Good day and welcome to the NASDAQ second quarter 2008 earnings results conference call. (Operator Instructions). At this time, I would like to turn the conference over to the Vice President of Investor Relations, Mr. Vincent Palmiere. Please go ahead sir.

Thank you, operator. Good morning and thank you for joining us today to discuss NASDAQ OMX's second quarter 2008 earnings results. Joining me are Bob Greifeld, Chief Executive Officer; David Warren, Chief Financial Officer and Magnus Bocker, our President, also on the line is Ed Knight, our General Counsel. Following our prepared remarks, we will open up the line for Q&A. And if you haven't done so already, you can access the results press release on the NASDAQ OMX investor relations and newsroom website at www.nasdaqomx.com. If you have any follow up questions after the call, you can contact me at 212-401-8742. Before we begin I would like to remind you that certain statements in the prepared presentation and during the subsequent Q&A period may relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. I urge you to read the full disclosure statement concerning such forward-looking statements in our press release and other factors detailed in the company's Form 10-K and periodic reports filed with the SEC. With that I will turn the call over to Bob.

Thank you, Vince, and thank you, everyone, for joining our call. I am happy to report that NASDAQ OMX delivered outstanding results this quarter, validating our strategic plan to transform our organization into a fully global and diversified multi-asset exchange. This is a very different business than what existed in 2003. Today, we operate the largest, most liquid stock exchange in the United States or the third largest US based options market and have operations that stretch across six continents. Our technology powers markets across the globe, supporting cash equity trading, derivatives trading, clearing and settlement and many other functions. We believe that our diversified business model is compelling and will provide unique growth opportunities for the company in the short and the long-term. When you think about NASDAQ OMX, it is important to realize that our core competency is the operation of a transaction processing business. Our goal is to create superior returns for our customers and investors by leveraging massive scale against the extreme efficiency of our transaction processing unit. A common theme that you will consistently hear from me is that we look for opportunities to process more transactions on our fixed cost trading engine. All of our initiatives, including NASDAQ OMX Europe, the NASDAQ Options marketplace, the BSE acquisition, the transaction with the Philadelphia Stock Exchange, and our market technology business seek to increase our scale and efficiency and it is this leverage that will drive profits. NASDAQ OMX delivered outstanding results during the quarter on the strength of our diversified business model. Although net NASDAQ volumes were down around 10% from last quarter, we still managed to deliver these outstanding results. On the integration front, things are moving full steam ahead with respect to OMX. Earlier this year, we committed to achieving $20 million to…

Thanks, Bob, and good morning, everyone. Thanks for joining us today. It's good to be with you. Net income for the second quarter was $101.6 million, or $0.48 per diluted share. When reviewing these results on a pro-forma non-GAAP basis, which we believe provides for a better comparison to prior period operating results, net income for the second quarter was $101.8 million. It changes very little. It still stays at $0.48 cents per diluted share, although the differences in the prior periods are greater. So when we compare on a pro-forma non-GAAP basis, the $0.48 represents an increase of 32% when compared to the second quarter of last year and it's up 5% from the first quarter of 2008. The FX impact on EPS for the company comparing 2Q to the first quarter and the second quarter to the fourth quarter of last year was $0.01. In comparing the second quarter of this year to the second quarter of last year, it was $0.03. Before I jump into the details of our results, I would like to first walk you through some of the changes we have made to our detailed revenue statement. Some of these are in response to comments we have heard from you and we appreciate those. I think you will find these improvements will provide more clarity around how we generate revenue. Specifically within market services, we now have four broad revenue categories, transaction services, market data, broker services and other. Within transaction services, we have cash equity trading and derivative trading and within each of those categories, we have US versus European revenue. Also included in transaction services are access services revenue. In market data, we have three categories, US Tape Plan revenues; US market data revenues, which were previously labeled US proprietary revenue, and…

Thank you, David. Well done. We are open for questions.

(Operator Instructions). We'll take our first question from Rich Repetto with Sandler O'Neill.

Yes, good morning, guys. Congrats on a strong quarter.

Thank you, Rich.

I guess the first question is on the synergies. If I understand it right, you're going to realize the 100 in 1Q09, so that means you got 68 annualized, I know it doesn't have to come out, but that's what you're going to cut on by year-end. And just trying to get what the quarterly rate might be, David, you know, you said cap and hap [0:56/18] and or is it more back ended?

