PHILADELPHIA STOCK EXCHANGE ANNOUNCES DISMISSAL OF DISSIDENT MEMBER LITIGATION

For more information, contact Barbara Sorid at 215-496-5200 or by e-mail

“Longstanding claims against Exchange dismissed in their entirety by Philadelphia Court of Common Pleas ”

PHILADELPHIA — October 7, 2004 — The Philadelphia Stock Exchange (PHLX) announced today that Judge Gene D. Cohen, of the Philadelphia Court of Common Pleas, in a ruling yesterday granted the Exchange’s motion for summary judgment, dismissing completely the claims brought against the PHLX in Joseph Carapico, et al. v. Philadelphia Stock Exchange, Inc., et al.

The Judge’s ruling effectively ends Mr. Carapico’s attempt to reverse the Exchange’s demutualization, which the Securities and Exchange Commission approved and which was concluded in January 2004. The Judge’s opinion stated that, among other reasons, the Court would not grant Carapico’s requested injunction because the plaintiffs “failed to offer any evidence that the Demutualization of PHLX will violate (or has violated) any applicable law, the articles of incorporation, or the bylaws of the PHLX.” In his lawsuit, Carapico also sought to have a custodian appointed by the Court to manage the Exchange, in addition to seeking financial damages from the Exchange itself.

“We never doubted that we would prevail in this matter,” said Meyer “Sandy” Frucher, PHLX’s chairman and CEO. “The Court affirmed what our members and seat owners approved overwhelmingly in November 2003 — that our demutualization was a sound business decision and key to positioning PHLX for future growth.”

A copy of the Philadelphia Court of Common Pleas opinion can be accessed by this link to the PHLX website: http://www.phlx.com/news/pr2004/phlx-order.pdf.

The Philadelphia Stock Exchange (PHLX) was founded in 1790. The PHLX trades more than 2,200 stocks, 1,016 listed equity options, 12 sectors index options and currency pairs. For more information about the PHLX and its products, visit www.phlx.com.

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