EXHIBIT 99.1
             [Pages 23-44 of the registration statement on Form S-4
             (File No. 333-126780), as amended, filed by NYSE Group
        with the SEC, which was declared effective on November 3, 2005]

                                  RISK FACTORS

     IN  ADDITION  TO THE OTHER  INFORMATION  CONTAINED  IN OR  INCORPORATED  BY
REFERENCE   INTO  THIS   DOCUMENT,   INCLUDING  THE  MATTERS   ADDRESSED   UNDER
"FORWARD-LOOKING  STATEMENTS," YOU SHOULD CAREFULLY  CONSIDER THE FOLLOWING RISK
FACTORS IN DECIDING  WHETHER TO VOTE FOR THE APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT.

RISKS RELATING TO THE MERGERS

BECAUSE THE MERGER  CONSIDERATION  EXCHANGE  RATIOS ARE FIXED, IF YOU ARE A NYSE
MEMBER,  THE MARKET  VALUE OF NYSE GROUP COMMON STOCK AND CASH ISSUED TO YOU MAY
BE LESS THAN THE VALUE OF YOUR NYSE  MEMBERSHIP,  AND, IF YOU ARE AN ARCHIPELAGO
STOCKHOLDER,  THE MARKET  VALUE OF THE NYSE GROUP COMMON STOCK ISSUED TO YOU MAY
BE LESS THAN THE VALUE OF YOUR ARCHIPELAGO COMMON STOCK.

     NYSE  members  and  Archipelago  stockholders  that  receive  shares in the
mergers  will receive a fixed number of shares of NYSE Group common stock rather
than a number of shares with a particular  fixed market value. The market values
of NYSE memberships and Archipelago  common stock at the time of the mergers may
vary  significantly  from  their  prices on the date the  merger  agreement  was
executed,  the  date of this  document  or the date on which  NYSE  members  and
Archipelago  stockholders  vote on the mergers.  Because the  respective  merger
consideration  exchange ratio will not be adjusted to reflect any changes in the
market price of NYSE  memberships or Archipelago  common stock, the market value
of the NYSE Group common  stock  issued in the mergers and the NYSE  memberships
and Archipelago  common stock  surrendered in the mergers may be higher or lower
than the values of these memberships or shares on earlier dates.

     Changes in membership  and stock price may result from a variety of factors
that are beyond the control of the NYSE and  Archipelago,  including  changes in
their   businesses,   operations  and  prospects,   regulatory   considerations,
governmental actions, and legal proceedings and developments. Market assessments
of the  benefits of the mergers and of the  likelihood  that the mergers will be
completed,  and general and industry specific market and economic conditions may
also have an effect on prices.  Neither the NYSE nor Archipelago is permitted to
terminate the merger  agreement solely because of changes in the market price of
either party's respective memberships or common stock.

     In addition, the mergers may not be completed until a significant period of
time has passed after the special  meetings.  As a result,  the market values of
the NYSE memberships and/or Archipelago common stock may vary significantly from
the date of the special  meetings to the date of the  completion of the mergers.
You are urged to obtain  up-to-date  prices for NYSE memberships and Archipelago
common stock.  See "The  Mergers--Stock  Exchange  Listing and Stock Prices" for
ranges of historic prices of NYSE  memberships and shares of Archipelago  common
stock.

THE ABILITY OF NYSE MEMBERS TO INCREASE  EITHER THE AMOUNT OF CASH OR THE NUMBER
OF SHARES OF NYSE GROUP  COMMON  STOCK THAT THEY  RECEIVE  PURSUANT  TO THE CASH
ELECTION OR STOCK  ELECTION,  RESPECTIVELY,  WILL BE SUBJECT TO PRORATION IN THE
EVENT OF AN OVERSUBSCRIPTION OF THE CASH ELECTION OR THE STOCK ELECTION.

     The cash  election  and stock  election  available  to NYSE  members in the
mergers are subject to  proration  to ensure that the total amount of cash paid,
and the total number of shares of NYSE Group common stock issued, in the mergers
to the NYSE members,  as a whole, will equal the total amount of cash and number
of shares that would be paid and issued if all of the NYSE members  received the
standard NYSE  consideration of $300,000 in cash and 80,177 shares of NYSE Group
common  stock per NYSE  membership.  As a  result,  the  consideration  that any
particular  NYSE  member  receives  if he or she makes the cash  election or the
stock  election  will not be known at the time that he or she makes the election
because the  consideration  will depend on the total  number of NYSE members who
make the cash  election  and the total number of NYSE members who make the stock
election.  If the cash  election is  oversubscribed,  then NYSE members who have
made the cash  election  will  receive some shares of NYSE Group common stock in
lieu of the full amount of cash sought for their NYSE memberships.  Likewise, if
the stock election is oversubscribed,  then NYSE members who have made the stock
election  will  receive  some cash in lieu of the full  number of shares of NYSE
Group common stock sought for

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their NYSE memberships.  Accordingly,  if NYSE members make the cash election or
the stock election with respect to their NYSE  membership,  they may not receive
exactly the amount and type of consideration that they elected to receive in the
mergers, which could result in, among other things, tax consequences that differ
from  those  that  would  have  resulted  if  they  had  received  the  form  of
consideration that they had elected (including the potential recognition of gain
for federal income tax purposes if they receive cash).

     Because there is no way to predict the value of shares of NYSE Group common
stock after the mergers,  the value of the consideration  that NYSE members will
receive in the mergers  may vary  depending  on the type of  election  that they
make.  NYSE members who make the cash  election or stock  election will receive,
subject to  proration,  a different  amount of cash and number of shares of NYSE
Group  common stock than the standard  NYSE  consideration,  based on an implied
cash value per share of NYSE Group  common  stock  equal to the volume  weighted
average price of a share of  Archipelago  common stock during the 10 consecutive
trading days ending the day immediately prior to the date of the mergers, as set
forth  in the  merger  agreement.  This  implied  cash  value,  however,  may be
different  from the  actual  value of a share of NYSE  Group  common  stock upon
completion of the mergers. As a result, the value of the consideration  received
by NYSE members who make any particular  election may vary from the value of the
consideration  received  by NYSE  members  who make a  different  election or no
election.

     For a discussion of the election mechanism and possible  adjustments to the
consideration  paid to those who make the cash election or stock  election,  see
"The Merger  Agreement--Merger  Consideration  Received by NYSE  Members." For a
discussion of the material federal income tax  consequences of the mergers,  see
"The Mergers--Material U.S. Federal Income Tax Consequences."

THE U.S. FEDERAL INCOME TAX  CONSEQUENCES OF ANY PERMITTED  DIVIDEND THAT MAY BE
PAID BY THE NYSE OR BY ARCHIPELAGO AND THE U.S.  FEDERAL INCOME TAX CONSEQUENCES
OF THE NYSE  MERGERS TO U.S.  HOLDERS  WHO RECEIVE A  COMBINATION  OF NYSE GROUP
COMMON STOCK AND CASH ARE SUBJECT TO SOME DEGREE OF UNCERTAINTY.

     The NYSE and  Archipelago  have jointly  requested a private  letter ruling
from the Internal Revenue Service with respect to the transactions  contemplated
by the merger  agreement.  The parties have not yet received the private  letter
ruling and it is uncertain  whether the  requested  rulings  regarding  the U.S.
federal income tax  consequences  of any permitted  dividend that may be paid by
the  NYSE  or  by  Archipelago,  and  regarding  the  U.S.  federal  income  tax
consequences  of the NYSE mergers to U.S.  holders who receive a combination  of
NYSE Group common stock and cash, will be granted.

     With respect to permitted  dividends,  uncertainty  as to the U.S.  federal
income tax treatment exists because there is a conflict among legal  authorities
as to whether and under what  circumstances  a pre-merger  distribution  will be
treated as a dividend or as  additional  merger  consideration.  With respect to
U.S.  holders who receive a  combination  of NYSE Group  common  stock and cash,
uncertainty as to the U.S.  federal income tax treatment  exists because the law
regarding  cash  payments  pursuant  to a  reincorporation,  such  as  the  NYSE
corporation  merger, that is part of a larger overall transaction is unclear. If
the requested rulings are granted,  the Internal Revenue Service's position with
respect  to these  issues  will be  certain.  There can be no  assurance  that a
private  letter  ruling will be  received or that,  if  received,  the  Internal
Revenue  Service  will agree with all of the  conclusions  set forth  under "The
Mergers--Material U.S. Federal Income Tax Consequences,"  including the opinions
of counsel  regarding the U.S.  federal income tax consequences of any permitted
dividend that may be paid by the NYSE or by Archipelago,  and regarding the U.S.
federal income tax  consequences of the NYSE mergers to U.S. holders who receive
a combination of NYSE Group common stock and cash.

     You are urged to consult  your tax  advisors  concerning  the U.S.  federal
income  and other tax  consequences  to you of any  permitted  dividend  and the
mergers.

WE MAY FAIL TO REALIZE THE ANTICIPATED COST SAVINGS,  GROWTH  OPPORTUNITIES  AND
SYNERGIES AND OTHER BENEFITS ANTICIPATED FROM THE MERGERS, WHICH COULD ADVERSELY
AFFECT THE VALUE OF NYSE GROUP COMMON STOCK.

     The NYSE and  Archipelago  currently  operate as  separate  companies.  The
success of the  mergers  will  depend,  in part,  on our  ability to realize the
anticipated synergies and growth opportunities from combining the

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businesses, as well as the projected stand-alone cost savings and revenue growth
trends identified by each company.  On a stand-alone basis, the NYSE anticipates
that the  introduction  of new financial and control  systems,  cost  efficiency
goals, and new pricing within its revenue model will generate material operating
leverage.  While  there  are no  assurances  that the  NYSE  would  reach  those
stand-alone projections,  we believe that the merger with Archipelago,  combined
with  a  for-profit   structure,   provides   incremental   incentives  for  the
organization  to  reach  its  stand-alone  objectives.   Archipelago,  with  the
integration of PCX Holdings,  which it recently  acquired,  also has independent
objectives,  as discussed  further  under "Risk  Factors--Risks  Relating to the
Mergers--There   are  significant  risks  and   uncertainties   associated  with
Archipelago's acquisition of PCX Holdings."

     In  addition,  on a  combined  basis,  NYSE Group  expects to benefit  from
operational  synergies  resulting from the  consolidation  of  capabilities  and
elimination  of  redundancies  as well as greater  efficiencies  from  increased
scale,  market  integration  and  more  automation.   With  the  combination  of
stand-alone cost savings and synergies from the mergers,  our managements expect
that NYSE Group will  achieve cost savings of  approximately  $100.0  million in
2005 and 2006,  combined,  and an additional $100.0 million in 2007, as compared
to the 2005  budgets  for the  NYSE  and  Archipelago  on a  stand-alone  basis.
Management also intends to focus on revenue  synergies for the combined  entity.
However, we must successfully combine the businesses of the NYSE and Archipelago
in a manner that  permits  these cost savings and  synergies to be realized.  In
addition,  we must achieve the anticipated  savings without adversely  affecting
current  revenues and our  investments in future  growth.  If we are not able to
successfully  achieve these  objectives,  the anticipated cost savings,  revenue
growth and synergies may not be realized  fully or at all, or may take longer to
realize than expected.

THE FAILURE TO INTEGRATE  SUCCESSFULLY THE BUSINESSES AND OPERATIONS OF THE NYSE
AND  ARCHIPELAGO  IN THE EXPECTED TIME FRAME MAY  ADVERSELY  AFFECT NYSE GROUP'S
FUTURE RESULTS.

     Historically,  the  NYSE  and  Archipelago  have  operated  as  independent
companies,  and they will continue to do so until the completion of the mergers.
The management of NYSE Group may face  significant  challenges in  consolidating
the functions  (including  regulatory  functions)  of the NYSE and  Archipelago,
integrating  their  technologies,   organizations,   procedures,   policies  and
operations,  as well as addressing  differences in the business  cultures of the
two companies and retaining key NYSE and Archipelago personnel.  The integration
may also be complex and time consuming,  and require  substantial  resources and
effort. The integration process and other disruptions resulting from the mergers
may also disrupt each company's ongoing  businesses or cause  inconsistencies in
standards,   controls,   procedures  and  policies  that  adversely  affect  our
relationships with market  participants,  employees,  regulators and others with
whom we have business or other dealings or to achieve the  anticipated  benefits
of the mergers.  In addition,  difficulties  in  integrating  the  businesses or
regulatory  functions of the NYSE and  Archipelago  could harm the reputation of
NYSE Group.