The actions are already in place. If you take a look at the headcount actions, and some of the actions in occupancy, those two alone generate some big savings. Those tend to be more towards the end of 2008, fourth quarter. So I would think that definitely there will be progress in the third quarter, but more of the progress comes in the fourth.

So it's not going to be linear. But it's not going to be completely lumpy also, Rich. Does that help?

Yes. But in any case, it's all out by year-end, so you can realize the full $100 million in 1Q.

No. What we're saying, we'll have it done by the end of February.

Okay. All right.

As we've said, that's obviously the target we're driving towards. We want to be able to claim we got it done within a year. So I think you correctly said we're 32% of the way there, in terms of how the numbers hit the income statement. But in fact, we've obviously taken actions that get us a lot closer to the goal. It is a question of when do they show up in the numbers.

Understood. And then on the PHLX. Your comments, David, all revolved around expenses and how you can offset it just from an expense standpoint. I unfortunately didn't get to see these 1Q numbers. But if you got option volumes, like what about the revenue side is the question? If you get option volumes up plus 30% year-over-year, I'm just trying to see how is that factored in as well?

Yes. I'll just give you the starting point on the pro-forma and then Bob can comment on direction of it. But pro-forma showed PHLX for the first quarter reporting revenues of $39.2 million.

Okay. Interesting, because I think that year was 100 million in total. Anyway, I can do follow-up questions on that. I guess my last question, Bob and David.

Rich, if I could just interrupt. I think the analysis that I gave you, you've got it is that the expense actions alone just on flat revenue allows this deal to accrete.

Right. So, Rich, our goal is to overachieve in both categories, so we think we'll do better on the expense takeout than what we had presented to our board and we feel very comfortable with that. We also see that the revenue will come in higher than what we had anticipated last year. So we're going to win on both counts.

Understood. Okay, and then the very last question is on the OMX technology revenues. Last quarter was much less, this quarter I think it was $38 million, $39 million, and I see the metrics that you put in the metrics at the bottom of the metrics page, but I don't understand, whether this is a good run rate, the $39 million versus I think it was $11 million or $12 million in the prior quarter.

I think it was higher than that in the prior quarter, but, Rich, I think what we said last quarter and it's important to realize this business will be somewhat lumpier than other businesses we have in the portfolio, because certainly you have big deliveries of big contracts in a given quarter and that doesn't necessarily follow that it will be there in the following quarter. We'll say that the second and the fourth quarter tends to be the stronger quarters for this business.

Yes. And Rich, the right number for the, for Q1 is 31.1 in the revised pro-forma.

Yes, I'm sorry. Correct, right.

But just to amplify a little bit more of Bob's comment, we did begin recognizing revenue on one of the major contracts. Obviously we signed that order up a while ago, but, again, speaking to Bob's comment, it's lumpy with respect to how you've got the contracts in and then some of them are larger than others.

Okay. And just to sneak one last one, the non-displayed orders, how is that going with the price increase there and that's all I have. Thanks.

It's gone incredibly well for us and that we've been able to maintain share in that type of order while increasing the capture. So we certainly feel good about that.

Thanks, guys.

(Operator Instructions) We'll next go to [Alex Brown] from Lehman Brothers.

Hi, good morning. First off, to follow up on Rich's question on the technology revenue, you said in the last quarter that some of your clients were holding back a little bit because of the integration and the closing of the OMX deal. Now, did the second quarter reflect some 1Q revenues flowing into 2Q and have your clients’ increased the spending from there?

Yes. I'll ask Magnus Bocker to comment some more on that.

Hi, Magnus here. I think you were right. We were a little cautious coming out when we reported the first quarter and we have seen that we have strong bounce back from clients. Now when they know what we are doing and what we are focused at. We have announced the technology road map just six weeks into the merger. I think that's been supported due to the strong sales we've seen in the second quarter. So I think you are right in your analysis here.

All right, and then switching gears to the European, pan-European market, when you announced the pricing there, 0.3, 0.2, which is very consistent with Triax, which is already active over there. So, can you talk a little bit about your pricing discussions with clients, how you got to this 3, 2, which I think originally you were thinking maybe more to the 0.2, 0.1, at least what we had heard. Then related to that, can you also talk about your routing pricing which you have published? Obviously being common pricing is very complex, but I would be interested to know if you look at routing more as a loss leader, which you've done in the US before, or if it's a break-even business or if' you're reason trying to make a spread there. Thanks.

