FUTURES INDUSTRY BUSINESS CONTINUITY AND DISASTER RECOVERY 2007 INDUSTRY TEST RESULTSDR IV November 5, 2007 Compiled and Developed by Tellefsen and Company, L.L.C.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. TABLE OF CONTENTS I. I.Background3 II.Executive Summary8 III.Overall Test Results12 IV.Problems Encountered27 V.Lessons Learned29 VI.Suggested Next Steps33 Page Number:

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. I.BACKGROUND The FIA Information Technology Division conducted the first annual Disaster Recovery (DR) Test in October Starting in Q2, 2007, the FIA Business Continuity Committee began detailed preparations for this years third annual industry-wide test. A Working Group was convened to discuss and agree on a date, goals, objectives, etc.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. BACKGROUND (Contd) … Two futures Industry BC/DR symposiums were held in September in New York and Chicago. Panelists included representatives from the major exchanges and clearinghouses: CBOE Futures Exchange Chicago Board of Trade Chicago Mercantile Exchange/CME Clearing The Clearing Corp. Eurex AG ICE Futures EU ICE Futures US/ICE Clear US Liffe Kansas City Board of Trade/KCBT Clearing Corp. MEFF New York Mercantile Exchange/NYMEX Clearing Philadelphia Board of Trade Winnipeg Commodity Exchange

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. BACKGROUND (CONTD) … The scope of this years initiative was designed to test disaster recovery back-up connectivity and functionality between exchanges, clearinghouses and member firms: – –Test firm back-up to exchange back-up sites (DR-DR). – –Verify connectivity. – –Test round-trip communications capabilities. The symposium sessions were well attended by numerous operations managers and BC/DR representatives from various clearing and non-clearing firms. Regular Committee conference calls were held between May and October (bi-weekly and weekly).

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. BACKGROUND (Contd) … The Committee including representatives from: – –Clearinghouses – –Exchanges – –FCMs – –Clearing firms – –Non-clearing firms – –Key service providers – –Independent software vendors

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. BACKGROUND (Contd) … To encourage participation, the FIA agreed that all firm names would be anonymous and test results would be without attribution to any firm. Post-test interviews with firms and survey forms were used to fine tune the results.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. II.EXECUTIVE SUMMARY The fourth annual industry-wide disaster recovery test in the U.S. financial services sector was highly successful, largely in part to the good working relationship between exchanges and the firms. Major U.S. and international futures exchanges, clearinghouses, FCMs and clearing firms participated in this years test: 103 FCMs, clearing firms and non-clearing firms participated - an increase over last year 98% of firms tested successfully Participant firms represent a significant critical mass of futures order flow and liquidity: ~88% of overall futures exchanges volume.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. EXECUTIVE SUMMARY (CONTD) … This years test initiative was expanded to include several domestic and international exchanges: – –ICE Futures EU – –MEFF – –Philadelphia Board of Trade Exchanges and clearinghouses demonstrated that their systems, processes and procedures simultaneously worked very well.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. EXECUTIVE SUMMARY (CONTD) … Feedback from the firms, exchanges and clearing houses indicated that this was a valuable and worthwhile exercise and that the industry should continue to do more common testing in the future. Firms indicated that the test helped them: – –Exercise their Business Continuity/Disaster Recovery plans – –Identify internal single points of failure – –Tighten up and document their business continuity procedures – –Better understand the need for cross-training – –Test connectivity with exchanges DR sites

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. Source: Exchanges and Clearing Houses TEST PARTICIPANTS REPRESENT A SIGNFICANT % OF EXCHANGES VOLUME

