Sales Presentation (written/edited by J Tormey)

1
Sales Presentation (written/edited by J Tormey)

• January xx, 2008

2
NYFIX Who We Are

• An innovator in institutional trading and
  software services since 1994
• Four areas of focus
• FIX CONNECTVITY (Community)
• FIX SOFTWARE
• TRADE EXECUTION SERVICES
• ORDER MANAGEMENT
• Warburg Pincus invested on belief in the NYFIX
  model
• A widely used, independent, and trusted partner
• A large community of long-term users who rely on
  NYFIX
• Deep expertise in electronic order routing and
  execution
• A product service platform designed for global
  expansion

3
Challenges in the New Capital Markets

• Dramatic increase in electronic trading volumes
  and fragmentation
• US leading - Europe and Asia coming
• Exchanges, global brokers and dark pools all
  competing
• Regulation
• MiFID in Europe, RegNMS in the US
• Best execution requirements
• Need for neutral solutions to monitor and measure
  trading performance
• Demand for multi-asset class solutions - on the
  horizon
• Accelerating changes impacting IT resources -
  globally

4
In Short

• In an environment where financial institutions
  are struggling with ever-increasing volumes and
  technology challenges

NYFIX optimizes the business of trading
5
A Vision to Address These Challenges
NYFIX optimizes the business of trading through

• A robust platform to optimize the critical
  components of electronic trading workflow
• An organization dedicated to technical
  excellence, expertise and customer service.
• A commitment to extend and support the reach of
  our client community, as their needs expand
  globally

6
NYFIX Solutions
7
NYFIX Solutions
Millennium/NEXAS/DMA
Services
Marketplace
Appia
TradeScope
NYFIX Marketplace
7,500 order-routing channels globally
FIXTrader OMS
8
Appia The Market Leader
Overview
Appia TradeScope
Detail
Key Features
5.0

• The 1 FIX engine globally FPL and Tower
  GroupSM Survey 12/2005
• Over 1,000 production engines in 30 countries
  
• 6 out of Top 10 Brokers 25 out of the top 50
• 49 of the Buy Side Market TowerGroup 2006
  Survey

Serving the most demanding trading environments
since 1998
9
Appia The Market Leader
Overview
Appia TradeScope
Detail
Key Features
5.0
10 years at the forefront of FIX software and
FIX network development Working
with the most advanced trading firms
globally Deep and ongoing investment in people,
tools, and systems development
Serving the most demanding trading environments
since 1998
10
Appia What It Does
Overview
Appia TradeScope
Detail
Key Features
5.0
OMS OrderManagementSystem
Appia FIX EngineSoftware
Trading
Appia - Order Flow Management
11
Appia Key Features
Key Features
Appia TradeScope
Detail
Overview
5.0
High speed low latency

• Servicing the most demanding electronic trading
  environments
• High volume message throughput with ultra-low
  latency
• 40,000 MPS, lt1 Millisecond PMsg
• Highly configurable for maximum performance

Scaleable
Customizable
24 hour global support
Fail-over backup
Quad CPU Intel 64 bit
12
Appia Key Features
Key Features
Appia TradeScope
Detail
Overview
5.0

• Appia today can be used in a single instance, or
  as an array across multiple desks around the globe

High speed low latency
Scaleable
Customizable
24 hour global support
Fail-over backup
13
Appia Key Features
Key Features
Appia TradeScope
Detail
Overview
5.0

• Hundreds of pre-built adaptors (plug-ins).
• Open framework for experienced users.

High speed low latency
Scaleable
Customizable
24 hour global support
Fail-over backup
14
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15
Appia Key Features
Key Features
Appia TradeScope
Detail
Overview
5.0

• Global Level I support, 24 X 7
• True product specific Level II III support
  teams in all regions
• Strongest global FIX expertise development
  Support staff since 2000 ? US ? EMEA
  ? ASIA

High speed low latency
Scaleable
Customizable
? London
? New York
Tokyo ?
24 hour global support
24 hour global support
Manila ?
Fail-over backup
16
Appia Key Features
Key Features
Appia TradeScope
Detail
Overview
5.0
High speed low latency

• Fast fail-over to secondary server to insure
  trading continuity (user defined options)
• Proprietary algorithm constantly replicates
  information to guarantee server synchronization.
• Disaster site failover and recovery management
  with complete replication of primary server

