2. Independent agency broker with over 10 years of experience providing high-throughput, low latency technologies to the professional trading community. Facilitates trading for high-frequency clientele as well as more traditional buy-side and other proprietary trading operations. Close to issues affecting high frequency trading, with no proprietary interest of our own  Lime does not engage in proprietary trading, internalization or dark pool operation. Products and services include: co-location (hub & spoke and LimeInside), algo trading, options trading, virtual brokerage and ultra- low latency data. About Lime Brokerage

3. Hundreds of millions of shares traded by our HFT clients last Thursday with no issue. Comprehensive pre-order controls before every single order/trade. Clients were providing liquidity throughout the day, especially during the most volatile periods. A prime example to us of HFT continuing to bring efficiency to the markets. Insertion of pre-order controls is consistent with ultra-low latency. A Comment on Last Thursday

4. Where Latency Exists Physical Distance Network Equipment Software  Network hops  Switching latency  Server nic cards  Client Software  BD validation  TCP/IP Stack  How far from the matching engine Some are optimized, but still room to reduce further on others Most to Least Inherent Latency

5. Latency game is nearly over for data delivery, order management and matching logic. Anyone willing to make the appropriate investments can quickly reach minimum latency using conventional technology: software architectural efficiency is reaching canonical perfection. Industry’s top performers have used every trick available with standard technology and have squeezed latency as far as it will go. Need further enhancements from the computer science sector. Best Bet: Should be working in partnership with your provider to help restructure code. Huge gains can still be made in computational algo restructuring. FPGA work ensuing. True exploration of ASICs and fabrication technology is yet to occur. What can we do to reduce latency?

6. Evidence of poor quality latency monitoring and reporting by firms. Apples and Oranges – little standard exists, mostly marketing buzz. Industry needs to be intellectually honest, customers already know but are being confused with disinformation. Within design tolerances, look at what comparative technology can do to aggregate risk, interact with the markets and provide configuration flexibility. Co-location is but one piece to consider, in many cases the benefit of colo is negated by sub-optimal internal latency and applications. Need to segregate: co-location, intra-process, through box, network, match interaction and message acknowledgement latencies. Monitoring Latency

7. Latency Monitoring Matrix Category Single Message Normal Behavior Peak Throughput Co-location Intra-Process Through Box Network Match Interaction Message Acknowledgement

8. Need to agree on what is high frequency trading. Need to agree on what is fair access. We must avoid a regulatory environment which becomes a “race to the bottom”. Stop procrastinating, rules banning naked access are inevitable. Any structures providing unfair advantage to certain participants should be disclosed – preferential order types, IOIs/Broker ‘flash orders’, dark pools, prop trading etc. There is nothing wrong with regulators keeping track of who’s trading provided that steps are taken to protect the intellectual property of the inventor. We are at a Critical Juncture for HFT