Integrated Exchange for fungibles with 24 hour trading & continuous cash T+0 settlement: Consolidating the exchange, broker & clearing house functions at one location and on one electronic platform, the “Integrated Exchange” is one of two innovations that makes both continuous 24 hour trading and T+0 settlement possible. The Integrated Exchange software was designed specifically for 24 hour trading and T+0 settlement. Also the Integrated Exchange is more efficient because it eliminates duplicate and overlapping functions of the traditional and separate exchange, broker & clearing house interactions. Examples of the efficiency of the Integrated Exchange are:

• e-Exchange has only one accounting system instead of three with overlapping information.
• As member-clients, both corporate and individual investors can deal directly with one another on the integrated exchange. At e-Exchange, the retail investor deals directly with the exchange as a member-client.
• Open Orders are stored at one location instead of two; see Figure 2 which illustrates the efficient order entry and order execution process of the integrated exchange.
• Quotes are delivered directly to the member-clients rather than through third party resellers.
• Trade confirmation and affirmation are redundant and therefore are eliminated.
• T+0 settlement reduces credit risks.

For the retail investor the efficient common platform for trading and settlement will result in reduced fees. The 24 hour trading allows retail investors who are often busy during conventional exchange business hours to trade at their convenience. These investors have time before or after their workday and on weekends to manage their investments. Operating 24 x 7 allows investors to enter transactions and receive reports of executed orders at any time on their computer rather than entering an order in the evening for a possible fill the next day which is how order entry presently works when the exchanges are closed.

The integrated exchange is a new software application and business method that incorporates certain broker, exchange and clearing house functions into a single platform; it is not merely the separate functions of a broker, exchange and clearing house on the same platform.

Real time 24 hour accounting system: A real time continuous 24 hour accounting system is the second of two innovations that make both continuous 24 hour trading and T+0 settlement possible. In contrast, most if not all exchanges, brokers and banks still use batch accounting systems that preclude operating an efficient 24 hour exchange.

e-Exchange has an accounting system that tracks both money and securities. The accounting system has an open ledger without sub ledgers. The accounting system presently offers two account currencies, US$ and Cdn$ and will offer more currencies to accommodate both foreign buyers and domestic buyers of foreign securities.

Trader-ID advertisement: Each member-client user of the Integrated Exchange may have a 80 character advertisement attached to each of their open orders for display in any trading market that the member-client has an order. Trader-ID allows individual investors to contact one another to arrange trades or discuss the size of an order. Trader-ID advertisements are free. Typical Trader-ID advertisements are:

Brokers may use Trader-ID to advertise their specialized service as shown in the trading market below.

There are five different Trader-IDs and six orders in this typical view of a trading market. It is possible, for example, to view a 40 visible orders in any trading market. A member-client can double click on any order to activate an action-box in which the member-client can enter the order or edit any parameter before entering it.

If a user wishes to remain anonymous, the exchange assigns Trader-ID such as Z117, K225 or N777. Also a user can choose an alias such as TRADER DAN to remain anonymous.

Contacting other investors or brokers is essential to negotiate the terms of a prearranged cross prior to order entry and order execution. A prearranged cross consists of a Buy-prearranged and Sell-prearranged order each of which contains a negotiated ordercode to ensure the two orders are matched. Prearranged orders are part of 28 different order types that e-Exchange offers to its users.

Trader-ID is an efficient way for investors to contact one another during the after-hours trading of listed securities. Trader-ID is essential for arranging trades of thinly traded fungibles such as

• Put & Call options
• unlisted securities
• minor foreign currencies
• foreign currency derivatives
• Delayed Delivery securities (single stock futures)
• listed securities
• strip bonds & coupons
• gold & silver coins & bullion
• commodities
• other fungibles & derivatives