Organization and Description of the Business
Knight Capital Group, Inc. (collectively with its subsidiaries, the "Company") has three operating business segments, Equities, Fixed Income, Currencies and Commodities (FICC) and Corporate. As of March 31, 2009, the Asset Management segment is a discontinued operation for financial reporting purposes. As of April 1, 2009, the Company’s operating business segments comprised the following subsidiaries:
Operating Business Segments
Equities
The Equities segment includes all global equities market-making and trading, including electronic trading and traditional sales and trading, within Knight Equity Markets, L.P., Knight Capital Markets LLC, Knight Clearing Services LLC, Knight Capital Europe Limited, Knight Capital Asia Limited, Knight Direct, LLC and Knight Transition Management LLC. Products and services in this segment include Corporate Access, EdgeTrade Algorithmic Suite, Knight Link, Knight Match and Knight Strategic Research.
Fixed Income, Currencies and Commodities (FICC)
The Fixed Income, Currency, and Commodities (FICC) business segment includes institutional fixed income sales, trading, research and capital markets within Knight Libertas LLC, Knight Capital Europe Limited, Knight Asia Europe Limited and Knight Capital Markets LLC. The FICC segment also includes Knight BondPoint, Inc. which offers electronic fixed income trading solutions and the Hotspot FX foreign exchange ECN.
Corporate
Corporate includes strategic investments in financial services-related ventures, corporate overhead expenses and all other expenses that are not attributable to the Equities and FICC segments.
Operating Business Subsidiaries
Knight Equity Markets, L.P. (“KEM”) operates as a market-maker in over-the-counter (“OTC”) equity securities, primarily those traded in the
NASDAQ Stock Market and on the OTC Bulletin Board. KEM also operates the Company’s primary domestic institutional sales business. KEM is a broker-dealer registered with the SEC and is a
member of the NASDAQ Stock Exchange (“NASDAQ”), Financial Industry Regulatory Authority (“FINRA”), the International Securities Exchange,
LLC, the National Stock Exchange and the NFA.
Knight Capital Markets LLC (“KCM”) primarily operates as a market-maker in the over-the-counter market for New York Stock Exchange (“NYSE”)
and American Stock Exchange (“AMEX”) listed securities. KCM is a broker-dealer registered with the SEC and is a member of NASDAQ and FINRA.
Knight Clearing Services LLC ("KCS") operates as a self clearing broker-dealer that also provides settlement and clearance services for its affiliated broker-dealers. KCS is also a member of FINRA, SIPC; Depository Trust Company ("DTC") and the National Securities Clearance Corporation ("NSCC");and a registered clearing member of NYSE, NASDAQ, ISE, NSX, CHX*, CBSX, Nasdaq OMX, Nasdaq OMX BX, Nasdaq OMX PHLX, NYSE ARCA, and BATS. KCS was established in April 2009.
*Membership pending approval
Knight Capital Europe Limited (“KCEL”) is a U.K. registered broker-dealer that provides execution services for institutional
and broker-dealer clients in U.S., European and international equities. KCEL is authorized and regulated by the FSA and is a member of the
London Stock Exchange, Deutsche Börse AG, Euronext N.V. (incorporating Euronext Amsterdam, Euronext Brussels, Euronext Lisbon and Euronext
Paris), Borsa Italiana, OMX (incorporating the Copenhagen Stock Exchange, Helsinki Stock Exchange and Stockholm Stock Exchange), Oslo Børs,
virt-x and Weiner Börse.
Knight Direct, LLC (“Knight Direct”) provides institutions with direct market access trading through Knight Direct, an
advanced electronic platform. The business of Direct Trading was acquired by the Company in June 2005. Direct Trading is a broker-dealer
registered with the SEC and is a member of NASDAQ, FINRA and the NFA.
Hotspot FX Holdings, Inc. and its subsidiaries (“Hotspot”) provide institutions, dealers and retail clients with spot foreign exchange executions
through an advanced, fully electronic platform. Hotspot was acquired by the Company in April 2006. One Hotspot subsidiary is regulated by
the FSA.
Knight BondPoint, Inc. (“Knight BondPoint”) (formerly known as ValuBond Securities, Inc.) provides electronic access and trade execution
products for the retail fixed income market. Knight BondPoint was acquired by the Company in October 2006. Knight BondPoint is a broker-dealer
registered with the SEC and is a member of FINRA and the Municipal Securities Rulemaking Board (“MSRB”).
Knight Libertas LLC (“Knight Libertas”) provides trade execution services and investment research across a broad range of fixed income
securities, including high-yield and high-grade corporate bonds, distressed debt, asset-backed and mortgage-backed securities, convertible
bonds and syndicated loans. Knight Libertas also provides capital markets services to growing companies in need of financing to support
expansion. Knight acquired Libertas Holdings in July 2008 and renamed it Knight Libertas LLC.
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