SIFMA Research Quarterly – 1Q21 Primary Market: US Equity Capital Formation Secondary Markets: US Cash Equities, Etfs and Multi-Listed Options

Executive Summary

SIFMA Research Quarterly – 1Q21 Primary Market: US Equity Capital Formation Secondary Markets: US Cash Equities, ETFs and Multi-Listed Options

April 2021

The SIFMA Research Quarterlies contain data and statistics on U.S. markets. The equity related report – cash equites, ETFs, listed options and capital formation – includes information on: volumes, volatility, total equity issuance, IPOs, market shares, exchange landscapes, etc.

All reports, including the two fixed income quarterlies (issuance and trading; outstanding), and corresponding databases can be found at: www.sifma.org/research

US Equity and Related Markets Page | 1 Executive Summary

Contents

Executive Summary ...... 4 Quarterly Highlights ...... 5 Chart Book: US Equity Capital Formation ...... 6 IPO Issuance and Other Statistics ...... 6 Chart Book: US Cash Equities ...... 10 Volumes and Other Statistics ...... 10 Exchange and Parent Group Market Share...... 13 Chart Book: US Multi-Listed Options ...... 14 Volumes and Other Statistics ...... 14 Exchange and Parent Group Market Share...... 15 Chart Book: US Exchange-Traded Funds ...... 16 Volumes and Other Statistics ...... 16 Exchange and Provider Market Share ...... 17 Appendix: Exchange Landscape ...... 18 US Cash Equities ...... 18 US Multi-Listed Options ...... 19 Appendix: Terms to Know ...... 20 Authors ...... 23

US Equity and Related Markets Page | 2 Executive Summary

Associated Reports

Please also see SIFMA Research Quarterly Reports: US Fixed Income – Issuance and Trading and US Fixed Income – Outstanding, which can be found at: https://www.sifma.org/ research SIFMA Insights Primers: The SIFMA Insights primer series is a reference tool that goes beyond a typical 101 series. By

illustrating important technical and regulatory nuances, SIFMA Insights primers provide a fundamental understanding of the marketplace and set the scene to address complex issues arising in today’s markets. The SIFMA Insights market structure

primer series includes: Global Capital Markets & Financial Institutions; Electronic Trading; U.S. Fixed Income; SOFR, the Transition from LIBOR; U.S. Equity; U.S. Multi-Listed Options; U.S. ETFs; U.S. Capital Formation and Listings Exchanges; and

Evolution of the Fintech Narrative. The primers and other Insights reports can be found at: https://www.sifma.org/primers

SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate on legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

US Equity and Related Markets Page | 3 Executive Summary

Executive Summary

The U.S. equity markets are the largest in the world and continue to be among the deepest, most liquid and most efficient, representing 41.5% of the $111 trillion global equity market cap, or $46 trillion. This is 3.8x the next largest market, China. U.S. market share has averaged 36.5% over the last 10 years, troughing at 29.8% in 2010 and peaking in 1Q21.

US Market Share

Global Equity Market Cap

Singapore 0.6% EM 8.8% Australia DM 1.6% 8.9% Canada US 2.4% 41.5% UK 3.9% HK 6.0%

EU Japan China 9.4% 6.1% 10.8%

Source: World Federation of Exchanges, SIFMA estimates Note: EM = emerging markets, DM = developed markets; YTD data is preliminary

US Market Share – Historical Trends

US Share of Global Equity Markets ($T) World US 120 110 111

100 93 88 77 80 73 72 67 70 58 57 60 51 45 46 37 40 32 27 30 24 26 25 17 16 19 20

0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 YTD Source: World Federation of Exchanges, SIFMA estimates (YTD = Mar 2021) Note: YTD data is preliminary

US Equity and Related Markets Page | 4 Executive Summary

Quarterly Highlights The S&P 500 index averaged 3,865.71 for the quarter and 3,910.51 for March, 1Q21 +26.5% Y/Y (peak 3,974.54, trough 3,700.65); the DJIA averaged 31,550.58 and 32,373.29, 1Q21 +18.8% Y/Y (peak 33,171.37, trough 29,982.62); the Nasdaq averaged 13,351.46 and 13,168.81, 1Q21 +52.2% Y/Y (peak 14,095.47, trough 12,609.16); and the Russell 2000 averaged 2,198.73 and 2,244.19, 1Q21 +46.6% Y/Y (peak 2,360.17, trough 1,945.91). The VIX declined to averaging 23.20 for the quarter and 21.84 for March, 1Q21 -25.7% Y/Y (peak 37.21, trough 18.86).

