Forward Looking Statements

Transcription

1 July 2012

2 Forward Looking Statements This presentation may contain certain statements that express the management s expectations, beliefs and assumptions about future events or results. Such statements are not historical fact, being based on currently available competitive, financial and economic data, and on current projections about the industries BM&FBovespa works in. The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and other similar verbs are intended to identify these forward looking statements, which involve risks and uncertainties that could cause actual results to differ materially from those projected in this presentation and do not guarantee any future BM&FBovespa performance. The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPA services; (ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly competitive industries BM&FBovespa operates in; (iii) changes in () (a) domestic and foreign legislation and taxation and (b)government policies related to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, including the implementation of enhanced functionality demanded by BM&FBovespa customers; (vi) ability to maintain an ongoing process for introducing competitive new products and services, while maintaining the competitiveness of existing ones; (vii) ability to attract new customers in domestic and foreign jurisdictions; (viii) ability to expand the offer of BM&FBovespa products in foreign jurisdictions. All forward looking statements in this presentation are based on information and data available as of the date they were made, and BM&FBovespa undertakes no obligation to update them in light of new information or future development. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities Commission CVM Instruction 400 of 2003, as amended. 2

3 BVMF STOCK PRICE Recent Performance 3

4 BVMF3 recent performance IOFs 10/17 R$14.97 GoodwillCompetition 11/30 News R$ /05 R$13.10 Rumors about IOF BM&FBOVESPA Reductions of Volumes Estimates by the Market IBOVESPA Removal of IOF on Equities 12/01 R$10,54 BVMF3 YTD: +4,6% Ibovespa YTD: -4.2% Change of IOF on foreign exchange transactions 06/ Exchanges Mergers 02/08 R$11.18 BATs 02/15 R$11.43 New IOF on Derivatives 07/26 R$9.55 Direct Edge 11/21 R$10.11 Oxera's Report Release 06/18 Updated until 06/29/

5 BRAZILIAN MARKET OPPORTUNITIES 5

6 Equity Market (BOVESPA Segment) Low penetration in the Brazilian market Clients base: huge potential in retail and pension funds segments Number of custody accounts (thousands) jan' Ja an 05 J ul 05 Ja an 06 J ul 06 Ja an 07 J ul 07 Ja an 08 J ul 08 Ja an 09 J ul 09 Ja an 10 J ul 10 Ja an 11 J ul 11 Ja an 12 Listed Companies Jun'12 Dec 11 Listed Companies (27 th in the World) Low penetration of equity and derivatives in the main investors portfolios Stable and low interest rate environment encourage more exposure in equities Pension funds portfolio Equity Fixed Income and Others R$168 billion R$574 billion 69.9% Recent growth in the number of 72.3% retail investors, but still low 27.7% compared to other markets % Low number of listed companies compared to other countries Lack of important economic sectors in the exchange, for instance: oil & gas, infrastructure, retail, IT and pharmaceutical, India USA Canada China/HK Japan Spain UK Australia Korea Brazil Investment cycle may bring new companies and sectors to the exchange Currently, SMEs are not able to raise money through equity easily Source: ABRAPP, WFE and BM&FBOVESPA 6

7 Derivatives Market (BM&F Segment) Growth in the credit level will favor volumes Credit: very low credit level and even lower in the case of mortgage transactions Credit to GDP Trade Flow (total Imports + Exports in USD billions) 27.4% Mortgage Total Credit 50.1% % 5.4% Interest Rate in BRL contracts: growth in credit levels, specially in fixed rates, support the increase the activity of financial institutions FX contracts: growth in the amount of foreign trading and change in the culture of the Brazilian entrepreneurs can push up volumes in this group of contracts, mainly in currencies other than US$ Index based contracts: growth in cash equity market, the launching and development of ETFs and the growth of exposure to equity by institutional investors can drive the growth of these contracts Commodities contracts: cash settled contracts and the change in the behavior of farmers that are becoming more sophisticated 7

