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To fund the formation of this new exchange, memberships were initially sold to a consortium of broker/dealers organized under the umbrella of Adirondack Trading Partners (ATP). The purchase of memberships has provided capital for the development of the trading system, acquisition of hardware, development of regulatory systems and other costs associated with establishing an exchange. Transaction fees, electronic access fees and the sale of real-time market data will generate ISE's operating revenues.

ATP's corporate structure and strategy is patterned after Roundtable Partners (Roundtable). Roundtable was organized by a consortium of U.S. broker/dealers who grouped together to establish two equity market making operations, one for listed securities and one for OTC stocks. Roundtable was so successful after just three years of operation that it went public (in an initial public offering) as Knight/Trimark Group, Inc. in mid-1998. Knight/Trimark currently ranks number one in volume of the country's OTC market makers and number two of the country's third market makers. The basis of this success is the collective order flow of the broker/dealers who were original investors in Roundtable. Unlike equities, there is no third market for options; the creation of an exchange format is the only mechanism by which ATP can replicate the proven model created by Roundtable.

ATP, the consortium of broker/dealers, accounts for approximately 10% of the total customer order flow in stock options. This order flow provides a solid foundation upon which ISE will build its business. The investors in ATP include Ameritrade; E*TRADE; Herzog, Heine, Geduld, Inc.; Knight/Trimark Group, Inc.; Scottsdale Securities and other broker/dealers whose participation in this new market will be announced at a later date.

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