ISEEE Presentation – April 6, 2014

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1.  In the News

2.  Brief History of BATS

3.  Direct Edge Merger

4.  U.S. Equities

5.  Europe Equities

6.  Other Businesses

7.  Regulation

8.  Q&A

Agenda

Corporate Overview

BATS Global Markets Snapshot •  Headquartered in Lenexa, KS •  296 Employees

•  100 in Kansas •  58 in London •  130 in New Jersey •  6 in New York

7 Large Banks 2 Market Makers

BATS Global Markets Ownership

2 Private Equity 1 Prop Broker 1 Clearing Firm

Follow us on Twitter @BATSGlobal

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Building a Track Record of Success

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Launched as Direct Edge ECN under Knight Capital

Spun off and added Goldman Sachs and Citadel as investors CEO William O’Brien joins the company

Applied for exchange status

Received SEC approval and launched exchanges with new technology and data center

Announced intentions to launch in Brazil Developed Connectivity & Member Services

Launched EdgeRisk Controls Introduced Retail Order Designation

Market share growth accelerated Acquired ISE Stock Exchange

Dire

ct E

dge

K

ey E

vent

s Announced plans to merge with BATS Global Markets Released Direct Edge Order Type Guide

Earned one point market share in first year trading

BATS Trading, Inc. formed

BATS processes 500 million shares for the first time, less than 18 months after launch

BATS Global Markets ranks as world’s 3rd largest stock exchange operator by notional value traded for the first time

BATS Options and second U.S. equity exchange go live

Acquires Chi-X Europe, becoming the largest pan-European trading center by value traded

Launches U.S. primary listing venue with 9 new iShares ETFs Completes seamless Chi-X Europe integration

Daily volume record of 1 billion shares in January BATS Exchange and BATS Europe go live

BATS Chi-X Europe earns exchange status and launches European ETF and trade reporting businesses

BATS goes live in January Daily volume record of 100 million shares in November B

ATS

Key

Eve

nts

BATS and Direct Edge complete merger, becoming top market for ETF and retail-driven liquidity

BATS chooses Equinix NY5 for long term data center strategy, secures innovative customer pricing deal

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Market Positioning

Synergy Opportunities

Diversification of Revenue

Streams

Shared Innovative

Culture

n  Creates the 1st or 2nd largest global equities exchange operator n  Jan 2014 U.S. Market Share: NYSE : 20.58%, BGM: 20.54%, NDAQ: 20.01% n  Expanded scale, market share and efficiencies of combined company will create

greater ability to innovate and compete n  Dedicated Institutional Focus

n  Broader competitive services for customers (e.g., market data competitive with that of NYSE and NASDAQ)

n  All four U.S. equity exchanges – BZX, BYX, EDGX and EDGA – will remain in operation providing a stronger customer value proposition, with different pricing models and functionality

n  Potential for reduced long-term costs for customers by reducing capital expenditures, redundant systems, data costs, and operating costs

n  Both BATS and Direct Edge were founded to challenge the U.S. exchange duopoly and increase efficiency for end-users

n  Shared history of market innovation, service and competitive pricing

Direct Edge Merger Overview

Top Global Exchange Operator

($ in millions)

Global Cash Equities Exchanges by Monthly Notional Value Traded

____________________ Source: World Federation of Exchanges, BATS Global Markets. Note: Monthly notional value traded through January 2014.

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1,391,861 1,306,737 1,285,522

542,978

362,540

225,369 193,570 134,200 115,606 101,494

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

NYSE Euronext

BATS Global Markets

NASDAQ OMX

Tokyo SE Group

Shenzhen SE

Shanghai SE London SE Group

Hong Kong SE

TMX Group Korea Exchange

U.S. Equity Market Share by Venue

TRF, 37.43%

NYSE, 20.58%

20.54%

NASDAQ, 20.01%

OTHER, 1.45%

Source: BATS Internal January 2014

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___________________ (1)  BATS Data, February 2014 (2)  As of February 2014, per 100 shares, parentheses represent rebate.