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. III.OVERALL TEST RESULTS The major domestic and international futures exchanges and clearinghouses and 103 firms* participated in the test: CBOE Futures6 CME Group54 Clearing Corp.23 Eurex 66 ICE87 ICE Futures US/ICE Clear US29 Kansas City Board of Trade17 Liffe19 MEFF2 NYMEX/COMEX40 Winnipeg Commodity Exchange14 * Some firms are common members of multiple exchanges and clearing houses. PBOT testing did not involve members.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. OVERALL TEST RESULTS (CONTD)… Test participants included both clearing firms and non-clearing firms. Approximately 85% of all futures clearing firms participated. 98% of firms tested successfully. 92% tested from their Disaster Recovery sites and/or via back up communications facilities. – –The remainder tested from their primary sites.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. CBOE FUTURES EXCHANGE Tested via member firms back up connectivity to production CBOEdirect trading platform. Scripted trade entry for VIX futures contracts. Transmitted trades to the Clearing Corps. back- up systems.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. CHICAGO BOARD OF TRADE Members tested connectivity to eCBOT trading system. Participated in post-trade testing and generated a subset of October 26th trades to member firms from CME Clearing. Injected trades in trade handling system via back up site. Transmitted trade confirmations from CME Clearing. Accepted EFP, change records, PCS and large trader records.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. CHICAGO MERCANTILE EXCHANGE Tested member firms back-up connectivity to production GLOBEX trading platform via CME remote back-up site. Entered a script of orders for various products. Received ex-pit, block trade information via CME remote site portal URL. Generated trade reporting and SPAN files from 10/26 trade date. Received PCS and large trader information from member firms. Transmitted trade registry data and SPAN files via FTP.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. THE CLEARING CORP. Tested member firms back-up connectivity to back-up clearing system. Confirmed system connectivity via successful system login message – no scripted trade entry. Transmitted previous business day clearing reports to member firms: – –Match off files – –Report files – –SPAN files PCS, ex-pit and large trader information was not accepted.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. EUREX AG Tested member firms back up connectivity to production XCEED electronic trading platform. Connectivity was confirmed via successful system log in message – no scripted order entry.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. ICE FUTURES US / ICE CLEAR US Tested member firms back-up connectivity to the ICE Trader electronic trading system. Scripted order entry for Cotton and Sugar futures contracts. Trade entry via TIPS system for test trades, ex- pit, large trader and PCS information. ICE Clear produced end-of-day files: – –Match off files, report files and SPAN files.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. ICE FUTURES EU Tested member firms back-up connectivity to the ICE Exchange electronic trading system DR site. Scripted order entry for Cotton and Sugar futures contracts. Tested ICE Block and other non trading functionality from DR site. ICE Web reporting via Internet portal for deal reporting, position reports, etc. Futures trades submitted to the ICE Clear DR site.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. KANSAS CITY BOARD OF TRADE Members tested connectivity to eCBOT trading system. Participated in post-trade testing. Generated a subset of October 26th trades to member firms. Transmitted trade confirmations from KCBT Clearing Corp. Accepted EFP, change records, PCS and large trader records.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. LIFFE Tested member firms back up connectivity to production CONNECT trading platform. Connectivity was confirmed via successful system log in message to central gateways– no scripted order entry.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. MEFF Tested via the MEFF production ETS environment. Simulated a failure of their London POP and successfully failed over to the backup system during the test. Members entered trades and received reports. Transfer files were delivered from clearing, but member firms back office systems did not receive any test data.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. NEW YORK MERCANTILE EXCHANGE Tested member firms back-up connectivity to GLOBEX trading platform, ClearPort TMS and ClearPort Clearing systems. Order entry via scripted trade entry in crude oil, natural gas, heating oil, gasoline, silver and gold futures contracts. Reported trade fill information to member firms. Transmitted end-of-day clearing reports via NYMEX Clearing: – –Ex-pit, PCS, large trader information – –591 Member Trade Register report

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. PHILADELPHIA BOARD OF TRADE PBOT conducted an internal test Used the PBOT/XL trading system Trade Orders received at PBOT/XL Help Desk. Fill reports were generated. PBOT trade file processed for clearing and settlement.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. WINNIPEG COMMODITY EXCHANGE Members tested connectivity to eCBOT trading system. Participated in post-trade testing. Generated a subset of October 26th trades to member firms from Clearing and transmitted trade confirmations. Accepted EFP, change records, PCS and large trader records.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. THE MAJORITY OF PARTICIPANTS WERE CLEARING FIRMS Source: Exchanges and Clearing Houses Number of Firms

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. IV.PROBLEMS ENCOUNTERED A number of problems were encountered, including: – –Incorrect FIX tags impacted routing logic – –Configuration parameter not set properly on back up servers – –Configuration file issues with ISV systems – –MQ connectivity/could not generate MQ messages – –Incorrect IP addresses/incorrect network configuration – –Firewall configuration parameters – –Member firm hotline was not working initially – –Exchange trading system not accepting logins – –Exchange web portal connectivity problems – –Remote login to clearing system did not work Most were resolved quickly, although some caused an unexpected delay to test progress.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. PROBLEMS ENCOUNTERED (CONTD)… Some firms experienced procedural problems with invalid or expired passwords, looking at the wrong system screens, etc. One exchange had problems with firms access to their backup systems, issues with SFTP encryption certification. Some firms did not verify that their back up servers and equipment was properly functioning prior to the test.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. V.LESSONS LEARNED The futures industry proved that it is capable of successfully orchestrating an industry-wide disaster recovery test. Most problems that were encountered were rectified quickly, although some caused an unexpected delay to the restoration of full processing capabilities: Under real life situations, most problems could probably be resolved within hours or by the next business day. The exchanges and clearinghouses internal support processes and procedures worked well.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. LESSONS LEARNED (CONTD)… Firms indicated that the test helped them: – –Identify some internal single points of failure – –Tighten up and document their business continuity and system fail over procedures – –Better understand the need for cross-training – –Test connectivity with exchanges DR sites Pre-test connectivity testing was valuable and should be a pre-requisite for future tests.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. LESSONS LEARNED (CONTD)… Firms must be aware of any environmental impact on their network fire walls caused by test requirements: – –Have proper network staffing support actively engaged during the test. – –Be aware of any firewall impact and make changes accordingly to accommodate testing. There is a need to better coordinate testing activities: – –More time should be allocated for this during future tests. – –Need to identify and corroborate all test contacts prior to the tests. – –Try to standardize scripts across exchanges.

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. LESSONS LEARNED (CONTD)… Need clear support desk procedures and sufficient staffing at exchanges to properly support the test. A number of firms apparently did not pre-register and showed up for the test at several exchanges: – –They were set up and most tested successfully, however, this placed an additional demand on exchange and clearing house support staffs. – –Additionally, several firms that registered at 1-2 exchanges were no shows

CG Consultants to the Financial Services Industry 2007 FUTURES INDUSTRY DR TEST RESULTS Tellefsen Consulting Group, Inc. VI.SUGGESTED NEXT STEPS Survey firms and exchanges for input to future testing. Announce the details of the 2008 DR test: – –Define the scope of next years scenario test exercise – –Establish the goals and objectives of test initiatives – –Announce dates early in advance Broadly market future test initiatives to firms IT, operations, trading and senior management, to ensure a wider dissemination of test information within all firms.