Forward Looking Statements

Transcription

1 February 2013

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 Goodwill 11/30 Competition R$13.01 News 01/05 R$13.10 Rumors about IOF BM&FBOVESPA Reductions of Volumes Estimates by the Market Removal of IOF on Equities 12/01 R$10,54 IBOVESPA Change of IOF on foreign exchange transactionsti 06/14 BVMF3 YTD: 0.4% Ibovespa YTD: 2.0% Exchanges Mergers 02/08 R$11.18 BATs 02/15 R$11.43 New IOF on Derivatives Direct Edge Oxera's Report 07/26 R$ /21 R$10.11 Release 06/18 Aug 1 0 Sep 10 Oct 1 0 Nov 10 Dec 1 0 Jan 1 1 Feb 1 1 Mar 1 1 Apr 1 1 May 1 1 Jun 1 1 Jul 1 1 Aug 1 1 Sep 1 1 Oct 1 1 Nov 1 1 Dec 1 1 Jan 1 2 Feb 1 2 Mar 1 2 Apr 1 2 May 1 2 Jun 1 2 Jul 1 2 Aug 1 2 Sep 1 2 Oct 1 2 Nov 1 2 Dec 1 2 Jan 1 3 Updated until 01/31/

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'13 Low penetration of equity and derivatives in the main investors portfolios Jan' Jan 0 05 Jul 0 05 Jan 0 06 Jul 0 06 Jan 0 07 Jul 0 07 Jan 0 08 Jul 0 08 Jan 0 09 Jul 0 09 Jan 1 10 Jul 1 10 Jan 1 11 Jul 1 11 Jan 1 12 Jul 1 12 Jan 1 13 Stable and low interest rate environment encourage more exposure in equities Recent growth in the number of retail investors, but still low compared to other markets Pension funds portfolio Equity Fixed Income and Others R$168 billion 72.3% 27.7% R$574 billion 69.9% 30.1% Listed Companies Dec 12 Listed Companies 6,856 Low number of listed companies compared to other countries Lack of important economic sectors in the ,916 exchange, for instance: oil & gas, infrastructure, 4,041 3,972 retail, IT and pharmaceutical, India USA China / HK 3,481 3,200 2,767 2,056 1, Canada 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 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) Mortgage Total Credit 53.5% % % 6.3% Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul Interest Rate in BRL contracts: growth in credit levels, specially in fixed rates, support increase the activity of financial institutions FX contracts: growth in the amount of foreign trading and change in the culture of hedging from 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 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 3Q12 4Q12 Jan/13 Average Assets under Management* Average Assets under Custody (in R$ millions) (in R$ billions) ,032 1,974 1,322 1,696 2,336 2,541 2, Q12 2Q12 3Q12 4Q12 Jan/13 *Excluded PIBB11. 9

10 High Growth Products Real Estate Funds (FII) and Agribusiness Credit Bills (LCA) FIXED INCOME AND REAL ESTATE PRODUCTS Real Estate Funds (FIIs) Agribusiness Credit Bills (LCAs) jan 12 fev 12 ADTV (R$ MM) mar 12 abr 12 mai 12 jun 12 jul 12 ago 12 set 12 out 12 Mkt Cap (R$ BN) nov 12 dez 12 Assets under custody (R$ billion) % 62% 19.7 # of investors Mkt. Share BVMF Other 10

11 High Growth Products Increased sophistication of market participants HIGH GROWTH PRODUCTS Options on stocks/indices (ADTV R$ MM) Stock index futures (ADV thd contracts) Securities Lending (Open Interest) Other PETR+VALE (R$ billion) CAGR: +44.0% CAGR: +35.9% % 2% % ETFs (ADTV R$MM) Tesouro Direto (custody R$ Bn) CAGR: +84.0% CAGR: +45.7%

12 Strategic Projects Multi asset trading platform (PUMA Trading System) State of the art in trading technology and technological independency Derivatives module successfully implemented in 2H11 Equities market to be concluded in 1Q13 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 Objective: 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 12

