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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
•Energy •Commodities •Currency •Agriculture •Credit* •Equities* •Interest Rates* •Weather*
*Mot Currently Live
Energy Agriculture Currency Equities Credit
Eurex
• Interest Rates • Equities • Inflation
Eurex Credit Clear
• Credit*
NYSE Liffe
BCIear
• Equities • Commodities • Credit*
LCH.CIearnet
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 Trading
Bilateral Clearing
Large Banks Broker-Dealers
Bespoke Swap Contracts Structured Products Exotic Options
Least Liquid
RFQ Multilateral Electronic Trading
Bilateral/Central Clearing
MarketAxess Tradeweb Bloomberg
Liquidity
Exchange/ECN Trading
Central Clearing
CME Eurex
• ICE • NYSE Liffe
Standardized Options/ Futures Products
Continuous 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 auctions for each instrument that a participant wishes to buy or sell.
Enables the seller or purchaser of an instrument to simultaneously request competitive, executable bids or offers from multiple dealers, at the choice ofthe participant.
Participant sets the time when he/she would like all of the dealers' prices or spreads returned to the participant, in order to have the ability to see all executable prices available at the same time.
The entire process is managed electronically is highly efficient and can be completed in minutes.
The MarketAxess platform can run auctions on single instruments or simultaneously on lists of up to 40 instruments (and up to 150 CDS single-names).
• Creates a highly transparent and competitive process that is ideally suited to less liquid markets.
• Preserves the existing participant relationships, incentivizing dealers to commit capital and provide liquidity in less liquid markets.
• Allows for highly efficient price discovery with broad group of dealers.
• Very effective for more fragmented and less liquid markets that do not enjoy continuous two-way liquidity.
• Already adapted to multiple asset classes, including credit default swaps.
• information on instruments and sizes traded could be reported in real time to trade repositories, clearing 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 : 0 6 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
Trade %\mM\U%\ rmenlon' roittoitos Art v•e5^S• MaiJ.- lU^ls Blotter Messaoes
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^ SPG 5.875311)17
igcOF 8.800 7/15)19
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X ^ " " ^ ^ ' ' " ilSJACCX 5.500 9/14)15
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Member SIPC
I r lduhyTradii igOpon \ 07:38:37 BM EDT
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 11
Instrument Search MarketAxess'
- ^ Instrument Search: Please select a bond
Basic Search "Advanced Search"^
-Instrument
O Bonds
# CDS Index
# CDS Single Names
Search by; Ticker, Issuer Name, Identifier
The following 1988 Instruments matched your criteria.
Qln|[x]
Search Hel
Short Name Ocy Features Moody's/S&P Issuer GE 4.460 06/15/18 EUR NC NA/AA+ GE CAP EURO FNDG GE 4.500 06/15/1 Be... USD C Aa2/A^+ GE CAPTAL GE 6.000 06/15/18 USD NC Aa2/AA+ GE CAPTAL GE 6.150 06/15/18 USD NC Aa2/AA+ GE CAPTAL IGE 4.500 06/15/18 c... USD C Aa2//W+ GE CAPTAL GE 3.375 06/19/18 CHF NC Aa2/Afl.+ GE CAPTAL GE 5.670 06/25/18 NOK NC Aaa/NA GE CAPTAL GE 6.670 06/25/18 NOK NC Aa2/AA+ GE CAPTAL GE 5.000 06/27/18 c... USD C Aa2/NA GE CAPTAL GE 5.000 06/30/18 C... USD C Aa2/NA GE CAPTAL
Ticker , Cpn i Maturity LiSector
06/15/2018 Finance 06/15/2018 Finance 06/15/2018 Finance
|i Finance Finance Finance Finance
06/26/2018 Finance 06/27/2018 Finance 06/30/2018 Finance
Fast and efficient tool to searcli for bonds and CDS to trade