Hi. First I would say you're a little bit ahead of us and that we have not officially announced any pricing. We certainly are in pricing discussions with a number of customers. What I can say is from a policy or a philosophical approach is we expect to have a capture rate that's very similar to the capture rate we have in the US so we're not going to take an incremental approach to it, and we look forward to publicizing the pricing. We're working hard on it and you'll probably hear from us as we get to the early part of September.

Then maybe on the routing, on the second part?

Same answer on the routing, but I do want to say that we're entering this market obviously to make money and I tie back to my opening comments, is our fundamental operating thesis is that we want to lever our fixed cost platform with scale, so we're moving our technology, it is working here in the states there. The incremental costs for us is very low and similar to our NASDAQ Options marketplace, it does not take a lot of volume for us to make a good return.

All right. Thanks.

Yes.

We'll take our next question from Michael Vinciquerra with BMO Capital Markets.

Good morning.

How are you doing, Mike?

David thanks for all the additional financial detail. I'm sure your people have been working hard on all this. One question for you on the PHLX, just looking in the filing that you put out late last week, if I'm looking at it correctly, the two lines, and you mentioned this, depreciation and amortization and then interest expense, if I'm looking at those right, depreciation will go up without any other changes about $2.7 million a quarter and we’d be looking at interest expense of around $12 million. Is that the right way to think about it?

You're correct on depreciation. If you're looking at interest expense of approximately, it was 9.9 for the first quarter. I should say that the LIBOR, obviously this is a LIBOR-based financing, so LIBOR for the first quarter was quite high. It's come down 30 basis points in Q2. But the right number, if you're looking at Q1 pro-forma, it would be $10 million for interest expense.

Okay, very good, thank you. And then among all the good news that you've announced, I want to ask about your share in your own listing. Fortunately you're gaining share in the NYSE side, which is obviously growing much faster, but can you talk about the loss share in your domestic NASDAQ-listed trading?

Yes. We certainly live in a competitive environment and we pay tremendous attention to it. Our fundamental requirement is obviously to deliver return to our investors and we feel quite proud of the actions we've taken with respect to our non-displayed order that improved our financial performance. So, we think we're at a good balance point, but it's something we evaluate on a regular basis.

Fair enough. Okay. Thank you, Bob.

We'll take our next question from Daniel Harris with Goldman Sachs.

Good morning. On the NASDAQ Options platform, as opposed to the Philly and you’ve gotten a decent total, given at you started from a starting stop. Can you guys comment a little bit about speed of that platform versus what else is out there? What you're hearing from clients and then what your expectations are as a mix of those two businesses?

Right. I think the first point is we recognize we're on a long march and we're simply significantly ahead of where we thought. We are involved with a large number of customers. We're working with a large number to have them booked into the marketplace. As we stand here today, we essentially have two liquidity providers into the system. We expect that number to increase as the quarters go by. As we're engaged in the dialogue with the customers, we're certainly taking feedback from them with respect to features and functions that we want to add to the platform and it's a positive reinforcement cycle today. The speed of the platform is clearly superior to anything that exists in the marketplace today and we look forward to having that platform really excel as the volume continues to increase in the options marketplace.

Okay. Thanks. That was helpful. Then if I could just touch a little bit more on the market technology that you discussed a little bit earlier. Is there another way to think about it? Is it our percentage that's ongoing maintenance or recurring revenue and some that's going to be more lumpy roll out revenue and if that is true, can you certainly help us frame how we should think about that?

Sure.

Good.

I think what you could think about, and this is for those that have followed the old OMX, is that the US GAAP and the way we service our clients might be of some effect to the lumpiness. That is mostly coming in not on the line of facility management, but either on the project and the service side.

So is there a way quantitatively to think about that?

I think when you look into it going forward and then you go back, you will see that the, the lumpiness might not be that huge, but you will see a few million up and down quarter-on-quarter and that will be mostly on the license, support and project revenue line.