ADVs were up Y/Y for equity and ETFs but it was down for options. Equity ADV was 14.7B shares for the quarter, +33.5% Y/Y (peak 24.5, trough 10.5B). Options ADV was 42.0M contracts for the quarter, +49.8% Y/Y (peak 60.0M, trough 28.1M). ETF ADV was 1.94B shares for the quarter, -25.4% Y/Y (peak 3.64B, trough 1.30B).

For capital formation, total equity issuance was $140.0B for the quarter (+151.4% Y/Y) and the total IPO value was $41.3B (+470.1% Y/Y). The number of IPOs was up 308.3% Y/Y. Private equity deal value fell 19.4% Y/Y.

In this report, we recap statistics for U.S. primary and secondary markets (cash equities, multi-listed options, ETFs). Highlights include:

1Q21 4Q20 1Q20 Y/Y Q/Q 2020 2019 Y/Y Primary Markets Total Equity Issuance ($B) 140.0 109.2 55.7 151.4% 28.1% 390.0 228.1 71.0% Total IPO Value ($B) 41.3 29.7 7.3 470.1% 39.1% 85.3 48.8 74.7% # IPOs 98 69 24 308.3% 42.0% 209 151 38.4% Small Cap as % Total IPOs 65% 72% 83% -18.0% -6.8% 73% 78% -5.1% # Listed Companies 4,916 4,771 4,648 5.8% 3.0% 4,734 4,771 -0.8% Private Equity Deal Value ($B) 135.4 245.0 168.0 -19.4% -44.7% 649.4 763.7 -15.0% Secondary Markets Equity ADV (B) 14.7 10.5 11.0 33.5% 40.1% 10.9 7.0 55.4% ETF ADV (B) 1.9 1.5 2.6 -25.4% 28.4% 2.0 1.4 44.1% ETFs as % Equitiy ADV 13.2% 14.4% 23.6% -10.4% -1.2% 18.2% 19.7% -1.4% Options ADV (M) 42.0 32.2 28.0 49.8% 30.4% 29.5 19.4 51.8% Market Performance (Price) S&P 500 3,865.71 3,554.50 3,055.87 26.5% 8.8% 3,217.86 2,913.36 10.5% DJIA 31,550.58 29,091.59 26,554.48 18.8% 8.5% 26,890.67 26,379.59 1.9% Nasdaq 13,351.46 11,954.43 8,771.73 52.2% 11.7% 10,201.51 7,939.98 28.5% Russell 2000 2,198.73 1,760.79 1,499.42 46.6% 24.9% 1,523.90 1,546.18 -1.4% VIX 23.20 25.62 31.22 -25.7% -9.4% 29.25 15.39 90.1% Source: Dealogic, The World Federation of Exchanges, Cboe Global Markets, Options Clearing Corporation, SIFMA estimates Note: 1Q21 number of listed companies and 1Q21 and 4Q20 private equity deal value data are preliminary

US Equity and Related Markets Page | 5 Chart Book: US Equity Capital Formation

Chart Book: US Equity Capital Formation

Companies need capital for various business purposes: invest in growth, fund mergers and acquisitions, etc. Firms have several ways to generate this capital, including initial public offerings (IPOs). IPOs allow businesses to grow, innovate and better serve their customers.

IPO Issuance and Other Statistics

US Equity Issuance Volume ($B) # Deals (RHS) 550 1,400

500 1,156 1,100 1,200 450 1,076 977 966 975 390 400 901 916 886 1,000 816 824 350 778 770 779 792 306 733 304 696 730 285 800 300 265 663 265 642 256 249 250 224 227 219 220 222 228 203 600 186 186 194 185 480 200 146 150 127 140 400 100 343 200 50 0 0 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 YTD

US Equity Issuance by Type ($B) US IPOs by Domicile ($B) IPOs Secondary Offerings Preferred Stock US Firms Non-US Firms # Deals (RHS) 450 100 209 225 390 400 90 185 200 46 350 80 175 154 151 19 70 300 150 60 250 220 222 228 125 203 50 98 98 17 258 200 26 34 8 100 25 17 140 40 150 9 67 15 75 18 30 155 155 145 100 157 50 81 20 6 41 30 33 50 26 25 85 10 15 39 50 49 41 0 21 0 0 FY16 FY17 FY18 FY19 FY20 YTD FY16 FY17 FY18 FY19 FY20 YTD

Source: Dealogic Note: Equity data includes rank eligible deals, excludes BDCs, SPACs, ETFs, CLEFs and rights offers (YTD = Mar 2021)

