SIFMA Fact Book Fact Book Broadway, 35th Floor New York, NY TEL FAX

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1 SIFMA Fact Book 2010 Fact Book Broadway, 35th Floor New York, NY TEL FAX

2 2010 FACT BOOK Editor Charles M. Bartlett, Jr. Produced by SIFMA Research Department Copyright 2010 by the Securities Industry and Financial Markets Association 120 Broadway New York, NY (212) Price: $75 for SIFMA members; $125 for non-members CD-ROM version (PDF and Excel formats): $150 To order, please visit our website:

3 TABLE OF CONTENTS HIGHLIGHTS... 4 CAPITAL MARKETS... 7 Corporate Capital Raised in the U.S. and U.S. Initial Public Offerings... 9 Corporate Capital Raised in the U.S. - Value and Number of Issues U.S. Private Placements - Value and Number of Issues Medium Term Note Programs - Value and Number of Issues U.S. Municipal Bond Underwritings - Value and Number of Issues Net Issuance of Government and Corporate Securities in the U.S U.S. Equity and Debt Outstanding U.S. Mergers and Acquisitions - Announced and Completed Global Mergers and Acquisitions - Announced and Completed U.S. Corporate Underwritings - Value and Number of Issues SECURITIES INDUSTRY...25 Financial Data of NYSE Reporting Firms Securities Industry Employment FINRA-Reporting Firms and Registered Representatives NYSE-Reporting Firms Aggregate Profitability NYSE-Reporting Firms Aggregate Total and Equity Capital NYSE Aggregate Income Statement U.S. Investment Banking Fee Data Global Investment Banking Fee Data Definitions for Major Income Statement Reporting Lines MARKET ACTIVITY...37 Stock Market Capitalization (NYSE, AMEX, NASDAQ) Number of Exchange-Listed Companies (NYSE, AMEX, NASDAQ) Margin Credit at Broker-Dealers New York Stock Exchange Turnover Rate U.S. Equity Markets - Share and Dollar Volume (NYSE, NASDAQ, AMEX) Average Daily Trading Volume in the U.S. Bond Markets Daily Share and Dollar Volume in the U.S. Equity Markets Stock Market Indices - Year-End Levels Stock Market Indices Annual Percentage Change Dow Jones Industrial Average - High, Low, Close Compound Annual Rates of Return Mutual Fund Net New Cash Flow Mutual Fund Assets Futures Contracts Traded on U.S. Exchanges Options Contracts Traded on U.S. Exchanges Years of Long-Term Municipal Bond Defaults Long-Term Municipal Issuance Bank Qualified Bonds Municipal Market Trades by Trade Type

4 INVESTOR PARTICIPATION...59 U.S. Holdings of Equities - Households vs. Institutions Number of Public Customer Accounts at Broker-Dealers U.S. Family Holdings of Stock / Household Equity Ownership U.S. Household Liquid Financial Assets U.S. Holdings of Equities by Investor Type Net Acquisitions of Corporate Equities GLOBAL MARKETS...71 Global Capital Markets Global Equity Market Capitalization Global Bond Market Outstanding International Security Offerings - Value and Number of Issues International Security Offerings by U.S. Issuers - Value and Number of Issues Foreign Gross Activity in U.S. Securities Foreign Net Purchases of U.S. Securities U.S. Gross Activity in Foreign Securities U.S. Net Purchases of Foreign Securities Foreign Holdings of U.S. Securities U.S. Holdings of Foreign Securities Foreign Acquisitions of U.S. Securities U.S. Investors Acquisitions of Foreign Securities Major Global Stock Market Indices Foreign Exchange Rates American Depositary Receipts (ADRs) Global Equity Market Capitalization Global Bond Market Outstanding Global Bond Market Issuance Global Equity Markets Trading Volume Foreign Gross Transactions in U.S. Equities by Country and Region Foreign Net Purchases of U.S. Equities by Country and Region U.S. Gross Transactions in Foreign Stocks by Country and Region U.S. Net Purchases of Foreign Stocks by Country and Region Global Derivatives Market SAVINGS AND INVESTMENT...99 Federal Receipts, Outlays, Deficit and Debt Economic Indicators Interest Rates and Bond Yields Household Savings Rates of Major Nations Individual Retirement Accounts (k) Assets U.S. Retirement Assets Private Pension Fund Assets Income Sources for Those Aged 65 or Older IRA Assets by Type of Financial Institution

5 HIGHLIGHTS Chapter 1 - Capital Markets The securities industry raised nearly $1.6 trillion of capital for U.S. businesses in 2009 through corporate underwriting activity in the United States, an 8.0 percent increase from the previous year when $1.5 trillion was raised. To put this into perspective, over $24.3 trillion in new capital was raised during the first ten years of the twenty-first century, more than one and half times than what was raised in the prior ten years. Debt issuance (including straight and convertible debt), asset-backed, non-agency mortgagebacked securities, and private placements, totaled $1.1 trillion in 2009, a 19.2 percent increase from 2008 debt issuance levels. Corporate debt issuance, investment grade and high yield, increased nearly 25 percent from Non-agency residential MBS issuance continued to be nearly nonexistent, declining for the third consecutive year. ABS issuance volume was $146.2 billion in 2009, up 4.8 percent from 2008, with auto, equipment leases and other showing signs of life, while the credit card, home equity and student loan sectors continued to struggle. While an improvement, the 2009 ABS issuance total is still a far cry from the pre-credit crisis period; the ABS sector averaged over $500 billion in annual issuance during the first eight years of this decade. The primary equity markets raised a record $267.3 billion in 2009, more than 10.2 percent higher than $242.6 billion raised in 2008, eclipsing the previous 2007 record of $247.5 billion. IPO volume, excluding closed-end funds, was $24.4 billion, up 241 percent from 2008, while closed-end fund IPOs fell by 37 percent to $2.4 billion. Follow-on, or secondary issuance, reached a record high $230.8 billion in 2009, up more than 50 percent from the prior record high $153.7 billion reached in U.S. merger and acquisition (M&A) announced activity totaled $710.5 billion in 2009, 21.6 percent below the $906.1 billion in The number of announced deals totaled 7,448 in 2009, a decline of 17.3 percent from the previous year s 9,369 deals announced, while completed U.S. M&A deals fell 21.7 percent to 6,322 from 8,071 deals completed in Global M&A announcements totaled $1,957.3 billion, a decline of 27.9 percent in value on 39,002 deals, compared to $2,716.3 billion on 40,992 deals in Global completed deals totaled $1,735.9 billion, down 39.2 percent in value on 28,797 deals compared to $2,856.3 billion on 31,591 deals in Chapter 2 - Securities Industry National securities industry employment, as reported by the U.S. Department of Labor, reached a 2009 high point of 839,800 in January, well below the record monthly high of 869,600 jobs set in June Following four consecutive years of increasing employment, the securities industry experienced two consecutive annual declines; total securities industry employment in the U.S. declined by 7.0 percent in 2009, closing the year at 781,800 jobs, following a drop of 0.2 percent in Pre-tax net income (profits) for NYSE brokerdealers doing a public business in the U.S. reached an all-time high of $61.4 billion, following two years of losses. Total revenues were $188.1 billion in 2009, up 5.6 percent compared to the previous year, while total expenses fell 46.5 percent to $126.6 billion due mostly to the dramatic decline in interest expense. 4

