ATS-N/UA 0000310607-20-000026 LIVE 0000310607 XXXXXXXX 013-00105 false false CBX Changes have been made to Part II, Item 2(a) and 6(a) to include Instinet Germany GmbH as an affiliate of the Broker-Dealer Operator (1) permitted to enter or direct the entry of orders and trading interest into the ATS; and (2) which may receive technology support services from ILLC Technology Personnel. The changes herein apply to the Broker Dealer Operator and all Subscribers. Y INSTINET, LLC 008-23669 000007897 Financial Industry Regulatory Authority 01/14/1980 ICBX https://www.instinet.com CoreSite Realty Corporation 2 Emerson Lane Secaucus 07094 US-NJ Rackspace U.S., Inc. 125 Belmont Drive Somerset 08873 US-NJ false false The ATS is owned and operated by Instinet, LLC ("ILLC" or the "Firm"), a broker-dealer registered with the Securities and Exchange Commission. The Firm's brokerage business takes place on a single trading desk. The component groups of ILLC's trading desk are: (1) Execution Trading; (2) Electronic Sales Trading; (3) International Sales Trading; (4) Program Sales Trading; (5) Cash and Hybrid Sales Trading; (6) Latency Sensitive Electronic Trading; (7) Event Driven Trading; and (8) Derivatives and Broker Dealer Execution. Component groups of the ILLC trading desk may submit trading interest to the ATS as agent or principal, although the desk primarily acts in an agency capacity. The ILLC trading specialist groups utilize the INCA MPID and, except as otherwise noted herein, trade on an agency basis. Y N N Instinet Incorporated ("Instinet") operates through locally registered brokerage entities worldwide. "Instinet-branded" affiliates outside of the United States (collectively, the "Instinet BD Affiliates") send their clients' orders in U.S. symbols to ILLC for execution. Orders sent by the Instinet BD Affiliates to ILLC may be routed to, and receive executions in the ATS. ILLC utilizes the INCA MPID. The Instinet BD Affiliates do not have their own MPIDs. ILLC and the following Instinet BD Affiliates primarily act on an agency basis but may act as principal or riskless principal to correct bona fide errors, to fulfill non-standard settlement requests, to provide ADR services, to effect foreign exchange transactions, and in other situations that do not involve substantial proprietary trading or investment risk: (i) Instinet Australia PTY Limited (Australian entity engaged in broker-dealer activities); (ii) Instinet Canada Limited (Canadian entity engaged in broker-dealer activities); (iii) Instinet Europe Limited (United Kingdom entity engaged in broker-dealer activities); (iv) Instinet Pacific Limited (Hong Kong entity engaged in broker-dealer activities); (v) Instinet Singapore Services Private Limited (Singapore entity engaged in broker-dealer activities); and (vi) Instinet Germany GmbH (German entity engaged in broker-dealer activities). Nomura Securities International, Inc. ("NSI") is a U.S. broker-dealer and client of ILLC. NSI places orders with ILLC that may be routed to the ATS for execution. NSI acts in a principal and agency capacity and its MPID is NMRA. Additional affiliates within the Nomura financial services group (the "Nomura Group Affiliates") may place orders with NSI or another entity that has a client relationship with ILLC. Such orders may be routed to ILLC for further handling and may subsequently be routed to, and receive executions in, the ATS. The following Nomura Group Affiliates engage in the listed financial services activities and do not have MPIDs, unless otherwise noted: (1) Nomura Global Alpha (U.S. entity engaged in investment advisory activities); (2) Nomura Financial Investment (Korea) CO., LTD. (Republic of China entity engaged in investment advisory and broker-dealer activities); (3) Nomura Saudi Arabia (Saudi Arabian entity engaged in investment advisory and broker-dealer activities); (4) Nomura Financial Advisory and Securities (India) Private Limited (Indian entity engaged in broker-dealer activities); (5) Nomura Securities Malaysia SDN. BHD. (Malaysian entity engaged in investment advisory and broker-dealer activities); (6) Nomura Global Financial Products, Inc. (U.S. entity engaged in broker-dealer activities, MPID: NGFP); (7) Nomura Derivative Products, Inc. (U.S. entity engaged in broker-dealer activities, MPID: NDPI); (8) Nomura Investment Banking (Middle East) E.C. (Bahrain entity engaged in investment advisory and broker-dealer activities); (9) Nomura Italia Sim P.A. (Italian entity engaged in investment advisory and broker-dealer activities); (10) Nomura Nederland N.V. (Dutch entity engaged in investment advisory and broker-dealer activities); (11) Nomura Bank (Deutschland) GMBH (German entity engaged in investment advisory and broker-dealer activities); (12) Nomura Bank (Switzerland) LTD. (Swiss entity engaged in investment advisory and broker-dealer activities); (13) Nomura Code Securities Limited (United Kingdom entity engaged in investment advisory and broker-dealer activities); (14) Nomura International PLC (United Kingdom entity engaged in investment advisory and broker-dealer activities); (15) Nomura Australia Limited (Australian (NSW) entity engaged in investment advisory and broker-dealer activities); (16) Banque Nomura France (French entity engaged in investment advisory and broker-dealer activities); (17) P.T. Nomura Indonesia (Indonesian entity engaged in investment advisory and broker-dealer activities); (18) Nomura Singapore Limited (Singapore entity engaged in investment advisory and broker-dealer activities); (19) Nomura Securities Singapore PTE., LTD (Singapore entity engaged in investment advisory and broker-dealer activities); (20) Nomura Securities CO., LTD (Japanese entity engaged in investment advisory and broker-dealer activities); (21) Nomura International (Hong Kong) LTD. (Hong Kong entity engaged in investment advisory and broker-dealer activities); (22) Nomura Securities (Hong Kong) Limited (Hong Kong entity engaged in investment advisory and broker-dealer activities); (23) Joinvest Securities CO., LTD. (Japanese entity engaged in investment advisory and broker-dealer activities); (24) Capital Nomura Securities Public Company Limited (Thailand entity engaged in investment advisory and broker-dealer activities); (25) Nomura Asset Management CO., LTD. (Japanese entity engaged in investment advisory activities); (26) Nomura Securities (Bermuda) LTD. (Cayman Islands entity engaged in broker-dealer activities); (27) Nomura Corporate Research and Asset Management INC. (U.S. entity engaged in investment advisory activities); and (28) Long Drive Management Trust (U.S. entity engaged in investment advisory activities). Nomura Holdings holds a non-controlling 41% economic interest in American Century Investments (U.S. entity engaged in investment advisory activities). Y N N N N N For purposes of this Form ATS-N, Subscribers to the ATS will, where necessary, be termed Direct or Indirect Subscribers. Direct Subscribers are ILLC clients that have been approved to direct their orders to the ATS via FIX (i.e., Subscribers who have elected not to utilize the electronic trading products offered by ILLC to route their orders or trading interest to the ATS) as discussed in Part III, Item 5(a) of this form. Indirect Subscribers are ILLC clients that have been approved to use one or more of the Instinet order and execution management systems ("Instinet OMSs"), the Instinet Execution Experts suite of algorithms ("Experts), or the Instinet Smart Order Router ("SOR"), all of which may route Indirect Subscriber orders to the ATS based on routing determinations made by the relevant product. Indirect Subscriber orders handled by the Experts, the SOR, or an ILLC trader may be routed to the ATS depending on marketability and the Indirect Subscriber's order handling instructions. Direct and Indirect Subscribers are collectively referred to as "Subscribers." Clients may be both Direct and Indirect Subscribers, depending on the method in which the Subscriber utilized to access the ATS. The use of the Experts and SOR services to enter orders into the ATS is discussed in Part III, Item 5(a). Additionally, ILLC offers its clients order routing and execution support services through the component groups of ILLC's trading desk listed in Part II, Item 1. The Experts, SOR, Instinet OMSs, and the Front End are referred to herein as the "Instinet Trading Products." ILLC offers these products and services to all Subscribers. Use of these products and services is governed by ILLC's client agreement (the "Client Agreement"), which contains no specific terms and conditions for routing orders into the ATS. Similarly, the terms and conditions of the Client Agreement do not differ dependent on whether the Subscriber is a Direct or Indirect Subscriber. Orders entering the ATS by any of the products or services listed above will be prioritized, matched, and executed in accordance with the ATS' standard matching and execution logic. ILLC offers Indirect Subscribers the ability to enter orders into the ATS by utilizing one or more of the following Instinet Trading Products: SMART ORDER ROUTER: The SOR is a customizable tool that explores liquidity in various market centers. Clients may elect to utilize the standard SOR configuration to access various market centers (ILLC determines the venues and the order in which client order flow is routed). Clients may also elect to customize the SOR in which case the client may choose the specific venue(s) to which their order flow is routed (to the extent permitted by regulatory requirements) as well as select the sequence in which their order flow is routed to each venue. The SOR will include the ATS as a potential venue, provided the client has not elected to limit its strategy