US Equity and Related Markets Page | 6 Chart Book: US Equity Capital Formation

US IPOs by Deal Size (#) US IPOs by Company Size >=$50M <$50M Large Cap Mid Cap Small Cap (RHS) 225 209 50% 88% 90%

200 185 84% 37 81% 175 40% 78% 154 29 151 80% 150 22 73% 30% 25 30% 125 98 98 21% 70% 100 19% 65% 17 172 19 20% 17% 75 156 15% 132 126 11% 60% 50 10% 81 79 6% 5% 25 3% 3% 1% 1% 0 0% 50% FY16 FY17 FY18 FY19 FY20 YTD FY16 FY17 FY18 FY19 FY20 YTD

US IPOs by Industry US SPACs

Volume ($B) # Deals (RHS) 298 Computers & Electronics 54.2% 120 300 248 Healthcare 21.0% 100 95.3 250 82.6 Consumer Products 8.1% 200 80 Insurance 3.5% 150 60 Retail 2.7% 100 59 40 46 34 50 Finance 2.7% 13 20 13.5 Auto/Truck 1.9% 10.0 10.8 0 3.5 0 -50 Other 5.8% FY16 FY17 FY18 FY19 FY20 YTD

US SPACs vs. IPOs ($B) IPOs SPACs 40 35.5 34.5 35

30 25.4 25

20 17.7 16.7 14.7 15.2 15 13.7 13.013.1 11.0 11.8 11.2 9.8 10.2 9.4 7.9 10 6.9 5.5 5 3.2 3.2 2.7 2.5 2.3 1.5 2.2 1.8 0.7 1.0 0.5 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

Source: Dealogic Note: IPOs include rank eligible deals, exclude BDCs, SPACs, ETFs, CLEFs and rights offers (YTD = Mar 2021)

US Equity and Related Markets Page | 7 Chart Book: US Equity Capital Formation

US Private Equity - Total Deals US Private Equity - Deal Size Breakout (#) Deal Value ($B) # of Deals (RHS) Under $100M $100M-$1B Over $1B 1,000 5,640 5,585 6,000 6,000 5,252 87 82 4,907 62 4,482 5,000 5,000 77 800 1,669 1,688 60 1,429 4,000 4,000 1,407 1,173 600 3,000 3,000 400 743 764 2,000 2,000 597 641 649 3,884 3,815 3,761 1,182 3,249 3,423 14 200 1,000 1,000 377 135 791 0 0 0 FY16 FY17 FY18 FY19 FY20 YTD FY16 FY17 FY18 FY19 FY20 YTD

US M&A US M&A by Industry Deal Value ($B) # of Deals (RHS) 2,500 12,000 Computers & Electronics 25.4% 10,537 10,029 9,897 Telecommunications 16.9% 10,000 2,000 8,503 8,190 Healthcare 11.8% 8,000 1,500 Oil & Gas 9.2% 6,000 Finance 8.1% 1,000 1,913 1,762 1,697 1,624 4,000 1,482 Chemicals 6.2% 1,789 500 2,000 495 Retail 4.1% 0 0 Other 18.3% FY16 FY17 FY18 FY19 FY20 YTD

Source: Dealogic, PitchBook Note: Private equity data for 2020 and YTD is preliminary (YTD = Mar 2021)

US Equity and Related Markets Page | 8 Chart Book: US Equity Capital Formation

US IPOs vs Stock Market Performance 55 550% IPOs ($B) Nasdaq (RHS) S&P 500 (RHS) 50 500% 45 41 41 450% 40 400% 35 31 350% 30 30 27 27 300% 25 25 23 23 250% 20 18 17 200% 15 15 14 15 14 15 12 12 15 12 11 12 12 10 150% 7 8 9 9 7 7 8 7 10 5 6 6 6 6 6 7 6 100% 5 4 5 5 5 1 50% 0 0% -5 -50%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 US Equity Market Capitalization ($T) Market Capitalization Trendline

50 45.3 46.0 45 40 37.5 32.1 35 30.4 30 26.3 27.4 24.0 25.1 25 19.3 19.7 18.7 17.3 20 16.2 16.9 15.6 15.1 14.0 14.2 15.1 15 11.1 11.5 10 5 0 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 YTD Number of Listed Domestic Companies in the US # of Companies Trendline 7,000

6,500 6,274

6,000 5,620

5,500 5,162 4,916 5,000 4,793 4,723 4,734 4,771 4,650 4,641 4,614 4,401 4,500 4,275 4,190 4,210 4,182 4,072 3,998 4,050 4,019 3,980 4,012 4,000

