TURQUOISE TICK SIZE UPDATE

Dear all,

Last week we announced that the Turquoise MTF would experiment with more granular tick sizes in 5 UK stocks. The stocks BARC, BP, LLOY, RBS, and XTA, were selected based on the potential price improvement that could be achieved in these stocks, and were chosen in consultation with members.

We are pleased to report that our analysis of trading in these stocks on Turquoise show that the smaller spreads deliver real benefits in terms of significant price improvement and increased trade size relative to their trading prior to the tick change. As such, we will continue to use the more granular ticks in these stocks, and from Tuesday we will extend the experiment to cover 5 more UK stocks, and 5 in Italy. (The stocks and their tick sizes are shown below.)

As before, the stocks for this trial have been chosen based on the potential for price improvement, i.e. the potential for real, significant benefits for investment firms and investors. It is worth noting that the selection process is a sensitive one, and not done purely based on trading volumes or the potential to achieve higher trading volumes.

We continue to work constructively with operators of other trading platforms, including incumbent exchanges, towards harmonization of tick sizes across Europe. While we hope that this process concludes rapidly, we share the disappointment of many of our members that it has taken so long. In any event, we believe that analysis of our experiments will inform the process and will lead to more rational tick sizes that can, ultimately, be adopted by platforms uniformly.

We are aware, of course, that other platforms have announced changes to tick sizes in other stocks. We have consciously chosen our stocks not to match their selection, but rather to test a hypothesis about a more efficient marketplace. We believe that there are optimal tick sizes for trading in transparent markets, and that arbitrarily small ticks are a detriment to real liquidity and market quality, and should be avoided. Ours is a determined, positive path to a better marketplace.

Thank you for your attention and best regards,

Eli

Tick Size Table Changes in some UK and Italian Securities effective Tuesday 16th June.

Effective June 16th, 2009, Turquoise will be moving the following 4 UK and 5 Italian stocks to the new "FESE Table 1" tick size table introduced on June 8th:

Additionally, the following 2 UK securities will be moved to the 0.05 single-level tick size table (6:600:600:V - same as VODAFONE):

UK securities: HSBC / BP