eTrade 2007 Annual Report Download - page 194

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execution performance on the aggregate Covered Orders with respect to each Evaluation Criterion during the
months of July, August, and September 2007.
III. Execution Data Requirements.
A. Delivery of Execution Performance Data.
1. The Company shall provide to E*TRADE Securities such execution quality data and/or statistics regarding NMS
Stocks (“Execution Performance Data”) as the Company and E*TRADE Securities agree and are reasonable in light
of current industry standards and information provided by the Company to its other clients. For the avoidance of
doubt, evaluation of the Company’s execution performance, including the performance of Comparable Market
Centers, shall be conducted with transaction level information provided by the Company. The Company agrees to
utilize a common transaction analysis vendor mutually agreed upon by the Parties, such as Transaction Auditing
Group (TAG), Thompson Transaction Group (TTA), or Quantum 5 Analytics.
2. If E*TRADE Securities reasonably believes that additional data collection or analysis of the Company’s execution
performance with respect to Covered Orders and the quality of competing markets should be conducted to satisfy its
best execution obligations or industry best practice, then E*TRADE Securities may propose such additional review
or analysis to be conducted by the Company, and E*TRADE Securities and the Company shall discuss in good faith
whether such review or analysis should be conducted.
IV. Remedies for Unsatisfactory Execution Performance.
1. If the Company’s execution performance has not met the Execution Performance Standard for NMS Stocks during a
Performance Period or E*TRADE reasonably believes that performance has been unsatisfactory for Options, then
E*TRADE Securities shall send to the Company a Failure Notice. After communication of a Failure Notice,
E*TRADE and the Company shall in good faith discuss the concerns of E*TRADE Securities in an effort to address
and resolve those concerns. Any concerns set forth in a Failure Notice with respect to NMS Stocks shall be assessed
by E*TRADE and the Company independent of the Company’s execution performance with respect to Options.
Similarly, any concerns set forth in a Failure Notice with respect to Options shall be assessed by E*TRADE and the
Company independent of the Company’s execution performance with respect to NMS Stocks. For avoidance of
doubt, execution quality performance will be judged over time periods and in security groupings determined in good
faith by the Parties based on industry standards and execution quality data provided by the Company to its other
clients.
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