to exclude the ATS. Subscribers may also customize the SOR to access only the ATS. Users of the SOR must be on-boarded as ILLC clients with access to the SOR. Use of the SOR is governed by the Client Agreement, which contains no specific terms and conditions for routing orders into the ATS. Orders routed to the ATS by the SOR will be prioritized, matched, and executed in accordance with the ATS' standard prioritization, matching and execution logic. EXPERTS: The Experts suite of algorithms includes a number of strategies designed to achieve a client's selected trading strategy. Orders routed via the Experts algorithms may include the ATS as a possible destination. Clients may customize the operation of the Experts algorithms, including limiting the venues accessed (to the extent permitted by regulatory requirements).Trading interest sent to the ATS by an Experts algorithm is subject to the ATS' standard prioritization, matching and execution logic. Unless a client has elected otherwise, trading interest entered into to the ATS by an Experts algorithm is treated as representing ILLC's trading interest (i.e., broker-dealer agency trading interest) and not the trading interest of the underlying Subscriber. Users of the Experts must be on-boarded as ILLC clients with access to the Experts. Use of the Experts is governed by the Client Agreement, which contains no specific terms and conditions for routing orders into the ATS. Orders entering the ATS through any of the Experts strategies will be prioritized, matched, and executed in accordance with the ATS' standard prioritization, matching and execution logic. OMS/EMS: ILLC offers the following proprietary order/execution management systems: (1) Newport; (2) Trading Portal; and (3) Tradespeed (collectively, the "Instinet OMSs"). The Instinet OMSs allow users to access the ATS in the following ways: (i) by directing trading interest to the ATS via FIX, (ii) by utilizing an Experts algorithm (to the extent offered by the Instinet OMS and permissioned to access the ATS,) and (iii) by otherwise submitting a non-directed order to ILLC for further handling by trading desk personnel or by entering the order in the SOR. Each Instinet OMS allows users to limit accessible trading venues. In the event an order, or a portion of an order, reaches the ATS via an Instinet OMS, the order is subject to the standard prioritization, matching and execution procedures described herein. Users of an Instinet OMS must be on-boarded as ILLC clients with access to an Instinet OMS. Use of the Instinet OMSs is governed by the Client Agreement, which contains no specific terms and conditions for the management of orders ultimately routed to the ATS, and do not differ based on which OMS is utilized. FRONT END: ILLC owns and operates a front end system (the "Front End"). The Front End is a separate, stand-alone system specific to the BlockCross ATS that includes certain algorithmic and order routing functionality. The Front End allows users to seek contra-side interest for their trading interest outside of the BlockCross ATS while simultaneously allowing for matching and execution within the BlockCross ATS. Only orders entered into the Front End for possible matching and execution within the BlockCross ATS are eligible to access the Front End's algorithmic and order routing functionality. Orders routed from the Front End may include an Instinet ATS other than the BlockCross as a routing destination. The means by which the order reached the ATS (e.g. Experts, SOR, OMS, FIX) does not affect the order's priority, matching, or execution. Y N BACKGROUND AND SCOPE: Subscribers' confidential trading information includes Subscriber order and execution information and excludes post-execution transaction information of the type made public under reporting rules or regulations, or of an aggregated nature (e.g., aggregated and anonymous order and execution statistics aged at least one day (T+1) from the date of execution) to be Subscriber confidential information. Instinet is an indirect wholly-owned subsidiary of Nomura Holdings Inc. ("NHI"). ILLC is a wholly-owned direct subsidiary of Instinet Holdings Incorporated ("IHI"). ILLC's affiliate, Instinet Group, LLC ("IGLLC"), is also a direct, wholly owned subsidiary of IHI. IHI is a wholly-owned direct subsidiary of Instinet Incorporated ("Instinet"). Certain personnel that provide services to the ATS are employed by IHI, IGLLC, or ILLC and certain compliance functions are outsourced to NHI ("Shared Employees"). Instinet does not have any employees who are solely responsible for the ATS. Listed below are the Shared Employees that service the ATS, ILLC, or an ILLC affiliate and have access to Subscriber confidential trading information. TECHNOLOGY PERSONNEL: Employees that provide information technology ("IT") support, IT development and strategy, tech management, and regulatory reporting services to the ATS (collectively "Technology Personnel"), also provide similar services to (i) ILLC's other business lines and (ii) some other subsidiaries of Instinet, including locally registered brokers Instinet Canada Limited, Instinet Canada Cross Limited, Instinet Europe Limited, Instinet Pacific Limited, Instinet Australia Limited, Instinet Germany GmbH, and Instinet Singapore Limited. For ILLC and the Instinet BD Affiliates, Technology Personnel are responsible for the operation, development, monitoring, and testing of various technology systems. For the ATS, certain groups of Technology Personnel are responsible for the operation, development, monitoring, and testing of the ATS's coding, network infrastructure, and software applications. In connection with the performance of their duties, Technology Personnel may access real-time and post-trade Subscriber order and execution information, including orders that were submitted to the ATS but were subsequently cancelled or did not otherwise receive an execution in the ATS. Separately, some Technology Personnel with direct physical access to ILLC servers and databases have the ability to access log files containing Subscriber order and execution information. Technology Personnel are employed by either ILLC, IHI, or IGLLC. OPERATIONS AND COMPLIANCE PERSONNEL: Employees that provide customer support, finance, clearing and middle office support and compliance supervision to the ATS (collectively "Operations Personnel") also provide services to ILLC's other business lines and, as needed, certain Instinet BD Affiliates. Customer support personnel are responsible for addressing client inquiries related to connectivity to the ATS and client trading activity and can access real-time and post-trade Subscriber order and execution information in connection with executing their duties. Clearing, middle office support, and Finance are responsible for the clearance, settlement, and billing of transactions and can access post-trade Subscriber order and execution information, including orders that were submitted to the ATS but were subsequently cancelled or did not otherwise receive an execution in the ATS, in connection with executing their duties. Compliance personnel have a range of responsibilities including, but not limited to, responding to regulatory inquiries or performing internal audits of ILLC or its affiliates, including the ATS. Generally, compliance personnel may access post-trade Subscriber order and execution information, including orders that were submitted to the ATS but were subsequently cancelled or did not otherwise receive an execution in the ATS, in connection with executing their duties but may, when appropriate, be permissioned to access real-time Subscriber order and execution information. Operations Personnel are employed by either ILLC, IHI, or IGLLC. ELECTRONIC TRADING PRODUCTS PERSONNEL: Employees that provide product development, customer support, and product sales support for the Instinet Trading Products (collectively "ETP Personnel") may also provide support to the ATS. Many ILLC clients access the ATS via an Instinet Trading Product. Accordingly, ETP Personnel may provide customer support to Indirect Subscribers as a result of the customer's use of an Instinet Trading Product as a means of access to the ATS. For ILLC, ETP Personnel are responsible for the development, testing, and sales and technology support of the Instinet Trading Products as well as other components of the Instinet systems. For the ATS, ETP Personnel are responsible for the development, testing, and monitoring of the Instinet Trading Products' interaction with the ATS and for compiling data and analytics in response to requests from Subscribers. ETP Personnel may access real-time and post-trade Subscriber order and execution information, including orders that were submitted to the ATS but were subsequently cancelled or did not otherwise receive an execution in the ATS, to support the development, testing, and monitoring of the Instinet Trading Products and to respond to Subscriber requests for data or analytics. ETP Personnel are employed by either ILLC, IHI, or IGLLC. U.S. LIQUIDITY VENUES TEAM: Employees that provide product strategy, customer support, and sales support for the Instinet ATSs (collectively "Liquidity Venues Personnel") also provide support for other ILLC businesses. For the ATS, Liquidity Venues Personnel provide customer support to Direct Subscribers. For ILLC, Liquidity Venues Personnel develop reports for use by internal groups in monitoring, developing, and enhancing ILLC's products and services. Liquidity Venues Personnel may access real-time and post-trade Subscriber order and execution information, including orders that were submitted to the ATS but were subsequently cancelled or did not otherwise receive an execution in the ATS, to