The Proven Retail Exchange Operator. Bill Cody Director, US Equity Sales Bats Global Markets

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1 The Proven Retail Exchange Operator Bill Cody Director, US Equity Sales Bats Global Markets November 16, 2017

2 Global Exchange Operator Options #1 U.S. options market Trading home to SPX and VIX options Futures CFE is an all-electronic, open access market model Trading home to VIX futures European Equities #1 Pan-European equities market Cboe Europe operates two lit books and two dark books Equities #2 U.S. equities market 234 listed ETFs from 41 unique issuers FX Well-established ECN for institutional trading Spot, Forwards and SEF marketplaces 2

3 Cboe is a top global exchange leader Global Cash Equities Exchanges by Monthly Notional Value Traded ($ in millions) 1,200,000 1,000,000 1,156,364 1,109,902 1,048, , , , , , , , , , ,272 88,568 80,996 0 NYSE Nasdaq Cboe Shenzhen Shanghai Tokyo Hong Kong LSE Korea Euronext Toronto Source: World Federation of Exchanges, Cboe Global Markets. Notional value traded July

4 Strong Track Record of Growth JUNE 2005 OCT 2008 OCT 2010 JAN 2012 FEB 2014 APRIL 2016 FEB 2017 BatsTrading, Inc. is founded in Kansas City, Missouri Bats launches in Europe with an equities market Bats Europe Bats BYX Exchange, the company s second equities exchange, goes live in the U.S. Bats BZX Exchange launches its first primary listings, 9 ETFs from BlackRock, Inc. s ishares ETFs business Bats acquires Direct Edge, becomes #1 global stock exchange operator Bats acquires ETF.com a media outlet focused on Exchange Traded Funds CBOE acquires Bats Global Markets and becomes Cboe Global Markets Bats receives SEC approval for its first U.S. equities exchange Bats Exchange (also known as the Bats BZX Exchange) Bats first equity options exchange goes live in the U.S. Bats acquires Chi-X Europe creating Bats Chi-X Europe the largest pan-european equities platform by notional value traded. Bats Europe becomes a Recognized Investment Exchange (RIE) Bats Europe lists its first ETFs from ishares and Lyxor, and launches Europe s largest trade reporting service, BXTR Bats completes its acquisition of Hotspot, a foreign exchange (FX) trading platform Bats Global Markets becomes a U.S. public company listed on Bats BZX Exchange AUG 2008 FEB 2010 DEC 2011 MAY 2013 NOV 2013 MAR 2016 APRIL

5 Cboe is the leading exchange in Europe and the U.S. #1 exchange group in Europe #1 exchange group in U.S. intraday* 18.6% 22.0% LSE 20.6% 15.1% Euronext NYS E 19.6% 10.3% Deutsche Boerse Nasdaq 17.5% 8.9% Turquoise 7.3% SIX Swiss Other 2.8% 17.0% Other Source: Cboe Global Markets, July 2017 *Excluding auction volume. 5

6 ETF Market Volume SM 22.7% SM 22.7% 15.1% Source: Cboe Global Markets (ETFMarketplace.com), 5-Day Average 10/27/17. Includes Volume Traded in the Auctions. 6

7 Cboe Four U.S. Equity Exchanges We operate markets that provide customer choice, various fees and liquidity profiles. EDGA BYX EDGX BZX Key Differentiators Routing, Low Cost Retail Price Improvement Retail, Attribution Hidden Price Improvement Listing Exchange Statistics 40 unique strategies average 30+ mils of price improvement 33% of orders are retail/wholesale; 9% attributed more than 7% of inbound executed orders receive PI Recent Market Share % 5.17% 6.33% 6.08% Pricing Model Pricing for Adding Liquidity Pricing for Removing Liquidity Low fee Taker-Maker with low fee and rebates Traditional Maker-Taker model Traditional Maker-Taker model 0 to 3 12 to 18 (20) to (35) (20) to (36) 3 to 5 (10) to (16) Exchange Code J Y K Z 1 Cboe Global Markets, June

Cboe Is The Top Retail Destination Retail Broker Limit Order Routing to the EDGX Exchange Q2 2016 Rule

31% Retail Broker & Wholesaler Limit Orders on Cboe ~1% Other SM #1 #1 27% Bulge Bracket 8% Agency 20%

