1. What Standards Can Do For You FIA IT Standards Working Group December 10, 2002

2. Panel Members John MunroSVP Product Design, Rolfe and Nolan Chairman, FIA IT Standards Working Group Angela Krug VP Deutsche Bank New York U.S. Regional Manager, F & O Technology Vice Chairman, FIA IT Standards Working Group Jim NortheyChairman, Fix Global Derivatives Committee Tom McCabeVice President, Floor Operations, CBOT Chris BennettSenior Vice President-Technology and Data Products, CBOT Chris ToczyckiDirector, Information Technology, BOTCC Mark BaumgardnerVice President of Business Development, OCC Ed GogolSystems Development Director, CME Matt SimpsonSenior Systems Analyst, CME

3. FIA IT Standards Working Group Formed in June of 2002 Membership 7 U.S. exchanges & clearing houses FCMs Vendors Standards Group Mission: review exchange-back office links for standardization potential Not: Order entry & confirmation – already moving to FIX Communications methodologies

4. Technical Development – Post- Trade Processing Punched cards Tapes, diskettes Transmission BSCA, RJE - fixed record length LU 6.2 - expanded record length MQM - variable length messages w/ fixed blocks What next?

5. Current Status of Interfaces Survey - all U.S. F & O exchanges & OCC Of the 12 different interfaces for trades/management, the only commonalities were: SPAN for all except OCC 3 exchanges using TREX 3 exchanges using FIX variants for order entry 2 exchanges using a common Large Trader format In the last year and a half: NYBOT - TIPS format change NYMEX – negative prices and strikes BOTCC – GAPI changes Security Futures CME – TREX, trade register changes NqLX trade feed OCC - Trade files and GPA’s SIAC – Large trader

6. Flat files Raw data that must be formatted at either end Changes must be made simultaneously at both ends Can only be read by programs Typically fixed-length : the punched-card legacy *...+....1....+....2....+....3....+....4....+....5....+....6....+....7....+ TRX 12140200 0184A12000032016 123 1ED 20020900 TRX 15015400 0184A12000030316 123 1ED 20020900 TRX 15101000 0184A12000030316 123 1ED 20020900 TRX 17120900 0184A12000030916 996 1ED 20080300C00009500 TRX 17135000 0184A12000031016 996 2NK 20070400C00140000 1 01171800F252017 0338A32002083001 252 L T 117 20020900 00000000 1 01171900F252017 0338A32002083001 252 L T 117 20020900 00000000 1 01381800F252017 0438A32002083001 252 M T D 217 20020900 00000000 1 01381800F252017 0438A32002083001 252 M T D 117 20020900 00000000 GSA101381900F252017 0333A32002083001 252 M T D 217 20020900 00000000 GAC101381900F252017 0360A32002083001 252 M T D 117 20020900 00000000

7. Data base files Format is defined within a database Can be read by another data base or a program Can be read by SQL or Query utilities over the data base Lacks portability to another data base....+....1....+....2....+....3....+....4....+....5....+....6....+....7.... TMSGID TMSGVR TMSGTM TUSRID TMSGLN TACTCD TTRDRT TTRDDT TRX 12,140,200 184 A 1 20000320 TRX 15,015,400 184 A 1 20000303 TRX 15,101,000 184 A 1 20000303 TRX 17,120,900 184 A 1 20000309 TRX 17,135,000 184 A 1 20000310 1 1,171,800 F252017 338 A 3 20020830 1 1,171,900 F252017 338 A 3 20020830 1 1,381,800 F252017 438 A 3 20020830 GSA 1 1,381,900 F252017 333 A 3 20020830 GAC 1 1,381,900 F252017 360 A 3 20020830

8. XML files Flexible format Data and its definition included in the same place DTD’s or schemas used to define the data and edit it on transmission or reception Portability across platforms ED 2002-12 OCAXXS XCME 92

9. The Value of Standards

10. Record increases in volume Many changes in the industry Supporting open outcry and electronic trading Need for more efficient and competitive business practices Today’s Challenges

11. Standards will enable our industry to grow and respond to change while controlling costs. Why Standards?

12. Costly Increased support costs for multiple formats Many additional components needed between systems Cost to run the business are high and growth opportunities suffer Lack of Competitive Advantages Changes in data or functionality require significant time for analysis, design, programming, testing and delivery Speed and quality of information limited by translation components between disparate systems Limited technology options Maintaining the Status Quo

13. Post Trade Process

14. Trade Process

15. Barriers to Integration Current messaging technologies are not common across the financial industry No common technologies used between trading, post trade and client processes Limited resources and tools The Future? Current messaging technologies have reached their functionality limits Costs are high to build and maintain outdated technologies so new initiatives may fail Maintaining the Status Quo

16. Savings Reduction of support and new development costs associated with multiple formats Scalability and reuse increase More options available in the industry Competitive Edge Ability to deliver more timely, accurate data Shorter development, deployment and integration cycles Increased ability to adopt advanced technologies and business practices The Benefits of Standards

17. Post Trade Process

18. Trade Process

19. Compatibility Increased opportunity for integration across the financial industry Better integration with internal and external systems More technology options and industry knowledge Opportunities for the Future STP New exchanges and products Increase efficiency and productivity of existing resources The Benefits of Standards

20. Commitment to participate Build knowledge/ Agree on standard Provide interfaces that conform to the standard Phased approach Initial investment for long term gain What is it going to take?

21. Reduction of current costs Respond to change Growth while controlling costs The Value of Standards