support each Subscriber's use of the ATS and compile data and analytics in response to requests from Direct Subscribers. SALES AND TRADING PERSONNEL: Trading desk personnel within the component groups identified in Part II, Item 1(a) (collectively, "Sales and Trading Personnel") are responsible for providing order routing and execution support to clients including addressing Subscriber inquiries regarding their orders routed to the ATS or other market centers. Sales and Trading Personnel may access real-time and post-trade Subscriber order and execution information, including orders that were submitted to the ATS but were subsequently cancelled or did not otherwise receive an execution in the ATS, in connection with executing their duties. Sales and Trading Personnel are permissioned for access to such information based on client coverage. The information that may be viewed includes the destination market center for a given order (e.g., the ATS) and whether a previously routed order was executed or cancelled. Sales and Trading Personnel are employed by ILLC. Pursuant to an Assignment of Intellectual Property between ILLC and IHI, IHI licenses to ILLC intellectual property employed by ILLC in connection with the operation of the ATS. Specifically, IHI licenses the ATS matching engine (see Part III Item 11), the functionality used to input and utilize market data (See Part III Item 23), and the systems and infrastructure providing connectivity to the ATS (See Part III Item 6). In addition, IHI develops and licenses certain algorithmic trading products to ILLC (See Part III Item 5). Employees of IHI and IGLLC provide services to the ATS as detailed in Part II Item 6(a) above and Part II Item 7(d) below. ILLC utilizes Broadridge Financial Solutions, Inc. systems and services for the purposes of recordkeeping, clearance and trade settlement processing. ILLC utilizes FIS for securities lending, regulatory reporting services, and WORM storage. ILLC utilizes Best Execution and Surveillance Solutions, LLC for regulatory reporting services. CoreSite Realty Corporation hosts ILLC's primary data center in Secaucus, NJ. Rackspace U.S., hosts ILLC's secondary data center in Somerset, NJ. As stated in response to Part II Item 6(a), the Instinet BD Affiliates are wholly owned subsidiaries of IHI and are affiliates of ILLC. The Instinet BD Affiliates may, on behalf of their clients, send orders for execution in U.S. markets to ILLC's trading desks, SOR, and algorithmic trading strategies, many of which include the ATS as a destination. Y BACKGROUND AND SCOPE: The ATS system (e.g., matching engine and associated applications) (the "ATS Core) comprises standalone hardware and software applications that are maintained separately from ILLC's systems used to support its agency broker-dealer business (the "ILLC Core"). ILLC maintains policies and procedures designed to safeguard the confidential trading information of Subscribers as well as virtual barriers to prevent unauthorized access to such information. ILLC's Core is the conduit through which firm-wide order information is processed (e.g., agency broker-dealer order and execution information). Indirect Subscriber orders routed to the ATS via an Instinet Trading Product pass through the ILLC Core. Direct Subscriber orders are routed to the ATS via dedicated FIX connections and do not pass through the ILLC Core in route to the ATS. EMPLOYEES WITH ACCESS TO SUBSCRIBER CONFIDENTIAL TRADING INFORMATION: Instinet does not have any employees solely responsible for the ATS. The employees described in response to Part II, Item 6(a) have access to Subscriber confidential trading information. These employees are prohibited from sharing any Subscriber confidential trading information with persons not expressly permissioned to receive such information under Instinet policy, as described in Part II, Item 7(a) of this form. SYSTEMS WITH ACCESS TO DIRECT SUBSCRIBER CONFIDENTIAL TRADING INFORMATION: ILLC Data messages are periodically written to a database for storage and retention (the "Core Database"). This information includes Direct and Indirect Subscriber order and execution information from both the ATS Core and the ILLC Core systems, as well as other ILLC data. Instinet maintains a Core Web Graphical User Interface ("Core Web GUI"), which allows a user to query the Core Database for the purposes of monitoring, reporting, and testing the Instinet systems and applications, including the ATS. Access to the Core Database via the Core Web GUI is limited to personnel supporting the operations of the ILLC and ATS Cores and related databases and compliance supervisory personnel. Employees responsible for operating the ATS Core include Operations and Technology Personnel and ETP Personnel whose responsibilities include the operation of the ATS. Members of the Liquidity Venues Team are permissioned to access Subscriber order and execution information. ATS data, including Direct and Indirect Subscriber order and execution information, is a subset of the data retained on the Core Web Database. ILLC personnel whose responsibilities include the operations of the ATS and related systems or its compliance with applicable rules, may be permissioned to access Subscriber order and execution information via the Core Web GUI. Other ILLC personnel may be permissioned for access to the Core Web GUI, but will be prevented from accessing subscriber confidential trading information. ILLC reviews and permissions employees for access to the Core Web GUI in accordance with the policies and procedures outlined in Part II, Item 7(a)(ii) below. Physical access to Instinet's servers and databases is limited to employees responsible for operating the system and is generally further limited to employees performing necessary IT functions. Instinet servers and databases are housed in locked rooms requiring keycard access. Entry and exit is monitored via video surveillance. ILLC reviews and permissions employees for physical access to Instinet's servers and databases in accordance with the policies and procedures outlined in Part II, Item 7(a) (ii) below. SYSTEMS WITH ACCESS TO INDIRECT SUBSCRIBER CONFIDENTIAL TRADING INFORMATION: The Newport OMS and Instinet Execution Experts can transmit Subscribers' confidential trading information to the extent orders are managed by the Newport OMS or routed through an Experts strategy. Data related to Indirect Subscriber orders managed by the Newport OMS or routed through an Experts strategy is accessible through certain GUIs that can disseminate information regarding the destination market center for a given order (e.g., the ATS) and whether a previously routed order was executed or cancelled. Through the Newport OMS, Technology and ETP Personnel who support the Experts strategies or the OMS utilized may access real-time and post-trade Indirect Subscriber order and execution information routed or managed through the relevant strategy or OMS (Direct Subscriber order and execution information will not pass through an Instinet OMS or the Experts). Sales and Trading Personnel may also be permissioned, based on client coverage, to access real-time and post-trade order and execution via the Newport OMS. Note, certain members of the Electronic Sales Trading component group of the ILLC trading desk are considered client coverage for all clients utilizing the Experts algorithms. Note, the information available to such support or trading personnel is provided by systems supporting the relevant strategy or OMS and does not include information regarding an order's priority or status in the ATS or another market center. Information regarding ATS orders and executions that do not relate to the relevant strategy or were not managed by the OMS is not transmitted by these systems. SUBSCRIBER CONFIDENTIAL TRADING INFORMATION SAFEGUARDS: ILLC requires permissioned logins to access Instinet Systems. Additionally, Instinet's global cyber security efforts, including measures to detect and prevent unauthorized access to Instinet systems, apply to ILLC and its affiliates, including the operation of the ATS. Relevant Principals and Supervisors must approve employee access to Instinet systems, including the ATS and the applications with the ability to access Subscriber confidential trading information outlined above. SEPARATION: ILLC has implemented physical and virtual information barriers to separate ATS data from other ILLC data and, in turn, separate personnel and systems with access to Subscriber confidential trading information from those not permitted to access such information. ACCESS TO DIRECT SUBSCRIBER INFORMATION: Employees seeking to access the systems that may transmit or disseminate Direct Subscriber Information (see above section titled Systems with Access to Direct Subscriber Confidential Trading Information) must receive approval from the ATS Supervisor. In reviewing such requests, the ATS Supervisor considers factors including the employee's current role and whether the employee performs a function related to the operations of the ATS and related systems or its compliance with applicable rules that requires access to Direct Subscriber information. An employee's request for access may be denied if, based on the ATS Supervisor's review: (1) the employee's stated job function does not relate to the operations of the ATS and related systems or its compliance with applicable rules, (2) the employee has requested a type of permissioning (see below) that is too broad for the employee's stated job function, or (3) the employee can perform their stated duties without such access. If an employee changes roles, the ATS Supervisor will adjust the employee's access to appropriately reflect the employee's new role. Based on this