8 MAIN INITIATIVES 8

9 Launching of new products Product diversification strengthens revenues and competitive position Growth in ETFs 14 ETFs currently traded Market maker for options Bidding process initiated to select equity options market makers for 10 companies and for the IBOVESPA Cross listing of derivatives with CME g p ( and BRICS Cross listing of futures contracts with CME Group (stock indexbased and commodities contracts) and BRICS exchange (stock index based contracts) Tesouro Direto A platform for retail investors to trade in government bonds through the Internet Incentives granted to brokerage firms Securities Lending Serves demand from trading or arbitrage strategies and borrowing demand to avoid settlement fails 9

10 Consistent Growth Historic record of volumes keeping long term growth trend (in R$ millions) ETFs Exchange Traded Funds ADTV Tesouro Direto Average Number of Investors Retail Investors (in thousands) Q12 2Q12 Average Assets under Management* Average Assets under Custody (in R$ millions) (in R$ billions) ,032 1,140 1, *Excluded PIBB11. 10

11 Consistent Growth Historic record of volumes keeping long term growth trend Average Open interest Stock Index Futures Contracts (in thousands of contracts) Options with Market Maker ADTV* (ITUB4, OGXP3, USIM5, IBOV, BVMF3, BBDC4, GGBR4, BBAS3 PDGR3, CSNA3, CYRE3) (in R$ millions) +85% 879 1, Q12 2Q Securities Lending: open interest (average year) (in R$ billions) ADTV Before ADTV After *Considering the period between Jan 11 and May 12, with speciific starting dates for the market maker. Options with Market Maker ADTV: 1Q11 vs. 1Q12 (in R$ millions) 1Q11 1Q12 Options with market maker take place in 91% of this amount Q Q Q12 2Q12 Petro and Vale Other Stocks 11

12 Revenue Diversification 1Q12 Revenue Securities lending (BTC): ~R$21.1 million Stock Indices Fut.: ~R$12.3 million Tesouro Direto: ~R$4.7 million Options with market maker: ~R$6.4 million Exchange Traded Funds (ETFs): ~R$2.6 million ~R$47.1 million ( % of total revenue) 12

13 Strategic Projects Multi asset trading platform (PUMA Trading System) State of the art in trading technology and technological independency Derivates module successfully implemented in 2H11 Equities market to be concluded in 2H12 Licensing TRADExpress Real Time Clearing system Objective: integrating and modernizing our existing clearing facilities should proceed over Integrated tests with the market and implementation of the systems scheduled to take place in 2013/2014 Partnership advantages: License tousethesoftwareth Access to the source code Selling rights over our new clearing platform Registration systems for OTC derivatives Objetive: modernize, improve and expand the range of our registration services for OTC derivatives, while offering our customers a streamlined, quality solution and thorough regulatory reporting tool One of the most flexible and complete engines for registration, price discovery, risk assessment, capture and lifecycle processing of these transactions Three module implementation: the first one is schedule to 2H12, the second one for 1H13 and third module of the platform will be announced in due course 13

14 International Projects Creating a global market Partnerships with international exchanges Strategic partnership with CME Group Asia: MoU and discussions with HKEx, Shanghai and Shenzhen Exchanges Latam: MoU with Chile and Colombia exchange and discussions with Peru and Colombia Cross listing agreements signed with CME Group and BRICS exchanges Strengthening the sales force in other countries Offices in New York, London and Shanghai 14

15 BUSINESS MODEL AND REGULATORY FRAMEWORK 15

16 Possible Competition Important considerations EASING REGULATION IS NOT EXPECTED Main requirements: pre trade controls, self regulatory (SRO), off exchange trades are not permitted (internalization of orders and OTC), CCP for stocks trading, post trading at the beneficial owner level Competition in other exchanges was intensified after easing regulation THE EXCHANGE FEES (TRADING AND POST TRADING) ARE PAID BY THE FINAL INVESTOR Differently from USA and Europe, the final investors is the one who pays the exchange fees Brokers couldn t increase their share in the all in trading cost pie in case of reduction on the exchange fees STOCKS TRADING ALL IN COST IN BVMF IS COMPETITIVE Despite the misleading perception, all in cost in BVMF is competitive compared to other markets Comparing only the trading fees among exchanges is misleading. BVMF provides higher portion of services than the peers IT INFRASTRUCTURE MOVING TO STATE OF THE ART There is no gap ofitinfrastructure Increasing participation of HFT via Co location (moving to sub millisecond latency) RECENT BM&FBOVESPA INITIATIVES (REBALANCING OFFEESSTRUCTURE) FEES STRUCTURE) Shift between trading and post trading fees 16