3,500 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 YTD Source: Bloomberg, Dealogic, World Federation of Exchanges Note: IPO data includes rank eligible deals, excludes BDCs, SPACs, ETFs, CLEFs and rights offers; Large increase in number of listed companies in 2019 caused by change in methodology by NYSE in January 2019; YTD number of listed companies is preliminary (YTD = Mar 2021)

US Equity and Related Markets Page | 9 Chart Book: US Cash Equities

Chart Book: US Cash Equities

On average for the quarter, around 14.7 billion shares are traded on U.S. equity markets every day, making them among the deepest, most liquid and most efficient in the world. Investors enjoy narrow spreads, low transaction costs and fast execution speeds, with plenty of opportunity for price improvement, especially for individual investors.

Volumes and Other Statistics

Equity ADV (B) vs VIX (#) 15.6 ADV VIX (RHS) 15.6 16 15.3 70

14 57.7 13.3 13.4 12.3 60 12 11.3 11.311.0 10.5 41.5 10.0 50 10 9.2 9.3 9.2 9.1 8.4 8.5 40 7.7 7.8 7.5 7.6 8 7.2 7.4 7.3 7.2 7.1 7.1 7.3 7.2 31.1 6.6 6.7 6.9 6.6 6.6 6.9 6.9 29.4 6.1 6.1 6.3 25.0 23.1 30 6 22.5 22.9 22.4 18.3 19.4 19.0 30.9 15.2 15.8 15.5 26.8 27.7 13.7 12.9 13.8 25.0 24.9 20 4 12.5 21.8 19.0 19.4 19.6 19.6 16.7 15.6 10 2 14.1 13.1 14.5 13.3 13.9 11.1 12.9 12.5 0 0 Jul-18 Jul-19 Jul-20 Oct-18 Oct-19 Oct-20 Apr-18 Apr-19 Apr-20 Jan-18 Jun-18 Jan-19 Jun-19 Jan-20 Jun-20 Jan-21 Mar-20 Mar-18 Mar-19 Mar-21 Feb-18 Feb-19 Feb-20 Feb-21 Nov-18 Dec-18 Nov-20 Dec-20 Nov-19 Dec-19 Aug-18 Sep-18 Aug-19 Sep-19 Aug-20 Sep-20 May-20 May-18 May-19

Equity ADV (B) Equity ADV (B) vs VIX (#) ADV Trendline ADV VIX (RHS) 16 14.7 16 14.7 50 14 14 12.4 12.4 40 12 11.0 12 11.0 10.5 9.9 10 10 8.6 8.5 8.6 8.5 34.5 30 7.6 7.6 8 8 6.6 6.9 6.9 6.8 6.6 6.9 6.9 6.8 6.1 6.3 6.1 6.3 25.8 6 6 23.2 20 20.5 21.1 4 4 17.4 15.2 13.2 14.0 10 11.7 12.9 2 2 10.9

0 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 3Q17 4Q17 1Q18 2Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

Source: Bloomberg, Cboe Global Markets, SIFMA estimates

US Equity and Related Markets Page | 10 Chart Book: US Cash Equities

Equity Volumes by Tape ($B) VIX Index (Daily) Tape A Tape B Tape C VIX Index Trendline 90 700 82.7 627 80 600 70 479 500 274 60

400 357 50 322 199 40.3 37.3 273 271 40 36.1 300 121 119 109 25.8 71 83 105 30 200 86 16.0 72 61 75 20 234 19.3 21.5 100 176 19.4 149 138 10 129 126 12.1 13.7 11.4 9.1 0 0 FY16 FY17 FY18 FY19 FY20 YTD Jan-16 Aug-16 Mar-17 Oct-17 May-18 Nov-18 Jun-19 Jan-20 Aug-20 Mar-21

S&P 500 (Monthly Avg) DJIA (Monthly Avg) S&P 500 Index Trendline DJIA Index Trendline 3,000 2,902 37,000 2,790 32,373 2,750 32,000 28,167 2,500 2,654 25,804 26,233 27,000 28,005 2,250 2,081 2,359 22,000 20,424 23,806 2,000 2,143 22,637 2,028 1,944 17,000 1,750 18,185 1,669 16,305 1,500 12,000 Jul-16 Jul-16 Oct-19 Oct-19 Apr-19 Apr-19 Jan-16 Jan-17 Jun-17 Jan-16 Jan-17 Jun-17 Mar-20 Mar-21 Mar-21 Mar-20 Nov-18 Dec-17 Dec-17 Nov-18 Sep-20 Sep-20 May-18 May-18

