Exchange Platform Review Version Date Status 0 2

Exchange Platform Review Version: Date: Status: 0. 2 10 Nov 2008 Draft for Discussion

Exchange Platform Review - Summary The following is a review of the services, performance and technology of the BATS, Chi-X and Currenex platforms. The purpose of review is better understand the platforms and possibly generate ideas for the technology renewal in IEB. Platform Summary • BATS • • • US Cash Equities / EU Cash Equities ECN launched in 2006, recently launched in EU The focus of BATS is low latency at a fraction of fees of the US Regional Exchanges • Chi-X • • • Chi-X is MTF in EU, it is owned by Instinet. Chi-X Canada has recently launched. Chi-X trades EU Cash Equities Instinet has other global ECNs, it is not known if these run on the same or different platforms • INET • • • The INET ECN was bought by Nasdaq OMX in 2005 Nasdaq OMX has an ECN for US Securities Nasdaq OMX Europe is for EU Cash Equities • Currenex • FX Spot, Forwards, Swaps, Money Markets Deposits • Currenex is a multi-bank portal supporting Executable Streaming Prices and RFQ to retail clients Limitations of the Review • The review is based on internet-based research, rather than direct contact with the Exchanges. The accuracy of materials is not guaranteed. • The platforms a loose in their definitions, particularly in the area of latencies • Little technical information is in the public domain on these platforms • The US Patent website was searched for patents for each platform, but this should not be regarded as conclusive

Exchange Platform Review - Background Vendor Id# Requirement BATS Chi-X Europe INET Currenex Notes 1 Ownership Group of banks and brokers *1 Instinet (Subsidiary of Nomura) Nasdaq OMX State Street Instinet, through its subsidiaries, operates a wide array of ATS platforms around the world, including CBXSM in the United States, Japan. Crossing. SM in Asia and Chi-X® in Europe, Canada and, soon, Australia. 3 Products US & EU Securities US Securities FX Spot, Fwd, Swap FX, Loans & Deps Currenex has 70 banks providing liquidity to Executable Streaming Prices (ESP) pool. Currenex supports “all possible” currency pairs. 4 Locations US, Europe US, EU US Currenex does not have any data centers in Europe 5 Market Model Order Driven ESP & RFQ Currenex support different liquidity pools by size. 6 Markets Traded US, UK, French, German, Dutch, Belgium 8 European Markets 14 EU Markets Global BATS went live in Europe in Oct 2008 7 Regulatory Regime ECN (US), MTF (EU) MTF ECN (US), MTF(EU) OTC 8 Market Share 10% (US Market) 22% (FTSE 100) No info 15% (of multibank e-FX market) Currenex daily volume is $100 bn. *1 Ownership group of Citi, Credit Suisse, GETCO, Lehman Brothers, Lime Brokerage, Morgan Stanley, Merrill Lynch and Wedbush.

Exchange Platform Review – Exchange Services Vendor Id# Requirement BATS Chi-X Europe INET Currenex Notes 9 Matching Algorithm Price-Display. Time Price-Time Not Applicable 10 Anonymity Full Name Give-up 11 Order Book Central order book Central Order Book ESP or RFQ 12 Post-Trade Services FIX No Info FIX, API 13 Clearing Partner EMCF (in EU) Not Applicable 14 Market Data Free No info No Info BATS publish full depth of book 15 Other Services Dark Scan, CYCLE smart order routing and Dark Match Off Exchange Reporting, Sponsored Access No Info White label, Prime Brokerage, Supports mini. ECNs BATs’ Dark Match is an pricing program for larger trades. Additionally Dark Scan provides order types to reach offexchange liquidity pools. 17 Patents/Trade marks No Info Intelligent Order Book Yes, see appendix B CX One. Order, CX Smart. Order is a algo trading tool. 18 Co-location Yes Yes Currenex does support different order types

Exchange Platform Review – Latency & Throughput Vendor Id# Requirement BATS Chi-X Europe INET Currenex Notes BATS timing is “the complete round trip from firewall to FIX handler to matching engine and back”. On average, the time between an order hitting BATS’ firewall and the platform sending an acknowledgement of execution is 400 microseconds 19 Average Internal Latency (microsecs) 400 890 250 < 1 ms to order book 20 Average External Latency (milliseconds) 1– 3 2 No Info 21 Messages per sec (Average) 34, 000 30, 000 No Info 5, 000 Currenex numbers are from 2005. This figure is for Chi-X Canada, not EU. 22 Messages per sec (Peak) 166, 000 75, 000 250, 000 11, 000 Currenex numbers are from 2005. INET numbers are from 2006. 23 Messages per day (in millions) 100 m No Info 25 m 23 Trades per day No Info 10, 000 to 25, 000 24 Order Throttling No Info None 25 Market Data Throttling None No Info None Currenex quotes are not throttled. BATS publishes the full depth of book.

Exchange Platform Review – Connectivity & Platform Vendor Id# Requirement BATS Chi-X Europe INET Currenex Notes 26 Technology Source Internally developed based on CBX Internally developed from Island ECN Internally developed Chi-X technology and INET platform is believed to have been sourced from the Island ECN (this is not documented) 27 Client Connectivity API FIX/FAST BATS PITCH BATS TOP FIX, CHIXMD FIX or OUCH ITCH/DROP FIX, Java API BATS PITCH is a derivative of the ITCH market data distribution standard 28 Client Trading GUI None Web based Applet (Java Swing) 29 ISVs No Info Bloomberg, Reuters, Fidessa, , RTS, GL Trade, etc No Info Cognotec 30 Operating System SUSE Linux No Info Red Hat Linux 31 Hardware HP Blade with EMC SAN HP No Info HP and Sun 32 Architecture Distributed Order handlers feeding central Matching Engines Matching Engine with real-time failover No Info “Server farm of Matching Engines running on commodity HP hardware” 33 Programming Languages and Frameworks C++ No info Java & J 2 EE Currenex document is from 2005 Chi-X does not deploy hardware on client sites.

