Welcome to the Financial Services Club

Established 2004

Focus is the future of financial services

Usually a keynote from an industry practitioner, government

policymaker, regulator or someone who’s really interesting

Covers all areas of the financial markets: retail and

investment banking, capital markets, insurance, brokerage

Aimed at any organisation interested in these markets:

banks, insurers, vendors, consultants

Presentations, Debates, Question Times, Dinners,

Roundtables

Chatham house rules

Modus Operandi

• The Financial Services Club UK

• The Supply Chain Forum

• The Capital Markets Club

• The Financial Services Club Ireland

• The Financial Services Club CEE

Five Groups

Sir John Gieve, Deputy Governor, the Bank of England

David Bagley, Global Head of Compliance, HSBC

The Right Honorable Lord Cecil Parkinson

John Sculley, former CEO Apple and Pepsi-Cola

Lindsay Tomlinson, Vice Chairman, Barclays Global Investors

David Yates, President, First Data Europe, Middle East & Africa

Annette Austin, Chief Operating Officer, ABN AMRO

Robin Phipps, former Group Executive Director UK Operations, Legal & General

Brian Pomeroy CBE, Chairman of the Payments Council

Detective Chief Superintendent Steve Wilmott, Head of Economic Crime Unit, City of London

Maria Velentza, Deputy Head of Securities Markets Unit, European Commission

James Alexander, co-founder, Zopa and Egg

Sharon Bowles, MEP

Stuart Bernau, Group Executive Director, Nationwide Building Society

Damian Atkinson, CIO, ING Wholesale

David Bagley, Global Head of Compliance, HSBC

Tom Buschman, CEO and Chairman, TWIST

Ken Farrow, Director, Fraud Services, Control Risks

Angela Knight, Chief Executive, the British Bankers’ Association

Previous Speakers include:

Connectivity Options

Round trip latency in all cases*Average based on a central London location** Average based on aggressive order executed – round trip times

Client

0.45 ms**

Chi-X Equinix Suite

Co-lo

NetworkServiceProvider

Leasedline

5 - 7 ms*

Equinix Service Provision

Connectivity Layer

Order entry

Quotes

< 1 ms*

CHIX MD

0.4 ms*

Speed: Roundtrip Latency By Venue

Trading VenueMedian Latency(milliseconds)

Chi-X Europe 0.4 (co-located)

Turquoise < 4

LSE SETS < 6

NASDAQ OMX Europe 10

Euronext 13

Deutsche Börse Xetra 37

OMX 43

Borsa Italiana 106

SWX 216

SWX Europe 230

Source: Internal system performance measurement statistics for average DMA order messaging in October 2008, supplied by Chi-X tradingparticipant. These internal figures are for round trip latency message acknowledgement based on sending an average number of messages to theexchange system and obtaining a response back to the participant's system over the course of a normal trading day.

These figures are provided for illustrative purposes only and are not intended to represent an independent performance measure of latency.

Chi-X internal latency is approximately 350 microseconds

Trading System Capacity

Chi-X is built on scaleable low cost hardware enabling increases in current capacity quickly and easily at low cost

Chi-X is wholly FIX compliant

Source:*Internal benchmark testing, December 2008** Trading Venue websites, December 2008

Trading VenueCore cash equity system order flow

capacity (messages per second)

Chi-X Europe Ltd 115,000*

London Stock Exchange 12,000**

Turquoise 6,000**

Total Chi-X Activity vs Capacity

Chi-X can currently handle up to 115,000 messages per second without a degradation in latency

At its peak on 6th February, the number of messages handled per second (34,316) was around30% of the total capacity

On the same day there was a peak market data output of 46,879 messages per second

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. 9

The Technology behind NASDAQ OMX Europe

•Quick business overview.

• Proven technology from the NASDAQ Stock Market.

• Inet platform – Latency of 250 microseconds with capacity of

125k orders/sec.

•Connectivity via Proprietary and Industry Standard protocols.

• The first marketplace in Europe to offer Pan-European Order

Routing.

- Based initially on price, but then order latency.

© Copyright 2008, The NASDAQ OMX Group, Inc. All rights reserved. 10

Your passport to European trading

COLT in brief

COLT is a leading provider of data, voice and managed services to finance, business and government customers in Europe

> Founded in 1992 to service the financial sector in London

> Financially strong - Majority shareholder Fidelity Investments

> Unique pan-European network and data centre infrastructure

> 4,000 employees in 15 countries, including Europe, US and India

Financial Services is our heritage, providing mission critical services that support:

> Trading / order execution and market data connectivity

> Payments, transaction processing, liquidity management

> Information delivery and security

COLT in Financial Services

> Over 1,000 financial services customers

> Europe’s top 20+ stock exchanges/MTFs, 7 of which we host

> World’s top 25 financial services companies

> Top 5 global providers of financial information

> 24 of the top 25 European hedge funds

> 13 central banks

> Largest accredited SWIFT network-provider,with 750+ European clients

> Largest 5 providers of market data

End to End Latency in the Trade Cycle = X+Y+Z

Data can not travel faster than the speed of light = 300km per millisecond

Trading Platform& Ticker Plant

Data Centre

Exchange

Data Centre

OrderManagementSystem

Customer Site

YX ZThe point of the network is to use a

combination of technology and network to make the path between X and Z as

fast and as short as possible

The exchange must transact the trade as fast as

possible

Latency is the time between issuing the instruction to

trade and receipt of completion notice

Network latency - Causes

Main causes for network latency

> Serialization delay– determined by packet size / bandwidth

> Switching delay- caused by the number network hops

> Propagation delay– a function of the physical distance

The only known way to shorten the propagation delayis to shorten the physical distance between components

Network latency - Solutions

Primary ways to reduce market data latency

> Receive market data directly from exchanges

> Increase bandwidth

> Upgrade the feed handlers, ticker plant, and distribution platform

> Co-locate applications

> Most COLT data centres are located close to the country exchanges so latency is low and therefore suited to host trading applications and order management systems

What has changed in the market?

>Banks now open to idea of moving their trading systems closer to the Exchanges

>Exchanges want to offer the right services but don’t have the right capabilities

>Bigger brokers want to offer ‘premium’ services to their most important hedge fund customers

What’s in a millisecond?

NYSE Trading

Traditional

Electronic

AlgorithmicTradingSource: InformationWeek ‘Business At Light Speed’, April 2007

A 1-millisecond advantage in trading applications can be worth $100 million a

year to a major brokerage firm

Speed is the deciding factor with markets moving in a millisecond. The key is to have low network latency between trading platforms and the exchanges.

• Personal Membership

– Specialist Group, £250 per annum (just their events)

– Full Club, £500 per annum (any / all events)

• Corporate Membership

– Single Seat, £1,000 per annum (1 attendee at any / all events)

– Specialist Group, £2,500 per annum (3 attendees per meeting and

Dinner Table)

– Full Club, £5,000 per annum (3 attendees all meetings and Dinner

Table)

Join Tonight!