review, the ATS Supervisor or delegate may revoke, suspend, or modify access. Decisions to approve access are subject to a periodic review pursuant to ILLC's Regulation ATS written supervisory procedures ("WSPs") described below. On a monthly basis, the ATS Operations Principal or delegate conducts a review to confirm the appropriateness of user access to Subscriber confidential trading information, including verification that users whose roles have changed and/or, employees who have been inactive, transferred or terminated have their permissioned access modified accordingly. Based on this review, the ATS Supervisor or delegate may revoke, suspend, or modify access. ACCESS TO INDIRECT SUBSCRIBER INFORMATION: Employees seeking to access the systems that may transmit or disseminate Indirect Subscriber information (see above section entitled Systems with Access to Indirect Subscriber Confidential Trading Information) may be permissioned to do so on an as needed basis. PERSONAL TRADING RESTRICTIONS: Instinet Incorporated maintains an Employee Investment Policy (the "EIP") which covers employees of all U.S. subsidiaries, and includes employees supporting the ATS. The EIP is designed to encourage long-term investments and prohibits employees from engaging in day-trading activities. Instinet prohibits all employees, including those with access to Subscriber Confidential Trading Information, from trading based on non-public, or other confidential information. The EIP requires employees to maintain EIP covered accounts at specified brokers that have agreed to provide Instinet daily trading information for employee personal accounts. EIP covered securities are subject to a 15-day holding period. Prior to entering any trades in a personal account covered by the EIP, employees must enter a trade approval request via the Personal Trading Control Center ("PTCC") tool and receive an approval from both their supervisor and PTCC group. The PTCC tool requires the employee to certify that the employee: (1) is not in possession of any material non-public information concerning the security or commodity the employee proposes to buy or sell; (2) does not know of a pending customer trade nor of a pending research report in the security or commodity; (3) is not engaging in personal trading activity that violates Instinet's policies and procedures, including the Code of Ethics, or any duties owed to Instinet or its clients; (4) has reviewed Instinet's restricted list and the proposed transaction is not on the restricted list; (5) has confirmed that the proposed transaction meets the holding period requirement; (6) agrees that the proposed transaction must be effected on the same day on which approval is given; and (7) has confirmed that the proposed transaction(s) does not involve the purchase of an initial public offering (IPO) or any other type of new equity issue. In approving or denying such a request, supervisors may review the employee's trades for any unusual activity, possible front-running customer trades or research, or conflicts with any of Instinet's businesses. In addition, supervisors consider whether transactions are appropriate, given the employee's economic status and investment experience and whether the transactions are of such a frequency that they may distract the employee from his or her responsibilities at Instinet. Separately, the Compliance Department reviews personal trades daily and consults with managers if irregularities are identified. Generally, if an approval for an employee trade is given, it remains in force for the trading day in which it was received. Once an employee receives written confirmation approving a covered transaction, the employee may enter a trade in that symbol. Employee supervisors review each employee's trading activity on a post trade basis and check for irregularities and potential red flags. In the event any irregularities or red flags are discovered, supervisors are to escalate the matter to Instinet management and the ILLC Chief Compliance Officer. Instinet, in its discretion, may take any action against an employee found to have violated the EIP, up to and including termination. CONFIDENTIAL INFORMATION AND INSIDER TRADING: Instinet Incorporated maintains a policy regarding confidential information and insider trading which covers employees of all U.S. subsidiaries, including employees supporting the ATS. Employees must not disclose any confidential information to anyone who is not authorized by Instinet to receive it pursuant to these policies and may not use such information, other than in the course of their employment and in connection with the performance of the duties for which access to such information has been granted. Accordingly, employees may not use confidential information to: (1) trade securities for their own accounts, accounts in which they have a direct or indirect beneficial interest, or accounts over which they can exercise control; or (2) advise relatives, friends, or other persons about possible securities transactions. Nor may employees authorize anyone else to disclose or use confidential information in a manner that would violate these prohibitions. WRITTEN PROCEDURES: ILLC's Regulation ATS WSPs provide specific guidelines for the initial review and approval process, as well as the ongoing evaluation of, employee access to ATS data. Prior to granting any employee access to Instinet's systems, including the ATS and the applications with the ability to access Subscriber confidential trading information must review and document each employee's level and type of access requested, the role and responsibilities of the employee, and the purpose for which access was requested. On a monthly basis, employee access is reviewed to determine whether their level of access to Instinet's systems, including the ATS and the applications with the ability to access Subscriber confidential trading information remains appropriate. The ATS Supervisor must document each review and the changes made, if any, to employee access. Periodically, the Internal Audit group reviews the ATS operations generally. Such reviews typically include testing the ATS WSPs, assessing the ATS Supervisor's review of employee access, and confirming that each review has been properly documented. ILLC considers all Subscribers to the ATS to have consented to the disclosure of their confidential trading information as described in Part II, Items 6(a) and 7(a) above and in the following ways. MARKETING: ILLC may include, in marketing materials or client presentations, aggregated and anonymous analysis related to order and execution statistics derived from orders and executions in the ATS. Subscribers do not have the ability to opt out of the use of their related order and execution information for ILLC marketing purposes. CLIENT COVERAGE: ILLC may permission the systems and personnel described in Part II, Items 6(a) and 7(a) to access Subscriber (both Direct and Indirect Subscribers) confidential trading information. Subscribers may request to limit such disclosure, with respect to Sales and Trading Personnel, in accordance with the procedure described in response to Part II, Item 6(c) below. ILLC reserves the right, in its sole discretion, to honor such requests and will review each request on a case-by-case basis. Typically, ILLC will honor such requests by adjusting a client's coverage model to reflect the client's requested opt out. THIRD PARTIES: ILLC does not disseminate Subscriber Confidential Trading Information to third parties, other than those listed in Part II, Item 6(b), except where required by applicable law. Subscribers may request that ILLC share their confidential trading information with third parties at their discretion. Subscribers may request to withdraw their consent to the information described above by contacting their sales representative in writing via email or instant message. Subscribers making such requests will receive written notification regarding their request to opt-out as soon as practicable. ILLC conducts periodic reviews of opt out requests to ensure that such requests have been implemented. The persons described in response to Part II, Item 6(a) and (b) have access to Subscriber confidential trading information. The type of information that such persons can access along with the reasons for such access is described in response to Part II, Item 6(a) and (b). Investment Companies Issuers Brokers NMS Stock ATSs Asset Managers Principal Trading Firms Hedge Funds Market Makers Banks Dealers N Only clients of ILLC with accounts approved for trading may be Subscribers of the ATS. Prior to establishing a trading account for a prospective client, ILLC will require (1) the client's name, address and other identifying information, as well as the name of any adviser/agent authorized to trade for the account; (2) the citizenship (or place of incorporation) of the client; (3) a Taxpayer Identification Number or equivalent; (4) the type of client, e.g., registered investment adviser, registered broker-dealer, etc.; (4) the names of the persons designated by the client for trading authorization; (5) clearing instructions, including, where applicable, the identity of the client's prime broker or custodian (ILLC does not custody customer securities); and (6) a completed account application, client agreement and supplementary documentation, as appropriate. ILLC does not admit natural persons as Subscribers to the ATS. Prospective clients must also pass ILLC's AML/KYC/CIP risk assessments, as well as any credit assessments. ILLC reserves the right to prevent or otherwise limit a prospective Subscriber from accessing the ATS if they fail to meet the requirements to become a client, in ILLC's sole discretion. ILLC may