Exchange Platform Review – Data Centre and Network Vendor Id# Requirement BATS Chi-X Europe INET Currenex Notes 33 Client Network BT, Savvis, STFI, Fixnetix, etc Atrium, BT, Colt, Savvis, etc No Info 34 Data Centre Provider Savvis Equinix No Info 35 Data Centre Location New Jersey London, Frankfurt No Info NY, London, California INET uses a MPLS backbone No Info 1 Mbps Bats says “Members using the same bandwidth to both receive quotes and transmit orders should also expect their orders to be slightly delayed. ” Hot-hot DR Real-time replication between data centres 36 37 Client Bandwidth (minimum) Resilience 10 – 25 Mbps 10 Mbps No Info “Simultaneous mirrored backup site” and “fully redundant communicatio n links between sites“

APPENDICIES

Appendix B: Exchange Comparison – References Bats http: //www. batstrading. com/news_article_pdf/IMD%202007 -07 -16%20 BATS%20 slashes%20 bandwidth. pdf http: //www. batstrading. com/news_article_pdf/Forbes%202007 -05 -21%20 Maverick. pdf http: //www. batstrading. com/bats_performance_study. pdf http: //www. batstrading. com/features/bats_trading_Latency. pdf http: //www. marketwatch. com/news/story/instinet-europe-set-begin-trading/story. aspx? guid=%7 BC 0 DD 56 FC-2 EB 5 -4 EBB-8 DDE-A 6 A 96 C 0 C 96 D 2%7 D&dist=hppr http: //www. batstrading. com/bats_performance_study. pdf http: //www. wallstreetandtech. com/resourcecenters/low-latency/show. Article. jhtml? article. ID=199702208 http: //www. batstrading. com/news_article_pdf/NEWSWEEK 08 -09. pdf http: //www. batstrading. com/subscriber_resources/BATS_Connectivity_Manual. pdf http: //www. automatedtrader. net/algo-trading-news-1496. xhtm Chi-X http: //www. sii. org. uk/SII/WEB 5/sii_files/Events/CPDseminars/CPD 185. ppt? bcsi_scan_89234 B 1 A 2594 B 463=0&bcsi_scan_filename=CPD 185. ppt http: //www. instinet. com/about/releases/Chi-X_Canada_Launch_Date_. pdf http: //www. chi-x. com/Faster_Performance_capacity. htm http: //www. nomuraholdings. com/news/nr/europe/20080926. pdf http: //www. nomuraholdings. com/news/nr/europe/20081006. pdf http: //findarticles. com/p/articles/mi_m 0 EIN/is_2008_April_7/ai_n 25126758/pg_1? tag=art. Body; col 1 http: //www. chi-x. com/news/Chi-X%20 selects%20 Equinix. pdf http: //www. computeractive. co. uk/computing/analysis/2226241/glitch-adds-pressure-lse-4225245 http: //www. reuters. com/article/press. Release/id. US 125628+17 -Sep-2008+BW 20080917 INET http: //www. nasdaqomx. com/whatwedo/trading/europeanmarket/ http: //faculty. babson. edu/rdavies/Mi. FID_July 2008_Davies 15. pdf http: //www. nasdaqomx. com/whatwedo/trading/europeanmarket/ http: //www. advancedtrading. com/exchanges/show. Article. jhtml? article. ID=206904732 http: //www. businesswire. com/portal/site/google/? ndm. View. Id=news_view&news. Id=20081022005096&news. Lang=en http: //www. marketwatch. com/news/story/chi-x-says-market-share-ftse/story. aspx? guid=%7 BBDB 682 CD-5510 -4580 -89 AE-DEDE 2 E 94 CC 67%7 D&dist=TQP_Mod_mktw. N http: //whitepapers. zdnet. co. uk/0, 1000000651, 260130178 p, 00. htm http: //linux. slashdot. org/article. pl? sid=07/12/14/2312210 Currenex http: //www. financetech. com/feed/show. Article. jhtml? article. ID=188500215 http: //fxtrades. currenex. com/pdfs/news-oct-2005_latency_issue. pdf http: //www. euromoney. com/Article/1924995/Article. html http: //www. dealingwithtechnology. com/public/show. Page. html? validate=0&page=dwt_login&url=%2 Fpublic%2 Fshow. Page. html%3 Fpage%3 D 442123 http: //en. wikipedia. org/wiki/Currenex http: //www. currenex. com/pdfs/PR_CX_One. Order. pdf http: //www. eweek. com/c/a/Linux-and-Open-Source/Currency-Firm-Trades-on-Open-Source/ http: //www. e-forex. net/Files/surveyreports. PDFs/Celent%20 FX%20 report. pdf http: //www. linkedin. com/pub/0/8 b 9/b 28

APPENDIX C: Exchange Comparison – Patents • Currenex Patents: United States 0162655; United States 0162657; United States 0162656; United Kingdom GB 2379063; United Kingdom GB 2392525; United Kingdom 390726; United States US 6807635 B 1. • Instinet http: //patft. uspto. gov/netacgi/nph-Parser? Sect 1=PTO 2&Sect 2=HITOFF&u=%2 Fnetahtml%2 FPTO%2 Fsearchadv. htm&r=0&f=S&l=50&d=PTXT&RS=Chi-x&Refine=Refine+Search&Query=instinet