Derivatives and cash products are traded in two distinct market places: regulated futures and securities exchanges and OTC markets. Exchanges offer trading in instruments with standardized contract characteristics, whereas OTC markets facilitate transactions involving bilateral contracts privately negotiated and traded among specific counterparties. Exchange-traded contracts are cleared through a central clearinghouse, whereas OTC contracts have historically been settled between counterparties. In recent years, however, clearinghouses have increasingly offered clearing services for OTC trades.

According to the Bank for International Settlements, the global turnover, or trading volume, in exchange-traded derivatives contracts increased at a compound annual growth rate of 21.6% per annum from the 12-month period ended December 31, 2001 to the 12-month period ended December 31, 2006 and the global notional amounts outstanding for OTC derivatives increased at a compound annual growth rate of 30.1% per annum between December 31, 2001 and December 31, 2006.

According to the Bank for International Settlements, global trading volume, in exchange-traded derivatives contracts increased from approximately 4.5 billion for the 12-month period ended December 31, 2001 to approximately 11.9 billion for the 12-month period ended December 31, 2006, representing a compound annual growth rate of 21.6%. This growth is due, in part, to the increasing demand for risk-management instruments and other trading tools to support trading strategies by more sophisticated, and an increasing number of, market participants.

The Company executes client trades on an agency basis for a wide array of listed and OTC derivatives and cash products. The Company typically executes client trades on an agency basis by directing the order to an appropriate exchange or OTC market where the client’s order is matched with a corresponding order that has been placed by a counterparty and then, in the case of a listed product, posted to the exchange.

The Company provides agency execution services to its clients both over the phone, which is known as voice broking, and through its online platforms. Agency execution of liquid contracts has increasingly moved away from traditional voice broking to online broking in recent years, as a growing number of brokers have developed online platforms that allow clients to execute trades electronically without having to speak directly with a broker.

The Company also provides execution services for various listed and OTC derivatives and cash products on a matched-principal basis. The Company executes orders on a matched-principal basis by entering into one side of a client trade and contemporaneously entering into an offsetting trade with another party.

The Company provides its clients with three primary types of products: exchange-traded derivatives, OTC derivatives and cash products.

The Company provides execution services on both an agency and a matched-principal basis for a wide array of OTC derivatives, including forwards, options, swaps and other derivative products, subject to applicable laws and regulations.

The Company executes and clears trades for a broad array of cash products, including listed equity securities, debt securities—i.e., non-derivative securities—and foreign exchange products on both an agency and a matched-principal basis. The cash product trades the Company executes involve listed equities, U.S. Treasury securities and corporate bonds traded in the OTC markets and OTC foreign exchange contracts and spot transactions.

Income before provision for income taxes increased $205.3 million, or 228.6%, to $295.1 million for fiscal 2007 from $89.8 million for fiscal 2006.

Net income increased $130.5 million, or 214.3%, to $191.4 million for fiscal 2007 from $60.9 million for fiscal 2006.