NASDAQ OMX Group (NDAQ)

Financial Products

Financial Products revenues include license fees for our trademark licenses related to financial products linked to our indexes issued in the United States and abroad. We primarily have two types of license agreements: transaction-based licenses and asset-based licenses. Transaction-based licenses are generally renewable long-term agreements. Customers are charged based on transaction volume or a minimum contract amount, or both. If a customer is charged based on transaction volume, we recognize revenue when the transaction occurs. If a customer is charged based on a minimum contract amount, we recognize revenue on a pro-rata basis over the licensing term. Asset-based licenses are also generally long-term agreements. Customers are charged based on a percentage of assets under management for licensed products, per the agreement, on a monthly or quarterly basis. These revenues are recorded on a monthly or quarterly basis over the term of the license agreement.

In addition, the Financial Products business has expanded to include the development, administration and licensing of OMX and PHLX indexes.

Financial Products

Financial Products revenues were $12.7 million for the third quarter of 2008, up 7.6% when compared to the third quarter of 2007, and up 16.5% when compared to the second quarter of 2008. Driving the increase in revenues is higher license fees associated with NASDAQ-licensed products.

Financial Products

Financial Products revenues include license fees for our trademark licenses related to financial products linked to our indexes issued in the United States and abroad. We primarily have two types of license agreements: transaction-based licenses and asset-based licenses. Transaction-based licenses are generally renewable long-term agreements. Customers are charged based on transaction volume or a minimum contract amount, or both. If a customer is charged based on transaction volume, we recognize revenue when the transaction occurs. If a customer is charged based on a minimum contract amount, we recognize revenue on a pro-rata basis over the licensing term. Asset-based licenses are also generally long-term agreements. Customers are charged based on a percentage of assets under management for licensed products, per the agreement, on a monthly or quarterly basis. These revenues are recorded on a monthly or quarterly basis over the term of the license agreement.

In addition, the Financial Products business has expanded to include the development, administration and licensing of OMX indexes.

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Financial Products

Financial Products revenues were $10.9 million for the second quarter of 2008, up slightly when compared to the second quarter of 2007, but down $0.6 million when compared to the first quarter of 2008. The decline from the first quarter of 2008 is primarily due to lower license revenues associated with NASDAQ-licensed products.

Financial Products

The following table shows the revenues from our U.S. Financial Products business:

Licensing revenues increased in the first quarter of 2008 compared with the first quarter of 2007 primarily due to an increase in licensing fees and underlying assets associated with NASDAQ-licensed ETFs and increased licensed derivatives volumes.

Other revenues decreased in the first quarter of 2008 compared with the first quarter of 2007 due to a decrease in Portal applications as a result of economic conditions. Financial Products, through its PORTAL Market, facilitates the eligibility for clearing and settlement services at Depository Trust and Clearing Corporation, or DTCC, of PORTAL/Rule 144A securities.

Financial Products

Financial Products revenues were $11.5 million for the first quarter of 2008, up $2.6 million, or 29.2%, from the first quarter of 2007, and down $0.1 million when compared to the fourth quarter of 2007. The increase from the prior year quarter is due to higher license revenues associated with NASDAQ-licensed ETFs.