6 Fee revenue from investment banking services Mergers & Acquisitions, Equity Capital Markets, Debt Capital Markets and Loans declined for the second straight year, both in the U.S. and globally. U.S. and Global investment banking fees fell 8.3 percent and 0.1 percent, respectively, in 2009 following declines of 35.1 percent and 35.3 percent decline in 2008, respectively. In the U.S., the most significant decline was that in M&A where fees fell nearly 40 percent for the second consecutive year. Globally, however, the strength of Equity Capital Market revenue, which rose by 81 percent, compensated for drops in M&A and Loan, keeping overall global fee levels flat. Chapter 3 - Market Activity The U.S. stock markets rose in 2009, the largest percentage increase since 2003 for all of the U.S. stock markets. For the year, the Dow Jones Industrial Average (DJIA) rose 1,651.7 points, or 18.8 percent, it s second best percentage gain of the decade, and ended 2009 at 10, The DJIA has posted an annual gain of 18 percent or more twenty-eight times since 1915, Following its third worst point drop in its 80 year history in 2008, the Standard & Poor s 500 Index (S&P 500) gained points or 23.5 percent to close 2009 at The NASDAQ Composite Index rose 43.9 percent to end the year at , the best percentage increase since 2003, and its seventh 30 percent or more annual gain since the NASDAQ s inception in Average daily share trading volume on the major U.S. stock markets declined in New York Stock Exchange (NYSE) daily share volume decreased by 16.7 percent compared to the previous year s average, ending five years of growth. The NYSE average daily share volume was billion shares in 2009, 16.4 percent below the record level reached in NASDAQ daily volume declined to billion shares in 2009, 1.9 percent below the 2008 level. Total trading volume on the NYSE was over billion shares in 2009; total share trading in the three years was greater than the total for all shares traded in the 1970s, 1980s and 1990s combined. Average daily dollar volume declined as well. NYSE average daily dollar volume fell for the second straight year in 2009, falling to $46.7 billion from $82.4 billion in 2008, which is 46.2 percent below the record high $86.8 billion set in NASDAQ average daily volume totaled $41.5 billion in 2009, 30.5 percent below the $59.7 billion daily average in 2008 and well off the record daily average volume of $80.9 billion set in Fixed-income average daily trading volume declined by 21.2 percent to $814.8 billion for 2009, well off the 2008 record of $1,033.8 billion shares and ending three consecutive years of growth. Average daily volume was led by the Treasury and agency MBS sectors, which accounted for nearly 87 percent of the overall volume for the second consecutive year. Chapter 4 - Investor Participation At year-end 2009, Federal Reserve Board data showed that nearly seventy percent of U.S. households liquid financial assets were invested in securities-related products such as stocks, bonds and mutual funds, with the balance in bank deposits and certificates of deposits. U.S households total liquid assets reached $23.9 trillion in 2009, of which 26.7 percent were in bank products, 32.2 percent in equities, 18.5 percent in stock and bond mutual funds, 7.7 percent in government and municipal bonds, 9.4 percent in corporate bonds and 5.5 percent in money market funds. 5

7 Chapter 5 - Global Markets Americans ownership of securities increased significantly since 1980, and so too has US investment activity in foreign securities. U.S. gross activity (purchases and sales) in foreign securities grew to $10.5 trillion in 2009 from $53.1 billion in 1980, although it was 33.4 percent below 2008 activity and well off the 2007 record level of $16.6 trillion. Foreign gross activity in all U.S. securities also fell in 2009, by 33.6 percent compared to 2008 but at $40.4 trillion level is still many multiples of its $197.8 billion level in After setting an all-time record of $64.6 trillion at year-end 2007; the global stock market selloff caused global market capitalization to decline a significant 46 percent 2008, but it recovered strongly in 2009, increasing 39.6 percent to end the year at $48.7 trillion. Global trading volume suffered its second back-to-back annual decline in ten years in The size of global bond markets outstanding1 increased for the twelfth consecutive year to $91.2 trillion at the end of Since 1990, the size of the global fixed-income markets has grown fivefold. Chapter 6 - Savings & Investment On the economic front, U.S. real Gross Domestic Product (GDP) declined 2.4 percent in 2009, compared to 0.4 percent growth in Inflation, as measured by the Consumer Price Index (CPI), decreased by 0.4 percent in 2009, compared with a rise of 3.8 percent in the prior year. The Federal Reserve continued to hold rates throughout 2009 down to the range of percent, established on December 16, This holding pattern kept Federal Funds target rate at a 50-year record low. The household savings rate of Americans continued to lag behind most of other major industrialized countries; for the first time in 50 years, however, the U.S. household savings rate has exceeded that of Japan. The Organization for Economic Cooperation and Development (OECD) estimated that the U.S. household savings rate rose to 3.9 percent in 2009 from 2.7 percent in By comparison, Japan household savings rate was 2.8 percent, which ranked as the lowest among the seven major OECD member countries. The United Kingdom and Canada exceeded 4.3 percent; while France, Germany and Italy had double-digit household savings rates greater than 10 percent. Total U.S. retirement assets grew to $16.04 trillion in 2009 according to Federal Reserve Flow of Funds Accounts, 14.5 percent more than the $14.01 trillion in 2008, but still below the record level of $18.1 trillion set in Total pension assets rose 16.6 percent to $11.8 trillion and assets held in IRAs rose by percent to the $4.2 trillion. 6

8 CAPITAL MARKETS

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10 Corporate Capital Raised in the U.S.* $ Billions $ Billions U.S. Initial Public Offerings** '70 '75 '80 '85 '90 '95 '00 '05 '09 * Consisting of common stock, preferred stock, straight corporate debt, convertible debt, asset backed debt, non-agency mortgage-backed securities and private placements. ** Excludes closed-end funds Source: Thomson Reuters ( Capital Markets 9

11 Corporate Capital Raised in the U.S. ($ Billions) Total Underwritten % Private Placement % Medium Term Notes % , , , , , , , , , , , , , , , , , , , , , , , , Source: Thomson Reuters ( investment_banking/league_tables) 10

12 Corporate Capital Raised in the U.S. (Number of Issues) Total Underwritten % Private Placement % Medium Term Notes % ,169 1, , ,647 3, , ,135 2, , ,405 1, , ,603 1, , ,965 1, , ,127 2, , ,276 3, , ,125 5, , ,329 4, , ,839 4, , ,727 5, , ,600 6, , ,780 6, , ,562 5, , ,163 4, , ,840 4, , ,524 5, , ,843 5, , ,367 6, , ,738 6, , ,063 6, , ,361 5, , ,072 1, , ,456 2, , Source: Thomson Reuters ( Capital Markets 11

13 U.S. Private Placements ($ Billions) Total Debt % Equity % Source: Thomson Reuters ( banking/league_tables) 12

14 U.S. Private Placements (Number of Issues) Total Debt % Equity % ,185 1, ,505 2, ,593 2, ,355 3, ,927 2, ,470 2, ,920 2, ,225 2, ,257 3, ,139 2, ,324 2, ,732 2, ,595 2, ,081 3, ,747 3, ,540 2, ,872 2, ,347 1, ,169 2, ,289 2, ,403 2, ,437 2, ,979 2, , , Source: Thomson Reuters ( banking/league_tables) Capital Markets 13

15 Medium-Term Note Programs ($ Billions) MTNs Worldwide US Issuers Worldwide MTNs Domestic US Issuers Domestic , , , , , , Source: Thomson Reuters ( deal_making/investment_banking/league_tables) 14

16 Medium-Term Note Programs (Number of Issues) MTNs Worldwide US Issuers Worldwide MTNs Domestic US Issuers Domestic Source: Thomson Reuters ( deal_making/investment_banking/league_tables) Capital Markets 15

17 U.S. Long-Term Municipal Bond Underwritings* ($ Billions) Compet. Nego. Total Private Total Rev. Rev. Rev. Compet. Nego. Total Placement Muni. Bonds Bonds Bonds G.O.s G.O.s G.O.s Bonds Bonds * Excludes taxable bonds and maturities under 13 months Note: Includes Competitive Revenue Bonds, Negotiated Revenue Bonds, Total Revenue Bonds, Competitive General Obligation Bonds, Negotiated General Obligation Bonds, Total Municipal Bonds Source: Thomson Reuters ( 16

18 U.S. Long-Term Municipal Bond Underwritings* (Number of Issues) Compet. Nego. Total Private Total Rev. Rev. Rev. Compet. Nego. Total Placement Muni. Bonds Bonds Bonds G.O.s G.O.s G.O.s Bonds Bonds ,877 4, , , ,767 3,529 2,831 1,047 3, , ,592 3,283 2,403 1,131 3, , ,201 3,944 2,705 1,245 3, , ,761 4,540 2,734 1,492 4, , ,411 4,140 2,753 1,532 4, , ,106 4,930 3,195 2,367 5, , ,017 5,265 6,282 3,226 3,082 6, , ,044 5,776 6,820 3,515 3,684 7, , ,589 5,424 3,168 2,202 5, , ,276 5,039 2,828 2,245 5, , ,742 5,615 3,270 2,554 5, , ,044 5,883 3,308 2,576 5, , ,116 6,092 7,208 3,859 3,503 7, , ,528 6,401 3,397 2,542 5, , ,556 5,325 3,262 2,005 5, , ,557 6,457 3,805 3,069 6, , ,621 6,505 3,860 3,692 7, , ,735 6,688 4,096 3,969 8, , ,232 6,022 3,401 3,894 7, , ,371 6,108 3,385 4,279 7, , ,255 5,921 3,182 3,355 6, , ,372 5,994 3,028 3,235 6, , ,235 4,713 2,882 2,776 5, , ,762 4,274 3,158 4,005 7, ,737 * Excludes taxable bonds and maturities under 13 months Source: Thomson Reuters ( Capital Markets 17