THE COMBINED COMPANY WILL INCUR SIGNIFICANT TRANSACTION AND MERGER-RELATED COSTS
IN CONNECTION WITH THE MERGERS.

     The NYSE and Archipelago  expect to incur a number of  non-recurring  costs
associated  with  combining the  operations of the two  companies.  The NYSE and
Archipelago  will also incur legal,  accounting and other  transaction  fees and
other costs related to the merger, anticipated to be between $34 million and $36
million  (excluding costs related to the legal proceedings  described under "The
Mergers--Legal  Proceedings  Related to the  Mergers").  Some of these costs are
payable regardless of whether the mergers are completed.
 Moreover,  under  specified  circumstances,  the  NYSE  or  Archipelago  may be
required to pay  termination  fees and reimburse  certain  expenses of up to $40
million in connection  with the  termination of the proposed  mergers.  See "The
Merger  Agreement--Termination--Termination  Fees  and  Expense  Reimbursement."
Additional  unanticipated  costs  may  be  incurred  in the  integration  of the
businesses of the NYSE and Archipelago.

     Although we expect that the  elimination of duplicative  costs,  as well as
the  realization  of  other  efficiencies  related  to  the  integration  of the
businesses,  may offset these  transaction and  merger-related  costs over time,
this net benefit may not be achieved in the near term, or at all.

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CERTAIN  DIRECTORS AND EXECUTIVE  OFFICERS OF THE NYSE AND  ARCHIPELAGO MAY HAVE
INTERESTS  IN THE  MERGERS  THAT ARE  DIFFERENT  FROM,  OR IN  ADDITION TO OR IN
CONFLICT WITH, YOURS.

     Executive officers of the NYSE and Archipelago  negotiated the terms of the
merger  agreement  and the  boards  of  directors  of the NYSE  and  Archipelago
approved the merger  agreement and unanimously  recommend that you vote in favor
of the  approval  and  adoption of the merger  agreement.  These  directors  and
executive officers may have interests in the mergers that are different from, or
in addition to or in conflict with, yours. These interests include the continued
employment of certain  executive  officers of the NYSE and  Archipelago  by NYSE
Group, the continued  positions of certain directors of the NYSE and Archipelago
as  directors  of NYSE  Group,  and  the  indemnification  of  former  NYSE  and
Archipelago  directors and officers by NYSE Group.  With respect to  Archipelago
directors and executive officers,  these interests also include the treatment in
the mergers of employment  agreements,  change-of-control  severance agreements,
restricted  stock units,  options and other rights held by these  directors  and
executive officers.  Although the compensation levels of the NYSE Group officers
have not yet been  determined,  during the last completed  fiscal year,  John A.
Thain,  the chief  executive  officer  of the NYSE,  received  salary  and bonus
totaling  $3,920,000;  Richard G. Ketchum,  the chief regulatory  officer of the
NYSE,  received  salary  and bonus  totaling  $1,084,615;  Robert  G.  Britz and
Catherine R. Kinney, the presidents and co-chief operating officers of the NYSE,
each received salary and bonus totaling $1,950,000;  and Richard B. Bernard, the
executive vice president and general  counsel of the NYSE,  received  salary and
bonus totaling $1,150,000. For the last completed fiscal year, Gerald D. Putnam,
the chief executive  officer of Archipelago,  received salary and bonus totaling
$2,282,885,  and the other four most highly compensated  officers of Archipelago
each received salary and bonus totaling  $753,692.  These  Archipelago  officers
also  received  significant  amounts  of  equity-based  compensation  and  other
compensation,  as described further in Archipelago's  2005 proxy statement.  You
should be aware of these  interests  when you consider  your board of directors'
recommendation  that you vote in favor of the mergers.  For a discussion  of the
interests  of  directors  and  executive  officers  in  the  mergers,  see  "The
Mergers--Interests of Officers and Directors in the Mergers."

GOLDMAN SACHS MAY HAVE  INTERESTS IN THE MERGERS THAT ARE DIFFERENT  FROM, OR IN
ADDITION TO OR IN CONFLICT  WITH,  THE  INTERESTS  OF THE NYSE AND  ARCHIPELAGO,
RESPECTIVELY.

     Goldman  Sachs was  hired by both the NYSE and  Archipelago  to  facilitate
discussions of a possible transaction between the NYSE and Archipelago.  In this
capacity, it assisted the NYSE and Archipelago in developing a joint analysis of
the pro forma financial profile of the combined  NYSE-Archipelago  entity,  held
due  diligence  meetings  to enable  each  company to learn more about the other
company,  helped perform  discounted  cash flow analysis of profit,  revenue and
cost projections  developed by each company and facilitated  discussions between
the parties.  Goldman Sachs was not hired as an independent financial advisor to
either the NYSE or  Archipelago  with  respect to the  mergers,  nor did Goldman
Sachs  negotiate on behalf of either party with respect to the mergers.  Goldman
Sachs was not asked to  provide,  and did not offer,  any  opinion to either the
NYSE or Archipelago as to the fairness of the mergers to either party.

     At the time that the NYSE and Archipelago hired Goldman Sachs, each company
was aware of the existing  relationships  that it had and continues to have with
Goldman Sachs.  These interests  include,  among other things, the fact that The
Goldman Sachs Group, Inc., the parent company of Goldman Sachs, is a NYSE-listed
company,  indirectly  holds 21 NYSE memberships and leases an additional 92 NYSE
memberships;  that Goldman Sachs Group indirectly owns approximately 7.3 million
shares,  or approximately  15.5%, of the outstanding  Archipelago  common stock;
that  Henry M.  Paulson,  Jr.,  chairman  of the  board of  directors  and chief
executive officer of The Goldman Sachs Group, Inc., currently serves on the NYSE
board of executives;  and that,  before becoming the chief executive  officer of
the NYSE,  John A. Thain,  chief  executive  officer of the NYSE,  held  various
positions at Goldman Sachs,  including president and chief operating officer. At
the time that he accepted the position of chief  executive  officer of the NYSE,
Mr. Thain also had  significant  holdings of Goldman  Sachs  equity  securities,
which were  placed in a blind  trust.  For a more  detailed  description  of the
relationships  between the NYSE and  Archipelago,  on the one hand,  and Goldman
Sachs,  on  the  other  hand,  see  "The   Mergers--Certain   Relationships  and
Related-Party  Transactions--Relationships with Goldman Sachs." Because of these
relationships,  Goldman  Sachs  may  have  interests  in the  mergers  that  are
different  from,  or in addition to or in conflict  with,  those of the NYSE and
Archipelago.

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THE NYSE AND ARCHIPELAGO'S  RESPECTIVE  FINANCIAL ADVISORS MAY HAVE INTERESTS IN
THE MERGERS THAT ARE DIFFERENT  FROM, OR IN ADDITION TO OR IN CONFLICT WITH, THE
INTERESTS OF THE NYSE AND ARCHIPELAGO, RESPECTIVELY.

     The NYSE  hired  Lazard,  and  Archipelago  hired  Greenhill,  to render an
opinion  regarding the fairness of the  consideration to be received by the NYSE
members and Archipelago  stockholders,  respectively,  in the proposed  mergers.
Shares of Lazard Ltd,  the parent  company of Lazard,  and shares of Greenhill &
Co.,  Inc.,  the parent  company of  Greenhill,  are listed on the NYSE. In this
regard,  Lazard and Greenhill pay listing fees to the NYSE. In addition,  Lazard
Capital  Markets  LLC, an entity  owned in large part by managing  directors  of
Lazard,  is the  beneficial  owner of one NYSE  membership.  The initial  public
offerings of Lazard Ltd and  Greenhill & Co.,  Inc.  were also  underwritten  by
syndicates  led by  Goldman  Sachs.  For a more  detailed  description  of these
relationships,   see  "The  Mergers--Certain   Relationships  and  Related-Party
Transactions--Relationships with Lazard" and "The Mergers--Certain Relationships
and Related-Party  Transactions--Relationships with Greenhill." Because of these
relationships,  Lazard and Greenhill may have  interests in the mergers that are
different  from,  or in addition to or in conflict  with,  those of the NYSE and
Archipelago.   The  NYSE  and  Archipelago  believe  that  these  interests  and
relationships of Lazard and Greenhill did not present conflicts of interest that
affected the judgment of Lazard or Greenhill,  respectively,  in rendering their
fairness opinions.

WE EXPECT THAT,  FOLLOWING THE MERGERS,  NYSE GROUP WILL HAVE SIGNIFICANTLY LESS
CASH ON HAND THAN THE SUM OF CASH ON HAND AVAILABLE TO THE NYSE AND  ARCHIPELAGO
PRIOR TO THE MERGERS.  THIS REDUCED AMOUNT OF CASH COULD  ADVERSELY  AFFECT NYSE
GROUP'S ABILITY TO GROW AND PERFORM.

     Following  an assumed  completion  of the  mergers in January  2006,  after
payment of the merger  consideration,  the expenses of consummating  the merger,
any   permitted   cash   dividends   prior  to  the  mergers  (see  "The  Merger
Agreement--Dividends;   Withholding"),  and  all  other  pro  forma  adjustments
relating  to the  mergers,  NYSE Group is expected  to have  approximately  $510
million in cash, cash equivalents, investment and other securities. Although the
managements  of the  NYSE and  Archipelago  believe  that  this  amount  will be
sufficient   to  meet  NYSE  Group's   business   objectives,   this  amount  is
significantly less than the approximately  $1,120 million of combined cash, cash
equivalents,  investment and other  securities held by the two companies  today,
and could constrain NYSE Group's ability to make necessary capital  expenditures
and other investments  necessary to operate and grow its business.  NYSE Group's
financial  position  following  the  mergers  could also make it  vulnerable  to
general  economic  downturns  and  industry  conditions,   and  place  it  at  a
competitive  disadvantage  relative  to its  competitors  that have more cash at
their disposal.  In the event that NYSE Group does not have adequate  capital to
maintain or develop its  business,  additional  capital may not be  available to
NYSE Group on a timely basis, on favorable terms, or at all.

THERE WILL BE MATERIAL  DIFFERENCES  BETWEEN THE CURRENT  RIGHTS OF NYSE MEMBERS
AND  ARCHIPELAGO  STOCKHOLDERS  AND THE  RIGHTS  THEY CAN EXPECT TO HAVE AS NYSE
GROUP STOCKHOLDERS.

     NYSE members and  Archipelago  stockholders  that receive NYSE Group common
stock in the mergers  will become NYSE Group  stockholders,  and their rights as
stockholders will be governed by the NYSE Group certificate of incorporation and
bylaws.  In  addition,  whereas  the  NYSE  is  currently  a  New  York  Type  A
not-for-profit corporation,  governed by the New York Not-For-Profit Corporation
Law,  NYSE Group will be a  for-profit  corporation,  governed  by the  Delaware
General Corporation Law. As a result, there will be material differences between
the current rights of NYSE members and Archipelago  stockholders  and the rights
they  can  expect  to have as  NYSE  Group  stockholders.  For  example,  a NYSE
membership  entitles its holder to trade on the NYSE.  After the  mergers,  NYSE
Group  common  stock  will not  entitle  its  holder  the  right to trade on any
facility of NYSE Group or its subsidiaries,  and instead,  trading licenses will
be sold  separately  from  time to time.  For a  discussion  of  other  material
differences, see "Comparison of Rights Prior to and After the Mergers."

THE NYSE IS A PARTY TO PENDING LAWSUITS IN CONNECTION WITH THE MERGERS.