prevent or otherwise limit any client's access to the ATS. Factors that may be considered in preventing or otherwise limiting a client from accessing the ATS include, but are not limited to, reputational risk to Instinet, failure to make timely and proper settlement of transactions, regulatory actions or findings suggesting inappropriate activity, or a failure to satisfactorily respond to an information request. For purposes of access to the ATS, Subscribers are not required to enter into any specific clearing arrangement. Y Y ILLC may prevent or otherwise limit any Subscriber's access to the ATS if they fail to meet the requirements to become a client or ILLC decides to terminate its relationship with the client based on factors related to the client's activity within the ATS or otherwise. As set forth in the Client Agreement, ILLC may, at any time, without cause or notice, (i) suspend or terminate all or part of the ATS or other Instinet services or a client's access thereto, (ii) change the nature, composition or availability of all or a portion of the Instinet services or (iii) change any limits or restrictions on the trading or other activities a client may conduct through the Instinet services. If a client's passwords or other access methods ("Access Methods") are lost, stolen or compromised, ILLC will cancel or suspend the access methods upon receipt of notice from the client. ILLC may terminate, revoke, suspend, modify or change any or all of a client's Access Methods at any time, without prior notice, in its sole and exclusive discretion. ILLC may, in its sole and absolute discretion, reject any order that exceeds established limits, appears to be entered in error, or is otherwise unacceptable. ILLC may also terminate its relationship with a client, and by extension, prevent or otherwise limit a Subscriber's access to the ATS based on factors including, but not limited to, reputational risk to Instinet, failure to make timely and proper settlement of transactions, regulatory actions or findings suggesting inappropriate activity, or a failure to satisfactorily respond to an information request. For instance, ILLC has terminated client access to ILLC's services due to client failure to adequately address compliance questions relating to the client's trading activity. As noted above, ILLC may, in its sole discretion, exclude a Subscriber from the ATS, or suspend or withdraw access in whole or in part. Any suspension of ILLC, in its capacity as a Subscriber to the ATS, is likely to be temporary, and to arise from a technical issue or another event that presents a risk to the ATS system or another Instinet service. The order entry and execution features of the CBX are available throughout each trading day, except between approximately 8:00 p.m. and 9:00 p.m. Eastern Time, subject to ILLC's ability to revise such hours of operation at any time. Orders received when the CBX is not in operation are rejected and open orders, if any, are canceled back. Regular trading occurs in the CBX from 9:00pm until 8:00pm the following day. The following is a description of the trading during various time periods throughout the day: 4:00am-8:00pm: CBX operates in accordance with its normal matching and execution procedures as described in Part III Item 11(c). During market holidays or shortened trading days this period of operation will be amended subject to the availability of market data. On market holidays or shortened trading days, once market data is no longer available, the CBX will operate in accordance with the section "9:00pm-4:00am" below. 8:00pm-9:00pm: The CBX is not in operation during this period. Orders received when the CBX is not in operation are rejected and open orders, if any, are canceled back. 9:00pm-4:00am: Market data is not available during this time. From 9:00pm until 4:00am the following day, the CBX will accept orders but a match will occur only if both orders have the same limit price (e.g., a buy order with a $10.00 limit price will match with a sell with a $10.00 limit price, but will not match with a sell order with a $9.95 limit price). Orders entered into the CBX during this period that remain unexecuted will be priced and matched in accordance with the description provided in Part II Item 11(c) as market data becomes available beginning at 4:00am. Y ILLC utilizes the FIX 4.0 and FIX 4.2 protocol for global electronic trading and is FIX compliant with the standard messaging format of the FIX 4.0 and FIX 4.2 protocol version. A Subscriber may connect to the ATS via cross connection when the Subscriber's system is located, or the Subscriber maintains a point of presence, in the same data center used for the ATS matching engine. As noted below, ILLC does not offer cross connections to Subscribers. In the event a Subscriber establishes a cross connection with the ATS, the Subscriber provides, installs and maintains the hardware used for connection. The ATS does not charge a fee for cross connects. Orders entered into the ATS via a FIX connection do not pass through the Experts or SOR to access the ATS. Y ILLC clients may choose to send directed orders to the ATS via a FIX connection. Subscribers may access the ATS indirectly via the Instinet SOR or a specific Experts strategy. Subscribers may use an Instinet OMS/EMS to send a directed order to the ATS via FIX, or to access the SOR or Experts. The Instinet router or strategy chosen will determine where individual orders are routed, including to external market centers and ATSs, which may include any Instinet ATS. In the event the Instinet SOR or Experts strategy chooses to transmit an order to CBX, an electronic message will be sent from the ILLC Core to the CBX Core using the FIX protocol (as described in Part III Item 5(a) above), in the same manner that Subscribers utilizing a FIX connection may transmit orders. Once an order reaches the ATS, the means by which the order reached the ATS (e.g. Experts, SOR, OMS, FIX) does not affect the order's priority, matching, or execution. In addition, clients of ILLC may submit orders to ILLC for further handling or routing (See Part II, Item 5), whether via ILLC's trade desk personnel, Instinet Trading Products or otherwise, and ILLC may route such orders to the ATS. Subscribers and the Trading Desks use the same methods to access the ATS. Latency is the total amount of time it takes for a message to reach CBX, be processed by CBX, and be responded to by CBX. Latency may differ on an order by order basis due to various conditions. The experienced latency for any individual order may materially differ from the median times typically observed based on these variable conditions. For example, the volume of messages transmitted across a given connection at a specific point in time or the location from which an order is transmitted (e.g., the physical distance from a Subscriber's server or point of presence to CBX) may impact the latency experienced on an individual order. Additionally, clients may request bespoke configurations to the Instinet Trading Products (e.g., a client requesting a configuration of the SOR where the only venue to which its orders would be routed is CBX may experience greater latency than a Subscriber choosing to route the same order to CBX via a direct FIX connection) which may impact the latency experienced for that client's orders. Y N N N The CBX accepts market, limit and pegged order types. "Market" is an order to buy or sell at immediately at the best available price. "Limit" is an order to buy or sell at a specified price or better. "Pegged" is an order to buy or sell at a price relative to a benchmark reference price. The CBX accepts both "buy" and "sell" orders. All Subscribers may submit orders to sell "long" or "short," but only broker-dealer Subscribers may submit orders marked "short sale exempt." Pegged orders are limit orders pegged to the national best bid ("NBB"), national best offer ("NBO") or midpoint of the national best bid and offer ("NBBO"). Pegged orders may include an ultimate limit price. Orders pegged to the NBB or NBO may include a peg-offset (e.g., Buy 100 shares XYZ pegged at the NBB plus/minus $.02). For orders priced at $1.00 per share or higher, peg-offsets may only be expressed in whole penny amounts. Orders pegged to the midpoint of the NBBO may not include a peg-offset. Orders may be designated immediate-or-cancel ("IOC"), "Day", Fill-or-Kill ("FOK") or "Good Till." While "Good Till" orders types with an expiry longer than a day will be accepted, they will be cancelled back at the end of the day if not executed. Subscribers may indicate a minimum acceptable quantity ("MinQty") associated with an order. The MinQty condition specifies the smallest contra-side order with which the Subscriber is willing to interact. A MinQty value must be satisfied on a single order from a single counterparty basis; CBX will not aggregate multiple orders to satisfy the MinQty requirement. The CBX allocates, matches, and executes orders using price/time priority. For derivatively-priced (e.g., pegged) orders, the time of order receipt will be deemed to be the time of each price change. However, where two pegged orders are deemed to be on time parity the ATS will treat the order originally received first as having priority; no two orders can enter the CBX at exactly the same time. For passive (i.e., nonmarketable) limit orders priced outside the NBBO, the time of order receipt will be deemed to be the time the order most recently became eligible to be executed at or within the NBBO. Limit orders priced through the NBBO and market orders are treated the same as market pegged orders. Orders deemed to be removing liquidity from the CBX will receive all available price improvement. For two given orders, the