8 Cboe Is The Top Retail Destination Retail Broker Limit Order Routing to the EDGX Exchange Q Rule 606 Reports EDGX Rank Among Exchanges Broker Cboe is #1 NYSE-Listed NASDAQ-Listed #1 #1 #1 #1 #2 #2 31% Retail Broker & Wholesaler Limit Orders on Cboe ~1% Other SM #1 #1 27% Bulge Bracket 8% Agency 20% Proprietary 14% Automated Market Making Source: Cboe SEC Rule 606 Public Disclosures for EDGX Exchange 8

9 Liquidity Profile by Exchange EDGA, BYX, BZX EDGX Retail-Wholesale 11% Retail 1% Retail-Direct 1% Proprietary 26% Other 1% Agency 10% Bulge Bracket 35% Automated Market Maker 16% Retail-Direct 14% Retail-Wholesale 16% Retail 1% Proprietary 20% Agency 8% Automated Market Maker 14% Bulge Bracket 27% Source: Percentages represent add and remove volume based on Cboe data for Q Cboe categorizes its members into segments on a best efforts basis according to its view of each Member's business model. For definitions of each segment, please click here. 9

10 Track Record of Leading Retail Initiatives Cboe has an extensive history of working closely with retail broker dealers in support of their customers. Cboe continues to be an industry leader in developing and promoting initiatives alongside retail Members to offer an ever-improving trading experience. These initiatives include: Functionality and Market Access Unique Retail Pricing Programs Transparency and Reporting Quality of Execution in Liquidity and Price Improvement System Stability and Resiliency First Class Operations and Trading Support Market Structure Advocacy 10

The Retail Package The Cboe Exchanges are hosted within Equinix NY4/NY5 campus, home to more equity market share and price discovery than any other data center in the U.S.

11 The Retail Package The Cboe Exchanges are hosted within Equinix NY4/NY5 campus, home to more equity market share and price discovery than any other data center in the U.S. Limit orders on the Cboe Exchanges are closer in proximity to more non-cboe markets than competing exchanges operating in Mahwah and Carteret. The Cboe exchanges are latency equalized across data centers; No co-location Hours of operation: 7 a.m. 8 p.m. ET Orders can be submitted as early as 6 a.m. ET. Cboe will queue the orders until the pre-market session opens at 7 a.m. ET Full Reg NMS protection during the pre/post-market sessions (unlike many of our competitors) Cboe router uses depth of book feeds, not the SIP, for pre/post-market for routing decisions Helps efficiently exhaust liquidity at away destinations while ensuring the best available price EQUINIX DATA CENTER 11

12 Retail Product Offerings Attestation Cboe developed a retail program around non-marketable limit orders: Unique pricing model that acknowledges retail orders and allows retail firms to achieve higher rebates than the standard, non-retail tiered rates. Enables Cboe to build additional retail-focused products (e.g., RTAL attribution; tagging retail orders on routable flow [see below]) Expand the retail category (included the definition of correspondent clearing) Attribution Enables liquidity providers to attribute (quote under their own MPID): Benefits retail liquidity providers. Resting retail order flow has value to liquidity takers. By displaying your MPID in data feeds, you provide liquidity takers more transparency, which attracts takers to EDGX Also offer RTAL attribution for retail firms that want to quote using a generic identifier Cboe BYX RPI A program aimed at providing price improvement for retail Members marketable orders Retail Members control the price improvement they are eligible to interact with ($.001 increments) Orders executing against resting price improving orders receive a $.0025 rebate July MTD price improvement is $.0018/share Orders can be sent book only or routable 12

13 Retail Product Offerings (ROOC) A one-stop solution for orders to partake in the listing venues opening and closing auctions while being able to participate on Cboe intraday. Route to Listing Market (Open, Close and Intra-Day Halts) Choose one exchange to seamlessly manage your flow across all listing market auctions Posts on Cboe intraday Re-routes to listing market after regulatory halts to participate in a stock s reopening (unhalt auction) Re-route functionality can be defaulted at the session level or enabled on an order by order basis The requirements include: EDGX or BZX order Routable 13