Let us say that we'll endeavor for the next quarterly release to give some better visibility into that business, but it will obviously have contract, it happened to one quarter that don't necessarily mean they will be that same level of contracting in the next quarter.

Okay, thank you.

The other one to add to that is what you also saw on the matrix of, where you saw the order intake, which is also to some extent a guidance and order backlog to some extent, guidance for your expectations of revenues to be recorded.

We'll take our next question from Patrick O'Shaughnessy with Raymond James.

Hi, good morning.

How are you doing, Patrick?

Pretty good. I was wondering if you can kind of give us an update on the Nord Pool acquisition, as far as timing and what you are expecting from the integration.

All right. Well, that has been delayed through regulatory review. We're obviously, like we were with Philly, anxious to close the transaction. That will probably close sometime in the fall, October, November-type timeframe and we are, like Philly, fine tuning our plans for integration of the acquisition. They have continued to excel as a stand-alone company, so as I said, we're anxious to complete it.

Great. And then the only other question I had was if you can provide the revenue impact of currency translation during the quarter?

As they are looking at that number, I would say with respect to Nord Pool, we're happy to report that both presidential candidates support carbon trade in the US and that could represent a wonderful opportunity for us, because it's one of their core competencies.

Yes, it's David here. Ron Hassen our controller has the answer to your currency question.

Yes. When you compare the second quarter versus the first quarter to $0.02 benefit, when you compare the second quarter versus the fourth quarter it's a $0.03 benefit. Then when you compare the second quarter over second quarter '07, it's a $0.07 benefit.

Great. Appreciate it.

We'll take our next question from Dan Fannon with Jefferies.

Good morning. Thanks for taking my questions. Just a comment or question around OMX, obviously you guys are doing very well on the cost cutting side and I just want to clarify that those improvements in synergies in the push-up, is that more than offsetting any potential changes on the negative side that have occurred in the revenue as you guys were projecting this out when the deal was announced?

I would say yes, and we do still see tremendous revenue opportunity with OMX. I think it's important to recognize in the Nordic marketplace today, they have a very low velocity of trading, so at old NASDAQ we have a very high, OMX, we have a very low, so clearly one of the synergies on the combined company is to increase the velocity of trading in the Nordic marketplace and we're working hard on that. We expect to see I think some fairly dramatic progress on that in 2009.

Okay. And then in terms of your launch in Europe at the end of September, what potential of hurdles remain out there that could delay this launch or any other that we should be looking for?

We need final approval from the FSA. We're expecting to get that by the end of August and we do find them to be a responsible organization as a regulator. So we're comfortable and confident that we will get that approval, but from the part of the process that we control, I think the effort has been well managed and well led and we are ready to go.

Great, thank you.

We'll take our next question from David Grossman with Thomas Weisel.

Good morning, thanks.

Hi, David.

Hi. Just, David, on back of Philadelphia just for a minute just to make sure I understand all the pieces here. So if we look at Philly, should we assume that the $39 million quarter, run-rate and the $6 million pretax loss is the right starting point exiting the second quarter?

That's the assumption. Yes.

Okay, and that right now you have visibility on about, call it $7 million a quarter in annualized cost savings? I just annualized the 11.5 over five months basically.

Yes.

Okay.

That's just what we talked about and we also, as I mentioned in my comments there that we expect that to increase as we get toward the end of the year as we're able to realize the benefit from technology actions and occupancy actions that can't be realized immediately.

Okay. But we shouldn't necessarily assume that the full $50 million of synergies would be realized by the fourth quarter, is that correct?

That's correct, but the deal becomes that there is definitely more to do and will be done. But the deal definitely accretes and the continued execution and operation of Philly will be baked into our 2009 budget.

Right. I think that's the larger point. We will have both of the transactions to the point of accretion by the first quarter. Philly in the fourth and then old OMX in the first, but that doesn't mean the expense synergies are done. They will continue, but at that point, we'll give guidance for the combined company, what the expenses will look like and not separately break it out, because as you are probably guessing, we're moving very hard to make this one integrated company where it doesn't make sense to try to pull out one piece versus the other because it's so interwoven.

All right, I got it. Then we make a crude estimate of net capture and I emphasize it's fairly crude, but looks it looks like the NASDAQ in the cash equities business was up modestly sequentially, OMX ex-currency was flattish and derivatives was down. Does this sound like, we got it right directionally, and if so, how should we think about net capture for the balance of the year?

