UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal period ended September 30, 2007

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from to

Commission File Number 001-32722

INVESTMENT TECHNOLOGY GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware		95 - 2848406
(State or Other Jurisdiction of Incorporation or		(I.R.S. Employer Identification No.)
Organization)

380 Madison Avenue, New York, New York		(212) 588 - 4000
(Address of Principal Executive Offices)		(Registrant’s Telephone Number, Including Area Code)

10017
(Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non accelerated filer (as defined by Exchange Act Rule 12b-2).

Large accelerated filer x Accelerated filer o Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined by Exchange Act Rule 12b-2) Yes o No x

At November 1, 2007, the Registrant had 43,856,921 shares of common stock, $0.01 par value, outstanding.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I. — Financial Information

Item 1.	Financial Statements
	Condensed Consolidated Statements of Financial Condition: September 30, 2007 (unaudited) and December 31, 2006	4

	Condensed Consolidated Statements of Income (unaudited): Three and Nine Months Ended September 30, 2007 and 2006	5

	Condensed Consolidated Statement of Changes in Stockholders’ Equity (unaudited): Nine Months Ended September 30, 2007	6

	Condensed Consolidated Statements of Cash Flows (unaudited): Nine Months Ended September 30, 2007 and 2006	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	29

Item 4.	Controls and Procedures	30

PART II. — Other Information

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 4.	Submission of Matters to a Vote of Security Holders	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

	Signature	33

Investment Technology Group, ITG, ITG Dark Algorithm, ITG Logic, ITG Opt, ITG Web Access, Macgregor, POSIT, Quantex, RouteNet, Triton and AlterNet are registered trademarks or service marks of the Investment Technology Group, Inc. companies. End-to-End Trading Solutions, ITG Algorithms, ITG Channel, ITG Compliance, ITG Derivatives, ITG Fair Value Model, ITG List-Based Algorithms, ITG Matrix, ITG Net, ITG Routers, ITG Single-Stock Algorithms, ITG TCA, ITG Trade Ops, ITG Triton X, ITG Wealth Management, Match Now, Macgregor Electronic Trading, Macgregor XIP, Plexus Plan Sponsor Group, Plexus Alpha Capture Service, Plexus BrokerEDGE Monitor, PAEG/L, Plexus Sponsor Monitor, POSIT Match, POSIT Now, POSIT VWAP, Powered by POSIT, Predator and Radical are trademarks or service marks of the Investment Technology Group, Inc. companies . BLOCKalert is a service mark of the Block Alert LLC joint venture.

FORWARD-LOOKING STATEMENTS

In addition to the historical information contained throughout this Quarterly Report on Form 10-Q, there are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, dividends, financing plans, business strategies, competitive positions, plans and objectives of management for future operations, and those concerning securities markets and economic trends are forward-looking statements. Although we believe our expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements herein include, among others, the actions of both current and potential new competitors, rapid changes in technology, fluctuations in market trading volumes, financial market volatility, evolving industry regulations, risk of errors or malfunctions in our systems or technology, cash flows into or redemptions from equity funds, effects of inflation, customer trading patterns, the success of our new products and services offerings, our ability to successfully integrate companies we have acquired, as well as general economic and business conditions, internationally or nationally, securities, credit and financial market conditions, and adverse changes or volatility in interest rates. Certain of these factors, and other factors, are more fully discussed in Item 1A “Risk Factors”, and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K, for the year ended December 31, 2006, which you are encouraged to read. Our 2006 Annual Report to Shareholders and Form 10-K are also available through our website at http://investor.itg.com.

PART I. — FINANCIAL INFORMATION

Item 1. Financial Statements

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition

(In thousands, except share amounts)

	September 30, 2007				December 31, 2006
	(unaudited)
Assets
Cash and cash equivalents	$	232,182			$	321,298
Cash restricted or segregated under regulations and other	34,279				13,610
Securities owned, at fair value	19,225				6,540
Receivables from brokers, dealers and clearing organizations	871,162				196,227
Receivables from customers	1,787,616				393,833
Investments	6,751				9,299
Premises and equipment, net	41,812				34,740
Capitalized software, net	47,447				32,203
Goodwill	419,035				405,754
Other intangibles, net	35,268				29,366
Deferred taxes	1,990				7,426
Other assets	9,505				12,016
Total assets	$		3,506,272		$		1,462,312

Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable and accrued expenses	$	191,748			$	152,049
Short-term bank loans	77,900				—
Payables to brokers, dealers and clearing organizations	685,917				118,251
Payables to customers	1,690,843				414,794
Securities sold, not yet purchased, at fair value	9,126				137
Income taxes payable	16,652				8,147
Deferred taxes	3,185				—
Long term debt	139,600				160,900
Total liabilities	2,814,971				854,278

Commitments and contingencies

Stockholders’ Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding	—				—
Common stock, $0.01 par value; 100,000,000 shares authorized; 51,503,221 and 51,443,560 shares issued at September 30, 2007 and December 31, 2006, respectively and 43,735,770 and 43,809,993 shares outstanding at September 30, 2007 and December 31, 2006, respectively	515				514
Additional paid-in capital	209,147				198,419
Retained earnings	621,671				540,570
Common stock held in treasury, at cost; 7,767,451 and 7,633,567 shares at September 30, 2007 and December 31, 2006, respectively	(161,713			)	(144,173			)
Accumulated other comprehensive income (net of tax)	21,681				12,704
Total stockholders’ equity	691,301				608,034
Total liabilities and stockholders’ equity	$	3,506,272			$	1,462,312

See accompanying notes to unaudited condensed consolidated financial statements.

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Revenues:
Commissions	$	161,192	$	121,787	$	453,308	$	365,269
Recurring	21,122		19,067		61,255		54,937
Other	7,521		5,712		19,851		26,161
Total revenues	189,835		146,566		534,414		446,367

Expenses:
Compensation and employee benefits	62,806		53,005		180,951		155,731
Transaction processing	29,188		20,391		78,844		57,972
Occupancy and equipment	11,913		9,655		34,353		27,724
Telecommunications and data processing services	10,937		8,006		29,971		22,603
Other general and administrative	23,053		16,797		64,012		46,052
Interest expense	2,579		3,098		8,028		9,278
Total expenses	140,476		110,952		396,159		319,360
Income before income tax expense	49,359		35,614		138,255		127,007
Income tax expense	20,179		14,005		57,154		51,139
Net income	$	29,180	$	21,609	$	81,101	$	75,868

Earnings per share:
Basic	$	0.66	$	0.50	$	1.84	$	1.75
Diluted	$	0.65	$	0.49	$	1.81	$	1.72

Basic weighted average number of common shares outstanding	44,100		43,436		44,171		43,249
Diluted weighted average number of common shares outstanding	44,813		44,397		44,884		44,178

See accompanying notes to unaudited condensed consolidated financial statements.

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Nine Months Ended September 30, 2007

(In thousands, except share amounts)

	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Common Stock Held in Treasury			Accumulated Other Comprehensive Income			Total Stockholders’ Equity
Balance at January 1, 2007	$	—	$	514	$	198,419	$	540,570	$	(144,173	)	$	12,704		$	608,034

Net income	—		—		—		81,101		—			—			81,101
Other comprehensive income (net of tax):
Currency translation adjustment	—		—		—		—		—			9,182			9,182
Unrealized holding gain on securities available-for- sale	—		—		—		—		—			38			38
Unrealized loss on hedging instruments	—		—		—		—		—			(243		)	(243		)
Comprehensive income															$	90,078
Issuance of common stock for employee stock options (535,263 shares), restricted share awards (4,919 shares) and employee stock unit awards (89,244 shares), including excess tax benefit of $4.1 million	—		—		2,678		—		11,986			—			14,664
Issuance of common stock for the employee stock purchase plan (59,661 shares)	—		1		2,126		—		—			—			2,127
Purchase of common stock for treasury (763,310 shares)	—		—		—		—		(29,526		)	—			(29,526		)
Share-based compensation	—		—		5,924		—		—			—			5,924
Balance at September 30, 2007	$	—	$	515	$	209,147	$	621,671	$	(161,713	)	$	21,681		$	691,301

See accompanying notes to unaudited condensed consolidated financial statements.

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)

	Nine Months Ended September 30,
	2007			2006
Cash flows from Operating Activities:
Net income	$	81,101		$	75,868
Adjustments to reconcile net income to net cash (used in) / provided by operating activities:
Depreciation and amortization	25,469			15,832
Deferred income tax expense	7,865			10,200
Provision for doubtful accounts	1,543			1,093
Share-based compensation	5,924			5,245
Gain on investments held	—			(6,908		)
Changes in operating assets and liabilities:
Cash restricted or segregated under regulations and other	(20,193		)	(16,320		)
Securities owned, at fair value	(12,169		)	(1,662		)
Receivables from brokers, dealers and clearing organizations	(606,714		)	(489,039		)
Receivables from customers	(1,302,106		)	(166,474		)
Accounts payable and accrued expenses	29,553			37,600
Payables to brokers, dealers and clearing organizations	501,005			11,225
Payables to customers	1,189,922			623,756
Securities sold, not yet purchased, at fair value	8,888			1,153
Income taxes payable	12,298			327
Excess tax benefit from share based payment arrangements	(4,114		)	(2,210		)
Other, net	4,488			(938		)
Net cash (used in) / provided by operating activities	(77,240		)	98,748
Cash flows from Investing Activities:
Acquisition of subsidiaries, net of cash acquired	(14,354		)	(254,259		)
Proceeds from sale of investments	2,516			11,134
Capital purchases	(18,697		)	(13,264		)
Capitalization of software development costs	(26,466		)	(18,475		)
Net cash used in investing activities	(57,001		)	(274,864		)

Cash flows from Financing Activities:
Proceeds from debt incurred	—			200,000
Short-term bank loans	77,900			—
Payments on debt	(21,300		)	(32,000		)
Excess tax benefit from share-based payment arrangements	4,114			2,210
Common stock issued	12,677			23,713
Common stock repurchased	(29,526		)	—
Net cash provided by financing activities	43,865			193,923

Effect of exchange rate changes on cash and cash equivalents	1,260			2,808
Net (decrease) / increase in cash and cash equivalents	(89,116		)	20,615
Cash and cash equivalents — beginning of year	321,298			261,044
Cash and cash equivalents — end of period	$	232,182		$	281,659

Supplemental cash flow information
Interest paid	$	10,510		$	12,738
Income taxes paid	$	36,202		$	41,926

Non cash investing activities:
Acquisition payment obligation	$	5,606		—

See accompanying notes to unaudited condensed consolidated financial statements.

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (unaudited)

(1) Organization and Basis of Presentation

Investment Technology Group, Inc. (“ITG” or the “Company”) was formed as a Delaware corporation on July 22, 1983. Its principal subsidiaries and affiliates include: (1) ITG Inc. and AlterNet Securities, Inc. (“AlterNet”), United States (“U.S.”) broker-dealers, (2) Investment Technology Group Limited (“ITG Europe”), an institutional broker-dealer in Europe, (3) ITG Australia Limited (“ITG Australia”), an institutional broker-dealer in Australia, (4) ITG Canada Corp. (“ITG Canada”), an institutional broker-dealer in Canada, (5) ITG Hong Kong Limited (“ITG Hong Kong”), an institutional broker-dealer in Hong Kong, (6) ITG Japan Ltd. (“ITG Japan”), an institutional broker-dealer in Japan, (7) ITG Software Solutions, Inc. (“ITG Software Solutions”), our intangible property, software development and maintenance subsidiary in the U.S., (8) ITG Solutions Network, Inc. (“ITG Solutions Network”), a holding company for ITG Analytics, Inc. (“ITG Analytics”), a provider of pre- and post- trade analysis, fair value, trade optimization and other research and analytical services, The Macgregor Group, Inc. (“Macgregor”), a provider of trade order management technology and ITG Net trade message connectivity services for the financial community, Blackwatch Brokerage, Inc. (“Blackwatch”), a U.S. broker-dealer and Plexus Plan Sponsor Group, Inc. (“Plexus”) a registered investment advisor providing transaction cost analysis and transition consulting and related services to the plan sponsor community, (9) ITG Derivatives LLC (“ITG Derivatives”), formerly RedSky Financial, LLC, a broker-dealer specializing in multi-asset class electronic trading and (10) Block Alert LLC (“BLOCKalert”), a 50% owned joint venture accounted for under the equity method of accounting.

Investment Technology Group, Inc. (NYSE: ITG), is a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process. A pioneer in electronic trading, ITG has a unique approach that combines pre-trade analysis, order management, trade execution and post-trade evaluation in order to provide clients with tools for continuous improvements in trading and cost efficiency. The firm is headquartered in New York with offices in North America, Europe, Asia and Australia.

The Company has three reportable operating segments: U.S. Operations, Canadian Operations and International Operations, following changes the Company made to its management hierarchy to synchronize with its strategy of managing business operations, planning and resource allocation as three separate and distinct businesses.

The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers in the U.S. The Canadian Operations segment provides trading focused on Canadian securities, as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as “Asia Pacific”), as well as a research and development facility in Israel.

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets, liabilities, revenues and expenses. Actual results could differ from those estimates.

The condensed consolidated financial statements and accompanying notes are prepared in accordance with U.S. GAAP. All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements reflect all adjustments, which in the opinion of management, are necessary for the fair presentation of results. Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation as a result of ITG Inc. commencing self-clearing of equity trades in May 2007. Receivables previously included in receivables from brokers, dealers and others are now divided among the following two accounts: (i) receivables from brokers, dealers and clearing organizations and (ii) receivables from customers. Similarly, payables previously included in payables to brokers, dealers and others are now divided among the following two accounts: (i) payables to brokers, dealers and clearing organizations and (ii) payables to customers. Additionally, certain payables to brokers for clearance and execution costs previously included in accounts payable and accrued expenses were reclassified to payables to brokers, dealers and clearing organizations in the Condensed Consolidated Statements of Financial Condition.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with SEC rules and regulations, however, management believes that the disclosures herein are adequate to make the information presented not misleading. This report should be read in conjunction with our consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2006.

Recent Accounting Pronouncements

We adopted the provisions of the Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes ” (“FIN 48”), on January 1, 2007. For further discussion see Note 7, “Income Taxes” .

On September 15, 2006, the FASB issued FASB Statement No. 157, “ Fair Value Measurement” (“FAS 157”). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Under the standard, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. The standard clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, the standard establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, for example, the reporting entity’s own data. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. FAS 157 does not expand the use of fair value in any new circumstances. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, with earlier adoption permitted. We do not expect the adoption of FAS 157 to have a material impact on our consolidated results of operations or financial condition.

On February 15, 2007, the FASB issued FASB Statement No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115” (“FAS 159”). FAS 159 provides companies with an option to report selected financial assets and liabilities at fair value. A company that adopts FAS 159 will measure, at specified election dates, many financial instruments and certain other items at fair value that are not currently measured at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date, with any differences between the carrying amount of the selected item and its fair value as of the adoption date being included as a cumulative-effect adjustment to beginning retained earnings. The objective of the standard is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently, as required under existing accounting principles. The standard also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The standard does not affect any literature that requires certain assets and liabilities to be carried at fair value. FAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, with earlier adoption permitted. We do not expect the adoption of FAS 159 to have a material impact on our consolidated results of operations or financial condition.

(2) Commencement of U.S. Self-Clearing Operations

In May 2007, ITG Inc., our primary U.S. broker-dealer, commenced self-clearing of equities trades. Clearing operations include the confirmation, settlement, delivery and receipt of securities and funds, as well as the record-keeping functions involved in the processing of securities transactions.

As a result of the commencement of self-clearing operations, ITG Inc. has several new significant accounting policies and has added several new captions to its Condensed Consolidated Statements of Financial Condition.

The following is an update to and should be read in conjunction with the significant accounting policies, as previously described in Note 2, “ Summary of Significant Accounting Policies ”, in our Annual Report on Form 10-K for the year ended December 31, 2006.

Interest Income and Expense on Securities Transactions

The income statement classification of interest, dividends and rebate income and expense varies because certain transactions are entered into as financings while others are entered into as part of trading strategies. As such, interest earned on securities borrowed transactions (see “ Securities Borrowed ”) consisting of interest earned on deposits with lending brokers (commonly known as a rebate), is recorded in other revenues. Interest expense on securities transactions consisting of the interest on cash borrowings to finance securities purchased or held, typically due to a failed transaction, is recorded in transaction processing expenses.

Securities Borrowed

Securities borrowed transactions generally occur when securities are needed to deliver against a settling transaction, such as non-standard settlements (equity settlements occurring other than trade date plus three days), as requested by our customers or a fail to deliver. Securities borrowed transactions are recorded at the amount of cash collateral advanced to the lender. Securities borrowed require the Company to deposit cash or other collateral with the lender. We monitor the market value of securities borrowed on a daily basis and the collateral is adjusted as necessary based upon market prices. As of September 30, 2007, the value of securities borrowed is included in receivables from brokers, dealers and clearing organizations.

Receivables from and Payables to Brokers, Dealers and Clearing Organizations

Receivables from brokers, dealers and clearing organizations include amounts receivable fails to deliver, cash deposits for securities borrowed, amounts receivable from clearing organizations and commissions receivable. Payables to brokers, dealers and clearing organizations include amounts payable for fails to receive, amounts payable to clearing organizations on open transactions and execution cost payables. In addition, the net receivable or payable arising from unsettled trades is reflected in the appropriate category.

Receivables From and Payables to Customers

Receivables from customers consist of customer fails to deliver, commissions earned and receivables arising from the Company’s pre-payment of soft dollar research, net of an allowance for doubtful accounts. Payables to customers primarily consist of customer fails to receive.

The following is an update to and should be read in conjunction with the significant accounting policies, as previously described in Note 22, “ Commitments and Contingencies, ” and Note 17, “ Off-Balance Sheet Risk and Concentration of Credit Risk ,” in our Annual Report on Form 10-K for the year ended December 31, 2006.

Guarantees

ITG Inc. provides guarantees to clearing organizations and exchanges under standard membership agreements, which require members to guarantee collectively the performance of other members. Under the agreements, if another member becomes unable to satisfy its obligations to the clearing organization or exchange, other members would be required to meet the shortfalls. In our opinion, our potential liability under these arrangements is not quantifiable and could exceed the cash and securities we have posted as collateral. However, we believe the possibility of our being required to make material payments under these arrangements is remote. Accordingly, no liability has been recorded for these arrangements.

Off-Balance Sheet Risk

ITG Inc. temporarily borrows securities from other broker-dealers in connection with its broker-dealer business. ITG Inc. deposits cash as collateral for the securities borrowed, which may be funded from existing cash balances or from short-term bank loans. Decreases in securities prices may cause the market value of the securities borrowed to fall below the amount of cash deposited as collateral. In the event the counterparty to these transactions does not return the cash deposited, ITG Inc. may be exposed to the risk of selling the securities at prevailing market prices. ITG Inc. seeks to manage this risk by requiring credit approvals for counterparties, by monitoring the collateral values on a daily basis, and by requiring additional collateral as needed.

Other Commitments

At September 30, 2007, we had $77.9 million in short-term bank loans under pledge facilities related to our settlement of equity transactions. See Note 11, “ Short-Term Bank Loans ,” for further details.

(3) Acquisitions

On July 31, 2007, we completed the acquisition of RedSky Financial, LLC (now ITG Derivatives) for $21.1 million, plus contingent consideration. The contingent consideration, which is based upon the achievement of performance milestones over two and three year periods, if earned in full, would result in a total purchase price of approximately $37.6 million.

$15.2 million was paid in cash at the closing with contingent payments of up to $2.5 million and $19.9 million due in 2009 and 2011, respectively. A portion of the contingent payments (approximately $9.4 million) would be recognized as expense in the appropriate periods as this portion of the consideration is considered to be compensatory. ITG Derivatives will augment our product offerings, providing our clients with multi-asset execution management systems.

The acquisition, accounted for under the purchase method, was recorded using management’s estimates derived from preliminary evaluations. Our present estimation of the allocation of the $21.1 million purchase price includes approximately $20 million of goodwill and other intangible assets. The final purchase price accounting adjustments to reflect the fair value of net assets will be based on management’s final evaluation and are therefore, subject to change.

(4) Cash Restricted or Segregated Under Regulations and Other

Cash restricted or segregated under regulations and other represents (i) funds on deposit with a bank in Asia for the purpose of securing working capital facilities for Asian clearing and settlement activities, (ii) a special reserve bank account for the exclusive benefit of customers (“Special Reserve Bank Account”) maintained by ITG Inc. in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934 (“Customer Protection Rule”), (iii) funds relating to the securitization of a letter of credit and a bank guarantee supporting two Macgregor leases, (iv) funds on deposit for European trade settlement activity, (v) a segregated balance maintained by our Japanese operations on behalf of its customers under certain directed brokerage arrangements, and (vi) funds relating to the securitization of a bank guarantee supporting an Australian lease.

(5) Securities Owned and Sold, Not Yet Purchased

The following is a summary of securities owned and sold, not yet purchased (dollars in thousands):

	Securities Owned				Securities Sold, Not Yet Purchased
	September 30, 2007		December 31, 2006		September 30, 2007		December 31, 2006
Corporate stocks—trading securities	$	12,435	$	388	$	9,126	$	137
Corporate stocks—available-for-sale	241		—		—		—
Mutual funds	6,549		6,152		—		—
Total	$	19,225	$	6,540	$	9,126	$	137

Securities owned primarily consists of securities positions held by the Company resulting primarily from temporary positions in securities in the normal course of our agency trading business. Securities owned also includes mutual fund positions, as well as 3,040 shares of common stock in the NYSE Group, Inc. (“NYX Shares”) we received in March 2006 as consideration in connection with the merger between the NYSE and Archipelago Holdings, Inc. (“the “NYSE Merger”). In March 2007, these 3,040 shares were reclassified from investments at cost to securities available-for-sale, as the restriction on their sale was less than one year. Since then, the restriction has been lifted and we are free to sell these shares. At December 31, 2006, there were no securities classified as available-for-sale and 55,440 NYX Shares were classified as investments at cost (of which 3,040 shares and 52,400 shares could not be sold until March 7, 2008 and 2009, respectively). For more information, see Note 6, “ Investments, ” below and Note 6, “ Securities Owned and Sold, Not Yet Purchased” in our Annual Report on Form 10-K for the year ended December 31, 2006.

Securities sold not yet purchased consist of short positions in securities resulting from temporary positions in securities in the normal course of our agency trading business.

Unrealized holding gains and losses for available-for-sale securities are reported in other comprehensive income until realized.

(6) Investments

Investments consist of investments in limited partnerships in hedge funds investing primarily in marketable securities and equity investments held at cost which are summarized as follows (dollars in thousands):

	September 30, 2007		December 31, 2006
Investments in limited partnerships	$	3,889	$	6,262
Investments at cost	2,862		3,037
Total	$	6,751	$	9,299

Investments at cost consists of the remaining 52,400 NYX Shares which may not be sold until March 7, 2009, as described in Note 5, “Securities Owned and Sold, Not Yet Purchased”, above. We periodically assess the carrying value of the investment to determine if there has been an “other than temporary” impairment.

(7) Income Taxes

On January 1, 2007, we adopted the provisions of FIN 48, which addressed the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, a company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The cumulative impact of our reassessment of uncertain tax positions in accordance with FIN 48 did not have a material impact on the results of operations, financial condition or liquidity.

As of the adoption date, we had gross unrecognized tax benefits of $15.5 million. After netting this liability with $4.7 million of offsetting federal tax benefits (related to state tax reserves) and $0.7 million related to business combinations, the resulting $10.1 million, if recognized, would reduce the effective tax rate.