13 Clearing Houses Integration Building a state of the art platform Derivatives (R$ 107 bn*) Equity and Corporate Debt (R$ 70 bn*) FX (R$ 4 bn*) Securities (R$ 1 bn*) Financial and commodities derivatives (futures, options and forward) OTC derivatives Equity, ETFs and fixed income cash market Equity and indices derivatives (options and forward) Securities lending FX spot market (US$ vs. R$) Cash market and forward market ktfor government bonds INTEGRATED CLEARING HOUSE** = Capital efficiency * Aggregate of pledged collaterals at our clearinghouses totaled R$181.3 billion in Sep. 30, **IPN/CORE implementation requires the authorization of the regulators. 13

14 Main Projects Deliveries already implemented and programmed INTENSE DELIVERY PHASE STARTING IN 4Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 (...) Migration of PUMA Trading System (equities) Fixed income registration platform Fixed income trading platform OTC Derivatives Platform (Calypso) Cross listing New integrated clearing house/ CORE* Construction of the New Data Center (...) Fee structure redesigning and introduction of incentive programs (...) (...) Development of new products / markets: ETFs, market making programs for the options market; dual listings (...) *IPN/CORE implementation requires the authorization of the regulators. 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 Comparing only the trading fees among exchanges is misleading. BVMF provides higher portion of services than the peers Despite the misleading perception, all in cost in BVMF is competitive compared to other markets 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 Panel sponsored by CVM Main points On June 29, CVM sponsored a discussion with stakeholders Regulator: the study shows that competition in exchange industry is not urgent Participants view Regulator: market integrity and transparency are priorities Brokers: most of them have doubts about the benefits and showed concerns related to cost rising for them and risks for the market Investors: in general have a perception that prices are in line with international benchmarks and are concerned with market integrity Infrastructure providers (exchanges): non consensus regarding the necessity of opening the clearing house or not in order to create the conditions for competition BVMF s main considerations: Understates regulatory and IT/infrastructure cost for brokers Disregards implicit costs of liquidity fragmentation and does not assess qualitatively the price formation impacts Compares inadequately the other market costs when it does not use the All in cost Market size is not big enough to embrace new exchanges Recognizes the importance of clearing houses integration 17

18 Equity Market Settlement Structure Brazil Compared to USA 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) 18

19 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: 01/31/2013 / 77.9% 65.5% 61.6% 58.6% 69.7% 42.3% 62.2% 76.9% 49.1% 47.6% 59.4% 72.0% HKEx CME BVMF Deutsche ICE Nyse SGX ASX* LSE Nasdaq TMX BME Boerse Euronext Diversified and integrated Derivatives Diversified but not integrated EBITDA Margin * 12 mths to 30 June

20 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 20

21 Brazilian s stock trading breakdown Novo Mercado Launching (Dec. 2000) End of CPMF (Financial Transaction Tax) Sarbanes Oxley Act (Jul. 2002) End of IOF Tax (2%) for foreign investors (Dec. 2011) Jan % 78% 7.8% 33.2% 36.0% 30.8% 66.8% Apr 1 1 May 1 1 Jun 1 1 Jul 1 1 Aug 1 1 Sep 1 1 Oct 1 1 Nov 1 1 Dec 1 1 Jan 1 2 Feb 1 2 Mar 12 Apr 1 2 May 1 2 Jun 12 Jul 1 2 Aug 1 2 Sep 1 2 Oct 1 2 Nov 1 2 Other USA Venues Brazilian ADRs NYSE Brazilian ADRs BM&FBOVESPA companies with ADRs BM&FBOVESPA (except companies with ADRs) Dec 12 Jan 1 3 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 02/08/

22 OPERATIONAL HIGHLIGHTS 22

23 BOVESPA Segment: operational highlights Average Daily Traded Value ADTV (BRL billions) Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Average annual market cap (R$ trillion) Turnover Velocity** (12 months average) % 29.4% 36.8% 37.6% 38.7% 42.3% 63.2% 56.4% 66.6% 63.8% 70.3% 71.0% 64.2% * * *Updated until 01/31/2013. **Relation of the trading value in the cash market and the market cap of the exchange. 23

