1. Technology: Outfitting of the Trading Desk Moderated by: Andy Luro Venture FSG

2. Agenda Topics Panelist Introductions What Venture FSG is Hearing Panelist Presentations Questions and Answers

3. Panelists Andy Sommers, Senior Vice President, Investment Trading Systems Putnam Investments Rick Enfield CPA Director of Product Management Charles River Development Mark Clark Executive Vice President Direct Market Access SunGard/BRASS

4. What Venture is Hearing Connectivity Intelligent Trade Automation Algorithmic Trading Trade Regulations Integration Market Data Access

5. The Trading Function Changes and Challenges Presented by: Andrew Sommers Putnam Investments

6. AgendaTopic Agenda Topic Equity Trading – The Mature Environment Fixed Income Trading – The Opportunities

7. Equity Trading Maturity in Order Generation and Management Robust Electronic Communications Measuring the Effectiveness of Implementations

8. Fixed Income Trading Improving Electronic Communications Increasing Use of Derivative Instruments Increasing Demand on Compliance, Reporting, and Risk Analysis

9. Compliance & Regulations: Technology Impact on the Trading Process Presented by: Rick Enfield Charles River Systems Inc.

10. Agenda Topic Equity Fixed Income Derivatives Foreign Exchange

11. Equity Trading Automated Routing and Algorithms Ultra High Volume Executions Impact of Wealth Management

12. Fixed Income ATS Processing and Origination of the Order Generic Security Processing Post Execution Allocations Data Management and Consistency

13. Derivatives Measuring Exposure / Look-through Growth of Credit Default Swaps Intraday Valuation

14. Foreign Exchange Local Cash Overdrafts Currency Swaps vs. Overlay Management Intraday Exposure Management Counterparty Exposure Management

15. Changes in Trading Technology: A Sell-Side Perspective Presented by: Mark Clark SunGard / BRASS

16. Changes in Trading Technology: A Sell-Side Perspective Structural Shifts in the Business of Trading Corresponding Movements in Trading Technology Closer Looks Direct Market Access Algorithmic Trading TCA/Trading Analytics Open Questions/Areas to Watch

17. Structural shifts in trading: client-driven changes ‘96‘98‘00‘02 1. INFO/ACCESS: Broker-Dealers lose information/market access advantages 4 8 12 16 Trade Reports Quote Updates Insides (Level1) NASDAQ: Average Messages Sent per Day [Millions] 3. CLIENT MIX: Hedge Funds/ Quants become important clients 0 200 400 600 800 Passive Quant Active '00 Hedge Passive Quant Active Hedge '03 US Buy-Side Trading Vol. [Billions of Shares] 2. FEES: Clients demand and get reduction in commissions chart -15% -10% -5% 0% ’95-’00'00-’04 Annual Change in Per Share Brokerage Commissions [%] -6% -14% Source: Mercer Oliver Wyman Analysis, Morgan Stanley Research, NASDAQ; NYSE; SIA; SunGard Analysis 4. TRADING MIX: Clients drive algorithms, program trading chart 0% 20% 40% NYSE Program Trading Volume Percentage '00'04 10% 30% 22% 48%

18. Structural Shifts in Trading Areas of Pressure and Change Regulation NMS Combinations and Evolving Market Micro-Structure (e.g., NYSE / ARCA) SEC and SRO Enforcement Sarbanes Oxley Auditing 8% Legal 10% IT 15% Staffing 12% Training 55% Estimated Total Compliance Costs: US $5 billion p.a. … and increasing Source: Deloitte – 2003 Global Securities Industry Outlook) Pressures from evolving market structure and regulation

19. The Results: Movements in Trading Technology Automated and Rules- Based Trading Electronic Client Relationships New Equities Trading Models Global Markets/ Other Asset Classes Alternative Execution Points TCA/ Trading Analytics Algorithms and Conditional Trading Compliance Handling – At- and Post- Trade Unified OTC/Listed Trading Smart Order Placement Sponsored Direct Market Access Client Connectivity “Hubs”

20. A Closer Look: Direct Market Access What Is It? Broker-sponsored direct-to-market, broker, and algorithmic routing Tailored, “smart” execution tools; Staging or direct integration (FIX) Administrative, reporting and risk tools for the Sponsor Why Is It Important? Increased trading control / reduced information leakage Lower commission and administrative costs What Comes Next? Smart order placement and trade-through compliance Increased execution points, e.g., block systems, new markets/ECNs/ATSs OTC/Listed, cross-asset, and cross-market access

21. A Closer Look: Algorithmic Trading What Is It? Automated block/strategy trading; managed historically by traders Increasingly focused on analysis and identification of opportunities Why Is It Important? Lower commissions Efficiency from electronic order entry and low(?) maintenance Better execution quality - if strategies are used and monitored correctly What Comes Next? Commodity “white labeled” algorithms Implementation outside of equities Strategy selection support and benchmarks/analytics

22. A Closer Look: TCA/Trading Analytics What Is It?: Post-trade transaction cost analysis tools Standard and customized reports and benchmarks Why Is It Important? Demonstrates compliance and value Facilitates trading improvement What Comes Next? Pre-packaged reports, benchmarks, and standards Better accounting for new trading types, e.g., algorithms and programs Integrated pre-trade and at-trade tools; OMS and DMA links

23. Open Questions/Areas to Watch Exchange Market Structure Market Data – More of It Regulation NMS Interpretations: Exemptions, e.g., Block Trading Order Placement Compliance New Entrants

24. What Venture is Hearing Questions & Answers