Well, in the US, the net capture was actually higher and that was masked by the fact that we had a rebate from DTCC in the first quarter and that went into the same bucket. So we did see some up tick in the capture rate. I think for the European part of the business, we will see probably some declines in capture rate as we drive to increase velocity in the marketplace. They go hand in hand.

Okay. And then just finally, one last question, I think David, you said a tax rate, we should think of 30% to 32% for the balance of the year. Is that including once you add Philly into the numbers for the second half of the year?

It does not at this point.

Could you give us a sense, once we roll in Philadelphia, how we should think about the tax rate?

Yes. I guess, our planning right now and obviously we're still looking at it, is it would go up, probably increase by a percent, maybe 2 or maybe 3 might be.

Okay. Very good, thanks a lot.

Thank you.

We'll take our next question from Howard Chen with Credit Suisse.

Hi. Good morning, everyone.

How are you doing there, Howard?

Well thanks. Congrats on a strong quarter and thanks for the new disclosure.

Thank you.

On the market technology business, Bob, you touched a bit on the Tokyo and Hong Kong new business wins, but historically you've also spoken about your desire to improve the operating margins of the business. I know it's early, but can you touch on where they stand now, any early progress you may have made, and your outlook there?

I would say we've made early tremendous early progress that's not being represented in the financial statements you see here in the second quarter. So that's one of the great opportunities we have and as we say that we will hit $100 million of expense synergies by the first quarter of 2009, it's probably important to note that from a market technology point of view, we won't be done. There will be more coming and we'll just exceed what the original target was. So I think as Magnus mentioned, we had basically finalized the road map six weeks after closing and now we're executing it.

Okay, great, thanks. Then David, on compensation, thanks for walking through all the moving parts. If I heard you correctly, all else being equal in the third quarter, $3.5 million of incentive comp will drop out and roughly $1 million related to technology roadmap initiatives will also come out. Is that broadly correct? Also, can you discuss that outlook and how that balances with the impact of the Philly deal and the other initiatives that you may have coming in during the quarter?

Yes, that's right, and then another $3.5 million comes out in the fourth quarter as well in incentive comp, as I said. I think I get your question. With respect to Philly, that just adds onto that.

Right, but there won't be additional compensation credit for achievement of Philly. So, just stepping back for one second, we're obviously overachieving on the synergy targets we've established for OMX and then for Philly, and that's why the number went up. So to the extent that we didn't achieve, then the number would go back down, but that's not going to happen. So this increase in comp is reflective of the expected performance on both OMX and Philly integration efforts.

That's right. I'm sorry. I misunderstood the question.

Okay, great. Then take just one quick point of clarification on that, I guess free synergy, the Philly expense base that we are working out of, something like the $130 million annualized or is that ballpark about right?

Well, it was 33.

It was 33 for the quarter, so you can just annualize that.

Great. Okay, thanks again.

We'll take our next question from Josh Elving with Piper Jaffray.

Hey, good morning.

How you doing?

Good. Just wanted to follow-up, I guess a little more question, not to beat a dead horse, but on the Philly then, if we're looking at, did you say $11 million in cost saves over the balance of the year or on a run-rate basis?

$11.5 million over the balance of the year just from compensation actions that we've already taken.

Okay. So that's an annualized, call it $22 million, $23 million, out of the $50 million. So you have essentially $25 million in cost saves left to achieve once we head into '09, is that the right way of looking at it?

That's the right way of looking at it. Yes.

Okay.

What I also said and what Bob has said further is that we've got actions planned for the balance of the year on technology saves and occupancy saves, which obviously, will add to that annualized number. We would expect to continue with our plans for integrating Philly as part of our 2009 combined operating plan.

Right. Okay. That makes sense. Just any additional color on the Dubai relationship and what you have planned there over the next year or two?