order viewed by the CBX as having been received first will be deemed to be adding liquidity. As noted above, the time of order receipt for any derivatively priced order is deemed to be the time of the most recent reference price change. CBX does not permit the execution of orders outside the NBBO. CBX does not permit the execution of orders when the NBBO is locked or crossed. The CBX does not currently allow order types designed not to remove liquidity (e.g., post-only orders). Orders are not routed out of the CBX. Up until an order is matched, Subscribers may modify, cancel, replace or remove their orders from the CBX at their discretion. In the event a Subscriber modifies, cancels or replaces an order in the ATS, the time of order receipt will be updated and the order will be prioritized based on the updated time of receipt. Any malformed order will be rejected. All order types discussed above are available across all forms of connectivity to the ATS. Orders are not routed out of the CBX. Only broker-dealer Subscribers may submit orders as short-sell exempt. CBX has a minimum order quantity of one share. CBX will reject any order greater than 2,147,483,647 shares, or that otherwise exceeds pre-set financial and regulatory risk management controls. Y There are no special requirements or handling procedures for odd lot orders. Y There are no special requirements or handling procedures for mixed-lot orders. Y N The CBX does not accept orders prior to the start of its regular trading hours (i.e., it does not accept orders between 8 p.m. and 9 p.m., ET). Orders received after opening are eligible for interaction in accordance with the standard prioritization, matching and execution rules identified at Part III Item 11(c) herein. The CBX does not conduct an "opening cross." The CBX does not conduct a "reopening cross" following a stoppage of trading during CBX's regular trading hours. Rather, orders are matched and executed in accordance with the CBX's standard prioritization, matching and execution logic. Y The CBX does not effect a "reopening cross" following a stoppage of trading during CBX's regular trading hours. Rather, the CBX will cross any open order interest following the stoppage (e.g., orders received prior to, or during, the stoppage in trading that were not subsequently canceled) in accordance with the CBX's standard prioritization, matching and execution logic. Y Regular trading occurs in the CBX from 9:00pm until 8:00pm the following day. The following is a description of the trading during various time periods throughout the day: 4:00am-8:00pm: CBX operates in accordance with its normal matching and execution procedures as described in Part III Item 11(c). During market holidays or shortened trading days this period of operation will be amended subject to the availability of market data. On market holidays or shortened trading days, once market data is no longer available, the CBX will operate in accordance with the section "9:00pm-4:00am" below. 8:00pm-9:00pm: The CBX is not in operation during this period. Orders received when the CBX is not in operation are rejected and open orders, if any, are canceled back. 9:00pm-4:00am: Market data is not available during this time. From 9:00pm until 4:00am the following day, the CBX will accept orders but a match will occur only if both orders have the same limit price (e.g., a buy order with a $10.00 limit price will match with a sell with a $10.00 limit price, but will not match with a sell order with a $9.95 limit price). Orders entered into the CBX during this period that remain unexecuted will be priced and matched in accordance with the description provided in Part II Item 11(c) as market data becomes available beginning at 4:00am. CBX is a crossing system which allows Subscribers to enter orders in equity securities for prioritization and interaction with orders of other CBX Subscribers. CBX matches orders on a continuous basis during its hours of operation. All NMS Stocks are eligible for trading on CBX. CBX does not permit the execution of orders outside the NBBO. CBX does not permit the execution of orders when the NBBO is locked or crossed. Direct Subscribers may designate their liquidity-adding orders, and ILLC may designate the liquidity-adding orders of Indirect Subscribers, as only eligible to interact with orders from certain Taker Tiers (further discussed in Part III Items 13 and 14). Direct Subscribers may designate their liquidity-adding orders, and ILLC may designate the liquidity-adding orders of Indirect Subscribers, as only eligible to interact with orders from certain Taker Tiers (further discussed in Part III Items 13 and 14). ORDER INTERACTION: CBX allocates, matches, and executes orders using price/time priority, subject to the terms of the orders. CBX matches eligible orders on a continuous basis during its hours of operation based on the pricing and priority rules outlined above. For derivatively-priced (e.g., pegged) orders, the time of order receipt will be deemed to be the time of each price change. However, where two pegged orders are deemed to be on time parity, the ATS will treat the order originally received first as having priority; no two orders can enter CBX at exactly the same time. For passive (i.e., nonmarketable) limit orders priced outside the NBBO, the time of order receipt will be deemed to be the time the order most recently became eligible to be executed at or within the NBBO. Limit orders priced through the NBBO and market orders are treated the same as market pegged orders. CBX does not permit the execution of orders when the NBBO is locked or crossed. PRICE IMPROVEMENT: Orders deemed to be removing liquidity from CBX will receive all available price improvement. For two given orders, the order viewed by CBX as having been received first will be deemed to be adding liquidity. As noted above, the time of order receipt for any derivatively priced order is deemed to be the time of the most recent reference price change. PRICE PROTECTION: CBX offers Subscribers the ability to choose price protection mechanisms in the form of pegged orders. Orders may be pegged to the NBB, NBO or to the midpoint of the NBBO. COUNTERPARTY TIERING: Subscribers may use CBX's counterparty tiering functionality to restrict eligible counterparties on an order-by-order basis. Specifically, Direct Subscribers may designate their liquidity-adding orders, and ILLC may designate the liquidity-adding orders of Indirect Subscribers, as only eligible to interact with orders from certain Taker Tiers. Taker Tier restrictions operate whenever an order would be deemed to add liquidity; the instruction is disregarded when an order would be deemed to remove liquidity (see Part III Items 13 and 14 for additional information). SHORT SALES: CBX is designed to operate in compliance with the requirements of Reg. SHO when accepting or executing orders. Accordingly, once a circuit breaker has been triggered, the Rule 201 price test restriction will apply to short sale orders in that security for the remainder of the day and the following day, unless an exemption applies. CBX accepts orders marked "short exempt" from broker-dealer Subscribers. Such orders will be permitted to execute at the NBB when a circuit breaker is in effect. In the event the NBB is suspended or otherwise unavailable, such orders will be rejected. EXECUTION ERRORS: For bona fide errors (as defined in FINRA Rule 6191) and other general errors made by ILLC or a client, ILLC handles execution errors occurring within the ATS in accordance with the Firm's internal policies and procedures (the "Error Procedures"). The Error Procedures require that a relevant Principal or delegate be notified of any error occurring within the ATS. For general errors (e.g., technology, administrative) ILLC will determine the best course of action, including cancelling both sides of the erroneous trade, based on internal policy and, on a case-by-case basis, the facts and circumstances of each error. ILLC handles executions at clearly erroneous prices in accordance with the applicable rules of the SRO, including FINRA Rule 11891. Following a determination of erroneous trading by one or more SROs, ILLC will cancel any contemporaneous erroneous trade executed in the ATS. Only broker-dealer subscribers may submit orders as short-sell exempt. N ILLC segments Direct Subscribers' orders into three distinct Taker Tiers based upon the results of an objective post-trade analysis of the Subscriber's executed orders that were deemed to remove liquidity in CBX during a prior period (the "Mark-Out Analysis," further discussed below). ILLC does not segment the order flow of Indirect Subscribers. All Indirect Subscribers are assigned to Taker Tier 1. MARK-OUT ANALYSIS: ILLC calculates a price movement metric based on the midpoint price of the relevant security at the time of execution and a weighted average of the security's midpoint prices at various times after the fill (e.g., one second, ten seconds, 60 seconds) (the "Mark-Out"). On a monthly basis, ILLC calculates the average Mark-Out for each Direct Subscriber (or, as further discussed below, for each segment of the Direct Subscriber's order flow) based on the Subscriber's orders that were deemed to remove liquidity from CBX during the prior three (3) calendar months. For two given orders, the order viewed by CBX as having been received first will be deemed to be adding liquidity. As noted above, the time of order receipt for any derivatively priced order is deemed to be the time of the most recent reference price change. Executions occurring before or after market hours are excluded from the calculations, and executions that are anomalous due to unusual market movements (e.g. when a spread or a