms to route orders only to national stock exchanges, and extended the concept of "passporting," which allowed firms authorized to carry on business in one European Economic Area, or EEA, member state to carry on business in other EEA member states.

    U.S. Listed Equity Options.  The most significant changes within the U.S. listed equity options market have been the move to penny-increment price quotes for many options and the shift away from the traditional pricing model, pursuant to which both sides pay a fee, for executing trades to a pricing model common in the U.S. listed cash equities market. We believe these changes have contributed to significant growth in overall options market volume and have encouraged more aggressive competition and better price discovery.

    Global FX.  While the global institutional spot FX market remains largely unregulated, the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank, and its related regulations in the United States and the ongoing implementation of the Market in Financial Instruments Directive II, or MiFID II, and Markets in Financial Instruments Regulation, or MiFIR, in Europe have impacted the regulatory landscape for currency derivative products. For example, certain standardized currency derivative products are expected to be required to trade on an organized trading venue such as a swap execution facility, or SEF, or designated contract market, or DCM, in the United States or on an MTF or organized trading facility, or OTF, in Europe. Trading on these venues has also been enabled by technological developments that facilitate the electronic trading of spot FX and currency derivatives.

    Shifting Investment Styles.  Investors are allocating increasing amounts of capital to passive investment products, such as ETPs, and are seeking exposure to a wider range of asset classes. Passive investment products have proliferated due to investor demand for transparency, lower costs and greater liquidity. We believe these trends will persist, generating significant growth opportunities for our product offerings.

    Continued Customer Need for Data/Risk Management Offerings.  New global regulations are driving not only increased electronic trading but also higher capital requirements, enhanced risk management and reporting and compliance requirements. In addition, regulations are driving market participants to gather more timely, relevant and complete data to improve transparency. With these new regulations, and as regulatory authorities globally continue to establish stricter standards, we believe our customers will continue to strengthen their compliance capabilities, manage greater volumes of data and improve their risk functions.

Our Competitive Strengths

        As a result of these industry developments, newer trading centers like ours are better able to compete against competing exchanges based on technology, price and customer experience. We believe that the following competitive strengths position us well to capitalize on these industry dynamics:

    Leading and Attractive Market Positions.  We are a leading global operator of securities exchanges and other electronic markets and have an attractive market share in the markets we serve. In U.S. listed cash equities, we are the second largest exchange, with a market share of 21.1% of the overall U.S. equity market for the nine months ended September 30, 2015. Our U.S. exchanges also execute the largest share of trading in ETPs, including ETFs and exchange-traded notes, with a 22.4% share of the trading of ETPs for the nine months ended September 30, 2015. In European listed equities, we execute the largest notional value of pan-European equities traded by a single market operator RIE, with a market share of 24.2% of European

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      trading in the securities available for trading on BATS Chi-X Europe for the nine months ended September 30, 2015. In addition, we have a substantial presence in the FX markets with our recent BATS Hotspot Acquisition, with an 11.5% market share of the publicly reported institutional spot FX market for the nine months ended September 30, 2015. The combination of our attractive market positions, the quality of our markets and the expertise of our teams have enabled us to grow our market share across our markets over the last four years.

    Leading Proprietary Technology Platform.  We develop, own and operate a proprietary technology platform, which we designed to optimize reliability, speed, scalability and versatility across all of our markets.

    Our trading platforms have experienced very low operational downtime, as demonstrated by the fact that for the nine months ended September 30, 2015 and the year ended December 31, 2014, all of our global markets were immediately and automatically accessible (i.e., fully operational) 99.992% and 99.991% of the time, respectively. For the nine months ended September 30, 2015, five of our global exchanges were fully operational 100% of the time. We believe that this reliability gives our customers an additional incentive to use our platforms to mitigate trade execution risk, especially in times of extreme market volatility.

    Our average latency, which measures the time that it takes for us to process an order message, has decreased 94% from over 930 microseconds in January 2007 to approximately 54 microseconds for the nine months ended September 30, 2015.

    We use the same technology platform across all of our equities and options markets, which optimizes efficiency, versatility, resiliency and scalability and maximizes uniformity of customer experience. We acquired an additional proprietary trading platform with the BATS Hotspot Acquisition in March 2015, and we are evaluating its migration to our existing BATS technology platform in the coming years. In order to continuously implement new enhancements to our trading platforms, new software releases are deployed to our markets multiple times per month.

    Highly Attractive Operating Model.  The scalability of our technology platforms and the efficiency of our operations allow us to continue to grow with limited additional capital investment. We use technology to leverage our products and employees across multiple asset classes and geographies. As a result, we are able to operate with lower overhead than many competing exchanges. In addition, unlike competing exchanges, we are not burdened by legacy infrastructure. With 284 employees globally as of September 30, 2015, we have captured substantial market share from traditional exchanges in the United States and Europe while maintaining substantially lower fixed costs. This scalability and our low cost structure have driven our Normalized EBITDA margins to 60.4% for the nine months ended September 30, 2015, which is up 6.3 percentage points from the nine months ended September 30, 2014. Along with the substantial amount of non-transactional revenue we generate, our operating leverage provides us with opportunities to continuously improve our operating margins and generate significant operating cash flows.

    Commitment to Competitive and Innovative Pricing.  Due to our operating leverage, we are able to profitably employ an aggressive, low-spread pricing strategy, which we believe provides us with an important competitive advantage. In addition, we have employed innovative, and in some cases, disruptive pricing strategies to increase our market share and improve net capture across our markets.

    Proven Ability to Rapidly Execute on Market Opportunities.  Since our inception, we have demonstrated a unique ability to efficiently expand into new products and new markets, through our effective navigation of dynamic regulatory environments and our identification and successful

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      execution of transformational acquisitions. We do so by leveraging our vast industry expertise and through a continuous dialogue with regulators and key market participants. For example:

      we launched trading in the United States within seven months of our initial incorporation, executed our first trades in the European market within seven months of receiving board approval, began trading listed equity options within eight months of receiving board approval and launched our first ETF listings within three months of receiving final approval from the Securities and Exchange Commission, or the SEC; and

      we successfully executed the transformational acquisitions of Chi-X, Direct Edge and Hotspot in 2011, 2014 and 2015, respectively, in an effort to accelerate our expansion into new products and geographies. Our rapid integration of these businesses and our realization of synergies from them have strengthened our competitive position and improved our financial results.

    Unique Partnership-Driven Product Design and Delivery.  We are structured and committed to deliver a differentiated experience to our customers, through our offering of innovative order types, risk management tools and other products and services. In part due to our strong relationships with our principal investors and their affiliates, we benefit from access to the strategic insights and industry expertise of some of the most active market participants. For example, we offer several products that enable our customers to monitor their order handling on our markets in real-time, such as our user dashboard and latency reports, both of which are web-based tools designed to provide customers with real-time information about their connectivity to our platform and the speed at which their orders are processed and executed within our markets. We also operate one of the few market centers in Europe that offer routing services to other venues that publicly display quotes, or lit venues, which we believe provides an added incentive to use our market. Additionally, EDGX has typically been the preferred exchange destination for retail limit orders as we provide a service model for the retail trading community's unique needs, competitive rates and a general advocacy and support for retail investors.

    Seasoned Management Team with a Core Focus on Technology.  Our management team has extensive experience in financial market operations with a strong background in technology. In addition, a significant portion of our management team has worked together for several years, and several of our founding employees continue to be employed with us. We believe that our management team has demonstrated its ability to grow our business through continued product and technological innovations and that our team of technology professionals is among the best in the industry.

Our Growth Strategies

        We believe that we are well positioned to leverage our competitive strengths to enhance our market position, develop new products and services and continue expanding into new asset classes and geographies. We continually analyze new opportunities and, in particular, intend to pursue the following growth strategies:

    Increase Penetration in U.S. Options with New Products and Services.  We believe there are significant opportunities to generate additional revenue from U.S. listed options by expanding the functionality and pricing models available on our exchanges to attract order flow from new customer segments. In November 2015, we launched our second options exchange, EDGX Options, with a customer-priority, "pro rata" market model as a complement to our existing BZX Options exchange featuring a price/time-priority model. We intend to compete in the larger "pro rata" segment of the options market with EDGX by offering very competitive pricing, a robust technology platform and superior customer service. We plan to develop new

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      functionality on the platform to specifically target more marketable flow from retail customers, more auction flow and growing complex order flow from institutional investors. In addition, we are continuing to explore the development of index and other higher-margin proprietary options products to trade on our exchanges.

    Expand Global FX Platform into Other Currency Instruments.  In March 2015, we acquired the BATS Hotspot Platform, which expanded our reach into foreign currency, the world's largest asset class. We believe the September 2015 launch of the BATS Hotspot matching engine in the United Kingdom will provide us with better access to Asian- and European-based customers and therefore allow us to compete more directly against other platforms in London, the center of global FX trading. We also intend to leverage this expanded footprint in institutional spot FX trading to offer BATS Hotspot customers other non-spot FX instruments such as forwards, swaps and options that make up the majority of the over $5 trillion in global daily notional value traded. As regulatory and other structural changes continue to evolve in the FX industry, we intend to enhance our offering to support additional automation and algorithmic trading, enhance client workflow and execution quality and increase penetration into new customer segments.

    Grow U.S. Equities by Leveraging Position in ETPs to Expand Listings.  We have been the number one market by volume for ETP trading for every month of 2015 while remaining the number two U.S. market by volume for overall listed cash equity trading during the same period. We believe this trading market share leadership can be used to attract new ETP listings to BATS or transfers to BATS of existing ETPs listed on other exchanges in both the United States and Europe. In addition to generating more revenues from increased trading volume in ETPs during the trading day, we believe listing ETPs offers us the opportunity to generate higher-margin fees from opening and closing auctions, as well as value-added market data and analytics. In Europe, we intend to capitalize on expected changes to regulatory transparency requirements that can encourage ETP trading to migrate from the more opaque over-the-counter, or OTC, market to regulated exchange markets like BATS Chi-X Europe. We also expect continued global industry expansion in ETP launches, trading volumes and assets, which we hope will create additional opportunities for us to serve issuers, liquidity providers and investors.

    Fully Monetize the Value of Market Data and Connectivity.  As market share and volumes on our exchanges and trading platforms continue to rise, we believe that additional proprietary market data, analytics and connectivity revenues can be generated while continuing to be a leader on price versus competing platforms across all of our segments. In our Global FX segment, we are considering introducing market data products and connectivity fees to our BATS Hotspot Platform. In Europe, we intend to leverage our position as the leading exchange and OTC reporting facility to use our market data to develop indices and other information services.

    Pursue Strategic Opportunities.  We intend to seek additional opportunities to grow through strategic alliances or acquisitions that are complementary to our business or that enable us to enter new markets or provide new products or services. Our focus will be on opportunities that we believe can enhance or benefit from our technology platform, offer significant cost synergies and operational efficiencies and are consistent with our corporate culture. We believe that the establishment of a public trading market for our common stock will enhance our ability to pursue strategic opportunities by providing a currency with which to execute future acquisitions.

Recent Developments

        In November 2015, we launched our second options exchange, EDGX Options, with a customer priority, "pro rata" market model as a complement to our existing BZX Options exchange featuring a

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price/time-priority model. See "Management's Discussion and Analysis of Financial Condition and Results of Operation—Our Model" for further information on our pricing models.

        In October 2015, we launched in the United States "The BATS ETF Marketplace," a market specifically structured and designed for ETF issuers and their investors, introducing the BATS ETP Issuer Incentive Program and the BATS Lead Market Maker, or LMM, Program. The BATS ETP Issuer Incentive Program is an innovative program that rewards issuers as their ETP listings grow on BZX. Traditionally, ETP issuers have paid an annual exchange fee to the listing venue that increases as the product becomes more successful. The BATS ETP Issuer Incentive Program rewards ETP issuers for their product's success with a rebate based on the product's consolidated average daily volume, or CADV. The BATS LMM Program is a rewards-based program that incentivizes market makers for their participation in BZX-listed ETPs. First, LMMs receive larger incentives for providing liquidity and reduced costs for removing liquidity in their assigned ETPs. Second, LMMs receive additional economic incentives for making markets in additional ETP products listed on BATS. The BATS LMM Program is supplemented by BATS' Competitive Liquidity Provider, or CLP, program, which is also a rewards-based program designed to incent market makers to make tighter quotes spreads with increased liquidity for BZX-listed ETPs.

Risk Factors

        Investing in our common stock involves substantial risk. Please read "Risk Factors" beginning on page 17 for a discussion of certain factors you should consider in evaluating an investment in our common stock. Some of these risks include:

    intense competition, including price competition, with a broad range of market participants globally, including our principal investors, and further consolidation and alliances among our securities trading competitors could impair our competitive position;

    market data fees and net transaction fees may be reduced due to declines in our market share, trading volumes or regulatory changes, and our lack of revenue diversification, which may adversely affect our operating results and place us at a competitive disadvantage;

    revenues are positively correlated with overall market volume, which can be adversely impacted by a number of factors, including market prolonged diminished volatility;

    system limitations, failures or security breaches could harm our business;

    regulatory changes and changes in market structure, which could have a material adverse effect on our business and those of many of our clients;

    a significant percentage of our total revenues that is generated from, and significant liquidity in our markets that is provided by, customers who are affiliates of our principal investors, who are not contractually obligated to continue to use our services or purchase our products and who also use the services of our competitors; and

    we may have difficulty executing our growth strategy and managing our growth effectively.

Principal Investors

        Immediately prior to this offering, thirteen affiliates of our customers, as well as International Securities Exchange Holdings, Inc. (owned by Deutsche Börse), or ISE, and BGM Holding, L.P., collectively owned                     shares of our common stock, representing approximately           % of our common stock. We refer to these investors as our "principal investors." Upon completion of this offering, our principal investors will collectively own approximately                     shares of our common stock, representing approximately        % of our common stock. See "Principal and Selling Stockholders." These principal investors are affiliates of Bank of America Merrill Lynch, Citadel,

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Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Instinet, J.P. Morgan, KCG, Lime, Morgan Stanley, Tradebot Ventures and WEDBUSH.

Conflicts of Interest

                            , underwriters of this offering, or their affiliates, will each receive more than 5% of net offering proceeds and will have a "conflict of interest" pursuant to FINRA Rule 5121(f)(5)(C)(ii). Accordingly, this offering will be made in compliance with the applicable provisions of FINRA Rule 5121. As such, any underwriter that has a conflict of interest pursuant to FINRA Rule 5121 will not confirm sales to accounts in which it exercises discretionary authority without the prior written consent of the customer. Pursuant to the Financial Industry Regulatory Authority, or FINRA, Rule 5121, a "qualified independent underwriter" (as defined in FINRA Rule 5121) must participate in the preparation of the prospectus and perform its usual standard of due diligence with respect to the prospectus. Sandler O'Neill & Partners, L.P. has agreed to act as qualified independent underwriter for the offering and to perform a due diligence investigation and review and participate in the preparation of the prospectus. See "Underwriters (Conflicts of Interest)."

Corporate Information

        BATS Global Markets Holdings, Inc. was incorporated in Delaware in August 2013. In connection with the Direct Edge Acquisition, BATS Global Markets Holdings, Inc. changed its name to BATS Global Markets, Inc. and became a single new holding company. Concurrently, Direct Edge and BATS Global Markets, Inc. (which was renamed BATS Global Markets Holdings, Inc.) each became intermediate holding companies held by the new BATS Global Markets, Inc.

        We are headquartered in the Kansas City area with additional offices in New York, London, Chicago and Singapore. Our principal executive offices are located at 8050 Marshall Drive, Suite 120, Lenexa, Kansas 66214, and our telephone number is (913) 815-7000. Our website is www.bats.com. Information contained on or accessible from our website is not incorporated by reference into this prospectus.

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THE OFFERING

Common stock offered:

                

Common stock offered by us

 

              shares

Common stock offered by the selling stockholders

 

              shares

Total

 

              shares

Common stock to be outstanding after this offering

 

              shares

Option to purchase additional common stock

 

We have granted the underwriters the option to purchase an additional              shares from us. The underwriters may exercise this option at any time within 30 days from the date of this prospectus.

Use of proceeds

 

We estimate that our net proceeds from this offering will be approximately $              million, based on an assumed initial public offering price of $              per share (the mid-point of the price range set forth on the cover page of this prospectus) and after deducting underwriting discounts and commissions and estimated offering expenses payable by us of $              million.

 

We intend to use the net proceeds received by us in connection with this offering to pay down our Amended 2014 Loan (as defined herein) in the amount of $            and for general corporate purposes, including funding potential future strategic alliances or acquisitions that are complementary to our business or that enable us to enter new markets or provide new products or services.

 

We will not receive any proceeds from the sale of our common stock by the selling stockholders in this offering. See "Use of Proceeds."

Dividend policy

 

The board of directors is expected to adopt a policy with respect to the payment of dividends on common stock following this offering. We currently expect that we will pay quarterly cash dividends following the offering, with the annual amount initially determined based on a payout ratio of earnings within a determined range. Notwithstanding the current expectations for our future dividend policy, the timing, declaration, amount and payment of any dividends are within the discretion of the board of directors and will depend upon many factors, including our financial condition, earnings, corporate strategy, debt covenants, legal requirements, regulatory constraints, industry practice, ability to access capital markets, and other factors deemed relevant by the board of directors.

BZX symbol

 

BATS

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Conflicts of interest

 

        , underwriters of this offering, or their affiliates, will each receive more than 5% of net offering proceeds and will have a "conflict of interest" pursuant to FINRA Rule 5121(f)(5)(C)(ii). Accordingly, this offering will be made in compliance with the applicable provisions of FINRA Rule 5121. As such, any underwriter that has a conflict of interest pursuant to FINRA Rule 5121 will not confirm sales to accounts in which it exercises discretionary authority without the prior written consent of the customer. Pursuant to FINRA Rule 5121, a "qualified independent underwriter" (as defined in FINRA Rule 5121) must participate in the preparation of the prospectus and perform its usual standard of due diligence with respect to the prospectus. Sandler O'Neill & Partners, L.P. has agreed to act as qualified independent underwriter for the offering and to perform a due diligence investigation and review and participate in the preparation of the prospectus. See "Underwriters (Conflicts of Interest)."

        Unless the context requires otherwise, all references to the number of shares of our common stock outstanding include 275,586 shares of unvested restricted stock as of September 30, 2015, but exclude:

    668,754 shares of common stock issuable upon the exercise of stock options outstanding as of September 30, 2015 with a weighted average exercise price of $27.84 per share; and

    an aggregate of 811,655 shares of common stock reserved for future issuance under our equity incentive plans as of September 30, 2015.

        Unless otherwise indicated, all information in this prospectus assumes that the underwriters do not exercise their option to purchase up to                additional shares of common stock from us.

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA

        The following summary historical and pro forma financial and operating data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," the unaudited pro forma financial statements and the accompanying notes, and the consolidated financial statements and the accompanying notes, in each case included elsewhere in this prospectus. We have derived the summary consolidated statements of operations data for the nine months ended September 30, 2015 and 2014 and the statement of financial condition data as of September 30, 2015 from our unaudited consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the summary consolidated statements of operations data for the years ended December 31, 2014, 2013 and 2012 and the statement of financial condition data as of December 31, 2014 and 2013 from our audited consolidated financial statements and related notes included elsewhere in this prospectus.