24 BOVESPA Segment: capital raising activity Public Offerings (BRL billions) Updated until 01/31/2013. Follow On IPO * Pipeline: already announced to the market There are 4 offerings in the pipeline: IPO (4): AutoBrasil Participações; Cia. Estadual de Águas Esgotos CEDAE; Senior Solution; Alupar Investimentos Additionaly, there are 16 Real Estate Funds filed in CVM: estimated value of R$4.3 billion * Excludes the capitalization with barrels reserves by federal government BRL74.8 billion in Petrobras offering. 24

25 BOVESPA Segment Potential to increase the number of listed companies MarketCapitalization togdp (%)* 177% 174% 158% 129% 137% 126% 121% 110% 109% 136% 129% 119% 109% 107% 104% 100% 89% 87% Hong Kong : 438% 481% 365% 138% 129% 96% 100% 87% 75% 75% 76% 80% 72% 72% 67% 60% 57% 55% 50% 49% 46% 44% 39% 35% Singapore Canada Chile USA Korea Australia Japan France India Brazil UK China Mexico * Source: World Bank Market Capitalization by Economic Sector Dec 11 Dec % 15.2% 22.4% 15.7% 14.1% 10.4% 1.8% 11.5% 21.6% 4.7% 6.8% 0.6% 3.9% 16.2% 11.1% 0.3% 26% 2.6% 8.6% 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 25

26 BM&F Segment: operational highlights Average Daily Traded Volume ADTV (Thousands of contracts) 1,167 1,740 1,573 1, Rate per Contract t RPC (BRL) 3,518 3, ,505 2,701 2,899 2,994 2,615 2, ,590 2,819 2,630 2,626 2,971 2,653 2,856 2, ,497 2, ,061 1,636 1,452 1,561 1,866 2,199 1,723 1,710 1,747 1,856 Jun Jun Jun Jun Jun Jul Jul Jul Jul Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 BRL Int. Rate (Thousands) FX (Thousands) Index (Thousands) Others (Thousands) , * J 12 F 12 M 12 A 12 M 12 J 12 J 12 A 12 S 12 O 12 N 12 D 12 J 13 Interest rates in BRL FXrates Stock Indices Interest rates in USD Commodities Mini contracts OTC Total RPC Updated until 01/31/

27 Interest Rate in BRL Contracts Structural changes behind the growth in volumes BRL INT. RATE: ADV PER MATURITY (MILLIONS OF CONTRACTS) Growth in interest rate contracts with longer maturity CAGR: +3% CAGR: +32% CAGR: 21% st 4th Maturity 5th Maturity Total Fixed Rate Credit in BRL billions Public Debt / Fixed Rate in BRL billions Dec'12: BRL Dec'12: BRL bn Jan'05: BRL Jan'05: BRL bn Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Source: Brazilian Central Bank. 27

28 High Frequency Trading (HFT) BM&F Segment: HFT (ADTV in thousands of contracts) and mkt. share 3.5% 42% 4.2% 3.9% 3.6% % 7.5% 7.3% 8.7% 8.5% 8.9% 9.1% 54% 6.6% 6.9% 5.4% 5.8% 5.9% 5.8% 7.5% 6.4% 7.2% 6.3% 6.7% 50% 5.0% 5.6% 52% 5.2% Mini FX Equities Other % overall volume Bovespa Segment: HFT (ADTV in BRL million) and mkt. share 5.7% 6.6% 5.9% 5.9% % 7.6% 8.6% % 10.4% 10.3% 11.5% 9.3% 8.7% 8.4% 8.4% 9.0% 10.3% 8.8% 10.3% 10.0% 9.1% 10.2% 10.1% 9.4% 10.1% 1, ,099 1,296 1,460 1,339 1, ,145 1, , ,366 1,517 1,473 1, ,268 1,332 1,517 1,363 1,489 1, , ,070 1,238 1,243 1,041 1, , ADTV (Foreigners) ADTV (Individuals) ADTV (Institutionals) % of overall market 28

