Presentation to ERCOT Technical Advisory Committee November 3, 2011

1. Presentation to ERCOT Technical Advisory Committee November 3, 2011 A Central Counter Party Discussion: Options Available For ERCOT 1

2. The NASDAQ OMX Group, Inc. February 2008 NASDAQ the technological powerhouse with 37 Years of expertise as the pioneer in electronic trading and leading electronic stock market Merged with OMX - 22 years expertise owning and operating exchanges and integrating exchange technology worldwide, including 15 years supporting NordPool’s exchange and clearing operations where 95% of trade volume of 421 members is cleared and powertrade volume is 6x the underlying (vs 1.5x in US); To form The NASDAQ OMX Group, Inc. 2

3. Central Counter Party (CCP) - Background CFTC is requiring ERCOT to substantially comply with the credit reforms being implemented within the other organized wholesale electric markets to obtain an exemption from Dodd-Frank regulations. One requirement is better bankruptcy protection for the netting of transactions “within” the ISO markets Today ERCOT and the ISO’s/RTO’s are only market administrators; they do not take title to power – they are not a counterparty to the transactions. “Mutuality” (counterparty relationship) between the parties must be established  to NET a market participant’s exposure should it file bankruptcy. CFTC considers a Central Counter Party (CCP) as the preferred netting solution for ISO markets A CCP takes title by being the Buyer to every Seller and Seller to every Buyer in the ISO market. 3

4. NASDAQ OMX-ERCOT Management Discussions: • Two Options • ERCOT becomes its own CCP • ERCOT retains a third party CCP • CFTC Process • ERCOT’s stated intent to become its own CCP in the CFTC exemption filing does not preclude ERCOT from subsequently implementing the third party CCP option. • Allow Stakeholder process to fully compare and vet both options

5. ERCOT 3rd Party Option by NASDAQ OMX • NASDAQ OMX would be the CCP for all transactions in the ERCOT markets: • NASDAQ OMX takes title to the commodity as the Buyer to every Seller and the Seller to every Buyer. • NASDAQ OMX provides a similar service in the OTC market today. • ERCOT is still the market operator. • ERCOT will continue to provide the same back office functions, but as agent for NASDAQ OMX.

6. ERCOT will continue to: • Administer its protocols and operating agreements • Administer all of its markets • Operate the Grid and be responsible for Maintaining Reliability • Conduct all of its transmission planning and generation interconnections services and activities 6

7. NASDAQ OMX will not: • Take on market or price risk • Maintain open positions • Provide offers to sell or bids to buy energy or other products • Have the discretion regarding which transactions clear the markets or the prices at which they clear 7

8. Potential 3rd Party CCP Benefits in ERCOT Market • Meets CFTC CCP requirements • No major changes in ERCOT processes • No impact on unsecured credit in ERCOT market • Incremental benefits that are not available to Market Participants should ERCOT become its own CCP • The Option to Maximize Collateral Efficiency in the ISO and OTC markets. • The Option to use and net NASDAQ OMX monthly settlements and/or ERCOT weekly settlements • Potential to reduce risk in the ERCOT markets • Costs • No charge for the base CCP service • Fees charged only to those using the optional services. 8

9. NASDAQ OMX Contacts: General: Richard Gutierrez -- 713-302-3205 richard.gutierrez@nasdaqomx.com ISO CCP Technical: Phil Gootee – 317-473-9281 9