With limited exception, we are no longer subject to U.S. federal, state, local or foreign tax audits by taxing authorities for years preceding 2000. The Internal Revenue Service (“IRS”) is currently examining the Company’s U.S. federal income tax returns for 2002 through 2005. The IRS is also auditing certain subsidiary returns for pre-acquisition fiscal years 2004-2005. Certain state and local returns are also currently under various stages of audit. The Company does not anticipate a significant change to the total of unrecognized tax benefits within the next twelve months.

As of the adoption date, we also had accrued interest expense of $4.6 million, gross of related tax effects of $1.8 million, related to these unrecognized tax benefits. As of September 30, 2007 we had accrued interest expense of $5.9 million, gross of related tax effects of $2.4 million related to the unrecognized tax benefits. As a continuing policy, we recognize interest accrued related to unrecognized tax benefits as income tax expense. Penalties, if incurred, would also be recognized as a component of income tax expense.

(8) Goodwill and Other Intangibles

The following is a summary of goodwill and other intangibles (dollars in thousands):

	Goodwill				Other Intangibles, Net
	September 30, 2007		December 31, 2006		September 30, 2007		December 31, 2006
U.S. Operations	$	384,380	$	371,159	$	33,822	$	27,943
Canadian Operations	—		—		—		—
International Operations	34,655		34,595		1,446		1,423
Total	$	419,035	$	405,754	$	35,268	$	29,366

We amortize other intangibles over their respective estimated useful lives, which range from three to eighteen years. For the three months and nine months ended September 30, 2007, we recognized intangible amortization expense of $0.7 million and $1.9 million, respectively.

During the nine months ended September 30, 2007 (“First Nine Months 2007”), no goodwill or intangibles were deemed impaired and accordingly, no write-off was required.

(9) Receivables From and Payables To Brokers, Dealers and Clearing Organizations

The following is a summary of receivables from and payables to brokers, dealers and clearing organizations (dollars in thousands):

	Receivables From				Payables To
	September 30, 2007		December 31, 2006		September 30, 2007		December 31, 2006
Broker-dealers	$	727,277	$	196,227	$	678,416	$	118,167
Clearing organizations	86,441		—		7,501		84
Deposits for securities borrowed	57,444		—		—		—
Total	$	871,162	$	196,227	$	685,917	$	118,251

(10) Accounts Payable and Accrued Expenses

The following is a summary of accounts payable and accrued expenses (dollars in thousands):

	September 30, 2007		December 31, 2006
Accrued compensation and benefits	$	60,591	$	43,784
Accrued soft dollar research payables	40,019		29,066
Deferred compensation	26,985		24,390
Trade payables	21,204		23,513
Deferred revenue	12,651		13,407
Acquisition payment obligation	5,606		—
Accrued transaction processing	2,211		3,051
Other accrued expenses	22,481		14,838
Total	$	191,748	$	152,049

(11) Short-Term Bank Loans

We fund our U.S. securities settlement operations with operating cash or with short-term bank loans. We have established pledge facilities with two banks, JPMorgan Chase Bank, N.A. and The Bank of New York Mellon, for this purpose. Borrowings under these arrangements bear interest at federal funds rate plus 50 basis points and are repayable on demand (generally the next business day). The short-term bank loans are collateralized by the securities underlying the transactions, which equal up to 125% of the borrowings. At September 30, 2007, we had $77.9 million in short-term bank loans under these pledge facilities.

We also have a $15 million unsecured line of credit with The Bank of New York Mellon bearing interest at a negotiated rate. Each advance under the line of credit is due at a specified maturity date with no prepayment option. At September 30, 2007, we had no borrowings outstanding under this facility.

During August 2007, we borrowed $25 million under our revolving credit facility (see Note 12, “ Long Term Debt ”, below) for a period of 2 days in order to facilitate working capital requirements at one of our international affiliates.

(12) Long Term Debt

On January 3, 2006, we entered into a $225 million credit agreement (“Credit Agreement”) fully underwritten by a syndicate of banks. The credit agreement consists of a five-year term loan in the amount of $200 million (“Term Loan”) and a five-year revolving facility in the amount of $25 million (“Revolving Loan”). We utilized the $200 million Term Loan on January 3, 2006, to partially finance the Macgregor and Plexus acquisitions. The Revolving Loan of $25 million is available for future working capital purposes and has no outstanding balance as of the filing date of this quarterly report. The current borrowings under the Term Loan bear interest based upon the Three-Month London Interbank Offered Rate (“LIBOR”) plus a margin of 1.25%. We incurred $2.3 million of debt issuance costs, primarily underwriting fees, related to the creation of the facility. The debt issuance costs are included in other assets on the accompanying Consolidated Statements of Financial Condition and are amortized to interest expense over the life of the loan.

At September 30, 2007, we had $139.6 million in outstanding debt under the Term Loan following scheduled principal payments of $21.3 million in First Nine Months 2007. The terms of our credit facility include certain restrictions on the cash proceeds of any sale or issuance of equity, the incurrence of certain further indebtedness, and the sale or other disposition of any of our subsidiaries or assets.

Principal and interest payments on the Term Loan are due on a quarterly basis. The remaining scheduled principal repayments are as follows (dollars in millions):

Year	Aggregate Amount
2007	$	7.1
2008	38.0
2009	47.6
2010	46.9
	$	139.6

Interest expense on the credit facility, including amortization of debt issuance costs and net settlement payments on interest rate swaps, totaled $8.0 million in First Nine Months 2007.

Pursuant to the terms of the credit agreement, we are required to maintain certain financial ratios and operating statistics, and we will also be subject to certain operational limitations, including limitations on our ability to incur additional indebtedness, to make certain fundamental company changes (such as mergers, acquisitions and dispositions of assets), to make dividends and distributions on our capital stock and to undertake certain capital expenditures. Also pursuant to the terms of the credit agreement, in March 2006 we entered into interest rate swap agreements which effectively fixed our interest rate on a portion of the outstanding Term Loan amount at 5.064% (plus a 1.25% margin) for a period of three years. As a result of mandatory principal prepayments, approximately 53% of our Term Loan was hedged by interest rate swap agreements at September 30, 2007.

(13) Financial Instruments and Derivative Instruments

Derivative Contracts

All derivative instruments are recorded on the Condensed Consolidated Statements of Financial Condition at fair value in other assets or accounts payable and accrued expenses. Recognition of the gain or loss that results from recording and adjusting a derivative to fair value depends on the intended purpose for entering into the derivative contract. Gains and losses from derivatives that are not accounted for as hedges under FASB Statement No. 133, “ Accounting for Derivative Instruments and Hedging Activities” , are recognized immediately in earnings. For derivative instruments that are designated and qualify as a fair value hedge, the gains or losses from adjusting the derivative to its fair value will be immediately recognized in earnings and, to the extent the hedge is effective, offset the concurrent recognition of changes in the fair value of the hedged item. Gains or losses from derivative instruments that are designated and qualify as a cash flow hedge will be recorded on the Condensed Consolidated Statements of Financial Condition in accumulated other comprehensive income until the hedged transaction is recognized in earnings; however, to the extent the hedge is deemed ineffective, the ineffective portion of the change in fair value of the derivative will be recognized immediately in earnings. For discontinued cash flow hedges, prospective changes in the fair value of the derivative are recognized in income. Any gain or loss in accumulated other comprehensive income at the time the hedge is discontinued continues to be deferred until the original forecasted transaction occurs. However, if it is determined that the likelihood of the original forecasted transaction is no longer probable, the entire related gain or loss in accumulated other comprehensive income is immediately reclassified into income.

Cash Flow Hedges

During the first quarter of 2006, we entered into interest rate swaps to hedge the variability of our LIBOR-based interest payments that we believed were probable to occur over the next three years. The interest rate swaps were designated as the hedging instruments in a cash flow hedge. For interest rate swaps designated as cash flow hedges, we measure effectiveness using the Hypothetical Derivative Method, which compares the change in fair value of the actual swap designated as the hedging instrument and the change in the fair value of the hypothetical swap, which has terms that identically match the critical terms of the floating rate liabilities. We also monitor the abilities of counterparties to fully satisfy their obligations under the swap agreements. During First Nine Months 2007, the quarterly net settlements from these swaps decreased interest expense by approximately $0.2 million. Based on the current interest rate environment, approximately $0.2 million of the after-tax realized loss within accumulated other comprehensive income is expected to be reclassified in the next twelve months.

The following table summarizes our derivative and debt related financial instruments at September 30, 2007 and December 31, 2006 (dollars in thousands):

	Asset / (Liability)
	Carrying Value						Fair Value
	September 30, 2007			December 31, 2006			September 30, 2007			December 31, 2006
Long term debt	$	(139,600	)	$	(160,900	)	$	(139,600	)	$	(160,900	)
Interest rate swap	(401		)	9			(401		)	9

(14) Earnings Per Share

The following is a reconciliation of the basic and diluted earnings per share computations (amounts in thousands, except per share amounts):

	September 30,
	2007		2006
Three Months Ended
Net income for basic and diluted earnings per share	$	29,180	$	21,609
Shares of common stock and common stock equivalents:
Average common shares used in basic computation	44,100		43,436
Effect of dilutive securities	713		961
Average common shares used in diluted computation	44,813		44,397
Earnings per share:
Basic	$	0.66	$	0.50
Diluted	$	0.65	$	0.49

Nine Months Ended
Net income for basic and diluted earnings per share	$	81,101	$	75,868
Shares of common stock and common stock equivalents:
Average common shares used in basic computation	44,171		43,249
Effect of dilutive securities	713		929
Average common shares used in diluted computation	44,884		44,178
Earnings per share:
Basic	$	1.84	$	1.75
Diluted	$	1.81	$	1.72

The following is a summary of anti-dilutive options not included in the detailed earnings per share computations (amounts in thousands):

	September 30,
	2007	2006
Three months ended	214	88
Nine months ended	205	38

(15) Other Comprehensive Income

The components and allocated tax effects of other comprehensive income as of September 30, 2007, are as follows (dollars in thousands):

	Before Tax			Tax (Expense) / Benefit			After Tax
Currency translation adjustment	$	21,881		$	—		$	21,881
Unrealized holding gain on securities, available-for-sale	65			(27		)	38
Unrealized loss on hedging activities	(401		)	163			(238		)
Total	$	21,545		$	136		$	21,681

Unrealized holding gains on securities, available-for-sale relates to the NYX Shares we received as part of the NYSE Merger on March 9, 2006.

Deferred taxes have not been provided on the cumulative undistributed earnings of foreign subsidiaries or the cumulative translation adjustment related to those investments since such amounts are expected to be reinvested indefinitely .

(16) Net Capital Requirement

ITG Inc., AlterNet, ITG Execution Services, Blackwatch and ITG Derivatives are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of minimum net capital. ITG Inc. has elected to use the alternative method permitted by Rule 15c3-1, which requires that ITG Inc. maintain minimum net capital equal to the greater of $1.0 million or 2% of aggregate debit balances arising from customer transactions. AlterNet, ITG Execution Services, ITG Derivatives and Blackwatch have elected to use the basic method permitted by Rule 15c3-1, which requires that they maintain minimum net capital equal to the greater of $100,000 for AlterNet and ITG Derivatives and $5,000 for each of ITG Execution Services and Blackwatch, or 6 ² / ₃ % of aggregate indebtedness.

Our net capital balances and the amounts in excess of required net capital at September 30, 2007 for our U.S. Operations are as follows (dollars in millions):

	Net Capital		Excess Net Capital
U.S. Operations
ITG Inc.	$	105.6	$	102.5
AlterNet	3.4		3.3
ITG Execution Services	0.3		0.3
Blackwatch	4.9		4.8
ITG Derivatives	1.6		1.4

As of May 1, 2007, ITG Inc. changed its business model from a fully disclosed introducing broker-dealer to a self-clearing broker-dealer. As it is a self-clearing broker-dealer acting as an executing broker who clears prime broker transactions, its minimum net capital requirement as defined under Rule 15c3-1 increased to $1.0 million from $250 thousand.

As of September 30, 2007, ITG Inc. had a $19.3 million cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule.

In addition, our Canadian and International Operations had regulatory capital in excess of the minimum requirements applicable to each business as of September 30, 2007 as summarized in the following table (dollars in millions):

	Excess Net Capital
Canadian Operations
Canada	$	26.0

International Operations
Australia	$	3.8
Europe	4.5
Hong Kong	18.4
Japan	2.3

(17) Segment Reporting

The Company realigned its management hierarchy in symmetry with its strategy of managing business operations, planning and resource allocation as three separate and distinct businesses. Effective January 1, 2007, the Company has three operating segments: U.S. Operations, Canadian Operations and International Operations.

The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers executing in U.S. markets. The Canadian Operations segment provides trading focused on Canadian securities, as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as “Asia Pacific”), as well as a research and development facility in Israel.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies described in Note 2, “ Summary of Significant Accounting Policies,” in our Annual Report on Form 10-K

for the year ended December 31, 2006 and updated in Note 2 above . We allocate resources to and evaluate performance of our reportable segments based on income before income tax expense.

A summary of the segment financial information is as follows (dollars in thousands):

	U.S. Operations		Canadian Operations		International Operations			Consolidated
Three Months Ended September 30, 2007
Total revenues	$	141,508	$	19,114	$	29,213		$	189,835
Income before income tax expense	43,580		5,177		602			49,359
Capital purchases	3,749		1,939		951			6,639

Three Months Ended September 30, 2006
Total revenues	$	117,710	$	12,614	$	16,242		$	146,566
Income before income tax expense	34,709		3,079		(2,174		)	35,614
Capital purchases	3,898		159		372			4,429

Nine Months Ended September 30, 2007
Total revenues	$	406,574	$	52,601	$	75,239		$	534,414
Income before income tax expense	122,557		14,160		1,538			138,255
Identifiable assets	1,165,111		662,634		1,678,527			3,506,272
Capital purchases	11,203		4,535		2,959			18,697

Nine Months Ended September 30, 2006
Total revenues	$	356,003	$	40,760	$	49,604		$	446,367
Income before income tax expense	115,649		12,858		(1,500		)	127,007
Identifiable assets	754,920		161,129		1,136,132			2,052,181
Capital purchases	11,226		548		1,490			13,264

Revenue and long-lived assets, classified by the geographic region in which the Company operates, are as follows:

	2007		2006
Revenues: Three Months Ended September 30,
United States	$	141,508	$	117,710
Canada	19,114		12,614
Europe	21,640		11,016
All other	7,573		5,226
Total	$	189,835	$	146,566

Revenues: Nine Months Ended September 30,
United States	$	406,574	$	356,003
Canada	52,601		40,760
Europe	54,101		34,012
All other	21,138		15,592
Total	$	534,414	$	446,367

Long-lived Assets at September 30,
United States	$	494,435	$	445,250
Canada	5,324		1,114
Europe	37,048		36,664
All other	6,875		5,332
Total	$	543,682	$	488,360

The Company’s long-lived assets primarily consist of premises and equipment, capitalized software, goodwill, intangibles, debt issuance costs and investments in unconsolidated affiliates.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements, including the notes thereto.

Overview

We are a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process. We have three reportable segments: U.S. Operations, Canadian Operations and International Operations. The U.S. Operations segment provides trading, trade order management, connectivity and research services to institutional investors, plan sponsors, brokers, alternative investment funds and money managers in the U.S. The Canadian Operations segment provides trading focused on Canadian securities, as well as connectivity and research services. The International Operations segment includes our trading, connectivity and research service businesses in Europe, Australia, Hong Kong and Japan (the latter three of which may be collectively referred to as “Asia Pacific”), as well as a research and development facility in Israel.

Our revenues principally consist of commissions from customers’ use of our trade execution services. Because commissions are earned on a per-transaction basis, such revenues fluctuate from period to period depending on (i) the volume of securities traded through our services in the U.S. and Canada, and (ii) the contract value of securities traded in Europe and Asia Pacific. Commission revenues are generated by orders delivered to us from our “front-end” software products, as well as other vendors’ front-ends and direct computer-to-computer links to customers through our proprietary and third party networks and phone orders from our customers. We also generate recurring revenues which are largely fee or subscription-based rather than transaction-based and are therefore significantly less sensitive to fluctuations in the level of trading activity. The subscription-based revenues principally consist of revenues from sales of analytical products, network connectivity and order management network services, as well as professional services.

Clearance and Settlement

ITG Inc., our primary U.S. broker-dealer, commenced self-clearing operations for equities in May 2007. Clearing operations include the confirmation, receipt, settlement, custody and delivery functions related to securities transactions. ITG Inc. is utilizing SunGard Data Systems’ Phase 3 product under a three year agreement to provide clearing, settlement and record keeping services. Prior to its conversion to self-clearing, the Company, as an introducing broker, cleared all of its customer transactions through Jefferies and Company. We believe that our strategy of becoming self-clearing in the U.S. will allow the Company to realize future savings via lower equity clearing and settlement costs.

Acquisition of RedSky Financial, LLC

On July 31, 2007, we completed the acquisition of RedSky Financial, LLC (now ITG Derivatives) for $21.1 million, plus contingent consideration. $15.2 million was paid in cash at the closing with the contingent payments of up to $2.5 million and $19.9 million payable in 2009 and 2011, respectively. A portion of the contingent payments (approximately $9.4 million) would be recognized as expense in the appropriate periods as this portion of the contingent consideration is considered to be compensatory. ITG Derivatives specializes in multi-asset class electronic trading with an emphasis on exchange-traded equity derivative products, as well as routing for foreign exchange and fixed income trading. ITG Derivatives’ advanced trading platform, now re-branded as ITG Matrix, further diversifies our asset class capabilities. Their multi-asset trading platform facilitates high frequency trading for professional and institutional traders. We plan to integrate this functionality into our existing execution systems, which will provide our customers with full access to equity options and futures trading in addition to our current equity trading capabilities.

ITG Derivatives also offers direct access to multiple destinations and market data through an Application Programming Interface (“API”), which gives high-frequency traders the lowest possible latency when submitting and processing orders. Our API allows traders using their own proprietary systems to connect directly to the markets via ITG Derivatives’ routing infrastructure.

Executive Summary

In the three months ended September 30, 2007 (“Third Quarter 2007”), our consolidated revenues increased 30% to $189.8 million, while our operating expenses grew 27% to $140.5 million as compared to the three months ended September 30, 2006 (“Third Quarter 2006”). Our reported net income for Third Quarter 2007 was $29.2 million, or $0.65 per diluted share, as compared to $21.6 million, or $0.49 per diluted share, in Third Quarter 2006.

Our U.S. commission revenue grew $19.1 million, or 20%, versus Third Quarter 2006 as strong volume growth more than offset the impact of price competition for trade executions which continues to exert downward pressure on the revenues earned per share for shares traded in the U.S. equity markets. Overall, Third Quarter 2007 market volumes increased 52% on the NYSE and 18% on NASDAQ compared to Third Quarter 2006, while ITG U.S. daily volumes were up 32% for the same period. Third Quarter 2007 daily trading volumes increased 18% at NYSE and 2% at NASDAQ over the second quarter of 2007, while ITG’s U.S. daily trading volumes increased 6% over the same period. In Third Quarter 2007, ITG’s volume as a percentage of the combined reported NYSE and NASDAQ volumes was 3.45% compared to 3.6% in Third Quarter 2006.

Market volatility, as measured by the CBOE Volatility Index (VIX), moved significantly higher in August, reaching the highest level since 2002. Volatility has since retreated, but remains significantly elevated as compared to earlier this year. In this environment, strong performances from our diverse product suite drove our 20% overall revenue growth in the U.S.

Canadian commission revenues grew 65% versus Third Quarter 2006 reflecting the success of our Triton direct market access product, increased use of our algorithmic products and a sustained sales effort yielding new clients. Total Canadian revenues increased $6.5 million, or 52% with pre-tax profitability of $5.2 million increasing 68% from prior year. The favorable exchange rate impact from a weakened U.S. Dollar added $1.3 million to total revenues and $0.4 million to pre-tax income.

International Operations revenues for Third Quarter 2007 increased $13.0 million, or 80%, versus Third Quarter 2006 to $29.2 million, reflecting a substantial increase in volume and the market value of executions.

The overall International Operations revenue increase included $2.0 million from exchange rate fluctuations primarily as a result of the stronger Pound Sterling (relative to the U.S. Dollar), with a favorable impact on pre-tax earnings of less than $0.2 million.

International Operations, as a whole, posted a pre-tax profit of $0.6 million on strong commission revenue growth. This is an increase of $2.8 million over Third Quarter 2006, when we recorded a pre-tax loss of $2.2 million. We see potential for further growth in our International Operations as we expand and globalize our product line.

Results of Operations — Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006

U.S. Operations

	Three Months Ended September 30,
$ in thousands	2007			2006			Change			% Change
Revenues
Commission	$	117,077		$	97,949		$	19,128		20
Recurring	19,836			18,030			1,806			10
Other	4,595			1,731			2,864			165
Total revenues	141,508			117,710			23,798			20

Expenses
Compensation and employee benefits	46,600			40,738			5,862			14
Transaction processing	13,907			12,155			1,752			14
Other expenses	34,842			27,010			7,832			29
Interest expense	2,579			3,098			(519		)	(17	)
Total expenses	97,928			83,001			14,927			18
Income before income tax expense	$	43,580		$	34,709		$	8,871		26
Pre-tax margin	30.8		%	29.5		%	1.3		%

U.S. revenues increased 20%, with ITG Derivatives contributing $3.1 million to total revenues.

Commission revenues included strong performances from our direct market access products. We benefited from strong growth in average daily share volumes of 32%, which was partially offset by a reduction in average revenue per share,

as shown in the Key Indicators table below. Transaction processing costs increased at a slower rate than the applicable commission revenues as we have been able to process a larger portion of executions through less expensive venues.

	Three Months Ended September 30,
U.S. Operations: Key Indicators	2007		2006		Change			% Change
Total trading volume (in billions of shares)	12.8		9.7		3.1			32
Trading volume per day (in millions of shares)	203.8		154.4		49.4			32
Average revenue per share ($)	$	0.0086	$	0.0099	$	(0.0013	)	(13	)
U.S. market trading days	63		63		—			—

In addition to the commission revenues above, which reflect our agency trading activities, we earned commission revenues of $3.7 million as a result of revenue sharing arrangements with other broker-dealers which are executing with our customers via algorithms integrated into our products.

Recurring revenues increased $1.8 million or 10%, reflecting an increase in the pricing of our network connectivity services, as well as growth in the number of customer network connections.

Other revenues increased $2.9 million primarily due to technology and support fees charged to the BLOCKalert joint venture and a favorable change in market gains/losses resulting from temporary positions in securities assumed in the normal course of our agency trading business, partially offset by a decrease in investment income.

U.S. compensation and employee benefits expense increased by $5.9 million, reflecting an 11% increase in average headcount associated with the RedSky acquisition and expansion of our business, as well as annual merit compensation increases and higher benefit and payroll tax costs. Compensation costs related to product development were partially offset by higher capitalizable salaries from product development efforts.

Other expenses increased $7.8 million to $34.8 million as growth was driven by (i) amortization expense related to new product releases, (ii) consulting fees related to systems and new business development activities, such as product globalization, (iii) market data fees related to increased business and the conversion to a global real time equity market data infrastructure to support our trading applications around the globe, (iv) depreciation expense, (v) higher legal fees and (vi) increased losses from the BLOCKalert joint venture. Additionally, our increased infrastructure needs, which included expanded office space in both our California and New York offices, as well as expansion of our telecommunications and data processing infrastructure further contributed to expense growth.

Interest expense declined 17% in line with the lower outstanding balance on our borrowings to finance the Macgregor and Plexus acquisitions.