Great question. I'm happy to move away from Philadelphia into Dubai. As you probably saw, we took one of our leading executives, Jeff Singer and with the agreement of the DIFX Board, he was appointed the CEO. Jeff had a great background and he ran part of listings here in the US and then had an international assignment over the last year. So he goes there with a perfect background to work with us and Dubai to make that a truly global listings venue. So, I think under his leadership, it's going to do incredibly well. I think the Dubai management before Jeff's arrival has done a wonderful job getting positioned for the launch of the derivatives market. They are using NASDAQ OMX technology for that. They have just received what are called tentative approval from the DFSA and we expect to launch that market in the fourth quarter of 2008. It will be the first derivatives market in that part of the world. So, we see great opportunity from the listing point of view to attract international listing companies in there. As part of that effort, we’ll also look to have the locals to be able to trade on the market in a fashion they are accustomed to, so we will be opening up for Sunday trading. We'll allow trading in dirhams and we're happy with the progress and certainly excited about the plan.

Is there a cash market there today?

There is.

Great. Thank you very much.

We'll take our next question from Brian Bedell with Merrill Lynch.

Hi. Good morning, guys. Congrats on a great quarter.

Thanks a lot, Brian.

Just to hit on the revenue synergies a little bit for the OMX deal, if we can talk about a couple of the components of that. First of all, whether it's a NASDAQ matching engine is officially already part of a Genium package or when you plan to have that rolled out and what you expect a general range of synergies from that to be. And then if you could elaborate on some of the other synergies you’re talking about, improving the velocity in the OMX markets, maybe if you could just talk about that in conjunction with, clearly what we're seeing as declining volumes in the OMX during the third quarter so far.

Right. Well, I would say one general statement, the revenue synergies that we put forth will be overachieved I think by a substantial amount. When you look at the NASDAQ OMX Europe effort, it is a true synergy of the respectively organization in that neither one of us could have done this by ourselves and as we're looking forward to launching that in September. We see great opportunity to increase velocity in the Nord marketplace and that will be through the marriage of the INET matching technology over the Genium overall architecture and we're looking for a second and third quarter launch of that in 2009, and that will have a dramatic impact I think on our revenue opportunities. So, we feel that we have been conservative with the revenue synergies and we look forward to delivering on them in a meaningful way in 2009.

So you're looking at $50 million in 2009 as you said and you think that remains conservative?

Well, we had, I think, committed to $50 million by 2010. We're not on this call moving that date up, but you might expect to us provide further clarification on that after we launch the market to London in September and also get closer to, introducing INET technology inside the Genium in the Nordic marketplace in 2009.

All right, great, okay. And then just if you can elaborate a little bit more on the Boston acquisition in terms of any additional color on plans to launch the second quote? You mentioned the clearing synergies, if we could elaborate on a little more detail on what type of level of synergies?

Sure. Boston is like a lot of these efforts that require regulatory approval somewhat overdue. We're growing increasingly confident that we'll be able to close that transaction in August. We eagerly await the date. On the clearing side, I'll start with that, because we have been a beneficiary of the threat of competition already, as we've seen I think two rounds of price cuts from DTTC so far this year. So that's all to the good just by the possibility of us entering the market. But we do have a development team hard at work and we do expect to launch that in 2009. We do need regulatory approval to operate the clearing license. More straightforward would be the launch of the second quote and we expect to do that hopefully soon after we close the transaction. Our hardware kit is built and ready, it's in our data center. We just need to have the approval to turn it on.

Okay, great. May I ask one more question?

Yes, you may.

Just on the revenue captures that it did tick up, if we net the rebate out, what would the revenue capture have been in the first quarter?

I don't have that number handy and we haven't publicized that number.

Okay, but are you saying it was up from the first quarter? I assume obviously due to the revenue increase on the non-displayed orders and that was on May 1, so we would expect I guess all else equal in the third quarter to have at least, again, another little tick up in US revenue capture?

Yes.

Okay, great. Thanks very much.

We'll take our next question from Niamh Alexander with KBW.

Good morning. Good quarter.

Thank you.

You're welcome. If I could just go back to Europe for a bit, the MTF, you were talking about increasing the velocity of customer trading activity and this is something you know really well, the high velocity customers, especially in the US. Can you give me a sense of where you think the big high velocity customers in the US; are they even operating in Europe right now? I'm trying to get a sense for the growth opportunity because there's quite a few lining up to participate there. If it's 30% of the volume in the US at least could what is it right now in Europe, what's the opportunity?

