© Copyright 2009, The NASDAQ OMX Group, Inc. All rights reserved. NASDAQ OMX Europe – smarter thinking for the future of equities in Europe Charlotte Crosswell,

© Copyright 2009, The NASDAQ OMX Group, Inc. All rights reserved.

NASDAQ OMX Europe – smarter thinking for the future of equities in Europe

Charlotte Crosswell, President, NASDAQ OMX Europe

23rd June 2009

© Copyright 2009, The NASDAQ OMX Group, Inc. All rights reserved. 2

Cautionary Note Regarding Forward-Looking Statements

The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about NASDAQ OMX's products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ OMX's control. These factors include, but are not limited to factors detailed in NASDAQ OMX's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements. There can be no assurance that the FSA will give the NASDAQ OMX applicant the authorization and permissions which it seeks.


The European Trading Landscape – what is the impact of MiFID?

• MiFID stands for the Markets in Financial Instruments Directive (or Directive 2004/39/EC), which was enforced by European Union (EU) Member States on 1 November 2007.

• Increased transparency across all trading venues

• Enhanced protection for the retail investor- From the provision of advice through to execution of orders

• Greater competition between regulated markets and Multilateral Trading Facilities (MTF’s) and removal of barriers of investment firms connecting with trading venues in other EU states.

• Greater emphasis and clarity on the obligation to avoid conflict of interest

• Increased levels of disclosure, particularly to retail investors

• Harmonized rules applying to all firms operating within the EU

• Removal of artificial barriers to ease cross-border trading


Greater Fragmentation, Global Price Formation

Fragmented securities trading

landscape

Global market for blue chip trading

• Exchanges will develop from being local/regional monopolies to being competitors, particularly for the largest blue-chips

• Different trading venues will exist in parallel, e.g. traditional exchanges, SIs and MTFs

• Exchanges and other trading venues likely to focus their profile and offering, for example by size (global vs. small and mid-cap stocks vs. micro-cap) or industry clusters (telecom/high tech, etc...)

• Role of smaller/regional exchanges will likely shift to being more of a “growth facilitator” and less of a “trading market for large caps”

• Trading of blue chip shares will be executed on multiple venues

• Trading of blue chips likely to be characterized by common, global customer requirements – including efficient execution and low price

• Price formation will be global despite fragmented trading across multiple trading platforms

• Volume sufficiently large to limit market impact even if liquidity is not pooled on a single venue

• Advanced order routing will facilitate blue chip trades across multiple venues

Fragmented securities trading

landscape

Global market for blue chip trading


New playing field

•Competitors- New competitors

- Fight to build liquidity against competition from European Primary markets and MTFs

- Leveraging our unique capabilities – NASDAQ OMX business model

- Differentiate NASDAQ OMX – not me too

•Customers- Can choose from a wide variety

of trading venues and service providers

- Have new needs

- There will be new types of customers

- Services to be made easy to understand and buy

- Creating relationship and real dialogue between customers and NASDAQ OMX


New Competitive Initiatives

New Trading Venues – examples

New CCP Interoperability - examples


Introducing NASDAQ OMX Europe

NASDAQ OMX Europe is a new global marketplace

designed for high performance tradingof European blue chips.

First platform to connect major European trading centers through sophisticated onward routing


Quick Facts

• Setup

- London based MTF, authorised and regulated by the Financial Services Authority

- Proven low latency matching engine (INET)

- Pan-European Order Routing functionality

• Equities trading

- Approx. 900 European blue chips

- Composite displayed/non-displayed book

- Pre and post-trade anonymity

- Consolidated European Best Bid Offer (EBBO)

- Order routing functionality

- Trading of ETFs and other liquid instruments

• Trading hours and calendar

- Market hours: 07:50– 17:00 UK Time

• Post trade

- CCP partnership with European Multilateral Clearing Facility (EMCF)