Canadian Operations

	Three Months Ended September 30,
$ in thousands	2007			2006			Change			% Change
Revenues
Commission	$	15,254		$	9,269		$	5,985		65
Recurring	891			865			26			3
Other	2,969			2,480			489			20
Total revenues	19,114			12,614			6,500			52

Expenses
Compensation and employee benefits	6,014			4,434			1,580			36
Transaction processing	3,805			2,898			907			31
Other expenses	4,118			2,203			1,915			87
Total expenses	13,937			9,535			4,402			46
Income before income tax expense	$	5,177		$	3,079		$	2,098		68
Pre-tax margin	27.1		%	24.4		%	2.7		%

In Canada, total revenues increased $6.5 million, or 52%, including a $1.3 million favorable exchange rate impact from the appreciating Canadian dollar. Share volume growth of 62% was driven primarily by the growth of direct market access and algorithmic trading products and a 33% increase in overall volume on the resource heavy Toronto Stock Exchange (“TSX”).

Total expenses increased 46% including a $0.9 million unfavorable exchange rate impact. On a pre-tax basis, there was a favorable exchange rate benefit of approximately $0.4 million.

Compensation and employee benefits expense reflects higher performance compensation from the growth in revenues, and increased headcount to support the overall expansion of the Canadian Operations.

Transaction processing costs grew with increased trading volumes but at a lower rate than revenue growth due to savings from a new TSX pricing model and lower clearing/settlement fees. There continues to be downward pressure on exchange fees in Canada due to the recent launches of alternative trading systems in the Canadian equities marketplace.

Other expenses reflect growth in technology related and facilities costs as well as connectivity and market data fees related to increased levels of business.

International Operations

	Three Months Ended September 30,
$ in thousands	2007			2006			Change			% Change
Commission Revenues
Europe	$	21,757		$	10,195		$	11,562		113
Asia Pacific	7,104			4,374			2,730			62
Total commission revenues	28,861			14,569			14,292			98
Recurring revenues	395			172			223			130
Other revenues	(43		)	1,501			(1,544		)	(103	)
Total revenues	29,213			16,242			12,971			80

Expenses
Compensation and employee benefits	10,192			7,833			2,359			30
Transaction processing	11,476			5,338			6,138			115
Other expenses	6,943			5,245			1,698			32
Total expenses	28,611			18,416			10,195			55
Income before income tax expense	$	602		$	(2,174	)	$	2,776		128
Pre-tax margin	2.1		%	(13.4		)%	15.5		%

International commission revenues increased 98% to $28.9 million, including a favorable exchange rate impact of $1.8 million. Excluding the foreign currency impact, commission revenues grew $12.5 million or 86%.

In Europe, commission revenues increased 113%, or $11.6 million, driven by significant volume increases, with the total value of shares traded by ITG in European markets increasing 186%. Share volume growth was driven primarily by significant additional volumes from global customers who had not previously conducted substantial European business with ITG. Related transaction processing costs also increased, with a greater proportion of trades executed via more costly direct market trading. In addition, our geographical mix changed and a greater share of our trading was in continental European markets where we incur significantly higher clearing and execution costs than in the UK market.

Our European revenues also benefited from a $1.6 million favorable exchange rate impact resulting primarily from the stronger Pound Sterling. On a pre-tax basis the favorable exchange rate impact was less than $0.2 million.

Commission revenues in Asia Pacific increased $2.7 million, primarily reflecting strong volume growth in the Hong Kong and Korean markets. Transaction processing costs grew at a lower rate than revenues due to the increased proportion of trades executed in Hong Kong, where we self-clear equity transactions, as well as lower execution rates charged by overseas brokers.

Compensation and employee benefits expense reflects higher performance related compensation related to the growth in revenues, increased headcount to support the general expansion of business activity, and an unfavorable exchange rate impact of $0.6 million.

Other expenses reflect higher technology, connectivity and market data fees related to increased business, business development, consulting, legal and occupancy charges, as well as an unfavorable exchange rate impact.

Income tax expense

Our effective tax rate was 40.9% in Third Quarter 2007, compared to 39.3% in Third Quarter 2006. Our Third Quarter 2006 was marginally impacted by U.S. Federal and state tax matters. Our consolidated effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings.

Results of Operations — Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006

U.S. Operations

	Nine Months Ended September 30,
$ in thousands	2007			2006			Change			% Change
Revenues
Commission	$	337,271		$	291,661		$	45,610		16
Recurring	58,097			52,680			5,417			10
Other	11,206			11,662			(456		)	(4	)
Total revenues	406,574			356,003			50,571			14

Expenses
Compensation and employee benefits	134,693			121,426			13,267			11
Transaction processing	43,242			33,823			9,419			28
Other expenses	98,054			75,827			22,227			29
Interest expense	8,028			9,278			(1,250		)	(13	)
Total expenses	284,017			240,354			43,663			18
Income before income tax expense	$	122,557		$	115,649		$	6,908		6
Pre-tax margin	30.1		%	32.5		%	(2.4		)%

U.S. revenues increased 14% over the nine months ended September 30, 2006 (“First Nine Months 2006”), which included $7.9 million in gains related to the exchange of our two New York Stock Exchange membership seats in connection

with the merger between the NYSE and Archipelago Holdings, Inc. (“NYSE Transaction”). Revenue growth excluding the NYSE Transaction was 17%. ITG Derivatives contributed $3.1 million to total revenues in the U.S.

Commission revenues included strong performances from our direct market access products. We benefited from strong growth in average daily share volumes, which was partially offset by a reduction in average revenue per share and one less trading day in the period, as shown in the Key Indicators table below.

	Nine Months Ended September 30,
U.S. Operations: Key Indicators	2007		2006		Change			% Change
Total trading volume (in billions of shares)	36.6		28.0		8.6			31
Trading volume per day (in millions of shares)	195.5		148.8		46.7			31
Average revenue per share ($)	$	0.0089	$	0.0103	$	(0.0014	)	(14	)
U.S. market trading days	187		188		(1		)	(1	)

In addition to the commission revenues above which reflect our agency trading activities, we earned commission revenue of $7.6 million as a result of revenue sharing arrangements with third party broker-dealers that execute orders received from our customers via algorithms integrated into our products.

On a pre-tax basis, our higher commission revenues were partially offset by the growth in transaction processing costs, which outpaced commission revenue growth. As our direct access clients utilized algorithmic strategies to a much larger extent, a larger portion of our clients’ executions were with costlier providers.

Recurring revenues, which include subscription-based sales of analytical products, our order management systems and related services, as well as our network connectivity and professional services, increased $5.4 million, or 10%. The growth is primarily due to an increase in the pricing of network connectivity services, as well as growth in the number of customer network connections.

Other revenues decreased $0.5 million due to the presence of gains from the NYSE Transaction in First Nine Months 2006 (as discussed above), which was partially offset in the 2007 period by technology and support fees charged to the BLOCKalert joint venture and a favorable change in market gains/losses resulting from temporary positions in securities assumed in the normal course of our agency trading business.

U.S. compensation and employee benefits expense increased by $13.3 million, reflecting a 11% increase in average headcount associated with the expansion of our business, as well as annual merit compensation increases and higher benefit and payroll tax costs. Compensation costs related to product development were partially offset by higher capitalizable salaries from new product development and existing product enhancement efforts.

Other expenses increased $22.2 million to $98.1 million as growth was driven by (i) consulting fees related to systems and new business development activities, (ii) amortization expense related to new product releases, (iii) market data fees related to increased business and the conversion to a global real time equity market data infrastructure to support our trading applications around the globe, (iv) depreciation expense, (v) our increased infrastructure needs, which included expanded office space in both our California and New York offices, as well as the expansion of our telecommunications and data processing infrastructure, and (vi) inclusion of losses from BLOCKalert for the entire period.

Interest expense declined 13% reflecting the lower outstanding balance on the borrowings to finance the Macgregor and Plexus acquisitions, partially offset by slightly higher LIBOR interest rates.

Canadian Operations

	Nine Months Ended September 30,
$ in thousands	2007			2006			Change			% Change
Revenues
Commission	$	42,762		$	26,852		$	15,910		59
Recurring	2,213			1,863			350			19
Other	7,626			12,045			(4,419		)	(37	)
Total revenues	52,601			40,760			11,841			29

Expenses
Compensation and employee benefits	16,990			12,335			4,655			38
Transaction processing	10,896			9,214			1,682			18
Other expenses	10,555			6,353			4,202			66
Total expenses	38,441			27,902			10,539			38
Income before income tax expense	$	14,160		$	12,858		$	1,302		10
Pre-tax margin	26.9		%	31.5		%	(4.6		)%

In Canada, total revenues increased $11.8 million, or 29%, reflecting 69% volume growth. Excluding the impact of a $5.4 million gain (“the IRESS Gain”) related to the sale of our 50% interest in our Canadian joint venture to IRESS Market Technology Limited (“IRESS”) for CAD$9.5 million (approximately US$8.3 million) in April 2006, total revenues increased $17.2 million or 49%.

Share volume growth of 69% was driven primarily by increased client penetration, as well as the growth of algorithmic products and direct market access trading and a 19% increase in overall volume on the resource heavy TSX.

Total expenses increased 38% including a $1.0 million unfavorable impact from the rising Canadian dollar. On a pre-tax basis, there was a favorable exchange rate benefit was approximately $0.4 million.

Compensation and employee benefits expense reflect higher performance based compensation related to the growth in revenues and increased headcount to support the overall expansion of our Canadian operations.

Revenue growth outpaced the 18% growth in transaction processing costs. Savings were realized on exchange fees due to the introduction of a new TSX pricing model in the second half of 2006, and lower clearing/settlement fees. There continues to be downward pressure on exchange fees in Canada due to the recent launches of alternative trading systems in the Canadian equities marketplace.

Other expenses reflect technology and market data fees related to increased business and the additional office needed to support our expanding operations.

International Operations

	Nine Months Ended September 30,
$ in thousands	2007			2006			Change			% Change
Commission Revenues
Europe	$	53,294		$	32,428		$	20,866		64
Asia Pacific	19,981			14,328			5,653			39
Total commission revenues	73,275			46,756			26,519			57
Recurring revenues	945			394			551			140
Other revenues	1,019			2,454			(1,435		)	(58	)
Total revenues	75,239			49,604			25,635			52

Expenses
Compensation and employee benefits	29,268			21,970			7,298			33
Transaction processing	24,706			14,935			9,771			65
Other expenses	19,727			14,199			5,528			39
Total expenses	73,701			51,104			22,597			44
Income before income tax expense	$	1,538		$	(1,500	)	$	3,038		203
Pre-tax margin	2.0		%	(3.0		)%	5.0		%

International commission revenues increased 57% to $73.3 million, including a $5.1 million favorable exchange rate impact. Excluding the exchange rate impact, commission revenues grew $21.3 million or 46%.

In Europe, commission revenues increased 64% driven by strong growth in our portfolio trading desk and direct market access products. In First Nine Months 2007, the total value of shares traded by ITG in European markets increased 82% to $116.2 billion. Commission revenue growth reflects the impact of the continuing rollout of our global product suite to European customers. Related transaction processing costs increased substantially in line with revenue growth.

Our European revenues also benefited from a $4.7 million favorable exchange rate impact resulting from the stronger Pound Sterling. On a pre-tax basis, the favorable exchange rate impact was approximately $0.6 million.

Asia Pacific commission revenues increased $5.7 million, reflecting strong volume growth in Hong Kong. As the proportion of trades executed in Hong Kong increased, we benefited from lower transaction processing charges relative to revenue growth, as we self-clear equity executions in Hong Kong.

Compensation and employee benefits expense reflect higher performance related compensation related to the growth in revenues, increased headcount to support the general expansion of business activity, and an unfavorable exchange rate impact of $2.0 million. This was partially offset by an increase in capitalized salaries primarily from our development projects relating to Triton and algorithmic trading by international customers.

Other expenses reflect higher telecom and data processing costs, business development, consulting and occupancy charges, as well as an unfavorable exchange rate impact.

Income tax expense

The effective tax rate was 41.3% in First Nine Months 2007, compared to 40.3% in First Nine Months 2006. First Nine Months 2006 benefited from resolution of certain Federal and state tax matters. Our consolidated effective tax rate can vary from period to period depending on, among other factors, the geographic and business mix of our earnings.

Liquidity and Capital Resources

Liquidity

Our primary source of liquidity is cash provided by operations. Our liquidity requirements result from our working capital needs, which now include clearing and settlement activities, as well as our regulatory capital needs. A substantial portion of our assets are liquid, consisting of cash and cash equivalents or assets readily convertible into cash. We generally invest our excess cash in money market funds and other short-term investments that mature within 90 days or less. At September 30, 2007, cash and cash equivalents and securities owned, at fair value amounted to $251.4 million.

Since becoming a self-clearing broker-dealer in the U.S. on May 1, 2007, we are subject to cash deposit requirements with clearing organizations which may be large in relation to our total liquid assets, and which may fluctuate significantly from time to time based upon the nature and size of our customers’ trading activity. As of September 30, 2007, we had interest-bearing security deposits totaling $29.4 million with clearing organizations and clearing agents for the settlement of equity trades. In the normal course of business we may also need to borrow stock when a security is needed to deliver against a settling transaction, such as a short settlement, a fail (to deliver or receive) or a short sale, generally to another broker-dealer or to a customer. Securities borrowed transactions require that we provide the counterparty with collateral in the form of cash. Our cash deposits may be funded from existing cash balances or from short-term bank loans.

When funding our U.S. securities clearance and settlement transactions with short-term bank loans, we utilize pledge facilities with two banks which have no specific limitations on our additional borrowing capacities (see “Loan Facilities” below). In Asia, where we also self-clear equity trades, we maintain working capital facilities with a bank relating to our clearing and settlement activities. These facilities are in the form of overdraft protection totaling approximately $18.8 million and are supported by $3.6 million in restricted cash deposits.

Capital Resources

Our capital resource requirements relate to capital expenditures, as well as business investments and are generally funded from operations. When required, as in the case of a major acquisition, our strong cash generating ability allows us to readily access capital markets.

Operating Activities

Cash flows used in operating activities were $77.2 million in First Nine Months 2007 as compared to the $98.7 million provided by operating activities in First Nine Months 2006. The decrease primarily relates to our U.S. broker-dealer, ITG Inc., becoming a self clearing broker-dealer. In the normal course of our clearing operations, cash is typically used to fund restricted or segregated cash accounts under regulations or other, broker and customer fails to deliver/receive, securities borrowed, deposits with clearing organizations and net activity related to receivables/payables from/to customers and brokers. The cash requirements vary from day to day depending on volume transacted and customer trading patterns.

Investing Activities

Net cash used in investing activities of $57.0 million includes our acquisition of RedSky and our increased spending in premises and equipment and capitalizable software development projects, as we continue to invest in both our infrastructure and our product portfolio.

Financing Activities

Net cash provided by financing activities of $43.9 million reflects net short-term bank borrowings from our pledge facilities (see “ Loan Facilities ” below), as well as cash provided by common stock issued in connection with our equity based compensation plans and their related excess tax benefit of $4.1 million, which was partially offset by principal repayments on our Term Loan and funds used to repurchase ITG common stock.

When funding our securities borrowing activities with short-term bank loans, we have pledge facilities with two banks, JPMorgan Chase Bank, N.A. and The Bank of New York Mellon, which have no specific limitations on our additional borrowing capacities. Borrowings under these arrangements bear interest at federal funds rate plus 50 basis points, and are repayable on demand. The short-term bank loans are collateralized by the securities underlying the transactions equal

to 125% of the borrowings. We also have a $15 million unsecured line of credit with The Bank of New York Mellon bearing interest at a negotiated rate. Each advance under the line of credit is due at a specified maturity date with no prepayment option. At September 30, 2007, we had $77.9 million in short-term bank loans under pledge facilities and no borrowings under the unsecured line of credit (see Note 11, “ Short-Term Bank Loans ”, to the condensed consolidated financial statements).

During First Nine Months 2007, we used $21.3 million for principal repayments on the Term Loan financing under our Credit Agreement (see Note 12, “ Long Term Debt ”, to the condensed consolidated financial statements). During the same period in 2006, we repaid $32 million of Term Loan principal as the 2006 period included mandatory prepayments triggered by the sale of our Canadian joint venture, the sale of a portion of our NYX shares and the cash received in connection with the NYSE Merger.

The Credit Agreement also provides an available $25 million revolving credit facility that can be drawn upon to meet working capital needs should they arise. As of the filing date of this Quarterly Report on Form 10-Q, we have no outstanding borrowings under the revolving credit facility. During August 2007, we borrowed $25 million under this facility for a period of 2 days in order to facilitate working capital requirements at one of our international affiliates.

During Third Quarter 2007, we repurchased 763,310 shares of our common stock at a cost of approximately $29.5 million, which was funded from our available cash resources. These shares were purchased under a 2004 authorization whereby our Board of Directors authorized management to use its discretion to purchase an agreed-upon maximum number of shares of common stock in the open market or in privately negotiated transactions.

Regulatory Capital

Under the SEC’s Uniform Net Capital Rule, our broker-dealer subsidiaries are required to maintain at all times at least the minimum level of net capital required under Rule 15c3-1.

Our net capital balances and the amounts in excess of required net capital at September 30, 2007, for our U.S. Operations are as follows (dollars in millions):

	Net Capital		Excess Net Capital
U.S. Operations
ITG Inc.	$	105.6	$	102.5
AlterNet	3.4		3.3
ITG Execution Services	0.3		0.3
Blackwatch	4.9		4.8
ITG Derivatives	1.6		1.4

As of May 1, 2007, ITG Inc. migrated from a fully disclosed introducing broker-dealer to a self-clearing broker-dealer. As we are a self-clearing broker-dealer acting as an executing broker who clears prime broker transactions, our minimum net capital requirement as defined under Rule 15c3-1 increased to $1.0 million from $250 thousand.

	Excess Net Capital
Canadian Operations
Canada	$	26.0

International Operations
Australia	$	3.8
Europe	4.5
Hong Kong	18.4
Japan	2.3

Liquidity and Capital Resource Outlook

Historically, our working capital and investment activity requirements have been funded from cash from operations and short-term loans, with the exception of our Macgregor and Plexus acquisitions, which required long term financing as described above. We believe that our cash flow from operations, existing cash balances and the available loan facilities will be sufficient to meet our ongoing operating cash and regulatory capital needs, while also complying with the terms of the Credit Agreement.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

In the normal course of business, we are involved in the execution of various customer securities transactions. Securities transactions are subject to the credit risk of counterparties or customer nonperformance. In connection with the settlement of non-U.S. securities transactions, Investment Technology Group, Inc. has provided third party financial institutions with guarantees in amounts up to a maximum of $133 million. In the event that a customer of ITG’s subsidiaries fails to settle a securities transaction, or if the related subsidiaries were unable to honor trades with a customer, Investment Technology Group, Inc. would be required to perform for the amount of such securities up to the $133 million cap. However, transactions are collateralized by the underlying security, thereby reducing the associated risk to changes in the market value of the security through settlement date. Therefore, the settlement of these transactions is not expected to have a material effect upon our financial statements. It is also our policy to review, as necessary, the credit worthiness of each customer.

As of September 30, 2007, our other contractual obligations and commercial commitments consisted principally of fixed charges, including principal repayment and interest, on the Term Loan, minimum future rentals under non-cancelable operating leases, minimum future purchases under non-cancelable purchase agreements and minimum compensation under employment agreements. There has been no significant change to such arrangements and obligations since December 31, 2006. The aggregate contractual obligations presented in our Annual Report on Form 10-K for the year ended December 31, 2006 (“2006 Form 10-K”) excluded the liability for unrecognized tax benefits, which totaled $20.1 million as of January 1, 2007, including interest of $4.6 million, since we cannot predict with reasonable reliability the timing of cash settlements with respective taxing authorities. For additional information, see “ Off-Balance Sheet Arrangements and Aggregate Contractual Obligations” in our 2006 Form 10-K and Note 7, “ Income Taxes ” to our condensed consolidated financial statements.

Critical Accounting Estimates

Except as described below, there have been no significant changes to our critical accounting policies and estimates during First Nine Months 2007 from those we disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2006 Form 10-K.

Uncertain Tax Positions

Effective January 1, 2007, we adopted FIN 48, which addressed the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, a company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. We consider many factors when evaluating and estimating our tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. Our estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. The impact of our reassessment of uncertain tax positions in accordance with FIN 48 did not have a material impact on the results of operations, financial condition or liquidity.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Please see our Annual Report filed on Form 10-K (Item 7A) for the year ended December 31, 2006. There has been no material change in this information.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures. The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this quarterly report on Form 10-Q, have concluded that, based on such evaluation, the Company’s disclosure controls and procedures were effective in reporting, on a timely basis, information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act and this Quarterly Report on Form 10-Q.

b) Changes in Internal Controls over Financial Reporting. During Second Quarter 2007, we established additional internal controls over financial reporting in connection with our conversion to a self-clearing broker-dealer in the U.S. Other than those controls, there were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the Company’s latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Following its July 31, 2007 acquisition, we have begun incorporating ITG Derivatives’ operations into our system of internal controls over financial reporting. This work will continue throughout 2007.

PART II. — OTHER INFORMATION

Item 1. Legal Proceedings

Except as described below, we are not a party to any pending legal proceedings other than claims and lawsuits arising in the ordinary course of business. We do not believe these proceedings will have a material adverse effect on our financial position or results of operations.

On November 21, 2006, Liquidnet, Inc. (“Liquidnet”) filed a lawsuit in the United States District Court for the District of Delaware ( Liquidnet, Inc. v. ITG Inc. et al ., 06-CV-703 (D.Del)) alleging that ITG Inc. and The Macgregor Group, Inc. (collectively, “ITG”) infringe one or more claims of U.S. Patent No. 7,136,834 (the “‘834 Patent”) through its “Channel ITG” and the “Macgregor XIP” products. That patent had been issued on November 14, 2006. On January 8, 2007, Liquidnet filed a First Amended Complaint in the District of Delaware naming Investment Technology Group, Inc., ITG Solutions Network, Inc. and The Macgregor Group, Inc. as defendants. After determining that Liquidnet did not own the ‘834 Patent (the patent was owned by Liquidnet’s corporate parent LiquidNet Holdings, Inc.), on January 23, 2007, Investment Technology Group, Inc., ITG Inc., ITG Solutions Network, Inc. and The Macgregor Group, Inc. sued LiquidNet Holdings, Inc. in the United States District Court for the Southern District of New York seeking a declaratory judgment that the ‘834 Patent was not infringed, was invalid and was unenforceable. On January 24, 2007, ITG advised Liquidnet that if Liquidnet did not withdraw its Delaware lawsuit against ITG, ITG would move to dismiss that lawsuit for lack of standing. On January 26, 2007, Liquidnet dismissed its Delaware lawsuit. On February 13, 2007, Liquidnet Holdings Inc. filed its answer, affirmative defense and counterclaims, alleging infringement of the ‘834 Patent. ITG’s declaratory judgment action will now proceed in the Southern District of New York. On October 12, 2007, the parties appeared before the court for a pretrial scheduling conference at which an initial plan for discovery was agreed.

It is our position that ITG is not infringing any valid patent claim of the ‘834 Patent and that Liquidnet’s claims are without merit. We plan to vigorously pursue our declaratory judgment action. However, intellectual property disputes are subject to inherent uncertainties and there can be no assurance that Liquidnet’s claims will be resolved favorably to us or that the lawsuit will not have a material adverse effect on us.

Item 1A. Risk Factors

Except for the below, there has been no significant change to the risks or uncertainties that may affect our results of operations since December 31, 2006. Please see our 2006 Form 10-K (Item 1A).