Well, the first thing I would say, with our European effort, we are approaching all manner of customer and I think we do have global appeal across all the different segments of the customer base. We certainly see some of the liquidity providers being the early adopters, but if you talk to any of the European customers, regardless of the segment you want to put them in, they have a strong interest in participating in the new competitive world that exists. So I think the opportunity, as I said, is large. We think it's our single largest organic revenue opportunity that we do have and we're obviously anxious to launch in the latter part of September.

Okay. Thanks for that color. Then I think if I just switch back to the US cash equities market, because purely Tape A volume is quite substantially up pacing Tape C and it looks like that's kind of structural and it's certain types of customers and it's a bit of a tailwind from Reg NMS. Do you think we might benefit from this trend for maybe another year or so? I'm trying to get a sense of when we revert back to the long-term growth trends for US cash equities which is probably single digits?

Yes. It's hard for us to guess, but I think to the extent that there's still friction in the system as a result of having a different market structure from what had been the central market that represents opportunity. To the extent the market had transformed itself entirely to price-time matching engines competing against itself, you could then positive would be at that point in a more normal growth level.

Okay, thanks for taking my questions.

We'll take our next question from Don Fandetti with CitiGroup.

Hi, Bob, quick question. Do you think all the dislocation and the market fragmentation has changed the psychology of the European exchange CEOs to where they might be more likely to sell and would you be interested in participating in that?

More likely to sell what?

To sell the exchange more M&A in the Europe landscape?

Well, I would say this. First, what I said in last quarter still holds. We have a lot on our plate and it's our job to make sure we deliver to our customers and to our investors the benefits that we've set out with these acquisitions. So we have to get to that platform. At that point, we'll then ascertain what are the proper moves forward for this organization. So it's not something that we're thinking about at this point in time.

Okay. That's all I had. Thank you.

Thank you.

Thank you.

We'll take our next question from Mike Carrier with UBS

Thanks, guys. In terms of the Pan-European platform, just what has been the client traction thus far and how much further do you have to go, so you feel like you had the expected target market onboard? Then given the complexities on the clearing side; just curious why you went with Fortis? And then David, if you could just give us the interest cost on the convertible notes?

All right. So I would say this, that we have the necessary number of customers working today to hook up to our market for the launch in late September. Clearly, we'll be on a long March to have additional customers, and that will increase quarter-by-quarter as we go forward. So we have 15 of the large customers now working with us. So we're very comfortable. What was the second part of your question?

It was just on the Fortis.

Well, that one was obviously, to us, fairly straightforward, is that we knew they are in operation, so we didn't have to worry about growing pains, in that they are doing the work for [Chavis] today. We thought there were advantages to having cross-margining capability and we certainly feel like their transaction rates were low and they had a state of philosophy of making sure they were the lowest provider in the space, whether that be against EuroCCP or anybody else.

Okay, thanks.

And you had a question on interest?

Yes, just on the convertible notes.

Yes, for the quarter it was 4.88%.

The convertible.

Over the convertible? We have 2.5% is the interest rate on the $475 million. 3.75% is the coupon on the other.

All right, thanks.

Okay.

We'll take our next question from Edward Ditmire with Fox-Pitt Kelton.

Good morning, guys.

How are you doing, Edward?

One follow-up question on M&A. You guys had previously said that you wanted to clear your plate or substantially clear your plate on the current M&A integrations before you moved on to new things. Are financial constraints going to become more important in, say early 2009, given that you guys seem to have the other stuff well in hand?

I think I said we're certainly not thinking that far ahead. We're proud of the fact that we are driving further, faster and better than we ever could have imagined with these transactions and as we get further down the pipe with them, then we would contemplate some other ways to leverage our platform, where the platform exists for NASDAQ OMX at that point in time. So the answer is we don't have a thoughtful answer.

Okay, great. Thank you.

We have no additional questions at this time. I would like to turn the call back over to management for any closing remarks.

Great. Well, I certainly appreciate your time today. We are obviously proud of this quarter. As I said previously, this quarter represents the successful execution of the stand-alone business plans of what we know as old NASDAQ and old OMX, but most importantly in the quarter, we had tremendous success in creating the new integrated NASDAQ OMX and the synergies on both the revenue and the expense side will become visible to all our customers and investors in the quarters to come. We look forward to delivering upon those to you. So we appreciate your time and thank you, and we'll talk to you in three months.

This concludes today's conference. We thank everyone for their participation. You may now disconnect your lines.