Investor Relations Department

Transcription

1 Investor Relations Department São Paulo, SP JAN/2015 Confidencial Restrita Confidencial Uso Interno X Público 1

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 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 3

4 Exchange sector Safety and market integrity as priorities Capital and derivatives markets in Brazil Stable and solid regulation CVM Trade and post-trade BACEN Post-trade, banks and intermediaries Main participants Intermediaries local and international brokers (linked to bank and independent) Listed companies Investors institutionals, foreign and individual (retail) Exchange market characteristics in Brazil BVMF is the sole exchange, despite the market being open for competitor since 2007 Stocks exclusively traded through an exchange (Dark pools, MTFs and internalization prohibit) Identification of the final beneficial owner in the entire trading and post-trading chain Derivatives trade predominantly through an exchange and OTC derivatives must be registered mandatorily Securities lending mandatorily through a central counter-party (CCP) The exchange is responsible for oversight and self-regulation of the markets in which it operates 4

5 Why invest in BM&FBOVESPA? A global exchange 1890: Foundation of Bolsa Livre (Bovespa's predecessor) 1967: Bovespa s Mutualization Aug 2007: Bovespa Hld demutualization Oct 2007: Bovespa Hld IPO (BOVH3) 1986: Start of BM&F activities Sep 2007: BM&F demutualization Nov 2007: BM&F IPO (BMEF3) May 2008: integration between BM&F and Bovespa Hld and creation of BM&FBOVESPA (BVMF3) High dividend payer¹: +80% of the net income and R$5,8 billion on distributed earnings since 2008 State-of-the-art trading and post-trading systems:r$1,5 billion invested in resilience, strength and safety Revenue diversification: trading and posttrading services for stocks, derivatives, fixed income and OTC Consolidated market position: dominant position in the domestic market and significant presence in the global exchanges industry Constantly seeking operational efficiency: investments in technology and cost growth below inflation² Reference in corporate governance standards: cutting edge in adopting best practices to the market ¹ Practice of the period and amount distributed from Jan/2008 to Sep/2014; ² Expenses adjusted to Company s depreciation, stock granting plan principal and social charges -, stock options plan, tax on dividends from the CME Group, transfer of fines and provisions 5

6 Multi-asset and vertically integrated model Value gained across most of the chain Services for the whole chain INTEREST COMMODITIES EQUITY A VISTA OPÇÃO FUTURO Pós-Negociação CCP, SSS e CSD SWAP TERMO REGISTRO FX CREDIT Trading Platform: equities, derivatives, government and corporate bonds, funds, spot FX, among others Post-trading Platform: Contraparte Central (CCP) Settlement System (SSS) Central Depository (CSD) Serviços para Emissores e Participantes: Listing Trading access (brokers) Securities lending Custody for clubs and foreign investors (2689) Market Data (vendors) Indices Licensing Software Licensing OTC (derivatives and fixed income) 6

7 Multi-asset and vertically integrated model Value gained across most of the chain BRAZIL (Internalization of orders is forbidden) USA (Internalization of orders is allowed) TRADING Trading venues Brokers A and B DTCC Brokers A and B Broker A Broker B POST-TRADING CCP SSS CSD Investors Investors Investors Investors Model 100% vertical: clearing, settlement and central depository at the FINAL BENEFICIAL OWNER LEVEL Clearing, settlement and depository occur at the brokerage houses 7

8 Corporate governance Reference in corporate governance practices Adoption of Best Practices Listed in Novo Mercado Only voting shares issued (ON) No controlling shareholder and pulverized capital Majority of the Board composed of independent members No Board member is a Company s executive Executives compensation system aligned with shareholders long-term interests Pulverized Capital 69,23% Oppenheimer Funds CME Group Brasil Treasury stock 10,44% 6,84% 5,32% 5,02% 3,15% Vontobel Asset Management BlackRock Funds Others Update in 11/03/2014 8