29 FINANCIAL HIGHLIGHTS 29

30 Highlights 3Q12 vs. 3Q11 Growth in all business lines and costs under control FINANCIAL HIGHLIGHTS Gross Revenue: R$581.3 million, +6.2% Bovespa Seg.: R$263.4 million, +5.9% BM&F Seg.: R$219.3 million, +6.8% Other revenues: R$98.7 million, +5.8% Net Revenue: R$521.6 million, +5.7% Adjusted Expenses¹: R$136.0 million,, 0.2% Operating Income: R$346.8 million, +7.0% EBITDA: R$375.6 million, +8.1% EBITDA Margin: 72.0% Adj. Net Income²: R$400.6 million, +0.3%, Adj. EPS: R$0.208, +1.7% Payout: R$ million in dividends id d and interest ton capital, 80% of GAAP net income in 3Q12 OPERATING HIGHLIGHTS Bovespa Segment: ADTV: +8.7% Margin: flat BM&F Segment: RPC: +14.7% ADV: 4.0% High growth products: ETFs: +90.2% ADTV Tesouro Direto: +45.6% AUM FII : strong growth in market capitalization and number of investors LCA: consistent increase of register volume MAIN PROJECTS FOR 4Q12 Cross listing: listing of S&P 500 mini contracts at BVMF and Ibovespa at CME PUMA Trading System : equities module Registration Platforms 1 Excludes stock options plan, depreciation, provisions and tax on dividends from CME Group. 2 Excludes deferred liability recognized in correlation with temporary differences from amortization of goodwill for tax purposes, the impact of the stock options plan, the investment in associate (CME Group) accounted for under the equity method of accounting, net of taxes related to dividends and recoverable taxes paid overseas to be compensated. 30

31 Financial Highlights Focus on cash generation and shareholders return OPERATING CASH GENERATION (R$ million) CASH AND FINANCIAL INVESTMENTS (R$ million) +6.9% 3Q12 1, ,100 3, Q12 1, ,979 4,125 1Q12 1, , ,658 4Q11 1, ,582 3,782 3Q11 1, ,487 3,508 3Q11 3Q12 Market participants cash collateral and others* Subsidiaries** Restricted funds Available funds RETURNING CAPITAL TO SHAREHOLDERS Payout: R$221.2 million, R$131.2 million in dividends and R$ million in interest oncapital, 80% of GAAP net income in 3Q12. Share buyback program: up to 60 million shares authorized for repurchase until June 28, 2013 CAPEX BUDGET FOR 2012 Budget range : R$ million Actual 3Q12: R$52.3 million Actual 9M12: R$124.2 million *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 and restricted funds at BM&F Settlement Bank (Banco BM&F). 31

32 Revenue Breakdown in 3Q12 Diversified revenue sources as a differential REVENUE BREAKDOWN (3Q12) 39.3%: Cash Equities 9.2%: Trading 30.1%: Post trading 92% 9.2% 18.5% 5.2%: Derivatives on Stocks and Indices 1.4%: Trading 3.8%: Post trading 22.7% Gross Revenue: R$581.3 million 30.1% 37.0%: Financial/Commodities Derivatives 14.3%: Trading 22.7%: Post trading 18.5%: Other revenues 14.3% 1.4% 3.8% 4.5%: Depository, Custody and back office 32%:Securities 3.2%: Lending 3.1%: Vendors 2.2%: Trading Access (brokers) 1.9%: Listing 36%:Others 3.6%: 32

