VlarketAxess OTC Derivatives: Electronic Trading Solutions Best Wlulti-Dealer CDS Trading Platform www.marketaxess.com Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None ofthe information contained herein may be ; excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consent. Page 1 About MarketAxess IVlarkerAxess' MarketAxess formed in 2000 to build technology solutions to promote efficiency, transparency and liquidity in credit markets Patented electronic trading system is an institutional participant to multi- dealer trading platform SEC-registered broker-dealer and ATS operator; U.K. affiliate is FSA- registered Multilateral Trading Facility 750+ active institutional participant firms and 72 participating broker-dealers Current products traded include HG Corporate bonds, High Yield, CDS, Emerging Market debt. Agency debt, European credit Profitable since 2003 and completed an Initial Public Offering in November 2004 (NASDAQ: MKTX) Leading provider of pre-trade data (MarketAxess Corporate BondTicker™), electronic trading solutions, and post-trade reporting and straight through processing CDS product launched in late 2005 Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None ofthe information contained herein may be excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consenL Page 2 Curren Privative Clearinghouse Activity MarketAxess CME Group Eurex NYSE Liffe LCH.CIearnet BCIear •Energy Energy • Interest Rates • Equities •Commodities Agriculture • Equities • Commodities •Currency Currency • Inflation • Credit* •Agriculture Equities •Credit* Credit •Equities* Eurex Credit •Interest Rates* Clear •Weather* • Credit* *Mot Currently Live Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None of the information contained herein may be excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consent. Pages Forward View of the Derivatives Market MarketAxess' Bilateral RFQ Multilateral Exchange/ECN Trading Electronic Trading Trading Bilateral/Central Bilateral Clearing Clearing Central Clearing MarketAxess Large Banks CME • ICE Broker-Dealers Tradeweb Bloomberg Eurex • NYSE Liffe Bespoke Swap Contracts Structured Products Standardized Options/ Exotic Options Futures Products Least Liquidity Continuous Liquid Liquidity Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None ofthe information contained herein may be ; excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consent. Page 4 Benefits of Electronic Trading MarketAxess" Enhanced market competition to drive down transaction costs Real-time transparency on derivative pricing and market participants Significant reduction in trade errors resulting in reduced overall market risk Improved audit trails to demonstrate compliance with best execution guidelines Automated confirmations and communication of trade details to clearinghouses and regulatory authorities Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None of the information contained herein may be • excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consent. Page 5 Request-For-Quote (RFQ) Trading Protocol MarketAxess" Key RFQ Features The RFQ trading protocol establishes discrete • Creates a highly transparent and competitive process auctions for each instrument that a participant wishes that is ideally suited to less liquid markets. to buy or sell. • Preserves the existing participant relationships, Enables the seller or purchaser of an instrument to incentivizing dealers to commit capital and provide simultaneously request competitive, executable bids liquidity in less liquid markets. or offers from multiple dealers, at the choice ofthe participant. • Allows for highly efficient price discovery with broad group of dealers. Participant sets the time when he/she would like all of the dealers' prices or spreads returned to the • Very effective for more fragmented and less liquid participant, in order to have the ability to see all markets that do not enjoy continuous two-way executable prices available at the same time. liquidity. The entire process is managed electronically is highly • Already adapted to multiple asset classes, including efficient and can be completed in minutes. credit default swaps. The MarketAxess platform can run auctions on single • information on instruments and sizes traded could be instruments or simultaneously on lists of up to 40 reported in real time to trade repositories, clearing instruments (and up to 150 CDS single-names). houses and regulatory authorities. Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None of the information contained herein may be excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consent. Page 6 MarketAxess eTrading Lifecycle: From Execution to Reporting in Minutes MarketAxess )+3:15 Executed Trade Appears on TRACE 1+3:06 Post-trade Trade Details Reported to Both Counterparties Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None ofthe information contained herein may be excerpted, copied, disseminated or otheiwise disclosed to any other person without the company's express written consent. Page? MarketAxess Credit Derivatives MarketAxess Pre-Trade - Indicative CDS quotes, analytics, and dealer pricing runs Trading Network - 72 participating dealers system-wide including global, regional and diversity dealers - 12 dealers currently participating in CDS - Approximately 750+ active institutional participants on the system primarily trading corporate bonds today - Approximately 200 direct connections to institutional participant order management systems Electronic Execution - Open, competitive auction-based request-for-quote system - Live trading capabilities in both index and single name CDS products - IVIarket leading electronic bid and offer list capabilities Post-Trade - straight through processing, post-trade feeds and reporting - Automatically stored audit trails for compliance - Automated links possible to CCPs Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None ofthe information contained herein may be excerpted, copied, disseminated or otherwise disclosed to any other person without the company's express written consent. Page 8 MarketAxess CDS Trading Capabilities MarketAxess" Broad Based Index Products - Investment Grade, Emerging Markets and European Indices - Seamless roll trading technology - ISDA-compliant calculations embedded in trading system - Auction and hit/lift cross-matching trading protocols Single Name Credit Derivatives - Investment Grade, Emerging Markets and European Credits - Market standard RED information - "Big Bang" calculations embedded in trading system - Auction and hit/lift cross-matching protocols CDS Single Name Lists - Ability to trade up to 150 single-name credit derivatives Member SiPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None of the information contained herein may be I excerpted, copied, disseminated or othenwise disclosed to any other person without the company's express written consent. Page 9 Appendix: Example Work Flow for a Corporate Bond Trade Member SIPC Confidential and proprietary information of MarketAxess Holdings Inc. (the "company"). None ofthe information contained herein may be excerpted, copied, disseminated or othera/ise disclosed to any other person without the company's express written consent. Page 10 Trading Homepage MarketAxess" '^ MdrkolAxcss Wotksldtion tliMI®' Trade %\mM\U%\ rmenlon' roittoitos Art^v•e5^S• MaiJ.-lU^ls Blotter Messaoes J Jimdch^b ^Minlv.^ -:-:•:?:'.:•"-^^ Last Updated: (».7&n(K» HmnCnida HighViM 0A1> #CnentDeilfif #lntei HMsraassFfssffis TTmirmiiii urntiriiinri 'V-Mima-'^ uactint:>'> E«ivoi(UM( MhtVcJ* Tradecoiint Top sprud Tighlentno |5yra and out) Total Volumo nanli% ^SOnCIl 5.000 90J(16 iDanKs.Uiokcfs 2.047.166.066 24 9'-V. ;iglKFT 6.125 2)1118 FInaiKo 1.225,6e2,05» 14 0% jj^miH 4.950 9(30/H ^.....^ '= "'J ;E1C 6.125 B)J5/3« JModla Telecom Cablo 7?3,:iO.OOO n4's :^CaMD5/22«9 X^""^^ ''" ilSJACCX 5.500 9/14)15 ;<oi).Gn.G(piQfBilon'£i»ri]y 613.49),000 75« ©WfC 3.7501011/14 I/ICH 5.750 4)1)10 jllcBnhcBrePhurmaccutlcals MO.44J.000 i;o\ '^NEM 0.25010/1139 i;consunwTProducli 500,009,000 C.2« @ lire 4.025 9115110 Central access to market tiGcticfiillnduslrial 477.«f.6.000 SB"*. ^ SPG 5.875311)17 i;ln«uroiKO 389,920.000 47'J igcOF 8.800 7/15)19 data and information lUlillty 330.053.000 4 I'i I [^OBI>J>009)1)17 ;R«tll|.CfCicon 319,067.000 SO*. .DON 7.5005)15)15 ilochnoioji/ 208.238.000 2 5'.<! iAero.D«fen»'1ranBportDllan 504,279,000 i.5« Ifmetglnar^ofkels 177,910.000 2 2'>. Blilg Pioduds.Komo DJdriREns 171,108.000 2.1« i/luto-AUTo Polls 91,952.000 1 l<t iiCT>l«J'.X-ar-M-r:ri^i-^niWri^ Paper 67,377,000 08% Clicmlcals 40.382.000 0 6'J; TC0 SpfcRd ^VlderHng (5yr» and ooU Supro.S{]v 60.000 O.O* ISllM! Lilt Char Gomtno and Lodging 2.2(.O,00O OO'J. @VVSIC 4.200 2/77/15 155 ;MlKe<l«1C0US 1,100,000 OO*