9 Corporate Governance Multidisciplinary knowledge in conducting business BOARD OF DIRECTORS Pedro Pullen Parente Chairman - Engineer Marcelo Fernandez Trindade Vice-chairman Lawyer Claudio Luiz da Silva Haddad Engineer and professor José Roberto Mendonça de Barros Economist and professor Luiz Fernando Figueiredo Co-Founder of Mauá Investments Luiz Nelson Guedes De Carvalho Professor André Esteves CEO of BTG Pactual José Berenguer Neto CEO of JP Morgan Brazil Daniel Luiz Gleizer Director of Itaú Unibanco Alfredo Antônio Lima de Menezes Executive Officer of Bradesco Charles P. Carey Member of CME Group s Board of Directors Independent members EXECUTIVE OFFICERS Edemir Pinto CEO Eduardo Guardia Chief Product and IRO Cícero Vieira DCOO Daniel Sonder CFO Luis Furtado CIO COMMITTEES Audit Committee Nominations and Corporate Governance Committee Compensation Committee Risk Committee Advisory Committee For The Securities Intermediation Industry 9

10 BM&FBOVESPA s Sustainability Policy Approved by the Board of Director 10

11 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 11

12 Opportunities in the Brazilian market BM&FBOVESPA is ready to capture future growth Growth opportunities in the Brazilian equities and derivatives markets EQUITIES MARKET Portfolio diversification: diversification of institutional investors portfolios with a higher participation of equities Retail investors: small number of retail investors and growth of the middle class Listed companies: low number of listed companies, while important sectors are not adequately represented on the exchange DERIVATIVES MARKET Growth of credit and fixed-rate government debt: higher demand for hedging from financial institutions and institutional investors Growth of foreign trade: higher demand for hedging through FX contracts Equities market development: growth in demand for index-based contracts OTC derivatives: capital requirements (Basel) should benefit OTC transactions through a CCP 12

13 Investors exposure to equities is low Investors portfolio opportunities shifting to equities Investors portfolios are highly concentrated in fixed income Historically high interest rates Investment Funds AUM (in BRL billion) Funds AUM evolution (in BRL billion). Global average of 40% for equities Low level of sophistication of pension funds and some asset managers Lack of knowledge about the equity market, combined with retail investors fixed-income mindset Number of Custody Accounts (in thousands) Number of retail investors represents only 0.3% of the population (lower than global average) Pension Funds AUM (in BRL billion) Participation of equities in the portfolio of pension funds Sources: BM&FBOVESPA, ANBIMA and ABRAPP. ¹ Nov/14 ²Jun/14 13

14 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 14

15 BM&FBOVESPA IT, Risk and Operating Development Building a state-of-the-art platform to boost market growth BM&FBOVESPA is investing more than USD650 million ( ) to build state-ofthe-art IT, Risk and Operating infrastructure Capital efficiency for clients Attract and retain clients and strengthen relationship with intermediaries Development of markets and products Operational leverage for BM&FBOVESPA Innovate and enhance market robustness ahead of regulatory demands OTC MARKET NEW DATA CENTER High performance: high availability, submilliseconds latency, standard deviation low Operational leverage: easily scalable capacity Capital efficiency for clients: integrated risk calculation (equities and derivatives - OTC and listed); and unification of settlement windows Rationalization and standardization of rules, procedures and requirements Capital efficiency for clients: integrated risk calculation (OTC and Exchange Traded Derivatives) Customer relationship: strengthening relationships with customers Customer relationship: able to host participants and clients infrastructure Significant capacity to expand co-location The implementation of IPN/CORE depends the approval of the regulators. 15

16 PUMA Platform High availability and performance Capacity and resilience of the system tested in times of high volatility and message peaks The entire trading infrastructure must be adequately sized for peak message traffic: RESILIENCE AND AVAILABILITY 438 uninterrupted trading days* Bovespa segment * Until Sep. 26, 2014 Bovespa Segment Apr. 29th Peak of msgs/min: 619,063 Average msgs/min: 60,000-70,000 BM&F segment BM&F Segment Aug. 13th Peak of msgs/min: 85,388 Average msgs/min: 7,000-8,000 16

17 Clearinghouses Integration and New Risk Model (CORE) Post-trade environment evolution Organization of the post-trade environment by types of assets/products 4 rulebooks and 4 manuals. Organization of the post-trade environment by process Equities, ETFs, BDRs 4 systems / back-office processes 4 participant structures 4 systems / processes for risk management 4 pools of collateral 4 distinct environments / IT architectures 4 settlement windows and 4 multilateral balances 4 registration systems for participants and clients. OTC derivatives Other products and assets Securities lending Rules and Manuals Structure of market participants Participants and customer registration Allocation and transfer Position control Clearing and settlement Risk management Pool of collateral Futures, options, forwards Government Bonds Corporate fixed income Interbank spot foreign exchange Exchange and market participation cost reduction Liquidity management improvement More efficient allocation of capital by investors Operational and technological risk reduction 17