Credit Risk

We are exposed to credit risk from third parties that owe us money, securities, or other obligations, including our customers and trading counterparties. These parties may default on their obligations to us due to bankruptcy, lack of liquidity,

operational failure or other reasons. Volatile securities markets, credit markets and regulatory changes increase our exposure to credit risk, which could adversely affect our financial condition and operating results.

Clearance and Settlement Risk

Our recent conversion to self-clearing securities transactions in the U.S. will require additional resources and subject us to additional regulations. As a U.S. clearing member firm, we may have to finance our clients’ unsettled positions and we could be held responsible for the defaults of our clients. We can pursue our clients for losses we sustain by delivering the required cash or securities. Although we regularly review credit exposure, default risk may arise from events or circumstances that may be difficult to detect or foresee and so there can be no assurance that we will avoid such risk or, that if losses do occur, they will not have a material impact on our financial condition, operating results or reputation. In addition, concerns about, or a default by, one institution could lead to significant liquidity problems, losses or defaults by other institutions which in turn could adversely affect ITG.

Converting to self-clearing has created additional costs for us and requires additional time and attention of management. In addition, over time, the cost savings and efficiencies of self-clearing may be less favorable than we expect as a result of increased fixed costs or unanticipated infrastructure or incremental costs, mistakes, increased regulatory scrutiny or other factors. Such anticipated savings may be more than offset by account losses or reduced trading activity if any self-clearing mistakes or failures occur which undermine our clients’ or prospects’ confidence in our ability to conduct reliable self-clearing operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth our share repurchase activity during First Nine Months 2007, including the total number of shares purchased, the average price paid per share, the number of shares repurchased as part of a publicly announced plan or program, and the number of shares yet to be purchased under the plan or program.

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
From: January 1, 2007
To: January 31, 2007	—	—		—	2,000,000

From: February 1, 2007
To: February 28, 2007	—	—		—	2,000,000

From: March 1, 2007
To: March 31, 2007	—	—		—	2,000,000

From: April 1, 2007
To: April 30, 2007	—	—		—	2,000,000

From: May 1, 2007
To: May 31, 2007	—	—		—	2,000,000

From: June 1, 2007
To: June 30, 2007	—	—		—	2,000,000

From: July 1, 2007
To: July 31, 2007	—	—		—	2,000,000

From: August 1, 2007
To: August 31, 2007	669,510	38.34		669,510	1,330,490

From: September 1, 2007
To: September 30, 2007	93,800	41.11		93,800	1,236,690
Total	763,310	$	38.68	763,310

On July 22, 2004, our Board of Directors authorized the repurchase of up to 2.0 million shares of our common stock. The authorization, which had no expiration date, was publicly announced as part of our 2004 Annual Report on Form 10-K filed on March 15, 2005 and was discussed on multiple earnings calls. The July 22, 2004 authorization was reaffirmed by our Board of Directors on August 6, 2007.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during Third Quarter 2007.

Item 5. Other Information

Our Audit Committee approved all of the non-audit services performed by KPMG LLP, our independent auditors, during the period covered by this report.

Item 6. Exhibits

(A)	EXHIBITS

	10.1	Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan

	10.2	Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (effective May 8, 2007)

	10.3	Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program (effective May 8, 2007)

	10.4	Form of Investment Technology Group, Inc. Stock Unit Grant Agreement for Non-Employee Directors

	10.5	Amended and Restated Investment Technology Group, Inc. Directors’ Retainer Fee Subplan (effective May 8, 2007)

	10.6	Amended and Restated Investment Technology Group, Inc. Directors’ Equity Subplan (effective May 8, 2007)

	10.7	Form of Investment Technology Group, Inc. Non-Qualified Stock Option Grant Agreement for Non- Employee Directors

	10.8	Second Amendment to Investment Technology Group, Inc. Employee Stock Purchase Plan

	31.1	Rule 13a-14(a) Certification (filed herewith)

	31.2	Rule 13a-14(a) Certification (filed herewith)

	32.1	Section 1350 Certification (filed herewith)

	SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		INVESTMENT TECHNOLOGY GROUP, INC.
		(Registrant)


Date: November 8, 2007	By:	/s/ HOWARD C. NAPHTALI
		Howard C. Naphtali
		Chief Financial Officer and
		Duly Authorized Signatory of Registrant

Exhibit 10.1

INVESTMENT TECHNOLOGY GROUP, INC.

2007 OMNIBUS EQUITY COMPENSATION PLAN

INVESTMENT TECHNOLOGY GROUP, INC.

2007 OMNIBUS EQUITY COMPENSATION PLAN

1. Purpose

The purpose of the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”) is to provide (i) designated employees of Investment Technology Group, Inc. (the “Company”) and its subsidiaries, and (ii) non-employee members of the board of directors of the Company with the opportunity to receive grants of stock options, stock units, stock awards, dividend equivalents and other stock-based awards. The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefiting the Company’s stockholders, and will align the economic interests of the participants with those of the stockholders. The Plan was effective May 8, 2007 (the “Effective Date”).

The Investment Technology Group, Inc. Non-Employee Directors Stock Option Plan (the “Director Plan”), the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”), the Investment Technology Group, Inc. Stock Unit Award Program, as amended and restated (the “SUA Subplan”), the Amended and Restated Investment Technology Group, Inc. Directors’ Retainer Fee Subplan (the “Directors Retainer Fee Subplan”), and the Amended and Restated Investment Technology Group, Inc. Directors’ Equity Subplan (the “Directors Equity Subplan”, and collectively with the SUA Subplan and the Directors Retainer Fee Subplan, the “Subplans”) were merged with and into this Plan as of the Effective Date. No additional grants will be made thereafter under the Director Plan and the 1994 Plan. Outstanding grants under the Director Plan, the 1994 Plan and the Subplans as of the Effective Date will continue in effect according to their terms as in effect on the Effective Date (subject to such amendments as the Committee (as defined below) determines appropriate, consistent with the terms of the Director Plan, the 1994 Plan or the Subplans, as applicable), and the shares with respect to such outstanding grants will be issued or transferred under this Plan. After the Effective Date, the Subplans shall continue in effect as subplans of the Plan and grants and/or deferrals may continue to be made under the Subplans with shares associated with such grants and/or deferrals being issued under this Plan.

2. Definitions

Whenever used in this Plan, the following terms will have the respective meanings set forth below:

(a) “Board” means the Company’s Board of Directors.

(b) “Change in Control” means and shall be deemed to have occurred:

(i) if any person (within the meaning of the Exchange Act), other than the Company or a Related Party, is or becomes the “beneficial owner” (as defined in Rule 13d-3

under the Exchange Act), directly or indirectly, of Voting Securities representing 35% percent or more of the total voting power of all the then-outstanding Voting Securities; or

(ii) if the individuals who, as of the date hereof, constitute the Board, together with those who first become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of the date hereof or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(iii) upon consummation of a merger, consolidation, recapitalization or reorganization of the Company, reverse split of any class of Voting Securities, or an acquisition of securities or assets by the Company other than (i) any such transaction in which the holders of outstanding Voting Securities immediately prior to the transaction receive (or retain), with respect to such Voting Securities, voting securities of the surviving or transferee entity representing more than 50 percent of the total voting power outstanding immediately after such transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction, or (ii) any such transaction which would result in a Related Party beneficially owning more than 50 percent of the voting securities of the surviving or transferee entity outstanding immediately after such transaction; or

(iv) upon consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets, other than any such transaction which would result in a Related Party owning or acquiring more than 50 percent of the assets owned by the Company immediately prior to the transaction; or

(v) if the stockholders of the Company approve a plan of complete liquidation of the Company.

(d) “Committee” means (i) with respect to Grants to Employees, the Compensation Committee of the Board or another committee appointed by the Board to administer the Plan, (ii) with respect to Grants made to Non-Employee Directors, the Board, and (iii) with respects to Grants that are intended to be “qualified performance-based compensation” under section 162(m) of the Code, a committee that consists of two or more persons appointed by the Board, all of whom shall be “outside directors” as defined under section 162(m) of the Code and related Treasury regulations.

(e) “Company” means Investment Technology Group, Inc. and any successor corporation.

(f) “Company Stock” means the common stock of the Company.

(g) “Dividend Equivalent” means an amount determined by multiplying the number of shares of Company Stock subject to a Grant by the per-share cash dividend, or the per-share

fair market value (as determined by the Committee) of any dividend in consideration other than cash, paid by the Company on its Company Stock.

(h) “ Effective Date ” of the Plan means May 8, 2007, subject to approval of the Plan by the stockholders of the Company.

(i) “Employee” means an employee of the Employer (including an officer or director who is also an employee).

(j) “Employer” means the Company and its subsidiaries.

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(l) “Exercise Price” means the per share price at which shares of Company Stock may be purchased under an Option, as designated by the Committee.

(m) “Fair Market Value,” unless otherwise required by an applicable provision of the Code, as of any date, means the closing sales price of the Common Stock as reported on the New York Stock Exchange on the date of grant; provided, however, that at any time that the Common Stock is not quoted on the New York Stock Exchange on such trading days, Fair Market Value shall be determined by the Committee in its discretion.

(n) “Grant” means an Option, Stock Unit, Stock Award, SAR, Dividend Equivalent or Other Stock-Based Award granted under the Plan.

(o) “Grant Agreement” means the written instrument that sets forth the terms and conditions of a Grant, including all amendments thereto.

(p) “Incentive Stock Option” means an Option that is intended to meet the requirements of an incentive stock option under section 422 of the Code.

(q) “Non-Employee Director” means a member of the Board who is not an employee of the Employer.

(r) “Nonqualified Stock Option” means an Option that is not intended to be taxed as an incentive stock option under section 422 of the Code.

(s) “Option” means an option to purchase shares of Company Stock, as described in Section 7.

(t) “Other Stock-Based Award” means any Grant based on, measured by or payable in, Company Stock (other than a Grant described in Sections 7, 8, 9 or 10(a) of the Plan), as described in Section 10(b).

(u) “Participant” means an Employee or Non-Employee Director designated by the Committee to participate in the Plan.

(v) “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, an estate, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

(w) “Plan” means this Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan, as in effect from time to time.

(x) “Related Party” means (a) a Subsidiary of the Company; (b) an employee or group of employees of the Company or any Subsidiary of the Company; (c) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned Subsidiary of the Company; or (d) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of Voting Securities.

(y) “SAR” means a stock appreciation right as described in Section 10(a).

(z) “Stock Award” means an award of Company Stock as described in Section 9.

(aa) “Stock Unit” means an award of a phantom unit representing a share of Company Stock, as described in Section 8.

(bb) “Subsidiary” or “Subsidiaries” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (a) if a corporation, fifty (50) percent or more of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or combination thereof; or (b) if a partnership, limited liability company, association or other business entity, fifty (50) percent or more of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes of this definition, a Person or Persons will be deemed to have a fifty (50) percent or more ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons are allocated fifty (50) percent or more of partnership, limited liability company, association or other business entity gains or losses or control the managing director or member or general partner of such partnership, limited liability company, association or other business entity.

(cc) “Voting Securities or Security” means any securities of the Company which carry the right to vote generally in the election of directors.

3. Administration

(a) Committee . The Plan shall be administered and interpreted by the Compensation Committee of the Board or another committee appointed by the Board to administer the Plan with respect to grants to Employees. The Plan shall be administered and interpreted by the Board with respect to grants to Non-Employee Directors. The Board or committee, as

applicable, that has authority with respect to a specific Grant shall be referred to as the “Committee” with respect to that Grant. Ministerial functions may be performed by an administrative committee comprised of Company employees appointed by the Committee.

(b) Committee Authority . The Committee shall have the sole authority to (i) determine the Participants to whom Grants shall be made under the Plan, (ii) determine the type, size and terms and conditions of the Grants to be made to each such Participant, (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms and conditions of any previously issued Grant, subject to the provisions of Section 18 below, and (v) deal with any other matters arising under the Plan.

(c) Committee Determinations . The Committee shall have full power and express discretionary authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder. All powers of the Committee shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated Participants.

4. Grants

(a) Grants under the Plan may consist of Options as described in Section 7, Stock Units as described in Section 8, Stock Awards as described in Section 9, and SARs or Other Stock-Based Awards as described in Section 10. All Grants shall be subject to such terms and conditions as the Committee deems appropriate and as are specified in writing by the Committee to the Participant in the Grant Agreement.

(b) All Grants shall be made conditional upon the Participant’s acknowledgement, in writing or by acceptance of the Grant, that all decisions and determinations of the Committee shall be final and binding on the Participant, his or her beneficiaries and any other person having or claiming an interest under such Grant. Grants under a particular Section of the Plan need not be uniform as among the Participants.

5. Shares Subject to the Plan

(a) Shares Authorized . The total aggregate number of shares of Company Stock that may be issued under the Plan shall equal that number of shares of Company Stock subject to outstanding grants under the Director Plan and the 1994 Plan as of the Effective Date as well as shares remaining available for issuance under the Director Plan and the 1994 Plan but not subject to previously exercised, vested or paid grants as of the Effective Date.

(b) Source of Shares; Share Counting . Shares issued under the Plan may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock,

including shares purchased by the Company on the open market for purposes of the Plan. If and to the extent Options or SARs granted under the Plan (including options granted under the Director Plan, the 1994 Plan and the Subplans) terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised, and if and to the extent that any Stock Awards, Stock Units, or Other Stock-Based Awards (including any stock awards, stock units or other-stock based awards granted under the Director Plan, the 1994 Plan and the Subplans) are forfeited or terminated, or otherwise are not paid in full, the shares reserved for such Grants shall again be available for purposes of the Plan. Shares of Company Stock surrendered in payment of the Exercise Price of an Option shall again be available for purposes of the Plan. To the extent any Grants are paid in cash, and not in shares of Company Stock, any shares previously subject to such Grants shall again be available for issuance or transfer under the Plan.

(c) Individual Limits . All Grants under the Plan shall be expressed in shares of Company Stock. The maximum aggregate number of shares of Company Stock with respect to which all Grants may be made under the Plan to any individual during any calendar year shall be 1,000,000 shares, subject to adjustment as described in subsection (d) below. A Participant may not accrue Dividend Equivalents during any calendar year in excess of $1,000,000. The individual limits of this subsection (c) shall apply without regard to whether the Grants are to be paid in Company Stock or cash. All cash payments (other than with respect to Dividend Equivalents) shall equal the Fair Market Value of the shares of Company Stock to which the cash payments relate.

(d) Adjustments . If there is any change in the number or kind of shares of Company Stock outstanding by reason of a stock dividend, spinoff, stock split or reverse stock split, or by reason of a combination, reorganization, recapitalization or reclassification affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, the maximum number of shares of Company Stock available for Grants, the maximum number of shares of Company Stock that any individual participating in the Plan may be granted in any year, the number of shares covered by outstanding Grants, the kind of shares issued under the Plan and outstanding Grants, and the price per share of outstanding Grants shall be equitably adjusted by the Committee, as the Committee deems appropriate, to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. In addition, the Committee shall have discretion to make the foregoing equitable adjustments in any circumstances in which an adjustment is not mandated by this subsection (d) or applicable law, including in the event of a Change in Control. Any adjustments to outstanding Grants shall be consistent with section 409A or 422 of the Code, to the extent applicable. Any adjustments determined by the Committee shall be final, binding and conclusive.

6. Eligibility for Participation

(a) Eligible Persons . All Employees, including Employees who are officers or members of the Board, and all Non-Employee Directors shall be eligible to participate in the Plan.

(b) Selection of Participants . The Committee shall select the Employees and Non-Employee Directors to receive Grants and shall determine the number of shares of Company Stock subject to each Grant.

7. Options

(a) General Requirements . The Committee may grant Options to an Employee or Non-Employee Director upon such terms and conditions as the Committee deems appropriate under this Section 7. The Committee shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees and Non-Employee Directors.

(b) Type of Option, Price and Term .

(i) The Committee may grant Incentive Stock Options or Nonqualified Stock Options or any combination of the two, all in accordance with the terms and conditions set forth herein. Incentive Stock Options may be granted only to Employees of the Company or its parents or subsidiaries, as defined in Section 424 of the Code. Nonqualified Stock Options may be granted to Employees or Non-Employee Directors.

(ii) The Exercise Price of Company Stock subject to an Option shall be determined by the Committee and may be equal to or greater than the Fair Market Value of a share of Company Stock on the date the Option is granted. However, an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary, as defined in section 424 of the Code, unless the Exercise Price per share is not less than 110% of the Fair Market Value of the Company Stock on the date of grant.

(iii) The Committee shall determine the term of each Option, which shall not exceed ten years from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary, as defined in section 424 of the Code, may not have a term that exceeds five years from the date of grant.

(i) Options shall become exercisable in accordance with such terms and conditions as may be determined by the Committee and specified in the Grant Agreement. The Committee may accelerate the exercisability of any or all outstanding Options at any time for any reason.

(ii) The Committee may provide in a Grant Agreement that the Participant may elect to exercise part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall be restricted shares and shall be subject to a repurchase right in favor of the Company during a specified restriction period, with the repurchase price equal to the lesser of (A) the Exercise Price or (B) the Fair Market Value of such shares at the time of repurchase, or such other restrictions as the Committee deems appropriate.

(iii) Options granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such Options may become exercisable, as determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a Change in Control or other circumstances permitted by applicable regulations).

(d) Termination of Employment or Service . Except as provided in the Grant Agreement, an Option may only be exercised while the Participant is employed by the Employer, or providing service as a Non-Employee Director. The Committee shall determine in the Grant Agreement under what circumstances and during what time periods a Participant may exercise an Option after termination of employment or service.

(e) Exercise of Options . A Participant may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Participant shall pay the Exercise Price for the Option (i) in cash, (ii) if permitted by the Committee, by delivering shares of Company Stock owned by the Participant and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation to ownership of shares of Company Stock having an aggregate Fair Market Value on the date of exercise equal to the Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or (iv) by such other method as the Committee may approve. Shares of Company Stock used to exercise an Option shall have been held by the Participant for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option. Payment for the shares pursuant to the Option, and any required withholding taxes, must be received by the time specified by the Committee depending on the type of payment being made, but in all cases prior to the issuance of the Company Stock.

(f) Limits on Incentive Stock Options . Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, as defined in section 424 of the Code, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or a parent or subsidiary, as defined in section 424 of the Code.

8. Stock Units

(a) General Requirements . The Committee may grant Stock Units to an Employee or Non-Employee Director, upon such terms and conditions as the Committee deems appropriate under this Section 8. Each Stock Unit shall represent the right of the Participant to receive a share of Company Stock or an amount based on the value of a share of Company Stock. All Stock Units shall be credited to bookkeeping accounts on the Company’s records for purposes of the Plan.

(b) Terms of Stock Units . The Committee may grant Stock Units that are payable on terms and conditions determined by the Committee, which may include payment based on

achievement of performance goals. Stock Units may be paid at the end of a specified vesting or performance period, or payment may be deferred to a date authorized by the Committee. The Committee shall determine the number of Stock Units to be granted and the requirements applicable to such Stock Units.

(c) Payment With Respect to Stock Units . Payment with respect to Stock Units shall be made in cash, in Company Stock, or in a combination of the two, as determined by the Committee. The Grant Agreement shall specify the maximum number of shares that can be issued under the Stock Units.

(d) Requirement of Employment or Service . The Committee shall determine in the Grant Agreement under what circumstances a Participant may retain Stock Units after termination of the Participant’s employment or service, and the circumstances under which Stock Units may be forfeited.

9. Stock Awards

(a) General Requirements . The Committee may issue shares of Company Stock to an Employee or Non-Employee Director under a Stock Award, upon such terms and conditions as the Committee deems appropriate under this Section 9. Shares of Company Stock issued pursuant to Stock Awards may be issued for cash consideration or for no cash consideration, and subject to restrictions or no restrictions, as determined by the Committee. The Committee may establish conditions under which restrictions on Stock Awards shall lapse over a period of time or according to such other criteria as the Committee deems appropriate, including restrictions based upon the achievement of specific performance goals. The Committee shall determine the number of shares of Company Stock to be issued pursuant to a Stock Award.

(b) Requirement of Employment or Service . The Committee shall determine in the Grant Agreement under what circumstances a Participant may retain Stock Awards after termination of the Participant’s employment or service, and the circumstances under which Stock Awards may be forfeited.

(c) Restrictions on Transfer . While Stock Awards are subject to restrictions, a Participant may not sell, assign, transfer, pledge or otherwise dispose of the shares of a Stock Award except upon death as described in Section 15(a). Each certificate for a share of a Stock Award shall contain a legend giving appropriate notice of the restrictions in the Grant. The Participant shall be entitled to have the legend removed when all restrictions on such shares have lapsed. The Company may retain possession of any certificates for Stock Awards until all restrictions on such shares have lapsed.

(d) Right to Vote and to Receive Dividends . The Committee shall determine to what extent, and under what conditions, the Participant shall have the right to vote shares of Stock Awards and to receive any dividends or other distributions paid on such shares during the restriction period.

10. Stock Appreciation Rights and Other Stock-Based Awards

(a) SARs . The Committee may grant SARs to an Employee or Non-Employee Director separately or in tandem with an Option. The following provisions are applicable to SARs:

(i) Base Amount . The Committee shall establish the base amount of the SAR at the time the SAR is granted. The base amount of each SAR shall be equal to the per share Exercise Price of the related Option or, if there is no related Option, an amount that is at least equal to the Fair Market Value of a share of Company Stock as of the date of Grant of the SAR.

(ii) Tandem SARs . The Committee may grant tandem SARs either at the time the Option is granted or at any time thereafter while the Option remains outstanding; provided, however, that, in the case of an Incentive Stock Option, SARs may be granted only at the date of the grant of the Incentive Stock Option. In the case of tandem SARs, the number of SARs granted to a Participant that shall be exercisable during a specified period shall not exceed the number of shares of Company Stock that the Participant may purchase upon the exercise of the related Option during such period. Upon the exercise of an Option, the SARs relating to the Company Stock covered by such Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the extent of an equal number of shares of Company Stock.

(iii) Exercisability . An SAR shall be exercisable during the period specified by the Committee in the Grant Agreement and shall be subject to such vesting and other restrictions as may be specified in the Grant Agreement. The Committee may grant SARs the exercise of which is subject to achievement of performance goals or other conditions. The Committee may accelerate the exercisability of any or all outstanding SARs at any time for any reason. The Committee shall determine in the Grant Agreement under what circumstances and during what periods a Participant may exercise an SAR after termination of employment or service. A tandem SAR shall be exercisable only while the Option to which it is related is exercisable.

(iv) Grants to Non-Exempt Employees . SARs granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such SARs may become exercisable, as determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a Change in Control or other circumstances permitted by applicable regulations).

(v) Value of SARs . When a Participant exercises SARs, the Participant shall receive in settlement of such SARs an amount equal to the value of the stock appreciation for the number of SARs exercised. The stock appreciation for an SAR is the amount by which the Fair Market Value of the underlying Company Stock on the date of exercise of the SAR exceeds the base amount of the SAR as described in subsection (i).

(vi) Form of Payment . The Committee shall determine whether the stock appreciation for an SAR shall be paid in the form of shares of Company Stock, cash or a

combination of the two. For purposes of calculating the number of shares of Company Stock to be received, shares of Company Stock shall be valued at their Fair Market Value on the date of exercise of the SAR. If shares of Company Stock are to be received upon exercise of an SAR, cash shall be delivered in lieu of any fractional share.