Scaleable
Customizable
24 hour global support
Fail-over backup
Fail-over backup
17
Appia How It Works
Detail
Appia TradeScope
Key Features
Overview
5.0
Middleware
LOGFILE
Appia - Order Flow Management
18
Appia HA (High Availability) - today
5.0
Detail
Key Features
Overview
Appia TradeScope
Production environment
5,000 MPS (messages per second)
5,000 MPS
Appia
FIX Traffictoday
Production environment
3,000 MPS (messages per second)
3,000 MPS
Appia HA
FIX Traffictoday
40 performancehit due to database double
writes (typical)
Appia HA
19
Appia 5.0 Coming Q1 2008
5.0
Appia TradeScope
Detail
Key Features
Overview
Production environment
5,000 MPS
5,000 MPS (messages per second)
Appia
FIX Traffictoday
Production environment
5,000 MPS
Appia 5.0
10,000 MPS (messages per second)
FIX Traffictomorrow
5,000 MPS
Appia 5.0
Load Balancer
5,000 MPS

• Automatic fail-over
• All instances of Appia write to a single
  database
• 300 increase in throughput performance vs. HA
• Messages can flow to one, or multiple OMSs

Appia 5.0
20
Appia 5.0 Coming Q1 2008
5.0
Detail
Key Features
Overview
Appia TradeScope
Production environment
5,000 MPS
5,000 MPS (messages per second)
Appia
FIX Traffictoday
Production environment
3,000 MPS
Appia 5.0
10,000 MPS (messages per second)
FIX Traffictomorrow
3,000 MPS
Appia 5.0
Load Balancer
3,000 MPS

• Appia engines can be added in an array
• Actual throughput would be based on a
  load-balancing formula roughly 2/3 of full
  engine capacity

Appia 5.0
21
Appia 5.0 Modular Design
5.0
Detail
Key Features
Overview
Appia TradeScope

• Appia 5.0 - Built for Low Latency
• Componentized design
• Session Management
• Validation
• Recovery
• Configuration
• Middleware
• Inbedding the FIX Engine in your application
• Components are independent
• Allows you to use only the layer you need
• Removes duplication of effort
• Eases integration

22
Appia TradeScope Working Together
Appia TradeScope
Detail
Key Features
Overview
5.0
TradeScope managing the entire process
Trade Order Detail
FIX Infrastructure
All Connections
Clients
Trading Support
Exchanges
OMS OrderManagementSystem
Appia FIX EngineSoftware
FIX NETWORKS
DarkPools
Trading
Appia - Order Flow Management
23
TradeScope
Overview
Detail
Key Features

• TradeScope is a comprehensive FIX monitoring and
  reporting tool
• Proactive method for managing the FIX
  infrastructure
• Web-based server application

24
TradeScope What It Does
Overview
Detail
Key Features
TradeScope managing the entire process
Appia FIX EngineSoftware
FIX NETWORKS
Trading
Appia - Order Flow Management
25
TradeScope What It Does
Overview
Detail
Key Features
TradeScope managing the entire process
Appia FIX EngineSoftware
FIX NETWORKS
Trading
Appia - Order Flow Management
26
TradeScope What It Does
Overview
Detail
Key Features
TradeScope managing the entire process
Appia FIX EngineSoftware
FIX NETWORKS
Trading
Appia - Order Flow Management
27
TradeScope What It Does
Overview
Detail
Key Features
TradeScope managing the entire process
Appia FIX EngineSoftware
FIX NETWORKS
Trading
Appia - Order Flow Management
28
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager
29
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager

• View and manage all open and executed orders
• Translate from FIX to English
• Find complete order chain with just one click

30
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager

• View and manage all open and executed orders
• Translate from FIX to English
• Find complete order chain with just one click

• Drill into order details and make modifications
  on the fly

31
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager

• Manage up to 500 FIX engines
• All aspects, all details

32
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager

• Monitor all sessions and connectivity status
• Easily find counterparties
• Complete session control and management

33
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager
Security

• Multi-level roles and responsibility-based
  tools
• Designate who can make critical changes
• Prevent accidental interruption of trading
• Limit direct user access to production systems
• Complete audit trail of user events
• Import your firms security policies

34
TradeScope Key Features
Key Features
Detail
Overview
TradeScope managing the entire process
Trade Order Manager
FIX Infrastructure
Connection Manager
Security

• Proactive connection alerts
• System and engine level health
• Order and execution thresholds