        We have derived the summary unaudited pro forma consolidated statements of operations data for the nine months ended September 30, 2015 and for the year ended December 31, 2014 from the unaudited consolidated pro forma financial statements and related notes included in this prospectus. The unaudited pro forma condensed combined statement of operations is intended to provide information about how the Direct Edge and BATS Hotspot acquisitions might have affected our historical statement of operations if they had been consummated as of January 1, 2014. The following unaudited pro forma condensed combined statement of operations is provided for informational purposes only and does not necessarily reflect the results of operations that would have actually resulted had the Direct Edge Acquisition and BATS Hotspot Acquisition occurred as of January 1, 2014, nor should it be taken as necessarily indicative of our future results of operations.

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  Pro Forma
2015(2)
  2015   2014   Pro Forma
2014(2)
  2014   2013   2012  
 
  (in millions, except per share data)
 

Consolidated Statements of Operations Data:

                                           

Revenues:

                                           

Transaction fees

  $ 979.1   $ 970.1   $ 707.7   $ 1,095.3   $ 1,009.9   $ 612.8   $ 645.3  

Regulatory transaction fees(1)

    207.0     207.0     186.5     282.0     272.0     127.4     148.1  

Market data fees

    99.4     99.4     81.2     114.3     110.3     59.4     60.3  

Port fees and other

    58.8     58.7     49.0     68.7     66.0     41.9     31.0  

Total revenues

    1,344.3     1,335.2     1,024.4     1,560.3     1,458.2     841.5     884.7  

Cost of revenues:

                                           

Liquidity payments

    805.7     805.7     578.5     858.4     831.4     474.7     508.2  

Section 31 fees(1)

    207.0     207.0     186.5     282.0     272.0     127.4     148.1  

Routing, clearing and other fees

    36.7     36.7     35.6     55.4     47.3     42.6     51.5  

Total cost of revenues

    1,049.4     1,049.4     800.6     1,195.8     1,150.7     644.7     707.8  

Revenues less cost of revenues

    294.9     285.8     223.8     364.5     307.5     196.8     176.9  

Operating expenses:

                                           

Compensation and benefits

    61.8     58.4     66.2     102.4     87.0     41.5     48.4  

Other operating expenses

    101.3     92.4     73.3     135.4     100.9     53.7     69.2  

Total operating expenses

    163.1     150.8     139.5     237.8     187.9     95.2     117.6  

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  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  Pro Forma
2015(2)
  2015   2014   Pro Forma
2014(2)
  2014   2013   2012  
 
  (in millions, except per share data)
 

Operating income

    131.8     135.0     84.3     126.7     119.6     101.6     59.3  

Interest and investment expense and other

    (34.6 )   (31.6 )   (32.7 )   (46.8 )   (39.3 )   (26.0 )   (1.2 )

Income before income tax provision

    97.2     103.4     51.6     79.9     80.3     75.6     58.1  

Income tax provision

    40.2     42.9     20.7     30.9     31.1     28.8     26.5  

Net income

  $ 57.0   $ 60.5   $ 30.9   $ 49.0   $ 49.2   $ 46.8   $ 31.6  

Earnings per share:

                                           

Basic

  $ 1.75   $ 1.86   $ 0.98   $ 1.51   $ 1.56   $ 2.07   $ 1.40  

Diluted

  $ 1.74   $ 1.85   $ 0.98   $ 1.50   $ 1.55   $ 2.06   $ 1.39  

Pro forma earnings per share(3):

                                           

Basic

            *     *           *     *     *

Diluted

            *     *           *     *     *

Weighted average shares outstanding:

                                           

Basic

    32.5     32.5     31.4     32.5     31.6     22.6     22.5  

Diluted

    32.7     32.7     31.5     32.6     31.8     22.7     22.7  

Distributions per share

        $ 0.31   $ 7.67         $ 7.82   $   $ 17.62  

(1)
As national securities exchanges, BZX, BYX, EDGX and EDGA are assessed fees pursuant to Section 31 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Section 31 fees are assessed on the notional value traded and are designed to recover the costs to the government of supervision and regulation of securities markets and securities professionals. Section 31 fees are paid directly to the SEC, and our national securities exchanges then pass these costs along to our members as regulatory transaction fees, recognizing these amounts as incurred in cost of revenues and revenues, respectively.

(2)
Represents the effects of the Direct Edge and BATS Hotspot acquisitions as if they had occurred on January 1, 2014. All acquisition related costs directly attributable to the transaction, such as fees to investment bankers, attorneys, accountants and other professional advisors and severance to employees are reflected as pro forma adjustments to derive pro forma net income. The pro forma adjustments do not reflect any cost savings or synergies we expect to realize after we integrate Direct Edge's and BATS Hotspot's operations.

(3)
Gives pro forma effect to this offering, the Direct Edge Acquisition and the BATS Hotspot Acquisition.

 
   
  As of December 31,  
 
  As of
September 30,
2015
 
 
  2014   2013  
 
  (in millions)
 

Consolidated Statement of Financial Condition Data:

                   

Cash and cash equivalents

  $ 77.9   $ 122.2   $ 87.2  

Financial investments

    0.5     68.4     25.2  

Goodwill and intangible assets, net

    993.7     598.2     247.0  

Total assets

    1,288.8     1,006.6     456.9  

Total liabilities

    924.8     702.4     316.9  

Long-term debt

    737.2     474.4     246.0  

Stockholders' equity

    364.0     304.2     140.0  

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Selected Operating Data

        The following table presents selected operating data for our four segments: U.S. Equities, European Equities, U.S. Options and Global FX for the periods presented. The information set forth below is not necessarily indicative of our future operations and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (in millions except for trading days, percentages and as noted below)
 

U.S. Equities:

                               

Market average daily volume (ADV)

    6,864.8     6,214.0     6,414.2     6,187.0     6437.2  

Number of trading days

    188     188     252     252     250  

Net capture per one hundred touched shares(1)

  $ 0.021   $ 0.022   $ 0.022   $ 0.024   $ 0.023  

Market share(2)

    21.1 %   18.9 %   19.4 %   10.4 %   11.9 %

European Equities:

                               

Average daily notional value (ADNV)

  52,394.2   38,124.1   39,659.3   32,613.6   30,857.6  

Number of trading days

    192     192     256     256     257  

Net capture per matched notional value (in basis points)(1)

    0.132     0.164     0.162     0.167     0.113  

Market share(2)

    24.2 %   21.3 %   21.6 %   23.1 %   24.6 %

U.S. Options:

                               

Market average daily value (in thousands of contracts)

    16,271.1     16,281.5     16,586.3     15,934.2     15,651.6  

Number of trading days

    188     188     252     252     250  

Net capture per touched contract(1)

  $ 0.024   $ 0.049   $ 0.046   $ 0.058   $ 0.063  

Market share(2)

    9.9 %   4.2 %   4.8 %   3.7 %   3.3 %

Global FX:

                               

ADNV (in billions)

  $ 27.8       *     *     *     *

Number of trading days

    194       *     *     *     *

Net capture per one million dollars traded(1)

  $ 3.01       *     *     *     *

Other Data:

                               

EBITDA(3)

  $ 166.1   $ 92.8   $ 136.0   $ 116.6   $ 75.7  

EBITDA margin(4)

    58.1 %   41.5 %   44.2 %   59.2 %   42.8 %

Normalized EBITDA(3)

  $ 172.5   $ 121.0   $ 168.1   $ 124.1   $ 101.3  

Normalized EBITDA margin(5)

    60.4 %   54.1 %   54.7 %   63.1 %   57.3 %

Pro Forma EBITDA(3)

  $ 173.1   $ 119.0   $ 183.0       *     *

Pro Forma EBITDA margin(6)

    58.7 %   44.6 %   50.2 %     *     *

Non-transaction revenue as a percentage of revenues less cost of revenues

    55.3 %   58.2 %   57.3 %   51.5 %   51.6 %

Capital expenditures

  $ 12.3   $ 17.6   $ 25.2   $ 3.6   $ 6.9  

*
Not meaningful.

(1)
Please see the glossary for our definitions of "net capture per one hundred touched shares," "net capture per matched notional value," "net capture per touched contract" and "net capture per one million dollars traded."

(2)
Please see the glossary for our definition of "market share."

(3)
"EBITDA" is defined as income before interest, income taxes, depreciation and amortization. Normalized EBITDA is defined as EBITDA before acquisition-related costs, initial public offering, or IPO, costs, loss on extinguishment of debt and other significant one-time items not expected to be recurring, including debt restructuring costs, intangible asset impairment charges and an unusually large

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    regulatory assessment charged to a member in 2013. Pro Forma EBITDA is defined as EBITDA before costs related to the Direct Edge Acquisition and the BATS Hotspot Acquisition, had such acquisitions been completed on January 1, 2014. EBITDA, Normalized EBITDA and Pro Forma EBITDA do not represent, and should not be considered as, alternatives to net income or cash flows from operations, each as determined in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. We have presented EBITDA, Normalized EBITDA and Pro Forma EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies. Other companies may calculate EBITDA, Normalized EBITDA and Pro Forma EBITDA differently than we do. EBITDA, Normalized EBITDA and Pro Forma EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP.

    The following is a reconciliation of net income to EBITDA, Normalized EBITDA and Pro Forma EBITDA:

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (in millions)
 

Net income

  $ 60.5   $ 30.9   $ 49.2   $ 46.8   $ 31.6  

Interest

    34.2     20.3     27.3     25.8     0.6  

Income tax provision

    42.9     20.7     31.1     28.8     26.5  

Depreciation and amortization

    28.5     20.9     28.4     15.2     17.0  

EBITDA

    166.1     92.8     136.0     116.6     75.7  

Acquisition-related costs

    6.4     14.6     18.5     5.2     19.3  

IPO costs

    0.5             0.6     6.3  

Loss on extinguishment of debt

        13.6     13.6          

Other one-time items

    (0.5 )           1.7      

Normalized EBITDA

  $ 172.5   $ 121.0   $ 168.1   $ 124.1   $ 101.3  

 

 
  Nine Months
Ended
September 30,
  Year Ended
December 31,
 
 
  2015   2014   2014  
 
  (in millions)
 

Pro forma net income

  $ 57.0   $ 23.0   $ 49.0  

Pro forma interest

    36.2     35.6     48.4  

Pro forma income tax provision

    40.2     15.4     30.9  

Pro forma depreciation and amortization

    39.3     36.5     44.7  

Acquisition costs

    0.4 (7)   8.5 (8)   10.0 (9)

Pro Forma EBITDA

  $ 173.1   $ 119.0   $ 183.0  
(4)
EBITDA margin represents EBITDA divided by revenues less cost of revenues.

(5)
Normalized EBITDA margin represents Normalized EBITDA divided by revenues less cost of revenues.

(6)
Pro Forma EBITDA margin represents Pro Forma EBITDA divided by revenues less cost of revenues.

(7)
Represents all acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors and severance to employees, of $4.3 million for the nine months ended September 30, 2015. Expenses related to retention payments to employees of $0.4 million for us were not reflected in the pro forma adjustments as these expenses are not directly attributable to the Direct Edge Acquisition and the BATS Hotspot Acquisition.

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(8)
Represents all acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors, equity award change in control payments and severance to employees, of $6.0 million and $26.6 million for us and Direct Edge, respectively, for the nine months ended September 30, 2014. Expenses related to retention payments to employees of $8.5 million for us were not reflected in the pro forma adjustments as these expenses are not directly attributable to the Direct Edge Acquisition.

(9)
Represents all acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors, equity award change in control payments and severance to employees, of $8.5 million and $26.6 million for us and Direct Edge, respectively, for the year ended December 31, 2014. Expenses related to retention payments to employees of $10.0 million for us were not reflected in the pro forma adjustments as these expenses are not directly attributable to the Direct Edge Acquisition.

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RISK FACTORS

        You should carefully consider the following risks and all of the information set forth in this prospectus before investing in our common stock.

Risks Relating to Our Business

We face intense competition and compete with a broad range of market participants globally, including our principal investors. Further consolidation and alliances among our securities trading competitors could impair our competitive position.

        The market for trade execution services is intensely competitive in the asset classes and geographies in which we operate. Increased competition may result in a decline in our share of trading activity and a decline in our revenues from transaction fees and market data fees, thereby adversely affecting our operating results.

        In the United States, the competition among securities exchanges and other securities execution venues has become more intense with regulatory changes. The U.S. listed cash equity securities marketplace has evolved dramatically in the years following the SEC's adoption of Regulation NMS. We compete in the U.S. listed cash equity securities market against NYSE and NASDAQ, other regional exchanges and several ATSs. Market participants now have multiple venues for the execution of orders, including national securities exchanges as well as numerous off-exchange venues, including ATSs operating "dark pools" that do not publicly display quotations, "lit" ATSs that publicly display quotations operating as ECNs and broker-dealers who internalize orders off-exchange. For example, dark pool venues compete with us by offering low cost executions and differ from "lit" ATSs in the degree of transparency with respect to quotes and trades they offer and in restrictions on who may access these systems. Unlike "lit" venues that publicly display orders, dark pools do not display orders publicly or privately. In addition, while dark pools are required to publicly report trade executions, unlike lit venues that are national securities exchanges, such as BZX, BYX, EDGX and EDGA, those public reports do not immediately identify the dark pool responsible for the trade execution. Hence, dark pools are less transparent than lit venues. Moreover, dark pools with trading volume below certain levels have discretion to offer access on discriminatory terms, effectively blocking access to certain types of market participants. These features of dark pools, which are not available to national securities exchanges, such as BZX, BYX, EDGX and EDGA, can appeal to trading participants who seek to minimize the public disclosure of their trading interest or limit the types of other trading participants that can access their orders. In addition, various broker-dealers internalize their order flow or route their orders to third-party ATSs. Based on publicly available data regarding reported trades, for the nine months ended September 30, 2015, off-exchange trading accounted for approximately 35.3% of consolidated U.S. listed equity volume, and for the year ended December 31, 2014, off-exchange trading accounted for approximately 36.2% of consolidated U.S. equity volume. If off-exchange trading expands further, it will adversely affect our market share in the United States. In addition, newer market entrants with different models may seek status as national securities exchanges, further competing with our exchange business. For example, on August 21, 2015, a subsidiary of an ATS operator, IEX Group, Inc. filed an application with the SEC to register as a national securities exchange.

        The market for execution services within listed cash equity securities in Europe has become significantly more competitive since MiFID came into effect in 2007. MiFID will be superseded and enhanced by MiFID II, which is expected to be implemented at the beginning of 2017. MiFID created a structure for pan-European competition versus other exchange monopolies throughout the E.U. countries. As a result, new MTFs emerged that have captured significant market share from existing national exchanges. Our major competitors in Europe include the London Stock Exchange Group, or

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LSE, which also includes an MTF, Turquoise, Euronext, Deutsche Börse, NASDAQ, SIX Swiss Exchange and Bolsas y Mercados Españoles, or BME.

        The market for the trading of U.S. listed equity options is also intensely competitive, with thirteen authorized U.S. options exchanges as of September 30, 2015, and a fourteenth currently pending approval, competing for market share. Our primary competitors in the U.S. options market are CBOE, NYSE, NASDAQ, ISE and Boston Options Exchange Group, LLC, or BOX. As a result of our size and limited product offerings, certain of our competitors have advantages in terms of greater market share and name recognition in the market for trading U.S. listed equity options. These advantages enable our competitors to provide products and services we do not offer, including proprietary products. For instance, some products offered uniquely by CBOE (for example, products based on the VIX volatility index) are not traded on our platform. Additionally, a rule change recently adopted by the Options Clearing Corporation, or the OCC, concerning a proposed capital plan that, if affirmed on review by the SEC, could effectively allow its shareholder exchanges, which include CBOE, ISE, NASDAQ and NYSE, to monetize for their benefit the OCC's monopoly over options clearing. We believe that the proposed capital plan has the potential to result in a wealth transfer from options investors to the OCC's shareholder exchanges, stifling future competition in the options market and increasing the costs of trading listed options.

        The spot FX market remains severely fragmented, with transparent automated marketplaces such as BATS Hotspot challenging ICAP plc (Electronic Booking System), or ICAP, and Thomson Reuters (Reuters Matching, FXall). While the spot FX market recently has been experiencing a shift from competing interbank platforms to ECNs, the electronification of spot FX may encounter resistance from clients that still prefer to utilize the phone, Reuters Conversational Dealing, Instant Bloomberg Chat, Bloomberg terminals and key banking relationships for price discovery and trading. Furthermore, electronification of FX appears to be experiencing more resistance outside the United States. The electronic FX market is also intensely competitive, with multiple venues such as EBS, Reuters Matching, FXall, FX Connect, CME Group, Currenex, 360T, Bloomberg, FastMatch, Gain GTX and others competing for market share. Additionally, exchange operators are actively expanding into the global FX market. For example Deutsche Börse has recently completed its acquisition of 360T and NASDAQ has announced its plans to launch an FX trading market. Moreover, the current market may experience consolidation, such as the recent acquisition of Molten Markets by ICAP.

        We compete in the spot FX market based on our ability to execute our customers' trades at competitive prices, to retain our existing customers and to attract new customers. Certain of our competitors have larger customer bases, more established name recognition, and a greater market share in certain markets, such as Europe. These advantages may enable them, among other things, to:

    provide products and services we do not offer;

    offer products and services at prices below ours to gain market share and to promote other businesses, such as FX options listed securities, contracts for difference including contracts for precious metals, energy and stock indices, and OTC derivatives;

    more efficiently engage in and expand existing relationships with strategic alliances;

    market, promote and sell their products and services more efficiently; and

    develop stronger relationships with customers.

        In recent years, the securities trading industry has witnessed increased consolidation among market participants, such as the November 2013 acquisition of NYSE by Intercontinental Exchange and our own acquisition of Direct Edge in January 2014. Additional consolidations and alliances among market participants may create larger internal liquidity pools that may attract trading volume and liquidity away from BZX, BYX, EDGX, EDGA and BATS Chi-X Europe's exchanges and, therefore, lead to

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decreased revenues. In addition, consolidations or alliances among our current competitors may achieve cost reductions or other increases in efficiency, which may allow our competitors to offer lower prices or better customer service than we do. These post-merger competitors may be able to achieve efficiencies that allow them to offer lower transaction fees or other financial incentives, which may hinder our ability to stay competitive in the listed cash equity securities market and to further penetrate the options market. In addition, these mergers may result in stronger competitors for us than the premerger entities as stand-alone businesses in other markets that we may decide to enter, such as futures and other derivative products.

        In addition, BATS is dependent upon certain third parties for its ETP listings business, some of which are direct competitors of BATS. For example, BATS does not currently offer intraday net asset values, or INAVs, calculation services for ETP issuers, which the SEC requires ETP issuers to calculate and distribute for their funds. NYSE Arca, owned by Intercontinental Exchange, is the primary provider of INAVs for equity ETP issuers. In October 2015, Intercontinental Exchange announced it agreed to acquire financial market data provider Interactive Data Corp., or IDC, by the end of 2015. IDC provides data and calculation services for ETP issuers to generate INAVs for fixed-income funds. As a result of Intercontinental Exchange's acquisition of IDC, Intercontinental Exchange would increase its competitive advantage in the INAV calculation space, which could result in ETP issuers listing on BZX not to be able to obtain comparable commercial terms from IDC for IDC's provision of INAV calculation services for BZX-listed ETPs.