18 Clearinghouses Integration and New Risk Model (CORE) Derivatives clearinghouse migration results Roughly R$20 billon released in collateral R$15 billion reduction in required collateral R$5 billion increase to the value of deposited collateral R$12 billion withdrawn in the early days of activity More than 5,000 margin simulation exercises per day 18

19 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 19

20 Products and Services Development Focus on the customers demands and needs Long-term development of products, markets and services Greater liquidity for listed products Development of infrastructure for expansion of MM and HFT activity Capital efficiency generated by CORE enables/encourages the realization of new strategies Development of the securities lending platform Marketing listed products and attracting new customers Expanding the retail investor base Incentive program with market participants Expanding the portfolio to attend to the investment profile of individuals (Tesouro Direto, Fixed Income ETFs, FIIs...) Discussion about tax treatment simplification in the equities market Capture of institutional investors diversification into foreign securities Listing of foreign securities (non-sponsored BDRs and Foreign Index ETF) Cross-listing of futures contracts 20

21 Products and Services Development Focus on the customers demands and needs Long-term development of products, markets and services Greater number of listed companies Discussions with the Government to encourage and facilitate IPOs by SMEs Law grants exemption on capital gains for eligible SME s investors until 2023 Creation of investment fund with proper structure to invest in SMEs Reduction of maintenance and public offer cost for listed companies Include stocks in the roll of restricted public distribution efforts BNDES support to foster IPOs on BOVESPA MAIS Fixed Income and OTC markets (product, market and revenue diversification) Securities registration: (i) marketing of already-available products (CDB, LCA, LCI and COE); ii) new products (CDB - new types, Financial Bills, COE - physical delivery and repos) OTC Derivatives: (i) benefits of CORE; (ii) SWAPs and Flexible Options migration to the new platform (flexibility and operational efficiency); and (iii) development of SWAPs with cash flow Corporate bonds: (i) acceptance of securities with restricted distribution efforts (ICVM 476); and (ii) migration of trading to PUMA Constant fee structure and incentive improvements Use of pricing policies and incentives as important tools for the development of products, markets and services, as well as alignment with market participants Review and monitoring of existing pricing and incentives policies 21

22 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 22

23 Bovespa Segment Operational highlights AVERAGE DAILY TRADING VALUE ADTV (BRL billion)* AVERAGE ANNUAL MARKET CAP (BRL trillion) TURNOVER VELOCITY² (12 months average) ¹ ¹Updated to December 30, ²Ratio of cash market trading volume to the market cap of the exchange. 23

24 BM&F Segment Operational highlights AVERAGE DAILY TRADED VOLUME ADV (thousands of contracts) REVENUE PER CONTRACT - RPC (BRL) ¹ D-13 J-14 F-14 M-14 A-14 M-14 J-14 J-14 A-14 S-14 O-14 N-14 D-14 Interest rates in BRL FX rates Stock Indices Interest rates in USD Commodities Mini contracts OTC Total RPC ¹Updated to December 30, ²Ratio of cash market trading volume to the market cap of the exchange. 24

25 Investor participation in volumes Equities and derivatives segments Bovespa SEGMENT (EQUITIES) BM&F SEGMENT (DERIVATIVES) ¹Updated to December 30, ²Ratio of cash market trading volume to the market cap of the exchange. 25

26 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 26

27 Income Statement History of income statement results (consolidated) (in BRL thousand) M14 Net revenue 1,510,569 1,898,742 1,904,684 2,064,750 2,131,795 1,657,209 Expenses (569,832) (633,504) (816,664) (763,080) (797160) (558,304) Adjusted expenses (446,677) (543,881) (584,521) (563,487) (575,764) (417,449) Operating income 940,737 1,265,238 1,088,020 1,301,670 1,334, ,147 Operating margin 62.3% 66.6% 57.1% 63.0% 62.6% 62.8% Equity method result - 38, , , , ,673 Financial result 245, , , , , ,881 Income before taxation of profit 1,186,574 1,592,515 1,588,210 1,659, ,535 1,241,701 Income tax and social contribution (304,505) (448,029) (539,681) (585,535) (606,588) (496,570) Net income¹ 881,050 1,144,561 1,047,999 1,074,290 1,081, ,131 Adjusted net income 1,223,761 1,586,374 1,545,627 1,612,136 1,609,769 1,105,422 Adjusted EPS (BRL) ¹Attributable to shareholders of BM&FBOVESPA. 27

