New trading system lands Merrill investment

NEW YORK (CNNMoney.com) -- BATS Trading, an electronics communications network, received a minority investment from Merrill Lynch on Wednesday.

Kansas City-based BATS, which stands for a better alternative trading system, averaged a daily volume of 307 million shares in February, or about 13.3 percent of the Nasdaq-listed volume.

"We see the Nasdaq as our chief competition," said Randy Williams of BATS Trading, who said the firm's technology and liquidity allows it greater competitive advantage to capitalize on regulatory change.

ECNs are electronic markets that allow orders to be placed and matched without a trading floor.

Reg NMS, new regulations affecting high-intensity algorithmic trading, go into effect this week. "They're a big positive for us," Williams said. "They're rules designed to level the playing field."

The terms of Merrill's (Charts) investment were not disclosed. BATS was founded in 2005, and counts among other investors Credit Suisse (Charts), Lehman Brothers (Charts), Morgan Stanley (Charts) and WedBush Inc.

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