Alerts
35
TradeScope How It Works
Key Features
Detail
Overview
36
NYFIX MarketplaceTM
Overview
Key Features
Products
Global Service
Professional Services
NYFIX Marketplace
7,500 order-routing channels globally
FIXTrader OMS
37
NYFIX MarketplaceTM
Overview
Key Features
Products
Global Service
Professional Services
38
NYFIX MarketplaceTM Experience Commitment
Overview
Key Features
Products
Global Service
Professional Services
10 years at the forefront of FIX network
development operations
Over 900 Institutional clients
Ongoing investment in people, tools and systems
development
Serving the most demanding trading environments
since 1997
39
NYFIX MarketplaceTM Benefits
Overview
Key Features
Products
Global Service
Professional Services
40
NYFIX MarketplaceTM Order Routing
Products
Key Features
Overview
Global Service
Professional Services
SINGLE CLIENT CONNECTION
Global
Mutual Funds
NYFIX Marketplace
National
Asset Managers
7,500 order-routing channels globally
7,500
Hedge Funds
Regional
Quants
Clearing Houses
Dark Pools
Exchanges
41
NYFIX MarketplaceTM IOIs (Indications of
Interest)
Products
Key Features
Overview
Global Service
Professional Services
111
171
NYFIX Marketplace
Broker
Matching real IOIs against open order offers the
best chance of capturing liquidity
Filtering at NYFIX back end prevents message
overload at the OMS
42
NYFIX MarketplaceTM Mission Critical Service
Global Service
Key Features
Overview
Products
Professional Services
Expert on-boarding start to finish
Experienced FIX certification translation
Dedicated Global Support 24 x 5.5
43
NYFIX MarketplaceTM Global Support Team
Global Service
Key Features
Overview
Products
Professional Services
London
Paris
Boston
New York
Madrid
Tokyo
Chicago
San Francisco
Hong Kong
Manila
44
NYFIX MarketplaceTM Faster Access to New
Services
Key Features
Overview
Products
Global Service
Professional Services
Open Architecture

• NYFIX open architecture avoids lengthy
  re-verification of new FIX tags and layouts
• Allows faster access to new broker algorithms and
  other electronic venues

OMS On-boarding
Buy-side370 members
Sell-side420 members
M Fund A Mgr Index Hedge Quant
Broker
New Algo
Expedites access to new broker algorithms
45
NYFIX MarketplaceTM Simplifies OMS Migration
Key Features
Overview
Products
Global Service
Professional Services

• NYFIX simplifies OMS migrations
• Eliminates the need to open firewalls and ports
  with each individual counterparty
• NYFIX enables simplified re-networking

Buy-side
Re-networking
Broker 1 Broker 2 Broker 3

• CRD
• LineData
• Eze Castle
• Latent Zero
• Others

FIX End-of-Day process
Re-networking
Re-networking
OMS On-boarding
Buy-side
Broker 1 Broker 2 Broker 3

• CRD
• LineData
• Eze Castle
• Latent Zero
• Others

One-time
46
NYFIX MarketplaceTM Eliminates E.O.D. Headaches
Key Features
Overview
Products
Global Service
Professional Services

• NYFIX greatly simplifies E.O.D. process
• Direct connections require daily coordination
  with every counterparty
• Faulty E.O.D. process results in trade errors

Open Architecture
520pm
Broker 1 Broker 2 Broker 3
535pm
610 pm
E.O.D Process
Broker 1 Broker 2 Broker 3
One-time
Buy-side (NYFIX)
47
NYFIX Professional Services
Professional Services
Key Features
Overview
Products
Global Service

• Optimize your investments with NYFIX technology
  specialists
• Recognized experts in FIX software
• Increase your efficiencies, reduce costs, and
  maximize output
• Customize solutions to meet your specific needs
• Receive local support from offices in global
  financial centers
• 10 years of FIX Protocol and FIX Engine expertise
  
• Flexible pricing packages available

48
NYFIX - FIX Training
Professional Services
Key Features
Overview
Products
Global Service
For successful FIX implementation and uptake

• Targeted to Developers, On-boarding Teams, Help
  Desks, and Business Users
• Introductory FIX Training
• Basic Jumpstart Orientation and Education
• FIX Engine Basics
• Fundamental Integration Concepts
• Advanced, Customized FIX Training
• FIX in Detail
• Advanced Integration Concepts
• Session Layer and Application Layer
• Connection On-boarding and Certification
• High Availability and Disaster Recovery
• FIX Across Asset Classes
• Trading with Exchanges

49
NYFIX Transaction Services
Transaction Services
NYFIX Millennium
NYFIX NEXAS
NYFIX DMA
NYFIX provides a suite of transaction services to
help achieve optimal execution on the Buy-side
and Sell-side.

