Here is the latest of the notorious emails from Dave Cummings, CEO, of BATS Trading. Looks like BATS won't be doing any deals with the regional exchanges, its working on exchange status and the market center has gained some "inspriation" from Nasdaq. Check it out:

Dear Trading Community,

"The Deal'n is Now Done"
BATS is happy to announce we have closed our funding round and raised an additional $45 million from new and existing investors. The new investor will be announced shortly in a separate press release.

We also have decided to stop talking about mergers with the regionals and remain independent.

Quite frankly, I am glad to be done with all the negotiations and am looking forward to returning my focus to "the business of running the business."

Focus on the Technical Details
BATS was created to restore aggressive competition among market centers for the benefit of the broker-dealers. With the latest funding, I am confident we now have enough money in the "war chest" to see that goal through to completion. Some say it is not enough to have a "simple limit order matching system." We think it also helps to have a "simple fee schedule."

The details make the difference. I believe we have built the best technology platform in the industry, at a far lower cost than our main competitor. We are now starting to roll out advanced functionality such as midpoint matching, pegging, and price sliding for NMS compliance. As we roll out new features, we are careful to ensure the new functionality is scalable and does not get in the way of our ultra-fast limit order matching. We will continue to add more functionality based on feedback from our active subscribers - please discuss your requests with your account manager.

Thanks to you, the number of BATS subscribers has grown from 99 at year-end, to more than 180 today. The number of subscribers averaging more than 1 million shares per day continues to grow rapidly. We continue to attract more liquidity and more "near the market" limit orders to our book. To enjoy the access fee savings, many firms are moving BATS towards the top of their smart order routing tables.

Working towards exchange status
BATS has asked the SEC to begin an informal review of our application for exchange status. We intend to run a responsible market and follow all existing rules and precedents.

In a little more than a year since launch, BATS consistently handles more volume than 7 of the 10 existing U.S. equity exchanges...combined. We believe our investors' orders deserve the same direct trade-through protection offered to other markets. Order Delivery and/or the ADF are great to encourage new entrants, but they were never designed to handle the order volumes we expect to handle going forward. The national market system would be more stable with BATS quotes directly reflected in the SIP.

With Reg. NMS, the SEC modified the tape revenue sharing formula to encourage more visible limit orders, especially in the less active stocks. Unfortunately, the public has been unable to benefit from this change, because existing exchanges have so far been unwilling to share quoting revenue with market participants.

"A long walk through the desert"
The approval process is lengthy, and we now have the resources to be patient. At Reuters Exchange Summit,
Bob Greifeld recently said "Our job is to make sure they don't get to a business model that represents sustainability -- we have to force them through a long walk in the desert." What inspiration!

BATS always intended to be a "privately-held semi-profitable industry utility owned by the dealers." With our growing volumes and reduced cost of selling receivables, we are approaching small profitability. Competitors would like you to believe our business model is "unsustainable". Seems a bit more sustainable than spending $1.16 billion for a market center that can be recreated for pennies on the dollar. Our stock has gone from $1 to $15 in under two years - NDAQ peaked at $46.75 the day after our launch and is now 28.5% lower. The bottom line is our cost structure is just far lower than theirs and we have no debt.

It is nice to NOT have the pressure to do deals just to get our short-term stock price up. "Build it right, price it right, treat 'em right - and maybe they will come."

"There'll be time enough for counting, when the dealin's done."
Today we "counted" our second busiest day ever, 373 million shares, matched plus routed. Thank you for your support.

Sincerely,
Dave Cummings
President & CEO
www.batstrading.com

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