        Further, we may face competition from our principal investors. Our principal investors or their affiliates may already have or may acquire an ownership interest in competing businesses (including national securities exchanges, dark pools, MTFs, ATSs or ECNs). These businesses may compete with us, either in relation to existing product and service offerings or any diversification of our product and service offerings into new asset classes and/or new geographic locations. For example, certain of our principal investors have a material interest in another MTF, Turquoise, and are planning to launch a new trading venue, "Plato." Furthermore, many of our principal investors operate off-exchange market-making desks, internalization platforms, dark pools, "lit" ATSs and ECNs and smart order routers, each of which potentially competes with us.

        If we are unable to compete successfully in this environment, our business, financial condition and operating results may be adversely affected. Also, if our share of total trading volumes decreases relative to our competitors, we may be less attractive to market participants as a source of liquidity, and we may lose additional trading volume and associated transaction fees, market data fees and connectivity fees as a result.

Our market data fees and net transaction fees may be reduced due to declines in our market share, trading volumes or regulatory changes, and our lack of revenue diversification may adversely affect our operating results and place us at a competitive disadvantage.

        We derived 34.8% and 44.7% of our revenues less cost of revenues from market data fees and net transaction fees, respectively, for the nine months ended September 30, 2015. We derived 35.9% and 42.7% of our revenues less cost of revenues from market data fees and net transaction fees, respectively, for the year ended December 31, 2014. Approximately 84.5% and 83.5% of our market data fees for the nine months ended September 30, 2015 and for the year ended December 31, 2014, respectively, represent our share of tape fees from the U.S. tape plans based on a formula, required by Regulation NMS, which takes into account both trading and quoting activity. For purposes of calculating this percentage, we have not attributed any incremental costs associated with providing trading and quoting information to the U.S. tape plans. Transaction fees represent fees that we earn for trade execution on BZX (including our U.S. listed equity options market), BYX, EDGX (including our U.S. listed equity options market), EDGA and BATS Chi-X Europe, whether a trade is executed internally on BZX, BYX, EDGX, EDGA or BATS Chi-X Europe or routed to another market center.

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Net transaction fees represent transaction fees less the liquidity payments and routing and clearing costs that we incurred to earn those transaction fees.

        The occurrence of any event that reduces the amount of market data fees or transaction fees that we receive, whether as a result of fee reductions, fewer members subscribing to the U.S. tape plans, declines in market share or trading volumes (or notional volume in the case of BATS Chi-X Europe) or regulatory changes, will have a direct negative impact on our operating results and future profitability. For example, if our market share of U.S. listed cash equities and U.S. listed equity options trading, or our European cash equities trading, were to decline, our share of market data fees could also decline. In addition, if the amount of trading volume on BZX, BYX, EDGX or EDGA or notional value traded on BATS Chi-X Europe decreases, we will lose transaction fees. Moreover, market data fees could decline as a result of a reduction in the numbers of market data users, for example because of consolidation among market data subscribers or due to a decline in professional subscriptions as a result of staff reductions in the financial services industry or otherwise. For a discussion of the factors that may impact trading volumes, see "—Current economic conditions could adversely affect our business and financial condition." Regulatory changes could also impact the manner in which we set our transaction fees, the fees we receive from market data, or our cost in providing such services. See "—We operate in a highly regulated industry. Regulatory changes and changes in market structure could have a material adverse effect on our business and those of many of our clients."

        In addition, our dependence upon revenues derived primarily from our transaction-based businesses may place us at a competitive disadvantage. Some of our competitors derive a more significant portion of their revenues from more than one source as a result of more diversified product and service offerings and in more numerous geographies. For example, NYSE, LSE, Euronext and NASDAQ may realize substantial revenue from listing fees and index licensing fees, and some of our FX competitors may realize substantial revenue from market data and port fees. In addition, many of our competitors also offer technology outsourcing. As a result, lower transaction fees or market data fees may impact our operating results and future profitability more significantly than our competitors', providing them with a competitive advantage in pricing their products and services or withstanding a reduction in trading volume.

Our industry is characterized by intense price competition.

        The securities trading industry and FX market are characterized by intense price competition. We may be required to adjust pricing to respond to actions by new or existing competitors, which could adversely impact operating results. We also compete with respect to the pricing of market data and with respect to value-added market data such as historical market data. If we are unable to compete successfully with respect to the pricing of our services and products, our business, financial condition and operating results may be adversely affected. Furthermore, to attract market share, we may offer "inverted" pricing specials or no-transaction fee trading from time to time. For example, our BATS Hotspot Platform has at times offered trading of spot gold and silver pairs without any transaction fee, or waived taker fees for certain currency pairs, and has agreed to offer free trading for all transactions on BATS Hotspot's London-based matching engine until the end of 2015. In addition, BZX recently began offering to pay an incentive fee to exchange-traded investment funds that list their shares on BZX. These forms of promotions may adversely affect our profitability.

Our revenues are positively correlated with overall market volume, which can be impacted by a number of factors, including market prolonged diminished volatility.

        A significant percentage of our revenue is tied directly to the volume of securities traded on our markets. Trading volume on our markets can be influenced by a number of factors, including market volatility. The U.S. listed cash equity market has seen an overall decline in trading volume for the past three years, with the market ADV falling approximately 17.9% from 2011 to 2012 and remaining flat

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from 2012 through 2014. In addition, other events may affect overall market volume on a sustained basis, including rule-making under Dodd-Frank. For example, the provision commonly known as the Volcker Rule restricts banking entities from engaging in certain kinds of proprietary trading, including with respect to listed equity securities and listed equity options. Still in its early stages of adoption, the Volcker Rule could have an adverse impact on U.S. equity market volumes and BATS' U.S. equity exchanges. For example, if banking entities reduce their trading activity and that activity is not replaced by other market participants, we may face a decline in our trading volumes, which could lower our revenues and may adversely affect our operating results.

        Revenue from our FX business is influenced by the general level of trading activity in the FX market. Our FX revenue and operating results may vary significantly from period to period due primarily to movements and trends in the world's currency markets and to fluctuations in trading levels. We have generally experienced greater trading volume and higher revenue in periods of volatile currency markets. Significant swings in the market volatility can also result in increased customer trading losses, higher turnover and reduced trading volume. In the event we experience lower levels of currency volatility, our revenue and profitability may be negatively affected.

        Like other financial services firms, our FX business and profitability are directly affected by factors that are beyond our control, such as economic and political conditions, government or central bank actions like the unexpected actions of the Swiss National Bank on January 15, 2015, broad trends in business and finance, changes in the volume of foreign currency transactions, changes in supply and demand for currencies, movements in currency exchange rates, changes in the financial strength of market participants, legislative and regulatory changes, changes in how such transactions are processed and disruptions due to terrorism, war or extreme weather events. Any one or more of these factors, or other factors, may adversely affect our FX business and results of operations and cash flows. A weakness in equity markets could result in reduced trading activity in the FX market and therefore could have a material adverse effect on our FX business, financial condition and results of operations and cash flows.

System limitations, failures or security breaches could harm our business.

        Our business depends on the integrity and performance of our computer and communications systems. If our systems cannot expand to cope with increased demand or otherwise fail to perform, we could experience unanticipated disruptions in service, slower response times and delays in the introduction of new products and services. These consequences could result in trading outages, lower trading volumes, financial losses, decreased customer service and satisfaction and regulatory sanctions. Our markets have experienced occasional systems failures and delays in the past and could experience future systems failures and delays.

        For example, on March 23, 2012, we experienced a serious technical failure on BZX, forcing us to cancel our planned IPO. The failure resulted from a software bug that appeared during the BATS IPO auction. In addition to forcing us to cancel our IPO, the technological failure played a role in the halting of another issuer's stock for five minutes. These technical failures damaged our reputation and resulted in increased regulatory scrutiny of the event by the SEC and other governmental authorities.

        Our systems and operations also are vulnerable to damage or interruption from human error, natural disasters, power loss, cyber attacks, sabotage or terrorism, computer viruses, unauthorized access, intentional acts of vandalism and similar events. Persons who circumvent security measures could wrongfully access and use our information or our customers' information or cause interruptions or malfunctions in our operations. Although we currently maintain and expect to maintain security measures designed to protect the integrity of our systems, multiple computer facilities designed to provide redundancy and back-up to reduce the risk of system disruptions and facilities expected to maintain service during a system disruption, such security measures, systems and facilities may prove

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inadequate. Any breach in security or system failure that allows unauthorized access, causes an interruption in service or decreases the responsiveness of our systems could impair our reputation, damage our brand name and negatively impact our business, financial condition and operating results.

We operate in a highly regulated industry. Regulatory changes and changes in market structure could have a material adverse effect on our business and those of many of our clients.

        Our securities markets and their participants are highly regulated and are subject to extensive regulation in the United States and Europe. In recent years, the securities trading industry and, in particular, the securities markets have also been subject to significant regulatory changes. Moreover, in the past several years, the securities markets have been the subject of increasing governmental and public scrutiny in response to the global economic crisis. For example, on July 21, 2010, Dodd-Frank was enacted, introducing significant changes to financial industry regulation. Dodd-Frank may also affect the structure, size, depth and liquidity of the financial markets generally and will require that certain standardized derivative products, likely including currency derivative products, be traded on a Swap Execution Facility, or SEF, or designated contract market, or DCM. Similarly, in Europe, the European Commission, or E.C., has proposed a draft delegated regulation in the context of the MiFID II reforms which would introduce a harmonized definition of currency derivative products across the European Union. If the proposed regulation is adopted in its current draft form, it would likely mean that a number of currency products which may have been treated as spot transactions (and outside the scope of the MiFID and certain other derivative rules) would thereafter be treated as derivative products (and consequently within the scope of the MiFID and certain other derivative rules). This may adversely impact the overall level of activity conducted in such products, although, to the extent that any such products are declared by the European Securities Markets Authority, or ESMA, to be subject to an obligation to trade on certain trading venues, this could lead to a greater proportion of the remaining activity taking place on trading venues.

        In addition, Congress, regulators and some media have been increasingly scrutinizing electronic trading and the structure of equity markets in recent years. The SEC continues to consider various potential market structure changes, which could result in reduced trading volumes, or which could negatively affect our business. For example, in June 2014, the Chair of the SEC announced that the SEC was conducting a comprehensive review of market structure. As part of that review, in January 2015, the SEC appointed a special market structure advisory committee of industry participants to review possible regulatory changes. In response to the SEC's efforts, many market participants, including BATS, have publicly announced recommendations for regulatory changes. Reforms recommended by various market participants have included: (i) the elimination of maker-taker pricing or a drastic reduction in access fees charged by exchanges, (ii) increased transparency around order handling practices, (iii) implementation of a so-called trade-at prohibition, which would restrict execution of a trade by a market center that was not displaying the best available quotation, such as off-exchange trading in listed equities, (iv) limitations on high frequency trading and restrictions on, and enhanced oversight of, broker-dealers' automated trading algorithms, (v) limitations on the distribution of direct, or proprietary, market data feeds by exchanges, (vi) changes to the governance models of the consolidated market data national market system plans, or SIPs, including potentially providing for increased representation by non-SROs, as well as increasing the SIPs' technological capacity, (vii) elimination of Self Regulatory Organization, or SRO, status for securities exchanges, and (ix) limitations on or elimination of Rule 611 of Regulation NMS, which currently requires all market participants to execute trades at prices no worse than the best bid or offer displayed by an exchange or other automated trading center. To the extent the SEC decides to adopt some or all of these recommendations, our business could be negatively impacted. For example, elimination of maker-taker pricing or a reduction in access fees could make it more difficult to incentivize market makers to display orders on our exchanges, and could reduce our net transaction fees. Implementation of a trade-at prohibition could restrict our ability to execute non-displayed orders on our exchanges. New

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restrictions on high frequency trading or broker-dealers' use of automated trading algorithms could result in decreases in market volumes which could negatively affect our revenue. Additional restrictions on our ability to distribute proprietary market data could make it more difficult to derive revenue from the sale of such market data. Changes to the SIPs, including by providing for greater non-SRO participation or mandating further technological investments, could negatively impact the costs and revenues of the SIPs, which in turn could negatively impact the amount of revenue we receive from the SIPs. Elimination of SRO status for securities exchanges could have the effect of eliminating our ability to assert the legal defense of quasi-governmental immunity to shield us from civil liability for actions we take in furtherance of our SRO responsibilities, which in turn could subject us to liability for monetary damages in lawsuits. Elimination or limitation on Rule 611 could reduce market participants' need to execute trades on our exchanges when such exchange is displaying the best available price, reducing our trading volumes and revenues.

        Over the last several years the SEC and other regulators have proposed various specific market structure changes in addition to those described above. See "Regulation." Actions on any of the specific regulatory issues currently under review in the United States and Europe could have a material impact on our business. The SEC, FINRA and the national securities exchanges have proposed, adopted, or are in the process of implementing several initiatives aimed at addressing the oversight, integrity and resilience of the markets. These include large trader reporting, market access risk control rules, limit up/limit down trading price bands and market-wide circuit-breakers, among other initiatives. In addition, in July 2012, the SEC adopted a rule requiring FINRA and the securities exchanges, such as BZX, BYX, EDGX and EDGA, to develop a consolidated audit trail, or CAT, that will allow regulators to efficiently and accurately track all activity in listed securities throughout the U.S. markets. While we support these initiatives and believe they will strengthen the U.S. equity market structure, these and potential future market structure reforms could involve significant implementation and ongoing costs for our U.S. exchange subsidiaries and other market participants. We believe our customers would likely bear a portion of these expenses through increased trading costs, and could result in lower transaction volumes. For example, the costs of developing, building and operating the CAT are expected to be significant. Although the manner in which the costs of the CAT will be allocated among the exchanges, FINRA and market participants has not yet been finalized, to the extent that FINRA and the national securities exchanges impose new quoting or trading fees in order to fund the CAT, market participants may alter their trading activities, causing volumes to decline.

        Effective November 2015, the SEC's Regulation SCI requires providers of certain key market infrastructure, including BZX, BYX, EDGX and EDGA, to have comprehensive policies and procedures in place surrounding their technology. Regulation SCI, which stands for "Systems Compliance and Integrity," replaces the current voluntary compliance program with rules whose violation may be the subject of enforcement actions. Self-regulatory organizations, such as BZX, BYX, EDGX and EDGA, certain ATSs, the SIPs and certain clearing agencies are required to take specific measures to ensure that the core technology meets these new Regulation SCI standards, to conduct business continuity testing and to provide certain notifications in the event of systems disruptions and other events. While we support this regulation and do not anticipate material changes will be necessary for continued compliance, the burdens associated with compliance with such rule could negatively impact our business by increasing our operational expenses.

        In addition, the SEC recently approved a two-year "tick pilot" program to impose wider minimum quoting and/or trading increments, or tick sizes, in certain illiquid securities in an effort to incent liquidity provision in those securities. The tick pilot is scheduled to begin by October 3, 2016, and among other criteria, will generally include stocks of companies with $3 billion or less in market capitalization, an average trading volume of one million shares or less, and a volume weighted average price of at least $2.00 for each trading day during the measurement period prior to the effective date of the pilot. The tick pilot will consist of a control group of approximately 1,400 securities and three

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test groups with 400 securities in each selected by a stratified sampling. During the pilot: (i) pilot securities in the control group will be quoted at the current tick size increment of $0.01 per share and will trade at the currently permitted increments; (ii) pilot securities in the first test group will be quoted in $0.05 minimum increments, but will continue to trade at any price increment that is currently permitted; (iii) the second test group will be quoted in $0.05 minimum increments and will trade at $0.05 minimum increments, subject to a midpoint exception, a retail investor exception, and a negotiated trade exception; and (iv) pilot securities in the third test group will be subject to the same terms as the second test group and will also be subject to a "trade-at" requirement to prevent price matching by a venue not displaying at a price of a trading center's best "protected" bid or offer, unless an enumerated exception applies. The exchanges, including BZX, BYX, EDGX and EDGA, and FINRA are required to submit their initial assessments on the tick pilot's impact 18 months after the pilot begins based on data generated during the first 12 months of its operation. The tick pilot will require BZX, BYX, EDGX and EDGA to devote additional significant resources to implement and report on the program, increasing our costs. In addition, for tick pilot test group securities where execution at price increments narrower than the permitted quote is permitted, the implementation of the tick pilot could incentivize additional trading away from the exchanges, reducing the volume of orders executed on BZX, BYX, EDGX and EDGA.

        The continued growth of high frequency trading, and what, if any, response is appropriate, has also been the subject of extensive Congressional and regulatory consideration. High frequency trading generally refers to certain types of computer-executed automated trading strategies. A number of exchanges and other market participants have also been the subject of private litigation and regulatory enforcement actions alleging that high frequency trading firms have received unfair advantages at the expense of other traders. High frequency trading accounts for a significant percentage of the daily volume in the U.S. and European equity markets and these actions and other efforts to slow trading could lead to a reduction in trading volumes, negatively impacting all trading markets, including our business.

        Our customers are also highly regulated. The SEC, FINRA, the Commodity Futures Trading Commission, or CFTC, the Board of Governors of the Federal Reserve System, or Federal Reserve, the Federal Deposit Insurance Corporation, or FDIC, the OCC, the U.K. Financial Conduct Authority, or FCA, and other regulatory authorities could impose regulatory changes that could adversely impact the attractiveness of, and the ability of our customers to use, our markets. Regulatory changes by the SEC, FINRA, CFTC, Federal Reserve, FDIC, OCC, FCA or other regulatory authorities could result in the loss of a significant number of customers or a reduction in trading activity on our markets.

        The implementation of MiFID II in Europe will result in an alteration of the existing MiFID structure that has encouraged competition among market centers in Europe. The impact of MiFID II and MiFIR, is likely to be significant, and could reduce trading volumes and trading fees, while increasing our costs of operating in Europe.

        For example, MiFID II and MiFIR introduce a number of new rules which apply directly to European trading venues such as our MTF and RM. These rules include provisions governing high frequency algorithmic trading and specific obligations on firms operating RMs to put in place systems, procedures and arrangements to ensure the trading venue is resilient, has sufficient capacity to cope with order flow, has effective business continuity arrangements, etc. In particular, there are new rules specifically governing tick sizes, synchronization of business clocks and the imposition of limits on the ratio of orders to transactions which RMs will need to implement.

        MiFIR also introduces a much broader transparency regime for RMs and MTFs covering not only pre-and post-trade transparency for equities but also for equity-like instruments, derivatives and fixed income instruments. Waivers from transparency are subject to venue-specific and European-wide volume caps which may curtail participants' ability to conduct dark book trading.

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        In addition to the new trading venue and transparency rules noted above, MiFID II introduces enhanced internal organizational and compliance monitoring requirements for RMs which will require the enhancement of internal compliance arrangements, processes and procedures.

        These additional requirements, individually and in aggregate, could have a material adverse effect on our business and cash flows, financial condition and results of our European operations. They imply additional implementation expenditure but potentially also additional ongoing compliance resource. They may also have an adverse impact on the volume of trading that takes place on our venues thereby potentially reducing revenue.