Nasdaq (Monthly Avg) Russell 2000 (Monthly Avg) Nasdaq Index Trendline Russell 2000 Index Trendline 15,000 13,737 2,400 2,244 2,200 13,000 11,212 13,169 2,000 11,000 1,701 9,233 1,800 1,647 1,581 1,576 9,000 7,892 7,993 1,600 7,279 1,377 1,400 1,518 7,000 6,125 7,805 7,772 1,393 6,814 1,200 5,000 1,222 1,217 5,256 1,000 4,463 1,033 3,000 800 Jul-16 Jul-16 Oct-19 Oct-19 Apr-19 Apr-19 Jan-16 Jan-17 Jun-17 Jan-16 Jan-17 Jun-17 Mar-20 Mar-21 Mar-20 Mar-21 Dec-17 Nov-18 Dec-17 Nov-18 Sep-20 Sep-20 May-18 May-18

Source: Bloomberg, SIFMA estimates Note: Tape A = NYSE listed stocks; Tape C = Nasdaq listed stocks; Tape B = formerly regionals, now mostly NYSE Arca (YTD = Mar 2021)

US Equity and Related Markets Page | 11 Chart Book: US Cash Equities

Average P/E Ratios for S&P 500 Stocks S&P 500 Average P/E by Sector 35 31.4 Real Estate 64.8 30 27.9 Consumer Discretionary 61.6 25.5 Industrials 50.5 25 21.3 21.8 21.2 21.9 Information Technology 34.5 19.5 19.9 19.4 20 18.0 18.0 Aggregate 31.3 Communication Services 30.2 15 Materials 29.8 10 Health Care 22.9 Consumer Staples 21.7 5 Utilities 20.6 0 Financials 18.1 Energy n/a 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

S&P 500 Sector Breakout US Market Short Interest (B) 24 Information Technology 26.6% 23 22.6 22.5 Health Care 13.0% 22 21.2 21.4 21.2 Consumer Discretionary 12.4% 21.1 21.1 20.7 21 20.5 20.3 Financials 11.3% 20.3 19.7 19.7 20 19.3 Communication Services 10.9% 19.0 19 Industrials 8.9% 18 Consumer Staples 6.1%

Energy 2.8% 17

Materials 2.7% 16

Utilities 2.7% 15

Real Estate 2.5% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q18

Source: Bloomberg, S&P Dow Jones Indices, SIFMA estimates Note: 1Q21 short interest data as of 3/15/2021 (most recent data available at time of publication)

US Equity and Related Markets Page | 12 Chart Book: US Cash Equities

Exchange and Parent Group Market Share

5 ICE: New York Stock Exchange, NYSE Arca, NYSE American, 16 NYSE Chicago, NYSE National 32 Equity Exchanges ATS 4 Cboe: Cboe BYX, Cboe BZX, Cboe EDGA, Cboe EDGX 3 Nasdaq: Nasdaq BX, Nasdaq PHLX, Nasdaq Stock Market IEX; MEMX; LTSE; MIAX PEARL 6 OTC Venues

Market Share - Exchange Nasdaq 15.7%

NYSE 8.8%

NYSE Arca 8.6%

Cboe EDGX 8.0%

Cboe BZX 4.5% Investors 2.1% Market Share - Parent Company Exchange Cboe BYX 1.5%

NYSE National 1.2% ICE MEMX 1.1% 19.4%

Cboe EDGA 1.0% Off Nasdaq PSX 0.7% Exchange Nasdaq 45.2% 17.1% Nasdaq BX 0.7%

NYSE American 0.5% Cboe NYSE Chicago 0.2% 15.0% Other MIAX PEARL 0.2% 3.3%

Source: Cboe Global Markets, FINRA, SIFMA estimates

Note: Intercontinental Exchange (ICE) owns the NYSE exchanges; ATS and OTC venues diagram as of 4Q20

US Equity and Related Markets Page | 13 Chart Book: US Multi-Listed Options

Chart Book: US Multi-Listed Options

Options, or a contract to buy or sell an underlying security (stocks, ETFs, etc.) at a specified price on or before a given date, are frequently used as risk management tools by investors to hedge positions and limit portfolio losses. They also provide flexibility, enabling an investor to tailor their portfolio to investment objectives and market environment.