     The NYSE is a party to several  lawsuits  filed by third parties  alleging,
among  other  things,  breach of  fiduciary  duty by the NYSE's  directors,  and
seeking monetary damages or injunctive  relief to prevent the mergers,  or both,
in connection  with the mergers.  Specifically,  on September 27, 2005,  several
NYSE members,

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on behalf of themselves and a purported class of similarly  situated  persons as
NYSE members, filed a consolidated amended complaint under the caption IN RE NEW
YORK  STOCK  EXCHANGE/ARCHIPELAGO   MERGER  LITIGATION  against  the  NYSE,  its
directors and The Goldman Sachs Group, Inc., in connection with the mergers. The
consolidated amended complaint contains twenty causes of action against the NYSE
and its  directors.  The causes of action allege that the NYSE and its directors
breached  their  fiduciary  duties of candor,  care,  loyalty and good faith and
unlawfully  converted  assets  belonging to the NYSE members.  The  consolidated
amended  complaint  also contains one cause of action  against The Goldman Sachs
Group, Inc., alleging that it aided and abetted the breaches of fiduciary duties
by the NYSE defendants.  In the consolidated  amended complaint,  the plaintiffs
allege  that NYSE  Group's  registration  statement  filed with the SEC does not
disclose  certain  information  regarding  the  exchange  ratio  for the  merger
consideration, the sales price of Archipelago common stock and NYSE memberships,
certain  assumptions behind the NYSE's  projections and the relationships  among
the NYSE and its advisors. In the consolidated amended complaint, the plaintiffs
also  argue  that  the  exchange  ratio  undervalues  the  NYSE  and  overvalues
Archipelago;  that the transfer restrictions imposed on the shares of NYSE Group
common  stock to be issued to the NYSE  members in the mergers are unfair;  that
the  shares  of NYSE  Group  common  stock  reserved  for  issuance  to the NYSE
employees belong to the NYSE members; and that the NYSE directors breached their
fiduciary  duties in not  considering  alleged  proposals  made by an investment
consortium.  A description of this litigation,  and the plaintiffs' allegations,
is set forth under "The Mergers--Legal  Proceedings  Relating to the Mergers." A
copy of the consolidated  amended  complaint is also attached as Annex I to this
document.  Although the NYSE believes  that the claims  asserted in the lawsuits
are  without  merit,  we can  provide no  assurance  as to the  outcome of these
claims.  An adverse  judgment for monetary damages could have a material adverse
effect  on the  operations  of NYSE  Group  after  the  mergers.  A  preliminary
injunction  could delay or  jeopardize  the  completion  of the mergers,  and an
adverse  judgment  granting  injunctive  relief  could  permanently  enjoin  the
completion of the mergers.

     The  costs and  expenses  incurred  by the NYSE in  connection  with  these
lawsuits could also reduce the amount of any permitted dividend paid to the NYSE
members.  The merger agreement will permit either the NYSE or Archipelago to pay
a cash  dividend  to its members or  stockholders,  as  applicable,  so that the
relative net cash that the NYSE and Archipelago  contribute to NYSE Group in the
mergers is in a 70:30 ratio,  so long as each company  maintains its  respective
minimum net cash amount.  See "The Merger  Agreement--Permitted  Dividends."  If
either the NYSE or  Archipelago  is able to pay a permitted  dividend  under the
merger agreement, it currently intends to do so to the greatest extent permitted
under the merger agreement. Currently, the NYSE expects that it will have excess
net cash to pay a permitted dividend to the NYSE members. The costs and expenses
incurred by the NYSE in connection  with these lawsuits,  however,  could reduce
the amount of permitted  dividend,  if any,  that the NYSE is able to pay to the
NYSE members.

THE SEC MAY REQUIRE US TO CHANGE THE STRUCTURE OF NYSE GROUP,  OR THE PROVISIONS
OF THE NYSE GROUP CERTIFICATE OF INCORPORATION AND BYLAWS.

     NYSE Group's proposed  organizational  structure after the mergers, as well
as its certificate of incorporation and bylaws after the mergers, are subject to
review by the SEC. The SEC may require changes to the structure,  certificate of
incorporation  or bylaws  of NYSE  Group and its  subsidiaries  (including  NYSE
Market and NYSE Regulation and  Archipelago),  as a precondition to its approval
of the rules of the national securities exchanges owned by NYSE Group. We cannot
predict what, if any,  changes may be required,  which may include  changes that
limit or  otherwise  adversely  affect your  ability to  transfer,  hold or vote
shares of NYSE Group common stock after the mergers. Certain changes may require
us to obtain the approval of the NYSE members and the  Archipelago  stockholders
and,  therefore,  to re-solicit  proxies.  We may incur  significant  additional
expenses and costs if we are required to re-solicit proxies.

CERTAIN  SHARES OF NYSE  GROUP  COMMON  STOCK ARE  SUBJECT  TO  RESTRICTIONS  ON
TRANSFER,  WHICH MAY PREVENT THEIR HOLDERS FROM  REALIZING  GAINS DURING CERTAIN
TIME PERIODS.

     Under the NYSE Group  certificate of  incorporation  that will be in effect
after the mergers, shares of NYSE Group common stock received by NYSE members in
the mergers may not be sold or transferred  for a period of time,  except in the
limited  circumstances  described  under  "Description  of  NYSE  Group  Capital
Stock--Transfer

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<PAGE>



Restrictions  on Certain  Shares of NYSE Group Common  Stock."  Subject to these
limited exceptions,  the transfer restrictions will expire in equal installments
on the first,  second and third  anniversaries of the completion of the mergers,
unless the NYSE Group board of directors removes these transfer restrictions, in
whole or in part, prior to these dates, or unless the transfer  restrictions are
removed  from shares of NYSE Group  common  stock  issued to certain  investment
entities  affiliated with General  Atlantic,  Goldman Sachs Group, and Gerald D.
Putnam. For a description of these transfer restrictions,  and the circumstances
in  which  they  may  be  removed,   see  "Description  of  NYSE  Group  Capital
Stock--Transfer Restrictions on Certain Shares of NYSE Group Capital Stock."

     During the duration of these transfer  restrictions on their shares of NYSE
Group common stock, NYSE members will be precluded from realizing any gains from
the increase in the market price of these shares of NYSE Group common stock.

BOTH NYSE MEMBERS AND ARCHIPELAGO STOCKHOLDERS WILL HAVE A REDUCED OWNERSHIP AND
VOTING  INTEREST  AFTER  THE  MERGERS  AND WILL  EXERCISE  LESS  INFLUENCE  OVER
MANAGEMENT.

     After the  completion  of the  mergers,  the NYSE  members and  Archipelago
stockholders will own a smaller percentage of NYSE Group than they currently own
of the NYSE and  Archipelago,  respectively.  Upon  completion  of the  mergers,
former  NYSE  members  and  employees  will  own  70%,  and  former  Archipelago
stockholders (including employees and other holders of Archipelago stock options
and restricted  stock units) will own 30%, of the NYSE Group common stock issued
and outstanding at the time of completion of the mergers, on a diluted basis, as
described under "The Mergers--General."  Consequently, NYSE members, as a group,
and Archipelago  stockholders,  as a group, will each have reduced ownership and
voting  power in the combined  company  compared to their  ownership  and voting
power in the NYSE and  Archipelago,  respectively.  In  particular,  Archipelago
stockholders,  as a group,  will have less than a majority of the  ownership and
voting  power  of NYSE  Group  and,  therefore,  will be able to  exercise  less
influence over the management and policies of the NYSE Group than they currently
exercise over the management and policies of Archipelago.

OBTAINING  REQUIRED  APPROVALS MAY DELAY OR PREVENT COMPLETION OF THE MERGERS OR
REDUCE THE ANTICIPATED BENEFITS OF THE MERGERS.

     Completion of the mergers is  conditioned  upon,  among other  things,  the
receipt of material governmental authorizations, consents, orders and approvals,
including  the  approval of the SEC and the  expiration  or  termination  of the
applicable waiting periods, and any extension of the waiting periods,  under the
Hart-Scott-Rodino  Antitrust  Improvements Act of 1976, as amended. The NYSE and
Archipelago  intend to pursue all required  approvals in  accordance  with their
obligations  under the merger  agreement.  In  connection  with  granting  these
approvals,   the  respective   governmental  or  other  authorities  may  impose
conditions  on, or  require  divestitures  or other  changes  relating  to,  the
divisions,  operations or assets of the NYSE or  Archipelago.  Such  conditions,
divestitures  or other changes may jeopardize or delay  completion of the merger
or  may  reduce  the  anticipated  benefits  of  the  merger.  See  "The  Merger
Agreement--Conditions  to  Completion  of the Mergers"  for a discussion  of the
conditions  to  the  completion  of  the  merger  and  "The  Mergers--Regulatory
Approvals" for a description of the regulatory approvals necessary in connection
with the mergers.

THERE ARE SIGNIFICANT  RISKS AND  UNCERTAINTIES  ASSOCIATED  WITH  ARCHIPELAGO'S
ACQUISITION OF PCX HOLDINGS.

     On  September  26,  2005,  Archipelago  completed  its  acquisition  of PCX
Holdings and all of its  subsidiaries,  including  the Pacific  Exchange and PCX
Equities.  PCX Holdings, the Pacific Exchange and PCX Equities operate as wholly
owned  subsidiaries of Archipelago and,  following the mergers,  will operate as
wholly owned subsidiaries of NYSE Group.

     There  are  significant  risks  and  uncertainties   associated  with  this
acquisition.   Archipelago   and  the  NYSE  may  fail  to  realize  the  growth
opportunities  and the  anticipated  benefits to be derived from  combining  the
businesses of the  subsidiaries  of PCX Holdings with their own. There can be no
assurances  that  the  systems,  policies,  procedures,   operations,  products,
services or  technology  of  Archipelago,  the NYSE and the PCX entities will be
implemented and integrated  successfully or on a timely basis. There also may be
delays, complications

                                       29

<PAGE>


and expenses relating to such implementation and integration.  If Archipelago or
the NYSE is not able to successfully  combine their businesses with those of the
PCX entities,  the anticipated benefits from the acquisition may not be realized
fully or at all or may take longer to realize than expected. It is possible that
the integration  process could result in the loss of key employees,  or that the
disruption of the businesses of Archipelago, the NYSE or the PCX entities due to
the acquisition  could adversely affect their ability to maintain  relationships
with customers or compete effectively in the market.

     Failure to manage  effectively  the  integration  of PCX  Holdings  and its
subsidiaries could adversely affect the growth strategy and future profitability
of  Archipelago  or NYSE  Group  and  subject  them to some or all of the  risks
identified above.  Additionally,  the Pacific Exchange and PCX Equities serve as
Archipelago's  regulator.  In the event  that  material  conflicts  of  interest
develop  between  Archipelago  and the Pacific  Exchange as its  regulator,  the
operations of Archipelago and NYSE Group could be adversely affected.

THERE ARE SIGNIFICANT  RISKS AND  UNCERTAINTIES  ASSOCIATED  WITH  ARCHIPELAGO'S
INTENDED DIVESTITURE OF WAVE SECURITIES.

     Archipelago  is in the process of divesting  its wholly  owned  subsidiary,
Wave Securities,  L.L.C.,  in response to a rule recently adopted by the Pacific
Exchange in connection  with  Archipelago's  acquisition of PCX Holdings and its
subsidiaries.  The  rule  allows  Archipelago  to  continue  to  own  all of its
ownership  interest in Wave Securities  following the closing of its acquisition
of PCX Holdings, but only until December 31, 2005.

     There are significant risks and uncertainties associated with Archipelago's
intended divestiture of Wave Securities.  For example, there can be no guarantee
that  Archipelago  will find a potential  buyer for Wave  Securities,  or find a
potential  buyer  willing to purchase  Wave  Securities  on favorable  terms and
conditions.  Because the intended divestiture of Wave Securities will be subject
to the negotiation of a definitive agreement, regulatory approvals and potential
unforeseen  uncertainties  and  delays,  Archipelago  may be unable to sell Wave
Securities,  or sell Wave Securities on favorable  terms,  prior to December 31,
2005.  The  divestiture  of  Wave  Securities  also  could  involve  substantial
transaction  costs,  including legal,  accounting and other transaction fees and
costs.

     If  Archipelago  is unable to sell Wave  Securities  prior to December  31,
2005, Archipelago would need to obtain the SEC's approval to continue to own and
operate Wave Securities. There can be no assurances, however, that such approval
would be timely granted. If Archipelago is unable to sell Wave Securities and is
also  unable to obtain  SEC's  approval  to  continue  to own and  operate  Wave
Securities prior to December 31, 2005,  Archipelago would be in violation of the
rule adopted to approve its indirect  acquisition  and  ownership of the Pacific
Exchange.