17 Equity Market Settlement Structure Brazil Compared with USA Two different regulatory frameworks Trading BRAZIL (All the trades must be matched on an exchange environment) BVMF USA (Brokers can internalize orders) Trading Venues BVMF Brokers A and B DTCC Brokers A and B Broker A Broker B Post trading Clearing (CCP) Settlement Central Depository Investors Investors Investors Investors 100% vertically integrated: clearing, settlement and central depository at the beneficial owner level Brokers control their clients portfolios and settle positions through BVMF s infrastructure (this impacts the post trade fees charged by BVMF) DTCC does the clearing, settlement and central depository of securities at the brokers level Each broker (prime broker) has its own structure to control their clients portfolios and settle positions (this impact the prime broker s costs) 17

18 Business Model Listed Exchange Business Model Diversified and Integrated Integrated Derivatives Diversified but Not Integrated* * Do not provide post trading services for the equity market Market Capitalization (US$ billions) and EBITDA Margin (%) Source: Bloomberg Updated until: 06/30/2012 / % 77.9% CME HKEx Deutsche Boerse 58.6% 61.6% 69.7% 78.1% 62.2% 42.3% 42.1% 47.6% BVMF ICE Nyse Euronext 59.4% 72.0% 1.7 ASX * SGX * LSE Nasdaq TMX BME 0,8 0,7 06 0,6 0,5 0,4 0,3 0,2 0,1 0 Diversified and integrated Derivatives Diversified but not integrated * 12 months ended on Jun/11 EBITDA Margin 2010 EBITDA Margin

19 Brazilian Market Regulatory Framework Legal requirements: resilience, transparence, clear rules. Brokers & investors Regulation prohibits internalization of orders, dark pools and ATS/MTFs, stocks trading in both exchange and OTC simultaneously Settlement and clearing of stocks trading must be done through a CCP Settlement and clearing at the beneficial owner level make the Brazilian market safer and more resilient Trading Pos Trading Under the regulation in place, potential competitors would be obliged to provide the same integrated solution, with the same rules and transparency The final investor pays the exchange fee Other exchanges have been seeking integrated models (self clearing models) Naked access is not allowed Naked short selling is not possible 19

20 Brazilian s stock trading breakdown Novo Mercado Launching End of CPMF (Financial Transaction Tax) Sarbanes Oxley Act (SOX) End of IOF Tax (2%) for foreign investors Jun % 34.6% 10.3% 23.6% 65.4% 41.8% Other USA Venues Brazilian ADRs BM&FBOVESPA companies with ADRs Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 NYSE Brazilian ADRs BM&FBOVESPA (except companies with ADRs) May 12 Jun 12 Source: Bloomberg (in USD traded value of 35 companies with ADRs programs ) Public Offerings in Number of Companies* Total IPOs Follow ons Total Dual Listings *Updated until 06/30/

21 OPERATIONAL HIGHLIGHTS 21

22 BOVESPA Segment: operational highlights Average Daily Traded Value ADTV (BRL billions) Updated until 06/30/ May 11 Jun 11 Jul 11 Aug 11 Sep 11 Ot11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Number of Custody Accounts (Thousands) Turnover Velocity** (12 months average) % 42.3% 36.8% 37.6% 38.7% 30.8% 29.4% 63.2% 70.0% 66.6% 68.1% 63.8% 64.2% Q11 2Q11 3Q11 4Q11 1Q12 2Q **Relation of the trading value in the cash market and the market cap of the exchange. Updated until 06/30/

23 BOVESPA Segment: capital raising activity Public Offerings (BRL billions) Updated until 06/30/2012. Follow On IPO * Pipeline: already announced to the market There are 7 offerings in the pipeline: IPO (5): CPFL Energias Renováveis S.A.; VIX Logística S.A.; BIOSEV S.A.; Manabi Holding S.A.; Empreendimentos Pague Menos S.A.; Follow on (2): Celulose l Irani S.A.; TAESA Transmissora Aliança de Energia Elétrica S.A. * Excludes the capitalization with barrels reserves by federal government BRL74.8 billion in Petrobras offering. 23