33 Expenses in 3Q12 Focus on cost control and higher operating efficiency TOTAL EXPENSES BREAKDOWN (3Q12) ADJUSTED EXPENSES Marketing Third Party Other 8% 2% 15% Expenses: R$174.8 MM 47% Personnel (R$ million) % Depr./ Amort. 14% Data. Proc. 14% 3Q11 4Q11 1Q12 2Q12 3Q12 ADJUSTED EXPENSES: 3Q11 vs. 3Q12 (R$ million) ADJUSTED EXPENSES: 2Q12 vs. 3Q12 (R$ million) (0.7) (1.1) (2.5) (0.3) (0.8) Q11 Adj. Exp. Personnel Data proc. Third Party Commun. Marketing Others 3Q12 Adj. Exp. 2Q12 Adj. Exp. Personnel Data proc. Third Party Commun. Marketing Others 3Q12 Adj. Exp. 33

34 ADJUSTED OPEX¹ BUDGET 2013 Budget: R$ million, the same range of 2012 Focus on cost control: in 2013, inflationary growth will be neutralized by higher efficiency Expenses CAGR ( ): 1.6% pa < Inflation CAGR ( ) 5.8% pa (in R$ millions) budget in thesamerange of A 2011A 2012E 2013E 1 Adjusted by depreciation, stock option program, tax on dividends from CME Group and provisions. Expenses growth considering the mid point budget for 2013 (R$570 million) and estimated IPCA from BCB Focus Bulletin (November 30, 2012). 34

35 CAPEX BUDGET 2013 Budget: R$ million 2014 Budget: R$ million Investments close to R$1.2 billion between 2010 and 2014 in projects below: Capex reduction starting from (in R$ millions) A 2011A 2012E 2013E 2014E 3Q10 1Q13: PUMA Trading System : Clearing houses integration / CORE* 4Q12 4Q14: Data Center 2Q12 3Q13: OTC : Improvements in infrastructure *IPN/CORE implementation requires the authorization of the regulators. 35

36 Appendix 36 36

37 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) 37

38 High Frequency Trading HFT New Products Pipeline 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 38

39 BOVESPA Segment: foreign investment flow Monthly Net Flow of Foreign Investments* (in BRL billions) (1.6) (1.5) (0.6) (1.3) (0.4)(0.2) (2.4) (1.1) (1.3) (2.3) 0.3 (1.2) (4.2) *Includes regular trades and public offering. Updated until Dec. 31,

40 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% 4% 4% 4% 4% 4% 4% 24% 25% 23% 23% 24% 30% 33% 34% 36% 34% 36% 34% 37% 38% 12% 15% 17% 19% 20% 22% 23% 25% 25% 27% 23% 28% 25% 23% 56% 51% 49% 48% 45% 42% 38% 34% 33% 34% 36% 33% 33% 33% Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Individuals id Institutional i linvestors Foreign Investors Financial i Institutions i Companies Central lbank Bovespa Segment (Investor s Participation in Total Value) 12% 10% 10% 8% 7% 8% 9% 8% 8% 7% 9% 8% 9% 8% 36% 35% 35% 34% 30% 33% 35% 40% 40% 41% 42% 42% 40% 40% 27% 27% 30% 27% 26% 33% 33% 32% 32% 31% 32% 32% 35% 35% 25% 25% 23% 27% 31% 26% 21% 18% 19% 17% 17% 17% 15% 17% Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Individuals Institutional Investors Foreign Investors Financial Institutions Companies Others 40

41 Investment Funds AUM Evolution (in BRL billions) 2, 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% 14% 11% Percent of Equity Fund Assets Worldwide Brazil Equity funds 40% Equity funds 14% Source: ANBlMA (Jul 12) and Investment Company Institute ICI (2Q12). 41