        MiFIR may also have an adverse impact on our U.S. listed cash equity operations as a result of the introduction of a mandatory equity trading rule which would require E.U. investment firms to trade equities which are either admitted to trading on an RM or traded on an E.U. trading venue only on RMs, MTFs with systematic internalisers or with third-country trading venues which have been specifically assessed to be equivalent. Since a significant number of U.S. listed cash equities can be traded on E.U. trading venues, E.U. investment firms may be required to undertake trades in such U.S. listed cash equities only on those European markets unless and until an equivalence assessment is made in respect of our U.S. exchanges.

        On February 14, 2013, the E.C. published a proposal for a directive for a common Financial Transaction Tax, or FTT, in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia or the participating Member States.

        The proposed FTT has a broad scope and could, if introduced in the form originally proposed, apply to certain transactions relating to financial instruments (including secondary market transactions) in certain circumstances.

        Under the February 14, 2013 proposal, the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain transactions relating to financial instruments where at least one party is a financial institution (as defined therein), and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, "established" in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is the subject of the transaction is issued in a participating Member State.

        The FTT proposal remains subject to negotiation between the participating Member States. Joint statements issued by participating Member States indicate an intention to implement the FTT by January 1, 2016, although this timing no longer appears to be realistic. The FTT proposal may, however, be altered prior to any implementation, the timing of which remains unclear. Additional E.U. Member States may decide to participate and/or certain of the participating Member States may decide to withdraw.

        If implemented, an FTT may, among other matters, make listing the affected financial instruments on an exchange less attractive for issuers than would be the case absent implementation of the FTT. By raising the cost of trading for our customers, an FTT may reduce the volume of transactions and the liquidity and market efficiency of the capital markets, reducing revenues.

        In addition, Dodd-Frank will likely result in exchange or execution platform trading and clearing of many swaps, which could give greater liquidity and accessibility to derivatives that compete with options traded on our U.S. listed equity options markets. The Camp Tax Reform proposals, introduced as legislation in 2014 as a means to unifying tax derivatives could result in adverse tax consequences to market participants, which may lead to fewer investors using listed equity options to reduce the risks of owning stock or generating additional income from their stock holdings. The proposals, if adopted as proposed, may reduce the volume of transactions in the U.S. listed equity options market. Furthermore,

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the SEC continues to consider whether to impose a cap on transaction fees charged by options exchanges similar to the caps applied to equity exchanges. Transaction fee caps would limit the amount of fees that we can charge to access our liquidity and, accordingly, the payments we can pay to market participants to attract liquidity.

        In addition to its other SRO responsibilities, BZX, as an ETP listing market, also is responsible for overseeing each listed company's compliance with BZX's listing standards. Our listings department evaluates applications submitted by issuers interested in listing their securities on BZX to determine whether the quantitative and qualitative listing standards have been satisfied. Once securities are listed, our listings department monitors each issuer's ongoing compliance with BZX's continued listing standards. Failure to comply with these SRO responsibilities could result in potential sanctions or fines and a negative impact on our reputation or branding.

        The legislative and regulatory environment in which the FX market operates is evolving and has undergone significant changes in the recent past and there may be future regulatory changes in the FX industry. FX market participants have seen an increasing number of law enforcement actions and regulatory inquiries into their business practices. The governmental bodies and regulatory organizations that regulate parts of the FX market have enacted, proposed and may consider additional legislative and regulatory initiatives and may adopt new or revised laws and regulations. Changes in the interpretation or enforcement of existing laws and regulations by these entities, or the adoption of new legal or regulatory requirements, may also adversely affect our FX business. For example, the New York State Department of Financial Services recently issued a consent order with Barclays Bank PLC, or Barclays, pursuant to which Barclays agreed, among other things, to pay a $150 million fine over the "last look" function in its electronic FX trading business. The Hotspot Platform contains "last look" functionality that may be used by certain platform participants. Changes in how "last look" is viewed by governmental bodies or regulatory organizations may have an adverse impact on the acceptance of "last look" functionality in the FX market generally as well as on our FX business.

We plan on expanding our FX business, which will expose us to additional risks, including increased regulatory oversight.

        In September 2015, BATS Hotspot launched a London matching engine to target specific currency pairs that are more active in Europe and attract more participation from Europe and Asia, complementing BATS Hotspot's New York area matching engine and giving investors two distinct pools of liquidity to drive price formation globally. This business expansion brings increased risk and potentially increased regulatory scrutiny.

        BATS Hotspot may launch a SEF. Launching the SEF would require BATS Hotspot to comply with additional regulatory obligations, as the SEF will be registered with and regulated by the CFTC. For example, under Dodd-Frank and CFTC rules, SEFs must establish and enforce trading and market monitoring procedures and maintain comprehensive business records, among other requirements. Similarly, BATS Hotspot may also launch an MTF in the United Kingdom that would be registered with and regulated by the FCA, and subject to corresponding obligations.

Changes to the regulators and agencies governing European financial markets could adversely affect our business.

        A number of changes in the regulators and agencies governing European financial markets have been enacted or proposed since the financial crisis. In 2010, the U.K. Government announced plans to reform the U.K. regulatory regime by abolishing the Financial Services Authority and replacing it with two regulators, one covering prudential risks and the other covering conduct of business matters. Accordingly, on April 1, 2013, the FCA became the primary regulator of BATS Chi-X Europe. In addition, three independent European agencies now regulate the financial markets, banking and

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insurance industries, with the mandate of contributing to the stability of the European Union's financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as by enhancing investor protection. In particular, ESMA fosters supervisory convergence both among national securities regulators and across financial sectors by working closely with the other competent European Supervisory Authorities, or ESAs.

        Until such changes have been in effect for a longer period of time, we cannot fully estimate what long term effect they will have on the oversight and operation of our European market, clearing and other operations, but we do expect it to affect our business, potentially leading to increased regulation and oversight of our operations and the European capital markets generally.

Regulatory changes or future court rulings may have an adverse impact on our revenue from proprietary market data products.

        Regulatory and legal developments could reduce the amount of revenue that we earn from our proprietary market data products. In the United States, we generally are required to seek approval from the SEC for the fees that we charge for our securities market data products. In recent years, certain industry groups have objected to the ability of exchanges to charge for certain market data products. Specifically, Securities Industry and Financial Markets Association, or SIFMA, has filed a number of denial of access applications with the SEC to set aside proposed rule changes to establish or modify fees for BATS market data products and related services. Each application is being held in abeyance pending a decision on a separate SIFMA denial of access application currently before the SEC's Chief Administrative Law Judge, or ALJ, regarding fees proposed by NASDAQ and NYSE for their respective market data products. An adverse ruling in that matter could cause the SEC to more closely examine exchange market data fees, which in turn could result in our having to reduce the fees we charge for market data. The SEC also has authority to undertake such review at its own discretion. If such an examination is conducted, and the results are detrimental to our U.S. securities exchanges' ability to charge for market data, there could be a negative impact on our revenues. We cannot predict how the ALJ will rule on the matter or whether, or in what form, any regulatory changes will be implemented, or their potential impact on our business. A determination by the SEC, for example, to link securities market data fees to marginal costs, to take a more active role in the market data rate-setting process, or to reduce the current levels of securities market data fees could have an adverse effect on our securities market data revenues.

        We believe BATS Chi-X Europe currently offers market data to customers on a non-discriminatory basis at a reasonable cost. As regulators determine how market data should be disaggregated and what is a reasonable commercial basis for providing market data, as set out in MiFID II and MiFIR, it could affect our ability to offer market data products in the same manner that we do today thereby causing an adverse effect on our European market data revenues. While MiFID II aims to encourage a commercial solution to a consolidated tape in Europe, should this fail to materialize, policy makers might be encouraged to implement a mandatory solution that could impact our ability to develop our own commercial offering.

We have indirect exposure to the European sovereign debt crisis.

        BATS Chi-X Europe may from time to time hold cash reserves in U.K. sovereign government debt, commonly known as Gilts. In addition, many of its customers are banks who may hold investments in Euro-denominated sovereign debt. To the extent those customers are negatively impacted by those investments, they may be less able to pay amounts owed to us or renew service agreements with us. Such developments could negatively affect our business. Further, to the extent that sovereign debt concerns depress economic activity, it may negatively impact the number of transactions processed on our trading venues, resulting in lower revenue.

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        In addition, an exit from the Euro by an E.U. Member State or an ongoing recession in the Euro zone and the related Euro crisis could lead to foreign exchange volatility and a potential loss of revenues if trading volumes are negatively impacted across all of our trading platforms.

We are dependent on the members of our senior management team and other key personnel.

        We are highly dependent upon our Chief Executive Officer and President, Chris Concannon, and the CEO of BATS Chi-X Europe, Mark Hemsley. Both of these individual's talents and leadership have been, and continue to be, critical to our success. The diminution or loss of the services of any one of these individuals for any reason, and any negative market or industry perception arising from that diminution or loss, would have a material adverse effect on our business.

        Our success also depends largely on the efforts and abilities of the other key members of our senior management team. Many of these individuals have worked together closely since our inception in 2005.

        Members of our senior management team are subject to employment agreements, each with a term of three years, with automatic one-year annual extensions. Notwithstanding the foregoing, an employment agreement and the corresponding employment relationship between us and our senior management may be terminated at any time by either party with or without cause or advance notice. Accordingly, it is possible that one or more members of our senior management team could resign to work elsewhere. Because each member of our senior management team has a different area of specialization, the departure of any one of these individuals could create a deficiency in one of the core aspects of our business, particularly given our small number of employees relative to our competitors.

        We are also dependent on the efforts of our team of technology professionals, many of whom have been with us for several years, and on our ability to recruit and retain highly skilled and often specialized personnel, particularly in light of the rapid pace of technological advances. The level of competition in our industry for individuals with this level of experience or these skills is intense. Significant losses of key personnel, particularly to competitors, could make it difficult for us to compete successfully. In addition, we may be unable to attract and retain qualified management and personnel in the future, including in relation to any diversification of our product and service offerings into new asset classes and/or new geographic locations.

        We do not maintain "key person" life insurance policies on any of our executive officers, managers, key employees or technical personnel. The loss of the services of these persons for any reason, as well as any negative market or industry perception arising from those losses, could have a material adverse effect on our business, financial condition and operating results.

We may not be able to keep up with rapid technological and other competitive changes affecting our industries, and we may be unable to further diversify our business.

        The markets in which we compete are characterized by rapidly changing technology, evolving industry standards and regulations, frequent enhancements to existing products and services, the adoption of new services and products and changing customer demands and regulatory requirements. If our platforms fail to function as expected, our business would be negatively affected. In addition, our business, financial condition and operating results may be adversely affected if we cannot successfully develop, introduce and/or market new services and products or if we need to adopt costly and customized technology for our services and products. Further, our failure to anticipate or respond adequately to changes in technology, customer preferences and regulatory requirements or any significant delays in product development efforts could have a material adverse effect on our business, financial condition and operating results.

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        In addition, we will face significant challenges as we seek to diversify our product and service offerings. We may, for example, diversify our equities business by competing with NYSE, NASDAQ and other exchanges and non-exchange trading platforms for new asset classes and in new geographic locations and new or existing listings. We may also diversify our FX business by competing with ICAP plc (Electronic Booking System), Thomson Reuters and others for new asset classes and in new geographic locations. We will face substantial competition from these market centers, some of which have greater brand recognition than we do and offer a broader range of services than we currently offer. Accordingly, we may not be able to increase our revenues, compete successfully by further diversifying our product and service offerings or meet ongoing and changing regulatory requirements.

We generate a significant percentage of our total revenues from, and are provided with significant liquidity in our markets by, customers who are affiliates of our principal investors, who are not contractually obligated to continue to use our services or purchase our products and who also use the services of our competitors.

        We earn a significant percentage of our revenue from customers who are affiliates of our principal investors. For the nine months ended September 30, 2015 and 2014, 46.7% and 49.9% of our total transaction fees were generated by affiliates of our principal investors, respectively. For the years ended December 31, 2014, 2013 and 2012, 49.0%, 46.6% and 45.7% of our total transaction fees, respectively, were generated by affiliates of our principal investors. One of our principal investors accounted for 11%, 12% and 10% of our total transaction fees during the nine months ended September 30, 2015 and the years 2014 and 2013, respectively. None of our principal investors accounted for more than 10% of our total revenues during the 2012 year. In addition, affiliates of our principal investors also provide us with liquidity for which we provide them with a rebate. For the nine months ended September 30, 2015 and 2014, 52.4% and 53.8% of our total liquidity payments was generated by affiliates of our principal investors, respectively. For the years ended December 31, 2014, 2013 and 2012, 54.8%, 53.4% and 52.8% of our total liquidity payments, respectively, were generated by affiliates of our principal investors. For the nine months ended September 30, 2015, none of our principal investors accounted for more than 10% of total liquidity rebates paid. For the years ended December 31, 2014, 2013 and 2012, an affiliate of one of our principal investors accounted for 9%, 12% and 10%, respectively, of total liquidity rebates paid. None of our customers is contractually or otherwise obligated to continue to use our services or purchase our products. In addition, affiliates of our principal investors and our other customers have made, and may continue to make, investments in businesses that directly compete with us. Our customers also trade, and will continue to trade, on markets operated by our competitors. The loss of, or a significant reduction in, participation on our markets by these customers may have a material adverse effect on our business, financial condition and results of operations.

We may not be able to successfully integrate BATS Hotspot, which may result in an inability to realize the anticipated benefits of the BATS Hotspot Acquisition.

        Integrating BATS Hotspot's operations will involve complex technological, operational and personnel-related challenges. This process will be time-consuming and may disrupt the business of the combined company. Difficulties, costs and delays could be encountered with respect to:

    the possible redesign of BATS Hotspot technology;

    resolving possible inconsistencies in standards, controls, procedures and policies, business cultures and compensation structures between us and BATS Hotspot;

    the diversion of management's attention from ongoing business concerns and other strategic opportunities;

    the retention of BATS Hotspot's key employees and management;

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    possible tax costs or inefficiencies associated with integrating the operations of the combined company; and

    the retention of strategic partners and attraction of new strategic partners.

        For these reasons, we may not achieve the anticipated financial and strategic benefits, including cost savings from operational efficiencies and synergies, from the acquisition of BATS Hotspot's businesses, and any actual cost savings and synergies may be lower than we currently expect and may take a longer time to achieve than we currently anticipate.

We may have difficulty executing our growth strategy and managing our growth effectively.

        We have experienced significant growth in our business since our inception in 2005, with material expansions into diverse businesses including European listed cash equity securities, U.S. listed equity options and global institutional spot FX trading. While our securities market share has increased, there is no guarantee this will continue in the future. Continuing to grow our businesses will require increased investment in our facilities, personnel and financial and management systems and controls. Unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated with this growth, our future profitability will be adversely affected. Furthermore, failure to successfully expand into new asset classes or new geographies may adversely affect our growth strategy and our future profitability.

        As part of our growth strategy, we intend to continue evaluating potential acquisition opportunities and strategic alliances. Any such transaction may be effected quickly, may occur at any time and may be significant in size relative to our existing assets and operations. The market for acquisition targets and strategic alliances is highly competitive, particularly in light of increasing consolidation in the securities trading industry and FX industry, which may adversely affect our ability to find acquisition candidates or strategic partners that fit our growth strategy and our investment parameters. These transactions involve numerous risks, including, among others:

    failure to achieve financial or operating objectives;

    failure to successfully and timely integrate any operations, products, services or technology we may acquire or combine within a strategic alliance;

    diversion of management's and other key personnel's attention;

    failure to obtain necessary regulatory or other approvals;

    potential loss of customers or personnel;

    failure to obtain necessary financing on acceptable terms; or

    acquisition-related litigation.

        Failure to successfully manage any acquisition or strategic alliance we may make in the future could adversely affect our growth strategy and our future profitability. Furthermore, future acquisitions or strategic alliances may require significant resources and may result in significant unanticipated losses, costs or liabilities.

        Future acquisitions may be effected through the issuance of our common stock, which could substantially dilute the ownership percentage of our current stockholders.

If our goodwill or intangible assets become impaired we may be required to record a significant charge to earnings.

        As a result of our acquisitions of Chi-X Europe on November 30, 2011, Direct Edge on January 31, 2014 and BATS Hotspot on March 13, 2015, we have recorded approximately $1,042.5 million of goodwill and other acquired intangible assets. We assess the potential impairment of goodwill at least annually, or more frequently when events or changes in circumstances signal indicators

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of impairment are present. Adverse changes in economic conditions or our operations could affect the assumptions we use to calculate the fair value, which in turn could result in an impairment charge in future periods that would impact our results of operations and financial position.

The regulatory framework under which we operate and new regulatory requirements or new interpretations of existing regulatory requirements could require substantial time and resources for compliance, which could make it difficult and costly for us to operate our business.

        Our securities markets operate in a highly regulated industry and may be subject to regulatory actions or other legal proceedings that could lead to censures, fines or other penalties if we fail to comply with our legal and regulatory obligations. The securities trading industry is subject to significant regulatory oversight and could be subject to increased governmental and public scrutiny in the future in response to global conditions and events. In the United States, our markets are regulated by the SEC and our broker-dealer subsidiary is regulated by the SEC, FINRA and other applicable SROs. In the United Kingdom, our markets are subject to local and/or E.U. regulation. As a result, our RMs may be subject to audits, investigations, administrative proceedings and enforcement actions relating to compliance with applicable rules and regulations.

        In January 2015, the SEC completed two separate investigations into the development of order types: one related to BZX and BYX and another related to EDGX and EDGA. While the SEC concluded its investigation with no action taken with regards to BZX and BYX, the SEC accepted our offer of settlement with respect to EDGX and EDGA, which included a monetary penalty and an agreement to implement certain measures aimed at preventing future violations of the Exchange Act and the rules and regulations promulgated thereunder. In the future, we could be subject to SEC or other regulatory investigations or enforcement proceedings that could result in substantial sanctions, including revocation of our operating licenses. Any such investigations or proceedings, whether successful or unsuccessful, could result in substantial costs, the diversion of resources, including management time, and potential harm to our reputation, which could have a material adverse effect on our business, results of operations or financial condition. In addition, our exchanges could be required to modify or restructure their regulatory functions in response to any changes in the regulatory environment, or they may be required to rely on third parties to perform regulatory and oversight functions, each of which may require us to incur substantial expenses and may harm our reputation if our regulatory services are deemed inadequate.

        In addition, our registered broker-dealer subsidiary, BATS Trading, is subject to regulation by the SEC, FINRA and other SROs. As a registered broker-dealer, BATS Trading is subject to regulations concerning all aspects of its business, including trading practices, order handling, best execution, anti-money laundering, handling of material non-public information, safeguarding data, reporting, record retention, market access and the conduct of its officers, employees and other associated persons. In addition, BATS Trading is subject to regulatory requirements intended to ensure its general financial soundness and liquidity, which require that it comply with certain minimum capital requirements. The SEC and FINRA impose rules that require notification when a broker-dealer's net capital falls below certain predefined criteria, dictate the ratio of debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the SEC's uniform net capital rule and FINRA rules impose certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC and FINRA for certain withdrawals of capital. Any failure to comply with applicable broker-dealer regulations could have a material adverse effect on the operation of our business, financial condition and operating results.