19 Net Issuance of Government and Corporate Securities in the U.S. (New Issues Less Retirements in $ Billions) U.S. Corporate Corporate Government Municipal Equities Bonds Securities* Bonds , , , , , * Includes U.S. Treasury securities, agency- and GSE-backed securities Source: Federal Reserve Flow of Funds Accounts ( Table F.4 Credit Market Borrowing by Instrument) 18

20 U.S. Equity and Debt Outstanding ($ Billions) Corporate Asset-Backed Treasury Agency Mortgage- Money Municipal Equities Securities Secutrities 1 Securities 2 Securities Related 3 Markets 4 Bonds 1985* 2, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , The Securities Industry and Financial Markets Association estimates. 2 Interest bearing marketable public debt. 3 Includes GNMA, FNMA, and FHLMC mortgage-backed securities and CMOs and private-label MBS/CMOs. 4 Includes commercial paper, bankers acceptances, and large time deposits. Beginning in 2006, large time deposits are excluded. Sources: U.S. Department of Treasury, Federal Reserve System, Federal Agencies, Thomson Financial, Bloomberg, SIFMA Capital Markets 19

21 U.S. Mergers and Acquisitions Announced Completed Value # of Value # of ($ Bils.) Deals ($ Bils.) Deals , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,992 1, , , ,045 1, , , ,080 1, , ,676 1, , , , , , , , , , , , ,684 1, , , ,287 1, , , , , ,322 Source: Thomson Reuters ( 20

22 Global Mergers and Acquisitions Announced Completed Value # of Value # of ($ Bils.) Deals ($ Bils.) Deals , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,886 1, , , ,875 1, , , ,392 2, , , ,219 2, , , ,769 3, , , ,211 2, , , ,544 1, , , ,917 1, , , ,222 1, , , ,947 2, , , ,792 3, , , ,864 4, , , ,997 2, , , ,002 1, ,797 Source: Thomson Reuters ( Capital Markets 21

23 Straight Corporate Debt Convertible Debt Asset- Backed Securities Non- Agency Mortgage- Backed Securities U.S. Corporate Underwritings ($ Billions) Total Debt High Yield Debt Preferred Stock Common Stock Total Equity All IPOs True IPOs Closed-End Fund IPOs Total Underwriting , , , , , , , , , , , , , , , , , , , , , , , , ,377.4 Note: High-yield debt is a subset of straight corporate debt; initial public offerings (IPOs) is a subset of common stock Source: Thomson Reuters ( (excludes best-efforts deals) 22

24 Straight Corporate Debt Convertible Debt Asset- Backed Securities U.S. Corporate Underwritings (Number of Issues) Non Agency Mortgage- Backed Securities Total Debt Pref. Stock High Yield Debt Common Stock Total Equity All IPOs True IPOs Closed End Fund IPOs Total Underwriting , , , ,228 1, , , , , , , , , , , , , , , , , ,087 1, , , ,039 4, ,489 1, , , , ,053 1, , , , ,175 1, , , , ,617 1, , , , ,365 1, , , , , , , , ,028 1, , , , , , , , , , , , , , , , , , , , , , , , , ,282 1,042 5, , , , , , , , , , ,447 Note: High-yield debt is a subset of straight corporate debt; initial public offerings (IPOs) is a subset of common stock Source: Thomson Reuters ( Capital Markets 23

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26 SECURITIES INDUSTRY

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28 Financial Data of NYSE-Reporting Firms ($ Millions) REVENUE: Commissions 26,665 28,846 30,166 25,575 Trading Gain (Loss) 34,523-10,334-71,796 29,539 Investment Account Gain (Loss) 3,307 3, Underwriting 20,884 23,182 16,463 20,062 Margin Interest 20,777 29,179 16,748 3,574 Mutual Fund Sales 7,844 8,050 6,676 4,998 Asset Management Fees 18,195 21,588 20,899 16,532 Research Commodities ,713 2,348 Other - Securities Related 175, , ,185 53,156 Other - Securities Unrelated 23,526 35,174 29,968 31,618 TOTAL REVENUE 331, , , ,072 EXPENSES: Total Compensation 71,104 69,610 59,794 68,079 - Registered Rep. Compensation 26,874 27,394 24,390 24,017 - Clerical Employee Compensation 41,664 40,435 33,569 35,728 Total Floor Costs 6,444 7,439 7,594 7,549 Communications Expense 4,919 5,328 5,333 4,866 Occupancy & Equipment Costs 5,211 5,423 5,552 5,332 Promotional Costs 1,541 1,532 1, Interest Expense 198, , ,533 19,518 Error Account & Bad Debt Lossses , Data Processing (EDP) Costs 2,926 2,953 2,649 2,269 Regulatory Fees & Expenses 1,266 1,406 1,459 1,406 Non-Recurring Charges Other Expenses 17,831 19,632 20,681 23,105 TOTAL EXPENSES 310, , , ,638 PRE-TAX NET INCOME 20,894-11,302-42,587 61,434 TOTAL ASSETS 5,019,451 5,459,435 3,795,781 3,690,355 TOTAL LIABILITIES 4,909,210 5,350,717 3,683,310 3,550,788 TOTAL OWNERSHIP EQUITY 110, , , ,567 NUMBER OF FIRMS Sources: NYSE Euronext At the time of publication, total U.S. Broker Dealer data was not available as in previous Fact Book editions. We have provided 2009 data from the NYSE, where available, and will provide updated total U.S. data as soon as it is available in the research section of Securities Industry 27

29 Securities Industry Employment* (In Thousands) Year End U.S. Annual % Chg. (U.S.) New York State Annual % Chg. (NYS) NYS % of U.S. New York City Annual % Chg. (NYC) NYC % of NYS * Data prior to 1992 based on Standard Industrial Classification (SIC) Code 62; beginning 1992, data based on North American Industry Classification System (NAICS) code 523 (not strictly comparable to earlier years). Sources: U.S. Department of Labor, Bureau of Labor Statistics; New York State Department of Labor (U.S. data - (N.Y. data

30 FINRA-Reporting Firms (Number of Firms) ,827 5,386 5,260 5,292 5,426 5,553 5,451 5,597 5,592 5,482 5,579 5,499 5,392 5,272 5,191 5, ,029 5,005 4, , '08 '09 FINRA Registered Representatives (Number of Individuals) Thousands Source: Finra.org/newsroom.statistics/index.htm Securities Industry 29

31 Securities Industry Profitability (NYSE-Reporting Firms Doing a Public Business in the U.S.) Total Pre-Tax Pre-Tax Pre-Tax Return Revenue Profits Profit Margin on Equity ($Mils.) ($Mils.) (%) (%) , , , , ,233 1, ,030 2, ,796 2, ,210 3, ,566 3, ,216 1, ,621 4, ,082 5, ,837 1, ,829 2, ,537 1, , ,718 5, ,840 6, ,182 8, ,355 1, ,303 7, ,249 11, ,004 12, ,805 9, ,367 16, ,201 20, ,766 10, ,674 6, ,516 16, ,197 13, ,819 9, ,336 20, ,048-11, ,068-42, ,072 61, Sources: NYSE Euronext 30

32 NYSE-Reporting Firms Total Capital $ Billions '08 ' NYSE-Reporting Firms Equity Capital $ Billions '08 '09 Sources: NYSE Euronext Securities Industry 31