28 Revenue breakdown Diversified revenue sources as a differential REVENUE BREAKDOWN (3Q14) MAIN LINES DYNAMICS Equities and equities derivatives: Market Capitalization of listed companies Level of activity in the market (turnover velocity) Type of investors Total revenue: R$594.7 million Type of operation and asset traded Financial and commodities derivatives: Type of contract traded Type of investors Type of operation BRL/USD quote Other Number of investors/account in the depository Market Capitalization of listed companies Type of investors Number and type of users of the data signal BRL/USD quote 28

29 Adjusted¹ expenses and investment budget Focus on cost control and investments phase ADJUSTED EXPENSES BUDGET Focus on expenses control offset most of the inflationary adjustments over the past years (in BRL million) 2014 budget reaffirmed INVESTMENTS BUDGET: 2015 Capex budget reviewed by R$10 million 2014e vs. 2013: 3.34%² IPCA 2014e: 6.38%² 2015e vs. 2014e: 1.26% 4 IPCA (average) 2015e: 6.50%³ CAGR e: 2.70% 4 IPCA (average) e: 6.23%³ The CAPEX program initiated in 2010 renewed the Company's IT, operations and service platform (in BRL million) 2014 budget reaffirmed Review of 2015 budget: from R$ million to R$ million Update of the timeline and budget of the Company s main projects Capex is expected to decline in e: R$ million ¹ Expenses adjusted to Company s depreciation, stock granting plan principal and social charges -, stock options plan, tax on dividends from the CME Group, transfer of fines and provisions. ² Considers the high point 2014 budget ³ IPCA for 2014 and 2015 based on market expectations released by the Central Bank in Dec. 05, 2014; 4 Considers the mid-point of 2015 budget and high point 2014 budget 29

30 1H14 Expenses Breakdown Pursuit of greater efficiency and controlling expenses Personnel expenditure¹ Data processing Third party services Marketing Communicat. Prioritization of activities, review of contracts and enhancement of processes has resulted in greater efficiency R$ MM Nominal Var. Real Var. ² 1H11 1H % -3.3% Diligent process of managing resources and headcount sizing Average annual wage increase of 7.2% and recognition of individual talents 1H11 1H % -12.0% Higher expenses with maintenance of new IT platforms Expenses reduction with service providers and deprecation of legacy IT platforms 1H11 1H % -37.7% Prioritization of activities and projects Review of contracts 1H11 1H % -84.0% Strategic review of marketing activities 1H11 1H % -57.0% Reduced costs from the posting of trading and custody statements, as a result of changes to the submission process ¹ Includes personnel capitalization and excludes stock option and bonus expenses, ² Calculated based on the annual wage increase between 2011 and 2013 for personnel expenditure and the IPCA of services accumulated from July, 2011 to June, 2014 for the other lines of expenses 30

31 Financial Highlights Financial solidity combined with return of excess capital to shareholders Distribution of most of the cash generation, reaffirming the commitment to return capital to shareholders Payout (% of GAAP earnings) 2009: 80% 2010: 100% 2011: 87% 2012: 100% 2013: 80% 9M14: 80% + Buyback Almost 13% of free float repurchased in almost 6 years (2H08-9M14) Cash Generation after Investments and Interest Payments (Accumulated ¹ between January, 2009 and September, 2014, in R$ million) Cash Position² R$2,091 MM Indebtedness R$1,513 MM Rating Moody s Baa1 (issuer global scale) Baa2 (issuer BR scale) Baa1 (global notes) S&P BBB+ (counterparty cred.) A-2 (issuer) ¹Data of BM&FBOVESPA (not consolidated): excludes variation in financial transactions and collateral pledged by participants, proceeds raised in connection with the acquisition of CME Group shares in ²Data from September, 2014 and excludes third party resources (investors collateral, resources deposited in the BM&FBOVESPA Bank and others). 31

