Best Execution &The Changing Landscape of European Equity Markets

September 2008

Best execution? Best check Chi-X!

The Historic Model

Trading ClearingSettlement

UK

Euronext

German

Swiss

Nordic

Ltd

SA

Bi-lateral settlement

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Trading

Clearing

Settlement

Live Sept 2008

ProjectProject

SA

Post MiFID : The Competition

LIVE March 2007

EMCF

Project

EMCF EMCF

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FASTER

CHEAPER

SMARTER

Check

Check

Check

Standard FIX 4.2 ConnectivityLow Latency

High message capacity

Lower trading fees Free market data

Lower clearing fees No connection or membership

charges

Anonymous order driven marketPan European CCP

Innovative pricing modelPrice Improvement

Why has Chi-X succeeded where others have failed ?

* Based on a 50/50 aggressive/passive ratio

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Connectivity Options

Client

500 microseconds

Chi-X Equinix Suite

Co-lo1.4 - 2 ms

NetworkServiceProvider

Leasedline

+/- 5 - 7ms

Equinix Service Provision

Connectivity Layer

Order entry

Quotes

+/- 3ms

Round trip latency in all cases

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Trading Tariff

Trading fees on Chi-X

Aggressive execution fee 0.30bps

Passive execution rebate 0.20bps

Order entry, amendments & deletions no charge

Membership & application no charge

Market data FREE

OTC trade reporting (optional) £210 pcm Aggressive execution Order hits Chi-X order book and immediately results in execution Passive execution Order is placed on Chi-X order book and executed as a result of being hit by an incoming order

The Chi-X business model is based on the principle that the user pays only for services consumed

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Trading Costs: Chi-X ‘vs’ Exchanges

* based on a passive/aggressive execution ratio of 50:50.

Source: Statistics based on average daily DMA trades, volume and consideration, supplied by Chi-X trading participants

Trading Venue Trading Costs (bps)*

Chi-X Europe Ltd 0.05

Turquoise 0.10

Euronext Amsterdam 0.40

London Stock Exchange 0.43

Deutsche Börse Xetra 0.58

Euronext Paris 0.65

SWX Europe 0.71

OMX Helsinki 0.78

OMX Stockholm 1.07

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EMCF Clearing Fees

EMCF has introduced further fee cuts with effect from 1st August 2008

All clearing fees are stated in Euros

Market Initial fees1 October

20071 March

20081 May 2008

1 July 2008

1 August 2008

Overall difference

Netherlands 0.30 0.28 0.19 0.14 0.10 0.05 -83.3%

Germany 0.25+0.075 bp 0.20+0.075 bp 0.19 0.14 0.10 0.05 -80.0%

UK 0.18 0.17 0.15 0.12 0.10 0.05 -72.2%

France n/a 0.28 0.19 0.14 0.10 0.05 -82.1%

Switzerland n/a n/a 0.10 0.08 0.08 0.05 -50.0%

Scandinavia n/a n/a 0.19 0.14 0.10 0.05 -73.7%

Internal / Self 0.03

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Basis Points Savings on Chi-X

Month% of trade better than the

spread Price Improvement

(BPS)

August 2008 40% 2.61

July 2008 41% 2.66

June 2008 36% 2.37

May 2008 34% 2.00

Apr 2008 37% 1.95

Mar 2008 45% 2.76

Feb 2008 48% 2.66

Jan 2008 53% 2.89

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Nordic Basis Points Savings on Chi-X

Month Finland Sweden Norway Denmark

August 2008 7.55 7.35 5.75 6.04

July 2008 7.71 9.78 8.61 7.40

June 2008 6.05 8.11 3.41 7.02

May 2008 3.81 5.60 n/a n/a

Apr 2008 7.11 5.28 n/a n/a

Mar 2008 12.69 5.48 n/a n/a

Price Improvement (bps) per market

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Chi-X Gross Consideration (EUR billions)

4.51 4.7810.92

13.86 12.728.03

21.28 19.49

33.4140.65 38.89

52.97

73.5568.02

96.97

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Proof of Fragmentation of Liquidity Chi-X Monthly Volumes

In September 2008 to date, a gross consideration of over €96 billion has been traded in just 20 days, with 2 more trading days remaining in the month

A value of over €68 billion was traded over 21 trading days in August

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Daily Trading Trend Analysis

In September 2008 alone, Chi-X has seen 5 record days in terms of gross consideration traded on the platform

Chi-X achieved a gross consideration of €4.5 billion on 2nd September, €4.6bn on the 4th and €5.4bn on 5th September, before topping those records on 9th September with over €6 billion worth of shares traded in one day. The 16th of September saw Chi-X achieve a gross consideration of €7.1bn.

Chi-X Europe ADC (Single Counted, Euros mm)

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Market Share Growth by Market

Market shares based on those stocks that are tradable on Chi-X.