33 Trading Gain Investment Gain NYSE-Reporting Firms Income Statement ($ Millions,: Revenues and Profits) Margin Interest Mutual Funds Asset Mgmt. Fees Research Commissions Underwriting Commodities Other Securities Related Other Unrelated Total Revs. Pre-Tax Profits ,238 9,943 1,089 4,250 2,578 1, ,176 1,755 38,621 4, ,473 12,561 1,143 5,939 2,920 2,801 1, ,065 9,552 2,118 50,082 5, ,674 9, ,161 3,352 2,194 1, ,094 11,634 2,796 50,837 1, ,790 11,299 1,394 5,158 3,028 1,413 1, ,382 14,693 2,762 51,829 2, ,151 12, ,120 3,723 1,580 2, ,408 20,338 3,134 59,537 1, ,878 13, ,243 3,075 1,669 2, ,686 17,389 2,942 54, ,589 16, ,073 2,632 2,124 2, ,875 2,884 60,718 5, ,584 16, ,478 2,624 2,787 3, ,537 14,554 2,409 62,840 6, ,707 17, ,061 3,130 3,541 3, ,868 2,995 73,182 8, ,504 13, ,856 4,525 3,192 3, ,954 20,322 4,757 71,355 1, ,998 17,547 1,355 7,799 6,239 3,406 4, ,594 3,371 96,303 7, , ,137 11,165 7,120 4,472 5, ,140 47,076 5, ,249 11, ,331 21,236 1,793 12,496 10,078 5,412 7, ,468 7, ,004 12, ,188 19,703 1,548 14,651 12,119 6,213 8, ,958 76,222 9, ,805 9, ,311 36,423 2,379 16,026 13,416 6,663 11, ,723 66,719 9, ,367 16, ,685 44,715 1,847 17,013 22,335 7,745 15, ,662 99,618 11, ,201 20, ,825 24, ,631 12,844 6,329 13, ,908 79,715 9, ,766 10, ,569 13, ,179 5,992 5,883 12, ,957 55,338 9, ,674 6, ,661 23,137 2,116 15,090 4,777 6,065 11, ,902 47,898 9, ,516 16, ,340 17,364 1,656 16,659 6,146 6,839 13, ,260 10, ,197 13, ,612 17,007 1,559 17,261 11,272 7,163 15, , ,762 21, ,819 9, ,665 34,523 3,307 20,884 20,777 7,844 18, ,354 23, ,336 20, ,846-10,334 3,184 23,182 29,179 8,050 21, ,554 35, ,048-11, ,166-71, ,463 16,748 6,676 20, , ,185 29, ,068-42, ,575 29, ,062 3,574 4,998 16, ,348 53,156 31, ,072 61,434 Sources: NYSE Euronext 32

34 NYSE-Reporting Firms Income Statement ($ Millions: Expenses) Total Comp. RR Comp.* Clerical Comp.* Floor Costs Communications EDP Occup & Equip. Promo. Interest Error- Bad Debt Reg. Fees- Non- Recur. Charges Other ,573 6,904 6,218 1,310 1, , , ,788 34, ,405 9,184 8,423 1,698 2, ,178 1,036 12, ,095 44, ,558 9,333 9,061 2,206 2, ,725 1,204 14,290 1, ,839 49, ,739 7,581 9,280 1,756 2, ,052 1,004 16, ,326 49, ,826 7,539 9,103 1,855 2, , , ,642 57,695 Total Exps ,715 6,868 8,789 1,731 2, , , ,042 54, ,824 8,362 10,179 1,760 2, , , ,881 54, ,162 9,888 11,861 1,867 2, ,009 1,094 15, ,435 56, ,968 11,884 14,212 2,306 2,481 1,071 3,136 1,279 16, ,523 64, ,340 10,900 13,568 2,620 2,713 1,206 3,170 1,296 23, ,314 70, ,309 12,538 14,563 2,728 2,822 1,270 3,401 1,245 38, ,073 88, ,768 14,783 18,279 3,103 3,089 1,368 3,632 1,553 49, , , ,666 17,283 20,286 3,673 3,450 1,590 3,934 1,842 63, , , ,344 20,204 22,660 4,345 4,177 1,895 4,736 2,117 83, , , ,098 23,477 32,841 4,896 4,592 2,295 5,323 2,408 70, , , ,958 26,783 37,514 5,199 5,397 2,699 6,626 3, , , , ,606 23,732 32,492 4,361 5,330 2,817 7,562 2,382 81, , , ,095 21,211 28,484 4,505 4,499 2,459 6,445 1,849 48, , , ,125 21,589 29,107 4,963 3,953 2,313 6,029 1,499 38, , , ,851 22,302 32,874 4,839 4,171 2,423 5,577 1,653 51, , , , ,953 23,156 34,308 5,234 4,344 2,725 5,087 1, , , , , ,104 26,874 41,664 6,444 4,919 2,926 5,211 1, , , , , ,610 27,394 40,435 7,439 5,328 2,953 5,423 1, , , , , ,794 24,390 33,569 7,594 5,333 2,649 5,552 1, ,533 1,100 1, , , ,079 24,017 35,728 7,549 4,866 2,269 5, , , , ,638 * Subset of total compensation Sources: NYSE Euronext Securities Industry 33

35 U.S. Investment Banking Fee Data In $ Billions M&A ECM DCM LOAN Source: ThomsonRueters / Freeman & Co. In Percent % 10.0% 10.9% 12.7% 14.6% 10.9% 12.0% 9.8% 11.2% % 30.4% 37.3% 30.7% 15.9% 26.8% 24.0% 23.1% 29.5% % 15.5% 20.1% 21.7% 20.6% 16.4% 16.0% 21.8% 31.1% % 44.1% 31.8% 34.9% 48.9% 45.9% 48.0% 45.2% 28.2% Source: Thomson Reuters / Freeman & Co. Thomson Reuters ( 34

36 Global Investment Banking Fee Data In $ Billions M&A ECM DCM LOAN Source: ThomsonRueters / Freeman & Co. In Percent % 8.7% 10.8% 12.7% 15.3% 11.0% 11.8% 10.6% 9.5% % 22.6% 31.0% 25.8% 13.2% 24.5% 19.6% 16.4% 24.4% % 19.4% 20.1% 22.7% 21.6% 18.9% 19.6% 19.3% 34.9% % 49.3% 38.0% 38.8% 49.9% 45.6% 49.0% 53.6% 31.2% Source: Thomson Reuters / Freeman & Co. Thomson Reuters ( Securities Industry 35

37 Income Statement Definitions for Major NYSE Reporting Lines Revenues Commissions Commissions from all agency equity (including closed-end but excluding open-end mutual funds) and debt transactions including non-inventory principal (simultaneous riskless) transactions. Commissions earned on introduced and omnibus accounts carried for other brokers are reported net. Trading Gain (Loss) Realized and unrealized gains and losses on securities held for sale in the ordinary course of business (net of dividends and interest earned on such securities but not reduced by floor costs or taxes). Investment Account Gain (Loss) Realized and unrealized gains and losses on securities identified as held for investment (no adjustment for dividends and interest earned, which are reported in other related revenues, nor for interest paid, taxes or floor costs). Underwriting Revenue Gross profits and losses from management of and participation in underwriting syndicates and selling groups (sales price less purchase price adjusted for discounts, commissions and allowances paid or received). Direct expenses for specific underwritings are deducted but employee compensation and other expenses of the underwriting department are not deducted. Margin Interest Interest earned on customers securities and commodities accounts. Mutual Fund Sale Revenue Income from sale of open-end investment company (mutual fund) securities as a retailer or underwriter. Includes net amount of sales load and commissions from installment sales (but excludes commissions from closed-end funds which are reported in all other commissions). Asset Management Fees Total fees for account supervision, investment advisory and administrative services. Research Revenue Revenues from the sale of research services including income from the sale of research advice, research reports, market letters, stock guides, portfolio analyses, and publications and consultations concerning investment advice. Commodities Revenue Income from commissions, fees, and principal trading in commodities (including futures and spot commodities contracts). 36 Other Revenue Related to the Securities Business Includes, among other things, private placement fees, proxy solicitation fees, service charges (such as for mergers and acquisitions), fees for options done away from an exchange, dividends and interest from investment accounts (including repos and reverse repos), subscription fees for periodic publications (exclusive of research). Other Revenue All other revenue not related to brokers securities business. Expenses Registered Representative Compensation Total compensation to registered representatives (RRs defined here as individuals that spend 50% of their time effecting transactions with public customers) including: salary, commission or other basis. Clerical Employee Compensation All salaries, commissions, bonuses, profit sharing, payroll taxes and benefits paid to or incurred for all employees other than RRs, voting stockholder officers and general partners. Total Floor Costs Includes all commissions (including commodity transaction payouts), floor brokerage and clearance paid to other brokers, and clearance fees paid to clearing corporations, associations and depositories (FOCUS II-A brokers report all these fees on the Commissions Paid to Broker-Dealers line). Communications Expense Expenditures for telephone, telegraph, leased wires, tickers and projectors, quotation machines, NASDAQ, postage, stationary and office supplies. Data Processing (EDP) Costs Rental and depreciation of data processing equipment (other than service bureau). Occupancy & Equipment Costs Expenditures for rent, heat, light, maintenance, depreciation and amortization, equipment (other than EDP) rentals, repair to premises, janitorial services, cleaning expenses and general insurance. Promotional Costs General advertising and promotional expenses. Interest Expense All interest payments other than those credited to subordinated borrowings or general and limited partners capital. Losses from Error Accounts & Bad Debts Includes all losses in error accounts and bad debts.