        Our European securities business is subject to regulatory oversight in the United Kingdom by the FCA, which through the "passporting" process provides authorization to carry on business in other EEA member states. The authorities may revoke this authorization if we do not suitably carry out our regulated business activities. The authorities are also entitled to request that we adopt measures in order to ensure that we continue to fulfill the authorities' requirements. Any failure by us to meet

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these requirements or any revocation by the authorities of our authorization to carry on business in other EEA member states would materially affect our ability to operate a trading venue on a pan-European basis and could adversely affect our business, financial condition and results of operations. We currently operate both an RIE and a routing broker in the United Kingdom.

We have self-regulatory obligations that may create conflicts of interests.

        We have obligations to regulate and monitor activities in our markets and ensure compliance with applicable law and the rules of our markets by market participants. In the United States, the SEC and others have expressed concern about potential conflicts of interest of "for-profit" markets performing the regulatory functions of an SRO. For example, we are responsible for identifying possible violations of the securities laws by our members and taking regulatory action against those members if such violations are confirmed. Although our U.S. exchanges outsource certain of their regulatory functions to FINRA, we could be conflicted in pursuing such regulatory actions against our customers because to do so could result in a loss of trading volumes on our markets. Any failure by us to diligently and fairly regulate our markets or to otherwise fulfill our regulatory obligations could significantly harm our reputation, prompt SEC scrutiny and adversely affect our business and reputation.

Our ability to implement or amend rules could be limited or delayed because of regulatory oversight, review or approval, which could negatively affect our ability to implement needed changes or expand our products or services.

        Our exchanges registered with the SEC must submit proposed rule changes to the SEC for its review and, in many cases, its approval. Even where a proposed rule change may be effective upon filing with the SEC, the SEC retains the right to suspend and disapprove such rule changes. The rule review process can be lengthy and can significantly delay the implementation of proposed rule changes that we believe are necessary to the operation of our markets. If the SEC delays or does not allow one of our exchanges to implement a rule change, this could negatively affect our ability to make needed changes or implement business activities. In addition, we must compete with ATSs that are not subject to the same SEC approval process and therefore may have lower regulatory and surveillance costs than us. There is a risk that other trading venues will be able to charge lower fees than us because they spend significantly less on regulation, attracting trading to those venues. The SEC has also been actively enforcing exchanges' compliance with these requirements, including entering an order against EDGX and EDGA for alleged failures to properly maintain SEC-approved rules relating to all of its order types. See "—Failures in our compliance systems could subject us to significant legal and regulatory costs. Furthermore, if our risk management methods are not effective, our business, reputation and financial results may be adversely affected."

        Similarly, the SEC must approve amendments to our exchange subsidiaries' certificates of incorporation and bylaws, as well as certain amendments to our certificate of incorporation and bylaws. The SEC may decide not to approve a proposed amendment or may delay such approval in a manner that could negatively affect our ability to make a desired change, which could prevent or delay us from improving the operations of our markets or recognize income from new products.

We depend on third-party service providers for certain services that are important to our business. An interruption or cessation of such service by any third-party could have a material adverse effect on our business.

        We depend on a number of service providers, including but not limited to, banking and clearing organizations such as the National Securities Clearing Corporation, or NSCC, and the OCC, and its member clearing firms; LCH.Clearnet Group, EuroCCP, SIX x-clear AG; data center providers such as Equinix, which hosts our primary data centers in the United States and Europe, and CenturyLink, which hosts our backup data center in the United States; the Consolidated Tape Association, or CTA, and the Options Price Reporting Authority, LLC, or OPRA; and various vendors of communications and networking products and services.

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        We also rely on third-party broker-dealers for routing and clearing services in certain circumstances. Specifically, we may route an order from a customer away from our markets to another trading venue if there is insufficient liquidity on our markets to match the order and/or if the customer is utilizing one of our smart-order routing strategies. We may use a third-party broker-dealer to establish back-up connectivity to another exchange in the event that our connection to such exchange fails, because we do not have a direct connection to such exchange or to take advantage of tiered pricing rates at such exchange. Once we (or such third-party) fill an order on another market, the executed trade is sent to a clearing broker to match the details of the trade with the clearing broker for the other party to the trade. We rely on affiliates of Bank of America Merrill Lynch, Citigroup, Morgan Stanley, Wedbush Securities, Credit Suisse and Lime Brokerage, each of which is an affiliate of one of our principal investors, to route orders that are not routed directly by us and to clear certain trades routed to other markets.

        In addition, we currently rely on FINRA to perform certain regulatory functions on our behalf pursuant to a regulatory services agreement, or RSA, which we entered into in 2014. Under the RSA, we maintain ultimate responsibility for the regulatory activities.

        We cannot assure you that any of these providers will be able to continue to provide these services in an efficient manner or that they will be able to adequately expand their services to meet our needs. An interruption or malfunction in or the cessation of an important service by any third-party and our inability to make alternative arrangements in a timely manner, or at all, could have a material adverse impact on our business, financial condition and operating results.

Financial or other problems experienced by third parties could have an adverse effect on our business.

        We are exposed to credit risk from third parties, including customers, clearing agents and counterparties. For example, we are exposed to credit risk for transaction fees we bill to customers on a monthly basis in arrears. Our customers and other third parties may default on their obligations to us due to lack of liquidity, operational failure, bankruptcy or other reasons.

        In addition, with respect to orders BATS Trading routes to other markets for execution on behalf of our customers, BATS Trading is exposed to some counterparty credit risk in the case of failure to perform on the part of our clearing firms, Wedbush Securities, Bank of America Merrill Lynch or Morgan Stanley, as well as failure on the part of our routing brokers (e.g., Morgan Stanley, Credit Suisse, NASDAQ, Lime Brokerage and Bank of America Merrill Lynch) to pass back transactional rebates. Wedbush Securities, Bank of America Merrill Lynch and Morgan Stanley guarantee trades until one day after the trade date, after which time NSCC provides a guarantee. Thus, BATS Trading is potentially exposed to credit risk to the counterparty to a trade routed to another market center between the trade date and one day after the trade date in the event that Wedbush Securities, Bank of America Merrill Lynch or Morgan Stanley fails to perform.

        With respect to U.S. equities, BATS Trading has counterparty credit risk exposure to Wedbush Securities and Morgan Stanley related to clearing until the day following the trade date. BATS Trading uses Wedbush Securities to clear trades routed through Credit Suisse as well as for trades routed directly to other exchanges and optionally dark pools. Morgan Stanley clears trades routed through the Morgan Stanley routing brokers and also clears executions routed to most dark pools. BATS Trading maintains counterparty credit risk exposure from routing brokers (i.e., Morgan Stanley, Credit Suisse, NASDAQ) with respect to rebates earned until completion of the routing brokers next invoice cycle following the execution.

        BATS Trading is subject to counterparty credit risk exposure from Wedbush Securities and Bank of America Merrill Lynch related to U.S. listed equity options until the day following the trade date. For U.S. listed equity options, BATS Trading uses Wedbush Securities to clear trades routed through Lime Brokerage as well as trades sent directly to another exchange. Bank of America Merrill Lynch is used to clear trades routed through its own routing broker. Counterparty credit risk also exists with respect

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to rebates earned from routing brokers (Lime Brokerage and Bank of America Merrill Lynch) until completion of the routing brokers' next invoice cycle has completed for an execution.

        Our exposure to credit risk may be further impacted by volatile securities markets that may affect the ability of our customers and other third parties to satisfy their contractual obligations to us. Moreover, we may not be successful in managing our credit risk through reporting and control procedures or by maintaining credit standards. Any losses arising from such defaults or other credit losses could adversely affect our financial condition and operating results.

        BATS Hotspot is not a counterparty to any FX transactions occurring on the BATS Hotspot Platform and it does not have any direct counterparty risk associated with such transactions. All transactions occurring on the BATS Hotspot Platform occur bilaterally between two banks or prime brokers as counterparties to the trade. While BATS Hotspot does not have direct counterparty risk, BATS Hotspot may suffer a decrease in transaction volume if a bank or prime broker experiences an event that causes other prime brokers to decrease or revoke the credit available to the prime broker experiencing the event. Therefore, BATS Hotspot may have risk that is related to the credit of the banks and prime brokers that trade FX on the BATS Hotspot Platform.

We may be required to inject further capital into EuroCCP.

        BATS Trading Limited owns 25% of EuroCCP, a Dutch domiciled clearing house. EuroCCP is one of three interoperable central counterparties, or CCPs, used to clear trades conducted on BATS Chi-X Europe. If EuroCCP were to experience financial difficulties, BATS Chi-X Europe might be required to inject further capital into it in order to maintain its working or regulatory capital. In a worst case scenario, EuroCCP might have its regulatory license suspended or withdrawn, or it might have to wind down. This would result in a loss to BATS Chi-X Europe of its investment in EuroCCP and a withdrawal of EuroCCP as a clearing house to the BATS Chi-X Europe markets.

We may be required to assume ownership of a position in securities in connection with our order routing service, which could subject us to trading losses when we dispose of that position.

        We offer a smart-order routing service through our broker-dealer subsidiary, BATS Trading, which provides our customers with access to other market centers when we route their orders to those market centers for execution. In connection with this service, however, we may assume ownership of a position in securities. This may occur, for example, when a market center to which we have routed a customer's order experiences systems problems and is unable to determine the status of that order. When this happens, we may make a business decision to provide a cancellation notice to our customer, relieving our customer of any liability with respect to the order. We may be informed later, however, that the order was executed at the market center to which we routed it, in which case BATS Trading would be required to take ownership of that securities position. Our clearing brokers, Wedbush Securities, Bank of America Merrill Lynch and Morgan Stanley, maintain error accounts on behalf of BATS Trading into which such positions settle, and we require the respective clearing broker to trade out of those positions as expeditiously as possible, which could result in our incurring trading losses.

Current economic conditions could adversely affect our business and financial condition.

        Our business performance is impacted by a number of factors, including general economic conditions and other factors that are generally beyond our control. A long-term continuation of challenging economic conditions is likely to negatively impact our business. Poor economic conditions may result in a decline in trading volume and a reduction in the demand for our products and could affect the ability of our customers to meet their obligations to us.

        Securities market data revenues may also be significantly affected by global market conditions. Adverse market conditions may cause reductions in the number of recipients of our market data.

        Securities and FX trading volume is directly affected by economic, political and market conditions, broad trends in business and finance, unforeseen market closures or other disruptions in trading, the

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level and volatility of interest rates, inflation, changes in price levels of securities and the overall level of investor confidence. In recent years, trading volumes across our markets have fluctuated significantly depending on market conditions and other factors beyond our control. In addition, trading volume in a particular stock could be negatively impacted by a significant reverse stock split which materially reduces the number of shares of such stock in the market. It is not possible to accurately forecast volatility or trading volumes. Because a significant percentage of our revenue is tied directly to the volume of securities traded on our markets, it is possible that a general decline in trading volumes could lower revenues and may adversely affect our operating results if we are unable to offset falling volumes through increased market share or other pricing actions.

        In Europe, countries such as Portugal, Ireland, Italy, Greece and Spain have been particularly affected by the recent financial and economic conditions. The European Union, the European Central Bank and the International Monetary Fund have prepared rescue packages for some of the affected countries. Other Euro-zone countries have been forced to take actions to mitigate similar developments in their economies. We cannot predict with any certainty whether these packages or other rescue plans will ultimately be successful or the effect that they may have on our business, results of operations, cash flows and financial condition.

Fluctuations in our quarterly operating results may negatively affect the valuation of our common stock.

        Our business experiences seasonal fluctuations, reflecting reduced trading activity generally during the third quarter of each year and during the last month of the year. In addition, the financial services industry is risky and unpredictable and is directly affected by many national and international factors beyond our control, including:

    economic, political and geopolitical market conditions;

    natural disasters, terrorism, war or other catastrophes;

    broad trends in industry and finance;

    changes in price levels and volatility in the stock markets;

    the level and volatility of interest rates;

    changes in government monetary or tax policy;

    other legislative and regulatory changes;

    the perceived attractiveness of the U.S. or European capital markets; and

    inflation.

        Any one of these factors could have a material adverse effect on our business, financial condition and operating results by causing a substantial decline in the financial services markets and reducing trading volumes. As a result, it is possible that our operating results or other operating metrics may fail to meet the expectations of stock market analysts and investors. If this happens, the market price of our common stock may be adversely affected.

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The occurrence or perception of unauthorized disclosure of confidential information could harm our business.

        In the course of our business, we receive, process, transmit and store confidential information. Our treatment of such information is subject to contractual restrictions. While we take measures to protect against unauthorized access to such information, these measures may be inadequate, and any failure on our part to protect this information may subject us to contractual liability and damages, loss of business, penalties and unfavorable publicity. Even the mere perception of a security breach or inadvertent disclosure of confidential information could harm our reputation. The occurrence of any of these events could have an adverse effect on our business.

Our inability to protect our intellectual property rights and claims by others that we infringe their intellectual property rights could adversely affect our business.

        To protect our intellectual property rights, we rely on a combination of trademark and copyright laws in the United States and similar laws in other countries, trade secret protection, confidentiality agreements and other contractual arrangements with our employees, customers and others. Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, and any application for registration of such rights could be denied. We may be unable to detect the unauthorized use of our proprietary information or take appropriate steps to enforce our intellectual property rights. Failure to protect our intellectual property adequately could harm our brand and affect our ability to compete effectively. Defending our intellectual property rights could result in the expenditure of significant financial and managerial resources, which could adversely affect our business, financial condition and operating results. Further, the laws of certain countries do not protect intellectual property rights to the same extent as the laws of the United States. Therefore, in certain jurisdictions, we may be unable to protect our intellectual property and proprietary technology adequately against unauthorized third-party copying or use, which could adversely affect our competitive position.

        Although we own patents covering our proprietary business processes related to the BATS 1000 Index and our proprietary business processes related to our now defunct European market-on-close product, as well as having filed patent applications further covering the administration of the BATS 1000 Index, our national best bid or best offer, or NBBO, Setter and Joiner pricing, our primary market auction, the business process related to operating an exchange based on the net asset value of an ETP, our CLP Program and our retail price improvement, or RPI, Program, we do not anticipate relying upon patents as a primary means of protecting our rights in our intellectual property. In any event, there can be no assurance that our patent applications will be approved, that any issued patents will adequately protect our intellectual property or that such patents will not be challenged by third parties.

        Finally, third parties may claim that we or customers indemnified by us are infringing upon their intellectual property rights. Even if we believe that such claims are without merit, they can be time-consuming and costly to defend and divert management resources and attention. Successful claims of intellectual property infringement also might require us to redesign infringing technology, enter into costly settlement or license agreements, pay costly damage awards or face a temporary or permanent injunction prohibiting us from using infringing technology. If we are found to be infringing and cannot, or do not, license the infringed technology on reasonable pricing terms or at all, or substitute similar technology from another source, our business, financial condition and results of operations could be adversely impacted.

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Our use of open source software code may subject our software to general release or require us to re-engineer our software, which could harm our business.

        We have used open source software code to create our proprietary software for use in our business. Companies that incorporate open source software into their products have, from time to time, faced claims challenging the ownership of open source software. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. In addition, some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the source code in their software and make any derivative works of the open source code available on unfavorable terms or at no cost. Open source license terms may be ambiguous, and many of the risks associated with usage of open source software cannot be eliminated. We believe that our use of open source software is in compliance with the relevant open source software licenses and does not require disclosure of any of our source code. However, if we were found to have inappropriately used open source software, we may be required to release our proprietary source code, re-engineer or discontinue use of our software or take other remedial action.

We are subject to risks relating to litigation, potential securities law liability and other liability.

        Many aspects of our business, including trading, market data services and listings, and the business of our members, potentially involve substantial liability risks. These risks include, among others, potential liability from disputes over terms of a trade and the claim that a system failure or delay caused monetary loss to a member or that an unauthorized trade occurred. For example, dissatisfied members that have traded on our electronic platform or those on whose behalf such members have traded, may make claims regarding the quality of trade execution, or allege improperly confirmed or settled trades, abusive trading practices, security and confidentiality breaches, mismanagement or even fraud against us or our members. In addition, because of the ease and speed with which sizable trades can be executed on our electronic platform, members can lose substantial amounts by inadvertently entering trade orders or by entering them inaccurately. A large number of significant error trades could result in member dissatisfaction and a decline in member willingness to trade in our electronic markets.

        In addition, SROs such as BZX, BYX, EDGX and EDGA are required by federal law to perform a variety of functions that would otherwise be performed by a governmental agency. As such, and similar to sovereign immunity accorded to governments, U.S. federal courts have held that SROs are immune from civil damages for conduct undertaken as part of their statutorily delegated adjudicatory, regulatory and prosecutorial authority. This immunity, however, only covers certain of our activities in the United States, and we could be exposed to liability under national and local laws, court decisions and rules and regulations promulgated by regulatory agencies.

        Furthermore, in the United States, our securities markets are subject to oversight by the SEC. As a result, we could be subject to investigations and judicial or administrative proceedings that result in substantial penalties if we were found to be out of compliance with our obligations under the federal securities laws. Any such liability or penalties could have a material adverse effect on our business. We have from time to time received inquiries and investigative requests from the SEC's Office of Compliance Inspections and Examinations as well as the SEC's Division of Enforcement seeking information about our and our members' compliance with the federal securities laws. For example, in January 2015, the SEC completed two separate investigations into the development of order types, one related to BZX and BYX and another related to EDGX and EDGA. While the SEC concluded its investigation with no action taken with regards to BZX and BYX, the SEC accepted our offer of settlement with respect to EDGX and EDGA which included a monetary penalty and an agreement to implement certain measures aimed at preventing future violations of the Exchange Act and the rules and regulations promulgated thereunder.

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        From time to time we are also involved in various legal proceedings arising in the ordinary course of our business. While we do not believe that the outcome of any of these legal proceedings will have a material impact on our consolidated financial position, results of operations or cash flows, litigation is subject to many uncertainties, and the outcome of individual litigated matters is not predictable with assurance.

        On April 18, 2014, the City of Providence, Rhode Island filed a securities class action lawsuit in the Southern District of New York against BATS and Direct Edge, as well as 14 other securities exchanges. The action purports to be brought on behalf of all public investors who purchased and/or sold shares of stock in the United States between April 18, 2009 and the present on a registered public stock exchange (Exchange Defendants) or a U.S.-based alternate trading venue and were injured as a result of the misconduct detailed in the complaint, which includes allegations that the defendants committed fraud through a variety of business practices associated with, among other things, what is commonly referred to as high frequency trading. On May 2, 2014 and May 20, 2014, American European Insurance Company and Harel Insurance Co., Ltd. each filed substantially similar class action lawsuits against the Exchange Defendants which were ultimately consolidated with the City of Providence, Rhode Island securities class action lawsuit. On June 18, 2015, Judge Jesse Furman of the Southern District of New York held oral argument on the pending Motion to Dismiss and thereafter, on August 26, 2015, the Court issued an Opinion and Order granting Defendant's Motion to Dismiss, dismissing the Complaint in full. Plaintiff filed a Notice of Appeal of the dismissal on September 24, 2015.

