SEC Rules & Regulations

RESTRICTED STOCK SALES – SEC RULE 144

SEC Rule 144 provides a safe harbor for resale of restricted and control stock and provides an exemption from registration under certain circumstances. Because a sale under Rule 144 requires ITG to obtain disclosures and agreements from the client as well as make certain representations to the Issuer’s Counsel and Transfer Agent, clients should contact our trading desk directly at (212) 588-4000 to handle such orders.

SEC RULE 10B-18 CORPORATE BUY-BACKS

SEC Rule 10b-18 provides issuers with a safe harbor from certain anti-manipulation rules and regulations on the condition that certain requirements relating to the price, time, and volume are met. Should a client desire to engage ITG to assist it in a buy-back, the client should contact our trading desk directly at (212) 588-4000.

SUBPENNY ORDER HANDLING POLICY

Effective January 31, 2006, ITG is required to make changes to its systems for trading in sub-pennies to comply with the SEC’s Regulation NMS.

Regulation NMS – Rule 612 (a.k.a – the “sub-penny rule”) prohibits market participants from accepting or displaying orders or quotations in a pricing increment smaller than a penny, except for orders or quotations in stocks that are priced at less than $1.00 per share.

Starting on January 31, 2006, ITG will reject any order that it receives from its clients/counter-parties that was entered with a sub-penny price (or more than 4 decimal digits for stocks that are priced at less than $1).

In addition, ITG will not route sub-penny limit orders to destinations that will not accept such orders even for stocks priced at less than $1.00 per share.

Please note that this rule does not apply to orders in inter-listed securities where the intended destination is the foreign market (e.g. an inter-listed security routed to a Canadian broker/dealer for execution on a Canadian market center).

Although order instructions from clients will not be accepted if they are priced at a sub-penny limit, ITG’s POSIT Match™ and POSIT NowSMATSs will continue to execute matched orders at prices between the bid/offer which may result in subpenny priced executions.

As of this notice, we believe the following information reflects other market centers’ policies with respect to sub-penny orders but we do not guarantee its accuracy. Please check the particular market center’s website for their policy regarding accepting sub-penny orders.

1. Market Centers that will NOT trade in sub-pennies, even for stocks priced under $1 per share: NYSE, AMEX, CHX (listed), BSE, ARCA/PSE, PHLX, and CBOE.

These Market Centers will REJECT sub-penny quotes/orders for all stocks with the following exceptions: (Note: The SEC states that any SRO that wishes to adopt a truncate/round convention for quotes/orders below $1.00 must file a rule change.)

a. ARCA/EX will truncate/round sub-penny orders received under $1.00. Buy orders will be truncated to two decimal places. Sell orders will be rounded up to two decimal places.

b. BSE and Amex will truncate (not round) all quotes (e.g., $0.8999 will round to $0.89 and not $0.90).

2. Market Centers that WILL accept quotes and trade in sub-pennies for stocks priced under $1 per share: INET, BRUT, CHX (only OTC), The NASDAQ Market Center (for NASDAQ listed and exchange listed securities).