24 BOVESPA Segment Potential to increase the number of listed companies MarketCapitalization togdp (%)* Hong Kong : 617% 1,095% 1,208% % 170% 166% 138% 137% 130% 129 % 126% 118% 107% 107% 95% 100% 93% 100% 78% 82% 85% 75% 81% 70% 75% 67% 62 66% 67% 75% 73% 74% 53% 53% 53% 36% 21% 44% 39% Chile Singapore United Kingdom Canada USA Korea India China France Japan Brazil Mexico Market Capitalization by Economic Sector * Source: World Bank Dec 11 26,4% 15,2% Dec 05 22,4% 15,7% 14,1% 10,4% 6,8% 0,6% 3,9% 16,2% 1,8% 4,7% 11,5% 11,1% 0,3% 2,6% 8,6% 21,6% 2,5% 3,6% Oil, Gas and Biofuels Basic Materials Capital Goods and Services Construction and Transportation Consumer Non Cyclical Consumer Cyclical Information Technology Telecommunications Public Utilities Financial 24

25 BM&F Segment: operational highlights Average Daily Traded Volume ADTV (Thousands of contracts) 1, ,904 3,418 3, ,505 2,701 3,035 2,831 2, ,606 2,716 2, ,430 2, , , , , ,573 1, ,684 1,797 1,995 2,383 1,493 1,774 1,589 1,789 2,061 2,497 2,681 1, ,220 1,234 1,452 1, * jun/11 jul/11 ago/11 set/11 out/11 nov/11 dez/11 jan/12 fev/12 mar/12 abr/12 mai/12 jun/12* Rate per Contract t RPC (BRL) BRL Int. Rate (Thousands) FX (Thousands) Index (Thousands) Others (Thousands) * J 11 J 11 A 11 S 11 O 11 N 11 D 11 J 12 F 12 M 12 A 12 M 12 J 12* Interest rates in BRL FX rates Stock Indices Interest rates in USD Commodities Mini contracts OTC Total RPC *Updated until 06/30/

26 Interest Rate in BRL Contracts Structural changes behind the growth in volumes Interest Rate in BRL Contracts Breakdown by Maturity (thousands of contracts) Uncertainty in consensus impacts short term contracts Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 1st. Maturity 2nd. Maturity 3rd Maturity 4th. Maturity 5th Maturity Fixed Rate Credit in BRL billions Public Debt / Fixed Rate in BRL billions May'12: BRL May'12: BRL Jan'05: BRL Jan'05: BRL Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Source: Brazilian Central Bank Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 26

27 Interest Rate in BRL Contracts Sustainable growth revenue from contracts with long term maturities Revenue (in R$ millions) ADTV (in thousands of contracts) 1st 4th. Maturity CAGR:+25% 1st 4th. Maturity 1,274 CAGR:+16% Q09 1Q10 1Q11 1Q12 1Q09 1Q10 1Q11 1Q12 5th Maturity 5th. Maturity 31.3 CAGR:+35% CAGR:+34% ,113 1Q09 1Q10 1Q11 1Q12 Note: 1st-4th maturity: up to 84 business day and 5th maturity: above 84 business day (limited to 105 business day) 1Q09 1Q10 1Q11 1Q12 27

28 High Frequency Trading (HFT) HFT will play an important role in both cash and derivatives markets BM&F Segment HFT (ADTV in thousands of contracts and mkt. share) BovespaSegment HFT (ADTV in BRL billions and mkt. share) 2.2% % 4.8% 6.0% 3.9% 50% 5.0% 7.8% 7.2% 8.0% 5.9% 5.8% 70% 7.0% CAGR*: 112.8% Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Apr/12May/12Jun/12 Equities FX Mini contracts Interest Rates % in Overall Volume % % 8.6% 11.4% 10.4% 10.3%11.5% 9.3% 8.7% 8.4% 8.4% 9.0% 10.3% 8.8% May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 ADTV (Foreigners) ADTV (Individuals) ADTV (Institutionals) % of overall market Co location (ADTV in thousands of contracts and mkt. share) 1Q12: 76.7% of HFT trading is via co-location 6.5% 66% 6.6% 5.8% 5.4% 4.2% % 3.2% 3.1% 2.6% % 0.4% 0.4% Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Co location (ADTV in BRL billions and mkt. share) 1Q12: 60.4% of HFT trading is via co-location 14% 2.0% 2.6% 1.4% 16%18% 1.6% 1.8% 2.1% 1.0% % 6.8% 6.9% 5.6% 4,.% 5.4% 6.0% 4.5% 5.7% 5.3% 5.0% 1, ,