Enabling Best Execution

What we do Customer advantage

Consistent sub millisecond latency Fast execution of orders

Competitive value based pricing Low cost of execution

Consolidated European Best Bid Offer Best available price

Order routing functionality Wide range of trading options

Proven core matching engine Reliability

Established by NASDAQ OMX Credibility, global exposure

Engaging new market participants Attracting new liquidity in shares

Neutral, public company Fair and equal treatment

Efficient pan-European clearing & settlement Low total cost of trading

Impro

ved in

vesto

r off

erin

g

Incre

ase

d re

venue/p

rofita

bility


Market Overview

NASDAQ OMX Europe Routing

Engine

NASDAQ OMX Europe Order Book

Broker/Dealer

e.g. LSE

e.g. Turquoise

Broker/DealerExecution

Order Entered

e.g. Chi-X

Ord

er

Ent

ered

Exe

cuti

onExecution

Routable Order Entered

Execution

Order Entered

The Routing Engine will always first check the NASDAQ OMX Europe Order Book prior to routing to another market

e.g. BATS


Clearing Solution

EMCF

Trading Member 1 Trading Member 2

Clearing Participant 1

Clearing Participant 2

Bid/offerTrade

confirmation

Gross trades

TradesPositions

Margins/MtM Net Deliveries

TradesPositions

Margins/MtMNet Deliveries

Clearing Agreement

Clearing Agreement

Agent Bank 1 Agent Bank 2

Settlement Arrangement

Settlement Arrangement

Net deliveries

Agent Bank

Bid/offerTrade

confirmation


The most competitive pricing in Europe!

Book Pricing

Euronext Book Pricing

• Aggressive fee structure introduced as response to new Euronext pricing.

• High volume liquidity rebate offered for significant volume on NEURO

Onward Routing PricingRouted orders All inclusive trading

cost

Turquoise 0.28 bps

Chi-X 0.30 bps

Deutsche Börse 0.50 bps

London Stock Exchange

0.50 bps

NYSE Euronext – Amsterdam, Paris and Brussels

0.50 bps

NASDAQ OMX Helsinki, Stockholm, Oslo Børs and Borsa Italiana

1.4 bps

NASDAQ OMX Copenhagen

1.8 bps

SWX Europe 1.8 bps

Wiener Börse 6.8 bps

Added Liquidity All inclusive trading cost

Rebate +0.20 bps

Removed Liquidity All inclusive trading cost

Charge 0.30 bps

Added Liquidity All inclusive trading cost

Rebate +0.15 bps

Removed Liquidity All inclusive trading cost

Charge 0.15 bps


NEURO Dark - launched 11th May, 2009

NASDAQ OMX Europe’s Dark Pool that offers customers the flexibility to enter orders of any size.

Functionality

• Trades over 900 European securities.

• A continuous crossing dark book using INET technology.

• Single Connection provides access to NASDAQ OMX Europe and NEURO Dark.

• Minimum Acceptable Quantity is available on all dark orders.

• Orders are priced based on the mid-point of the primary market.

• SELF order type gives market participants the ability to enter internalised orders.

• Post-Trade Transparency via NASDAQ OMX Europe ITCH feed.

For further information visit: www.nasdaqomxeurope.com/NEURO_Dark.

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Sponsored Access

Benefits for the Sponsored Client• Full range of connectivity options

available.• Ultra low latency enabled through co-

location services.• Access to full range of NASDAQ OMX

Europe onward routing strategies

Benefits for Sponsoring Participant• Utilize NASDAQ OMX Europe’s

advanced Pre-Trade Risk Management system.

• Legal framework developed in full consultation with U.K. Financial Services Authority (FSA).

• Order and execution information provided through real time drop copy feed.

NASDAQ OMX Europe Pre-Trade Risk Management (PRM)

• PRM Fat Finger Check feature allows users to set order limits at several levels to ensure that erroneous orders never execute.

• PRM functionality is fast, with less than one millisecond of added latency.

• PRM provides Sponsoring Participants with ability to set values on a wide range of parameters.


Your passport to European trading


Questions?

Contact Information:

NASDAQ OMX Europe Tel: +44 (0) 20 7065 8000

Email: [email protected]

www.nasdaqomxeurope.com


Thank you


NASDAQ OMX Europe Ltd. is authorised and regulated by the Financial Services Authority. Insofar as the content of this communication is considered a financial promotion for the purposes of section 21 FSMA 2000, it is not

communicated or approved by a person authorised under FSMA. This communication is directed only at persons to whom NASDAQ OMX Europe may lawfully make financial promotions (Relevant Persons) including persons who have professional experience in matters relating to investments who are "investment professionals" within the meaning of article 19 of the FSMA (Financial Promotion) Order of 2005. This website must not be distributed to,

acted on or relied upon by persons who are not Relevant Persons.

Documents

© Copyright 2009, The NASDAQ OMX Group, Inc. All rights reserved. NASDAQ OMX Europe – smarter thinking for the future of equities in Europe Charlotte Crosswell,