32 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 32

33 3Q14 Highlights Solid results in a challenging environment; one-off charge FINANCIAL HIGHLIGHTS (3Q14 vs. 3Q13) TAX RELIEF PROGRAM (REFIS) ONE-OFF CHARGE Total revenue: R$594.7 MM, -0.4% BM&F seg.: R$228.7 MM, flat Bovespa seg.: R$263.6 MM, +2.5% Other: R$102.4 MM, -7.8% Dispute related to the deductibility of expenses from Bovespa Holding s IPO Amount under dispute reduced from R$123.0 MM to R$69.2 MM one-off net impact of R$63.1 MM (R$18.1 MM as financial expense and R$45.0 MM as income tax) Net revenue: R$546.0 MM, +2.0% Adjusted expenses¹: R$146.8 MM, -2.3% Operating income: R$352.2 MM, +3.2% EBITDA²: R$431.2 MM, +3.4% (EBITDA margin 79.0%) Financial Results: R$47.3 MM, -4.6% Adjusted net income³: R$357.4 MM, -11.5% Adjusted EPS: R$0.195, -7.5% VOLUME HIGHLIGHTS Better volumes quarter-over-quarter for both segments Oct 14 volumes: Bovespa seg % yoy (all time high); and BM&F seg % yoy RETURNING CAPITAL TO SHAREHOLDERS Payout: R$190.7 MM in 3Q14, 80% of GAAP net income Share buyback: Jul-Oct 14: 12.4 MM shares (0.7% of the free float) 11.2 MM repurchased in October. MAIN PROJECTS AND UPDATES Clearinghouses Integration: derivatives module fully implemented on August 18, 2014 Indices development: partnership with S&P DJI 1 Excludes stock options plan cost, depreciation, tax on dividends from CME Group and provisions. ²According to CVM Rule 527/12 that does not exclude equity method accounting. ³ Excludes deferred liability recognized in correlation with temporary differences from amortization of goodwill for tax purposes, stock options plan cost, investment in associate (CME Group) accounted under the equity method of accounting, net of taxes related to dividends and taxes paid overseas to be compensated. 33

34 Bovespa Segment Performance Margins positively impacted by the mix effect AVERAGE DAILY TRADING VALUE (ADTV) 3Q14 vs. 3Q13: +0.8% Roughly flat at R$7.29 billion, mainly due to: 9.9% increase in average market capitalization Lower turnover velocity yoy Volatility related to elections in Brazil positively impacted volumes from mid-august TRADING MARGINS (in basis point - bps) MARKET CAPITALIZATION AND TURNOVER VELOCITY Market 3Q14 3Q13 Cash market Derivatives on single stocks Options market (stocks / indices) Forward market Total Bovespa Q14 vs. 3Q13: +2.6% Trading/post-trade margins impacted by the mix effect: Lower participation of local institutional investors Higher participation of equity derivatives Lower participation of day traders 34

35 BM&F Segment Performance Mix effect and FX rate drove RPC down, offsetting ADV growth AVERAGE DAILY VOLUME (ADV) AND AVERAGE REVENUE PER CONTRACT (RPC) 3Q14 vs. 3Q13: ADV: 2.7 million contracts, +7.3% +47.3% ADV of mini contracts +38.9% ADV of Interest Rates in USD contracts RPC: -6.4% Mix effect: higher participation of lower priced contracts (mini contracts and options) coupled with higher participation of day traders 2.5% Real appreciation against USD in the period (in millions of contracts) Contracts with RPC referenced in USD represented ~26% of derivatives ADV in 3Q14 REVENUE PER CONTRACT AND FX RATE (in R$) ~44% of derivatives revenue was priced in USD in 3Q14 MINI CONTRACTS 11.3% 11.9% 8.6% 9.1% 8.8% Q13 4Q13 1Q14 2Q14 3Q14 ADV (millions of contracts) % Total *Average FX rate (R$/US$) in the quarter, considering the closing price for previous month