29 FINANCIAL HIGHLIGHTS 29

30 2012 Budgets Commitment to cost control Adjusted Operating Expenses 2012 Budget CAPEX 2012 Budget 2012 Budget: between R$580 million and R$590 million Maintenance of headcount Steadily effort to reduce other expenses lines Maintenance expenses adjusted¹ to 2012 R$ millions 2012 budget in the same range of budget: between R$230 million and R$260 million Continuity of IT investments Equities segment of PUMA Trading System New Data Center Clearings integration New OTC platform Improvements in infrastructure R$ millions e e 1 Adjusted Expenses exclude depreciation, stock option program, provisions and tax on dividends from CME. 30

31 1Q12 revenues breakdown Diversification of revenues is clear after revenues rebalancing 1Q12 revenues: BRL560 million 0.7% 17.0% 9.2% Cash hmarket (Trading) Cash Market (Post Trading) Equities Derivatives (Trading) 30.4% Equities Derivatives (Post Trading) Other Revenue BOVESPA Seg. 21.6% Financial Derivatives (Trading) Financial Derivatives (Post Trading) Spot FX Other Revenue 13.7% 5.2% 2.0% 0.3% 31

32 Expenses Details Focus on costs controls: delivering efficiency Expenses Breakdown 1Q12 Adjusted Expenses Others (In R$ millions) -10.8% 17% Marketing Third Party Serv. Depr./Am. 5% 3% 13% 47% Personnel -23.5% % 1Q11 2Q11 3Q11 4Q11 1Q12 Data Processing Breakdown of Adjusted Expenses (in R$ millions) -10.8% Q11 Adj. Expenses Personnel Data processing Third Party Serv. Communication Marketing Others 1Q12 Adj. Expenses 32

33 Appendix 33

34 Fully integrated Business Model Diversified sources of revenues Services forissuers, brokers and commodities trading Trading, Clearing and Depository Activities Others Services Listing (stocks, bonds, funds, asset backed securities, Among others ) Trading (stocks, derivatives, corporate and government Bonds, funds, spot US Dollar, among others) Custody (services provided for funds and other market participants) Commodities Certification Central Counterparty (CCP) Clearing and Settlement (for all products) Market Data Indices Licensing Trading Access Central Depository (Brokers) (stocks and corporate bonds) Securities Lending (stocks and corporate bonds Software Licensing (used by brokerage Houses and other market participants) OTC Derivatives (registration and collateral management) 34

35 High New Frequency Products Trading Pipeline HFT New pricing policy (both segments) Main Characteristics Differentiated fees by tier only for day trades transactions executed by a registered HFT A HFT Committee created to approve and monitor the HFTs The new pricing policy was implemented in Nov 10 Bovespa Segment In the Bovespa Segment, different tiers were created for individuals and non individuals HFT investors ADTV tier (BRL millions) Individuals Trading Fee (bps) Settlement Fee (bps) Total Up to 4 (inclusive) i From 4 to 12.5 (inclusive) From 12.5 to 25 (inclusive) From 25 to 50 (inclusive) Above BM&F Segment Non individuals ADTV tier (BRL millions) Trading Fee (bps) Settlement Fee (bps) Total Up to 20 (inclusive) From 20 to 50 (inclusive) From 50 to 250 (inclusive) From 250 to 500 (inclusive) Above In the BM&F Segment, the 70% flat discount was replaced by a volume tiered based discount, only for day trades, divided into trading and registration fees 35

36 BOVESPA Segment: foreign investment flow Monthly Net Flow of Foreign Investments* (in BRL billions) (0.6) (1.6) (1.5) (0.6) (1.3) (0.4)(0.2) (0.7) (2.4)(1.1)(1.3) (2.3) *Includes regular trades and public offering. Updated until June 30,