        On May 23, 2014 and May 30, 2014, Harold R. Lanier filed three class action lawsuits in the Southern District of New York against BATS and other securities exchanges. The complaints were identical in all substantive respects, but each related to the dissemination of market data under a different market system: (i) the NASDAQ Unlisted Trading Privileges, or UTP, Plan Market System; (ii) the OPRA Market System; and (iii) the Consolidated Quotation System, or CQS, and the Consolidated Tape System, or CTS. Each of the actions purported to be brought on behalf of all subscribers who entered into contracts with the exchanges for the receipt of market data and were injured as a result of the misconduct detailed in the complaints, which includes allegations that the defendants did not provide market data services in a non-discriminatory manner or provide subscribers with "valid" data (i.e., data that is accurate and not stale). On January 16, 2015, Judge Katherine Forrest of the Southern District of New York held oral argument on the pending Motion to Dismiss and thereafter, on April 28, 2015, the Court filed an Opinion and Order granting the Exchange Defendants' Motion to Dismiss, terminating all three class action lawsuits with prejudice. On May 20, 2015, Plaintiff filed a Notice of Appeal of the dismissal and on September 1, 2015, Appellant filed its appeal brief. Respondent's brief was filed on November 24, 2015 and Appellant's reply brief was filed on December 8, 2015.

        In addition to potential sanctions, censure, monetary penalties and disruption of our business, an investigation, inquiry, regulatory enforcement action and the related publicity could impair our reputation and damage our brand name, particularly with our members and other market participants. This could result in a decrease of our share of total trading volumes relative to our competitors, which may make us less attractive to market participants as a source of liquidity and cause us to lose additional trading volume and associated fees, which would adversely affect our business, reputation, financial condition and operating results.

        Our European business is subject to regulatory oversight in the United Kingdom by the FCA, which through the "passporting" process provides authorization to carry on business in other EEA member states. In addition, our operations are regulated at the European Union level. If a regulatory authority makes a finding of non-compliance, conditional fines could be imposed, and our licenses could be revoked. Any such fine or revocation of a license could have a material adverse effect on our business.

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Failures in our compliance systems could subject us to significant legal and regulatory costs. Furthermore, if our risk management methods are not effective, our business, reputation and financial results may be adversely affected.

        Our ability to comply with all applicable laws and rules is largely dependent on our establishment and maintenance of compliance, audit, risk and reporting systems and procedures, as well as our ability to attract and retain qualified compliance, audit and risk management personnel. These systems and procedures may not be fully effective. We face the risk of intervention by regulatory authorities, including extensive examination and surveillance activity. In the case of actual or alleged non-compliance with applicable laws or regulations, we could be subject to investigations and judicial or administrative proceedings that may result in substantial penalties, settlements or civil lawsuits, including by customers, for damages, which can be substantial. In the past, the SEC has brought actions against exchange operators for failing to fulfill their obligations to have an effective regulatory system. Any failure to comply with applicable laws and rules could adversely affect our business, reputation, financial condition and operating results and, in extreme cases, our ability to conduct our business or portions thereof.

        Additionally, we have adopted policies and procedures to identify, monitor and manage our risks. For example, our Global Policy for Enterprise Risk Management, or ERM, adopts a framework for identifying and managing risks in both our U.S. and European operations. In the U.S., the ERM framework is overseen by the U.S. exchanges' Audit Committee, as well as the company's Audit Committee, and ultimately the company's board of directors. The ERM framework is also periodically reviewed by the SEC's Office of Compliance Inspections and Examinations as part of routine inspections. The policy created a firm-wide risk committee that regularly reviews known and emerging risks, as well as the maintenance of the risk register. The European ERM framework is overseen by the BATS Trading Limited Audit, Risk and Compliance Committee as well as the company's Audit Committee, and ultimately the company's board of directors. The FCA has also reviewed and approved the framework and maintains continuous dialogue with European executive management on risk-related matters. The framework has been in place formally since January 2013 and, in addition to the policy and strategy, comprises a risk appetite statement and risk register. We also maintain a vendor management policy that is intended to both manage the business relationships and mitigate the risks associated with utilizing outside vendors and other third-party service providers. We employ a vendor risk tool to facilitate this process.

        These policies and procedures, however, may not be fully effective. If our policies and procedures are not fully effective or we are not always successful in monitoring or evaluating the risks to which we are or may be exposed, our business, reputation, financial condition and operating results could be materially adversely affected.

Damage to our reputation could have a material adverse effect on our business.

        We believe one of our competitive strengths is our strong industry reputation. Various issues may give rise to reputational risk, including issues relating to:

    the representation of our business in the media;

    the quality of our products, including the reliability of our transaction-based business, and the accuracy of our market data;

    the ability to execute our business plan, key initiatives or new business ventures and the ability to keep up with changing customer demands and regulatory initiatives;

    our regulatory compliance and our enforcement of compliance on our customers;

    the accuracy of our financial statements and other financial and statistical information;

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    the quality of our corporate governance structure;

    the quality of our disclosure controls or internal controls over financial reporting, including any failures in supervision;

    the integrity and performance of our computer and communications systems;

    security breaches, including any unauthorized delivery of proprietary data to third parties;

    management of our outsourcing relationships, including our relationship with FINRA;

    any misconduct or fraudulent activity by our employees, especially senior management, or other persons formerly or currently associated with us;

    our listings business and our enforcement of our listing rules; and

    any negative publicity surrounding our listed companies.

        Damage to our reputation could cause a reduction in the trading volume on our exchanges or cause us to lose customers. This, in turn, may have a material adverse effect on our business, financial condition and operating results.

Because we have operations outside of the United States, we are exposed to currency risk.

        We have operations in the United States, the United Kingdom, continental Europe and Singapore. We therefore have significant exposure to exchange rate movements between the British pound, the Euro, the Singapore dollar and the U.S. dollar. Significant inflation or changes in foreign exchange rates with respect to one or more of these currencies could occur as a result of general economic conditions, acts of war or terrorism, changes in governmental monetary or tax policy or changes in local interest rates. These exchange rate differences will affect the translation of our non-U.S. results of operations and financial condition into U.S. dollars as part of our consolidated financial statements.

Changes in tax laws, regulations or policies could have a material adverse effect on our financial results.

        Like other corporations, we are subject to taxes at the federal, state and local levels, as well as in non-U.S. jurisdictions. Changes in tax laws, regulations or policies could result in us having to pay higher taxes, which would in turn reduce our net income. For example, in 2015, our tax liability increased as a result of legislative changes in New York and New York City. In computing our tax obligation in federal, state and local and non-U.S. jurisdictions, we take various tax positions on matters that are not entirely free from doubt. We cannot assure you that upon review of these positions the applicable tax authorities will agree with our positions. A successful challenge by a tax authority could result in additional taxes being imposed on us.

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members.

        As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and BZX listing requirements. The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. Our management will be required to report on the effectiveness of our internal control over financial reporting and our independent registered public accounting firm will be required to attest to such internal control over financial reporting. In order to maintain and improve the

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effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight will be required. As a result, management's attention may be diverted from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations. Failure to maintain an effective internal control environment could result in our not being able to accurately report our financial results, prevent or detect fraud or provide timely and reliable financial information pursuant to the reporting obligations we will have as a public company, which could have a material adverse effect on our business, financial condition and results of operations. Further, it could cause our investors to lose confidence in the financial information we report, which could adversely affect the price of our common stock.

        These rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our board of directors. Additionally, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.

Risks Relating to Our Indebtedness

We have a substantial amount of debt and the cost of servicing those obligations could adversely affect our business, financial condition or operating results and such risk could increase if we incur more debt. We may be required to prepay our obligations.

        We have a substantial amount of indebtedness and other liabilities. As of September 30, 2015, total liabilities were $924.8 million, of which $737.2 million represents long-term debt obligations, total assets were $1,288.8 million and total equity was $364.0 million. As of December 31, 2014, total liabilities were $702.4 million, of which $474.4 million represents long-term debt obligations, total assets were $1,006.6 million and total equity was $304.2 million. We may not have sufficient funds to satisfy all such obligations as a result of a variety of factors, some of which may be beyond our control. If the opportunity for a strategic acquisition arises, we may be required to incur additional debt for these purposes or to fund working capital needs, which we may not be able to obtain. The amount of debt we carry and the terms of our indebtedness could adversely affect us in several ways, including:

    our ability to obtain additional financing in the future for working capital, capital expenditures and general corporate purposes, including strategic acquisitions, may be impaired;

    our ability to use operating cash flow in other areas of our business may be limited because a substantial portion of our cash flow from operations may have to be dedicated to the payment of the principal and interest on our indebtedness;

    reporting lower earnings as result of rising interest expense from our indebtedness;

    the level of debt we carry could increase our exposure to a continued downturn in general economic conditions;

    the terms of such indebtedness could restrict our ability to pay future dividends; and

    the level of debt we carry could restrict our corporate activities, including our ability to respond to competitive market conditions, to provide for capital expenditures beyond those permitted by the loan agreements or to take advantage of acquisition opportunities and grow our business.

        In the event that we fail to comply with the covenants in any current or future loan agreements, there could be an event of default under the applicable instrument. As a result, all amounts outstanding under our current or any future debt instruments may become immediately due and payable. If interest rates were to increase significantly or if we are unable to generate sufficient cash flow from operations in the future, we may not be able to service debt under any current or future loan agreements and may have to refinance all or a portion of our debt, structure our debt differently, obtain additional financing or sell assets to repay such debt.

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        Restrictive covenants in our credit facility may adversely affect us. Our credit facility requires us not to have a debt to earnings ratio above certain amounts as set forth in the credit facility.

        Our ability to secure additional financing for growth or to refinance any of our existing debt is also dependent upon the availability of credit in the marketplace, which has experienced severe disruptions due to the recent economic crisis. If we are unable to secure additional financing or such financing is not available at acceptable terms, we may be unable to secure financing for growth or refinance our debt obligations, if necessary.

In the event that we need debt financing in the future, recent uncertainty in the credit markets could affect our ability to obtain debt financing on reasonable terms.

        In the event we were to require additional debt financing in the future, the ongoing uncertainty in the credit markets, including the European sovereign debt crisis, could materially impact our ability to obtain debt financing on reasonable terms. The inability to access debt financing on reasonable terms could materially impact our ability to make acquisitions, refinance existing debt or materially expand our business in the future.

Increases in interest rates will adversely impact our results of operations.

        For the approximately $800 million amount outstanding under our current credit facility, as well as borrowings incurred under our revolving credit facility, increases in variable interest rates will increase the amount of interest expense that we pay for our borrowings and have a negative impact on our results of operations. As of September 30, 2015, the one-month London Interbank Offered Rate, or LIBOR, was 0.193%. Any increase in the LIBOR will increase our interest expense on approximately $737.2 million of debt. If the LIBOR were to exceed the floor interest rate of 1.00%, we would incur a negative impact of higher interest expense on the remaining balance of our debt.

Any reduction in our credit rating could increase the cost of our funding from the capital markets.

        Our long-term debt is currently rated speculative grade by two of the major rating agencies. These rating agencies regularly evaluate us and their ratings of our long-term debt are based on a number of factors, including our financial strength as well as factors not entirely within our control, including conditions affecting the financial services industry generally. There can be no assurance that we will maintain our current ratings. Our failure to maintain those ratings could adversely affect the cost and other terms upon which we are able to obtain future funding and increase our cost of capital.

Risks Relating to an Investment in Our Common Stock

Volatility in our stock price could adversely affect your investment in our common stock.

        There has not been a public market for our stock prior to this offering. We cannot predict the extent to which a trading market for our common stock will develop or how liquid that market might become. If you purchase shares of common stock in this offering, you will pay a price that was not established in the public trading markets. The initial public offering price will be determined by negotiations between us, the underwriters and the selling stockholders. You may not be able to resell your shares above the initial public offering price and may suffer a loss on your investment.

        Broad market and industry factors may adversely affect the market price of our common stock, regardless of our actual operating performance. Factors that could cause fluctuations in our stock price may include, among other things:

    the representation of our business in the media;

    actual or anticipated variations in quarterly operating results;

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    changes in financial estimates by us or by any securities analysts who might cover our stock;

    conditions or trends in our industry, including trading volumes, regulatory changes or changes in the securities marketplace;

    changes in the market valuations of other companies operating in our industry;

    announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;

    announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us or others operating in our industry, including our principal investors;

    additions or departures of key personnel; and

    sales of our common stock by our directors and officers or our principal investors following the expiration of the applicable transfer restrictions or the occurrence of other limited circumstances.

We plan to list our security on our own market, BZX. Any technical failures or outages associated with that listing could negatively impact our stock and subject us to reputational harm and regulatory scrutiny, and a loss of business.

        Upon completion of the offering, we plan to list our security on our own exchange, BZX. Our security will be the first corporate listing on BZX and to the extent we suffer a technological failure or outage associated with that listing, we could suffer a loss of business, and incur reputational harm and regulatory scrutiny and potentially regulatory sanctions. In addition, such a failure or outage could result in the cancellation of the offering. For example, on March 23, 2012, we experienced a serious technical failure on BZX, forcing us to cancel our planned IPO. The failure resulted from a software bug that appeared during the BATS IPO auction. In addition to forcing us to cancel our IPO, the technological failure played a role in the halting of another issuer's stock for five minutes. Ultimately, the technological failure caused us to withdraw our IPO, which was a widely reported, high-profile event that damaged our reputation and resulted in increased regulatory scrutiny of the event by the SEC and other governmental authorities. There can be no guarantee that we will not suffer a similar failure in conjunction with this planned offering of securities.

We will be controlled by our principal investors, whose interests may differ from those of other stockholders.

        Upon completion of this offering, our principal investors will collectively own approximately              shares of our common stock, representing approximately        % of our common stock. We are not a party to any voting agreement with any of our stockholders, other than the Investor Rights Agreement dated as of January 31, 2014, among us and our stockholders (which, pursuant to its terms, will terminate upon consummation of this offering, except for the registration rights contained therein), which we refer to as the Investor Rights Agreement, and we are not aware of any other voting agreements among our principal investors; however, they may enter into voting agreements in the future or otherwise vote in a similar manner. To the extent that all of these principal investors vote similarly, they will be able, by virtue of their ability to elect our board of directors, to control our policies and operations, including, without limitation, the determination of our strategic plans, appointment of management, future issuances of our common stock or other securities, the payments of dividends on our common stock, entering into extraordinary transactions and the approval of major financing decisions, and their interests may not in all cases be aligned with your interests. This concentrated control will limit your ability to influence corporate matters. As a result, the market price of our common stock could be adversely affected.

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        Affiliates of our principal investors are also significant customers. See "Certain Relationships and Related Transactions." As a result, the interests of these investors could conflict with your interests as holders of our common stock in a number of ways. For example:

    you may disagree with the structure and timing of future transfers by these stockholders of all or any portion of their ownership interests in us. The actual or potential sale by these stockholders of their holdings of our common stock held by them could cause the valuation of our stock to decline significantly;

    these stockholders may have or acquire an ownership interest in competing businesses (including national securities exchanges, MTFs or ECNs) and they may make decisions that favor the competing enterprise over our company; and

    many of these stockholders, as affiliates of our customers, have an incentive to favor commercial terms that may not be advantageous to us, such as lower "taker fees" and higher "maker" rebates on BZX and EDGX.

        Accordingly, our principal investors may have different business objectives, any of which could adversely impact the market price of your shares of common stock.

Certain affiliates of the underwriters of this offering are our principal investors, some of which are also selling stockholders, and therefore, they have interests in this offering beyond customary underwriting discounts and commissions.

        Each of Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and Nomura Securities International, Inc., who are underwriters of this offering, is an affiliate of one of our principal investors. Certain affiliates of the underwriters of this offering are participating as selling stockholders in this offering. There may be a conflict of interest between their interests as selling stockholders (e.g., to maximize the value of their investment) and their respective interests as underwriters (e.g., in negotiating the initial public offering price) as well as your interest as a purchaser. As affiliates of participants in this offering that may seek to realize the value of their investment in us, these underwriters could have interests beyond customary underwriting discounts and commissions. See "Certain Relationships and Related Transactions—Underwriters (Conflicts of Interest)."                    , underwriters of this offering, or their affiliates, will each receive more than 5% of net offering proceeds and will have a "conflict of interest" pursuant to FINRA Rule 5121(f)(5)(C)(ii). Accordingly, this offering will be made in compliance with the applicable provisions of FINRA Rule 5121. Pursuant to FINRA Rule 5121, a "qualified independent underwriter" (as defined in FINRA Rule 5121) must participate in the preparation of the prospectus and perform its usual standard of due diligence with respect to the prospectus.

        Sandler O'Neill & Partners, L.P. has agreed to act as qualified independent underwriter for the offering and to perform a due diligence investigation and review and participate in the preparation of the prospectus. Although the qualified independent underwriter has participated in the preparation of the prospectus and conducted due diligence, we cannot assure you that this will adequately address any potential conflicts of interest. See "Underwriters (Conflicts of Interest)."

If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our common stock, then our stock price and trading volume could decline.

        The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us, our industry and our markets. If no analyst elects to cover us and publish research or reports about us, the market for our common stock could be severely limited, and our stock price could be adversely affected. In addition, if one or more analysts ceases

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coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us adversely changes their recommendations regarding our common stock, our stock price could decline. In addition, SEC rules may make it impractical for analysts associated with some of our principal investors to cover us.

Our share price may decline due to the large number of shares eligible for future sale.

        Sales of substantial amounts of our common stock, or the possibility of such sales, may adversely affect the market price of our common stock. These sales may also make it more difficult for us to raise capital through the issuance of equity securities at a time and at a price we deem appropriate. See "Shares Eligible for Future Sale" for a discussion of possible future sales of common stock.

        Upon completion of this offering, we will have              shares of common stock. Of these shares, the              shares of common stock sold in this offering will be freely transferable without restriction or registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares purchased by one of our existing "affiliates," as that term is defined in Rule 144 under the Securities Act. The remaining              shares of common stock will be available for sale in the public market within 180 days or one year, as applicable. See "Shares Eligible for Future Sale."

        In addition to outstanding shares eligible for sale, upon consummation of this offering approximately              shares of our common stock will be issuable upon exercise under currently outstanding stock options granted to several executive officers and employees under our incentive plans. Such shares of common stock will also be subject to a transfer restriction that expires one year from the completion of this offering.

        Additionally, the Investor Rights Agreement provides for certain registration rights, including demand registration rights. For a more detailed description of these registration rights, see "Description of Capital Stock—Registration Rights."

        Upon completion of this offering, our principal investors will collectively own approximately              shares of our common stock, representing approximately        % of our common stock. See "Principal and Selling Stockholders."

Your ownership of our company may be diluted if additional capital stock is issued to raise capital, to finance acquisitions, in connection with strategic transactions or pursuant to stock options or other equity compensation awards.

        We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of existing stockholders. As of September 30, 2015, 668,754 shares of common stock were issuable upon the exercise of outstanding stock options, and an aggregate of 811,655 shares of common stock were reserved for future issuance under our equity incentive plans. In addition, as of September 30, 2015, 32.8 million shares of common stock were outstanding which included 275,586 shares of unvested restricted stock. Our board of directors has the authority, without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common stock, including pursuant to stock options or other equity compensation awards.              shares of voting common stock and               shares of nonvoting common stock are authorized and unissued under our amended and restated certificate of incorporation. Future issuances of common stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share.