38 MARKET ACTIVITY

39

40 Stock Market Capitalization ($ Billions) NYSE AMEX NASDAQ Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,177.8 n/a 2, , ,885.5 n/a 4, ,903.5 Sources: New York Stock Exchange, Inc.; The Nasdaq Stock Market, Inc.; American Stock Exchange LLC Market Activity 39

41 Exchange Listed Companies (Number) NYSE AMEX NASDAQ Total , ,894 5, , ,353 5, , ,264 5, , ,901 6, , ,097 6, , ,136 6, , ,417 6, , ,706 7, , ,451 7, , ,293 6, , ,132 6, , ,094 6, , ,113 7, , ,611 7, , ,902 8, , ,122 8, , ,556 9, , ,487 9, , ,068 8, , ,829 8, , ,734 8, , ,109 7, , ,663 6, , ,333 6, , ,271 6, , ,208 6, , ,247 6, , ,158 6, , ,954 7, ,517 n/a 2,852 6,369 Sources: New York Stock Exchange, Inc.; The Nasdaq Stock Market, Inc.; American Stock Exchange LLC 40

42 Margin Credit at Broker-Dealers* $ Billions '08 '09 *NYSE-reporting firms Annual Turnover Rate on New York Stock Exchange Percent '08 '09 Market Activity 41

43 New York Stock Exchange Activity Reported Value of Average Share Shares Daily Volume Traded Volume (Mils.) ($ Mils.) (Mils.) ,937 95, , , , , , , ,518 92, , , , , , , , , , , , , , , , , , , , , , , ,680 1,374, ,801 1,873, ,850 1,356, ,699 1,542, ,665 1,325, ,266 1,520, ,376 1,745, ,923 2,283, ,420 2,454, ,217 3,082, ,636 4,063, ,312 5,777, ,745 7,317, ,851 8,945, ,478 11,060,046 1, ,509 10,489,323 1, ,136 10,311,156 1, ,398 9,692,316 1, ,098 11,618,151 1, ,764 14,125,304 1, ,291 17,140,500 1, ,947 21,866,800 2, ,168 20,855,441 2, ,644 11,767,400 2,181.1 Source: New York Stock Exchange, Inc. ( 42

44 NASDAQ Activity Value of Average Share Shares Daily Volume Traded Volume (Mils.) ($ Mils.) (Mils.) n.a. n.a. n.a ,220 n.a ,682 30, ,180 18, ,390 21, ,684 24, ,932 24, ,762 36, ,651 44, ,692 68, ,823 71, ,432 84, , , , , , , , , , , , , , , , , , , , , ,540 1,350, ,353 1,449, ,158 2,398, ,112 3,301, ,882 4,481, ,040 5,758, ,605 11,013,192 1, ,753 20,395,335 1, ,217 10,934,572 1, ,706 7,254,595 1, ,745 7,057,440 1, ,930 8,727,498 1, ,175 9,965,442 1, ,264 11,675,879 2, ,263 15,115,541 2, ,613 15,104,864 2, ,637 10,458, Source: The Nasdaq Stock Market, Inc. ( Market Activity 43

45 American Stock Exchange Activity Value of Average Share Shares Daily Volume Traded Volume (Mils.) ($ Mils.) (Mils.) , ,071 18, ,118 21, , , , , , , ,100 22, ,626 35, ,343 24, ,338 21, ,081 31, ,545 21, ,101 27, ,979 45, ,506 50, ,515 30, ,125 44, ,329 37, ,367 40, ,596 42, ,582 56, ,523 58, ,072 72, ,628 91, , , , , , , , , , , , , , , , , ,500 1,267, ,515 2,364, ,027 4,394, ,202 6,817, ,276 4,208, Source: American Stock Exchange LLC merged with ARCA on 10/1/08 ( 44

46 Average Daily Trading Volume in the U.S. Bond Markets ($ Billions) Municipal Treasury 1 Agency MBS 1 Debt 2 Corporate Federal Agency Securities 1 Total , , Primary dealer activity 2 Excludes all issues with maturities of one year or less and convertible securities 3 Totals may not add due to independent rounding Sources: Federal Reserve Bank of New York, Municipal Securities Rulemaking Board, NASD TRACE Market Activity 45

47 Average Daily Trading Volume in the U.S. Equirt Markets (On NYSE, NASDAQ, AMEX) Millions of Shares 5,328 4, ,851 3,206 3,258 3,151 3,324 3,458 4,006 4, '08 '09 Daily Dollar Volume (On NYSE, NASDAQ, AMEX) $ Billions '08 '09 * Restated volume for AMEX/ARCA as a result of the acquisition of American Stock Exchange by NYSE Euronext on October 1,

48 Stock Market Indices (At Year-End) Dow Jones Industrial S&P NYSE AMEX NASDAQ Average 500 Composite Composite* Composite *Amex Market Value Index through 1994; Amex Composite Index thereafter. Market Activity 47

49 Stock Market Indices Annual Percentage Change (In Percent) Dow Jones Industrial S&P NYSE AMEX NASDAQ Average 500 Composite Composite* Composite * Amex Market Value Index through 1994; Amex Composite Index thereafter. 48

50 Dow Jones Industrial Average High Low Close Market Activity 49

51 Compound Annual Rates of Return by Decade* (In Percent) Large Small Long-Term Company Company Corporate Long-Term Intermediate Treasury Stocks Stocks Bonds Treasuries Treasuries Bills Inflation 1920s** s s s s s s s s*** * Nominal. ** Based on the period *** Based on the period Source: Computed using data from Stocks, Bonds, Bills, and Inflation 2008 Yearbook, Ibbotson Associates, Chicago, a Morningstar subsidiary. Compound Annual Rates of Return* Treasury Bills 3.7% Intermed. Treasuries Long-Term Treasuries Long-Term Corp. Bonds 5.3% 5.4% 5.9% Large Co. Stocks 9.8% Small Co. Stocks 11.9% * Nominal. Source: Computed using data from Stocks, Bonds, Bills, and Inflation 2007 Yearbook, Ibbotson Associates, Chicago, a Morningstar subsidiary. 50

52 Mutual Funds Net New Cash Flow* ($ Billions) Money Equity Hybrid Bond Market Total * New sales (excluding reinvested dividends) minus redemptions, combined with net exchanges. Source: Investment Company Institute ( Market Activity 51

53 Mutual Fund Assets (Year -End, $ Billions) Money Equity Hybrid Bond Market Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,120.7 Source: Investment Company Institute (http// 52

54 Futures Contracts Traded on U.S. Exchanges (Number, in Millions) Aggric. Non- Interest Com- Energy Foreign Equity Precious Precious Rate modities Products Currency Indexes Metals Metals Other Total * * , , , , , , , , , ,328.1 * Not yet traded. Note: Single stock futures began trading on November 8, 2002 Source: Futures Industry Association ( Market Activity 53

55 Number of Options Contracts Traded on U.S. Exchanges (Number, In Millions) Individual Equity Foreign Interest Equities Indexes Currency Rate Futures Total * * * * * * * * * , , , , , , , , , , , , ,987.1 * Not yet traded; 0.0 = Less than 50,000 Sources: Options Clearing Corporation; Futures Industry Association ( 54

56 80 Years of Long-Term Municipal Bond Defaults Decade Defaults(1) Total Issues Default Rate 1930 to 1939* 2,748 47, % 1940 to 1949* , % 1950 to , % 1960 to , % 1970 to , % 1980 to , % 1990 to , , % 2000 to , , % % s 2.08% s 0.18% 1950s 0.49% 1960s 0.46% 1970s 1.11% 1980s 0.96% 1990s 0.88% 2000s (1) Defaults are when the bonds are not paid as described in the bond indenture. * = a five year average of Defaults according to Bond Buyer & Sources: 1930 to 1939 The Bond Buyer Distressed Debt Securities Newsletter published by Income Securities Advisors Inc to 1979 Advisory Commission on Intergovernmental Relations, Securities Data Company; The Bond Buyer; Bond Investoirs Association, James E. Spiotto, Chapman & Cutler, J.J. Kenny Co., Inc to 2009, Thomson Reuters, Distressed Debt Securities Newsletter published by Income Securities Advisors Inc. Advisory Commission on Intergovernmental Relations; Bond Investors Association; Distressed Debt Securities Newsletter published by Income Securities Advisors Inc.; J.J. Kenny Co., Inc.; James E. Spiotto, Chapman & Cutler; The Bond Buyer; Thomson Reuters. Market Activity 55