42 3Q12 EARNINGS 42

43 Bovespa Segment ADTV growth and flat margins OPERATING HIGHLIGHTS ADTV and margin in basis points Q11 4Q11 1Q12 2Q12 3Q12 ADTV (R$ billions) Margin (bps) Average market cap and turnover velocity 69.3% 66.6% 66.2% 75.0% 70.4% Q11 4Q11 1Q12 2Q12 3Q12 Average Stock Market Capitalization (BRL trillions) Turnover Velocity (%) 3Q12 x 3Q11: +8.7% ADTV => 9.8% growth of cash equities ADTV foreign investors ADTV went up 26.2% => foreign HFTs ADTV rose 24.9% all time high monthly ADTV of R$8.4 billion in Sep 12 record of million trades in 9/14 stable trading margins at 5.7 bps higher turnover velocity of 70.4% 6.6% 6%growth in the average market capitalization 3Q12 x 2Q12: HFTs: ADTV (R$ millions) and volume participation p (%) ADTV 6.1% down compared to the previous record of R$7.6 billion in 2Q % 10.3% 8.5% 9.4% 9.8% 1, , , ,2 1,368.9 margins 4.2% higher => lower participation of 1, , institutional investors and day trades, which pay lower fee rates , , Q11 4Q11 1Q12 2Q12 3Q12 Foreigners Individuals Institutionals % of overall market 43

44 BM&F Segment Average RPC growth OPERATING HIGHLIGHTS ADV (millions of contracts) and RPC (R$) Q11 4Q11 1Q12 2Q12 3Q12 Int. Rate BRL FX Indices Others RPC (BRL) BRL Int. Rates volumes by maturities (%) 57% 65% 79% 86% 68% 90% 8% 4% 16% 7% 22% 15% 3% 7% 4% 2% 6% 2% 3Q11 2Q12 3Q12 1st Maturity 2nd Maturity 3rd Maturity 4th Maturity 5th Maturity HFTs: ADV (thd contracts) and volume participation (%) 7.8% 7.2% 8.0% 6.3% 6.7% Q12 2 x 3Q11: 500,0 400,0 300,0 200,0 100, % RPC => depreciation of R$/US$ rate impacting RPC of FX (+36.2%) and USD int. rates (+25.3%) contracts; => 10.1% increase in RPC for BRL int. rate due to concentration of trading in longer maturities contracts (4thand 5th) 4.0% ADV => drop in ADV of BRL int. rate ( 2.4%), indices ( 17.3%) and FX ( 13.8%) Lower participation of HFTs, due mainly to a reduction in ADV of FX and indices contracts 3Q12 x 2Q12: +12.0% RPC => reflecting the depreciation of R$/US$ rate ( 6.5%) and reduction of day trade operations of BRL int. rates 19.8% ADV compared to the previous record of R$3.4 million contracts t in 2Q12 3Q11 4Q11 1Q12 2Q12 3Q12 Equities FX Mini contracts Others % in Overall Volume 44

45 Net income Net income impacted by a fall in financial income ADJUSTED NET INCOME Adjusted net income did not fully capture the revenue growth due to a plunge in interest income EBITDA EBITDA growth in line with operating income growth (R$ million) 27.9 (3.9) (R$ million) % (37.1) Q11 Net revenues Expenses* Financial i Income tax 3Q12 Income Adjusted net income Adjusted net income 3Q11 3Q12 Financial Income: 3Q12 vs. 3Q11 OPERATING INCOME R$45.5 million,down 44.9% Financial Revenue: R$67.6 million, down 33.7% due mainly to lower interest rates Financial Expenses: R$22.1 million, a 14.0% growth due to depreciation of 24.0% in R$/US$ (R$ million) +7.0% * Excludes stock options plan and tax on dividends from CME Group. 3Q11 3Q12 45

46 Final Remarks BVMF better prepared to capture opportunities OPPORTUNITIES IN BRAZILIAN MARKETS New reality of lower interest rates Capital markets set to become a more important alternative for long term funding MAINTAINING MARKET INTEGRITY Control, governance, transparency and market security Strengthening the integrity of Brazilian capital markets targeting growth WHAT IS BVMF DOING? Investing intensively in trading and post trading platforms Increasing focus on customers (brokers and investors): revisiting the fee structure, investing in product development Stringent cost controls Ensuring market integrity by establishing efficient controls and strengthening BSM Operating leverage materialization WHAT IS ALREADY HAPPENING! Revenue growth, despite slow economic growth scenario and international ti linstability High potential products have been showing strong growth 46

47