36 3Q14 Revenue Breakdown Diversified revenue base REVENUE BREAKDOWN CASH EQUITIES TRADING REVENUE ACCOUNTED FOR 5.9% OF TOTAL DERIVATIVES REVENUE (BM&F + Bovespa) ACCOUNTED FOR 43.5% OF THE TOTAL 38.1%: Cash Market 5.9%: Trading 32.2%: Post-Trade 5.7%: Stock and Indices Derivatives¹ Total Revenue R$594.7 million 37.8%: Financial/Commodity Derivatives¹ 18.1%: Brazilian Real interest rate contracts 13.5%: FX Contracts 2.9%: USD interest rate contracts 3.3%: Other Financial/Commodity Derivatives 18.4%: Other Revenue 3.2%: Securities Lending 3.1%: Depository, Custody and Back-Office 3.1%: Vendors 2.0%: Listing 1.6%: Trading Access ¹Trading and Post-trade 36 36

37 3Q14 Expenses Breakdown Delivering efficiency on a diligent expense management (in R$ millions) Adjusted Expenses (-2.3%) Adjusted personnel (-2.2%): (i) headcount downsizing; (ii) reduction to profit-sharing accrual; and (iii) higher personnel expenses capitalized Data processing (-11.5%): 3Q13 was impacted by the concentration of expenses for software service and maintenance of IT platforms Communication (-30.3%): reduction in mail service expenses, reflecting improvements and electronification of the statements mailing process Other (+120.0%): higher donations and contributions including, particularly: Contribution to the Federal Government educational program called Ciências sem Fronteiras Transfer of fines due to failures in the financial and physical settlement processes, which are now destined to BSM *Include expenses with maintenance in general, taxes adjusted by the dividends from CME Group, board and committee members compensation and others. 37

38 Data processing Personnel expenditure¹ Third party services 9M14 Expenses Breakdown Pursuit of greater efficiency and controlling expenses Communicat. Marketing Prioritization of activities, review of contracts and enhancement of processes has resulted in greater efficiency 9M14 adjusted expenses grew 2.5% yoy, significantly bellow inflation (in R$ millions) Nominal Var. Real Var. ² % -2.2% Main forces pressuring expenses Average annual wage increase of 7.0% Main factors offsetting expenses growth Diligent management of assets and headcount dimensioning; lower profit sharing % -3.0% Higher expenses from new IT platforms maintenance and inflationary contract adjustments Review of contracts, legacy system deprecated % -3.6% Inflationary contract adjustments Contracts review % -27.6% Inflationary contract adjustments Improvements and eletctronification of the mailing process for statements successfully implemented % -23.2% Inflationary contract adjustments Strategic review of marketing activities; ongoing process of expenses review ¹ Includes personnel capitalization and excludes stock option and bonus expenses, ² Calculated based on the annual wage increase between 2013 and 2014 for personnel expenditure and the IPCA of services accumulated from September, 2013 to September, 2014 for the other expenses lines. 38

39 Financial Highlights Consistently returning capital to shareholders CASH AND FINANCIAL INVESTMENTS (In R$ millions) 3Q14 1, ,037 2Q14 1, ,053 1,055 3,497 3,842 1Q14 2, ,307 4Q13 2, ,921 5,077 4,871 RETURNING CAPITAL TO SHAREHOLDERS Payout R$190.7 MM in dividends (80% of the 3Q14 GAAP net income): payment on November 28 th (shareholders position of November 17 th ) Share Buyback Mar-Oct 14: 41.5 MM shares (R$456.9 MM) under the current program (up to 100 MM shares until Dec 14) YTD14: 78.4 MM shares (R$827.4 MM) reaching 4.1% of the free-float 3Q13 1, ,960 4,498 FINANCIAL RESULT Market participants cash collateral and others¹ Subsidiaries² Clearinghouses' required safeguards Available funds Financial result of R$47.3 MM, down 4.6% from 3Q13, explained mainly by R$18.1 MM interest payment in connection with the settlement of a tax dispute under the REFIS Clearinghouses required safeguards: growth in line with additional collateral pledged by market participants CAPEX 3Q14: R$47.7 MM (R$153.7 MM in 9M14) Capex budget ranges: 2014: between R$ MM 2015: between R$ MM ¹ Includes earnings and rights on securities in custody. ² Includes third party collateral at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA). 39

