NASDAQ OMX Group (NDAQ)

Exchange Registration

In August 2006 we began operating as an exchange for Nasdaq-listed securities. As discussed above, we expect to become operational as an exchange in non-Nasdaq listed securities later in the fourth quarter of 2006, simultaneous with the integration of our trading systems for these securities. Before we can operate as an exchange in non-Nasdaq listed securities, we need final regulatory approvals from the SEC and NASD related to the functionality of our TRF and our single platform for trading non-Nasdaq listed securities.

Exchange registration gives us our own SRO license, and provides benefits to our proprietary data business and our corporate governance structure. Nasdaq does not expect the TRF to have a material effect on our financial results.

22

Table of Contents

Exchange Registration

In January 2006, the SEC approved our application for registration as a national securities exchange. We began operating as an exchange in Nasdaq-listed securities on August 1, 2006, and expect to begin operating in other exchange-listed securities in the fourth quarter of 2006. Before we can operate as an exchange for other exchange-listed securities, the NASD must establish a facility for quotation and trade reporting of these securities. We expect to act as a service provider to NASD to allow it to satisfy this condition in the near term, though there may be delays in NASD completing required actions and SEC approval. Exchange registration has already provided benefits to our proprietary data business and our corporate governance structure.

To facilitate our operations as an exchange, we have formed the TRF, a joint venture with NASD to operate a trade reporting facility, which will allow us to continue to collect reports of trades executed by broker-dealers outside of our exchange and recognize revenue for the related fees. Nasdaq provides technology and managerial services for the TRF, and NASD regulates the TRF as one of its facilities. The TRF began operating on August 1, 2006 for Nasdaq-listed securities, and will begin operating for other exchange-listed securities after the SEC approves an NASD filing to establish applicable rules. Nasdaq does not expect the TRF to have a material effect on our financial results.

Exchange Registration

On January 13, 2006 the SEC approved our application for registration as a national securities exchange. We will begin operating as an exchange once we satisfy conditions specified by the SEC. While we have satisfied most of these conditions and expect to satisfy the remaining conditions in the second quarter of 2006, some of the conditions require actions by third parties and/or additional approvals by the SEC which may cause delays. We expect exchange registration to provide benefits to our proprietary data business and in our corporate governance structure once we become fully operational as an exchange.

To facilitate our operations as an exchange, we have formed a joint venture with NASD to operate a trade reporting facility, which will allow us to continue to collect reports of trades executed by broker-dealers outside of our exchange and recognize revenue for the related fees. To this end, we recently formed a limited liability company called The Trade Reporting Facility LLC, of which Nasdaq and NASD are members. Nasdaq will provide technology and managerial services for the TRF, and NASD will regulate the TRF as one of its facilities. The TRF will begin to operate once the SEC approves a pending NASD filing to establish rules governing its operations. Nasdaq will receive all of the revenues and pay all of the costs associated with operating the TRF. Nasdaq expects that all or substantially all of the revenues associated with operating the TRF will be offset by regulatory costs, operational costs, and the revenue we share with market participants who report trades to the TRF; accordingly Nasdaq does not expect the TRF to have a material effect on our financial results.

Exchange Registration

On January 16, 2006, the SEC unanimously approved Nasdaq’s application to operate as a national securities exchange. This action will allow Nasdaq to take the final steps needed to complete its separation from NASD. With exchange status, Nasdaq will be licensed to operate a newly formed subsidiary, The Nasdaq Stock Market LLC, as its own Self-Regulatory Organization.

F-49

Table of Contents

The Nasdaq Stock Market, Inc.