37 12% 15% 17% 19% 20% 22% 23% 23% 25% 26% 27% 25% 23% 16% 23% 26% 26% 26% 25% 27% Operational highlights: investor s participation in Total Volume BM&F Segment (Investor s Participation in Total Volume) 7% 7% 9% 8% 8% 4% 4% 5% 5% 5% 5% 5% 5% 3% 5% 5% 5% 5% 4% 5% 24% 25% 23% 23% 24% 30% 33% 31% 33% 35% 32% 34% 34% 34% 32% 32% 34% 34% 34% 32% 56% 51% 49% 48% 45% 42% 38% 39% 35% 32% 35% 35% 36% 46% 39% 35% 35% 33% 34% 34% Individuals Institutional Investors Foreign Investors Financial Institutions Companies Central Bank Bovespa Segment (Investor s Participation in Total Value) 12% 10% 10% 8% 7% 8% 9% 10% 8% 9% 8% 10% 8% 9% 8% 9% 7% 9% 8% 9% 8% 8% 33% 36% 35% 35% 34% 30% 35% 34% 34% 35% 33% 37% 34% 36% 35% 39% 37% 40% 38% 40% 42% 42% 27% 27% 30% 27% 26% 33% 33% 34% 33% 33% 35% 32% 34% 33% 33% 32% 33% 31% 32% 33% 32% 32% 25% 25% 23% 27% 31% 26% 21% 21% 22% 21% 24% 20% 23% 20% 22% 18% 21% 19% 21% 18% 17% 15% Apr 11 May 11Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12Jun 12 Individuals Institutional Investors Foreign Investors Financial Institutions Companies Others 37

38 Investment Funds AUM Evolution (in BRL billions) % Equities Fixed Income % 11% 1,070 11% 1,301 15% 1,513 1,375 22% 14% 1,703 1,787 18% 18% 1,925 15% 2,073 15% Percent of Equity Fund Assets Mar 12 Worldwide Brazil Equity funds Equity 15% funds 40% Source: ANBIlMA and Investment Company Institute ICI (2T12). 38

39 1Q12 EARNINGS 39

40 BOVESPA Segment Performance Increased HFT activity and growth of turnover velocity ADTV evolution by type of investors and Margin 1Q12 vs. 1Q11 10,0 ADTV grew 6.3% and reached R$7.2 bn (all 9, ,0 time high) , ,0 Turnover velocity was positively impacted by ,0 2.3 market volatility ,0 3,0 1Q12 vs. 4Q Increasing in margin driven by growth in options volumes and reduction of HFT share (in R$ billions) ( 2,0 1,0 0, Q11 2Q11 3Q11 4Q11 1Q12 Individuals Institutional Investors Foreign Investors Others Margin in bps 7,0 6,6 6,2 5,8 5,4 50 5,0 4,6 4,2 3,8 3,4 3,0 2,6 2,2 1,8 1,4 1,0 0,6 02 0,2 (0,2 (0,6 (1,0 HFT: ADTV and share of trading volume Average market capitalization and Turnover Velocity +47% 7.4% 6.1% % 10.3% 8.5% 3,5 1, , % 1, , , ,0 1, ,0 0,5 1Q11 2Q11 3Q11 4Q11 1Q12 Foreigners Individuals Institutionals % of overall market 69.3% 61.8% 66.6% 66.2% % 10.8% Q11 2Q11 3Q11 4Q11 1Q12 Average Market Capitalization (BRL trillions) Turnover Velocity ,

41 BM&F Segment Performance High growth of stock index and mini sized contracts ADTV in (thds of contracts) and RPC (in R$) 1Q12 vs. 1Q11 5.3% ADTV decrease impacted by 18.6% reduction in ADTV of interest rates contracts in R$ RPC rose 12.7%: higher participation of long term maturity contracts, FX futures, index bases futures (27.1% and 55.5%, respectively) HFTs volumes up 95% 1,30 1,20 1,10 1,00 0,90 0,80 0, ,60 0,50 0, ,127 1,720 1,810 1,532 1,730 1Q11 2Q11 3Q11 4Q11 1Q Interest Rates in BRL FX Rates Others Stock Index RPC HFT: ADTV (thds of contracts) and share of ADTV (%) ADTV : Mini sized and stock index (in thds of contracts) +95% 7.8% 8.0% % % 5.0% % Q11 2Q11 3Q11 4Q11 1Q12 Equities FX Mini contracts Interest Rates % in Overall Volume ,127 40% 1,720 1,810 1,532 1,730 46% 7% 57% 6% 51% 64% 4% 31% 13% 8% 6% 4% 18% 10% 13% 16% 23% 6% 17% 19% 5% 15% 9% 11% 1Q11 2Q11 3Q11 4Q11 1Q12 1st Maturity 2nd Maturity 3rd Maturity 4th Maturity 5th Maturity RPC 1,00 0,50 (0,50) (1,00) (1,50) (2,00) 41