     The divestiture of Wave Securities also may be complex and  time-consuming,
and may  temporarily  disrupt  or  distract  the  management  and  employees  of
Archipelago  and  Wave  Securities  from  their  focus on  business  operations.
Realizing the benefits of this  divestiture will depend in part on Archipelago's
ability to transfer Wave  Securities in an efficient and effective  manner while
maintaining adequate focus on its retained business.

RISKS RELATING TO NYSE GROUP'S BUSINESS

NYSE GROUP WILL FACE NUMEROUS  COMPETITORS  IN THE SECURITIES  MARKET  INDUSTRY,
INCLUDING BOTH U.S.-BASED AND NON-U.S.-BASED COMPETITORS.

     The  securities  market  industry  is  very  competitive,   and  we  expect
competition  to continue to  intensify in the future.  NYSE Group's  prospective
competitors,  both  domestically  and around the world, are numerous and include
both traditional and nontraditional execution venues.

     NYSE  Group  will  compete  with  U.S.-based  and  non-U.S.-based  markets,
electronic   communication  networks  and  other  alternative  trading  systems,
market-makers and other execution venues.  NYSE Group will also face competition
for liquidity and trading securities from  broker-dealers that internalize order
flow.  Internalization of order flow occurs when a broker-dealer  trades against
its own customers'  orders,  thus decreasing trading volume on public securities
markets.

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<PAGE>



     NYSE Group will  compete  with other  market  participants  in a variety of
ways,   including  the  cost,   quality  and  speed  of  trade  execution,   the
functionality,  ease of use and  performance  of trading  systems,  the range of
products and services,  technological  innovation and  reputation.  NYSE Group's
competitors may:

     o    respond more  quickly to  competitive  pressures  because they are not
          subject to the same degree of regulatory oversight as NYSE Group;

     o    develop products that are preferred by NYSE Group's customers;

     o    price their products and services more competitively;

     o    develop and expand their network  infrastructure and service offerings
          more efficiently;

     o    utilize faster, more user-friendly technology;

     o    consolidate  and form alliances,  which may create greater  liquidity,
          lower costs and better pricing than NYSE Group is able to offer;

     o    more effectively market, promote and sell their products and services;
          and

     o    better  leverage  existing  relationships  with customers and alliance
          partners  or  better  exploit  brand  names to market  and sell  their
          services.

     NYSE Group may also face  competition from new entrants into the markets in
which  it  competes.  The  emergence  of  new  competitors  may  increase  price
competition and reduce margins for all existing  securities  markets,  including
NYSE  Group.  New  entrants  include  new  alternative  trading  systems and new
initiatives by existing market participants,  including  established  securities
markets or exchanges. For example:

     o    On August 25, 2005, the Boston Stock Exchange  announced its intention
          to launch a new stock  trading  network  called  the  Boston  Equities
          Exchange, or BeX, in connection with a joint venture entered into with
          Fidelity  Brokerage Co., Lehman Brothers  Holdings Inc., Credit Suisse
          First Boston and Citigroup Inc.

     o    In June and August 2005, the  Philadelphia  Stock  Exchange  announced
          that it had entered  into  strategic  alliances  with  Merrill  Lynch,
          Citadel Derivatives Group LLC, Citigroup,  Credit Suisse First Boston,
          Morgan Stanley and UBS.  According to the Philadelphia Stock Exchange,
          these  investments  will  advance its goal of growing its business and
          technology.

     o    In June 2005,  BATS Trading,  Inc., a company  located in Kansas City,
          announced its intention to launch a new  alternative  trading  system.
          BATS has stated  that its new  platform  will be ready for  trading in
          early 2006, subject to pending regulatory approvals.

     o    In August 2005,  Nasdaq  announced its intention to allow customers to
          route options  orders to major options  exchanges by the first quarter
          of 2006.

     o    The  International  Securities  Exchange,  Inc., a U.S. equity options
          exchange,   recently   announced  that  it  will  explore  becoming  a
          participant  in the CTA Plan and the OTC/UTP Plan (which are described
          further  under  "Industry"),   which  would  allow  the  International
          Securities  Exchange to enter into the equities  trading market and to
          trade exchange-listed and Nasdaq-listed securities.

     If NYSE  Group is  unable  to  compete  successfully  with  these  numerous
competitors,  its business,  financial  condition and operating  results will be
adversely  affected.  For a discussion of the  competitive  environment in which
NYSE Group operates, see "Information About NYSE Group--Competition."

GLOBALIZATION,  GROWTH,  CONSOLIDATIONS  AND OTHER  STRATEGIC  ARRANGEMENTS  MAY
IMPAIR NYSE GROUP'S COMPETITIVE POSITION.

     The  liberalization  and  globalization  of world  markets has  resulted in
greater  mobility  of  capital,  greater  international  participation  in local
markets and more competition between markets in different geographical areas. As
a result, the competition among U.S.-based and non-U.S.-based  markets and other
execution venues has become more intense.

                                       31

<PAGE>


     In addition,  in the last several  years,  the structure of the  securities
trading  industry  has  changed  significantly   through   demutualizations  and
consolidations.  In response to growing  competition,  many marketplaces in both
Europe and the United States (such as the London Stock  Exchange plc and Nasdaq)
have  demutualized  to  provide  greater  flexibility  for  future  growth.  The
securities industry is also experiencing consolidation,  creating a more intense
competitive environment. In particular, Nasdaq has recently announced a proposed
transaction  that would  result in Nasdaq  owning Inet ATS,  Inc.  ("INET").  At
present,  Nasdaq,  ArcaEx and INET account for a  substantial  proportion of the
trading volume in  Nasdaq-listed  securities.  Accordingly,  this transaction is
expected  to increase  the  competition  between  ArcaEx and Nasdaq and INET for
Nasdaq-listed  securities.  The  Philadelphia  Stock  Exchange has also recently
entered into  investment  agreements  with other  participants in the securities
industry, with the aim of enabling it to better compete with other exchanges. In
addition,  there have been a number of recent  attempts on the part of more than
one European  exchange to acquire the London  Stock  Exchange.  This  increasing
consolidation  also  eliminates  potential  acquisition  targets  and  strategic
partners for NYSE Group.

     Because of these market  trends,  NYSE Group will face intense  competition
after the mergers.  If NYSE Group is unable to compete  successfully in this new
environment,  its business,  financial  condition and operating  results will be
adversely affected.

NYSE GROUP MUST KEEP UP WITH EMERGING  TECHNOLOGICAL CHANGES IN ORDER TO COMPETE
EFFECTIVELY IN A RAPIDLY EVOLVING AND HIGHLY COMPETITIVE INDUSTRY.

     NYSE Group will operate in a business  environment that has undergone,  and
continues to experience,  significant and rapid technological  change. In recent
years,  electronic  trading has grown in  significance,  and customer demand for
increased choice of execution methods has increased. To remain competitive, NYSE
Group must  continue to enhance and improve the  responsiveness,  functionality,
accessibility  and  features of its  proprietary  trading  platforms,  software,
systems and technologies. Its success will depend, in part, on its ability to:

     o    develop and license leading technologies useful in its businesses;

     o    enhance its existing trading platforms and services;

     o    respond to  customer  demands,  technological  advances  and  emerging
          industry standards and practices on a cost-effective and timely basis;
          and

     o    continue  to attract and retain  highly  skilled  technology  staff to
          maintain  and  develop  its  existing  technology  and to adapt to and
          manage emerging technologies.

     The development and expansion of proprietary  electronic trading technology
entails  significant  technical,  financial and business  risks.  Any failure or
delay  in  exploiting  technology,   or  a  failure  to  exploit  technology  as
effectively as a competitor of NYSE Group,  could have a material adverse effect
on the business,  financial  condition and operating  results of NYSE Group.  In
addition,  the increased use of electronic  trading on the NYSE may make it more
difficult  for NYSE  Group  to  differentiate  its  products  from  those of its
competitors,  possibly  reducing one of the  competitive  strengths of the NYSE.
This may have an adverse  impact on NYSE Group's  business,  and, in particular,
may reduce the  incentive for companies to pay to list on the NYSE. In addition,
the  commoditization  of trade execution may result in a reduction in the number
of people  using  NYSE's  trading  floor.  This may result in a decrease  in the
revenues raised through use of the trading floor.

     The NYSE  uses  leading  technologies  and  currently  devotes  substantial
resources to its services.  The adoption of new technologies or market practices
may  require  NYSE  Group to devote  further  resources  to modify and adapt its
services.  In such cases,  NYSE Group cannot assure you that it would succeed in
making these improvements to its technology infrastructure in a timely manner or
at all. If NYSE Group is unable to anticipate  and respond to the demand for new
services,  products and technologies on a timely and cost-effective basis and to
adapt to technological  advancements and changing standards, it may be unable to
compete effectively, which would have a material adverse effect on its business,
financial  condition and results of operations.  Moreover,  NYSE Group may incur
substantial development, sales and marketing expenses and

                                       32

<PAGE>


expend  significant  management  effort to add new  products  or services to its
trading  platform.  Even after incurring these costs,  NYSE Group ultimately may
not realize  any,  or may realize  only small  amounts  of,  revenues  for these
products or  services.  Consequently,  if revenue  does not increase in a timely
fashion  as  a  result  of  these  expansion  initiatives,  the  up-front  costs
associated  with  expansion may exceed  revenue and reduce NYSE Group's  working
capital and income.

NYSE GROUP'S BUSINESS MAY BE ADVERSELY AFFECTED BY PRICE COMPETITION.

     The securities  trading and listing industries are characterized by intense
price  competition.  The pricing model for trade execution for equity securities
has changed in response to competitive market  conditions.  Some of NYSE Group's
prospective  competitors  have  recently  lowered  their  transaction  costs and
accordingly  reduced the prices that they charge.  In  addition,  NYSE Group may
face price  competition  in the fees that it charges  to its  customers  to list
securities  on its  securities  exchanges.  It is likely  that NYSE  Group  will
continue  to  experience  significant  pricing  pressures  and that  some of its
competitors  will seek to increase their share of trading or listings by further
reducing their  transaction  fees or listing fees, by offering higher  liquidity
payments or by offering  other forms of  financial or other  incentives.  In the
event that NYSE  Group's  competitors  engage in any of these  activities,  NYSE
Group's operating results and future  profitability could be adversely affected.
For  example,  NYSE Group could lose a  substantial  percentage  of its share of
trading or listings if it is unable to price its  transactions  in a competitive
manner,  or its  profit  margins  could  decline if it  reduces  its  pricing in
response. In addition,  one or more competitors may engage in aggressive pricing
strategies  and  significantly  decrease or  completely  eliminate  their profit
margin  for a period of time to capture a greater  share of trading or  listing.
Some potential competitors,  especially those outside of the United States, have
high profit margins in other business areas,  which may assist them in executing
these  strategies.  This  environment  could  lead  to loss of  order  flow  and
decreased revenues, and could adversely affect NYSE Group's operating results.

     In addition,  the NYSE is currently undertaking a fundamental review of its
pricing  structures for its listing,  trading and regulatory fees. There is risk
inherent in the introduction of new pricing  structures,  and the implementation
of a new price  structure  may have  material  adverse  effects on the business,
financial condition and operating results of NYSE Group.

REGULATION NMS, AND CHANGES IN REGULATION NMS, MAY ADVERSELY AFFECT NYSE GROUP'S
BUSINESSES.

     On  April  6,  2005,  the SEC  adopted  Regulation  NMS,  which is a set of
regulations  that will govern  certain  aspects of trading on securities  market
centers.  Its  provisions  are scheduled to become  effective at various  points
throughout 2005 and 2006. One of the principal features of Regulation NMS is the
modernization  of the  "trade  through"  rule.  Among  other  things,  this rule
requires  market centers to establish and maintain  procedures to prevent "trade
throughs,"  which is the  execution of an order at a price  inferior to the best
bid or offer  displayed  by  another  market  center  at the time of  execution.
Regulation  NMS will protect and apply only to quotes  available  for  immediate
execution. The "trade through" rule implemented by Regulation NMS could increase
competition between markets.

     Regulation NMS, as currently  formulated,  will also impose a cap of $0.003
per share on the access fees charged by market centers to members (or customers)
and non-members based on executions against the best bid or best offer displayed
through the consolidated  quote system.  This system  continuously  provides the
best bid quote and best offer quote in listed  equity  securities to the public.
As a result,  the  transaction  fees that NYSE Group may  charge for  executions
against its best bid and offer will be capped,  which could  decrease the amount
of  transaction  fees that NYSE Group earns and prevent it from  increasing  its
revenues by charging higher prices. The imposition of a cap on access fees could
have an adverse effect on certain of NYSE Group's businesses.