Selected FTSE 250 stocks launched in March 2008

AMX 25 stocks launched in September 2008

Chi-X Average Market Share - France

1.2% 0.8%1.2%

2.2%2.7%

4.1%

5.8% 5.8%6.7%

10.2%

13.5%

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Chi-X Average Market Share - Holland

4.0%3.0%

3.9%

5.4%4.8%

6.4%7.3%

8.5% 8.3%

11.0%

14.8%

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Chi-X Average Market Share - Germany

2.9%2.2%

1.4%2.1% 2.4%

3.8%

5.5% 5.8%

7.5%

8.7%

11.5%

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Chi-X Average Market Share - UK

1.9% 2.0%2.6% 2.7%

4.3%

8.8%

10.2%11.2%

12.2%12.7%

16.7%

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(Combines FTSE 100 and FTSE 250)

Chi-X Average Market Share - UK

1.9% 2.0%2.6% 2.7%

4.3%

8.8%

10.2%11.2%

12.2%12.7%

16.7%

0.0%

2.0%

4.0%

6.0%

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(Combines FTSE 100 and FTSE 250)

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UK45.68%

Finland1.10%

France18.97%

Belgium0.37%

Germany18.57%

Sweden1.42%

Denmark0.17%

Switzerland3.16%

Norway0.34%

Netherlands10.17%

Austria0.06%

Proof of Fragmentation of Liquidity Market share highlights to date

Chi-X Gross Consideration by Market, August 2008

Index Highest Chi-X share

Date

FTSE 100 22.36% 20 Aug 08 ETFs (5 iShares) 20.46% 17 June 08 AEX 25 18.42% 20 Aug 08 CAC 40 16.12% 20 Aug 08 DAX 30 15.44% 20 Aug 08 FTSE 250 (171) 14.29% 20 Aug 08 OMX H 25 8.54% 17 Sept 08 SMI 20 7.47% 20 Aug 08 BEL 20 6.41% 20 Aug 08 OMX S 30 5.51% 23 July 08 ATX 20 4.08% 3 Sept 07 OBX 25 3.23% 5 Sept 08 OMX C 20 3.06% 1 Sept 08

Chi-X has achieved intraday market shares of up to 25% of the FTSE 100

Prior to close on 20th August 08, Chi-X had a market share of 24.37% of the FTSE 100 and 20.16% of the AEX 25

Best execution? Best check Chi-X!

Chi-X market share of FTSE 100 – Aug 08

FTSE 100 stocks at 4.15pm - Chi-X market share thresholds in August 08

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Best execution? Best check Chi-X!

European Order Book Volumes

Figures sourced from FESE, Chi-X Europe figures inserted for comparison

1,324,900,00027,444Prague Stock Exchange15

1,362,700,00097,830Budapest Stock Exchange14

2,891,400,000580,162Warsaw Stock Exchange13

2,988,500,000437,653Athens Stock Exchange12

3,691,800,000452,316SWX Swiss Exchange11

4,925,100,000412,871Wiener Borse10

15,912,200,000864,435Oslo Bors9

47,729,200,0003,179,678OMX Nordic Exchange8

51,012,500,0004,015,200Borsa Italiana7

54,098,900,0002,288,316SWX Europe6

67,189,600,0002,120,080Spanish Exchanges (BME)5

68,023,864,873 7,319,096Chi-X Europe4

122,431,500,0006,623,281Deutsche Borse3

154,305,800,00012,751,289London Stock Exchange2

163,063,000,00012,466,223Euronext1

Order Book Turnover €Order Book TradesExchange / MTF

Value of Equity trading, August 2008

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Where to find the best market

This is the exchange identifier

The volume distribution is displayed here

Executed trades are

displayed here

Choose the venues that you want to monitor here

Edit the default settings here

You must have access to real-time data

Bloomberg has developed a consolidated Market Depth Monitor (MDM) that displays the consolidated level 2 data from each market. It will help you achieve a better result for your

client<CONSOLIDATED TICKER> EQUITY MDM <GO> e.g. RBS EU

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European Roadmap

Switzerland 23rd November 2007

Sweden 14th March 2008

Netherlands 30th March 2007

Finland 4th April 2008

UK 29th June 2007

France 28th September 2007

Germany 30th March 2007

Live Markets & Future Launch Dates

To Be Announced

Italy 13th October 2008

Spain

Norway 20th June 2008

Belgium 4th July 2008

Portugal

Austria 8th August 2008

Denmark 20th June 2008

Ireland

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©2008 Chi-X Europe Ltd (“Chi-X”). All rights reserved. Chi-X is a registered mark. Chi-X Europe Limited is authorised and regulated by the Financial Services Authority. Chi-X Europe Limited is a majority owned subsidiary of Instinet Incorporated.

This information is provided for informational purposes only. It does not take into account the particular investment objectives, financial situation, or needs of any individual or entity. Under no circumstances is it to be used or considered as an offer to purchase or sell any security, or as a solicitation or recommendation of the purchase, sale, or offer to purchase or sell any security. While the information has been obtained from sources deemed reliable, neither Chi-X nor its licensors, nor any other party through whom the user obtains any such information: (i) makes any guarantees that it is accurate, complete, timely, or contains correct sequencing of information; (ii) makes any warranties with regard to the results obtained from its use; or (iii) shall have any liability for any claims, losses, or damages arising from or occasioned by any inaccuracy, error, delay, or omission, or from the use of the information or actions taken in reliance on the information. Reproduction or redistribution of this information is prohibited except with written permission from Chi-X.

System response times may vary for a number of reasons including market conditions, trading volumes and system performance.