(b) Other Stock-Based Awards . The Committee may grant other awards not specified in Sections 7, 8 or 9 or subsection (a) above that are based on or measured by Company Stock to Employees and Non-Employee Directors, on such terms and conditions as the Committee deems appropriate. Other Stock-Based Awards may be granted subject to achievement of performance goals or other conditions and may be payable in Company Stock or cash, or in a combination of the two, as determined by the Committee in the Grant Agreement.

11. Dividend Equivalents

(a) General Requirements . When the Committee makes a Grant under the Plan, the Committee may grant Dividend Equivalents in connection with the Grant, under such terms and conditions as the Committee deems appropriate under this Section 11. Dividend Equivalents may be paid to Participants currently or may be deferred, as determined by the Committee. All Dividend Equivalents that are not paid currently shall be credited to bookkeeping accounts on the Company’s records for purposes of the Plan. Dividend Equivalents may be accrued as a cash obligation, or may be converted to Stock Units for the Participant, and deferred Dividend Equivalents may accrue interest, all as determined by the Committee. The Committee may provide that Dividend Equivalents shall be payable based on the achievement of specific performance goals.

(b) Payment with Respect to Dividend Equivalents . Dividend Equivalents may be payable in cash or shares of Company Stock or in a combination of the two, as determined by the Committee.

12. Qualified Performance-Based Compensation

(a) Designation as Qualified Performance-Based Compensation . The Committee may determine that Stock Units, Stock Awards, Dividend Equivalents or Other Stock-Based Awards granted to an Employee shall be considered “qualified performance-based compensation” under section 162(m) of the Code, in which case the provisions of this Section 12 shall apply. The Committee may also grant Options or SARs under which the exercisability of the Options is subject to achievement of performance goals as described in this Section 12 or otherwise.

(b) Performance Goals . When Grants are made under this Section 12, the Committee shall establish in writing (i) the objective performance goals that must be met, (ii) the period during which performance will be measured, (iii) the maximum amounts that may be paid if the performance goals are met, and (iv) any other conditions that the Committee deems appropriate and consistent with the requirements of section 162(m) of the Code for “qualified performance-based compensation.” The performance goals shall satisfy the requirements for “qualified performance-based compensation,” including the requirement that the achievement of the goals

be substantially uncertain at the time they are established and that the performance goals be established in such a way that a third party with knowledge of the relevant facts could determine whether and to what extent the performance goals have been met. The Committee shall not have discretion to increase the amount of compensation that is payable, but may reduce the amount of compensation that is payable, pursuant to Grants identified by the Committee as “qualified performance-based compensation.”

(c) Criteria Used for Objective Performance Goals . The Committee shall use objectively determinable performance goals based on one or more of the following criteria: stock price, earnings per share, price-earnings multiples, net earnings, operating earnings, revenue, number of days sales outstanding in accounts receivable, productivity, margin, EBITDA (earnings before interest, taxes, depreciation and amortization), net capital employed, return on assets, shareholder return, return on equity, return on capital employed, growth in assets, unit volume, sales, cash flow, market share, relative performance to a comparison group designated by the Committee, or strategic business criteria consisting of one or more objectives based on meeting specified revenue goals, market penetration goals, customer growth, geographic business expansion goals, cost targets or goals relating to acquisitions or divestitures. The performance goals may relate to one or more business units or the performance of the Company as a whole, or any combination of the foregoing. Performance goals need not be uniform as among Participants.

(d) Timing of Establishment of Goals . The Committee shall establish the performance goals in writing either before the beginning of the performance period or during a period ending no later than the earlier of (i) 90 days after the beginning of the performance period or (ii) the date on which 25% of the performance period has been completed, or such other date as may be required or permitted under applicable regulations under section 162(m) of the Code.

(e) Certification of Results . The Committee shall certify the performance results for the performance period specified in the Grant Agreement after the performance period ends. The Committee shall determine the amount, if any, to be paid pursuant to each Grant based on the achievement of the performance goals and the satisfaction of all other terms of the Grant Agreement.

(f) Death, Disability or Other Circumstances . The Committee may provide in the Grant Agreement that Grants under this Section 12 shall be payable, in whole or in part, in the event of the Participant’s death or disability, a Change in Control or under other circumstances consistent with the Treasury regulations and rulings under section 162(m) of the Code.

13. Deferrals

The Committee may permit or require a Participant to defer receipt of the payment of cash (including dividend equivalents) or the delivery of shares that would otherwise be due to the Participant in connection with any Grant. The Committee shall establish rules and procedures for any such deferrals, consistent with applicable requirements of section 409A of the Code.

14. Withholding of Taxes

(a) Required Withholding . All Grants under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements. The Company may require that the Participant or other person receiving or exercising Grants pay to the Company the amount of any federal, state or local taxes that the Company is required to withhold with respect to such Grants, or the Company may deduct from other wages paid by the Company the amount of any withholding taxes due with respect to such Grants.

(b) Election to Withhold Shares . If the Committee so permits, a Participant may elect to satisfy the Company’s tax withholding obligation with respect to Grants paid in Company Stock by having shares withheld, at the time such Grants become taxable, up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. The election must be in a form and manner prescribed by the Committee.

15. Transferability of Grants

(a) Restrictions on Transfer . Except as described in subsection (b) below, only the Participant may exercise rights under a Grant during the Participant’s lifetime, and a Participant may not transfer those rights except by will or by the laws of descent and distribution. When a Participant dies, the personal representative or other person entitled to succeed to the rights of the Participant may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Participant’s will or under the applicable laws of descent and distribution.

(b) Transfer of Nonqualified Stock Options to or for Family Members . Notwithstanding subsection (a) above, the Committee may provide, in a Grant Agreement, that a Participant may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with the applicable securities laws, according to such terms as the Committee may determine; provided that the Participant receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

16. Consequences of a Change in Control

(a) In the event of a Change in Control, the Committee may take any one or more of the following actions with respect to some or all outstanding Grants, without the consent of any Participant: (i) the Committee may determine that outstanding Options and SARs shall be fully exercisable, and restrictions on outstanding Stock Awards and Stock Units shall lapse, as of the date of the Change in Control or at such other time as the Committee determines, (ii) the Committee may require that Participants surrender their outstanding Options and SARs in exchange for one or more payments by the Company, in cash or Company Stock as determined by the Committee, in an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock subject to the Participant’s unexercised Options and SARs exceeds the

Exercise Price, or Base Amount, as applicable, if any, and on such terms as the Committee determines, (iii) after giving Participants an opportunity to exercise their outstanding Options and SARs, the Committee may terminate any or all unexercised Options and SARs at such time as the Committee deems appropriate, (iv) with respect to Participants holding Stock Units, Other Stock-Based Awards or Dividend Equivalents, the Committee may determine that such Participants shall receive one or more payments in settlement of such Stock Units, Other Stock-Based Awards or Dividend Equivalents, in such amount and form and on such terms as may be determined by the Committee, (v) if the Company is the surviving corporation, the Committee may determine that Grants will remain outstanding after the Change in Control, or (vi) if the Company is not the surviving corporation, the Committee may determine that Grants that remain outstanding after the Change in Control shall be converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation). Such acceleration, surrender, termination, settlement or conversion shall take place as of the date of the Change in Control or such other date as the Committee may specify.

(b) Other Transactions . The Committee may provide in a Grant Agreement that a sale or other transaction involving a subsidiary or other business unit of the Company shall be considered a Change in Control for purposes of a Grant, or the Committee may establish other provisions that shall be applicable in the event of a specified transaction.

17. Requirements for Issuance of Shares

No Company Stock shall be issued in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance of such Company Stock have been complied with to the satisfaction of the Committee. The Committee shall have the right to condition any Grant made to any Participant hereunder on such Participant’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Company Stock as the Committee shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions. Certificates representing shares of Company Stock issued under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon. Except as determined under Section 9(a), no Participant shall have any right as a shareholder with respect to Company Stock covered by a Grant until shares have been issued to the Participant.

18. Amendment and Termination of the Plan

(a) Amendment . The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without approval of the stockholders of the Company if such approval is required in order to comply with the Code or applicable laws, or to comply with applicable stock exchange requirements. No amendment or termination of this Plan shall, without the consent of the Participant, materially impair any rights or obligations under any Grant previously made to the Participant under the Plan, unless such right has been reserved in the Plan or the Grant Agreement, or except as provided in Section 19(b) below. Notwithstanding anything in the Plan to the contrary, the Board may amend the Plan in such manner as it deems appropriate in the event of a change in applicable law or regulations.

(b) No Repricing Without Stockholder Approval . Notwithstanding anything in the Plan to the contrary, the Committee may not reprice Options, nor may the Board amend the Plan to permit repricing of Options, unless the stockholders of the Company provide prior approval for such repricing. The term “repricing” shall have the meaning given that term in Section 303A(8) of the New York Stock Exchange Listed Company Manual, as in effect from time to time.

(c) Stockholder Approval for “Qualified Performance-Based Compensation .” If Grants are made under Section 12 above, the Plan must be reapproved by the Company’s stockholders no later than the first stockholders meeting that occurs in the fifth year following the year in which the stockholders previously approved the provisions of Section 12, if additional Grants are to be made under Section 12 and if required by section 162(m) of the Code or the regulations thereunder.

(d) Termination of Plan . The Plan shall terminate on May 7, 2017, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders. The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant.

19. Miscellaneous

(a) Grants in Connection with Corporate Transactions and Otherwise . Nothing contained in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other stock-based awards outside of this Plan. Without limiting the foregoing, the Committee may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company in substitution for a grant made by such corporation. The terms and conditions of the Grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives, as determined by the Committee

(b) Compliance with Law . The Plan, the exercise of Options and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. With respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that Incentive Stock Options comply with the applicable provisions of section 422 of the Code, that Grants of “qualified performance-based compensation” comply with the applicable provisions of section 162(m) of the Code and that, to the extent applicable, Grants comply with the requirements of section 409A of the Code. To the extent that any legal requirement of section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code as set forth in the Plan ceases to be required under section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code,

that Plan provision shall cease to apply. The Committee may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation. The Committee may also adopt rules regarding the withholding of taxes on payments to Participants.

(d) Funding of the Plan; Limitation on Rights . This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Grants under this Plan. Nothing contained in the Plan and no action taken pursuant hereto shall create or be construed to create a fiduciary relationship between the Company and any Participant or any other person. No Participant or any other person shall under any circumstances acquire any property interest in any specific assets of the Company. To the extent that any person acquires a right to receive payment from the Company hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.

(e) Rights of Participants . Nothing in this Plan shall entitle any Employee, Non-Employee Director or other person to any claim or right to receive a Grant under this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employment or service of the Employer.

(f) No Fractional Shares . No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any Grant. The Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

(g) Employees Subject to Taxation Outside the United States . With respect to Participants who are subject to taxation in countries other than the United States, the Committee may make Grants on such terms and conditions as the Committee deems appropriate to comply with the laws of the applicable countries, and the Committee may create such procedures, addenda and subplans and make such modifications as may be necessary or advisable to comply with such laws.

(h) Governing Law . The validity, construction, interpretation and effect of the Plan and Grant Agreements issued under the Plan shall be governed and construed by and determined in accordance with the laws of the State of New York, without giving effect to the conflict of laws provisions thereof.

Exhibit 10.2

INVESTMENT TECHNOLOGY GROUP, INC.

Amended and Restated 1994 Stock Option and Long-term Incentive Plan

1. Purposes

The purposes of the Amended and Restated Investment Technology Group, Inc. Stock Option and Long-term Incentive Plan (the “Plan”) are to advance the interests of the Company, to increase stockholder value by providing its directors, officers and other key employees with a proprietary interest in the growth and performance of the Company and with incentives for continued service with rewards for outstanding service to the Company and its subsidiaries, and to provide the Company with an additional means to attract and retain qualified officers and other key employees. To this end, the Committee, as hereinafter designated, may grant stock options, stock appreciation rights, performance units, dividend equivalents and/or other incentive awards to directors, officers and other key employees of the Company and its subsidiaries, on the terms and subject to the conditions set forth in this Plan. The Plan was merged with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “2007 Plan”) effective as of May 8, 2007 (the “Effective Date”). No new grants will be made under the Plan after the Effective Date and any Shares issued pursuant to outstanding Awards under this Plan after the Effective Date shall be issued under the 2007 Plan.

2. Definitions

As used in the Plan, the following terms shall have the meanings set forth below:

2.1 “Award” means any form of stock option, stock appreciation right, performance unit, dividend equivalent or other incentive award granted under the Plan, whether singly, in combination, or in tandem, to a Participant by the Committee pursuant to such terms, conditions, restrictions, and/or limitations, if any, as the Committee may establish.

2.2 “Award Agreement” means a written agreement setting forth the terms of an Award.

2.3 “Base Price Per Share” means a price per share fixed by the Committee at the time of grant of a Stock Appreciation Right that may be equal to, greater than, or less than the Fair Market Value of the shares of Common Stock covered thereby, but not less than the amount required by such laws, rules or regulations as may be applicable.

2.4 “Board” means the Board of Directors of the Company.

2.5 “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code shall be deemed to include successor provisions thereto and rules and regulations thereunder.

2.6 “Committee” means the Compensation Committee of the Board, or such other Board committee as may be designated by the Board to administer the Plan; provided, however, that Committee action shall be taken by act of such members specified in, and otherwise in accordance with, Section 3.3. The Committee shall consist solely of two or more directors of the Company. In appointing members of the Committee, the Board will consider whether a member is or will be a Qualified Member, but such members are not required to be Qualified Members at the time of appointment or during their term of service on the Committee.

2.7 “Common Stock” means the Common Stock of the Company.

2.8 “Company” means Investment Technology Group, Inc., and successors thereto.

2.9 “Dividend Equivalent” means a right granted to a Participant to receive cash, shares of Common Stock, other Awards, or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award, and may be paid currently or on a deferred basis.

2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include successor provisions thereto and rules and regulations thereunder.

2.11 “Fair Market Value,” unless otherwise required by an applicable provision of the Code, as of any date, means the mean of the high and low regular way sales prices of the Common Stock as reported on the New York Stock Exchange as determined on the date as of which the valuation is to be made; provided, however, that at any time that the Common Stock is not quoted on the New York Stock Exchange on such trading days, Fair Market Value shall be determined by the Committee in its discretion.

2.12 “Incentive Stock Option” (“ISO”) means any Stock Option intended to be, and designated and qualifying as, an “incentive stock option” within the meaning of Section 422 of the Code.

2.13 “Non-Qualified Stock Option” means any Stock Option awarded under this Plan that is not intended to be an Incentive Stock Option or that fails to meet the requirements applicable to an Incentive Stock Option.

2.14 “Officer” means a person who is considered to be an officer of the Company under Exchange Act Rule 16a-1(f).

2.15 “162(m) Award” means an Award intended by the Committee to constitute “qualified performance-based compensation” within the meaning of Code Section 162(m) and regulations thereunder. Such Awards would include Options or SARs granted with an exercise price or base price per share equal to or greater than 100% of the Fair Market Value of a share of Common Stock, or Awards granted in accordance with Section 7.

2.16 “Option” or “Stock Option” means a right granted pursuant to the Plan to purchase shares of Common Stock, and includes both Incentive Stock Options and Non-Qualified Stock Options.

2.17 “Option Price” or “Exercise Price” means the price per share at which Common Stock may be purchased upon the exercise of an Option.

2.18 “Participant” means any individual to whom an Award has been granted under this Plan.

2.19 “Performance Award” means the right to receive either (i) shares of Common Stock or cash in an amount determined with reference to Common Stock value (performance shares), or (ii) a fixed dollar amount payable in cash or shares (performance units), or a combination of both, at the end of a specified Performance Period.

2.20 “Performance Period” means a period of not less than one nor more than ten years during which corporate, division, subsidiary, group or other performance objectives shall be utilized for purposes of determining the amount of a Performance Award.

2.21 “Qualified Member” means a member of the Committee who is a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) under the Exchange Act and an “outside director” within the meaning of Treasury Regulation 1.162-27(e)(3) under Code Section 162(m).

2.22 “Stock Appreciation Right” or “SAR” means the right to receive, for each unit of the SAR, cash or shares of Common Stock equal in value to the excess of the Fair Market Value of one share on the date of exercise of the SAR over the Base Price Per Share established on the date the SAR was granted.

3. Administration

3.1 The Plan shall be administered and interpreted by the Committee. The foregoing and other provisions of the Plan notwithstanding, the Board may perform any function of the Committee under the Plan, including for the purpose of ensuring that transactions under the Plan by Participants who are then subject to Section 16 of the Exchange Act in respect of the Company are exempt under Rule 16b-3. In any case in which the Board is performing a function of the Committee under the Plan, each reference to the Committee herein shall be deemed to refer to the Board, except where the context otherwise requires.

3.2 The Committee shall have the authority to (a) establish such rules and regulations as it deems necessary for the proper operation and administration of the Plan; (b) select the Officers and other key employees of the Company and its subsidiaries to receive Awards under the Plan; (c) determine the form of an Award, or combinations thereof, and whether such Awards are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company, either within or outside of this Plan; (d) determine the number of shares of Common Stock or units or rights to be covered by each such Award granted hereunder; (e) determine the terms and conditions, not inconsistent with the terms of this Plan, of any Award granted hereunder (including, but not limited to, any restriction or limitation on transfer, any vesting schedule or acceleration thereof, and any forfeiture provisions or waiver thereof), regarding any Award and the shares of Common Stock relating thereto, based on such factors as the Committee shall determine, in its sole discretion; (f) determine whether Common Stock to be issued and other amounts payable with respect to an Award under this Plan shall be deferred, either automatically or at the election of the Participant; and (g) make any other determination or take any other action that the Committee deems necessary or desirable for the administration of the Plan.

3.3 At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Company, or relating to a 162(m) Award, may be taken either (i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee, but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided, however, that, upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such Non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan. The Committee may delegate to officers or managers of the Company or any subsidiary the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions, as the Committee may determine, to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to be 162(m) Awards to fail to so qualify. Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company, the Board, or the Committee (or any of its members pursuant to any authority duly delegated to any such member) arising out

of or in connection with the Plan shall be within the absolute discretion of all or any of them, as the case may be, and shall be final, binding and conclusive on the Company and its subsidiaries, all employees and Participants and their respective beneficiaries, transferees, heirs, executors, administrators, successors and assigns.

4. Eligibility

Officers and other key employees of the Company and its present and future subsidiaries (including those who may also be directors of the Company) and non-employee directors of the Company, who are responsible for or contribute to the management, growth and profitability of the business of the Company and its subsidiaries, are eligible to receive Awards under this Plan.

5. Shares Available for Awards

5.1 The maximum number of shares of Common Stock of the Company that may be used in conjunction with the grant of Incentive Stock Options under the Plan is 500,000.

5.2 Except as provided in Section 5.1 above, the maximum number of shares of Common Stock of the Company with respect to which any Awards may be made in any calendar year during the term of this Plan shall not exceed twenty percent (20%) of the number of shares of Common Stock issued and outstanding as of the first day of the calendar year in which Awards are made, less the number of shares of Common Stock reserved for issuance with respect to, or underlying, any Award made and outstanding pursuant to this Plan as do such date. In addition, in each fiscal year during any part of which the Plan is in effect, a Participant may be granted (i) Options and SARs under Section 6.1 and 6.2 relating to no more than 1,000,000 shares of Common Stock and (ii) Performance Awards pursuant to Section 7 relating to no more than 100,000 shares of Common Stock, subject in each case to adjustment as provided in Section 5.5. With respect to Performance Awards pursuant to Section 7 not valued by reference to Common Stock at the date of grant, the maximum amount payable to a Participant in settlement of such an Award in any fiscal year shall be the Fair Market Value of the number of shares of Common Stock specified in the preceding sentence (subject to adjustment) to which Performance Awards may relate valued at the date of grant or at the date of settlement of the Award whichever is greater (this limitation is separate and not affected by the limitation on shares of Common Stock set forth in clause (ii) of the preceding sentence).

5.3 Shares of Common Stock which are attributable to Awards which expire or are otherwise terminated, cancelled, surrendered or forfeited are available for issuance or use in connection with future Incentive Stock Option grants, and future Awards during the calendar year in which they expire or otherwise become available.

5.4 Shares of Common Stock to be issued under the Plan may be authorized and unissued shares of Common Stock, treasury stock or a combination thereof.

5.5 In the event of a merger, consolidation, reorganization, recapitalization, stock split, stock dividend, other extraordinary dividend or other changes in corporate structure or capitalization affecting the Common Stock, the Committee may make appropriate adjustments in the number or kind of shares subject to options, rights and other Awards granted under the Plan, and other terms and conditions of Awards and/or the exercise price of Awards in the event of any stock dividend, stock split, spin-off or recapitalization in the form of large, special and non-recurring dividends, appropriate provision for supplemental payments of cash, other Awards, or other property, or appropriate adjustment in the maximum number of shares referred to in Section 5 of the Plan (including the number of shares specified in Section 5.1 and in each of clauses (i) and (ii) of the second sentence of Section 5.2), as the Committee may determine to be necessary or appropriate in order to prevent dilution or enlargement of the rights of Participants. In the event that the Company declares a cash dividend (other than

one constituting a large, special and non-recurring dividend), the Committee may make appropriate adjustment to the number of shares subject to options, rights and other Awards granted under the Plan or make appropriate provision for supplemental payments of cash, other Awards or other property, but shall not make any adjustment to the exercise price of the Awards.

6. Awards Under the Plan

6.1 Stock Options. The Committee may grant Incentive Stock Options, Non-Qualified Stock Options or both to purchase shares of Common Stock from the Company, in such amounts and subject to such terms and conditions as the Committee shall determine in its sole discretion, subject to the provisions of the Plan, provided, however, that in no event may any Stock Option granted hereunder be exercisable prior to May 4, 1997, except upon the occurrence of a change in control of the Company (as defined by the Committee), or after the expiration of ten years from the date of such grant. The automatic or discretionary grant of “reload” Stock Options is specifically authorized.

In case of Incentive Stock Options, the terms and conditions of such grants, including the exercise price for the purchase of Common Stock, shall be subject to and comply with the requirements of Section 422 of the Code, as from time to time amended, and any implementing regulations.

The exercise price at which shares of Common Stock may be purchased pursuant to the grant of a Non-Qualified Stock Option shall be fixed by the Committee at the time of grant and may be equal to, greater then, or less than the Fair Market Value of the shares of Common Stock covered thereby.

6.2 Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights (SARs), in such amounts and subject to such terms and conditions as the Committee shall determine in its sole discretion, subject to the provision of the Plan.

SARs may be granted in connection with all or any part of, or independently of, any Stock Option granted under the Plan. An SAR granted in connection with a Non-Qualified Stock Option may be granted at or after the time of grant of such option. An SAR granted in connection with an ISO may be granted only at the time of grant of such option.

Limited SARs that may only be exercised in connection with a change in control or other event (as specified by the Committee) may be granted on such terms, not inconsistent with this Section 6.2, as the Committee may determine. Limited SARs may be either freestanding or in tandem with other Awards.

Upon the exercise of an SAR granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the SAR is exercised. Upon the exercise of an option in tandem with which an SAR has been granted, the number of shares subject to the SAR shall be reduced by the number of shares with respect to which the option is exercised.

6.3 Performance Awards. The Committee may grant Performance Awards in such amounts and subject to such terms and conditions, as the Committee shall determine in its sole discretion, subject to the provision of the Plan.