40 Resilient IT Infrastructure Capacity and resilience of the system tested in times of high volatility Investments in trade and post-trade platforms ensured the resilience of our systems in a period of messages and trades peaks 486 uninterrupted trading days¹ Msgs Bovespa Seg. (04/29/14) # of Trades in the Bovespa Seg. (million) ¹ Until Nov. 13th, 2014 Msgs BM&F Seg. (08/13/14) Oct Record # of Trades 2,582,718 0 Jan-14 Feb-14Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Less than three months after its launch, the new Clearinghouse has already handled record volumes in the BM&F Segment # of Trades in the BM&F Seg. (million) Oct Record # of Trades 376,741 0 Jan-14 Feb-14Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 40

41 Growth Products Increasing revenue diversification Products well accepted by clients, with continuous developments to maintain growth trend Securities Lending Tesouro Direto Market maker for options on single stocks Exchange traded funds (ETF) Agribusiness credit bills (LCA) Real estate investment funds (FII) Non sponsored Brazilian Depositary Receipts (BDRs N1 NP) CAGR ( ): +22.9% (In R$ millions) 41

42 Financial Statements Summary of Balance Sheet (Consolidated) ASSETS LIABILITIES AND SHAREHOLDERS EQUITY (in R$ millions) 9/30/ /31/2013 (in R$ millions) 9/30/ /31/2013 Current assets 3, ,319.5 Current liabilities 1, ,710.8 Cash and cash equivalents ,196.6 Collateral for transactions 1, ,073.0 Financial investments 2, ,853.4 Others Others Non-current liabilities 4, ,886.9 Non-current assets 22, ,577.2 Foreign debt issues 1, ,426.2 Long-term receivables 1, ,135.4 Deferred Inc. Tax and Social Contrib. 2, ,295.8 Financial investments 1, Others Others Shareholders equity 18, ,298.9 Investments 3, ,346.3 Capital stock 2, ,540.2 Property and equipment Capital reserve 15, ,056.7 Intangible assets 16, ,672.3 Others 1, Goodwill 16, ,064.3 Minority shareholdings Total Assets 25, ,896.7 Liabilities and Shareholders equity 25, ,

43 Financial Statements Net income and adjusted expenses reconciliations ADJUSTED NET INCOME RECONCILIATION 3Q14 3Q13 Change Change Change 2Q14 9M14 9M13 3Q14/3Q13 3Q14/2Q14 9M14/9M13 Net Income* % % % Stock options plan % % % Deferred tax liabilities % % % Equity in income of investees (net of taxes) (43.7) (38.2) 14.3% (39.8) 9.9% (128.1) (117.0) 9.4% Recoverable taxes paid overseas % % % Adjusted Net Income % % 1, , % * Attributable to BM&FBOVESPA shareholders. ADJUSTED EXPENSES RECONCILIATION 3Q14 3Q13 Change Change Change 2Q14 9M14 9M13 3Q14/3Q13 3Q14/2Q14 9M14/9M13 Total Expenses % % % Depreciation (29.5) (32.5) -9.2% (28.0) 5.2% (87.1) (88.4) -1.5% Stock options plan (7.3) (5.6) 30.2% (7.6) -3.2% (21.8) (21.4) 2.0% Tax on dividends from the CME Group (5.8) (5.1) 13.2% (5.3) 9.2% (16.6) (14.8) 12.1% Provisions (4.3) (0.6) - (3.2) 36.7% (15.4) (11.8) 30.4% Adjusted Expenses % % % 43

44 Financial Statements Summary (in R$ millions) 3Q14 3Q13 Change 3Q14/3Q13 2Q14 Change 3Q14/2Q14 9M14 9M13 Change 9M14/9M13 Net revenues % % 1, , % Expenses (193.8) (194.1) -0.2% (178.2) 8.7% (558.3) (543.7) 2.7% Operating income % % , % Operating margin 64.5% 63.7% 76 bps 61.7% 286 bps 62.8% 67.2% -438 bps Equity in income of investees % % % Financial result % % 1, , % Net income* % % % Adjusted net income % % 1, , % Adjusted EPS (in R$) % % % Adjusted expenses (146.8) (150.2) -2.3% (134.1) 9.5% (417.4) (407.3) 2.5% * Attributable to BM&FBOVESPA shareholders. 44