Volumes and Other Statistics

Options Asset Class Breakout Equity Options as % of Total Volume

Index / Stock 96% 94.8% Other Futures Loan 4.5% 0.6% 0.01% 94% 93.1% 92.0% 92% 91.1%

90% 88.7% 88.8%

88% 87.0%

86%

84% 85.2%

82% Equity 94.8% 80% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 YTD

Options ADV (M) Options ADV (M) vs VIX (#) ADV Trendline ADV VIX (RHS) 45 42.0 45 42.0 40 34.5 40 40 35 35 29.5 29.5 30 30 28.0 30 28.0 20.5 25 22.4 22.5 25 22.4 22.5 25.8 19.5 23.2 20 18.3 19.3 19.5 18.3 19.3 20 17.1 20 17.1 16.6 21.1 15.4 16.6 16.2 15.4 16.2 15 17.4 15 15.2 14.0 13.2 12.9 10 10 10 11.7 10.3 5 5 0 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

Source: The Options Clearing Corporation (OCC), Bloomberg, SIFMA estimates Note: YTD = Mar 2021

US Equity and Related Markets Page | 14 Chart Book: US Multi-Listed Options

Exchange and Parent Group Market Share

Market Share - Exchange

Cboe 15.1%

Nasdaq PHLX 12.4%

NYSE ARCA 10.1%

BATS 8.4%

NYSE AMEX 8.4%

Nasdaq 7.6%

Nasdaq ISE 7.4%

Nasdaq GEMX 5.6%

MPRL 4.8%

MIAX 4.1%

BOX 3.9%

MIAX EMLD 3.7%

Cboe EDGX 3.5%

C2 3.2%

Nasdaq MRX 1.3%

Nasdaq NOBO 0.7%

Source: The Options Clearing Corporation (OCC), SIFMA estimates Note: Intercontinental Exchange (ICE) owns the NYSE exchanges

US Equity and Related Markets Page | 15 Chart Book: US Exchange-Traded Funds

Chart Book: US Exchange-Traded Funds

Exchange-traded funds (ETFs), or pooled investment vehicles holding an underlying basket of securities (equities, bonds, commodities, currencies), provide investors a multitude of choices to meet different investment objectives.

Volumes and Other Statistics

ETF ADV (B) ETF ADV (B) vs VIX (#) ADV Trendline ADV VIX (RHS) 3.0 3.0 50 2.6 2.6 2.5 2.5 2.3 2.3 40 2.0 2.0 2.0 1.9 2.0 2.0 1.6 1.5 1.5 34.5 1.6 30 1.5 1.5 1.5 1.5 1.5 1.4 1.4 1.3 1.3 1.5 1.3 21.1 1.3 1.2 17.4 1.2 25.8 1.1 1.1 23.2 20 1.0 1.0

15.2 14.0 10 0.5 0.5 13.2 12.9 11.7 10.3

0.0 0.0 0 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q17 4Q17 1Q18 2Q18 3Q18 3Q16 4Q16 1Q17 2Q17 3Q17 3Q20 4Q20 1Q21 3Q16 4Q16 1Q17 2Q17 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

ETFs as a % of Total Equity ADV Single Stock ETF 100% 90% 13.7% 14.4% 16.4% 16.8% 17.5% 18.0% 18.2% 18.3% 18.5% 18.6% 19.6% 19.6% 20.0% 20.1% 20.3% 20.4% 20.7% 23.5% 80% 23.6% 70% 60% 50% 40% 30% 20% 10% 0%

3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21

Source: Cboe Global Markets, Bloomberg, SIFMA estimates

US Equity and Related Markets Page | 16 Chart Book: US Exchange-Traded Funds

Exchange and Provider Market Share

Exchange Market Share

ETF Market Share - Exchange Parent Company

Off Exchange 38.5%

NYSE 23.9%

Cboe 19.6%

NASDAQ 15.3%

IEX 1.2%

MEMX 1.1%

MIAX 0.4%

LTSE 0.00001%

Provider Market Share

ETF Market Share - Provider

Blackrock 36.1%

Vanguard 28.0%

State Street 15.3% Global Advisors

Invesco 5.4%

Charles Schwab 3.7%

Other 11.5%

Source: Cboe Global Markets, etf.com, SIFMA estimates Note: Intercontinental Exchange (ICE) owns the NYSE exchanges

US Equity and Related Markets Page | 17 Appendix: Exchange Landscape

Appendix: Exchange Landscape

US Cash Equities

Members Long-Term MIAX Exchanges Stock Exchange PEARL (MEMX) (LTSE)

Intercontinental Cboe Global Investors Nasdaq Exchange Markets Exchange (NDAQ) (IEX) (ICE) (CBOE)