42 Revenues: 1Q12 BOVESPA Segment (47% of total) 3% 12% 85% Cash Market Forward Market Options Market Market / Product / Service Cash market Forward Market Options Market In bps Fee Model BM&F Segment (36% of total) 12% Interest Rate BRL 33% 55% FX Others Interest Rate Exchange Rates (FX) Indices Commodities Fee per contract Other Revenues 17% Depository and custody: 4% Securities Lending: 4% Vendors: 3% Listing: 2% Trading access: 2% Fixed cost: R$6,90 + additional fee 25 bps per year (open interest) Fixed fee Annual lfee: based on the social ilcapital Fixed fee

43 Financial Highlights Strong cash generation Cash and Financial Investments (in R$ millions) 1Q12 1, ,714 3,658 4Q11 1, ,582 3,782 Financial Income R$65.5 million in 1Q12, increase of 3.7% over 1Q11 Financial i Income of R$86.7 million, 63% 6.3% up, mainly due to growth in the Company s average cash position Financial Expenses of R$21.2 million increased 15.3% due to the FX devaluation Market participants cash collateral and others* Restricted funds Subsidiaries** Available funds Collateral Deposited in the Clearinghouse (in R$ billions) Higher level of market exposure requires more collaterals +78.7% 7% Buyback program The approved buyback program allows BM&FBOVESPA to repurchase up to 60 million shares until Jun 12 (29.6mn bought) Earnings distribution (payout) 102 Approval of R$224.3 million as dividends, 80% Payout ratio in 1Q12 Dec/09 Dec/10 Dec/11 Mar/12 *Includes collaterals pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed ** Includes third party collaterals (R$118 million in the 4Q11 and R$181 million in the 1Q12) and restricted funds (R$12 million in the 4Q11 and 1Q12) at Banco BM&F 43

44 BM&FBOVESPA Financial Highlights P/E analysis Since 2009, the goodwill tax benefit has been recognized as deferred liability (being cash neutral), reducing the GAAP earnings Tax Book in 1Q12 Simulation GAAP Book in 1Q12 Simulation Current Current BRL millions without goodwill BRL millions without goodwill EBT EBT ( ) goodwill amortization Deferred Tax ( ) Interest on capital (1) Other taxes 7.3 (=) Taxable earnings Total Taxes Tax 0 75 Net Income GAAP EPS Δ: 16.6% EPS 2012e² P/E³ Eti Estimated tdgaap EPS (A) Earnings without goodwill = (A) x Δ 16.6% Stock price discounted by goodwill NPV (R$1.00 per share) / Earnings without goodwill Adjusted Earnings % impact on P/E multiple Difference between EPS GAAP and the EPS adjusted to non existence of goodwill simulation i Different earnings impact the P/E calculation and distort comparisons and market consensus. The reported adjusted net income reflects better the company s cash generation ¹ Simulates the Interest on Capital amount that would be approved if there was no goodwill tax benefit; ²EPS market estimative for 2012; ³ Stock at BRL10.72 (April 30, 2012). 44

45 important technological delivering years Key investments to support growth Investments (CAPEX) : ~R$1 billion 1Q12 CapEx totaled R$26.7 million (in R$ millions) ~90% of CAPEX to IT projects to: preserve current revenues catch up technology support growth strengthen market integrity e Key infrastructure investments PUMA Trading System: New Multi Asset Trading Platform Clearing Integration Performance and capacity improvements; cross asset arbitrage promotion; submillisecond RTT latency State of the art the art technology Capital efficiency: Cross market risk calculation methodology Cross market multilateralnetting for settlement purposes Data Centers OTC Platform Scalability and reliability; co location (additional space) Offering of services for market participants and bringing new synergies to the BVMF ecosystem Modernization, improvement and expansion of the range of registration services Flexibility to meet specific demands Offering to our customers a rationalized quality solution and thorough reporting tool 45

