Early termination of the Hart-Scott-Rodino waiting period has been granted in respect of the proposed merger of stock exchange operators BATS Global Markets, Inc. and Direct Edge Holdings LLC. Davis Polk is providing legal advice to BATS on the merger.

When the DOJ conducted its antitrust review of the NYSE/Deutsche Bourse merger – in 2011 – it alleged that the relevant antitrust market should be narrowly defined to include only the four exchanges which executed equity trades. The BATS merger with Direct Edge, by contrast, was cleared by the DOJ less than two months after its August 26, 2013 announcement, in part because the Davis Polk team was able to demonstrate that because of the evolution of the marketplace there are now many off-exchange venues such as dark pools which are alternatives to the stock exchanges for investors wishing to execute equity trades.

The transaction, which remains subject to other regulatory approvals, is expected to close in the first half of 2014.

BATS, which is headquartered in Kansas City, Missouri, is a leading operator of securities markets in the United States and Europe. Headquartered in Jersey City, New Jersey, Direct Edge offers dynamic trading functionality across two distinct platforms, EDGA and EDGX, as well as connectivity and market data services.

The Davis Polk antitrust team includes Michael N. Sohn, Ronan P. Harty, Stephen M. Pepper, Jesse Solomon and Michael Posada. Members of the Davis Polk team are based in the New York and Washington DC offices.