identifier
XS0256480566 36966RFN1 36966R3J3 36966R3G9 36966RFY7
CH0025633717 XS0371764605 XS0371764605
36962GD35 36962GD50
Member SIPC Confidential and proprietary information of Marl<etAxess 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 12
Client Submits New Inquiry MarketAxess' >:*f!«ia<Sa^S«i9SL»B»?;-:
•^ New inquiry
[ Inquiiy Details
O Spread Request OBid • Offer • Swap
Type
O Outright • Cross
Request Bid: - -GE 5.100 02/15/19
Size (000s):
IOct-02-2009
TgtLvl(bps):
Spread Over:
Benchmark: JST 3.625 08/19-CUR 10
Internal Note:
Timer
• ASAP O Bin
O |2 minsi : • 5 mlns • 10 mlns : • 60 mlns '
I Pricing
• 1-Step O Standard • Phone Spot • 3PM Spot
Issuer: GE CAPTAL Ticker: GE
Coupon: 5.100% Maturity: 02/15/2019
Features: NC Ratina: Aa2/AA+
Amt Outs: $ 191,731,000 CUSIP: 36966RW28
BondTicker ??nri Details Market Depth
Notes: Current 10 CUSIP: 912828U7
BondTicker
GE 5.100 02/15A19
Sprd ' Benchmai l< ,
Q®t BARX
BNYM
C
FCMS
HSBC
JEFF
MS
SANT
SIG
WSAX
BAHL
CIBC
CS
FTN
ING
KEY
RBC
SCO
USBI
WFS
BNPP
C D S ^
DB
GS
JPM
NITE
RBS
STFL
UBS
H
S,QQO +74 3.825 08/16 1GS,003 500 +75 3.B25 DS/19 IK.OQO
1,£0D +82 3.B25 D8i'19 1CS.TS2 715 +77 3.625 08/19 1IS.915
3.088 3.092 3;1SB 3.118
Clients electronically send a request-for-quote (RFQ) to the
dealers of their choice
TRACE data is integrated into the corporate bond trading
system, giving users pre-trade transparency
L Yield Z-Sprd l-Spr
+ 103 + 104 + 113 + 107
Toda/8 TradBK 0 Voliane (QOOs): $0
• 1C2 0 9 / 2 9 J O S 1 1 ; 1 7 A M TRACE
+ 102 :09/2.5iQS 02:45 PM TRACE + 111 09 /23911 :47 AM TRACE + 106 09/2a0910:01 AM TRACE
BondTlckw (i«t30 pnntt-j
Member S IPC Conf ident ia l and proprietary information of MarketAxess Holdings Inc. (the "company") . None of t l ie informat ion contained herein may be excerpted, copied, d isseminated or otherwise d isc losed to any other person without the company 's express wri t ten consent. Page 13
Electronic Execution MarketAxess'
Request Live and Executable Levels
- You select the pool of dealers to respond to trade inquiry
Electronically Execute at the Best Price
- Competitive bidding/offering
- Streamlined for both Index and Single Name Protocols
Cash Flows and Trade Details - Calculations occur within the
Trading System
^Inquiry: 61180
Your Request:
Bid: $5,000M GE 5.100 02/15/19 UST3.62508/19-CUR 10 Outright
Status: RespReq
tDealsr j Size (000s) jSpread (bps)lkl Pricing CS
RBSM BAML BNYM BNPP DLR1 BARX CIBC
C DB
$5,000 100.749 $5,000 100.777 $5,000 101.247 $5,000 101.388 $5,000 103.205
Live Live Live Live Live
HISTOmCnLACTIWlY CUSIP: 36966RW7a
Allocations (0)
0:42 0:42 0:42 0:42 0:42
Dealer responses are released simultaneously from the 'holding bin'
allowing investors to choose best level ActwHyLoo : Analytics I BondTicker I Commi
11:10:19 AM WFS has failed lo respond 11:10:19 AM SANT has failed to respond
11 '10-19 AM ^'^'^'^ (b nymdealer) bids UST +101.388, size $5,000,000, Timer 1 mlns (Auto Spot) Remark Dealer response QuoteUpdate
10:19 AM BARX has failed lo respond 10:19AM MS has failed lo respond
Compliance - Instant access to demonstrate
compliance with Best Execution
Member SIPC Confidential and proprietary information of IVlarketAxess 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 14
Post-Trade •H ^1 k •K
^ k MarketAxess'
Straight Through Processing - Trade details flow directly into
your blotter and/or trading system
Post-Trade Feeds - Experienced in building
connections with all types of formats and endpoints
- Fully capable of connecting directly to CCPs
Reporting
- Existing connectivity to TRACE - Experience with connectivity to
DTCC
Electronic Trade Ticket
• ^ Trade Ticket
YOU SOLD