45 REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency BRAZILIAN MARKET OPPORTUNITIES Main growth drivers MAIN GROWTH INITIATIVES Building an State-of-the-art platform MAIN GROWTH INITIATIVES Investments, new products and focus on the customer OPERATIONAL PERFORMANCE Notable global exchange FINANCIAL HIGHLIGHTS Cost discipline and capital return to shareholders 3Q14 RESULTS APPENDIX 45

46 High growth products Growing sophistication of market participants Initiatives to develop and prompt higher volume in certain products Performance shows that the initiatives are being well received by the market Options with Market Maker Real Estate Funds (FIIs) Securities Lending (ADTV in BRL million) (ADTV in BRL million) (Open Interest - average for the period - in BRL billion) +43.1% CAGR(09-14): % CAGR (10-14): +12.4% ETFs Brazilian Treasury Direct - Tesouro Direto Agribusiness Credit Bills (ADTV in BRL million) (Custody in BRL billion) (AUM in BRL billion) CAGR (10-14): +37.5% CAGR (10-14): +33.5% ¹Updated to December 30,

47 Bovespa Segment Raising Capital PUBLIC OFFERINGS (BRL billion) PIPELINE: OFFERINGS ANNOUNCED SO FAR TO THE MARKET There are 5 offerings in the pipeline IPO:T4U, Ouro Verde, JBS, AZUL and PAR Corretora de Seguros Additionally, there are 4 Real Estate Funds filed with CVM: estimated value of R$ 700 million Update to December 30, 2014 ¹Excludes the portion acquired by the Brazilian government in the Petrobras offering, via the transfer of rights in barrels (BRL 74.8 billion). 47

48 Trading in ADRs of Brazilian companies Liquidity migration process interrupted Novo Mercado Launch (Dec. 2000) End of CPMF (Financial Transaction Tax) Sarbanes-Oxley Act (Jul. 2002) End of IOF Tax (2%) for foreign investors (Dec. 2011) December % 9.6% 37.0% 25.6% 37.3% 63.0% PUBLIC OFFERINGS IN NUMBER OF COMPANIES Source: Bloomberg (in USD traded value of 35 companies with ADRs programs ) Total IPOs Follow ons Total Dual Listings

49 Bovespa Segment Foreign investment flow MONTHLY NET FLOW OF FOREGIN INVESTMENTS (in BRL billons) Includes public offering (primary market) and regular trades (secondary market). 49

50 Products and Services Development Recent changes in pricing policy and incentives Products / Market Main changes SECURITIES LENDING Elimination of 0.05% incentive for national lenders (settlement rate for voluntary loan maintained at 0.25% p.a.) DMA MARKET DATA Elimination of 10% discount for trades via DMA in Derivatives Market (BM&F Segment) Price recomposition and pricing of new products and services ISSUERS Depository Elimination of analysis fee discount on the annual fee Creation of analysis fee for Public Tender Offers, IPOs and Follow-ons Adjustment of maintenance fees of custody accounts for a certain group of investors; and creation of fees for ownership transferring within the depository 50

51 Clearinghouses Integration and New Risk Model (CORE) Benefits from Clearinghouse integration OVERVIEW: CLOSEOUT RISK CALCULATION IN THREE STEPS 1. DETERMINING THE CLOSEOUT STRATEGY T+0 T+1 T+2 T+3 T+4... T+N Defines the portfolio closeout strategy which, respecting the settlement restrictions of the portfolio of assets/markets, should minimize the risk of a loss associated with the closeout process, preserving existing hedge strategies 2. RISK EVALUATION T+0 T+1 T+2 T+3 T+4... T+N Defines the (stress) scenarios associated with the dynamics of each risk factor relevant to the portfolio. All assets and contracts are reevaluated considering the scenarios defined in this step (full valuation). 3. POTENTIAL P&L CALCULATION T+0 T+1 T+2 T+3 T+4... T+N Calculates and aggregates intertemporally P&L associated with each scenario, considering the defined closeout strategy CLOSEOUT RISK PERMANENT LOSS TRANSIENT LOSS Result: Two risk measures market and liquidity that are estimated both jointly and consistently 51

52 Departamento de Relações com Investidores / 4418 / 4207/4834 ri@bmfbovespa.com.br 52