ISE-Direct Edge Deal Done

January 5, 2009

International Securities Exchange's (ISE) equities market became a subsidiary of the Direct Edge electronic communications network in a previously announced deal that closed on Dec. 23. ISE, which operates a leading electronic options market and is a subsidiary of Eurex, co-owned by Deutsche Borse and SIX Swiss Exchange, has taken a 31.54 percent stake in Direct Edge. Knight Capital Group, Citadel Derivatives Group and Goldman Sachs each hold 19.9 percent; JP Morgan Chase & Co., Deutsche Bank, Merrill Lynch & Co., Nomura Securities and Sun Trading own the remainder.

Until its EDGA and EDGX trading platforms receive approval to operate as exchanges-applications are expected to be filed shortly-Direct Edge will use ISE Stock Exchange to display quotes. Direct Edge CEO William O'Brien noted that in addition to facilitating the ECN's transition to exchange status, the agreement means that "Direct Edge has gained immediate direct access to the national market system, inherited innovative products such as the MidPoint Match, improved its technology and infrastructure, and expanded our talent base."