Mark-Out spread exceeds 5% of the execution price or when the market is crossed at the time of one or more of the post trade Mark-Outs) may also be excluded from the calculations. By default, ILLC performs a Mark-Out Analysis (and corresponding Taker Tier segmentation) at the MPID level for Direct Subscribers that are broker-dealers, and at the Subscriber account level for Direct Subscribers that are not broker-dealers. Alternatively, Direct Subscribers may request that ILLC perform the Mark-Out Analysis related to their orders on a FlowID level, as described below. Direct Subscribers may elect to have ILLC perform the Mark-Out Analysis related to their orders based upon one or more FlowIDs. A FlowID is an identifier that a CBX Direct Subscriber may choose to apply to all or a subset of the Direct Subscriber's CBX order flow for the purposes of performing the Mark-Out Analysis. Direct Subscribers are not required to utilize Flow IDs, but if they choose to do so they may designate that ILLC associate their orders with a FlowID in one of two ways. Direct Subscribers may utilize a FIX tag to designate a FlowID on an order by order basis; or Direct Subscribers may designate that one or more of their FIX connections be associated with a FlowID. In either case, each order message transmitted by a Direct Subscriber that chooses to utilize FlowIDs will be associated with a maximum of one (1) FlowID. Where a Direct Subscriber has requested that ILLC associate its order flow with one or more FlowIDs, Taker Tier segmentation will be assessed at the FlowID level. Direct Subscribers may utilize up to four FlowIDs on some or all of their order flow, or may choose to not utilize FlowIDs. Broker-dealer Direct Subscribers may utilize more than one FlowID for each MPID utilized by the Subscriber. For instance, if a broker-dealer Direct Subscriber accesses CBX through two (2) MPIDs, that broker-dealer Direct Subscriber may utilize up to four FlowIDs for each MPID (that is, up to eight (8) FlowIDs in total). Any Direct Subscriber that accesses CBX via direct-FIX connection may utilize the FlowIDs by FIX tag or connection. ILLC may ignore a FlowID created intra-month, or where a FlowID does not otherwise have sufficient volume associated with it, when assessing the Subscriber's Taker Tier, and will aggregate that flow under an existing FlowID. ILLC does not perform a Mark-Out Analysis for Indirect Subscribers. Accordingly, ILLC does not segment Indirect Subscribers. All Indirect Subscribers are assigned to Taker Tier 1. ILLC assigns Taker Tiers by sorting Direct Subscribers (or the relevant portion of the Subscriber's order flow) by their Mark-Out scores. The three Taker Tiers are called "1" or Low Impact, "2" or Medium Impact, and "3" or High Impact. Taker Tier 1 contains Subscribers who exhibit the lowest Mark-Out scores (that is, stocks tend to exhibit the least amount of movement in the NBBO over the post-trade Mark-Out time horizons in the removing Subscriber's favor) relative to other Subscribers' liquidity removing flow, and the Taker Tier 3 contains Subscribers who exhibit the highest Mark-Out scores relative to other Subscribers' taking flow. When a new Direct Subscriber is on-boarded, ILLC will assign the Subscriber a Taker Tier based on ILLC's subjective judgement regarding the expected nature of the Subscribers' order flow. ILLC may periodically reassess and modify the metrics (e.g. Mark-Out time durations, weightings, etc.) used to determine the Taker Tiers. CBX, by default, will allow a Subscriber's orders to interact with orders from any Subscriber. However, Subscribers may, subject to the below, designate their liquidity-adding orders as only eligible to interact with the orders of Subscribers in specific Taker Tiers (see Part III Section 13 for additional information regarding Taker Tiers). Note that a Taker Tier restriction only applies when the Subscriber's order is deemed to add liquidity. For instance, where Subscriber A designates its liquidity-adding orders as only eligible to interact with Taker Tier 1 orders, Subscriber A's order may nevertheless interact with Taker Tiers 2 and 3 when Subscriber A's order is deemed to remove liquidity. Direct Subscribers may designate their liquidity-adding orders as only eligible to interact with one or more Taker Tiers through the use of a unique FIX tag. Indirect Subscribers may not designate their liquidity-adding orders as only eligible to interact with one or more Taker Tiers. However, the Indirect Subscriber's manner of order entry to CBX (e.g., SOR or Experts) as well as the specific SOR configuration or Experts strategy utilized, may include instructions that limit the Taker Tier(s) with which a liquidity providing order may interact. Such order instructions are made at ILLC's sole discretion. When a new Direct Subscriber is on-boarded, ILLC will assign the Subscriber a Taker Tier based on ILLC's subjective judgement regarding the expected nature of the Subscriber's order flow. Otherwise , all Direct Subscribers are segmented into one or more Taker Tiers in accordance with the Mark-Out analysis discussed above. ILLC does not perform a Mark-Out analysis on Indirect Subscribers. All Indirect Subscribers are assigned to Taker Tier 1. Direct Subscribers may designate their liquidity-adding orders as only eligible to interact with one or more Taker Tiers through the use of a unique FIX tag. Indirect Subscribers may not designate their liquidity-adding orders as only eligible to interact with one or more Taker Tiers. However, the Indirect Subscriber's manner of order entry to CBX (e.g., SOR or Experts) as well as the specific SOR configuration or Experts strategy utilized, may include instructions that limit the Taker Tier(s) with which a liquidity providing order may interact. Such order instructions are made at ILLC's sole discretion. Upon written request, ILLC will inform a Subscriber of its designated Taker Tier(s) for its order flow to CBX. A Subscriber cannot contest its designated Taker Tier. Y N SELF-CROSSING: CBX, by default, allows orders submitted by the same Subscriber to cross. Subscribers may, however, elect to prevent orders submitted by the same Subscriber from interacting with one another ("Self-Crossing Prevention"). Y N N N N Y Trading occurs in the CBX from 9:00pm until 8:00pm the following day. The following is a description of the trading during various time periods throughout the day: 4:00am-8:00pm: CBX operates in accordance with its normal matching and execution procedures as described in Part III Item 11(c). During market holidays or shortened trading days this period of operation will be amended subject to the availability of market data. On market holidays or shortened trading days, once market data is no longer available, the CBX will operate in accordance with the section "9:00pm-4:00am" below. 8:00pm-9:00pm: The CBX is not in operation during this period. Orders received when the CBX is not in operation are rejected and open orders, if any, are canceled back. 9:00pm-4:00am: Market data is not available during this time. From 9:00pm until 4:00am the following day, the CBX will accept orders but a match will occur only if both orders have the same limit price (e.g., a buy order with a $10.00 limit price will match with a sell with a $10.00 limit price, but will not match with a sell order with a $9.95 limit price). Orders entered into the CBX during this period that remain unexecuted will be priced and matched in accordance with the description provided in Part II Item 11(c) as market data becomes available beginning at 4:00am. Y Subscribers are not charged fees to access CBX (e.g., monthly access fees, hookup fees, port fees, or connection fees). ILLC charges Subscribers per share fees for executions in CBX. Per share fees are not standardized, are individually negotiated, and may differ depending on the means of accessing the ATS (i.e., Direct vs Indirect). Per share fees charged to Direct Subscribers accessing the ATS through a direct connection (rather than through an Instinet Trading Product or by submitting their order flow to an Instinet Trading Desk) range between $0.00 and $0.025. Factors that impact the fees charged may include, but are not limited to, whether the Subscriber elects All-In or Cost Plus pricing, the volume of trades the Subscriber executes in CBX or with Instinet generally, and the Subscriber's order characteristics (e.g, order capacity, adding or removing liquidity, whether the orders generally meet the definition of a "Retail Investor Order" under FINRA Rule 6191). Fees charged for Indirect Subscriber order flow (orders and trading interest routed by an Instinet Trading Product or by submitting their order flow to an Instinet Trading Desk) are not standardized and are individually negotiated. ILLC generally operates under two pricing models, All-In and Cost Plus. Clients utilizing the All-In pricing model pay an agreed upon per-share commission regardless of destination. Under this pricing model, the cost of execution is included in the client's negotiated commission rate ($0.0001 - $0.10 per share). Subscribers utilizing the Cost Plus model would pay the cost of execution plus commission (e.g. client would pay $0.0010 per share for executions in CBX plus that client's individually negotiated commission). Under the Cost Plus model, ILLC charges a $0.0001 - $0.10 per share commission in addition to the per-share fee for executions in CBX. The variables that impact pricing include the expected trading volume of the Subscriber and the level of service it requires, including, but not limited to, clearing type, whether it will utilize ILLC execution services, analytics tools, Instinet Experts, or OMS/EMS systems. Additionally, the level of custom