     There is also a risk that Regulation NMS would not be implemented,  or that
it would be implemented  after being amended in a manner that is adverse to NYSE
Group. The NYSE and Archipelago have begun to develop their respective  business
strategies  and alter  their  businesses  in  consideration  of the rules in the
current form of Regulation NMS. There is no assurance,  however, that Regulation
NMS will be  implemented in a timely manner or in its current form. Any delay in
the  implementation  of  Regulation  NMS, as well as any amendment to Regulation
NMS,  could create  uncertainty  and  adversely  affect NYSE  Group's  financial
condition and results of operations.

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<PAGE>



NYSE GROUP INTENDS TO COMPETE IN ESTABLISHED  TRADING MARKETS,  SUCH AS THE U.S.
OPTIONS OR FUTURES  MARKETS OR NON-U.S.  SECURITIES  MARKETS.  DEMAND AND MARKET
ACCEPTANCE FOR NYSE GROUP'S  PRODUCTS AND SERVICES  WITHIN THESE MARKETS WILL BE
SUBJECT  TO A HIGH  DEGREE OF  UNCERTAINTY  AND RISKS AND MAY  AFFECT ITS GROWTH
POTENTIAL.

     NYSE Group  intends to develop  additional  products that will enable it to
enter into or expand in established trading markets such as the U.S. options and
futures  markets  or  non-U.S.   securities   markets,   which  already  possess
established  competitors.  As a result,  demand and market  acceptance  for NYSE
Group's new products and services within these markets will be subject to a high
degree of uncertainty and risk. If this demand fails to develop or develops more
slowly than expected, these markets may become saturated with competitors, or if
NYSE Group's products and services do not achieve or sustain market  acceptance,
NYSE Group may not generate sufficient revenues from these new products.

     NYSE Group's future growth and success may depend in part on its ability to
compete with and  penetrate  the non-U.S.  securities  markets.  There can be no
assurance,  however, that NYSE Group will be successful in competing with and/or
penetrating  these  markets.  Attracting  customers in certain  countries may be
subject  to  a  number  of  risks,   including   currency  exchange  rate  risk,
difficulties in enforcing agreements or collecting  receivables,  longer payment
cycles, and compliance with the laws or regulations of foreign countries.

DAMAGE TO THE REPUTATION OF THE NYSE COULD HAVE A MATERIAL ADVERSE EFFECT ON THE
BUSINESSES OF NYSE GROUP.

     One of the NYSE's competitive  strengths is its strong reputation and brand
name.  This  reputation  could be harmed in many  different  ways,  including by
regulatory failures,  governance failures or technology failures.  Damage to the
reputation of the NYSE could cause some issuers not to list their  securities on
NYSE Group's  exchange,  as well as reduce the trading  volume on its exchanges.
This, in turn,  may have a material  adverse  effect on the business,  financial
condition and operating results of NYSE Group.

INCREASED  INVESTOR INTEREST IN OTHER INVESTMENT  PRODUCTS COULD HAVE A MATERIAL
ADVERSE EFFECT ON THE BUSINESSES OF NYSE GROUP.

     Trading  fees will  account for a  significant  proportion  of NYSE Group's
revenues.  Increased  consumer interest in investment  products that will not be
traded on the facilities of any of the  subsidiaries of NYSE Group may result in
a reduction in order flow, and may therefore  have a material  adverse effect on
the business, financial condition and operating results of NYSE Group.

NYSE GROUP WILL OPERATE IN A HIGHLY  REGULATED  INDUSTRY,  AND MAY BE SUBJECT TO
CENSURES,  FINES AND OTHER LEGAL  PROCEEDINGS  IT FAILS TO COMPLY WITH ITS LEGAL
AND REGULATORY OBLIGATIONS.

     NYSE Group will  operate in a highly  regulated  industry.  The  securities
industry is subject to extensive governmental  regulation and could be subjected
to increased regulatory scrutiny. As a matter of public policy, these regulatory
bodies are  responsible  for  safeguarding  the integrity of the  securities and
other  financial  markets and  protecting  the  interests  of investors in those
markets. The SEC extensively  regulates the U.S. securities industry,  including
its  operations,  and it has  broad  powers to audit,  investigate  and  enforce
compliance and punish  noncompliance with its rules and regulations and industry
standards  of  practice.  NYSE Group and its  subsidiaries  will be  required to
comply with the rules and  regulations  of the SEC.  The cost of  compliance  is
great.  NYSE  Group's  ability to comply with all  applicable  laws and rules is
largely dependent on its establishment and maintenance of compliance,  audit and
reporting  systems and procedures,  as well as its ability to attract and retain
qualified compliance, audit and risk management personnel.

     The SEC is invested with broad enforcement  powers to censure,  fine, issue
cease-and-desist  orders,  prohibit  NYSE  Group  from  engaging  in some of its
businesses or suspend or revoke the registration of its subsidiaries as national
securities  exchanges.  In the case of  actual  or  alleged  noncompliance  with
regulatory  requirements,  NYSE Group  could be subject  to  investigations  and
administrative or judicial proceedings that may result in substantial penalties,
including  revocation of a subsidiary's  registration  as a national  securities
exchange.   Any  such   investigation  or  proceeding,   whether  successful  or
unsuccessful,  would result in substantial costs and diversions of resources and
might  also  harm  NYSE  Group's  business  reputation,  any of which may have a
material  adverse  effect on the  business,  financial  condition  and operating
results of NYSE Group. For a

                                       34

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discussion  of recent  SEC  administrative  proceedings  against  the NYSE,  see
"Information About the NYSELegal Proceedings-SEC Administrative Proceedings."

     In  addition,   there  may  be  a  conflict  between  the   self-regulatory
responsibilities  of  certain  businesses  of NYSE  Group and some of the market
participants  or  customers of NYSE  Group's  subsidiaries.  Any failure by NYSE
Group to diligently and fairly regulate its members or to otherwise  fulfill its
regulatory  obligations  could  significantly  harm its  reputation,  prompt SEC
scrutiny and adversely affect its business.

NYSE GROUP WILL FACE  RESTRICTIONS  WITH RESPECT TO THE WAY IN WHICH IT CONDUCTS
CERTAIN OF ITS OPERATIONS,  AND MAY EXPERIENCE CERTAIN COMPETITIVE DISADVANTAGES
IF IT DOES NOT RECEIVE SEC  APPROVAL FOR NEW  BUSINESS  INITIATIVES  OR RECEIVES
THEM IN AN UNTIMELY MANNER.

     NYSE  Group  expects  to  operate  two   registered   national   securities
exchanges-the  New  York  Stock  Exchange  LLC  and,  upon  its  acquisition  by
Archipelago,  the Pacific Exchange.  Pursuant to the Securities  Exchange Act of
1934, as amended (the "Exchange Act"), a registered national securities exchange
is responsible  for regulating its members  through the adoption and enforcement
of rules  governing  the trading  activities,  business  conduct  and  financial
responsibility of its members and individuals  associated with them.  Changes to
these rules are generally  subject to the approval of the SEC,  which  publishes
proposed  rule  changes  for  public  comment.  Changes  to the  certificate  of
incorporation, bylaws or rules of NYSE Group and any of its subsidiaries, to the
extent that these changes could affect the  activities of these  self-regulatory
organizations  ("SROs") must also be approved.  NYSE Group and its  subsidiaries
may from time to time seek to engage in new business  activities,  some of which
may require changes to their governing rules.

     Any delay or denial of a requested  approval could cause NYSE Group to lose
business opportunities. NYSE Group's competitive position could be significantly
weakened  if  its   competitors   are  able  to  obtain  SEC  approval  for  new
functionalities  faster and with less difficulty than NYSE Group, or if approval
is not required for NYSE Group's competitors.  Competitors that are not SROs are
subject to less stringent regulation. In addition, as NYSE Group seeks to expand
its  product  base,  it could  become  subject to the  oversight  of  additional
regulatory bodies.

THE PACIFIC  EXCHANGE HAS HAD  DISCUSSIONS  WITH SEC STAFF REGARDING A POTENTIAL
PILOT PROGRAM TO TRADE AND QUOTE OPTIONS IN PENNY  INCREMENTS,  BUT ANY PROPOSAL
THAT THE PACIFIC EXCHANGE MAY MAKE ON THIS ISSUE MAY BE DENIED BY THE SEC.

     The  Pacific  Exchange  has had  discussions  with SEC  staff  regarding  a
potential  pilot program to display,  rank,  quote and execute  option orders in
penny increments.  Currently, options are displayed, ranked, quoted and executed
in nickel and dime  increments,  although the underlying  equity security may be
displayed,  ranked,  quoted and  executed  in penny  increments  (or,  after the
implementation of Regulation NMS,  sub-penny  increments if the quote,  order or
indication of interest for the stock is less than $1.00).  Any proposal that the
Pacific Exchange may make on this issue will require approval from the SEC.

     Currently,  only certain option market  participants can execute orders for
options in penny increments;  however, these orders are not executed in a manner
that is  transparent  to all option market  participants.  Although these market
participants  are able to execute  orders in penny  increments,  they still must
quote  and  display  their  orders in nickel  or dime  increments.  The  Pacific
Exchange's  potential  pilot  program  would  provide  transparent  option order
display and execution to all market participants.  It would also seek to provide
improved and enhanced pricing opportunities for all market participants,  as the
fair value of  options  are often in part  dependent  upon the fair price of the
underlying  equity security.  Some industry  participants  oppose such a program
under the belief that it would  overwhelm the capacity limits of existing option
quote processing systems.

     In the  event  that the SEC  approves  displaying,  quoting  and  executing
options in any increments  under a nickel,  we believe that the Pacific Exchange
and  Archipelago,  and consequently  NYSE Group after the mergers,  will be well
positioned to adequately  handle the process.  Failure of the SEC to approve the
ability to display,  rank,  quote and execute  orders for options in  increments
under a nickel could limit to a material  extent the ability of Archipelago  and
NYSE Group to gain options market share or realize the growth  opportunities and
the anticipated  benefits to be derived from the acquisition of PCX Holdings and
its subsidiaries.

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<PAGE>



REGULATORY DEVELOPMENTS COULD HAVE A NEGATIVE IMPACT ON NYSE GROUP'S BUSINESSES.

     The  securities  markets have been the subject of increasing  political and
public  scrutiny in recent  years in response  to a number of  developments  and
inquiries.   In  November   2004,   the  SEC  proposed   corporate   governance,
transparency,  oversight  and  ownership  rules  for SROs and  issued a  concept
release examining the efficacy of  self-regulation  by SROs. The concept release
also  solicited  public  comment  concerning  the  level of  market  data  fees,
following several years of claims from some competitors and data  intermediaries
and competitors that market data fees and revenues are excessive.

     We cannot predict  whether,  or in what form,  any regulatory  changes will
take place,  or their impact on NYSE  Group's  business.  However,  the proposed
changes in the rules and  regulations  affecting SROs could result in changes to
the manner in which NYSE Group conducts its business or governs itself.  The new
rules could also, among other things,  make it more difficult or more costly for
NYSE Group to conduct the existing  businesses of the NYSE and Archipelago or to
enter into new  businesses.  A  determination  by the SEC, for example,  to link
market data fees to marginal  costs,  to become even more involved in the market
data rate-setting  process,  or to reduce the current levels of market data fees
could  have a  material  adverse  effect on the  NYSE's  market  data  revenues.
Moreover,  given the importance of regulation in the securities industry,  it is
possible  that any  developments  could have a material  adverse  effect on NYSE
Group's  business,  as  well  as  the  business  of  other  participants  in the
securities  industry.  For a discussion of recent regulatory  developments,  see
"Regulation--Recent Regulatory Developments."

NYSE GROUP'S PROSPECTIVE  CUSTOMERS WILL OPERATE IN A HIGHLY REGULATED INDUSTRY,
AND  REGULATORY  CHANGES AND CHANGES IN MARKET  STRUCTURE  COULD HAVE A MATERIAL
ADVERSE EFFECT ON NYSE GROUP'S BUSINESS.