14 Routing Opening 1 Order Drops/Copies Executions 2 Cboe EDGX Exchang e System hours: 6:00 AM ET 8:00 PM ET Market Data 3 4 Cboe Routing Broker Dealer Cboe (Routing begins at 7:00 AM) Nasdaq (Routing begins at 3:00 AM) Arca (Routing begins at 6:00 AM) NYSE (Routing begins at 7:30 AM) 9:28 AM: MOO/LOO orders are cutoff & LLOO orders are accepted. 9:25 AM: Quotes are opened /entered for those with no open interest. 9:28 AM: MOO cut off time. LOO will be treated as Imbalance Only order 9:27 AM 9:30 AM: Dissemination of imbalance info begins. 7:30 AM; Orders can be entered/cancelled until security is opened. 9:29 AM 9:30 AM: Market Order freeze period. 7:30 AM; Orders can be entered/cancelled until security is opened. 9:28 AM: Opening price info. TIMELINE 1. 6:00:00 AM ET System begins accepting orders and receiving market data 2. 7:30:30 AM ET Start of batch routing to listing market based on time order ROOC* routing to the Listing market up until Listing Market cutoff Orders that miss the listing market opening cutoff, are posted on EDGX 3. Send down to primary as On Open MKT/LMT (Example MOO/LOO) *ROOC = Route to Primary **= Orders receive a new timestamp Dark Pools (Routing begins at 9:30 AM) Individual orders result in individual executions (not grouped with other broker dealers for clearing) 4. 9:30:00 AM ET Post auction, listed market executions are returned to Members, unfilled orders post to EDGX** 5. 9:30:01 AM ET If routed Aggressive or Super Aggressive (odd lot), route to B/D router + Street 5 14

15 Routing Regular Hours System hours: 9:30 AM ET 4:00 PM ET 1 Market Data 3 Order Drops/Copies Executions Cboe EDGX Exchang e 2 Cboe Routing Broker Dealer 4 Liquidity 4 Cloud (Combination of Dark Pools, Cboe, Nasdaq, NYSE) 5 1. Non-marketable limit orders are posted on EDGX 2. Orders that route out of exchange Marketable in-flight Residual route out 3. Reg NMS routing Route to Improve Ability to receive price improvement will take priority over speed of execution Route to Fill Speed of execution will take priority over potential price improvement 4. Price Improvement within the dark Wholesalers, ATS s 5. Displayed Liquidity 15

16 Routing Closing Cross Order Drops/Copies Executions 4 1 Cboe EDGX Exchang e 3 System hours: 6:00 AM ET 8:00 PM ET 1 Market Data 2 5 Cboe Routing Broker Dealer 3 Cboe 3 Nasdaq 3 Arca 3:55 PM: MOC/LOC orders are cut off & LLOC orders are accepted. 3:50 PM: Dissemination of imbalance info begins. 3:59 PM 4:00 PM: Closing Auction Freeze Period. TIMELINE 1. Start routing orders: 3:55:00 PM ET, Order after 3:55:00 will be routed, with best efforts, to the listing market 2. Route orders to the listing market 3. Post as - Day Orders(Not MOC/LOC) Market orders will be collared with a LMT 4. Executions (or cancel) on the close will flow back immediately 5. If the Listing Market does not provide an execution or cancellation by 4:45:00 PM ET, then EDGX will provide electronic out due to known NYSE issue Configurable as Done-For-Day, cancelled, or suppressed 3 NYSE 3:45 PM: MOC & LOC orders must be in. 3:58 PM: No cancels after this point. 16

17 Retail Product Offerings (Retail Routing) Cboe introduced a unique way for Retail Orders to be eligible to receive price improvement on outbound marketable orders. If Members (1) designate their orders as retail and (2) are eligible to route, then the orders may be sent to participating dark liquidity providers allowing them to provide the best execution quality possible. The requirements include: EDGX Order Must have an executed retail attestation on file with Cboe Orders must be eligible to route Features: Note: Orders can be individually marked on an order-by-order basis OR Members can choose to default orders at the port level to ensure all orders are eligible Members have the ability to opt out of retail routing 17

Retail Product Offerings (Retail Routing using ROUT) Advantages of Retail Routing Access to multiple DLPs looking to provide Price Improvement to retail attested orders Average Price Improvement for

18 Retail Product Offerings (Retail Routing using ROUT) Advantages of Retail Routing Access to multiple DLPs looking to provide Price Improvement to retail attested orders Average Price Improvement for marketable orders was $ * in July Lower remove rates for interacting with off exchange liquidity Retail attested orders typically experience a shorter order life time as compared to non-retail orders Retail Routing is available with multiple strategies (ROOC, ROUE, ROUD, ROUT, ROUQ, ROUZ) Cboe Internal Data 18

19 Cboe Global Markets 400 South LaSalle Street Chicago, IL

20 Craig M. Rose Institutional Sales (203)

Interactive Brokers Rule 606 Quarterly Order Routing Report Quarter Ending December 31, 2018

Interactive Brokers Rule 606 Quarterly Order Routing Report Quarter Ending December 31, 2018 I. Introduction Interactive Brokers ( IB ) has prepared this report pursuant to a U.S. Securities and Exchange