Four U.S. Equity Exchanges

EDGA BYX EDGX BZX Key Differentiators Routing, Low

Cost Retail Price

Improvement Retail, Attribution Hidden Price Improvement

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 Share1 2.75% 2.04% 7.53% 8.07%

Pricing Model “Taker-Maker”

with low fee and rebates

“Taker-Maker” with low fee and

rebates

Traditional “Maker-Taker”

model

Traditional “Maker-Taker”

model

Pricing for Adding Liquidity2 5 to 6 0 to 3 (20) to (35) (20) to (32)

Pricing for Removing Liquidity2 (2) (1) to (3) 29 to 30 30

Exchange Code J Y K Z

The merger of BATS and Direct Edge combines two highly complementary firms dedicated to customer-focused principles, products and pricing that have been the foundation for our individual success. Together, we have designed a market model that provides customer choice, low cost and technology compatibility.

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Complimentary Liquidity

Source: Percentages represent add and remove volume based on BATS and Direct Edge Internal Data for Q1 2014. BATS 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.

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Agency 15%

Automated Market Maker 34% Bulge Bracket

31%

Other 3% Proprietary 15%

Retail/Wholesale 3%

EDGA/BYX/BZX

Agency 9%

Automated Market Maker

11%

Bulge Bracket 27%

Other 4%

Proprietary 20%

Retail/Wholesale 29%

EDGX

BATS BYX Retail Price Improvement Program –  ~3.5 million shares per day executed in RPI program –  $.0030 of price improvement on average (35 in Feb so far)

Top Retail Destination

Broker NYSE- Listed

NASDAQ- Listed

#1 #1

#1 #1

#1 #1

#1 #1

EDGX Retail Broker Limit Order Routing Q3 Rule 606 Reports – EDGX Rank Among Exchanges

____________________ Source: Direct Edge, SEC Rule 606 Public Disclosures

Other 1%

Market Maker 10%

Proprietary 11%

Agency 13%

Retail 18%

Wholesaler 19%

Bulge Bracket 28%

Limit Orders on EDGX Exchange

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ETF Volume Leader

BATS leads all other exchanges in ETF volume.

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TRF 33%

26%

NYSE Arca 22%

NASDAQ 17%

Other 2%

Source: ETF Data Provided by ArcaVision / BATS data as of Y/E 2013

European Equity Market Share

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BATS, 22.10%

LSE, 19.97%

NYSE, 14.70%

DB, 11.40%

Other Lit, 7.80%

Turquoise, 7.25%

SWISS SIX, 6.42%

NASDAQ, 5.82%

Other Dark, 1.56%

UBS Dark, 1.40%

ITG Dark, 0.84%

SIGMA X Dark, 0.69%

Source: BATS Internal Jan 2014 12

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Listings

Market Data & Connectivity

Services

U.S. Options

Other Business Units

§  Approximately 20 listings, currently focused on exchange traded products §  Unique market structure with complimentary competitive liquidity provider

programs, which provides more consistent market quality than other exchanges

§  Launched February 2010 §  Maker/Taker pricing structure §  Approximately 3 – 5% market share

§  No fees for individual consumption of market data §  Connectivity to multiple liquidity centers for inbound and outbound order routing §  Consolidating data centers 1H 2015 to lower member costs and provide greater

cost certainty

Our Market Structure Principles

•  Monopolies are not the answer –  But exchanges need to communicate and coordinate better

•  All market participants should focus on reducing IT and operational risks

•  Regulators must have info they need to deter bad conduct •  Investors should know where their orders are routed

–  This is in addition to knowing where they are executed •  Market structure should be re-visited for small caps •  A national “depth of book” feed should be created

–  The importance of depth-of-book information –  The concern about informational advantages –  This should be worked on while strengthening the current SIP