     The prospective  customers of NYSE Group will operate in a highly regulated
industry.  The SEC and other regulatory  authorities,  both in the United States
and abroad, could impose regulatory changes that could have a negative impact on
the desirability of listing on or utilizing the securities exchanges of the NYSE
Group.  For  example,  NYSE Group  will  compete  with  non-U.S.  exchanges  for
listings. The regulatory requirements of the U.S. securities markets,  including
the  requirements  of the  Sarbanes-Oxley  Act of 2002, may discourage  non-U.S.
issuers from listing their securities on a U.S.  securities market and, instead,
lead them to list their  securities  on a  non-U.S.  securities  market.  Future
regulatory  changes  and changes in market  structure  could cause NYSE Group to
lose prospective  customers.  The loss of a significant number of customers or a
reduction  in trading  activity on the  securities  exchanges of NYSE Group as a
result of these  changes  may have a material  adverse  effect on the  business,
financial condition and operating results of NYSE Group.

NYSE GROUP WILL BE REQUIRED TO ALLOCATE  FUNDS AND  RESOURCES TO THE  REGULATORY
FUNCTIONS OF NYSE REGULATION.

     NYSE  Group will be  required  to  allocate  significant  resources  to the
regulatory functions of NYSE Regulation.  This dedication of resources may limit
the ability of NYSE Group to dedicate funds and human  resources in other areas.
In connection  with the mergers,  provisions will be made for NYSE Regulation to
provide  regulatory   services  to  NYSE  Group's  securities   exchanges.   The
obligations to fund NYSE Regulation under the agreements covering those services
negatively  affect the cash available to NYSE Group and its ability to invest in
or  pursue  other  opportunities  that  may  also be  beneficial  to NYSE  Group
stockholders.  NYSE Group and its subsidiaries will incur significant  financial
costs  and  expend   considerable   human   resources  in  connection  with  the
surveillance,  examination  and  enforcement  obligations  of  NYSE  Regulation,
including  the  costs  of  maintaining  an  effective  regulatory  staff.  For a
discussion of the regulatory  structure and  responsibilities of NYSE Group, see
"NYSE Regulation."

ANY  CONFLICTS  OF INTEREST  BETWEEN NYSE GROUP AND NYSE  REGULATION  MAY HAVE A
MATERIAL ADVERSE EFFECT ON NYSE GROUP'S BUSINESS.

     NYSE  Regulation will regulate and monitor the activities on the securities
exchanges of NYSE Group and enforce issuer and member compliance with applicable
law and the rules of the  exchanges.  In a recent rule  proposal,  the SEC noted
that there is an  inherent  conflict  that exists  within  every SRO between its
regulatory  functions,  on the one hand,  and its  members,  market  operations,
listed issuers, and shareholders, on the other hand.

                                       36

<PAGE>


The SEC has  expressed  particular  concern about the conflicts of interest that
exist when a for-profit  entity owns an SRO.  The  for-profit  entity's  goal of
maximizing  stockholder  value  might  conflict  with the SRO's  self-regulatory
responsibilities  imposed by the securities  laws.  For example,  the for-profit
entity might have an incentive to commit  insufficient  funds to the  regulatory
operations  of the SRO,  or use the  disciplinary  powers of the SRO to generate
revenue  for the  for-profit  entity by  disciplining  members  that  operate or
participate  in  competing   trading  systems.   In  addition,   the  regulatory
responsibilities  imposed  by the U.S.  securities  laws  (such  as  encouraging
low-cost trading and competitive  markets) may conflict with the profit-oriented
goals of NYSE Group as a public  company.  There may be more  opportunities  for
conflicts  of  interest  to arise  when SROs  regulate  more  listed  companies.
Additional  conflicts  of interest  arise  where a company  (such as NYSE Group)
lists its  securities  on the national  securities  exchange  that it owns.  The
listing  of NYSE  Group  common  stock on the NYSE  could  potentially  create a
conflict of interest between the NYSE's regulatory  responsibility to vigorously
oversee the listing and trading of securities on the NYSE, on the one hand,  and
NYSE Group's  commercial and economic  interest,  on the other hand.  Such "self
listing" may raise questions as to the NYSE' s oversight of competitors.

     NYSE Group expects to implement  structural  protections  to minimize these
potential  conflicts of interest.  For a discussion of some of these  structural
protections, see "NYSE Regulation-Structure, Organization and Governance of NYSE
Regulation--After the Mergers." These structural  protections,  however, may not
be adequate and, in any event,  will not  eliminate  all potential  conflicts of
interest.  For  example,  NYSE Group  expects  that  certain of the  independent
directors  of the NYSE Group board of  directors  will serve as directors on the
NYSE Regulation board of directors. In the event that NYSE Group fails to manage
these  potential  conflicts of interest  adequately,  it may incur  reputational
damage or otherwise suffer a material adverse effect on its business,  financial
condition and operating results.

CERTAIN OF NYSE GROUP'S  BUSINESSES  WILL  CONTINUE TO RELY ON  SPECIALISTS  FOR
EFFECTING  SOME  TRANSACTIONS.  ANY  FAILURE BY  SPECIALISTS  TO  PERFORM  THEIR
FUNCTION  OR TO COMPLY  WITH THEIR  REGULATORY  OBLIGATIONS  MAY HAVE A MATERIAL
ADVERSE EFFECT ON NYSE GROUP'S BUSINESS.

     Some of the  businesses of NYSE Group will depend on  specialists to assist
in maintaining some of their key competitive advantages.  Specialists contribute
to some of the  advantages  of the auction  market,  for example by assisting in
providing   liquidity  and  minimizing   volatility.   A  deterioration  in  the
performance  of  specialists,  or misconduct by  specialists,  could damage NYSE
Group's  reputation  and reduce  NYSE  Group's  ability  to  compete  with other
securities  exchanges for listings.  The  profitability  of the seven specialist
units currently active on the NYSE has fallen substantially since 2002.

     The  increased  use  of  technology,  and  in  particular,   computers,  in
securities executions also is changing the business models of specialists. Their
failure to adapt their business models to this changing  environment in general,
and to the NYSE Hybrid  MarketSM in  particular,  would  further  undermine  the
differentiation,  and therefore the competitive  position, of NYSE Market. For a
discussion of certain  litigation and SEC action  relating to  specialists,  see
"Information About the NYSE--Legal Proceedings."

THE SUCCESSFUL  IMPLEMENTATION AND OPERATION OF THE NYSE HYBRID MARKETSM FACES A
NUMBER OF SIGNIFICANT CHALLENGES AND DEPENDS ON A NUMBER OF FACTORS THAT WILL BE
OUTSIDE THE CONTROL OF NYSE GROUP.

     The NYSE is currently  working on  implementing  the NYSE Hybrid  MarketSM,
which  is  intended  to  integrate  into  one  platform   aspects  of  both  the
physically-convened  auction  market and automated  execution.  If  successfully
implemented,  we expect that the NYSE Hybrid  MarketSM  will change the way that
securities  are  traded  on the NYSE  and will  differentiate  NYSE  Group  from
electronic  trading  venues.  This initiative is scheduled to be launched in the
second quarter of 2006.

     The successful implementation of the NYSE Hybrid MarketSM faces a number of
significant   challenges,   including  the   difficulties  of  developing  novel
technology.  The successful  implementation of the NYSE Hybrid MarketSM may also
depend on the ability and  willingness  of  specialists  to build new technology
platforms.  It is also  dependent on the SEC's timely  approval of the necessary
rule changes. There is no assurance that approval of the necessary rules will be
forthcoming,  or that the NYSE Hybrid  MarketSM will be  implemented in the form
that the NYSE currently foresees.

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<PAGE>


     In  addition,  as a novel  technology  and method of  trading,  there is no
assurance  that  the NYSE  Hybrid  MarketSM  will  function  as it is  currently
anticipated to function, or that customers will accept and use the services that
it offers.  The  operation  of the NYSE Hybrid  MarketSM  may also put stress on
other  sections  of  NYSE  Group,  such  as NYSE  Regulation,  and  specifically
surveillance.

     Any delay or  difficulties  in  implementing  or operating  the NYSE Hybrid
MarketSM  may have a  material  adverse  effect on the  ability of NYSE Group to
compete,  particularly  after all of the  provisions  of  Regulation  NMS are in
effect.  An  unwillingness  of  customers  to accept and utilize the NYSE Hybrid
MarketSM services might also have an adverse impact on the ability of NYSE Group
to compete. For a discussion of the NYSE Hybrid MarketSM, see "Information About
the NYSE--The NYSE Hybrid Market Initiative."

MARKET   FLUCTUATIONS   AND  OTHER  RISKS  BEYOND  NYSE  GROUP'S  CONTROL  COULD
SIGNIFICANTLY REDUCE DEMAND FOR ITS SERVICES AND HARM ITS BUSINESS.

     The volume of securities  transactions and the demand for listings and NYSE
Group's other products and services are directly affected by economic, political
and market  conditions  in the United States and elsewhere in the world that are
beyond its control, including:

     o    broad trends in business and finance;

     o    concerns about terrorism and war;

     o    concerns  over   inflation  and  wavering   institutional   or  retail
          confidence levels;

     o    changes in government  monetary policy and foreign  currency  exchange
          rates;

     o    the availability of short-term and long-term funding and capital;

     o    the availability of alternative investment opportunities;

     o    changes in the level of trading activity;

     o    changes and volatility in the prices of securities;

     o    changes in tax policy;

     o    the level and volatility of interest rates;

     o    legislative and regulatory changes; and

     o    unforeseen market closures or other disruptions in trading.

     General economic conditions affect securities markets in a variety of ways,
from  determining  availability of capital to influencing  investor  confidence.
Poor economic  conditions also have an impact on the process of raising capital,
reducing the number of new applicants to listing or private sales of securities.
The  economic  climate in recent  years has been  characterized  by  challenging
business and economic conditions. During 2000 through early 2003, the major U.S.
market indices  experienced  severe  declines.  The weak and uncertain  economic
climate, together with corporate governance and accounting concerns, contributed
to a reduction in corporate transactions and a generally more difficult business
environment.  In addition,  the United States and other  countries in which NYSE
Group hopes to offer its  services  have  suffered  acts of war or  terrorism or
other armed  hostilities.  These or similar  acts have in the past  increased or
prolonged,  and  may  in the  future  increase  or  prolong,  negative  economic
conditions.  Adverse  changes in the economy or the  outlook for the  securities
industry can have a negative impact on NYSE Group's revenues through declines in
trading  volume,  new  listings and demand for market  data.  Generally  adverse
economic  conditions  may also have a  disproportionate  effect  on NYSE  Group.
Because NYSE Group's infrastructure and overhead will be based on assumptions of
certain levels of market activity,  significant declines in trading volumes, new
listings  or demand for market  data may have a material  adverse  effect on the
business, financial condition and operating results of NYSE Group.

     A significant portion of NYSE Group's revenues will depend, either directly
or indirectly,  on its transaction-based  business, which, in turn, is dependent
on its ability to attract and maintain  order flow,  both in absolute  terms and
relative to other market centers. If the amount of trading volume on the NYSE or
ArcaEx decreases,

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<PAGE>


     NYSE Group's revenue from transaction fees will decrease. There may also be
a reduction  in revenue from market data fees.  If NYSE  Group's  share of total
trading volumes decreases relative to its competitors, it may be less attractive
to market  participants as a source of liquidity and may lose trading volume and
associated  transaction  fees and  market  data fees as a result.  In  addition,
declines in NYSE  Group's  share of trading  volume could  adversely  affect the
growth,  viability and importance of various of its market information products,
which will constitute an important portion of its revenues.
     NYSE Group also expects to generate a  significant  portion of its revenues
from listing fees. Among the factors affecting  companies' decision to go public
and/or  list their  shares on U.S.  markets  are  general  economic  conditions,
industry-specific circumstances, capital market trends, mergers and acquisitions
environment,  and regulatory  requirements.  The extent to which these and other
factors cause  companies to remain  privately  owned or decide not to list their
shares in the United States may have a material  adverse effect on the business,
financial condition and operating results of NYSE Group.

