© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. NASDAQ OMX Europe MTFs (ATS), and the road to competitive markets in US equities Danish.

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© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. NASDAQ OMX Europe MTFs (ATS), and the road to competitive markets in US equities Danish Securities Dealers Association: October 01, 2008

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. Total US Equity Market – July 2008

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved – 2000: Seeds Of Change October 1987: Black Monday. Markets fall 20 % in one day. -Investors are angered when phone calls to floor brokers and market makers are unanswered, and orders are unfilled. August 1996: Market Maker Collusion - The SEC imposes the largest fine in its history against market makers for price fixing, and anti-competitive behavior. -Order Handling Rules are created that require all investor limit orders to be included in the market montage, including those from Automated Trading Systems (MTFs). December 1998: Regulation ATS (a regulatory catalyst simliar to MIFID) - MTFs become regulated marketplaces. For the first time, MTFs are allowed to compete on near equal footing with the incumbent exchanges. -A competitive marketplace begins to rise, and MTFs distinguish themselves with superior: pricing, tick sizes, technology, market structure, and service : Decimalization - Incumbent exchanges begin to change behavior based on the new competitive landscape. - Tick sizes on NASDAQ and NYSE move from fractions (1/8), to (1/16), to decimals.

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved – 2002: Rise Of The MTFs Instinet - Is founded in 1969, and becomes the first, largest, and for a time, the only upstairs electronic liquidity pool. Attracts a large community of buy-side and sell-side traders. Archipelago -Founded in 1997 with the support of E-Trade, Goldman Sachs, and other broker/dealers. Distinguishes itself by routing to all MTFs and primary markets. Island ECN -Founded in 1997 by Datek (an early online broker). Focuses on fast and simple order matching. Attracts day traders and the early algorithmic trading strategies. Many Others -BRUT ECN, Attain, Market XT, Redibook, Bloomberg Tradebook, Direct- edge, Light speed, TRAC, Elephant, etc.

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved – 2005: MTF Consolidation Island ECN surpasses Instinet as the largest MTF by market share. Instinet purchases Island ECN, combines the two platforms, and rebrands itself INET. Archipelago purchases Redibook, combines the two platforms, and achieves double digit market share in NASDAQ securities. INET becomes the largest marketplace for NASDAQ securities, with over 25% market share. NASDAQ purchases INET. NASDAQ purchases BRUT ECN. Archipelago grows its market share in NASDAQ and NYSE securities. New York Stock Exchange purchases Archipelago. 1 Based on Salomen Smith Barney report. Dollar Volume % Market MTFJANUARY 2002 Market Share In NASDAQ Securities 1 Instinet12 % Island ECN12 % Archipelago5 % Redibook5 %

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved Present: Regulation NMS and the race for NYSE Market Share The SEC institutes Regulation NMS - Broker/dealers are forced to comply with Best Execution policies - Trading floors of the NYSE and AMEX are required to offer an electronic limit order book.

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. Building Liquidity In The U.S.: Pricing, Technology, Market Structure, Trade Support, and Routing July 2008 Source: NASDAQ, Securities Information Processor (SIP ) NASDAQ ARCA Percent of quoting at the Inside (NBBO) for NASDAQ- Listed Securities

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. Evolution of Market Structure Price / Time priority Pricing (Maker : Rebated / Taker: Charged) Tick Sizes (how fine is fine enough?) Advanced Order Types Proximity Services Non Displayed Orders Routing

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. Growth In Message Traffic and Volume NASDAQ U.S. MATCHING ENGINE - MILESTONES ROUTING & SPECIAL HANDLING Orders Orders Per SecondShares TradedValue Traded (USD)Total Messages DateValueDateValueDateValueDateValueDateValue 9/18/08 612,847,952 9/16/08 62,590 9/18/08 11,963,652,537 9/18/08 430,670,424,972 9/18/08 2,115,885,764 3/14/08 551,617,634 9/4/08 60,375 9/16/08 10,058,923,933 1/23/08 366,523,125,194 7/11/08 1,923,511,458 1/23/08 547,196,817 8/25/08 60,015 9/15/08 9,043,271,363 1/22/08 338,924,421,348 1/23/08 1,798,227,692 1/22/08 532,153,088 5/29/07 59,244 1/23/08 8,930,017,775 8/16/07 328,171,909,617 1/9/08 1,671,263,228 1/18/08 410,306,017 5/24/07 56,092 1/22/08 8,356,644,087 7/26/07 298,902,840,318 11/8/07 1,590,921,408 1/10/08 397,028,862 5/15/07 33,209 8/16/07 7,769,475,310 7/25/07 212,289,196,934 11/2/07 1,365,972,947 1/9/08 357,425,902 5/9/07 32,507 7/26/07 6,867,842,974 7/24/07 206,129,005,660 11/1/07 1,237,851,157

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. Growth Of Consolidators and Routers NASDAQ Trader Website: Attributed Broker VolumeNYSE tm Website: Attributed Broker Volume

Thank you! © Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. Landis Olson Director – Markets Development | Henning Kruse Director – Sales and Customers |