46 Prioritizing customer and operational excellence Guaranteeing excellence and market integrity Strengthening Institutional Position PUMA Trading System: equities module in tests Increasing capital efficiency by integrating clearing facilities New OTC platform: building one stop shop Improving supervision and market monitoring Consistently increasing and diversifying revenues Well placed to capture Brazilian growth potential Leveraging growth through product development (new products and arbitrage/strategies among markets/products) Favored from increasing sophistication of Brazilian market Focus on Clients and p g market participant relationship Products development materialized in revenues and broadening market sophistication: market maker for options, ETFs, HFTs, cross listing and Tesouro Direto Strengthening ties with investors and participants Consistently delivering sound financial i results Focus on Cost Control adjusted Opex is decreasing in real terms in 2012, according to the announced budget Maximizing shareholders return: high payout 46

47 Income Statement Summary R$ millions 1Q12 1Q11 Change 1Q12 / 1Q11 4Q11 Change 1Q12 / 4Q11 Gross Revenues % % Net Revenues % % Expenses (166.2) (188.7) 11.9% (291.6) 43.0% Operating Income % 8% % Equity accounting % % Financial Income % % Income before Taxes % % Net Income* % % EBITDA % % EBITDA Margin 73.3% 33% 65.2% 801 bps 43.4% 2,988 bps Adjusted Net Income % % Adjusted earnings per share (in R$) % % Adjusted EBITDA % % Adjusted EBITDA Margin 74.9% 70.4% 448 bps 65.2% 974 bps Adjusted Expenses (125.4) (140.6) 10.8% (163.9) 23.5% * Attributable to BM&FBOVESPA s Shareholders 47

48 Balance Sheet In R$ millions ASSETS 03/31/ /31/2011 LIABILITIES AND SH. EQUITY 03/31/ /31/2011 Current assets 2, ,401.1 Current liabilities 1, ,929.9 Cash and cash equivalents Collateral for transactions 1, ,501.0 Financial investments 2, ,128.7 Others Others Non current liabilities 2, ,402.5 Non current assets 20, ,188.8 Financing 1, ,138.7 Long term receivables 1,247.0 Deferred Inc. Tax and Social 1,767.4 Contrib. 1, ,204.6 Financial investments 1, ,589.1 Others Others Shareholders' h equity 19, , Capital 2, ,540.2 Investments 2, ,710.1 Capital reserve 16, ,033.9 Property and equipment Others Minority interest in Intangible assets 16, ,354.1 subsidiaries TOTAL ASSETS 23, ,589.9 TOTAL LIAB. AND SHAREHOLDERS' EQUITY 23, ,

49 SUSTAINABILITY 49

50 BM&FBOVESPA Sustainability Mission BM&FBOVESPA s Sustainability Mission Support, promote and practice the concepts and actions towards economic, social and environmental responsibility with the purpose of contributing to sustainable development Novo Valor BM&FBOVESPA Program created in 2010 to guide sustainability actions of BVMF. Goal Induce and promote the sustainable development of the BM&FBOVESPA and the capital market, involving all audiences, includinginvestors investors, companies and brokerages. 50

51 BM&FBOVESPA Sustainability Program Working in four dimensions 1. Natural Resources Mgt GHG Inventory Materials recycling program Ecoefficiency Green IT Member of Carbon Disclosure Project South America Board of Empresas pelo Clima, FGV 4. Stakeholder Engagement Instituto BM&FBOVESPA Stakeholders Global Compact Signatory (1 st exchange) PRI Signatory (Principles for Responsible Investment) Organization Stakeholder GRI (Global Reporting Initiative); Member of Board for GRI Brazil 2. Governance Novo Mercado Advisory Boards Sustainability Committee Sustainability Comission 3. Products and Services Indexes: ISE, ICO2 and IGC/IGCT Carbon Market Em Boa Companhia (program with companies) 51

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