     The  financial   services   industry  and   particularly   the   securities
transactions  business are dynamic and uncertain  environments,  and we expect a
highly  competitive  environment,  as well as exchange  consolidation and member
organization consolidation to persist in the future. This environment has led to
business  failures and has encouraged the  introduction  of alternative  trading
venues with varying market structures and new business models.  Well-capitalized
competitors  from outside the United States may seek to expand their  operations
in the U.S. market. In addition,  the financial  services industry is subject to
extensive regulation, which may change dramatically in ways that affect industry
market structure. If NYSE Group is unable to adjust to structural changes within
its markets,  technological  and  financial  innovation,  and other  competitive
factors,  its  business  will  suffer and  competitors  will take  advantage  of
opportunities to its detriment.

THE LOSS OF KEY PERSONNEL MAY ADVERSELY AFFECT NYSE GROUP.

     Following the mergers,  NYSE Group will be dependent upon the contributions
of its senior  management  team and other key employees,  including key staff of
NYSE Regulation,  for its future success.  Most of these individuals do not have
employment agreements.  If several of these executives,  or other key employees,
were to  cease to be  employed  by NYSE  Group,  including  as a  result  of the
integration of the NYSE and Archipelago  following the mergers, NYSE Group could
be  adversely  affected.  In  particular,  NYSE Group may have to incur costs to
replace  key  employees  that leave,  and its  ability to execute  its  business
strategy could be impaired if it is unable to replace  departing  employees in a
timely manner.  Competition in the financial  services  industry for individuals
with relevant experience is intense.

     In addition,  NYSE Group will rely on a number of third-party  consultants,
particularly  for trading  technology.  The interruption or loss of any of these
regularly  provided  services  could result in a material  adverse effect on the
business, financial condition and operating results of NYSE Group.

INSUFFICIENT  SYSTEMS  CAPACITY  OR  SYSTEMS  FAILURE  COULD  HARM NYSE  GROUP'S
BUSINESS.

     NYSE Group's  business  depends on the  performance  and reliability of the
computer and communications  systems supporting it. In particular,  heavy use of
ArcaEx's  platform and order  routing  systems  during peak trading  times or at
times of unusual  market  volatility  could  cause  ArcaEx's  systems to operate
slowly or even to fail for periods of time. If its systems cannot be expanded to
handle  increased  demand,  or  otherwise  fail to  perform,  NYSE  Group  could
experience disruptions in service,  slower response times, delays in introducing
new  products  and  services  and loss of  revenues.  In  addition,  its trading
activities  may be  negatively  affected  by system  failures  of other  trading
systems,  as a result of which it may be required to suspend trading activity in
particular stocks or, in the case of ArcaEx,  cancel previously  executed trades
under certain circumstances.

     Failure to  maintain  systems  or to ensure  sufficient  capacity  may also
result in a  temporary  disruption  of NYSE  Group's  regulatory  and  reporting
functions.  These consequences,  in turn, could result in lower trading volumes,
financial losses,  decreased  customer service and  satisfaction,  litigation or
customer claims, or regulatory sanctions.

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<PAGE>


     The NYSE and Archipelago have experienced  systems failures in the past. It
is possible that NYSE Group will experience  systems failures in the future,  or
periods  of  insufficient  systems  capacity  or  network  bandwidth,  power  or
telecommunications  failure, acts of God or war, terrorism, human error, natural
disasters,  fire,  power loss,  sabotage,  hardware or software  malfunctions or
defects, computer viruses,  intentional acts of vandalism or similar events. Any
system  failure  that  causes  an  interruption  in  service  or  decreases  the
responsiveness  of  its  service  could  impair  NYSE  Group's   reputation  and
negatively  impact its  revenues.  NYSE Group also  relies on third  parties for
systems support. Any interruption in these third-party services or deterioration
in the  performance  of these  services could also be disruptive to its business
(and the  planned  NYSE  Hybrid  MarketSM,  in  particular)  and have a material
adverse effect on its business, financial condition and operating results.

NYSE GROUP'S  NETWORKS AND THOSE OF ITS  THIRD-PARTY  SERVICE  PROVIDERS  MAY BE
VULNERABLE  TO  SECURITY  RISKS,  WHICH  COULD  RESULT  IN  WRONGFUL  USE OF ITS
INFORMATION  OR CAUSE  INTERRUPTIONS  IN ITS  OPERATIONS  THAT  CAUSE IT TO LOSE
TRADING VOLUME AND RESULT IN SIGNIFICANT LIABILITIES. NYSE GROUP WILL ALSO INCUR
SIGNIFICANT EXPENSE TO PROTECT ITS SYSTEMS.

     NYSE Group expects that the secure transmission of confidential information
over public networks will be a critical element of its operations.  Its networks
and those of its third-party service providers may be vulnerable to unauthorized
access,  computer  viruses and other security  problems.  Persons who circumvent
security  measures could wrongfully  access and use NYSE Group's  information or
cause interruptions or malfunctions in its operations. Any of these events could
cause NYSE Group to lose trading  volume.  NYSE Group will be required to expend
significant further resources to protect against the threat of security breaches
or to alleviate problems, including reputational harm and litigation,  caused by
breaches.  Its security measures may prove to be inadequate and result in system
failures and delays that could cause NYSE Group to lose business.

NYSE GROUP'S REVENUES FROM SIAC COULD  SIGNIFICANTLY  DECREASE IF SIAC LOSES ITS
MAJOR CUSTOMERS.

     SIAC,  which is  two-thirds  owned by the NYSE and  one-third  owned by the
American Stock Exchange,  is the principal  vendor of the NYSE's data processing
and software development  services. In 2004, SIAC's revenues accounted for 15.3%
of the  NYSE's  aggregate  revenues.  Historically,  SIAC  has  relied  on three
principal  customers  for a  majority  of its  revenues:  (1) the NYSE,  (2) the
American Stock Exchange and (3) the National Securities Clearing Corporation and
Fixed Income Clearing Corporation.  In 2004, the NYSE was the source of 54.4% of
SIAC's  revenues;  the American Stock Exchange was the source of 16.2% of SIAC's
revenues;  and the National  Securities  Clearing  Corporation  and Fixed Income
Clearing  Corporation were the source of 13.7% of SIAC's revenues.  The National
Securities  Clearing  Corporation  and Fixed Income  Clearing  Corporation  have
entered  into  separate  agreements  with SIAC,  pursuant to which the  services
previously provided by SIAC will be phased out. In addition,  the American Stock
Exchange has sent a notice to SIAC  indicating  that it may materially  decrease
its use of SIAC's services.  If the American Stock Exchange materially decreases
its use of SIAC's  services,  NYSE Group's  revenues from SIAC will be adversely
affected. To the extent that the American Stock Exchange does not bear a portion
of the costs associated with this decrease,  (including  transition costs and an
appropriate  share of SIAC's  current  overhead  as SIAC seeks to  mitigate  the
overhead  costs),  or to the  extent  that NYSE  Group is not able to reduce its
costs  associated  with SIAC to offset the amount of  reduction  in revenue from
SIAC  (which it may not be able to do),  NYSE  Group's  profits  and  results of
operations may be adversely affected.

ANY  FAILURE BY NYSE GROUP TO PROTECT ITS  INTELLECTUAL  PROPERTY  RIGHTS  COULD
ADVERSELY AFFECT ITS BUSINESS.

     NYSE  Group  and its  subsidiaries  will  own the  rights  to a  number  of
trademarks,  service  marks,  trade  names,  copyrights  and patents used in its
businesses. To protect its intellectual property rights, NYSE Group will rely on
a combination  of trademark  laws,  copyright  laws,  patent laws,  trade secret
protection,  confidentiality  agreements and other contractual arrangements with
its affiliates,  customers, strategic investors and others. The protective steps
taken may be inadequate to deter  misappropriation  of proprietary  information.
NYSE Group may be unable to detect the  unauthorized use of, or take appropriate
steps to  enforce,  its  intellectual  property  rights.  Failure to protect its
intellectual property adequately could harm the reputation of NYSE Group and its
subsidiaries and affect its ability to compete effectively.  Further,  defending
its intellectual property rights may require significant

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financial and managerial resources, the expenditure of which may have a material
adverse  effect on the business,  financial  condition and operating  results of
NYSE Group.

     In the future NYSE Group or its subsidiaries may be subject to intellectual
property rights claims, which may be costly to defend, could require the payment
of damages and could  limit NYSE  Group's  ability to use certain  technologies.
Some of NYSE Group's  competitors  currently  own patents and have actively been
filing patent  applications  in recent  years,  some of which may relate to NYSE
Group's trading platforms and business processes.  As a result, NYSE Group could
in the future face allegations  that it has infringed or otherwise  violated the
intellectual property rights of third parties. Any intellectual property claims,
with or without merit, could be time-consuming,  expensive to litigate or settle
and could divert  management  resources  and  attention.  Successful  challenges
against  NYSE  Group  could  require  it to  modify  or  discontinue  its use of
technology  where such use is found to infringe or violate the rights of others,
or require NYSE Group to obtain licenses from third parties. For a discussion of
litigation   involving  the  NYSE,  see   "Information   About  the  NYSE--Legal
Proceedings."

NYSE GROUP IS SUBJECT TO SIGNIFICANT  LITIGATION  RISK AND POTENTIAL  SECURITIES
LAW LIABILITY.

     Many aspects of NYSE Group's  business will involve  substantial  liability
risks. These risks will include, among others, potential liability from disputes
over terms of a trade,  the claim that a system failure or delay caused monetary
losses to a customer,  that NYSE Group entered into an unauthorized  transaction
or that  NYSE  Group  provided  materially  false or  misleading  statements  in
connection  with a transaction.  Dissatisfied  customers  frequently make claims
against their service providers regarding quality of trade execution, improperly
settled  trades,  mismanagement  or even  fraud.  NYSE Group could be exposed to
substantial liability under federal and state laws and court decisions,  as well
as  rules  and  regulations  promulgated  by the SEC.  NYSE  Group  could  incur
significant  legal  expenses  defending  claims,  even those without  merit.  In
addition,  an adverse  resolution  of any future  lawsuit or claim  against NYSE
Group may have a material  adverse effect on the business,  financial  condition
and operating results of NYSE Group.

THE SALE OF TRADING  LICENSES MAY CAUSE  UNCERTAINTY  THAT MAY ADVERSELY  AFFECT
NYSE GROUP'S BUSINESS.

     The right to trade securities on the NYSE is currently held by the owner or
lessee of a regular NYSE  membership.  Following the mergers,  NYSE  memberships
will cease to exist, and the right to trade securities on the trading facilities
of the NYSE will be separate from equity  interests in NYSE Group.  We currently
expect that trading  licenses  will be sold through some form of Dutch  auction,
and that a holder of a trading  license  would be  subject to the  approval  and
surveillance of NYSE Regulation. There is risk associated with this process. The
use of an auction to  determine  the  number and price of trading  licenses  can
result in revenues that differ from those projected. In addition,  there is risk
that the  uncertainty  regarding the number and pricing of the trading  licenses
could result in a reduction in the use of the trading  facilities of the NYSE or
cause the NYSE to impose  transition rules that could constrain  trading license
revenue.   For  a  discussion  of  trading  licenses  after  the  mergers,   see
"Information About NYSE Group--Trading Licenses."

NYSE GROUP'S  BUSINESS  AFTER THE MERGERS WILL BE DIFFICULT TO EVALUATE  BECAUSE
THE NYSE HAS NEVER BEEN OPERATED AS A FOR-PROFIT  COMPANY AND  ARCHIPELAGO HAS A
LIMITED OPERATING HISTORY.

     After the mergers,  NYSE Group's business will consist of the businesses of
the NYSE and  Archipelago,  and will be operated as for-profit  entities  (other
than NYSE Regulation).  Historically,  the NYSE has operated as a not-for-profit
entity. In addition,  although  Archipelago  historically has been operated as a
for-profit entity, its operating history is limited. As a result, the historical
financial  condition of the NYSE and Archipelago may not adequately  reflect the
likely financial condition of NYSE Group after the mergers.

NYSE GROUP MAY BE AT GREATER RISK FROM TERRORISM THAN OTHER COMPANIES.

     Given the NYSE's  position  as the world's  largest  equities  market,  its
prominence in the U.S.  securities industry and the concentration of many of its
properties and personnel in lower Manhattan,  NYSE Group may be more likely than
other companies to be a direct target of, or an indirect casualty of, attacks by
terrorists or terrorist organizations.