The Committee may condition the grant or vesting of a Performance Award upon the attainment of specified performance goals; the appreciation in the Fair Market Value, book value or other measure of the value of the Common Stock, the performance of the Company, including based on earnings or cash flow; the performance of any subsidiary or affiliate of the Company; or

such other facts or criteria as the Committee shall determine. Such goals may be revised by the Committee at any time and from time to time during the Performance Period to take into account significant unforeseen events or changes in circumstances. The foregoing notwithstanding, any Performance Award intended to constitute a 162(m) Award shall be subject to the limitations set forth in Section 7.

6.4 Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to Participants. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional shares, Awards, or other investment vehicles as the Committee may specify.

6.5 Other Stock-Based Awards. The Committee may from time to time grant Awards under this Plan, the value of which are based in whole or in part on the value of Common Stock, that may not be defined in Sections 6.1 through 6.4 of this Plan.

Other stock-based Awards may be awards of shares of Common Stock or may be denominated or payable in, valued, in whole or in part, by reference to, or otherwise based on or related to the value of, Common Stock (including, without limitation, phantom securities convertible or exchangeable into or exercisable for Common Stock), as deemed by the Committee consistent with the purposes of the Plan.

6.6 Consideration; Tandem and Substitute Awards. Except as provided in this Section 6.6 or to the extent that payment of lawful consideration may be required under Delaware General Corporation Law, only services may be required as consideration for the grant (but no the exercise) of any Award. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for, any other Award granted under the Plan or any award granted under any other plan of the Company, any subsidiary or affiliate, or any business entity to be acquired by the Company or a subsidiary or affiliate, or any other right of a Participant to receive payment from the Company or any subsidiary or affiliate. If an Award is granted in substitution for another Award or award, the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. Awards granted in addition to or in tandem with other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards.

6.7 Award Agreements. Awards under the Plan shall be evidenced by an agreement approved by the Committee that sets forth terms, conditions and limitations of an Award. The Committee may amend agreements theretofore entered into, either prospectively or retroactively, including, but not limited to, the acceleration of, vesting of or lapse of restrictions on an Award and the extension of time to exercise an Award, except that no such amendment shall affect the Award in a materially adverse manner without the consent of the Participant.

7. Performance Awards

7.1 Performance Awards Granted to Designated Covered Employees. If the Committee determines that a Performance Award to be granted to a person who is designated by the Committee as likely to be a Covered Employee (as hereinafter defined) should qualify as a 162(m) Award, the grant and/or settlement of such Performance Award shall be contingent upon achievement of preestablished performance goals and other terms set forth in this Section 7.

7.2 Performance Goals Generally. The performance goals for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to such criteria, as specified by the Committee consistent with this Section 7. Performance goals shall be objective and shall otherwise meet the requirements of Code Section 162(m) and Treasury Regulation 1.162-27 thereunder. The Committee may determine that such Performance Awards shall be granted, exercised, and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to settlement of such

Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

7.3 Business Criteria. One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries, affiliates, or business units of the Company (except with respect to the measures relating to Common Stock), shall be used by the Committee in establishing performance goals for such Performance Awards: (1) appreciation in Fair Market Value or book value of Common Stock; (2) earnings per share; (3) revenues; (4) cash flow or cash flow return on investment; (5) return on assets, return on investment, return on capital, or return on equity; (6) economic value added; (7) operating margin; (8) net income; operating income (before or after income taxes); earnings; or operating earnings (before or after income taxes); (9) total stockholder return; and (10) any of the above goals as compared to the performance of a published or special index deemed applicable by the Committee including the Standard & Poor’s 500 Stock Index or other indexes, or compared to one or more comparable companies specified by the Committee.

7.4 Performance Period; Timing For Established Performance Goals. Achievement of performance goals in respect of such Performance Awards shall be measured over a Performance Period specified by the Committee (or, if so determined by the Committee, for a specified portion of a Performance Period). Performance goals shall be established not later then 90 days after the beginning of any Performance Period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Code Section 162(m).

7.5 Performance Award Pool. The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7.3 during the given Performance Period, as specified by the Committee in accordance with Section 7.4 hereof. The Committee may specify the amount of the Performance Award pool as a percentage of any such business criteria, a percentage thereof in excess of a threshold amount, or another amount which need not bear a strictly mathematical relationship to such business criteria.

7.6 Settlement of Performance Awards; Other Terms. Settlement of such Performance Awards shall be in cash, Common Stock, other Awards, or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of Performance Awards subject to this Section 7. The Committee shall specify the circumstances in which Performance Awards shall be forfeited in the event of termination of employment prior to the end of a Performance Period or settlement of Performance Awards, and other terms relating to such Performance Awards in accordance with Section 6 and this Section 7.

7.7 Written Determinations. All determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards and as to the achievement of performance goals relating to Performance Awards under this Section 7 shall be made in writing.

7.8 Status of 162(m) Awards. It is the intent of the Company that Performance Awards granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so designated by the Committee, constitute “qualified performance-based compensation” within the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of this Section 7, including the definitions of Covered Employee and other terms used herein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding,

because the Committee cannot determine with certainty whether a given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term “Covered Employee” as used herein shall mean only a person designated by the Committee, at the time of grant of a Performance Award, as likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan or any agreement relating to such Performance Awards does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

8. Effect on Other Plans

8.1 The Plan was originally effective in March 1994 and amended and restated effective January 29, 1997. The Plan was again amended effective September 15, 2006, subject to approval of the Company stockholders. In the event stockholders of the Company do not so approve the amendment, the amendment shall not be effective, Awards granted subject to such stockholder approval shall be cancelled and Awards shall not be made thereafter to the extent required under Treasury Regulation 1.162-27(e)(4) in order that the submission of the matter for stockholder approval meets the requirements of that Regulation.

8.2 In no event shall the value of, or income arising from, any Awards issued under the Plan be treated as compensation for purposes of any pension, profit sharing, life insurance, disability or other retirement or welfare benefit plan now maintained or hereafter adopted by the Company, unless such plan specifically provides to the contrary.

9. Miscellaneous Provisions Related to Participants

9.1 The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company. The Company may at time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. No Participant or other person shall have any claim to be granted any Awards, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards.

9.2 Except as may be otherwise provided under Section 6.4, no Award granted under the Plan, unless otherwise provided in the Award Agreement, shall entitle the holder of such Award to any dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are subject to such Award.

9.3 The purchase price of the shares of Common Stock as to which an option is exercised shall be paid in cash or by check, except that the Committee may, in its discretion, allow the payment to be by surrender of unrestricted shares of Common Stock (valued at their Fair Market Value at the date of exercise), or by a combination of cash, check and unrestricted shares of Common Stock.

9.4 A Participant may be required to pay to the Company, and the Company shall have the right to deduct from all amounts paid to a Participant (whether under the Plan or otherwise), any taxes required by or to be paid or withheld in respect of Awards hereunder to such Participant. The Committee may provide additional cash payments to holders of Awards to defray or offset any tax arising from the grant, vesting, exercise or payment of any Award or, at the election of the holder of the Award, the Committee may withhold shares or accept the transfer of shares to the Company, in such amounts as are equivalent to the Fair Market Value of the withholding obligations.

9.5 If the Committee determines that such action is advisable, the Company may assist any Participant in obtaining financing from the Company or from any bank or other third party, on such terms as determined by the Committee, and in such amount as is required to accomplish

the purposes of the Plan, including, but not limited to, permitting the exercise of an Award and/or paying any taxes in respect thereof to the extent permitted by law. Such assistance may take any form that the Committee deems appropriate, including, but not limited to, a direct loan from the Company, a guarantee of the obligation by the Company, or the maintenance by the Company of deposits with such bank or third party.

9.6 Awards (and rights or interests therein) shall not be assignable or transferable by a Participant except by will or the laws of descent and distribution (or pursuant to a beneficiary designation authorized under Section 9.7), and during the Award holder’s lifetime, such Awards and rights shall be exercisable only by such holder or such holder’s duly appointed guardian or legal representative. The foregoing notwithstanding, the Committee may provide that Awards (or rights or interests therein), other than Incentive Stock Options and Awards in tandem with such Incentive Stock Options, shall be transferable, including permitting transfers to a Participant’s immediate family members (i.e., spouse, children, grandchildren, or siblings, as well as the Participant), to trusts for the benefits of such immediate family members, and to partnerships in which such family members are the only parties, or other transfers deemed by the Committee to be not inconsistent with the purposes of the Plan.

9.7 Each Participant may file and maintain with the Company a written designation of one or more persons as the beneficiary or beneficiaries who shall be entitled to receive the Award or related payment payable under the Plan upon the Participant’s death. If no such designation is in effect at the time of a Participant’s death, or if no designated beneficiary survives the Participant or if such designation conflicts with the law, the Participant’s estate shall be entitled to receive the Award or related payment, if any, payable under the Plan upon the Participant’s death.

10. Governing Law

The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Delaware and applicable federal law.

11. Severability

If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Participant or Award under any law deemed applicable by the Committee, such provision or Award shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended, in the determination of the Committee, without materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Participant or Award and the reminder of the Plan and any such Award shall remain in full force and effect.

12. Unfunded Plan

The Plan is intended to constitute an “unfunded” plan. Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right (unless otherwise determined by the Committee) shall be no greater than the right of any unsecured general creditor of the Company.

13. Rule 16b-3 Compliance

13.1 Unless a Participant could otherwise transfer an equity security, derivative security, or shares issued upon exercise of a derivative security granted under the Plan without incurring liability under Section 16(b) of the Exchange Act, (i) an equity security issued under the Plan,

other than an equity security issued pursuant to the exercise of a derivative security granted under the Plan, shall be held for at least six months from the date of acquisition, and (ii) at least six months shall elapse from the date of acquisition of a derivative security to the date of disposition of the derivative security (other than upon exercise or conversion) or disposition of any underlying equity issued pursuant to the exercise or conversion of such derivative security.

13.2 With respect to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Company, the Committee shall implement transactions under the Plan and administer the Plan in a manner that will ensure that each transaction by such a Participant is exempt from liability under Rule 16b-3, except that such a Participant may be permitted to engage in a non-exempt transaction under the Plan if written notice has been given to the Participant regarding the non-exempt nature of such transaction. The Committee may authorize the repurchase of any Award or shares resulting from any Award in order to prevent a Participant from incurring or potentially incurring liability under Section 16(b) of the Exchange Act. Unless otherwise specified by the Participant, equity securities, including derivative securities, acquired under the Plan which are disposed of by a Participant shall be deemed to be disposed of in order acquired by the Participant.

14. Effective Date and Term of Plan

14.1 The Plan was approved by the stockholders of the Company by written consent and became effective in March 1994. The amendment and restatement of the Plan adopted by the Board of Directors on January 29, 1997, was effective upon adoption by the Board, subject to approval of the Company stockholders at the Company’s 1997 Annual Meeting of Stockholders by the affirmative vote of the holders of a majority of the shares of Common Stock present, or represented and entitled to vote on the subject matter at the Meeting. In the event stockholders of the Company do not so approve the amendment and restatement, the amendment and restatement shall not be effective, Awards granted subject to such stockholder approval shall be cancelled and Awards shall not be made thereafter to the extent required under Treasury Regulation 1.162-27(e)(4) in order that the submission of the matter for stockholder approval meets the requirements of that Regulation.

14.2 The Plan shall remain in effect until March 31, 2007, unless sooner terminated by the Board. After this date, no further Awards may be granted but previously granted Awards shall remain outstanding in accordance with their applicable terms and conditions, as stated in the Award Agreement, and conditions of the Plan.

15. Amendment and Termination of the Plan

15.1 The Plan may be amended by the Board in any respect, without the consent of stockholders or Participants, except that any such amendment (although effective when made) shall be subject to the approval of the Company’s stockholders at the annual meeting of stockholders the record date of which next follows the taking of such Board action if such stockholder approval is required by any federal or state law or regulation or rules of any stock exchange or automated quotation system on which the Common Stock may be listed or quoted, and the Board may otherwise, in its discretion, determine to submit any other amendment to the Plan to stockholders for approval. In addition, no amendment may materially impair the rights of a Participant under any Award previously granted under the Plan without the consent of such Participant, unless such amendment is required by law.

15.2 The Plan may be terminated at any time by the Board. No further Awards may be made under the Plan after termination, but termination shall not affect the rights of any Participant under, or the authority of the Committee with respect to, any grants or awards made prior to termination.

Exhibit 10.3

AMENDED AND RESTATED
INVESTMENT TECHNOLOGY GROUP, INC.
STOCK UNIT AWARD PROGRAM

1. Purpose

This Investment Technology Group, Inc. Stock Unit Award Program, as amended and restated herein (the “Program”) was originally implemented by Investment Technology Group, Inc. (the “Company”) under the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”). The Program was merged as a subplan with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”) effective as of May 8, 2007 (the “Effective Date”). Effective as of the Effective Date, the Program shall continue in effect according to the terms set forth herein as a subplan under the 2007 Plan.

The purpose of the Program is to provide an additional incentive to selected members of senior management and key employees to increase the success of the Company, by substituting stock units for a portion of the cash compensation payable to such persons, which stock units represent an equity interest in the Company to be acquired and held under the Program on a long-term, tax-deferred basis, and otherwise to promote the purposes of the Plan. The Program is amended and restated herein, effective for deferrals made from compensation earned for periods on or after the Effective Date. Deferrals made from compensation earned for periods prior to the Effective Date shall be governed by the Program as in effect prior to the Effective Date. Shares with respect to deferrals prior to May 8, 2007 were issued under the 1994 Plan. Persons selected to be eligible to participate in the Program will participate only if they elect to participate for a calendar year.

2. Definitions

Capitalized terms used in the Program but not defined herein shall have the same meanings as defined in the Plan. In addition to such terms and the terms defined in this Program, the following terms used in the Program shall have the meanings set forth below:

2.1 “Account” means the account established for each Participant pursuant to Section 7(g) hereof.

2.2 “Actual Reduction Amount” means the amount by which a given quarterly or year-end bonus payment to a Participant is in fact reduced under Section 6.

2.3 “Administrator” shall be the person or committee appointed by the Committee to perform ministerial functions under the Program and to exercise other authority delegated by the Committee.

2.4 “Assigned Reduction Amount” means an amount determined by the Administrator in accordance with Section 6(b), in the case of an individual Participant, which

shall be used under Section 7(a) to determine the number of Stock Units to be credited to the Current Participant’s Account in respect of a given calendar quarter. The Assigned Reduction Amount does not accumulate from one quarter to the next.

2.5 “Basic Stock Unit” means a Stock Unit granted pursuant to the first sentence of Section 7(a).

2.6 “Cause” shall be deemed to exist where a Participant: (i) commits any act of fraud, willful misconduct or dishonesty in connection with their employment; (ii) fails, refuses or neglects to timely perform any material duty or job responsibility and such failure, refusal or neglect is not cured after appropriate warning; (iii) commits a material violation of any law, rule, regulation or by-law of any governmental authority (state, federal or foreign), any securities exchange or association or other regulatory or self-regulatory body or agency applicable to Company or any of its subsidiaries or affiliates or any general written policy or directive of Company or any of its subsidiaries or affiliates; (v) commits a crime involving dishonesty, fraud or unethical business conduct, or a felony; or (vii) is expelled or suspended, or is subject to an order temporarily or permanently enjoining Participant from an area of activity which constitutes a significant portion of Participant’s activities by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, any national securities exchange or any self-regulatory agency or governmental authority, state, foreign or federal.

2.7 “Current Participant” means a Participant who, for the calendar year, has elected, in accordance with Section 5 below, to participate in the Program and is, therefore, subject to mandatory payment of a portion of his or her compensation for the calendar year by grant of Stock Units under the Program.

2.8 “Disability” means (a) the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than twelve (12) months; or (b) any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than twelve (12) months, by reason of which a Participant receives income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Participant’s employer.

2.9 “Matching Stock Unit” means a Stock Unit granted pursuant to Section 7(a).

2.10 “Participant” means an eligible person who is granted Stock Units under the Program, which Stock Units have not yet been settled.

2.11 “Related Party” means (a) a majority-owned subsidiary of the Company; (b) an employee or group of employees of the Company or any majority-owned subsidiary of the Company; (c) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (d) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of Voting Securities.

2.12 “Retirement” means Termination of Employment (other than a termination for Cause) after the Participant has reached age 65 or after the Participant has reached age 55 and has at least 10 years of service with the Company and its subsidiaries.

2.13 “Stock Unit” means an award, granted pursuant to Section 8 of the Plan, representing a generally nontransferable right to receive one share of Company Stock at a specified future date together with a right to Dividend Equivalents as specified in Section 7(d) hereof and subject to the terms and conditions of the Plan and the Program. Notwithstanding anything to the contrary, in the case of Stock Units granted to employees of ITG Canada Corp., the Committee may, in its discretion, settle such Stock Units by delivery of cash equal to the Fair Market Value on the settlement date of the number of shares of Company Stock equal to the number of such Stock Units. Stock Units are bookkeeping units, and do not represent ownership of Company Stock or any other equity security.

2.14 “Termination of Employment” means termination of a Participant’s employment by the Company or a subsidiary for any reason, including due to death or Disability, immediately after which event the Participant is not employed by the Company or any subsidiary.

2.15 “Voting Securities or Security” means any securities of the Company which carry the right to vote generally in the election of directors.

3. Administration

(a) Authority . The Program shall be established and administered by the Committee, which shall have all authority under the Program as it has under the Plan; provided, however, that terms of the grant of Stock Units hereunder may not be inconsistent with the express terms set forth in the Program. Ministerial functions under the Program and other authority specifically delegated by the Committee shall be performed or exercised by and at the direction of the Administrator.

(b) Manner of Exercise of Authority . Any action of the Committee or its delegatee with respect to the Program shall be final, conclusive, and binding on all persons, including the Company, subsidiaries, participants granted Stock Units which have not yet been settled, and any person claiming any rights under the Program from or through any Participant, except that the Committee may take action within a reasonable time after any such action superseding or overruling a prior action.

(c) Limitation of Liability . Each member of the Committee or delegatee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or other employee of the Company or any subsidiary or any agent or professional assisting in the administration of the Program, such member or person shall not be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Program, and such member or person shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination, or interpretation.

(d) Status as Subplan Under the Plan . The Program constitutes a subplan implemented under the Plan, to be administered in accordance with the terms of the Plan. Accordingly, all of the terms and conditions of the Plan are hereby incorporated by reference, and, if any provision of the Program or a statement or document relating to Stock Units granted hereunder conflicts with a provision of the Plan, the provision of the Plan shall govern.

4. Stock Subject to the Program

Shares of Company Stock delivered upon settlement of Stock Units under the Program shall be shares reserved and available under the Plan. Accordingly, Stock Units may be granted under the Program if sufficient shares are then reserved and available under the Plan, and the number of shares delivered in settlement of Stock Units hereunder shall be counted against the shares reserved and available under the Plan. Awards may be granted under the Plan even though the effect of such grants will be to reduce the number of shares remaining available for grants hereunder. Stock Units granted under the Program in place of compensation under the Plan resulting from an award intended to comply with the applicable requirements of section 162(m) of the Code shall be subject to the annual per-person limitations under the Plan. Stock Units granted under the Program in place of compensation under the Company’s Pay-for-Performance Incentive Plan shall be subject to annual per-person limitations under the Pay-for-Performance Plan.

5. Eligibility and Election

The Committee may select any person who is eligible to be granted an Award under the Plan to be eligible to be granted Stock Units under the Program in lieu of compensation otherwise payable to the person (such persons are referred to herein as “Eligible SUA Participants”). A Participant who is selected to be an Eligible SUA Participant in one year will not necessarily be selected to be an Eligible SUA Participant in a subsequent year. An Eligible SUA Participant may elect to participate in the Program and, therefore, be a Current Participant for a calendar year by filing a written irrevocable election with the Company prior to the beginning of that calendar year. Participation elections (for persons who continue to be Eligible SUA Participants) will automatically carry forward for subsequent calendar years unless the Participant irrevocably elects in writing, by no later than the last day of the immediately preceding calendar year, not to participate in the Program for a calendar year. Notwithstanding the foregoing, an Eligible SUA Participant may make an election to participate in the Program within 30 days after first becoming an Eligible SUA Participant, but, notwithstanding any provision of this Program to the contrary, only with respect to compensation earned for services provided after the effective date of the election, which, in the case of bonus payable for a period beginning prior to and ending after the effective date of the election, shall be prorated for the portion of the period beginning after the effective date of the election.

6. Mandatory Reduction of Bonus Compensation

(a) (i) Amount of Mandatory Reduction . A Current Participant’s cash compensation earned for the calendar year of participation shall be automatically reduced by an amount determined in accordance with the following schedule:

0% of the first $200,000 of annual compensation;
15% of the next $100,000 of annual compensation; and
20% of annual compensation in excess of $300,000.

The foregoing notwithstanding, the Committee may adjust the schedule applicable to an individual Current Participant and in no event will the amount by which cash compensation is reduced exceed the amount of bonus payable to the Participant for the calendar year. For purposes of the Program, the amount by which cash compensation is reduced hereunder shall be calculated without regard to any reductions in compensation resulting from Participant’s contributions under any section 401(k), section 125, pension plan, or other plan of the Company or a subsidiary, and such amount shall not be deemed a reduction in the Participant’s compensation for purposes of any such section 401(k), section 125, pension plan, or other plan of the Company or a subsidiary.

(ii) In lieu of the schedule set forth in Section 6(a)(i) above, each Current Participant who participated in the Program for the portion of calendar year 2003 prior to June 30 and who made a one-time written election (in the form specified by the Committee) on or prior to June 30, 2003 to have any and all mandatory reductions under the Program based on the following schedule shall have all reductions hereunder based on such following schedule:

5% of the first $100,000 of annual compensation;
10% of the next $100,000 of annual compensation;
15% of the next $100,000 of annual compensation; and
20% of annual compensation in excess of $300,000.

(b) Manner of Reduction of Compensation . Amounts by which compensation is reduced under Section 6(a)(i) or (ii) will be subtracted from bonus amounts in respect of services during the year otherwise payable to the Current Participant at or following the end of the first three calendar quarters of such year and at or following the end of the year. The amount by which the bonus amount payable will be reduced following the end of the first three calendar quarters will be reduced will be calculated based on a reasonable estimate of total compensation for the year, taking into account the amount by which compensation previously has been reduced for the year (i.e., in the case of a Current Participant employed since the beginning of the year and for whom estimated annual compensation has not varied during the year, by calculating an estimated aggregate amount by which compensation will be reduced for the year and reducing the quarterly bonus payment by one-fourth of such amount), and will be calculated at the time the year-end bonus amount otherwise becomes payable based on actual compensation for the year, taking into account the amount by which compensation previously has been reduced for the year (i.e., by calculating the actual amount by which compensation will be reduced for the year and reducing the year-end bonus payment by that amount less the amount by which compensation was reduced in previous quarters). The foregoing notwithstanding, the Administrator may determine in the case of any individual Participant, including a Participant who is not paid a bonus on a quarterly basis, the extent (if any) to which any bonus amounts other than the Participant’s year-end bonus amount shall be reduced taking into account the terms of the Participant’s compensation arrangement and the Participant’s individual circumstances. In such cases, the Administrator may assign to the Participant an Assigned Reduction Amount for each calendar quarter, so that Stock Units will be automatically granted to such Participant under Section 7(a)

at times and in amounts comparable to grants to other Participants, such that, on a full-year basis, the aggregate of the Participant’s Assigned Reduction Amounts and any Actual Reduction Amounts used to determine the number of Stock Units credited to the Participant’s Account under Section 7(a) for such year will equal the aggregate amount by which the Participant’s full-year’s compensation is to be reduced (after giving effect to adjustments under Section 7(b)).