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Provisions in our amended and restated certificate of incorporation and bylaws, Delaware law and FINRA rules might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

        Our organizational documents will contain provisions that may have the effect of discouraging or delaying a change in control of us or unsolicited acquisition proposals that a stockholder might consider favorable. These provisions generally include:

    voting and ownership limitations. Our certificate of incorporation prohibits any person from owning greater than 40% of any class of our capital stock, prohibits exchange members from owning greater than 20% of any class of our capital stock and prohibits all persons from exercising a greater than 20% voting power of our issued and outstanding capital stock, in each case subject to certain conditions and exceptions;

    advance notice requirements for stockholder proposals and director nominations;

    establish a classified board of directors with staggered three-year terms;

    limits on stockholders to act by written consent;

    authorize the issuance of "blank check" preferred stock that our board of directors could use to implement a stockholder rights plan;

    require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws;

    provide that our board of directors is expressly authorized to amend or repeal any provision of our amended and restated bylaws; and

    restrict the forum for certain litigation against us to Delaware.

        In addition, Section 203 of the Delaware General Corporation Law may delay or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations and other transactions between us and holders of 15% or more of our common stock. Anti-takeover provisions could depress the price of our common stock by acting to delay or prevent a change in control of our company.

        Further, BATS Trading is a member of FINRA and subject to FINRA rules, which could impede or delay a change of control. FINRA's NASD Rule 1017 generally provides that FINRA approval must be obtained in connection with any transaction resulting in a single person or entity acquiring, directly or indirectly, 25% or more of a FINRA member firm's or its parent company's equity. Our European subsidiaries, BATS Trading Limited and Chi-X Europe Limited, are also regulated by the FCA in the United Kingdom, as an RIE and an Authorised Firm, respectively, and are also subject to change in control rules. FCA approval must be obtained for any transaction that would result in a single person or entity acquiring, directly or indirectly, 20% of BATS Chi-X Europe or 10% of Chi-X Europe Limited, including through ownership of its parent company's equity.

        The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. See "Description of Capital Stock—Certain Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws" for a discussion of these provisions.

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Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

        Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws or any action asserting a claim against us that is governed by the internal affairs doctrine. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

We intend to pay dividends to our stockholders, but the decisions to declare future dividends on our common stock will be at the discretion of our board of directors based upon a review of relevant considerations. Accordingly, there can be no guarantee that we will pay future dividends to our stockholders.

        In 2012, our board of directors declared two cash dividend payments of $4.42 and $13.20 per share of outstanding common stock paid in August and December, respectively. In February 2014, in accordance with our merger agreement to acquire Direct Edge, we made working capital distributions to stockholders of the company prior to the acquisition of $3.38 and $0.07 per share paid in January and April, respectively. In addition, in 2014, our board of directors declared cash dividend payments of $4.07, $0.15 and $0.15 per share of outstanding common stock.

        The board of directors is expected to adopt a policy with respect to the payment of dividends on common stock following this offering. We currently expect that we will pay quarterly cash dividends following the offering, with the annual amount initially determined based on a payout ratio of earnings within a determined range. Notwithstanding the current expectations for our future dividend policy, the timing, declaration, amount of, and payment of any dividends is within the discretion of the board of directors and will depend upon many factors, including our financial condition, earnings, corporate strategy, debt covenants, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the board of directors. Any of these factors, individually or in combination, could restrict the company's ability to pay dividends. Accordingly, there can be no assurance that the board of directors will not reduce the amount of dividends or cause the company to cease paying dividends altogether.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        We have made statements under the captions "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and in other sections of this prospectus that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "could," "believes," "estimates," "predicts," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled "Risk Factors." You should specifically consider the numerous risks outlined under "Risk Factors."

        Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements to actual results or revised expectations.

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RECENT ACQUISITIONS

Direct Edge Acquisition

        On January 31, 2014, we acquired 100% of the ownership interests of Direct Edge through a merger with former Direct Edge members receiving 30% of equity interest in the newly formed combined company, BATS Global Markets, Inc. The results of Direct Edge's operations have been reflected in the U.S. Equities segment since January 31, 2014.

        Direct Edge developed and operated electronic markets for the trading of listed cash equity securities in the United States. Direct Edge was headquartered in Jersey City, New Jersey and only had operations in the United States. Direct Edge operated two national securities exchanges, EDGX and EDGA, and also operated a routing broker-dealer, Direct Edge ECN LLC, d/b/a DE Route, providing routed transaction services for listed cash equity securities for EDGX and EDGA.

        As of January 12, 2015, the EDGX and EDGA exchange operations were migrated onto the BATS technology platform, or Direct Edge Integration. In conjunction with the Direct Edge Integration, Direct Edge began routing all trades through the BATS' affiliated broker-dealer, BATS Trading, and no longer routed trades through DE Route, which is no longer registered as a broker-dealer and is no longer in operation.

    Strategic rationale

        We believe that our combination with Direct Edge will further our position as a leading global exchange operator. We expect to continue to benefit from synergies as a result of the acquisition, including the Direct Edge Integration, which was completed in the first quarter 2015. We believe the combination has improved our competitive position, enhanced our profitability through scale and cost efficiencies and provides us with additional opportunities to influence market structure developments for the benefit of our customers.

BATS Hotspot Acquisition

        On March 13, 2015, we completed the acquisition of BATS Hotspot from KCG Holdings, Inc. for $365 million in cash at closing and additional payments under a tax sharing arrangement estimated at closing at $62.6 million. The operations of BATS Hotspot are reflected in the Global FX segment since March 13, 2015. BATS Hotspot provides institutional spot FX services through an electronic marketplace where buyers and sellers worldwide can trade directly and anonymously with each other.

        BATS Hotspot provides an independent, transparent electronic marketplace for institutional spot FX trading. The BATS Hotspot Platform includes true price competition with full depth of book display, centralized price discovery, tailored liquidity solutions to suit client needs, a diverse client base of banks, institutions, hedge funds, high frequency traders, corporates and Commodity Trading Advisors, direct and anonymous market access, multiple means of access and flexible real-time and historical market data services. BATS Hotspot's model provides full market transparency and greater control of the trading process, enabling better trade execution and lower execution costs. BATS Hotspot was headquartered in Jersey City, New Jersey, and has operations in the United States, the United Kingdom and Singapore.

    Strategic rationale

        We believe that our acquisition of BATS Hotspot represents further expansion into non-equity trading businesses for BATS as it enters the world's largest asset class. Approximately half of the FX market is comprised of spot trading and the other half includes forwards, swaps and options. As BATS Hotspot only participates in the institutional spot market, product expansion into the other FX markets is a significant opportunity. Large financial institutions comprise a portion of the FX trading market.

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As these institutions face increased regulatory pressure to provide greater transparency to their clients and to reduce their risk exposure, we expect more trading volume will migrate to electronic platforms, including BATS Hotspot. We believe there are geographic expansion opportunities for BATS Hotspot, which when acquired, operated in a data center located in Jersey City, New Jersey. We have recently expanded its operations by adding trading operations in London, United Kingdom, which is the largest trading center for the FX market. We also recently moved our technology into a stronger trading environment located in Secaucus, New Jersey that hosts a significantly larger number of overall trading participants. In addition to the product and geographic expansion opportunities noted above, we plan to explore additional non-transactional revenue sources including market data and connectivity charges.

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UNAUDITED SELECTED PRO FORMA FINANCIAL DATA

        The following unaudited selected pro forma financial data and explanatory notes are intended to provide information about how the Direct Edge Acquisition and BATS Hotspot Acquisition might have affected our historical consolidated statement of operations if they had been consummated as of January 1, 2014. An unaudited pro forma statement of financial condition as of September 30, 2015 is not presented, as Direct Edge and BATS Hotspot's statements of financial condition, including related acquisition adjustments, have already been included in our consolidated statement of financial condition and accompanying notes as of September 30, 2015 included elsewhere in this prospectus.

        The following unaudited pro forma condensed combined financial data is provided for informational purposes only and does not necessarily reflect our results of operations or financial position had the acquisition occurred as of the date indicated, nor should it be taken as necessarily indicative of our future results of operation or financial position. The following unaudited pro forma condensed combined financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the accompanying notes included elsewhere in this prospectus.

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Unaudited Pro Forma Condensed Combined Statement of
Operations for the Nine Months Ended September 30, 2015 (under U.S. GAAP)

 
  BATS Global
Markets, Inc.
(Historical)
  KCG Hotspot FX
(Historical)(2)
  Pro Forma
Adjustments(3)
  BATS Global
Markets, Inc.
Pro Forma
 
 
  (in millions, except per share data)
 

Revenues:

                         

Transaction fees

  $ 970.1   $ 9.0   $   $ 979.1  

Regulatory transaction fees(4)

    207.0             207.0  

Market data fees

    99.4             99.4  

Other

    58.7     0.1         58.8  

Total revenues

    1,335.2     9.1         1,344.3  

Cost of revenues:

   
 
   
 
   
 
   
 
 

Liquidity payments

    805.7             805.7  

Section 31 fees(4)

    207.0             207.0  

Routing and clearing

    36.7             36.7  

Total cost of revenues

    1,049.4             1,049.4  

Revenues less cost of revenues

    285.8     9.1         294.9  

Operating expenses:

   
 
   
 
   
 
   
 
 

Compensation and benefits

    58.4     4.0     (0.6) (6)   61.8  

Depreciation and amortization

    28.5     1.4     9.4 (7)   39.3  

Changes in fair value of tax sharing liability

    1.7         1.1 (8)   2.8  

General and administrative

    62.2     0.7     (3.7) (6)   59.2  

Total operating expenses

    150.8     6.1     6.2     163.1  

Operating income (loss)

    135.0     3.0     (6.2 )   131.8  

Interest and investment expense

    (34.2 )       (2.0) (9)   (36.2 )

Other income

    2.6         (1.0) (10)   1.6  

Income (loss) before income tax provision

    103.4     3.0     (9.2 )   97.2  

Income tax provision

    42.9     1.1     (3.8) (12)   40.2  

Net income (loss)

  $ 60.5   $ 1.9   $ (5.4 ) $ 57.0  

Earnings per share:

                         

Basic

  $ 1.86       *     * $ 1.75  

Diluted earnings per share

  $ 1.85       *     * $ 1.74  

Weighted average shares outstanding:

                         

Basic

    32.5       *     *   32.5  

Diluted

    32.7       *     *   32.7  

*
Not meaningful.

See footnotes under "Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2014 (under U.S. GAAP)" below.

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Unaudited Pro Forma Condensed Combined Statement of
Operations for the Year Ended December 31, 2014 (under U.S. GAAP)

 
  BATS Global
Markets, Inc.
(Historical)
  Direct Edge
Holdings LLC
(Historical)(1)
  KCG Hotspot FX
(Historical)(2)
  Pro Forma
Adjustments(3)
  BATS Global
Markets, Inc.
Pro Forma
 
 
  (in millions, except per share data)
 

Revenues:

                               

Transaction fees

  $ 1,009.9   $ 38.8   $ 47.1   $ (0.5) (5) $ 1,095.3  

Regulatory transaction fees(4)

    272.0     10.1         (0.1) (5)   282.0  

Market data fees

    110.3     4.0             114.3  

Other

    66.0     2.3     0.4         68.7  

Total revenues

    1,458.2     55.2     47.5     (0.6 )   1,560.3  

Cost of revenues:

   
 
   
 
   
 
   
 
   
 
 

Liquidity payments

    831.4     27.0             858.4  

Section 31 fees(4)

    272.0     10.1         (0.1) (5)   282.0  

Routing and clearing

    47.1     8.6         (0.5) (5)   55.2  

Other

    0.2                 0.2  

Total cost of revenues

    1,150.7     45.7         (0.6 )   1,195.8  

Revenues less cost of revenues

    307.5     9.5     47.5         364.5  

Operating expenses:

   
 
   
 
   
 
   
 
   
 
 

Compensation and benefits

    87.0     29.1     19.7     (33.4) (6)   102.4  

Depreciation and amortization

    28.4     0.6     2.4     13.3 (7)   44.7  

Changes in fair value of tax sharing liability

                4.4 (8)   4.4  

General and administrative

    72.5     10.2     5.3     (1.7) (6)   86.3  

Total operating expenses

    187.9     39.9     27.4     (17.4 )   237.8  

Operating income (loss)

    119.6     (30.4 )   20.1     17.4     126.7  

Interest and investment (expense) income

    (27.3 )           (21.1) (9)   (48.4 )

Other (expense) income

    (12.0 )           13.6 (11)   1.6  

Income (loss) before income tax provision

    80.3     (30.4 )   20.1     9.9     79.9  

Income tax provision (benefit)

    31.1     (9.0 )   7.8     1.0 (12)   30.9  

Net income (loss)

  $ 49.2   $ (21.4 ) $ 12.3   $ 8.9   $ 49.0  

Earnings per share:

                               

Basic

  $ 1.56       *     *     * $ 1.51  

Diluted

  $ 1.55       *     *     * $ 1.50  

Weighted average shares outstanding:

                               

Basic

    31.6       *     *     *   32.5  

Diluted

    31.8       *     *     *   32.6  

(1)
Reflects the historical results of operations of Direct Edge for January 2014.

(2)
Reflects the historical results of operations of BATS Hotspot.

(3)
Represents the effects of the Direct Edge Acquisition and the BATS Hotspot Acquisition as if the acquisitions had occurred on January 1, 2014.

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(4)
As national securities exchanges, BZX, BYX, EDGX and EDGA are assessed fees pursuant to Section 31 of the Exchange Act. Section 31 fees are assessed on the notional value traded and are designed to recover the costs to the government of supervision and regulation of securities markets and securities professionals. Section 31 fees are paid directly to the SEC, and our national securities exchanges then pass these costs along to our members as regulatory transaction fees, recognizing these amounts as incurred in cost of revenues and revenues, respectively.

(5)
Represents revenue and cost of revenues recognized for routed transactions to BZX and BYX from EDGX and EDGA and routed transaction to EDGX and EDGA from BZX and BYX.

(6)
Represents all acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors and severance to employees, of $4.3 million for the nine months ended September 30, 2015. Expenses related to retention payments to employees of $0.4 million for us were not reflected in the pro forma adjustments as these expenses are not directly attributable to the Direct Edge Acquisition and the BATS Hotspot Acquisition.

Represents all acquisition-related costs, such as fees to investment bankers, attorneys, accountants and other professional advisors, equity award change in control payments and severance to employees, of $8.5 million and $26.6 million for us and Direct Edge, respectively, for the year ended December 31, 2014. Expenses related to retention payments to employees of $10.0 million for us were not reflected in the pro forma adjustments as these expenses are not directly attributable to the Direct Edge Acquisition.

(7)
Represents annual amortization of identifiable intangible assets as a result of the Direct Edge Acquisition and BATS Hotspot Acquisition. Amortization of identifiable intangible assets is based on the discounted cash flow method applied over the respective useful lives of the assets.

(8)
Represents the effects of the fair market value adjustment of the tax sharing liability recorded in connection with the BATS Hotspot Acquisition. The fair market value is based on the discounted cash flow method of the probable future payment.

(9)
Represents additional interest expense as a result of the modified and incremental debt issued to finance the BATS Hotspot Acquisition.

(10)
Eliminates the gain recognized upon payment of the revolving credit facility in connection with the BATS Hotspot Acquisition.

(11)
Eliminates the loss on extinguishment of debt that was recognized in connection with the Direct Edge Acquisition.

(12)
Represents the incremental income tax provision of the pro forma adjustments.

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Notes to the Unaudited Pro Forma
Condensed Combined Statement of Operations
(unaudited)

1.     Basis of Presentation

        The Direct Edge Acquisition and the BATS Hotspot Acquisition are accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification, or ASC, Topic 805-10, "Business Combinations—Overall," or ASC 805-10. We have accounted for the transactions by using our historical information and accounting policies and adding the assets and liabilities of Direct Edge and BATS Hotspot as of the respective acquisition dates at their respective fair values. Pursuant to ASC 805-10, under the acquisition method, the total purchase price (consideration transferred), as described in Note 3, Purchase Price Allocation, is measured at the acquisition closing date. The assets and liabilities of Direct Edge and BATS Hotspot have been measured based on various estimates and valuations using assumptions that our management believes are reasonable utilizing information currently available. Use of different estimates and judgments could yield different results.

        The process for estimating the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions, including estimating future cash flows and developing appropriate discount rates. The excess of the purchase price (consideration transferred) over the estimated amounts of identifiable assets and liabilities of Direct Edge and BATS Hotspot as of the respective effective dates of the acquisition was allocated to goodwill in accordance with ASC 805-10.

        Under ASC 805-10, acquisition-related transaction costs (e.g., investment banking, advisory, legal, valuation, and other professional fees) are not included as a component of consideration transferred but are required to be expensed as incurred.

2.     Accounting Policies

        Upon completion of the acquisitions, we reviewed Direct Edge's and BATS Hotspot's respective accounting policies and identified differences between the accounting policies of the two companies. The unaudited pro forma condensed combined statement of operations reflects adjustments to conform Direct Edge's and BATS Hotspot's respective results to record certain referral fees.

3.     Purchase Price Allocation

    Direct Edge

        The acquisition-date fair value of the consideration transferred totaled $386.2 million, which consisted of the following (in millions):

Cash paid at closing

  $ 12.5  

Fair value of share outlay

    344.5 (a)

Change in control payments

    29.2  

Total consideration to former Direct Edge members

  $ 386.2  

(a)
Based on a third-party valuation as of January 31, 2014. We issued 9.8 million shares of common stock as partial consideration for the acquisition.

        Under the purchase method of accounting, the total purchase price for the Direct Edge Acquisition is allocated to acquired tangible and intangible assets based on their respective fair values

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as of the acquisition date as determined by us and a third-party valuation firm. The allocation of the purchase price and the estimated useful life of the acquired intangible assets is as follows:

 
  Purchase Price
Allocation
(in millions)
  Estimated
Useful Life
(in years)
 

Customer relationships

  $ 43.0     16  

Trade name

    1.6     1  

Non-compete agreements

    3.9     2  

Licenses and registration

    71.9     Infinite  

Total acquired intangible assets

    120.4        

Goodwill

    253.5        

Total intangible assets

    373.9        

Current assets

    131.6        

Property and equipment

    10.4        

Liabilities

    (129.7 )      

Total cost of acquisition

  $ 386.2        

        Of the total purchase price, approximately $12.3 million has been allocated to net tangible assets and working capital acquired, and approximately $48.5 million has been allocated to amortizable intangible assets acquired. The amortization related to the amortizable intangible assets is reflected as a pro forma adjustment to the unaudited pro forma condensed combined consolidated statement of operations.

        Of the total estimated purchase price, approximately $253.5 million has been allocated to goodwill. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets.

    BATS Hotspot

        The acquisition-date fair value of the consideration transferred totaled $430.1 million, which consisted of the following (in millions):

Cash paid at closing

  $ 365.0  

Tax sharing liability

    62.6 (a)

Working capital payment

    2.5  

Total consideration to former BATS Hotspot stockholders

  $ 430.1  

(a)
Consistent with ASC 805, we estimated the fair value of the tax sharing liability based on an evaluation of alternative scenarios relating to the likelihood that the settlement option would be exercised after three years. The evaluation of these factors resulted in a probability-weighted forecast of the tax sharing liability, which was then discounted to present value using an appropriate discount rate that reflects the risk associated with the cash flows. The sum of the present value of the tax sharing liability amounts represented our estimate of the fair value of the contingent consideration.

