Through this partnership, Direct Edge will immediately gain direct access to the National Market System, strengthen its technology and infrastructure, and position itself to meet the regulatory requirements necessary to become an exchange. Direct Edge will continue to operate under its current brand and management team, led by CEO William O'Brien.

Upon completion of the transaction, the strategic partners of both Direct Edge and the ISE Stock Exchange will have a combined 68.5% ownership interest in Direct Edge Holdings, with Knight Capital Group, Inc., Citadel Derivatives Group, and Goldman Sachs each remaining as strategic investors with a 19.9% ownership interest. ISE will own the remaining 31.5% stake. ISE's investment, which includes an increase in its investment in the ISE Stock Exchange, will be approximately $123 million. The transaction is expected to close in the fourth quarter of 2008, pending regulatory approvals.

``We are very excited to announce this partnership with the ISE, which will strengthen our competitive position by accelerating the evolution of Direct Edge as a major market center on several fronts,'' said William O'Brien, CEO of Direct Edge. ``By leveraging ISE's technology and regulatory expertise and continuing to offer the innovative market structure and order types that have facilitated our significant recent growth, we will be poised to expand upon our established liquidity base and to provide our customers with an industry-leading exchange platform.''

``Through this transaction, we will be aligning ourselves with an innovative new leader whose compelling offering stands out in the highly competitive cash equity space,'' said Gary Katz, President and CEO of ISE. ``We have successfully grown the ISE Stock Exchange to the point where it is today, and are confident that this partnership with Direct Edge is the logical next step that will enable us to continue our strong growth in the U.S. equities market.''

Direct Edge, which handled 10.06% of all U.S. listed equities volume in July, with a matched market share of 4.88%, will continue to operate its complementary twin execution platforms, EDGA and EDGX, and will integrate the best of Direct Edge's and ISE's unique functionalities, such as the Enhanced Liquidity Provider (ELP) program and MidPoint Match. Direct Edge will also use the ISE Stock Exchange's technology as part of its long-term roadmap to improve the latency, capacity and exchange readiness of its trading platform.

Direct Edge will continue with its efforts to submit two Form 1 applications to gain exchange status for two new subsidiaries for the purpose of operating EDGA and EDGX as newly-registered national securities exchanges. Until SEC approval of the two exchange licenses is granted, Direct Edge will utilize the ISE Stock Exchange for quotation display and trade-through protection in the National Market System, transitioning from the National Stock Exchange early in the fourth quarter. During this period, the ISE Stock Exchange will continue to operate as a facility of ISE, LLC. This approach immediately gives Direct Edge full control of its presence in the National Market System through its affiliation with ISE while its exchange applications are pending approval. ISE will also provide data center and regulatory services for Direct Edge exchange subsidiaries once they become part of the National Market System.

ISE was advised on the transaction by Evercore Group L.L.C. and Merrill Lynch & Co.