• Millennium
• Dark Pool ATS
• NEXAS
• NYFIX Execution and Algorithmic Solutions
• NYFIX Direct - DMA
• Direct Market Access

50
NYFIX Millennium
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA
A Dark Pool Alternative Trading System (ATS)
launched in 2001 to provide access to
non-displayed liquidity

• Continuous, real-time matching engine
• No minimum order quantity
• Open to all types of clients and order flow
• Pure price priority all clients treated equally
• Flexible connectivity options (OMS, EMS, FIX)
• Supports multiple order types to allow full
  control of interaction by clients not mid-point
  constrained
• US equities (NYSE/AMEX Listed and NASDAQ)

51
NYFIX Millennium - Statistics
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA
Recent Stats

• 41.1 million shares/day executed on average in
  November 2007 (up 29 from November 2006)
• 6,400 exposed symbols/day and 2,400 executed
  symbols/day on average in November 2007
• 889 executed NASDAQ symbols/day accounting for
  roughly 21 of executed volume
• Record day 95 million shares
• Approximately 1.4 billion shares of liquidity are
  available in Millennium on average each day

52
NYFIX Millennium - Security Coverage Executed
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA
Depth and Breadth

• 45 of order flow occurred in names with market
  caps lt 1B
• 80 of order flow occurred in names with market
  caps lt 5B
• Price improvement increased as market cap
  decreased

53
NYFIX Millennium - ATS Volume
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA
95M
Record Day
49.0
29.7
14.0
7.0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Q3 Q4 Q1 Q2 Q3
2004 2005 2006 2007
54
Consolidates Dark Liquidity Fragmentation
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA
GUERILLA
MERRILL LYNCH
Pipeline
Liquidnet
DARK SERVER
NIGHT VISION
NIGHTHAWK
FUSION
ARID/AQUA
BEAR STEARNS
FUSOR
TAP
ATS
SCOUT
SONAR
DEUTSCHE
ROBE
B-TRADE
LAVA
COVERT
VORTEX
HYDRA
55
NYFIX Millennium ATS Order Types
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA

• Resident Order
• An order that rests in Millennium to interact
  with pass-through orders and other resident
  orders
• Pass-Through Order
• An order that seamlessly checks for liquidity in
  Millennium before routing to another exchange or
  market center
• Millennium Plus
• Allows pass-through and resident orders from any
  client to draw liquidity from other sources
  providing aggregation of non-displayed liquidity

56
NYFIX Millennium Bloomberg Advertised Volume
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA
NYFIX Millennium Advertised Volume Available on
Bloomberg
57
NYFIX Millennium Anti-Gaming Logic
NYFIX Millennium
Transaction Services
NYFIX NEXAS
NYFIX DMA

• An order setting for institutions that protects
  an order against gaming within Millennium.
• To determine whether an order needs to move from
  unprotected to protected mode, NYFIX Securities
  tracks price, volume, and time for that order. A
  combination of certain price, volume and/or time
  parameters determines when the order switches to
  protected mode.
• In laymans terms, the new order types kicks in
  only when an order experiences significantly
  adverse price movement without volume sufficient
  to make that move acceptable.

58
NYFIX NEXAS
NYFIX NEXAS
NYFIX Millennium
Transaction Services
NYFIX DMA

• Full suite of Algorithm strategies integrated
  with Millennium and our DMA solutions
• VWAP
• TWAP
• Inline ( of Volume)
• Certified with several OMS/EMS providers as well
  as direct FIX connections from clients

• Corporate Buyback (Passive Buyer)
• Millennium Optimizer
• Stealth

59
NYFIX Direct Market Access (DMA)
NYFIX DMA
NYFIX Millennium
Transaction Services
NYFIX NEXAS

• High capacity/low latency execution solutions for
  delivering client order flow to exchanges and
  ECNs
• Single destination supports Listed and OTC
• NYSE, AMEX, NASDAQ, Regionals, ECNs
• Building out full access to protected exchanges
  for Reg NMS
• Smart Order Router will add additional value to
  DMA solutions
• Millennium interaction is a unique value for
  NYFIX
• Multi-Market solution for Europe

