CHICAGO STOCK EXCHANGE

Presentation by: Group 4

Type Location Founded Owner Keypeople Currency No.oflistings Volume Website

PrivateStockExchange Chicago,Illinois,UnitedStates March21,1882 CHXHoldings,Inc. DavidA.Herron(CEO) USD 3,000 USD32,030,753(Feb29,2008) www.chx.com

HISTORY
The Chicago Mercantile Exchange is the United States. Largest futures exchange, as well as the second largest in the world. It trades futures and options on interest rates, stock indexes, foreign currencies, and agricultural commodities. In 2004, the exchange traded 805.3 million contracts with a value of $463.4 trillion. The CME also utilizes electronic trading, using GLOBEX2. This system allows for 24 hour trading while also allowing traders who are not physically located on the Chicago trading floor to participate.

HISTORY

The Chicago Stock Exchange was founded in a formal meeting on March 21, 1882. At this time, Charles Henrotin was elected the chairman and president In July 1914, the Exchange closed as a result of World War I, and remained closed until December 11. In October 1915, the basis of quoting and trading in stocks changed from percent to par value to dollars On April 26, 1920, the Chicago Stock Exchange Stock Clearing Corporation was established. On October 29, 1929, the stock market crashed, resulting in a very difficult time period for the Chicago Stock Exchange, and the stock market in general. In May 1933, the Securities Act of 1933 was enacted. This act provided full disclosure to investors to prohibit fraud in connection with the sales of securities. The following year, the Securities Exchange Act of 1934 was enacted, which regulated securities trading and established the Securities & Exchange Commission (SEC) In 1949, the CHX merged with the exchanges of St. Louis, Cleveland and Minneapolis/St. Paul to form the Midwest Stock Exchange.

In April 1978, the Chicago Stock Exchange launched an Intermarket Trading System (ITS), a system that allows order to be sent from one exchange to another to ensure that customers receive the best execution available. In the 1980s, the Chicago Stock Exchange made several technological advancements to improve trading. In 1982, the CHX launched the MAX system, which allowed them to be one of the first stock exchanges to provide fully automated order execution. In 1987, the CHX implemented programs to trade NASDAQ securities. In the 1990s, the Exchange had a rebirth, and in 1993 changed its name back to the Chicago Stock Exchange (after being the Midwest Stock Exchange), reflecting its roots and identity within the Chicago financial community In 1997 the Chicago Stock Exchange began trading exchangetraded funds (ETFs). In 2005, the SEC approved a change of the ownership structure of the CHX from a not-for-profit, member-owned company to a forprofit, stockholder-owned corporation In 2006 the Exchange announced regulatory and shareholder

Trading on the CHX

Publicly traded companies do not need to be listed on the CHX to be traded here. SEC rules allow the CHX to trade stocks listed on other exchanges. Stocks eligible for trading in the CHX Matching System will include NYSE, AMEX and NASDAQ-listed securities. There are two trading sessions each day. The first or regular trading session begins at 8:30 AM and ends at 3 PM (Central Time) except for specified exchange-traded funds, which trade until 3:15 PM The second session, or late trading session, commences immediately after the close of the regular session and will end at 4 PM. Only cross orders with the exception of mid-point cross orders are eligible for the late trading session.

REGULATORY BODIES
US SECURITIES AND EXCHANGE COMMISION The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The Laws That Govern the Securities Industry Securities Act of 1933 Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives: Require that investors receive financial and other significant information concerning securities being offered for public sale; and Prohibit deceit, misrepresentations, and other fraud in the sale of securities. Securities Exchange Act of 1934 Trust Indenture Act of 1939 Investment Company Act of 1940 Investment Advisers Act of 1940

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