New York Stock Nasdaq Stock Cboe BZX Exchange Market

NYSE Arca Nasdaq BX Cboe EDGX

NYSE National Nasdaq PHLX Cboe BYX

NYSE Chicago Cboe EDGA

NYSE American

US Equity and Related Markets Page | 18 Appendix: Exchange Landscape

US Multi-Listed Options

Cboe Intercontinental Miami Int'l Nasdaq BOX Global Markets Exchange Securities Ex Options (NDAQ) (CBOE) (ICE) (MIAX) Exchange*

Cboe Nasdaq PHLX NYSE ARCA MPRL

BATS NOM NYSE AMEX MIAX

C2 Nasdaq ISE MIAX EMLD

Cboe EDGX Nasdaq GEMX

Nasdaq MRX

Nasdaq NOBO

Note: BOX also opened an open outcry trading floor in August 2019

US Equity and Related Markets Page | 19 Appendix: Terms to Know

Appendix: Terms to Know

ADV Average Daily Trading Volume Y/Y Year-over-Year Algo Algorithm (algorithmic trading) Q/Q Quarter-over-Quarter AP Authorized Participant YTD Year-to-Date AT Automated Trading BPS Basis Points ATS Alternative Trading System PPS Percentage Points AUM Assets Under Management CAGR Compound Annual Growth Rate Best Ex Best Execution CEF Closed-End Fund CFTC Commodity Futures Trading Commission CLOB Central Limit Order Book FINRA Financial Industry Regulatory Authority D2C Dealer-to-Client SEC Securities and Exchange Commission D2D Dealer-to-Dealer SRO Self-Regulatory Organization Dark Pool Private trading venues NMS National Market System ECN Electronic Communication Network Reg NMS Regulation National Market System EMS Equity Market Structure SIP Security Information Processor ETF Exchange-Traded Fund ETP Exchange-Traded Product HFT High-Frequency Trading IDB Inter-Dealer Broker IIV Intraday Indicative Value IOI Indication of Interest IPO Initial Public Offering MF Mutual Fund MM Market Maker NAV Net Asset Value OEF Open-End Fund OTC Over-the-Counter PCF Portfolio Composition File PFOF Payment For Order Flow SI Systematic Internaliser Tick Size Minimum price movement UIT Unit Investment Trust

US Equity and Related Markets Page | 20 Appendix: Terms to Know

Bid An offer made to buy a security Ask, Offer The price a seller is willing to accept for a security Spread The difference between the bid and ask price prices for a security, an indicator of supply (ask) and demand (bid) NBBO National Best Bid and Offer Locked Market A market is locked if the bid price equals the ask price Crossed Market A bid is entered higher than the offer or an offer is entered lower than the bid Opening Cross To determine the opening price of a stock, accumulating all buy and sell interest a few minutes before the market open Closing Cross To determine the closing price of a stock, accumulating all buy and sell interest a few minutes before the market close

Order Types AON All or none; an order to buy or sell a stock that must be executed in its entirety, or not executed at all Block Trades with at least 10,000 shares in the order Day Order is good only for that trading day, else cancelled FOK Fill or kill; must be filled immediately and in its entirety or not at all Limit An order to buy or sell a security at a specific price or better Market An order to buy or sell a security immediately; guarantees execution but not the execution price Stop (or stop-loss) An order to buy or sell a stock once the price of the stock reaches the specified price, known as the stop price

Call The right to buy the underlying security, on or before expiration Put The right to sell the underlying security, on or before expiration Holder The buyer of the contract Writer The seller of the contract American Option may be exercised on any trading day on or before expiration European Option may only be exercised on expiration Exercise To put into effect the right specified in a contract Underlying The instrument on which the options contract is based; the asset/security being bought or sold upon exercise notification Expiration The set date at which the options contract ends, or ceases to exist, or the last day it can be traded Stock Price The price at which the underlying stock is trading, fluctuates continuously Strike Price The set price at which the options contract is exercised, or acted upon Premium The price the option contract trades at, or the purchase price, which fluctuates constantly Time Decay Time value portion of option premium decreases as time passes; longer option’s life, greater probability option will move in the money Intrinsic Value The in-the-money portion of an option's premium Time Value (Extrinsic value) Option premium (price) minus intrinsic value, given external factors (passage of time, volatility, interest rates, dividends) In-the-Money For a call option, when the stock price is greater than the strike price; reversed for put options At-the Money Stock price is identical to the strike price; the option has no intrinsic value Out-of-the-Money For a call option, when the stock price is less than the strike price; reversed for put options

Investors Institutional Organization, fewer protective regulations as assumed to be more knowledgeable and better able to protect themselves* Retail Individual, a non-professional investor Accredited Individual, income > $200K ($300K with spouse) in each of the prior 2 years or net worth >$1M, excluding primary residence *Types of institutional investors: endowment funds, commercial banks, mutual funds, hedge funds, pension funds and insurance companies