60
NASDAQ securities - 2 on price
Transaction Services
NYFIX Millennium
NYFIX NEXAS
NYFIX DMA
Overall Ranking of 30 Largest NASDAQ Market
Centers
Price Ranking Market Center Price Ranking Market Center
1 Instinet 16 National Financial
2 NYFIX 17 Direct Edge (ADF)
3 Nasdaq MC 18 Direct Edge ECN
4 ATD 19 Track ECN
5 Citadel Derivatives 20 Bear Sterns
6 Lehman Bros 21 Wachovia
7 Madoff 22 Pershing
8 Knight 23 Morgan Stanley
9 ArcaEx 24 Goldman Sachs
10 ETrade 25 LavaFlow
11 AG Edwards 26 Tradebook
12 UBS Securities 27 Raymond James
13 Scottrade 28 Lehman Bros
14 Citigroup 29 Deutsche Bank
15 BATS Training 30 CHX Matching
These rankings are based on the
effective-over-quoted spread achieved by market
centers for a large variety of different
segments. Orders were categorized into a number
of different segments, including order type
(market or marketable limit) and size (large or
small) as well as the liquidity segment (15 most
active, 100 most active, mid-active and least
active).
Source Celent analysis raw data from firms SEC
Rule 605 execution quality reports. Note
Includes only large marketable orders,
implausible figures omitted. All figures are
percentages.
61
NYSE securities - 1 on price
Transaction Services
NYFIX Millennium
NYFIX NEXAS
NYFIX DMA
Overall Ranking of 30 Largest NYSE Market Centers
Price Ranking Market Center Price Ranking Market Center
1 NYFIX 16 Bear Hunter
2 Instinet 17 Pershing
3 Citigroup 18 Direct Edge (ADF)
4 Knight 19 Van der Moolen
5 Citadel Derivatives 20 La Branche
6 Nasdaq MC 21 Direct Edge ECN
7 ATD 22 Wagner Stott Bear
8 Lehman Bros 23 Spear Leeds Kellogg
9 Madoff 24 Fleet Meehan
10 UBS Securities 25 PSG
11 ETrade 26 NYSE ITS
12 National Financial 27 La Branche Structured
13 ArcaEx Scottrade 28 LavaFlow
14 BATS Training 29 Lehman Bros
15 Susquehanna 30 CHX Matching
These rankings are based on the
effective-over-quoted spread achieved by market
centers for a large variety of different
segments. Orders were categorized into a number
of different segments, including order type
(market or marketable limit) and size (large or
small) as well as the liquidity segment (15 most
active, 100 most active, mid-active and least
active).
Source Celent analysis raw data from firms SEC
Rule 605 execution quality reports. Note
Includes only large marketable orders,
implausible figures omitted. All figures are
percentages.
62
NYSE securities - 1 in pricing for large orders
Transaction Services
NYFIX Millennium
NYFIX NEXAS
NYFIX DMA
Effective-over-Quoted Spreads by Market
Center For Selected Active Issues for Large
Marketable Orders
Market Center AMD COP F GE HAL HPQ MOT PFE S T TXN WMT XOM
NYFIX 76 78 99 79 87 92 81 91 37 143 87
Knight 94 153 70 86 103 142 80 77 70 100 106 108 124
Nasdaq MC 99 142 99 96 102 101 99 99 99 100 104 98 141
BATS Trading 106 118 101 104 107 107 108 102 107 112 107 109 106
ATD 101 156 97 102 109 107 99 101 101 99 105 98 124
ArcaEx 101 179 101 103 114 144 100 101 101 105 109 123 176
Lehman Bros 108 102 97 141 107 109 147 100 225 147 97
Direct Edge ECN 97 190 101 100 113 119 108 102 105 104 147 131 235
Van der Moolen 154 107
Citigroup 100 94 116 120 130 236
Fleet Meehan 117 113 176
UBS Securities 103 304 99 102 125 135 102 100 106 122 146 127 270
Citadel Derivatives 100 526 97 104 108 116 93 96 101 109 139 122 175
Wagner Stott Bear 110 106 229
Madoff 108 348 100 111 193 191 113 104 108 123 118 138 284
ETrade 133 105 138 247 424 139 122 137 123 180 125
Instinet 109 445 95 110 223 491 92 66 80 114 293 100 78
Tradebook 98 107 183 161 101 95 104 117 161 177 717
La Branche 102 163 143 531
National Financial 116 141 98 116 174 142 114 97 162 163 322 152 7835
Very Good lt100
Good 100-110
Average 110-130
Poor 130-200
Very Poor gt200
Source Celent analysis raw data from firms SEC
Rule 605 execution quality reports. Note
Includes only large marketable orders,
implausible figures omitted. All figures are
percentages.