        Under the purchase method of accounting, the total purchase price for the BATS Hotspot Acquisition is allocated to acquired tangible and intangible assets based on their respective fair values

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as of the acquisition date as determined by us and a third-party valuation firm. The allocation of the purchase price and the estimated useful life of the acquired intangible assets is as follows:

 
  Purchase Price
Allocation
(in millions)
  Estimated
Useful Life
(in years)
 

Customer relationships

  $ 81.2     18  

Technology

    12.6     6  

Non-compete agreements

    1.9     1  

Trade name

    15.3     Infinite  

Total acquired intangible assets

    111.0        

Goodwill

    308.2        

Total intangible assets

    419.2        

Current assets

    11.8        

Property and equipment

    0.3        

Liabilities

    (1.2 )      

Total cost of acquisition

  $ 430.1        

        Of the total purchase price, approximately $11.0 million has been allocated to net tangible assets and working capital acquired, and approximately $95.7 million has been allocated to amortizable intangible assets acquired. The amortization related to the amortizable intangible assets is reflected as a pro forma adjustment to the unaudited pro forma condensed combined consolidated statements of income.

        Of the total estimated purchase price, approximately $308.2 million has been allocated to goodwill. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets.

        In accordance with ASC 350, Intangibles—Goodwill and Other, goodwill is not amortized but instead is tested for impairment on an annual basis and whenever events or circumstances dictate. In the event that we determine that the value of goodwill has become impaired, we will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

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USE OF PROCEEDS

        We estimate that our net proceeds from this offering will be approximately $           million, based on an assumed initial public offering price of $          per share, which is the mid-point of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us of $           million. We intend to use the net proceeds received by us in connection with this offering to pay down our Amended 2014 Loan in the amount of $        and for general corporate purposes, including funding potential future strategic alliances or acquisitions that are complementary to our business or that enable us to enter new markets or provide new products or services. We are not currently a party to any agreements or commitments for any such alliances or acquisitions, and we have no current understandings with respect to any such transactions.

        For information on the interest rate and maturity date of our Amended 2014 Loan, see Note 8 to our Condensed Consolidated Financial Statements (unaudited) for the nine months ended September 30, 2015 included herein.

        Affiliates of certain of the underwriters are lenders under our Amended 2014 Loan and will receive net proceeds from this offering in connection with the repayment in part of our Amended 2014 Loan.

        We will not receive any proceeds from the sale of our common stock by the selling stockholders in this offering.


DIVIDEND POLICY

        The board of directors is expected to adopt a policy with respect to the payment of dividends on common stock following this offering. We currently expect that we will pay quarterly cash dividends following the offering, with the annual amount initially determined based on a payout ratio of earnings within a determined range. Notwithstanding the current expectations for our future dividend policy, the timing, declaration, amount, and payment of any dividends is within the discretion of the board of directors and will depend upon many factors, including our financial condition, earnings, corporate strategy, debt covenants, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by the board of directors.

        In 2012, our board of directors declared two cash dividend payments of $4.42 and $13.20 per share of outstanding common stock paid in August and December, respectively. In February 2014, in accordance with our merger agreement to acquire Direct Edge, we made working capital distributions to stockholders of the company prior to the acquisition of $3.38 and $0.07 per share paid in January and April, respectively. In addition, in 2014, our board of directors declared cash dividend payments of $4.07, $0.15 and $0.15 per share of outstanding common stock. Future declarations of dividends and the establishment of future record and payment dates are subject to approval by our board of directors.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents, financial investments and capitalization as of September 30, 2015:

    on an actual basis; and

    on an as adjusted basis to give effect to this offering and the indicative application of the net proceeds as described under "Use of Proceeds" on the assumption that $          is being used to repay existing indebtedness.

        This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and notes thereto appearing elsewhere in this prospectus.

 
  September 30, 2015  
 
  Actual   As Adjusted(1)  
 
  (unaudited)
 
 
  (in millions, except
share data)

 

Cash and cash equivalents

  $ 77.9   $    

Financial investments

    0.5        

Debt

  $ 737.2   $    

Stockholders' equity:

             

Common stock, $0.01 par value: 55,000,000 voting and 20,000,000 non-voting shares of common stock authorized, 25,613,507 voting and 7,266,714 non-voting shares of common stock issued and 25,502,356 voting and 7,266,714 non-voting shares outstanding, actual;                shares of common stock authorized,         shares of common stock issued and outstanding on an as adjusted basis

    0.3        

Treasury stock

    (4.4 )      

Additional paid-in capital

    268.8        

Retained earnings

    103.2        

Accumulated other comprehensive loss, net

    (3.9 )      

Total stockholders' equity

    364.0        

Total capitalization

  $ 1,101.2   $    

(1)
A $1.00 increase/(decrease) in the assumed IPO price of $        per share, which is the mid-point of the price range listed on the cover page of this prospectus, would increase/(decrease) the pro forma as adjusted amount of each share of common stock in treasury and total capitalization by approximately $          million, assuming that the number of shares offered, as set forth on the cover page of this prospectus, remains the same.

        The above table does not include:

    668,754 shares of common stock issuable upon the exercise of stock options outstanding as of September 30, 2015 with a weighted average exercise price of $27.84 per share; and

    an aggregate of 811,655 additional shares of common stock reserved for future issuance under our equity incentive plans as of September 30, 2015.

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DILUTION

        Dilution is the amount by which the portion of the offering price paid by the purchasers of our common stock in this offering exceeds the net tangible book value per share of our common stock after the offering. Our net tangible book value as of September 30, 2015 was $        million, or $        per share of common stock after giving effect to this offering. Pro forma net tangible book value per share is determined by dividing our tangible net worth (total tangible assets less total liabilities) by the aggregate number of shares of common stock outstanding. Our pro forma net tangible book value at September 30, 2015 would have been $        million or $        per share. This represents dilution to new investors of $        per share. The following table illustrates this per share dilution:

Assumed initial public offering price per share of common stock

  $    

Pro forma net tangible book value per share of common stock as of September 30, 2015

  $    

Increase in pro forma net tangible book value per share of common stock attributable to new investors

       

Pro forma net tangible book value per share after offering

       

Dilution in net tangible book value per share of common stock to new investors

  $    

        Dilution is determined by subtracting pro forma net tangible book value per share of common stock after the offering from the initial public offering price per share of common stock.

        The following table sets forth, on a pro forma basis, as of September 30, 2015, the number of shares of common stock purchased, the total consideration paid, or to be paid, and the average price per share paid, or to be paid, by existing stockholders and by the new investors, at an assumed initial public offering price of $          per share of common stock, the mid-point of the range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and offering expenses:

 
   
   
  Total
Consideration
   
 
 
  Shares Purchased    
 
 
  Average Price
Per Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

                               

New investors

                               

        Sales by the selling stockholders in this offering will reduce the number of shares of common stock held by existing stockholders to          , or approximately          %, and will increase the number of shares of          common stock to be purchased by new investors to          or approximately          %, of the total shares of common stock outstanding after the offering.

        As of September 30, 2015, 668,754 shares of common stock were subject to outstanding options, which represents stock options outstanding as of September 30, 2015 with a weighted average exercise price of $27.84 per share. As of September 30, 2015, 32.8 million shares of common stock were outstanding, which included 275,586 shares of unvested restricted stock. To the extent these options are exercised there will be further dilution to new investors. See "Executive Compensation—Equity Incentive Plans" and Note 17 to our consolidated financial statements included elsewhere in this prospectus.

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SELECTED FINANCIAL AND OPERATING DATA

        The following selected financial and operating data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the accompanying notes included elsewhere in this prospectus. We have derived the consolidated statements of operations data for the nine months ended September 30, 2015 and 2014 and the consolidated statement of financial condition data as of September 30, 2015 from our unaudited consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the consolidated statement of operations data for the years ended December 31, 2014, 2013 and 2012 and the consolidated statement of financial condition data as of December 31, 2014 and 2013 from our audited consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the consolidated statement of operations data for the years ended December 31, 2011 and 2010 from our audited consolidated financial statements which are not included in this prospectus. We have prepared our unaudited information on the same basis as our audited consolidated financial statements and have included, in our opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of this financial information.

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  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2015   2014   2014   2013   2012   2011   2010  
 
  (in millions, except per share data)
 

Consolidated Statements of Operations Data:

                                           

Revenues:

                                           

Transaction fees

  $ 970.1   $ 707.7   $ 1,009.9   $ 612.8   $ 645.3   $ 695.4   $ 668.3  

Regulatory transaction fees(1)

    207.0     186.5     272.0     127.4     148.1     156.4     111.0  

Market data fees

    99.4     81.2     110.3     59.4     60.3     55.4     46.0  

Port fees and other

    58.7     49.0     66.0     41.9     31.0     19.4     9.5  

Total revenues

    1,335.2     1,024.4     1,458.2     841.5     884.7     926.6     834.8  

Cost of revenues:

                                           

Liquidity payments

    805.7     578.5     831.4     474.7     508.2     566.1     541.7  

Section 31 fees(1)

    207.0     186.5     272.0     127.4     148.1     156.4     111.0  

Routing, clearing and other fees

    36.7     35.6     47.3     42.6     51.5     76.1     82.9  

Total cost of revenues

    1,049.4     800.6     1,150.7     644.7     707.8     798.6     735.6  

Revenues less cost of revenues

    285.8     223.8     307.5     196.8     176.9     128.0     99.2  

Operating expenses:

                                           

Compensation and benefits

    58.4     66.2     87.0     41.5     48.4     42.9     30.6  

Depreciation and amortization

    28.5     20.9     28.4     15.2     17.0     8.4     6.5  

Systems and data communication

    21.4     16.9     23.5     9.6     11.9     10.1     10.9  

Occupancy

    2.4     2.6     4.2     1.9     2.3     1.5     1.4  

Professional and contract services

    8.9     5.0     6.5     8.1     9.2     10.3     3.1  

Regulatory costs

    8.6     8.7     12.1     5.4     5.7     5.5     4.5  

Change in fair value of tax sharing liability

    1.7                          

Change in fair value of contingent consideration liability

                    12.4     0.3      

Impairment of assets

                3.5     0.2          

General and administrative

    20.9     19.2     26.2     10.0     10.5     10.7     7.4  

Total operating expenses

    150.8     139.5     187.9     95.2     117.6     89.7     64.4  

Operating income

    135.0     84.3     119.6     101.6     59.3     38.3     34.8  

Interest and investment (expense) income

    (34.2 )   (20.3 )   (27.3 )   (25.8 )   (0.6 )   0.1     0.3  

Loss on extinguishment of debt

        (13.6 )   (13.6 )                

Equity in earnings in EuroCCP

    1.0     0.8     1.1                  

Other income (expense)

    1.6     0.4     0.5     (0.2 )   (0.6 )   (0.1 )   (0.1 )

Income before income tax provision

    103.4     51.6     80.3     75.6     58.1     38.3     35.0  

Income tax provision

    42.9     20.7     31.1     28.8     26.5     14.8     15.2  

Net income

  $ 60.5   $ 30.9   $ 49.2   $ 46.8   $ 31.6   $ 23.5   $ 19.8  

Earnings per share:

                                           

Basic

  $ 1.86   $ 0.98   $ 1.56   $ 2.07   $ 1.40   $ 1.29   $ 1.11  

Diluted

  $ 1.85   $ 0.98   $ 1.55   $ 2.06   $ 1.39   $ 1.26   $ 1.08  

Weighted average shares outstanding:

                                           

Basic

    32.5     31.4     31.6     22.6     22.5     18.2     17.8  

Diluted

    32.7     31.5     31.8     22.7     22.7     18.7     18.3  

Distributions per share

  $ 0.31   $ 7.67   $ 7.82   $   $ 17.62   $   $  

(1)
As national securities exchanges, BZX, BYX, EDGX and EDGA are assessed fees pursuant to Section 31 of the Exchange Act. Section 31 fees are assessed on the notional value traded and are designed to recover the costs to the government of supervision and regulation of securities markets and securities professionals. Section 31 fees are paid directly to the SEC, and our national securities exchanges then pass these costs along

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    to our members as regulatory transaction fees, recognizing these amounts as incurred in cost of revenues and revenues, respectively.

 
   
  As of December 31,  
 
  As of
September 30,
2015
 
 
  2014   2013   2012   2011   2010  
 
  (in millions)
 

Consolidated Statement of Financial Condition Data:

                                     

Assets:

                                     

Cash and cash equivalents

  $ 77.9   $ 122.2   $ 87.2   $ 82.5   $ 99.4   $ 150.0  

Financial investments

    0.5     68.4     25.2     29.8     151.7     27.3  

Goodwill and intangible assets, net

    993.7     598.2     247.0     251.9     246.9      

Total assets

  $ 1,288.8   $ 1,006.6   $ 456.9   $ 469.6   $ 594.9   $ 256.5  

Liabilities and stockholders' equity:

                                     

Long-term debt

  $ 737.2   $ 474.4   $ 246.0   $ 287.6   $   $  

Total liabilities

    924.8     702.4     316.9     381.9     148.3     57.8  

Total stockholders' equity

    364.0     304.2     140.0     87.7     446.6     198.7  

Total liabilities and stockholders' equity           

  $ 1,288.8   $ 1,006.6   $ 456.9   $ 469.6   $ 594.9   $ 256.5  

Selected Operating Data

        The following table presents selected operating data for U.S. Equities, European Equities, U.S. Options and Global FX for the periods presented. Direct Edge, which is reported in our U.S. Equities segment, was acquired in January 2014. BATS Hotspot, which is reported in our Global FX segment, was acquired in March 2015. The information set forth below is not necessarily indicative of our future operations and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  Nine Months Ended
September 30,
  Year Ended December 31,  
 
  2015   2014   2014   2013   2012  
 
  (in millions except for trading days, percentages and as noted below)
 

U.S. Equities:

                               

Market ADV

    6,864.8     6,214.0     6,414.2     6,187.0     6,437.2  

Number of trading days

    188     188     252     252     250  

Net capture per one hundred touched shares(1)

  $ 0.021   $ 0.022   $ 0.022   $ 0.024   $ 0.023  

Market share(2)

    21.1 %   18.9 %   19.4 %   10.4 %   11.9 %

European Equities:

   
 
   
 
   
 
   
 
   
 
 

Market ADNV

  52,394.2   38,124.1   39,659.3   32,613.6   30,857.6  

Number of trading days

    192     192     256     256     257  

Net capture per matched notional value (in basis points)(1)

    0.132     0.164     0.162     0.167     0.113  

Market share(2)

    24.2 %   21.3 %   21.6 %   23.1 %   24.6 %

U.S. Options:

                               

Market ADV (in thousands of contracts)

    16,271.1     16,281.5     16,586.3     15,934.2     15,651.6  

Number of trading days

    188     188     252     252     250  

Net capture per touched contract(1)

  $ 0.024   $ 0.049   $ 0.046   $ 0.058   $ 0.063  

Market share(2)

    9.9 %   4.2 %   4.8 %   3.7 %   3.3 %

Global FX:

                               

ADNV (in billions)

  $ 27.8              *            *            *            *

Number of trading days

    194       *     *     *     *

Net capture per one million dollars traded(1)

  $ 3.01              *            *            *            *

*
Not meaningful

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(1)
Please see the glossary for our definitions of "net capture per one hundred touched shares," "net capture per matched notional value," "net capture per touched contract" and "net capture per one million dollars traded."

(2)
Please see the glossary for our definition of "market share."

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2015   2014   2014   2013   2012   2011   2010  
 
  (in millions except for percentages and exchange rates)
 

Other Data:

                                           

EBITDA(1)

  $ 166.1   $ 92.8   $ 136.0   $ 116.6   $ 75.7   $ 46.6   $ 41.2  

EBITDA margin(2)

    58.1 %   41.5 %   44.2 %   59.2 %   42.8 %   36.4 %   41.5 %

Normalized EBITDA(1)

  $ 172.5   $ 121.0   $ 168.1   $ 124.1   $ 101.3   $ 60.3   $ 42.4  

Normalized EBITDA margin(3)

    60.4 %   54.1 %   54.7 %   63.1 %   57.3 %   47.1 %   42.7 %

Non transaction revenue as a percentage of revenues less cost of revenues(4)

    55.3 %   58.2 %   57.3 %   51.5 %   51.6 %   58.4 %   55.9 %

Capital expenditures

  $ 12.3   $ 17.6   $ 25.2   $ 3.6   $ 6.9   $ 9.6   $ 6.4  

Average British pound/U.S. dollar exchange rate

  $ 1.5322   $ 1.6691   $ 1.6476   $ 1.5643   $ 1.5847   $ 1.6039   $ 1.5458  

Average Euro/U.S. dollar exchange rate

  $ 1.1155   $ 1.3559   $ 1.3290   $ 1.3280   $ 1.2858   $ 1.3924   $ 1.3275  

Average Euro/British pound exchange rate

  £ 0.7280   £ 0.8122   £ 0.8062   £ 0.8489   £ 0.8112   £ 0.8678   £ 0.8583  

(1)
"EBITDA" is defined as income before interest, income taxes, depreciation and amortization. Normalized EBITDA is defined as EBITDA before acquisition-related costs, IPO costs, loss of extinguishment of debt and other significant one-time items not expected to be recurring, including debt restructuring costs, intangible asset impairment charges and an unusually large regulatory assessment charged to a member in 2013. EBITDA and Normalized EBITDA do not represent, and should not be considered as, alternatives to net income or cash flows from operations, each as determined in accordance with U.S. GAAP. We have presented EBITDA and Normalized EBITDA because we consider them important supplemental measures of our performance and believe that they are frequently used by analysts, investors and other interested parties in the evaluation of companies. Other companies may calculate EBITDA and Normalized EBITDA differently than we do. EBITDA and Normalized EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP.

        The following is a reconciliation of net income to EBITDA and Normalized EBITDA:

 
  Nine Months
Ended
September 30,
  Year Ended December 31,  
 
  2015   2014   2014   2013   2012   2011   2010  
 
  (in millions)
 

Net income

  $ 60.5   $ 30.9   $ 49.2   $ 46.8   $ 31.6   $ 23.5   $ 19.8  

Interest

    34.2     20.3     27.3     25.8     0.6     (0.1 )   (0.3 )

Income tax provision

    42.9     20.7     31.1     28.8     26.5     14.8     15.2  

Depreciation and amortization

    28.5     20.9     28.4     15.2     17.0     8.4     6.5  

EBITDA

    166.1     92.8     136.0     116.6     75.7     46.6     41.2  

Acquisition-related costs

    6.4     14.6     18.5     5.2     19.3     11.4      

IPO costs

    0.5             0.6     6.3     2.3     1.2  

Loss on extinguishment of debt

        13.6     13.6                  

Other one-time items

    (0.5 )           1.7              

Normalized EBITDA

  $ 172.5   $ 121.0   $ 168.1   $ 124.1   $ 101.3   $ 60.3   $ 42.4