modifications to each product requested by the client may impact pricing. A client's classification as broker-dealer or institutional is not considered with respect to its commission rates. ILLC does not offer rebates or discounted fees for trading in the CBX. CBX may suspend matching for technology, compliance, or risk related reasons. Matching can be paused while new orders will continue to be accepted and prioritized as they would during normal trading yet without any matching taking place. CBX also has the ability to reject all new orders should situations dictate. Once the pause is lifted trading will begin in each security with the first quote update that appears on the consolidated tape. ILLC trading desk personnel provide clients notice of a suspension or stoppage in trading on an as needed basis. Clients may request that notice of a suspension or stoppage of trading be provided.CBX may suspend trading for individual NMS stocks with a symbology update. The ATS Principal monitors activity on the ATS for compliance with Reg. ATS and SCI, including whether, during at least four of the last six months, it had with respect to NMS stocks (i) 5% or more in any single NMS stock, and 0.25% or more in all NMS stocks, of the average daily dollar volume reported by an effective transaction reporting plan, or (ii) 1% or more, in all NMS stocks, of the average daily dollar volume reported. If the ATS had 0.25% or more of the average daily dollar volume reported by an effective transaction reporting plan in all NMS stocks, and an individual security has breached the 5% threshold in three out of six months, the symbol will be set to "route only" mode. The "route only" mode will prevent the Instinet Trading products from routing the symbol to the ATS. Orders in such a symbol routed to the ATS directly via FIX or via third-party algorithms, smart routers, or otherwise will be rejected. When the 1% threshold for all NMS stocks is breached for the first, second, and third time in a six month span, ILLC may take a range of action, in its sole discretion. Clients may request that ILLC provide notice of a suspension or stoppage of trading. Those clients who have requested such notice will be notified as soon as practicable. Clients who have not requested notice of a suspension or stoppage of trading may be provided notice on an as needed basis. ILLC reports equities transactions executed in the CBX to the FINRA/NASDAQ Trade Reporting Facility (TRF) located in Carteret. Y ILLC is a self-clearing broker and a member of the National Securities Clearing Corporation ("NSCC") and the Depository Trust Company ("DTC"). ILLC becomes a counterparty to each side of any transaction executed on the ATS. ILLC does not custody funds or securities for Subscribers and settles all transactions effected on the ATS with the Subscriber or the Subscriber's custodian, prime broker or other settlement agent, in accordance with settlement instructions provided by the Subscriber to ILLC. For Subscribers settling via the facilities of the NSCC, ILLC submits each transaction to the NSCC for clearance (either for trade matching with the NSCC member contra or on a locked-in basis, such as through a Qualified Special Representative arrangement), with the legal obligation for settlement of the transaction transferring from ILLC to NSCC once NSCC has novated the submitted transaction and final settlement through the facilities of the DTC. For Subscribers settling via the facilities of the DTC, ILLC submits transaction information to OMGEO or DTC for affirmation prior to final settlement via the facilities of the DTC. ILLC utilizes certain Broadridge Financial Solutions, Inc. systems and services for the purposes of recordkeeping, clearance and trade settlement processing. ILLC will designate a small portion of transactions executed for settlement on the Paxos Settlement Service ("PSS"), a platform operated by Paxos Trust Company, LLC ("Paxos"), a New York State limited purpose trust company and DTC participant. Paxos received a no-action letter from staff at the SEC's Division of Trading and Markets (the "No-Action Letter") indicating that the staff would not pursue a referral to the enforcement division against Paxos under Section 17A(b)(1) of the Securities Exchange Act of 1934 if Paxos fails to register with the Commission as a clearing agency in connection with its operation of the PSS. Paxos uses a proprietary blockchain-based cryptographic ledger that records changes in ownership of securities and cash resulting from settlement of securities transactions between participants on the platform. The PSS facilitates settlement on a simultaneous DvP basis, and therefore, at the time an executed trade is submitted to the PSS, the counterparties must be existing PSS participants who have designated Paxos as the settlement location for that trade. In the initial phase, ILLC will settle a limited number of symbols against a small number of (up to six (6)) broker-dealer Subscribers who are also Paxos participants. As Paxos onboards additional participants to the PSS, ILLC will work with Paxos and the PSS participants who are also broker-dealer Subscribers to confirm the selection of securities which have been deemed eligible for inclusion in the pilot phase in accordance with the No-Action Letter (each, an "Active Security"), and the date that ILLC will begin routing executions in those symbols to Paxos for settlement. ILLC will systematically identify the executions involving (i) a Subscriber who is a PSS participant and (ii) an Active Security, and submit such executions to Paxos for settlement in accordance with the operating procedures of the PSS. This will not affect standard settlement procedures for Subscribers who are not PSS participants. ILLC is under no obligation to submit trades to the PSS for settlement and may, in its sole discretion, elect to cease the submission of trades of an Active Security or of a specific PSS participant to the PSS at any time and for any reason. In the event of such an election by ILLC, trades of the relevant security will clear and settle in accordance with the Subscriber's default settlement instructions. ILLC will provide notice to any impacted Subscriber, but may, where necessary, elect to cease submission to the PSS prior to notifying the Subscriber of the change. As stated above, ILLC is a counterparty to all transactions on the ATS by acting as agent and executing broker for Subscribers on both the buy and sell sides of a transaction. When a Subscriber that is a PSS participant receives an execution in the ATS on one of the selected symbols, that Subscriber's side of the trade will be submitted to Paxos for settlement. The contra side of that execution (if not also a PSS participant) will be handled in accordance with ILLC's ordinary settlement procedures. At predetermined intervals on each trading day, Paxos will monitor the volume of executions routed to PSS for settlement to ensure compliance with the volume limits set forth in the operating procedures of the PSS and the No-Action Letter. Paxos will utilize the following limits as daily targets for the share volume submitted to the PSS (the "Volume Limits"): (1) less than 100,000 shares per security, per counterparty pair; and (2) aggregate shares per security across all counterparty pairs of less than 1% of the total average daily trading volume of the respective security. At each interval, Paxos will determine whether the Volume Limits have been reached and assess the risk of each Volume Limit being exceeded before the market close. In the event Paxos determines that an Active Security has met, or is at risk of exceeding, the Volume Limits, Paxos may, in its sole discretion, elect to stop the submission of trades in an Active Security. Following such an election, the relevant security will be ineligible for settlement on the PSS for three (3) business days, during which Paxos will determine, based on the relevant security's trading behavior, if the security can be reinstated for settlement on the PSS. Paxos will promptly notify ILLC in the event that ILLC needs to stop the submission of trades of an Active Security intraday. Paxos will also notify ILLC in the event that a Paxos participant is no longer a PSS participant. As a result of any such notification from Paxos, ILLC personnel will remove the relevant security and/or PSS participant from the ATS component responsible for the systematic identification of executions for submission to Paxos. Following such removal, ILLC personnel will notify Paxos of its completion. Executions involving a security or Subscriber which Paxos has removed from PSS eligibility will clear and settle in accordance with the Subscriber's default settlement instructions until such time as Paxos notifies ILLC that the relevant security and/or PSS participant may resume submission to the PSS. The relationship between Paxos and ILLC described above does not impact the application of ILLC's rules and procedures discussed elsewhere on this Form ATS-N. As stated above, certain transactions where the Subscriber is a Paxos participant will be settled via the PSS. CBX consumes the Securities Information Processor feed (SIP) for matching purposes within the NBBO. The SIP data feeds are combined by an Instinet market data consolidator that sits outside of the ATS and calculates a consolidated NBBO based on the SIP. The ATS utilizes the NBBO to price, prioritize and execute orders as described in Part III, Item 11. The ATS is designed to operate in compliance with all applicable rules and regulations (e.g., Reg NMS, Reg SHO, etc.). The ATS can also use market data from the SIP to interpret any condition disseminated by the marketplace (e.g. Limit Up/Limit Down bands). Y N N N