All reforms should be targeted, with the objective of improving investor confidence

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Our Views on the Issues

•  Internalization/Maker-Taker/Payment for order flow –  An exchange is not always the best place to execute a trade –  Restrictions on payment will disadvantage retail & institutions

•  Pennies, Nickels, etc. –  BGM is working with the SEC around a potential industry wide tick pilot –  To work best, any pilot should be simple and respect existing business

models •  Dark Pool Regulation

–  Dark pools serve a purpose but some have gone too far –  Greater transparency of order routing and business practices

•  “Complexity” –  A simpler market is not the answer, but we must act responsibly –  Rules/order types should be right-sized and easy to understand

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Order Types Demystified

•  How many are there? –  All exchanges have basic order types, with “options” on top –  These alternatives help brokers customize their trading strategy based

on the needs of their traders and/or their customers •  Market session (pre, post, regular session, all) •  Time (IOC, Day, GTT, GTC) and price (Market, Limit) •  Order Control (Full routing, partial routing, “Book Only”) •  Cost & Risk Control (“Post Only”, minimum quantity) •  Compliance (“Hide Not Slide”)

•  Does this present risks? –  Greater choice does increase the need to “do your homework” –  “Queue jumping” is not a risk – price-time priority prevails

•  How can we do better? –  More “plain English” marketing to broadly advertise your choices –  Greater clarity in the SEC rule filing process

Direct Edge Order Type Guide now available on the Direct Edge website; BATS Order Type Guide coming soon. 16

Topic (Geography) Description

Technology Risks

Consolidated Audit Trail (U.S.)

Tick Size Regulation

Key Regulatory Topics

n  SEC proposed Regulation SCI in response to exchange technology failures

n  HFT generates regulatory scrutiny due to the perceived unfairness and misunderstood trading

n  Puts the burden on U.S. SROs to develop and fund the establishment of the CAT

n  Increased tick size for small cap issuers providing incentive for market makers

n  Bill introduced in the House, vote expected in early 2014

n  Regulation would require OTC derivatives to be centrally cleared and create favorable margin/collateral requirements for on-exchange traded vs. OTC

MiFID Review (MiFID 2)

Financial Transaction Tax (FTT)

European Markets Infrastructure

Regulation (EMIR)

n  Tax on individual securities transactions n  Previously proposed in the U.S.; enacted in

France, Italy, Germany and several other countries

n  The United Kingdom and 16 other EU states objected to it

n  Relates to the opening up of vertical silos, the licensing of indices and a review of HFT practices

High Frequency Trading

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•  Closely regulates activities of two exchanges and its affiliated broker-dealer for compliance with the federal securities laws and BATS’ own rules

•  Governs equities and options market structure; particularly active since recent financial crisis and “flash crash” in 2010

•  Regulates all broker-dealers doing business with the public

•  Exercises regulatory oversight through exams; separately performs market regulation under contract on behalf of U.S. exchanges

•  Under contract to perform certain regulatory functions for DE and prior to 2011 for BATS

FCA

ESMA

U.S. Regulators European Regulators

SEC

FINRA

BATS management engages in frequent dialogues with the various regulatory organizations as it navigates this multi-faceted regulatory framework

Key Regulators

•  Primary regulator, responsible for oversight of compliance with relevant aspects of U.K. securities laws

•  Operational objectives include consumer protection, market integrity and enhanced market competition

•  In response to global financial crisis, U.K. government abolished FSA in April 2013 and transferred prudential supervision to the Bank of England and conduct of business supervision to FCA

•  European Securities and Markets Authority is one of several new European supervisory authorities established at beginning of 2011

•  Responsible for ensuring integrity, transparency, efficiency and orderly functioning of securities markets. Fosters supervisory co-operation and convergence amongst regulators

•  Granted broad powers to draft technical standards (legally binding in EU member states), resolve disagreements between national authorities and monitor systemic risk of cross border financial institutions

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Questions?

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