US Equity and Related Markets Page | 21 Appendix: Terms to Know

IPO Initial Public Offering; private company raises capital buy offering its common stock to the public for the first time in the primary markets SPAC Special Purpose Acquisition Company; blank check shell corporation designed to take companies public without going through the traditional IPO process Bought Deal underwriter purchases a company's entire IPO issue and resells it to the investing public; underwriter bears the entire risk of selling the stock issue Best Effort Deal Underwriter does not necessarily purchase IPO shares and only guarantees the issuer it will make a best effort attempt to sell the shares to investors at the best price possible; issuer can be stuck with unsold shares Secondary (Follow-on) Issuance of shares to investors by a public company already listed on an exchange Direct Listing (Direct placement, direct public offering) Existing private company shareholders sell their shares directly to the public without underwriters. Often used by startups or smaller companies as a lower cost alternative to a traditional IPO. Risks include, among others, no support/guarantee for the share sale and no stock price stabilization after the share listing.

Underwriting Guarantee payment in case of damage or financial loss and accept the financial risk for liability arising from such guarantee in a financial transaction or deal Underwriter Investment bank administering the public issuance of securities; determines the initial offering price of the security, buys them from the issuer and sells them to investors. Bookrunner The main underwriter or lead manager in the deal, responsible for tracking interest in purchasing the IPO in order to help determine demand and price (can have a joint bookrunner) Lead Left Bookrunner Investment bank chosen by the issuer to lead the deal (identified on the offering document cover as the upper left hand bank listed) Syndicate Investment banks underwriting and selling all or part of an IPO Arranger The lead bank in the syndicate for a debt issuance deal

Pitch Sales presentation by an investment bank to the issuer, marketing the firm’s services and products to win the mandate Mandate The issuing company selects the investment banks to underwrite its offering Engagement Letter Agreement between the issuer and underwriters clarifying: terms, fees, responsibilities, expense reimbursement, confidentiality, indemnity, etc.

Letter of Intent Investment banks’ commitment to the issuer to underwrite the IPO Underwriting Agreement Issued after the securities are priced, underwriters become contractually bound to purchase the issue from the issuer at a specific price Registration Statement Split into the prospectus and private filings, or information for the SEC to review but not distributed to the public, it provides investors adequate information to perform their own due diligence prior to investing The Prospectus Public document issued to all investors listing: financial statements, management backgrounds, insider holdings, ongoing legal issues, IPO information and the ticker to be used once listed Red Herring Document An initial prospectus with company details, but not inclusive of the effective date of offering price

Roadshow Investment bankers take issuing companies to meet institutional investors to interest them in buying the security they are bringing to market. Non-Deal Roadshow Research analysts and sales personnel take public companies to meet institutional investors to interest them in buying a stock or update existing investors on the status of the business and current trends. Pricing Underwriters and the issuer will determine the offer price, the price the shares will be sold to the public and the number of shares to be sold, based on demand gauged during the road show and market factors Stabilization Occurs for a short period of time after the IPO if order imbalances exist, i.e. the buy and sell orders do not match; underwriters will purchase shares at the offering price or below to move the stock price and rectify the imbalance Quiet Period (Cooling off period) The SEC mandates a quiet period on research recommendations, lasting 10 days (formerly 25 days) after the IPO

Reg S-K Regulation which prescribes reporting requirements for SEC filings for public companies Reg S-X Regulation which lays out the specific form and content of financial reports, specifically the financial statements of public companies Form S-1 Registration statement for U.S. companies (described above) Form F-1 Registration statement for foreign issuers of certain securities, for which no other specialized form exists or is authorized Form 10-Q Quarterly report on the financial condition and state of the business (discussion of risks, legal proceedings, etc.), mandated by the SEC Form 10-K More detailed annual version of the 10Q, mandated by the SEC Form 8-K Current report to announce major events shareholders should know about (changes to business & operations, financial statements, etc.) Greenshoe Allows underwriters to sell more shares than originally planned by the company and then buy them back at the original IPO price if the demand for the deal is higher than expected, i.e. an over-allotment option Tombstone An announcement that securities are available for sale. (Also a plaque awarded to celebrate the completion of a transaction or deal) EGC Emerging Growth Company

US Equity and Related Markets Page | 22 Authors

Authors

SIFMA Research Katie Kolchin, CFA, Director of Research Justyna Podziemska Ali Mostafa [email protected]

US Equity and Related Markets Page | 23