57 Long-Term Municipal Issuance Year Total LT Muni Unique* Issuer ,963 3, ,255 3, ,011 4, ,289 4, ,576 4, ,928 3, ,699 5, ,055 5, ,162 5, ,163 6, ,762 6, ,952 7, ,006 8, ,508 9, ,280 7, ,373 6, ,162 7, ,653 7, ,408 9, ,215 8, ,260 6, ,786 8, ,398 8, ,030 9, ,603 8, ,948 8, ,742 8, ,656 7, ,686 6, ,734 7,371 Source: Thomson Reuters Thomson Reuters ( deal_making/investment_banking/league_tables) * Unique Issuer is the number of municipalities that come to market. 56

58 Bank Qualified Bonds Year Number of Deals Dollar Amount $ Millions Average Deal Size $ Millions , , ,543 9, ,545 12, ,107 14, ,981 18, ,902 13, ,448 12, ,221 14, ,552 16, ,762 23, ,406 17, ,385 13, ,185 16, ,969 15, ,800 15, ,963 16, ,037 18, ,692 17, ,425 16, ,143 15, ,969 32, Source: Thomson Reuters Thomson Reuters ( products/deal_making/investment_banking/league_tables) Tax Exempt Short Term & Long Term Municipale Bonds, under the Tax Reform Act of 1986 (265b). Market Activity 57

59 Municipal Market Trades by Trade Type Retail vs. Institutional Average daily par amount in $ millions Year Retail Percent Institutional Percent TOTAL % % 16, % 19, % 20, % 23, % 24, % 25, % 26, , % 20, % 21, , % 13, % 15,047.1 Average daily number of trades Year Retail Percent Institutional Percent TOTAL , % 7, % 29, , % 8, % 29, , % 10, % 33, , % 11, % 36, , % 10, % 43, , % 7, % 41,115 Source: Municipal Securties Rulemaking Board (MSRB) 58

60 Investor Participation

61

62 U.S. Holdings of Equities (Market Value in $ Billions) Households Institutions % of % of Total Value Total Value Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Note: Household sector includes nonprofit organizations. Source: Federal Reserve Flow of Funds Accounts ( Table L.213 Corporate Equities) Investor Participation 61

63 Number of Public Customer Accounts at Broker-Dealers Year Accounts ,739, ,253, ,137, ,305, ,516, ,518, ,621, ,285, ,342, ,361, ,288, ,700, ,064, ,325, ,007, ,399, ,258, ,431, ,743, ,671, ,562, ,754, ,733, ,379, ,347, ,246, ,564, ,308, ,133, ,509, Source: Office of Economic Analysis, U.S. Securities and Exchange Commission 62

64 U.S. Family Holdings of Stock Percentage of Families having stock holdings, direct or indirect (%) Median value of stock holdings among families with with holdings ($000*) Stock holdings as a percentage of total financial assets (%) Note: Indirect holdings are those in pooled investment trusts, retirement accounts, and other managed assets. * 2007 dollars Source: Survey of Consumer Finances ,000 Household Equity Ownership (Market Value in $ Billions) '65 '70 '75 '80 '85 '90 '95 '00 '05 '09 Note: Household sector includes nonprofit organizations. Source: Federal Reserve Flow of Funds Accounts Investor Participation 63

65 U.S. Household Liquid Financial Assets* 1975 $1.8 Trillion Bank Deposits 51% Securities Products 49% $23.9 Trillion Bank Deposits 26.7% Securities Products 73.3% 41.3 Note: Households include nonprofit organizations. Liquid financial assets exclude such illiquid assets as pension fund reserves, equity in non-corporate business, etc. Source: Federal Reserve Flow of Funds Accounts ( Table L.100 Households & Nonprofit Organizations) 64

66 U.S. Household Liquid Financial Assets (Market Value in $ Billions) Total Bank Mutual U.S. Money Liquid Deposits Fund Gov t Muni. Market Corp. Financial Equities & CDs Shares Secs. Bonds Funds Bonds Assets ,010 1, , , , , , ,089 1, , ,009 2, , ,229 2, , ,494 2, , ,463 2, , ,757 2, , ,147 2, , ,960 2, , ,751 2, , ,074 2, , ,404 2,808 1, , ,249 2,749 1,138 1, , ,347 2,835 1,344 1, , ,112 2,914 1,705 1, , ,635 3,007 2,150 1, , ,481 3,113 2,611 1, , ,596 3,174 3,226 1, , ,091 3,304 3,041 1, , ,721 3,598 2, , , ,536 4,002 2, , , ,768 4,316 2, ,108 16, ,496 4,781 3, ,145 19, ,993 5,146 3, ,300 21, ,494 5,590 4, ,115 1,523 23, ,465 5,999 4, ,347 2,011 25, ,881 6,261 3, ,580 1,988 21, ,698 6,381 4, ,320 2,236 23,880 Note: Households include nonprofit organizations. Liquid financial assets exclude such illiquid assets as pension fund reserves, equity in non-corporate business. Source: Federal Reserve Flow of Funds Accounts ( Table L.100 Households & Nonprofit Organizations) Investor Participation 65

67 U.S. Household Liquid Financial Assets (In Percent) Total Bank Mutual U.S. Money Liquid Deposits Fund Gov t Muni. Market Corp. Financial Equities & CDs Shares Secs. Bonds Funds Bonds Assets Note: Households include nonprofit organizations. Liquid financial assets exclude illiquid assets as pension fund reserves, equity in non-corporate business. Source: Federal Reserve Flow of Funds Accounts ( Table L.100 Households & Nonprofit Organizations) 66

68 U.S. Holdings of Equities Outstanding by Investor Type (Market Value in $ Billions) TOTAL 13,293 15,547 19,523 17,627 15,311 11,901 15, , , , , , ,451.0 Households 6,635 7,481 9,596 8,091 6,721 4,536 5, , , , , , ,698.4 Institutions 6,658 8,066 9,927 9,536 8,590 7,364 9, , , , , , ,752.6 Mutual Funds 2,019 2,506 3,377 3,227 2,836 2,187 3, , , , , , ,172.2 Foreign 953 1,250 1,612 1,643 1,573 1,336 1, , , , , , ,454.6 State & Local Gov t Retirement Funds 1,051 1,188 1,408 1,299 1,260 1,057 1, , , , , , ,526.3 Private Pension Funds 1,667 1,948 2,081 1,915 1,562 1,559 2, , , , , , ,945.7 Life Insurance Companies , , , , , ,142.4 Exchange-Traded Funds Other Insurance Companies Broker/Dealers Federal Gov t Retirement Funds Closed-End Funds State & Local Governments Savings Institutions Commercial Banks Note: Households include nonprofit organizations. Source: Federal Reserve Flow of Funds Accounts ( Table L.213 Corporate Equities) Investor Participation 67

69 U.S. Holdings of Equities by Investor Type (In Percent) Households Institutions Mutual Funds Foreign State & Local Gov t Retirement Funds Private Pension Funds Life Insurance Companies Exchange-Traded Funds Other Insurance Companies Broker/Dealers Federal Gov t Retirement Funds Closed-End Funds State & Local Governments Savings Institutions Commercial Banks Note: Households include nonprofit organizations. Source: Federal Reserve Flow of Funds Accounts ( Table L.213 Corporate Equities) 68

70 Net Acquisitions of Corporate Equities ($ Billions) NET ISSUANCE Households Institutions Mutual Funds Foreign State & Local Governments Private Pension Funds Life Insurance Companies Exchange-Traded Funds Other Insurance Companies Broker/Dealers Federal Gov t Retirement Funds Closed-End Funds State & Local Gov t Retirement Funds Savings Institutions Commercial Banks Note: Households include nonprofit organizations. Source: Federal Reserve Flow of Funds Accounts ( Table F.213 Corporate Equities) Investor Participation 69