7. Grant of Stock Units

(a) Automatic Grant of Stock Units . Except as set forth below, each Participant shall be automatically granted Basic Stock Units as of the date the Participant’s bonus would have otherwise been paid, in a number equal to the Participant’s Actual Reduction Amount or Assigned Reduction Amount (as applicable) divided by the Fair Market Value of a share of Company Stock on such date. In addition, each Participant shall be automatically granted Matching Stock Units as of the date the Participant’s bonus would have otherwise been paid, in a number equal to 20% of the number of Basic Stock Units granted under this Section 7(a) at that date. Stock Units shall be credited to the Participant’s Account as of the date of grant. Other provisions of the Program notwithstanding, no grant of Stock Units shall be effective until the date of grant specified in this Section 7(a).

(b) Risk of Forfeiture; Cancellation of Certain Stock Units . The Basic Stock Units, together with any Dividend Equivalents credited thereon, shall at all times be fully vested and non-forfeitable. Matching Stock Units (together with any Dividend Equivalents credited thereon) will vest 100% on the third anniversary of the date of grant, if the Participant remains continuously employed by the Company through such vesting date; provided that (i) all Matching Stock Units (together with Dividend Equivalents credited thereon) will vest in full at the time of Retirement of the Participant or upon the occurrence of a Change in Control, but in either such event the Matching Stock Units shall continue to be settled on the schedule set forth in Section 8(a) below; and (ii) all Matching Stock Units (together with Dividend Equivalents credited thereon) will vest in full at the time a Participant’s employment terminates due to his or her death or Disability, and all Stock Units held by such Participant shall be settled as soon as practicable thereafter.

If the Participant’s employment by the Company terminates for any reason other than Retirement, death or Disability prior to a vesting date, unless the Committee provides otherwise, all unvested Matching Stock Units, together with any Dividend Equivalents credited thereon, shall be forfeited to the Company. The foregoing notwithstanding, if, at the end of a given year (upon calculation of year-end bonuses), the aggregate of the Participant’s Actual Reduction Amounts and any Assigned Reduction Amounts used to determine the number of Stock Units credited under Section 7(a) for such year exceeds the amount by which the full-year’s compensation should have been reduced under Section 6(a) (the “corrected full-year amount”), the Participant shall be paid, prior to March 15 of the following year, in cash, without interest, the amount (if any) by which such Actual Reduction Amounts and Assigned Reduction Amounts exceeded such corrected full-year amount, and any Stock Units (including Basic Stock Units and Matching Stock Units relating thereto) credited to the Participant under Section 7 as a result of such excess Actual Reduction Amounts and Assigned Reduction Amounts shall be cancelled. Unless otherwise determined by the Administrator, the Stock Units to be cancelled shall be cancelled from each of the four quarterly grants in the proportion the Actual Reduction Amounts

and Assigned Reduction Amounts used in determining such quarterly grant bore to the aggregate of the Actual Reduction Amounts and Assigned Reduction Amounts used in determining all grants of Stock Units over the full year.

(c) Nontransferability . Stock Units and all rights relating thereto shall not be transferable or assignable by a Participant, other than by will or the laws of descent and distribution, and shall not be pledged, hypothecated, or otherwise encumbered in any way or subject to execution, attachment, or similar process.

(d) Dividend Equivalents on Stock Units . Dividend Equivalents shall be credited on Stock Units as follows:

(i) Cash and Non-Company Stock Dividends . If the Company declares and pays a dividend or distribution on Company Stock in the form of cash or property other than shares of Company Stock, then a number of additional Stock Units shall be credited to a Participant’s Account as of the payment date for such dividend or distribution equal to (i) the number of Stock Units credited to the Account as of the record date for such dividend or distribution multiplied by (ii) the amount of cash plus the fair market value of any property other than shares actually paid as a dividend or distribution on each outstanding share of Company Stock at such payment date, divided by (iii) the Fair Market Value of a share of Company Stock at such payment date.

(ii) Company Stock Dividends and Splits. If the Company declares and pays a dividend or distribution on Company Stock in the form of additional shares of Company Stock, or there occurs a forward split of Company Stock, then a number of additional Stock Units shall be credited to the Participant’s Account as of the payment date for such dividend or distribution or forward split equal to (i) the number of Stock Units credited to the Account as of the record date for such dividend or distribution or split multiplied by (ii) the number of additional shares of Company Stock actually paid as a dividend or distribution or issued in such split in respect of each outstanding share of Company Stock.

(e) Adjustments to Stock Units . The number of Stock Units credited to each Participant’s Account shall be appropriately adjusted, in order to prevent dilution or enlargement of Participants’ rights with respect to such Stock Units, to reflect any changes in the number of outstanding shares of Company Stock resulting from any event referred to in Section 5.5 of the Plan, taking into account any Stock Units credited to the Participant in connection with such event under Section 7(d).

(f) Fractional Shares . The number of Stock Units credited to a Participant’s Account shall include fractional shares calculated to at least three decimal places, unless otherwise determined by the Committee.

(g) Accounts and Statements . The Administrator shall establish, or cause to be established, an Account for each Participant. An individual statement of each Participant’s Account will be issued to each Participant not less frequently than annually. Such statements shall

reflect the Stock Units credited to the Participant’s Account, transactions therein during the period covered by the statement, and other information deemed relevant by the Administrator. Such statement may include information regarding other plans and compensatory arrangements for Directors.

(h) Consideration for Stock Units . Stock Units shall be granted for the general purposes set forth in Section 1 of the Program. Except as specified in Section 6 and 7 of the Program, a Participant shall not be required to pay any cash consideration or other tangible or definable consideration for Stock Units. No negotiation shall take place between the Company and any Participant as to the amount, timing, or other terms of an award of Stock Units.

8. Settlement

(a) Issuance and Delivery of Shares in Settlement . Except as otherwise provided in Section 7(b) above in the case of a Participant’s death or Disability, Stock Units (together with any Dividend Equivalents credited thereon) shall be settled by issuance and delivery to the Participant (or following his or her death, to the Participant’s designated beneficiary) of a number of shares of Company Stock equal to the number of such Stock Units promptly following the third anniversary of the date of grant of the Stock Units; provided, however, that the Committee may, in its discretion, accelerate the settlement date of any or all Stock Units.

The Committee may, in its discretion, make delivery of shares hereunder by depositing such shares into an account maintained for the Participant (or of which the Participant is a joint owner, with the consent of the Participant) established in connection with the Company’s Employee Stock Purchase Plan or another plan or arrangement providing for investment in Company Stock and under which the Participant’s rights are similar in nature to those under a stock brokerage account. If the Committee determines to settle Stock Units by making a deposit of shares into such an account, the Company may settle any fractional share by means of such deposit. In other circumstances or if so determined by the Committee, the Company shall instead pay cash in lieu of fractional shares, on such basis as the Committee may determine. In no event will the Company in fact issue fractional shares. Notwithstanding any provision of the Program to the contrary, in the case of Stock Units granted to employees of ITG Canada Corp., the Committee may, in its discretion, settle such Stock Units by delivery of cash equal to the Fair Market Value on the settlement date of the number of shares of Company Stock equal to the number of such Stock Units. Upon settlement of Stock Units, all obligations of the Company in respect of such Stock Units shall be terminated, and the shares so distributed shall no longer be subject to any restriction or other provision of the Program.

(b) Tax Withholding . The Company and any subsidiary may deduct from any payment to be made to a Participant any amount that federal, state, local, or foreign tax law requires to be withheld with respect to the settlement of Stock Units. At the election of the Committee, the Company may withhold from the shares of Company Stock to be distributed in settlement of Stock Units that number of shares having a Fair Market Value, at the settlement date, equal to the amount of such withholding taxes.

(c) No Elective Deferral . Participants may not elect to further defer settlement of Stock Units or otherwise to change the applicable settlement date under the Program.

9. General Provisions

(a) No Right to Continued Employment . Neither the Program nor any action taken hereunder, including the grant of Stock Units, will be construed as giving any employee the right to be retained in the employ of the Company or any of its subsidiaries, nor will it interfere in any way with the right of the Company or any of its subsidiaries to terminate such employee’s employment at any time.

(b) No Rights to Participate; No Stockholder Rights . No Participant or employee will have any claim to participate in the Program, and the Company will have no obligation to continue the Program. A grant of Stock Units will confer on the Participant none of the rights of a stockholder of the Company (including no rights to vote or receive dividends or distributions) until settlement by delivery of Company Stock, and then only to the extent that such Stock Unit has not otherwise been forfeited by the Participant.

(c) Changes to the Program . The Committee may amend, alter, suspend, discontinue, or terminate the Program without the consent of Participants; provided, however, that, without the consent of an affected Participant, no such action shall materially and adversely affect the rights of such Participant with respect to outstanding Stock Units, except insofar as the Committee’s action results in accelerated settlement of the Stock Units.

(d) Section 409A . It is intended that the Program and Stock Units issued hereunder will comply with section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Program and Stock Units are subject thereto, and the Program and such Stock Units shall be interpreted on a basis consistent with such intent. The Program and any Stock Unit Agreement issued hereunder may be amended in any respect deemed by the Board or the Committee to be necessary in order to preserve compliance with section 409A of the Code.

10. Effective Date and Termination of Program

The Program as set forth herein shall become effective as of the Effective Date, and shall apply to deferrals from compensation earned for periods on or after the Effective Date. Unless earlier terminated under Section 9(c), the Program shall terminate at such time after 2007 as no Stock Units previously granted under the Program remain outstanding.

Adopted by the Committee:		June 4, 1998
Amended and restated by the Committee:		February 25, 1999
Amended and restated by the Committee:		March 20, 2002
Amended and restated by the Committee:		September 3, 2002
Amended and restated by the Committee:		June 30, 2003
Amended and restated by the Board:		November 17, 2005
Amended and restated by the Committee:		March 20, 2006
Amended and restated by the Committee:		March 15, 2007 (effective May 8, 2007)

Exhibit 10.4

INVESTMENT TECHNOLOGY GROUP, INC.
STOCK UNIT GRANT AGREEMENT
FOR NON-EMPLOYEE DIRECTORS

THIS GRANT AGREEMENT, dated as of (the “ Date of Grant ”), is entered into by and between Investment Technology Group, Inc. (the “ Company ”), a Delaware corporation, and , a member of the Board of Directors of the Company (the “ Director ”).

WHEREAS, the Director has been awarded the following Grant under the Amended and Restated Investment Technology Group, Inc. Directors’ Equity Subplan (the “ Subplan ”), a subplan of the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “ 2007 Plan ”);

WHEREAS, capitalized terms used herein and not defined herein shall have the meanings set forth in the Subplan and in the 2007 Plan. In the event of any conflict between this Grant Agreement, the Subplan and the 2007 Plan, the Subplan and the 2007 Plan shall control; and

WHEREAS, the Director is not employed by the Company, a Subsidiary of the Company or a parent of the Company and is not otherwise ineligible to participate in the Subplan.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of Stock Units . Subject to the terms and conditions set forth in this Grant Agreement, the Subplan and the 2007 Plan, the Director is hereby awarded Stock Units that represent hypothetical shares of Company Stock on a one-for-one basis (the “ Stock Unit Grant ”).

2. Grant Subject to Plan Provisions . This Stock Unit Grant is granted pursuant to the Subplan and the 2007 Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Subplan and the 2007 Plan. This Stock Unit Grant is subject to interpretations, regulations and determinations concerning the Subplan and the 2007 Plan established from time to time by the Committee in accordance with the provisions of the Subplan and the 2007 Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the 2007 Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other provisions of the Subplan and the 2007 Plan. The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Subplan and the 2007 Plan, and its decisions are conclusive as to any questions arising hereunder.

3. Stock Unit Account . The Company shall establish and maintain a Stock Unit bookkeeping account (the “ Account ”) on its records for the Director and shall record in the Account the number of Stock Units awarded to the Director. No shares of stock shall be issued to the Director at the time the Stock Unit Grant is made.

4. Vesting of the Stock Unit Grant .

(a) Subject to the terms and conditions of this Grant Agreement, the Subplan and the 2007 Plan , this Stock Unit Grant shall become vested and the restrictions on the Stock Unit Grant shall lapse in three approximately equal annual installments, beginning on the first anniversary of the Date of Grant if the Director is serving as a Non-Employee Director, or is deemed to be serving as a Non-Employee Director in accordance with Section 5 below, as of each applicable vesting date; provided , however , that the Stock Unit Grant shall become immediately vested in full (i) immediately prior to the effectiveness of a Change in Control if the Director is serving as a Non-Employee Director, or is deemed to be serving as a Non-Employee Director in accordance with Section 5 below, as of such date or (ii) in the event that the Director ceases to serve as a Non-Employee Director due to the Director’s death or Disability (as defined below). In the event the Director ceases to serve as a Non-Employee Director for any other reason not described or provided for herein, any portion of the Stock Unit Grant that has not yet vested shall be forfeited.

“ Disability ” shall have the meaning ascribed to such term in Section 22(e)(3) of the Code.

(b) The lapse of restrictions on the Stock Unit Grant shall be cumulative, but shall not exceed 100% of the Stock Unit Grant. If the foregoing vesting schedule would produce fractional Stock Units, the number of Stock Units on which the restrictions lapse shall be rounded down to the nearest whole Stock Unit.

(c) Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the 2007 Plan, as incorporated within the Subplan, shall be subject to the vesting schedule in this Section 4.

5. Continued Service as an Employee . If the Director ceases to serve as a Non-Employee Director and, immediately thereafter, the Director is employed by the Employer, then, solely for the purposes of Sections 4 and 6 herein, the Director shall not be deemed to have ceased to serve as a Non-Employee Director at that time, and his or her continued employment by the Employer shall be deemed to be continued service as a Non-Employee Director. If the Director becomes employed by the Employer, the distribution of shares as described in Section 6 below shall be subject to applicable federal (including FICA), state and local tax withholding requirements pursuant to Section 14 of the 2007 Plan.

6. Distribution of Shares . The Company shall distribute to the Director (or the Director’s heirs in the event of the Director’s death) at the time of vesting of the Stock Unit Grant in accordance with Section 4 above (but not later than March 15 of the calendar year following the calendar year in which the Stock Units vest), a number of shares of Company Stock equal to the number of Stock Units then held by the Director that became vested at such time (subject to any applicable tax withholding under Section 5 above); provided , however , that,

if the Director so elected in accordance with the terms of the Subplan and the 2007 Plan, distribution of the shares of Company Stock subject to the Stock Unit Grant shall be deferred until the time the Director ceases to be a Non-Employee Director for any reason (except as otherwise provided in Section 5 above), in accordance with the terms of the Subplan and the 2007 Plan.

7. Rights and Restrictions . The Stock Unit Grant shall not be transferable, other than by will or under the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee). Prior to vesting of the Stock Unit Grant and delivery of the shares of Company Stock to the Director, the Director shall not have any rights or privileges of a stockholder as to the shares of Company Stock subject to the Stock Unit Grant. Specifically, the Director shall not have the right to receive dividends or the right to vote such shares of Company Stock, nor shall the Director have the right to sell, assign, pledge, hypothecate, encumber, transfer or otherwise dispose of, in whole or in part, the Stock Unit Grant, prior to vesting of the Stock Unit Grant and delivery of the shares of Company Stock. The Director shall not have any interest in any fund or specific assets of the Company by reason of this Stock Unit Grant or the Account established for the Director.

8. Limitations . Nothing herein shall limit the Company's right to issue Company Stock, or Stock Units or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates. Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.

9. Expenses of Issuance of Company Stock . The issuance of stock certificates hereunder shall be without charge to the Director. The Company shall pay, and indemnify the Director from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of Company Stock.

10. Terms are Binding . The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Director and the Company.

11. Compliance with Law . The transfer of Company Stock hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and approvals by any governmental or regulatory agency as may be required. By signing this Grant Agreement, the Director agrees not to sell any Company Stock at a time when applicable laws or the Company policies prohibit a sale.

12. References . References herein to rights and obligations of the Director shall apply, where appropriate, to the Director’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.

13. Notices . Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:

If to the Company:

Investment Technology Group, Inc.
380 Madison Avenue
New York, NY 10017
Attention: General Counsel

If to the Director:

At the Director’s most recent address shown on the Company’s corporate records, or at any other address at which the Director may specify in a notice delivered to the Company in the manner set forth herein.

14. Section 409A . It is intended that the Stock Unit Grant issued hereunder shall comply with Section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Stock Unit Grant is subject thereto, and the Stock Unit Grant shall be interpreted on a basis consistent with such intent. This Grant Agreement may be amended without the consent of the Director in any respect deemed by the Committee to be necessary in order to preserve compliance with Section 409A of the Code.

15. Costs . In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys' fees shall be included as part of the judgment.

16. Further Assurances . The Director agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Grant Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities laws.

17. Counterparts . For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

18. Governing Law . This Grant Agreement shall be construed and enforced in accordance with Section 6(h) of the Subplan.

19. Entire Agreement . This Grant Agreement, together with the Subplan and the 2007 Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or implied, between them with respect to the Stock Unit Grant other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.

20. Amendment; Waiver . This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance. Any such written instrument must be approved by the Committee to be effective as against the Company. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.

21. Severability . Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.

	INVESTMENT TECHNOLOGY GROUP, INC.


	By:
	Name: Robert C. Gasser
	Title: CEO and President

I hereby accept the Stock Unit Grant described in this Grant Agreement, and I agree to be bound by the terms of the Subplan, the 2007 Plan and this Grant Agreement. I hereby acknowledge that a copy of the Plan and the Plan prospectus have been delivered to me. I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.


	*[Insert Name of the Director]*

Exhibit 10.5

AMENDED AND RESTATED
INVESTMENT TECHNOLOGY GROUP, INC.
DIRECTORS’ RETAINER FEE SUBPLAN

SECTION 1. Introduction .

This Amended and Restated Investment Technology Group, Inc. Directors’ Retainer Fee Subplan (the “Subplan”) was originally implemented by Investment Technology Group, Inc. (the “Company”) under the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan and was merged with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “2007 Plan”) effective as of May 8, 2007 (the “Effective Date”). Effective as of the Effective Date, the Subplan shall continue in effect according to the terms set forth herein as a subplan under the 2007 Plan. The purpose of the Subplan is to provide non-employee directors with an election to receive payment of their annual retainer fees in the form of shares of Company Stock or cash or to defer payment of their annual retainer fees in the form of Deferred Share Units. The Subplan is intended to encourage qualified individuals to accept nominations as directors of the Company and to strengthen the mutuality of interest between the nonemployee directors and the Company’s other stockholders. The Subplan is amended and restated herein, effective for deferrals made from annual retainer fees earned for periods on or after the Effective Date. Deferrals made from annual retainer fees earned prior to the Effective Date shall be governed by the Subplan as in effect prior to this amendment and restatement.

SECTION 2. Definitions .

Capitalized terms used in the Subplan but not defined herein shall have the same meanings as defined in the 2007 Plan. In addition to such terms and the terms defined in Section 1 hereof, the following terms used in the Subplan shall have the meaning set forth below.

(a) “Deferred Share Unit” means a fully vested Stock Unit entitling the holder to receive one share of Company Stock per Stock Unit in accordance with the terms of the Subplan.

(b) “Director” means a member of the Board who is not, and has not been during the preceding three months, (i) an employee of the Company or any parent or subsidiary of the Company or (ii) a consultant who has received, during the preceding 12-month period, payments in excess of $150,000 from the Company and its subsidiaries for consulting services.

(c) “Subplan Benefits” means the benefits described in Sections 5 and 6 hereof.

SECTION 3. Administration .

The Subplan shall be administered by the Committee. The Committee shall have full authority to construe and interpret the Subplan, and any action of the Committee with respect to the Subplan shall be final, conclusive, and binding on all persons.

SECTION 4. Cash or Stock Election .

Each Director may elect to receive his or her annual retainer fee in the form of cash or fully vested shares of Company Stock. In addition, each Director may elect to defer receipt of his or her annual retainer fee in the form of Deferred Share Units as provided in Section 5 below. If a Director elects to receive his or her annual retainer fee in the form of vested shares of Company Stock, the shares will be distributed on the date the annual retainer fee is otherwise payable in accordance with the Company’s regular retainer fee payment practices, and the amount of Company Stock distributed shall be the number of shares of Company Stock having an aggregate Fair Market Value on the payment date equal to the amount of the Director’s annual retainer fee that is otherwise payable on that date. Fractional shares will be rounded up to the nearest whole share. A Director’s election to receive his or her annual retainer fee in the form of cash or vested shares of Company Stock shall continue in effect until the Director notifies the Company in writing, in a manner consistent with Section 5 below, that the Director wishes to prospectively change his or her election. If a Director fails to make any election under the Subplan, the Director’s annual retainer fee shall be paid in cash.

SECTION 5. Deferred Share Unit Accounts .

The Company shall maintain a Deferred Share Unit account (an “Account”) for each Director who has elected to defer his or her annual retainer. Deferred Share Units will be credited to each such Account as follows:

(a) Each Director may make an irrevocable election on or before December 31 by written notice to the Company, to defer payment of all of the compensation otherwise payable as his or her annual retainer fee for service as a Director for the following calendar year. Notwithstanding the foregoing, a Director may make such an election within 30 days after first becoming eligible to participate in the Subplan, with respect to compensation payable after the effective date of the election. All compensation which a Director elects to defer pursuant to this Section 5(a) shall be credited in the form of Deferred Share Units to the Director’s Account. The number of Deferred Share Units so credited will be equal to the number of shares of Company Stock having an aggregate Fair Market Value (on the date the compensation would otherwise have been paid) equal to the amount by which the Director’s compensation was reduced pursuant to the deferral election. Deferrals of compensation hereunder shall continue until the Director notifies the Company in writing that the Director wishes his or her compensation for the following calendar year, and succeeding periods to be paid on a current basis either in the form of cash or Company Stock.

(b) As of each date on which a cash dividend is paid on Company Stock, there shall be credited to each Account that number of Deferred Share Units (including fractional

units) determined by (i) multiplying the amount of such dividend (per share) by the number of Deferred Share Units in such Account; and (ii) dividing the total so determined by the Fair Market Value of a share of Company Stock on the date of payment of such cash dividend. The additions to a Director’s Account pursuant to this Section 5(b) shall continue until the Director’s Subplan Benefit is fully paid in accordance with Section 6 below.

SECTION 6. Subplan Benefits .

(a) Form . The Subplan Benefit of a Director shall consist of shares of Company Stock equal in number to the Deferred Share Units in the Director’s Account. Any fractional Deferred Share Units shall be rounded up to the nearest whole Deferred Share Unit.

(b) Distribution .

(i) The Subplan Benefit of a Director shall be distributed at the time of termination of the Director’s service on the Board.

(ii) In the case of the death of a Director, the Director’s Subplan Benefit shall be distributed, within a reasonable time as determined by the Company, after the Director’s death to the Director’s estate as beneficiary, unless the Director has requested a different distribution by written notice to the Committee.

SECTION 7. General .

(a) Nontransferabilily . Except as provided in Section 6(b)(ii), no payment of any Subplan Benefit of a Director shall be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law. Any act in violation of this subsection shall be void.

(b) Compliance with Legal and Trading Requirements . The Subplan shall be subject to all applicable laws, rules and regulations, including, but not limited to, federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required.

(c) Amendment . The Committee may amend, alter, suspend, discontinue, or terminate the Subplan without the consent of stockholders of the Company or individual Directors, except that any such action will be subject to the approval of the Company’s stockholders at the next annual meeting of the stockholders having a record date after the date such action was taken if such stockholder approval is required by any federal or state law or regulation or the rules of any automated quotation system or securities exchange on which the Company Stock may be quoted or listed, or if the Committee determines in its discretion to seek such stockholder approval; provided , however , that, without the consent of an affected Director, no amendment, alteration, suspension, discontinuation, or termination

of the Subplan may impair or, in any other manner, adversely affect the rights of such Director to accrued Subplan Benefits hereunder.

