BATS Global Markets made an agreement with asset manager BlackRock Inc. (BLK) to list eight new exchange-traded funds, the first primary listings to be landed by the Kansas City exchange group as it seeks to expand its profile.

The new funds run by BlackRock's iShares unit are linked to indices of international stocks and the first will become available for trading on Jan. 24, according to an announcement by the companies planned for Thursday, a copy of which was reviewed by Dow Jones Newswires.

Winning the listings represents the first success by BATS, a seven-year-old operator of electronic markets, as it aims to compete for share issues against larger and more well-known rivals like the New York Stock Exchange and Nasdaq Stock Market. Those venues battle intensely for the prestige and fees that come from primary listings, and smaller venues historically have found it difficult to gain an edge.

BATS oversees 11% of daily trading in U.S.-listed shares, making it the third-largest stock market operator by volume. The company built its market share through a mix of robust technology and attractive fee schemes aimed at the sophisticated electronic trading firms that now dominate exchange trading.

Its gambit to win listings is similar. BATS has proposed an incentive plan to encourage trading firms to offer more competitive prices in securities listed on its market, and intends to leverage its systems to provide to issuers a clearer idea of why their shares trade the way they do. The exchange group has also positioned itself as a generally lower-cost venue to list shares, compared with Nasdaq and NYSE.

Noel Archard, global head of product management and development for iShares at BlackRock, said BATS' "innovative approach" to the listings business factored into his firm's decision to offer its new products there.

The new ETFs to be listed at BATS are linked to indices run by MSCI Inc., covering shares of countries like Norway, India, Canada and Australia.

BATS, which officially opened its primary listings venue in December, aims to lure initial public offerings and existing company listings alongside structured products like ETFs. But the potential for lower listing fees and improved liquidity for just-launched products is seen as particularly appealing to ETF issuers like iShares.

"It's an extremely cost-competitive world, and wherever you can eke out efficiencies, you're going to explore it," said Paul Justice, who leads ETF research for North America at Morningstar. He estimated that there currently are 1,380 exchange-traded products now competing to draw investor assets, which were estimated to stand at about $1 trillion in the U.S. late last year.

BATS has also been playing on its Midwestern roots to recruit new share issuers. The company maintains a presence in New York and in London but was founded and remains headquartered in Kansas City, where most of its 117 staff work.

There is one initial public offering already slated for BATS -- the company's own, which is seen on track for sometime in 2012. The firm aims to sell shares following its acquisition of Chi-X Europe, a rival London platform for trading European stocks.

 
 -By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com
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