71

72 Global Markets

73

74 GLOBAL Capital Markets ($ Trillions) Equity Markets Capitalization Debt Securities Outstanding Derivatives Market Value Securities Industry Total Commerical Bank Assets Financial Markets* Total *excludes insurance Global Capital Markets $ Trillions Sources: Standard and Poor's Global Stock Markets Factbook, Bank of International Settlements (BIS) Global Markets 73

75 Global Equity Market Capitalization (Year End) 1990 $9.4 Trillion Japan 31% U.S. 33% Emerging Markets 6% 41.3 UK 9% Other Developed Markets 27% 2009 $48.7 Trillion Japan 6.9% U.S. 31% UK 5.7% Emerging Markets 28.3% 41.3 Other Developed Markets 28.1% Source: Standard and Poor's Global Stockmarket Factbook 74

76 Global Bond Market Outstandings (Year End) 1990 $17.3 Trillion Emerging Markets 2.3% U.S. 44.7% Japan 16.4% 41.3 UK 2.9% Other Developed Markets 33.7% 2009 $91.2 Trillion Emerging Markets 2.6% U.S. 34.8% Japan 13.1% UK 5.2% 41.3 Source: Bank of International Settlement (BIS) Other Developed Markets 44.3% Global Markets 75

77 International Security Offerings ($ Billions) straight Conv. Total Common Pref. Total Debt Debt Debt Stock Stock Equity Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,965.4 International Security Offerings (Number of Issues) straight Conv. Total Common Pref. Total Debt Debt Debt Stock Stock Equity Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,678 1, ,397 5, , , , , , , , , , , , , , , , , ,508 1, ,144 9, , ,423 2, ,963 11, , ,728 1, ,775 7, , ,580 2, ,572 8,152 Source: Thomson Financial ( 76

78 International Security Offerings by U.S. Issuers ($ Billions) straight Conv. Total Common Pref. Total Debt Debt Debt Stock Stock Equity Total International Security Offerings by U.S. Issuers (Number of Issues) straight Conv. Total Common Pref. Total Debt Debt Debt Stock Stock Equity Total Source: Thomson Reuters ( Global Markets 77

79 Foreign Gross Activity in U.S. Securities ($ Billions) Corporate stocks Bonds Treasuries Agencies Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,481.6 Note: Gross = purchases plus sales Source: SIFMA Foreign Activity Report ( 78

80 Foreign Net Purchases of U.S. Securities ($ Billions) Corporate stocks Bonds Treasuries Agencies Total , , , Note: Net = purchases minus sales Source: SIFMA Foreign Activity Report ( Global Markets 79

81 U.S. Gross Activity in Foreign Securities ($ Billions) stocks Bonds total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,483.6 Note: Gross = purchases plus sales Source: SIFMA Foreign Activity Report ( 80

82 U.S. Net Purchases of Foreign Securities ($ Billions) stocks Bonds total Note: Net = purchases minus sales Source: SIFMA Foreign Activity Report ( Global Markets 81

83 Foreign Holdings of U.S. Securities ($ Billions) Corp. Treasury/ stocks Bonds Agency Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,839.7 Source: Federal Reserve Flow of Funds Accounts ( Table L.107 Rest of the World) 82

84 U.S. Holdings of Foreign Securities ($ Billions) stocks Bonds total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,642.9 Source: Federal Reserve Flow of Funds Accounts ( Global Markets 83

85 Foreign Acquisitions of U.S. Securities $ Billions , , ' '09 U.S. Acquisitions of Foreign Securities $ Billions '08 '09 Source: SIFMA Foreign Activity Report ( 84

86 Major Global Stock Market Indices (Local Currency) Canada: France: Germany: Hong Kong: Japan: UK: S&P/TSX Comp.* CAC 40 DAX Hang Seng Nikkei 225 FT-SE n.a. n.a n.a. n.a n.a * TSE 300 through 2001; S&P/TSX Composite Index thereafter. Source: Federal Reserve ( Global Markets 85

87 Foreign Exchange Rates (Foreign Currency Per $) Canada: Dollar Japan: Yen EMU Members: Euro* UK: Pound* Major Currencies Index** * U.S. dollar per foreign currency unit. ** Trade-weighted value of the dollar. A weighted average of the foreign exchange value of the U.S. dollar against a subset of the broad index currencies that circulate widely outside the country of issue. Source: Federal Reserve Board, Statistical Release G.5A ( 86

88 American Depositary Receipts (ADRs) total Number share Dollar of Listed Volume Volume ADR Programs (Bils.) ($ Bils.) , , , , , ,700.0 Listed on NYSE, AMEX and NASDAQ Source: Bank of New York ( Global Markets 87

89 Global Equity Market Capitalization (Market Value in $ Billions) Aus- Ger- Hong Nether- Singa- Developed Emerging tralia Canada France many Kong Italy Japan lands pore Switz. UK U.S. Markets Markets Total ,448 2, , ,333 2, , ,520 2, , ,898 3, , ,863 3, , ,325 4, , , ,637 6, , , ,589 7, , , ,794 9, , , ,506 10, , , ,059 8, , , ,088 10, , , ,485 9, , , ,152 5,136 12,353 1,664 14, , ,210 5,067 13,233 1,883 15, , ,408 6,858 15,880 1,893 17, , ,740 8,484 18,007 2,246 20, , ,996 11,309 20,955 2,161 23, , , ,374 13,451 25,118 1,806 26, ,475 1, , ,933 16,635 33,134 2,974 36, ,447 1, , ,577 15,104 29,575 2,612 32, ,174 1, , ,165 13,855 25,334 2,573 27, , ,864 11,098 21,019 2,491 23, ,356 1, , ,460 14,266 28,262 3,775 32, ,178 1,559 1, , ,816 16,324 33,204 4,948 38, ,481 1,759 1, , ,058 16,971 36,183 7,136 43, ,096 1,701 2,429 1, ,027 4, ,213 3,794 19,426 42,917 10,459 53, ,298 2,187 2,771 2,106 1,163 1,073 4, ,275 3,859 19,947 46,301 18,263 64, ,002 1,492 1,108 1, , ,852 11,738 26,534 8,354 34, ,258 1,681 1,972 1,298 2, , ,071 2,796 15,077 34,907 13,807 48,714 Source: Standard and Poor's, Global Stock Markets Factbook ( 88

90 Global Equity Market Capitalization (In Percent) Aus- Can- Ger- Hong Nether- Singa- Developed Emerging tralia ada France many Kong Italy Japan lands pore Switz. UK U.S. Markets Markets Total Source: Standard and Poor's, Global Stock Markets Factbook ( Global Markets 89

91 Global Bond Market Outstandings ($ Billions) Aus- Hong Nether- Singa- Developed Emerging tralia Canada France Germany Kong Italy Japan lands pore Switz. UK U.S. Markets Markets Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Source: Bank of International Settlement (BIS) 90

92 Global Bond Market Issuance ($ Billions) Australia Canada France Germany Hong Kong Italy Japan Netherlands Singapore UK U.S. Other Developed Markets Emerging Markets Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,576.6 Sources: Thomson Financial for private sector issuance;country-specific government sources, including central bank and government websites, for government issuance data. Global Markets 91

93 Global Equity Markets Trading Volume ($ Billions) Aus- Ger- Hong singa- Developed Emerging tralia Can France many Kong Italy Japan Neth. pore Switz. UK U.S. Markets Markets Total n.a n.a n.a n.a , , n.a , , n.a , , , n.a ,796 3, , , n.a ,423 5, , , n.a ,720 5, , , n.a ,016 6,299 1,169 7, , n.a ,751 4, , ,184 4, , ,082 4, , ,355 6,098 1,096 7, , ,564 7,167 1,655 8, , ,109 9,180 1,040 10, , ,121 12,017 1,565 13, , ,216 16,104 2,732 18, ,167 13,148 20,198 1,967 22, , ,378 18,574 27,432 2,923 30, ,083 1, , ,835 31,862 43,909 3,953 47, ,077 1, ,826 1, ,861 29,041 39,665 2,409 42, , , ,910 25,371 35,288 2,487 37, ,104 1, , ,212 15,547 26,896 2,950 29, ,416 1, , ,707 19,355 35,440 4,020 39, ,526 1, ,115 4, ,167 21,510 41,693 5,693 47, ,290 2,505 2, ,366 6,252 1, ,287 4,242 33,268 59,258 8,227 67, ,323 1,645 3,419 3, ,313 6,497 1, ,778 10,324 42,613 82,455 16,361 98, ,018 1,771 3,265 3,105 1, ,879 1, ,505 6,487 36,467 67,796 12,721 80, ,240 1,366 1,289 1, , ,402 46,736 64,458 15,960 80,418 Source: Standard and Poor's, Global Stock Markets Factbook ( 92