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<PAGE>



     It is  impossible  to predict  the  likelihood  or impact of any  terrorist
attack  on the  securities  industry  generally  or on NYSE  Group or any of its
subsidiaries.  In the event of an attack or a threat of an attack,  NYSE Group's
security measures and contingency plans may be inadequate to prevent significant
disruptions in NYSE Group's business, technology or access to the infrastructure
necessary  to maintain  its  business.  For a  discussion  of some of the NYSE's
security   measures  and  contingency   plans,   see   "Information   About  the
NYSE--Security   Measures  and  Contingency   Plans."  Damage  to  NYSE  Group's
facilities due to terrorist attacks may be significantly in excess of any amount
of insurance received,  or may not be insurable at a reasonable price or at all.
The threat of terrorist  attacks may also negatively affect NYSE Group's ability
to attract  and retain  employees.  In  addition,  terrorist  attacks  may cause
instability or decreased trading in the securities markets, including trading on
NYSE  Group's  trading  platforms.  Any of these  events  could  have a material
adverse  effect on NYSE Group's  business,  financial  condition  and  operating
results.

RISKS RELATING TO AN INVESTMENT IN NYSE GROUP COMMON STOCK

THERE HAS BEEN NO PRIOR PUBLIC MARKET FOR NYSE GROUP COMMON STOCK.

     NYSE  Group  has  applied  to list  NYSE  Group  common  stock on the NYSE.
However,  an active public market for NYSE Group common stock may not develop or
be sustained  after the completion of the mergers.  We cannot predict the extent
to which a trading market will develop or how liquid that market might become.

     The market price of NYSE Group common stock may fluctuate. Broad market and
industry  factors may  adversely  affect the market  price of NYSE Group  common
stock, regardless of its actual operating performance.  Factors that could cause
fluctuations in its stock price may include, among other things:

     o    actual or anticipated variations in quarterly operating results;

     o    changes in  financial  estimates  by NYSE  Group or by any  securities
          analysts who might cover NYSE Group's stock;

     o    conditions or trends in its industry,  including regulatory changes or
          changes in the securities marketplace;

     o    changes  in the  market  valuations  of  exchanges  and other  trading
          facilities in general,  or other companies operating in the securities
          industry;

     o    announcements   by  NYSE  Group  or  its  competitors  of  significant
          acquisitions, strategic partnerships or divestitures;

     o    announcements  of  investigations   or  regulatory   scrutiny  of  its
          operations or lawsuits filed against NYSE Group;

     o    additions or departures of key personnel; and

     o    sales of NYSE Group common stock,  including sales of its common stock
          by its directors and officers or its strategic investors.

NYSE GROUP'S SHARE PRICE MAY DECLINE DUE TO THE LARGE NUMBER OF SHARES  ELIGIBLE
FOR FUTURE SALE.

     Sales of substantial amounts of NYSE Group common stock, or the possibility
of these sales, may adversely affect the market price of its common stock. These
sales may also make it more  difficult for NYSE Group to raise  capital  through
the issuance of equity securities at a time and at a price it deems appropriate.

     Upon completion of the mergers,  based on currently  outstanding  shares of
Archipelago common stock, there will be approximately 158 million shares of NYSE
Group common stock outstanding (excluding shares of NYSE Group common stock held
by  wholly  owned  subsidiaries  of  NYSE  Group).  In  addition,  approximately
8,550,000  shares of NYSE Group  common  stock  will be  reserved  for  issuance
pursuant  to grants to  officers  and  employees  of the NYSE Group and  certain
shares of NYSE Group common stock may be issued to officers and employees  under
NYSE Group equity plan (see "Information About NYSE Group--Equity Plan").

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<PAGE>



     Of  the  approximately  158  million  shares   outstanding,   approximately
127,208,009 shares of NYSE Group common stock (including  10,380,505 shares held
by certain  entities  affiliated with General Atlantic and 7,305,722 shares held
by certain  entities  affiliated  with  Goldman  Sachs Group) will be subject to
restrictions   on  transfer   that  are  scheduled  to  expire  in  three  equal
installments on the first,  second and third  anniversaries of the completion of
the mergers. In addition, 1,184,178 shares of NYSE Group common stock held by an
entity  affiliated  with  Gerald D. Putnam  will be subject to  restrictions  on
transfer, which restrictions are scheduled to expire on the first anniversary of
the completion of the mergers.  The NYSE Group board of directors has the right,
in its discretion,  to remove the transfer  restrictions earlier, in whole or in
part,  on any of the shares of NYSE Group  common  stock held by the former NYSE
members or the entities affiliated with General Atlantic, Goldman Sachs Group or
Mr. Putnam. If the NYSE Group board removes transfer restrictions on shares held
by any of the NYSE  members,  then the board is required to remove the  transfer
restrictions  simultaneously  from a proportionate  number of shares held by the
entities  affiliated with General Atlantic,  Goldman Sachs Group and Mr. Putnam.
Similarly, if the NYSE Group board of directors removes transfer restrictions on
shares held by the entities  affiliated  with General  Atlantic,  Goldman  Sachs
Group  or Mr.  Putnam,  then the  transfer  restrictions  automatically  will be
removed from a proportionate number of shares of NYSE Group common stock held by
the former NYSE members.  See "Support and Lock-Up  Agreements--Lock-Up  of NYSE
Group  Common  Stock" and  "Description  of NYSE Group  Capital  Stock--Transfer
Restrictions on Certain Shares of NYSE Group Common Stock."

     Removal of the transfer  restrictions  for any of these reasons may lead to
significant  numbers of shares of NYSE Group common stock becoming available for
sale, which may adversely affect the then-prevailing  market price of NYSE Group
common stock.

NYSE GROUP MAY SEEK TO RAISE ADDITIONAL FUNDS,  FINANCE  ACQUISITIONS OR DEVELOP
STRATEGIC RELATIONSHIPS BY ISSUING CAPITAL STOCK.

     NYSE Group may seek to raise  additional  funds,  finance  acquisitions  or
develop   strategic   relationships   by  issuing  equity  or  convertible  debt
securities,  which would reduce the percentage  ownership of existing NYSE Group
stockholders.  Furthermore,  any newly  issued  securities  could  have  rights,
preferences and privileges senior to those of the NYSE Group common stock.

NYSE GROUP DOES NOT EXPECT TO PAY  DIVIDENDS  ON NYSE GROUP  COMMON STOCK IN THE
SHORT TERM.

     NYSE Group has not yet determined its dividend policy. Any determination to
pay dividends in the future will be at the discretion of the NYSE Group board of
directors  and will depend upon NYSE Group's  results of  operations,  financial
condition,  contractual restrictions,  restrictions imposed by applicable law or
the SEC, business and investment strategy, and other factors that the NYSE Group
board of  directors  deems  relevant.  The NYSE  Group  board of  directors  may
determine not to implement a policy to pay periodic dividends to holders of NYSE
Group common stock.

PROVISIONS OF NYSE GROUP'S  ORGANIZATIONAL  DOCUMENTS AND DELAWARE LAW MAY DELAY
OR DETER A CHANGE OF CONTROL OF NYSE GROUP.

     Following the mergers, NYSE Group's  organizational  documents will contain
provisions  that may have the effect of  discouraging,  delaying or preventing a
change of control of, or unsolicited  acquisition proposals for, NYSE Group that
a stockholder might consider favorable. These include provisions:

     o    vesting the NYSE Group board of  directors  with sole power to set the
          number of directors;

     o    limiting the persons that may call special stockholders' meetings;

     o    limiting stockholder action by written consent; and

     o    requiring  supermajority  stockholder approval with respect to certain
          amendments to the NYSE Group certificate of incorporation and bylaws.

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<PAGE>



     In addition, its organizational documents will include provisions that:

     o    restrict  any  person  (either  alone or  together  with  its  related
          persons)  from  voting  or  causing  the  voting  of  shares  of stock
          representing more than 10% of NYSE Group's  outstanding voting capital
          stock (including as a result of any agreement by any other persons not
          to vote shares of stock); and

     o    restrict  any  person  (either  alone or  together  with  its  related
          persons) from  beneficially  owning shares of stock  representing more
          than 20% of the  outstanding  shares  of any  class or  series of NYSE
          Group's capital stock.

For a more detailed  description of these  provisions,  see "Description of NYSE
Group  Capital  Stock,"  as  well  as the  form of  NYSE  Group  certificate  of
incorporation  and bylaws  attached  as Annexes G and H,  respectively,  to this
document.

     Furthermore,  the NYSE Group board of directors  has the authority to issue
shares  of  preferred  stock in one or more  series  and to fix the  rights  and
preferences of these shares  without  stockholder  approval.  Any series of NYSE
Group preferred stock is likely to be senior to the NYSE Group common stock with
respect to dividends,  liquidation  rights and,  possibly,  voting  rights.  The
ability of the NYSE Group board of directors to issue preferred stock also could
have  the  effect  of  discouraging  unsolicited  acquisition  proposals,   thus
adversely affecting the market price of the common stock.

     In addition, Delaware law makes it difficult for stockholders that recently
have  acquired  a large  interest  in a  corporation  to  cause  the  merger  or
acquisition of the corporation against the directors' wishes.  Under Section 203
of the Delaware General  Corporation Law, a Delaware  corporation may not engage
in any merger or other business combination with an interested stockholder for a
period  of three  years  following  the  date  that the  stockholder  became  an
interested stockholder except in limited circumstances, including by approval of
the  corporation's  board of directors.  See  "Comparison of Rights Prior to and
After the Mergers."

     Certain aspects of the certificate of  incorporation,  bylaws and structure
of NYSE  Group  and its  subsidiaries  will be  subject  to SEC  oversight.  See
"Regulation--SEC Oversight."

IF NYSE GROUP IS UNABLE TO FAVORABLY  ASSESS THE  EFFECTIVENESS  OF ITS INTERNAL
CONTROLS OVER  FINANCIAL  REPORTING,  OR IF ITS  INDEPENDENT  REGISTERED  PUBLIC
ACCOUNTING FIRM IS UNABLE TO PROVIDE AN UNQUALIFIED  ATTESTATION  REPORT ON NYSE
GROUP'S ASSESSMENT, THE STOCK PRICE OF NYSE GROUP COULD BE ADVERSELY AFFECTED.

     Pursuant  to  Sections  302 and 404 of the  Sarbanes-Oxley  Act of 2002 and
beginning  with NYSE  Group's  annual  report on Form 10-K for the  fiscal  year
ending December 31, 2006,  NYSE Group  management will be required to certify to
and report on, and its  Independent  Registered  Public  Accounting Firm will be
required to attest to, the  effectiveness of NYSE Group's internal controls over
financial  reporting as of December 31, 2006. The rules  governing the standards
that must be met for  management to assess NYSE Group's  internal  controls over
financial reporting are new and complex, and require significant  documentation,
testing and possible remediation.  The NYSE and Archipelago currently are in the
process of  reviewing,  documenting  and testing  their  internal  controls over
financial  reporting.  In  connection  with  this  continuing  effort,  the NYSE
restated its financial  statements as of December 31, 2004 and 2003, and for the
years ended  December 31, 2004,  2003 and 2002, and for the three and six months
ended June 30, 2004. For a more detailed discussion of these  restatements,  and
the impact of these restatements, see "Selected Historical Financial Data of the
NYSE--Restatement  of Financial  Statements." A restatement may be an indication
that a material weakness would have existed had the NYSE been required to comply
with Section 404 of the Sarbanes-Oxley Act. The continuing effort to comply with
regulatory  requirements  relating to internal  controls will likely cause us to
incur increased  expenses and diversion of management's  time and other internal
resources.   We  also  may  encounter  problems  or  delays  in  completing  the
implementation  of any changes  necessary to make a favorable  assessment of our
internal controls over financial reporting.  In addition, in connection with the
attestation  process by NYSE Group's  Independent  Registered  Public Accounting
Firm,   NYSE  Group  may  encounter   problems  or  delays  in  completing   the
implementation   of  any  requested   improvements   or  receiving  a  favorable
attestation.  If NYSE Group cannot  favorably  assess the  effectiveness  of its
internal  controls over financial  reporting,  or if its Independent  Registered
Public Accounting Firm is unable to provide an unqualified attestation report on
its  assessment,  investor  confidence  and the stock price of NYSE Group common
stock could be adversely affected.


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