(d) Unfunded Status of Awards . The Subplan (other than Section 4 hereof) is intended to constitute an “unfunded” plan of deferred compensation. With respect to any payments not yet made to a Director, nothing contained in the Subplan shall give any such Director any rights that are greater than those of a general creditor of the Company; provided , however , that the Company may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Subplan to deliver cash, or other property pursuant to any award, which trusts or other arrangements shall be consistent with the “unfunded” status of the Subplan unless the Company otherwise determines with the consent of each affected Director.

(e) Nonexclusivity of the Subplan . The adoption of the Subplan shall not be construed as creating any limitations on the power of the Board or the Committee to adopt such other compensation arrangements as it may deem desirable, including, without limitation, the granting of Options and other awards otherwise than under the Subplan, and such arrangements may be either applicable generally or only in specific cases.

(f) Adjustments . The adjustment provisions in Section 5(d) of the 2007 Plan are incorporated herein by reference and shall apply in the case of Company Stock and Deferred Share Units granted hereunder.

(g) No Right to Remain on the Board . Neither the Subplan nor the crediting of Deferred Share Units under the Subplan shall be deemed to give any individual a right to remain a director of the Company or create any obligation on the part of the Board to nominate any Director for reelection by the stockholders of the Company.

(h) Section 409A . It is intended that this Subplan and awards issued hereunder will comply with section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the awards are subject thereto, and this Subplan and such awards shall be interpreted on a basis consistent with such intent. This Subplan and any award agreements issued thereunder may be amended in any respect deemed by the Board or the Committee to be necessary in order to preserve compliance with section 409A of the Code.

(i) Governing Law . The validity, construction, and effect of the Subplan shall be determined in accordance with the laws of the State of Delaware without giving effect to principles of conflict of laws.

(j) Effective Date . This Subplan, as amended and restated herein shall become effective as of the Effective Date.

(k) Titles and Headings . The titles and headings of the Sections in the Subplan are for convenience of reference only. In the event of any conflict, the text of the Subplan, rather than such titles or headings, shall control.

Amended and Restated by the Committee effective: May 8, 2007.

Exhibit 10.6

AMENDED AND RESTATED
INVESTMENT TECHNOLOGY GROUP, INC.
DIRECTORS’ EQUITY SUBPLAN

1. Introduction.

The Investment Technology Group, Inc. Directors’ Equity Subplan (the “Subplan”) was originally implemented by Investment Technology Group, Inc. (the “Company”) under the Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”) and was merged with and into the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “2007 Plan”) effective as of May 8, 2007 (the “Effective Date”), the terms of which are incorporated herein by reference. Effective as of the Effective Date, the Subplan shall continue in effect according to the terms set forth herein as a subplan under the 2007 Plan. The purpose of the Subplan is to promote ownership by non-employee directors of a greater proprietary interest in the Company, thereby aligning such non-employee directors’ interests more closely with the interests of stockholders of the Company, and to assist the Company in attracting and retaining highly qualified persons to serve as non-employee directors. The Subplan is amended and restated herein, effective for Options or Stock Units granted on or after the Effective Date. Options or Stock Units granted prior to the Effective Date shall be governed by the Subplan as in effect prior to this amendment and restatement.

2. Definitions.

(a) “Director” means a member of the Board who is not employed by the Company or any of its subsidiaries.

(b) “Disability” has the meaning ascribed to such term in section 22(e)(3) of the Code.

3. Administration.

4. Options.

(a) Initial Options . An Option to purchase a number of shares of Company Stock having a Fair Market Value on the date of grant, based on the Black-Scholes option pricing model (or such other model utilized by the Company in valuing Company equity awards in accordance with U.S. Generally Accepted Accounting Principles), equal to $100,000 will be granted under the Subplan to each person who is first elected or appointed to serve as a Director

of the Company after the Effective Date, such grants to be effective on the date of such first election or appointment. For purposes of this Subplan, all determinations of Fair Market Value of Options using the Black-Scholes option pricing model will be based on the full five year Option term, the volatility assumption for the Company Stock used in the Company’s annual report on Form 10-K for the prior year, and the grant date risk-free interest rate.

(b) Annual Options . An Option to purchase a number of shares of Company Stock having a Fair Market Value on the date of grant, based on the Black-Scholes option pricing model (or such other model utilized by the Company in valuing Company equity awards in accordance with U.S. Generally Accepted Accounting Principles), equal to $36,000 will be granted, on the forty fifth (45th) day following each of the Company’s annual meetings of stockholders at which Directors (or a class of Directors if the Company then has a classified Board of Directors) are elected or reelected by the Company’s stockholders, to each Director in office on the date of grant; provided , however , that no such grant will be made to a person first elected or appointed to serve as a Director of the Company at such annual meeting of stockholders.

(c) Exercise Price . The exercise price per share of Company Stock purchasable under an Option will be equal to 100% of the Fair Market Value of a share of Company Stock on the date of grant of the Option.

(d) Option Term . Each Option will expire five years after the date of grant; provided , however , that if the Participant ceases to serve as a Director of the Company prior to five years after the date of grant, the Option will expire as follows (except as otherwise provided in Section 4(f)): (i) if the Participant ceases to serve as a Director of the Company due to the Participant’s death, Disability, or retirement at or after age 65, twelve months after such cessation of service, but in no event later than five years after the date of grant; and (ii) if the Participant ceases to serve as a Director of the Company for any reason other than due to the Participant’s death, Disability, or retirement at or after age 65, at the date sixty (60) days after such cessation of service, but in no event later than five years after the date of grant.

(e) Exercisability . Each Option will vest and become exercisable in three equal annual installments, beginning on the first anniversary of the date of grant and continuing on the following two anniversaries and will thereafter remain exercisable until the Option expires; provided , however , that each Option will vest and become immediately exercisable in full upon a Change in Control. In the event the Participant ceases to serve as a Director of the Company by reason of the Participant’s death or Disability, the Option shall become vested and exercisable in full at the time of such termination. In the event the Participant ceases to serve as a Director of the Company for any other reason (except as otherwise provided in Section 4(f) below) any portion of the Option that has not yet vested shall be forfeited.

(f) Continued Service as an Employee . If a Participant ceases serving as a Director and, immediately thereafter, he or she is employed by the Company or any subsidiary, then, solely for purposes of Sections 4(d) and (e) and Sections 5(d) and (e) of the Subplan, such Participant will not be deemed to have ceased service as a Director at that time, and his or her continued employment by the Company or any subsidiary will be deemed to be continued

2 service as a Director; provided, however , that such former Director will not be eligible for additional grants of Options or Stock Units under the Subplan.

(g) Method of Exercise . A Participant (or other person entitled to exercise an Option) may exercise an Option, in whole or in part, at such time as it is exercisable and prior to its expiration by giving written notice of exercise to the Company specifying the Option to be exercised and the number of shares of Company Stock to be purchased, and paying in full the exercise price as provided in the 2007 Plan.

(h) Nontransferability . Options shall not be assignable or transferable by a Participant except by will or the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee, and during the Participant’s lifetime, such Options and rights shall be exercisable only by such the Participant or the Participant’s duly appointed guardian or legal representative. The foregoing notwithstanding, the Committee may provide that Options (or rights or interests therein), may be transferable, including permitting transfers to a Participant’s immediate family members ( i.e. , spouse, children, grandchildren, or siblings as well as the Participant), to trust for the benefits of such immediate family members, and to the partnerships in which such family members are the only parties, or other transfers deemed by the Committee to be not inconsistent with the purposes of the 2007 Plan.

5. Stock Units.

(a) Initial Stock Units . A number of Stock Units having a value, as determined below on the date of grant, equal to $100,000 will be granted under the Subplan to each person who is first elected or appointed to serve as a Director of the Company after the Effective Date, such grants to be effective on the date of such first election or appointment. For purposes of this Subplan, all determinations of value of Stock Units shall be made by treating the value of a Stock Unit as equal to the Fair Market Value of a share of Company Stock on the date of grant.

(b) Annual Stock Units . A number of Stock Units having a value, as determined above on the date of grant, equal to $36,000 will be granted on the forty fifth (45th) day following each of the Company’s annual meetings of stockholders at which Directors (or a class of Directors if the Company then has a classified Board of Directors) are elected or reelected by the Company’s stockholders, to each Director in office on the date of grant; provided , however , that no such grant will be made to a person first elected or appointed to serve as a Director of the Company at such annual meeting of stockholders.

(c) Vesting of Award . The Stock Units will become vested in three equal annual installments, commencing on the first anniversary of the date of grant and continuing thereafter on the second and third anniversaries thereof; provided , however , that the Stock Units will become immediately vested in full upon a Change in Control. Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Stock Units under Section 5(d) of the 2007 Plan shall be subject to the vesting schedule in this Section 5(c).

(d) Termination of Service; Forfeiture of Unvested Stock Units . In the event the Participant ceases to serve as a Director of the Company by reason of the Participant’s death

3 or Disability, the Stock Units shall become vested in full at the time of such termination. In the event the Participant ceases to serve as a Director of the Company for any other reason (except as otherwise provided in Section 4(f) above) any portion of the Stock Units that have not yet vested shall be forfeited.

(e) Distribution of Shares . The Company shall distribute to the Participant (or his or her heirs in the event of the Participant’s death) at the time of vesting of the Stock Units, a number of shares of Company Stock equal to the number of Stock Units then held by the Participant that became vested at such time; provided, however , that the Participant may elect that the distribution of the shares of Company Stock subject to a Stock Unit be deferred until the time the Participant ceases to be a Director of the Company for any reason (except as otherwise provided in Section 4(f)), such election to be made in writing prior to the beginning of the calendar year in which the Stock Unit is granted to the Participant (except that such a deferral election may be made (i) in the case of Stock Units granted under Section 5(a) hereof, at any time on or prior to the date the Director is first elected or appointed to serve as a Director of the Company, and (ii) in the case of Stock Units granted in connection with the first annual meeting of stockholders of the Company that occurs after the Effective Date of this Subplan, at any time on or prior to the date of grant).

(f) Rights and Restrictions . The Stock Units shall not be transferable, other than pursuant to will or the laws of descent and distribution. Prior to vesting of the Stock Units and delivery of the shares of Company Stock to the Participant, the Participant shall not have any rights or privileges of a stockholder as to the shares of Company Stock subject to the Stock Units. Specifically, the Participant shall not have the right to receive dividends or the right to vote such shares of Company Stock prior to vesting of the Stock Units and delivery of the shares of Company Stock.

6. General.

(a) Compliance with Legal and Trading Requirements . The Subplan shall be subject to all applicable laws, rules and regulations, including, but not limited to, federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required.

(b) Amendment . The Board may amend, alter, suspend, discontinue, or terminate the Subplan without the consent of stockholders of the Company or individual Directors; provided , however , that, without the consent of an affected Director, no amendment, alteration, suspension, discontinuation, or termination of the Subplan may impair or, in any other manner, adversely affect the rights of such Director to outstanding Options or Stock Units granted hereunder.

(c) Unfunded Status of Awards . Section 5 of this Subplan is intended to constitute an “unfunded” plan of deferred compensation. With respect to any payments not yet made to a Director, nothing contained in the Subplan shall give any such Director any rights that are greater than those of a general creditor of the Company; provided , however , that the Company may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Subplan to deliver cash, or other property pursuant to any

4 award, which trusts or other arrangements shall be consistent with the “unfunded” status of the Subplan unless the Company otherwise determines with the consent of each affected Director.

(d) Nonexclusivity of the Subplan . The adoption of the Subplan by the Board shall not be construed as creating any limitations on the power of the Board to adopt such other compensation arrangements as it may deem desirable, including, without limitation, the granting of Options and other awards otherwise than under the Subplan, and such arrangements may be either applicable generally or only in specific cases.

(e) Adjustments . The adjustment provisions in Section 5(d) of the 2007 Plan are incorporated herein by reference and shall apply in the case of Options and Stock Units granted hereunder; provided , however , that no adjustment shall be made pursuant thereto that causes any Option to be treated as deferred compensation pursuant to section 409A of the Code.

(f) No Right to Remain on the Board . Neither the Subplan nor the crediting of awards under the Subplan shall be deemed to give any individual a right to remain a director of the Company or create any obligation on the part of the Board to nominate any Director for reelection by the stockholders of the Company.

(g) Section 409A . It is intended that this Subplan and awards issued hereunder will comply with section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the awards are subject thereto, and this Subplan and such awards shall be interpreted on a basis consistent with such intent. This Subplan and any award agreements issued thereunder may be amended in any respect deemed by the Board or the Committee to be necessary in order to preserve compliance with section 409A of the Code.

(h) Governing Law . The validity, construction, and effect of the Subplan shall be determined in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

(i) Titles and Headings . The titles and headings of the Sections in the Subplan are for convenience of reference only. In the event of any conflict, the text of the Subplan, rather than such titles or headings, shall control.

Amended and Restated by the Committee effective: May 8, 2007

Exhibit 10.7

INVESTMENT TECHNOLOGY GROUP, INC.

NONQUALIFIED STOCK OPTION GRANT AGREEMENT

FOR NON-EMPLOYEE DIRECTORS

WHEREAS, the Director is not employed by the Company, a Subsidiary of the Company or a parent of the Company and is not otherwise ineligible to participate in the Subplan.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1. Grant of the Option . Subject to the terms and conditions set forth in this Grant Agreement, the Subplan and the 2007 Plan, the Director is hereby awarded a nonqualified stock option to purchase shares of Company Stock for an Exercise Price of $ per share (the “ Option ”). This Option is intended to be a nonqualified stock option and shall not be treated as an incentive stock option under the provisions of the Code.

2. Grant Subject to Plan Provisions . This Option is awarded pursuant to the Subplan and the 2007 Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Subplan and the 2007 Plan. This Option is subject to interpretations, regulations and determinations concerning the Subplan and the 2007 Plan established from time to time by the Committee in accordance with the provisions of the Subplan and the 2007 Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the 2007 Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other provisions of the Subplan and the 2007 Plan. The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Subplan and the 2007 Plan, and its decisions are conclusive as to any questions arising hereunder.

3. Vesting of the Option .

(a) Subject to the terms and conditions of this Grant Agreement, the Subplan and the 2007 Plan, this Option shall vest and become exercisable in three approximately equal annual installments, beginning on the first anniversary of the Date of Grant if the Director is serving as a Non-Employee Director or is deemed to be serving as a Non-Employee Director in accordance with Section 7 below, as of each applicable vesting date; provided , however , that the Option shall vest and become immediately exercisable in full (i) immediately prior to the effectiveness of a Change in Control if the Director is serving as a Non-Employee Director or is deemed to be serving as a Non-Employee Director in accordance with Section 7 below, as of such date or (ii) in the event that the Director ceases to serve as a Non-Employee Director due to the Director’s death or Disability (as defined below). In the event the Director ceases to serve as a Non-Employee Director for any other reason not described or provided for herein, any portion of the Option that has not yet vested shall immediately be forfeited.

“ Disability ” shall have the meaning ascribed to such term in Section 22(e)(3) of the Code.

(b) The vesting of the Option shall be cumulative, but shall not exceed 100% of the shares of Company Stock subject to the Option. If the foregoing vesting schedule would produce fractional shares, the number of shares for which the Option vests shall be rounded down to the nearest whole share.

(c) Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the 2007 Plan, as incorporated within the Subplan, shall be subject to the vesting schedule in this Section 3.

4. Term . The Option (to the extent not earlier exercised or forfeited in accordance with Section 3(a) above) shall expire at 5:00 p.m., Eastern time, on the fifth anniversary of the Date of Grant; provided , however , if the Director ceases to serve as a Non-Employee Director prior to such date (except as provided in Section 7 below), the Option shall expire as follows: (a) if the Director ceases to serve as a Non-Employee Director due to the Director’s death, Disability or retirement at or after age 65, the date 12 months after such cessation of service, but in no event later than the fifth anniversary of the Date of Grant; and (b) if the Director ceases to serve as a Non-Employee Director for any reason other than due to the Director’s death, Disability or retirement at or after age 65, the date sixty (60) days after such cessation of service, but in no event later than the fifth anniversary of the Date of Grant.

5. Method of Exercise . The Director may exercise the Option, in whole or in part, at such time as the Option is exercisable and prior to its expiration by giving written notice of exercise of the Option to the Secretary of the Company. Such written notice shall be deemed to have been received either when delivered personally to the office of the Secretary or at 11:58 p.m. on the date of any U.S. Postal Service postmark on the notice, whichever is earlier. Such notice shall be irrevocable and must be accompanied by the payment of the Exercise Price as provided in Section 6 below. Upon the exercise of the Option, the Company shall transfer or

shall cause to be issued a certificate or certificates for the Company Stock being purchased as promptly as practicable.

6. Payment of Exercise Price . The Exercise Price of the shares of Company Stock purchased by the Director upon exercise of the Option (the “ Option Shares ”) shall be paid in full to the Company at the time of such exercise in cash (including by check), by the surrender of Company Stock (including the surrender of Option Shares), by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or by such other method as the Committee may approve; provided , however , that Company Stock held for less than six months may be surrendered in payment or partial payment of the Exercise Price only with the approval of the Committee.

7. Continued Service as an Employee . If the Director ceases to serve as a Non-Employee Director and, immediately thereafter, the Director is employed by the Employer, then, solely for the purposes of Sections 3 and 4 above, the Director shall not be deemed to have ceased to serve as a Non-Employee Director at that time, and his or her continued employment by the Employer shall be deemed to be continued service as a Non-Employee Director. If the Director becomes employed by the Employer, the transfer of Option Shares as described in Section 13 below shall be subject to applicable federal (including FICA), state and local tax withholding requirements pursuant to Section 14 of the 2007 Plan.

8. Nontransferability . Neither the Director nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or convey the Option, which Option is, and all rights under this Grant Agreement are, expressly declared to be unassignable and nontransferable, other than by will or under the laws of descent and distribution (or pursuant to a beneficiary designation authorized by the Committee).

9. No Right to Company Assets . Neither the Director nor any other person shall acquire by reason of the Option or the Option Shares any right in or title to any assets, funds or property of the Company whatsoever including, without limiting the generality of the foregoing, any specific funds or assets which the Company, in its sole discretion, may set aside in anticipation of a liability. No trust shall be created in connection with or by the granting of the Option or the purchase of any Option Shares, and any benefits which become payable hereunder shall be paid from the general assets of the Company. The Director shall have only a contractual right to the amounts, if any, payable pursuant to this Grant Agreement, unsecured by any asset of the Company or any of its affiliates.

10. Limitations . Nothing herein shall limit the Company’s right to issue Company Stock, or stock options or other rights to purchase Company Stock subject to vesting, expiration and other terms and conditions deemed appropriate by the Company and its affiliates. Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any Person, other than the parties hereto, any right, remedy or claim under or by reason of this Grant Agreement or of any term, covenant or condition hereof.

11. Expenses of Issuance of Option Shares . The issuance of stock certificates hereunder shall be without charge to the Director. The Company shall pay, and indemnify the Director from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of the Option Shares.

12. Terms are Binding . The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors, transferees and assignees of the Director and the Company.

13. Compliance with Law . The exercise of the Option and the obligations of the Company to issue or transfer Option Shares hereunder shall be subject to the terms, conditions and restrictions as set forth in the governing instruments of the Company, Company policies, applicable federal and state securities laws or any other applicable laws or regulations, and approvals by any governmental or regulatory agency as may be required. In no event shall the Director be permitted to exercise the Option if the issuance of Option Shares at that time would violate any law or regulation. By signing this Grant Agreement, the Director agrees not to sell any Option Shares at a time when applicable laws or the Company policies prohibit a sale.

14. References . References herein to rights and obligations of the Director shall apply, where appropriate, to the Director’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Grant Agreement.

15. Notices . Any notice required or permitted to be given under this Grant Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently, by similar process, give notice of:

If to the Company:

Investment Technology Group, Inc.
380 Madison Avenue
New York, NY 10017
Attention: General Counsel

If to the Director:

16. Costs . In any action at law or in equity to enforce any of the provisions or rights under this Grant Agreement, including any arbitration proceedings to enforce such provisions or rights, the unsuccessful party to such litigation or arbitration, as determined by the

court in a final judgment or decree, or by the panel of arbitrators in its award, shall pay the successful party or parties all costs, expenses and reasonable attorneys’ fees incurred by the successful party or parties (including without limitation costs, expenses and fees on any appeals), and if the successful party recovers judgment in any such action or proceeding such costs, expenses and attorneys’ fees shall be included as part of the judgment.

17. Further Assurances . The Director agrees to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Grant Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities laws.

18. Counterparts . For convenience, this Grant Agreement may be executed in any number of identical counterparts, each of which shall be deemed a complete original in itself and may be introduced in evidence or used for any other purposes without the production of any other counterparts.

19. Governing Law . This Grant Agreement shall be construed and enforced in accordance with Section 6(h) of the Subplan.

20. Entire Agreement . This Grant Agreement, together with the Subplan and the 2007 Plan, sets forth the entire agreement between the parties with reference to the subject matter hereof, and there are no agreements, understandings, warranties, or representations, written, express, or implied, between them with respect to the Option other than as set forth herein or therein, all prior agreements, promises, representations and understandings relative thereto being herein merged.

21. Amendment; Waiver . This Grant Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance. Any such written instrument must be approved by the Committee to be effective as against the Company. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party of the breach of any term or provision contained in this Grant Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Grant Agreement.

22. Severability . Any provision of this Grant Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement as of the date first above written.

	INVESTMENT TECHNOLOGY GROUP, INC.


	By:
	Name: Robert C. Gasser
	Title: CEO and President

I hereby accept the Option described in this Grant Agreement, and I agree to be bound by the terms of the Subplan, the 2007 Plan and this Grant Agreement. I hereby acknowledge that a copy of the Plan and the Plan prospectus have been delivered to me. I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.


	*[Insert Name of the Director]*

Exhibit 10.8

SECOND AMENDMENT TO
INVESTMENT TECHNOLOGY GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN

The Investment Technology Group, Inc. Employee Stock Purchase Plan (the “Plan”) is amended as set forth below
effective March 26, 2007:

1. The definition of “Fair Market Value” as set forth in Section 2(i) of the Plan is hereby amended to read, in its entirety, as follows:

“‘Fair Market Value” unless otherwise required by an applicable provision of the Code, as of any date, means the closing sales price of the Common Stock as reported on the New York Stock Exchange on the date as of which the valuation is made.”

Adopted by the Board:

March 26, 2007

Exhibit 31.1

CERTIFICATION

I, Robert C. Gasser, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Investment Technology Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2007

	/s/ ROBERT C. GASSER
	Robert C. Gasser
	Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Howard C. Naphtali, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Investment Technology Group, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2007

	/s/ HOWARD C. NAPHTALI
	Howard C. Naphtali
	Chief Financial Officer

Exhibit 32.1

Certification Under Section 906 of the Sarbanes-Oxley Act of 2002
(United States Code, Title 18, Chapter 63, Section 1350)
Accompanying Quarterly Report on Form 10-Q of
Investment Technology Group, Inc. for the Quarter Ended September 30, 2007

In connection with the Quarterly Report on Form 10-Q of Investment Technology Group, Inc. (the “Company”) for the quarter ended September 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Robert C. Gasser, as Chief Executive Officer of the Company, and Howard C. Naphtali, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. (§)1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ ROBERT C. GASSER		/s/ HOWARD C. NAPHTALI
	Robert C. Gasser		Howard C. Naphtali
	Chief Executive Officer		Chief Financial Officer
	November 8, 2007		November 8, 2007

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.