94 Global Equity Markets Trading Volume Aus- Ger- Hong Nether- Singa- Developed Emerging tralia Can. France many Kong Italy Japan lands pore Switz. UK U.S. Markets Markets Total Source: Standard and Poor's, Global Stock Markets Factbook ( Global Markets 93

95 Foreign Gross Activity in U.S. Equities ($ Millions) Europe 1,902,506 2,957,582 2,424,970 2,251,595 2,448,582 3,516,107 3,811,428 4,614,532 7,754,987 9,541,870 4,688,249 Euro. Union 1,672,056 2,631,114 2,234,358 2,090,691 2,276,874 3,325,989 3,603,456 4,352,248 7,443,782 9,163,241 2,608,015 France 313, , , , , , ,803 1,214,552 2,569,646 4,400,699 2,177,562 Germany 121, , , ,421 88, , , , , ,681 92,290 Greece 3,424 6,192 3,438 2,513 1,794 1,916 2,142 4,023 3,810 4,827 3,896 Netherlands 82, ,571 79,667 80,031 71,020 81,384 74, , , ,911 86,587 UK 867,480 1,409,786 1,233,296 1,090,726 1,256,415 1,997,567 2,246,415 2,420,706 3,640,431 3,671,160 1,739,250 Switzerland 209, , , , , , , , , , ,388 Canada 169, , , , , , , , , , ,094 Latin Amer. & Caribbean 2,101,603 3,210,262 2,934,691 3,443,063 3,128,911 4,038,553 4,524,599 8,408,064 12,387,906 12,975,205 7,390,529 Argentina 6,387 10,204 6,923 7,529 9,163 8,397 6,930 9,717 10,220 11,907 13,982 Bermuda 704,155 1,116, ,018 1,102, , ,401 1,154,316 1,476,877 1,872,202 1,727, ,430 Mexico 9,901 13,604 8,547 8,526 11,950 12,923 18,736 31,139 36,178 63,263 46,041 Neth. Antilles 281, , , , , ,605 94, , , ,952 44,232 Asia 363, , , , , , , , , , ,825 Hong Kong 27,356 38,583 35,631 20,997 19,481 26,051 26,418 37, , ,938 61,982 Japan 186, , , , ,350 92, ,320 88, , , ,896 All Countries 4,573,796 7,035,502 5,986,324 6,369,331 6,197,539 8,083,337 8,859,372 13,657,303 21,083,936 23,940,521 13,172,100 Note: See SIFMA s Foreign Activity Report for further information. Source: U.S. Treasury Department ( 94

96 Foreign Net Purchases of U.S. Equities ($ Millions) Europe 98, ,654 88,098 32,909 24,350 19,473 38,880 96,552 89,233 11, ,319 Euro. Union 91, ,238 83,264 28,315 21,426 19,421 34,696 95,954 86,304-2,067 7,479 France 3,813 5,727 5,914 2,127 6, ,283 21,740 19,516-7,189 3,686 Germany 13,410 31,752 8, ,379-3,770-8, ,341-1,200 Greece Netherlands 8,083 4,915 10,919 4, ,228-2,275-5,426 6,886-1,469 1,829 UK 42,902 58,736 38,492 15, ,137 19,953 75,464 69,473 29,936 93,948 Switzerland 5,650 11,960 3,456 2,787-2,194-1,276 1,153 1,194-2,977 5,404 7,896 Canada ,956 10,984 8,207 11, ,342 11,822 8,086 7,383 14,993 Latin Amer. & Caribbean 5,187-17,812-5,157-15, ,331 37,172 49,370-39,313 62,198 Argentina Bermuda -1,459-10,052-11,560-9,131-4, ,656 6,125 5,450-1, Mexico , ,777 Neth. Antilles -3,547-8, , ,826-4,678 2,706 Asia 3,379 21,683 22,516 21,367 2,635 6,445 9,609 3,479 43,974 65,308 59,413 Hong Kong , ,434 27,462 3,546 Japan 5,723 2,070 6,788 12,336-2,230 2, ,973 21,382 13,271 All Countries 107, , ,386 50,189 37,881 25,815 79, , ,498 40, ,072 Source: U.S. Treasury Department ( Global Markets 95

97 U.S. Gross Transactions in Foreign Stocks ($ Millions) Europe 1,340,876 2,062,815 1,583,175 1,383,171 1,393,559 1,771,489 2,290,210 3,371,011 4,613,829 4,808,731 2,763,621 Euro. Union 1,254,960 1,938,696 1,506,865 1,317,807 1,314,260 1,674,002 2,167,883 3,121,770 4,412,966 4,592, ,962 France 55,157 92,083 75,736 60,395 84,883 98, , , , , ,647 Germany 90, ,640 86,530 57,501 45,406 39,979 51,239 78,426 94, ,201 64,109 Greece 2,820 2,008 2,698 1,048 1,480 2,739 3,598 4,721 5,420 4,463 2,606 Netherlands 53,850 79,527 53,369 42,604 35,589 35,659 44,351 89, , , ,099 UK 906,651 1,350,347 1,127,084 1,057,087 1,024,684 1,360,205 1,713,260 2,463,223 3,452,487 3,511,738 1,998,096 Switzerland 63,555 94,616 49,922 45,811 44,510 49,833 62,523 79, , ,844 97,033 Canada 97, , , , , , , , , , ,790 Latin Amer. & Caribbean 326, , , , , , ,892 2,140,055 3,283,029 3,310,325 1,895,857 Argentina 5,707 9,341 5,250 3,232 2,810 3,762 5,815 8,991 11,568 12,161 5,743 Mexico 16,341 22,901 20,040 16,757 14,549 20,196 25,887 48,148 66,116 65,798 40,937 Asia 522, , , , , , ,033 1,488,982 1,940,396 1,852,849 1,167,089 Hong Kong 86, , ,281 97, , , , , , , ,701 Japan 355, , , , , , , , , , ,166 All Countries 2,338,965 3,615,670 2,845,441 2,537,081 2,747,347 3,514,594 4,495,327 7,502,305 10,520,766 10,836,608 6,422,942 Source: U.S. Treasury Department ( 96

98 U.S. Net Purchases of Foreign Stocks ($ Millions) Europe -61,260-10,341 17,295 3,983 15,753 51,447 45,710 70,135 69,693-17,251-9,432 Euro. Union -56,708-19,786 18,773 1,269 14,048 50,726 42,277 65,974 67,442-14,224-6,573 France -1,385-1,869-2, ,691 3,697 3,964 5,068 6, ,056 Germany -2,428-8, ,369-2,464 2,557 1,907 3,248 8,860-3,881-1,578 Greece Netherlands -3,512 2,435-3,189-2, ,621-3,031-6, UK -38,491-1,937 21,418 6,903 17,454 34,967 26,802 61,015 66,685 2,068-1,605 Switzerland -3,459 7,788-1,658 3, , , Canada 854 8,829-1,733-4,022 2, ,411 7,634 5,550 1,978 3,183 Latin Amer. & Caribbean -1,120 25,622 4,728 3,456-3,455-8,337 2,826-21,551 11,745 45,269 10,437 Argentina Mexico 1,591-1,793-1,076 1,335-2,073-2,256 1, ,360-4, Asia 46,873-12,642 27,523-1,919 66,342 45,377 63,821 41,286 2,746-52,973 1,704 Hong Kong -2,777 3,005 4,823-3,186 4,223-1,961 6,723 21,240-6, , Japan 46,134-17,400 19,938 2,024 39,563 33,177 39,818 2,085 1,738-21,614 3,402 All Countries -15,643 9,502 50,113 1,493 82,367 91, , ,181 94,428-20,008 3,255 Source: U.S. Treasury Department ( Global Markets 97

99 Global Derivatives Market (Notional Principal Value Outstanding, $ Billions) exchange- Over-thetraded Counter (OTC)* total ,286 3,450 5, ,521 4,449 7, ,638 5,346 9, ,756 8,475 16, ,845 11,303 20, ,282 17,713 26, ,018 25,453 35, ,407 29,035 41, ,975 80,309 94, ,588 88, , ,246 95, , , , , , , , , , , , , , , , , , , , , , , , , , , , ,811 * Data since 1998 not strictly comparable to prior years. Source: Bank for International Settlements ( 98

100 Savings & Investment