Qmm InquliylD: 61180 Trade Date: 09/29e009 Trade Time: 11:10 AM EDT
SLD ; Response Summaiy
r Corporate Trade Details
GE 5.100 02/15/19 Issuer: GE CAPTAL
Coupon: 5.10DH I IVIatiiiity: 02/15/2019 I CUSIP: 36966mU28
I I Trade ID: 38626-0 I 1 I r BenclimarK Spot Details I ! UST 3.625 08/19 ! ' - - • - -
I Counterparty Information I Dealer: CS Cvi
r Trade Proceeds
Size: $5,000,000 Spread: 100.749... Cvr: 100.777 Principal;
Benchmark: UST 3.625 08/19 Yield: 4.33BK
Price: 105.811
User: ameatto... Portfolio: N/A
$5,290,550.0
$33,291.67
$5,323,841.67
47
StIDate: Fri 10/02/2009
" " ~ Spot Price; 102-14+
RBSM
• - • - — -
""*"" ' spotYieid; 3.331% j status: Dofie
Trader: csflidealer Salesperson: N/A
- - — Activity Log
MA Inc. (ameattol 2) aprees to the final price of 105.811. Trade Is complete CS(cs(tidealer^ submits final price ofi 05.811 for confirmation 102-14t (3.331) spot on UST 3.625 08/19 • CUR 10 accepted by MA Inc. (ameatlol 2). Est. DW Hedge Is $4,^,000. Awaiting price confirmalion CS (cS^aler) (auto) provides 102-14* (3.331) spot on UST 3.625 08/19 - CUR 10 Bid o f+^^ i2Jrom CS (cslbdealer) accepted by MA Inc. (ameattol 2). Cover UST *100.777. DONE - AwalUng
I Cancel Trade I lAmendTradel
Fully electronic audit trail from trade inquiry to settlement
IVlemberSIPC Confidential and proprietary information of iVlarl^etAxess Holdings Inc. (tlie "company"). None of tl ie information contained tierein may be excerpted, copied, disseminated or otiierwise disclosed to any other person without the company's express written consent. Page 15
BondTicker MarketAxess'
(^BondTicker Corporate Bond Detail - Windows Inlernel Explorer
(Q)'.^ ' LiJj *'M' /!=?^)::t<?'f'|Wbon^^ "
tt •si? jSBondTickurCorporatiiBondDelal
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hi HIda Navigation a • 0 i S • |£^ Page-CS Tools.
Corporate BoncfTicker IssutB US BONOS US AGENCIES EURO BONDS >< MUNIS CDS LOANS ETFS NEWS / RESEARCH MICTX ACTIVIIV COHPUANCE INFO SETTINOS
|,..W.?.'i,'.t''f!... I SUMkMRv I D6HIL^_.. / ! !«MI! :A_. ...?!'«_ntm=. SMncii Wntyi LIST ...../llffil.... ^...".Sy.!!". Inveuronv SOK
Back I Forward uj, | p,in| g j ^
LOGOUT
Corporate Trade Summaty (Sector - Financed Curfnml;.!. Vl.w
! 0 Investment Grade D FDIC-Guarantead CrJ
0 HiBhYi.ld D Convertibles I O Prtcertteld | L , ° ' " | > -S1MM Watch ust ! Sector- Finance
i\ lAeroO i tMo-/L ! 2Binb- i <BldaP I sConsun I H S i W i ^GamingJ j Gens/a J i \
Pag«s: 1
di«fflPJ>|i^H.m!iqiWlkllf.ffiii^^
MHE I Fm ?!• i 3Y •; 5Y ! lOY | 30Y
Trade Dates 09/30/2009 As of l l : l l : 0 0 a ! '|j
lUgh tow 1 . i ^w i I . Spread <;Nai*9«
' 4 i ^ " ' l l l O J a + 7 , +13 , -S UST 3.623 08/19
liOla -a; ""-7! -j UST 109/11 ~ j
^+718 -1033 UST 1 09/11 - llqT7.^7B n q / i j
Once the trade is executed and reported to TRACE, it appears on Marl<etAxess Corporate BondTicker™
BondTicker provides professional market participants witti the most robust corporate bond price information available today
i . J /3 US/14
($ Internet t^lOOV. •
IVlemberSIPC 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 16
Electronic Trading: Front to Back Solution MarketAxess^
A COMPLETE ELECTRONIC PROCESS
- Pre-Trade analysis and electronic request-for-quote auctions
- Electronically execute at the best level, complete with audit trail
- Trade details electronically flow into your blotter/trading system
- TRACE/TRACE-like reporting automatically occurs
- MarketAxess maintains an electronic audit trail for the trade from inquiry to settlement
- Post-trade connectivity available to a variety of OMS systems
- Instantaneous post trade message could link to CCPs
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 17
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