BM&FBOVESPA Analyst Day São Paulo, SP

Transcription

1 BM&FBOVESPA Analyst Day São Paulo, SP PLANEJAMENTO SEP/2014 ESTRATÉGICO 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 in which BM&FBOVESPA operates; (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. BM&FBOVESPA Analyst Day SEP/14 2

3 BM&FBOVESPA Analyst Day Schedule OPENING Edemir Pinto, Chief Executive Officer PRODUCTS, CLIENTS AND PRICING POLICY Eduardo Guardia, Chief Product and Investors Relations Officer CLEARING BM&FBOVESPA AND CORE RISK MODEL Cícero Vieira, Chief Operations Officer TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT Luís Furtado, Chief Technology Officer FINANCIAL HIGHLIGHTS Daniel Sonder, Chief Financial and Corporate Affairs Officer Q&A SESSION BM&FBOVESPA Analyst Day SEP/14 3

4 BM&FBOVESPA Analyst Day Schedule OPENING Edemir Pinto, Chief Executive Officer PRODUCTS, CLIENTS AND PRICING POLICY Eduardo Guardia, Chief Product and Investors Relations Officer CLEARING BM&FBOVESPA AND CORE RISK MODEL Cícero Vieira, Chief Operations Officer TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT Luís Furtado, Chief Technology Officer FINANCIAL HIGHLIGHTS Daniel Sonder, Chief Financial and Corporate Affairs Officer Q&A SESSION BM&FBOVESPA Analyst Day SEP/14 4

5 Strategic Drivers REVENUE GROWTH AND DIVERSIFICATION OPERATING EXCELLENCE FOCUS ON THE CUSTOMER INSTITUTIONAL STRENGTHENING BM&FBOVESPA Analyst Day SEP/14 5

6 Markets and Products Development Searching opportunities to accelerate growth Pursuit of excellence in customer service and in developing products and markets Main goals Customer segmentation and relationship strengthening To identify market demands and trends To link internal and external efforts (regulators and partners) To increase efficiency and assertiveness in addressing market needs To execute the company s commercial and pricing policies BM&FBOVESPA Analyst Day SEP/14 6

7 Products and Services Development Commercial and development areas Active stance in relationship with customers and in identifying trends and demands Segmentation: regulation, distinct needs and demands Local Institutional Investors Foreign Investors Banks Insurers Agribusiness Companies Listed and Unlisted Examples of demands and discussions Securities lending Treatment of corporate actions; control improvements for the participants, and tax treatment Fixed income / OTC derivatives Strengthening the CCP service and gains from the optimization of deposited margin due to CORE; new securities on the registration platform New products Fixed income ETFs Derivatives: inflation, foreign index and agribusiness futures New listings Small and medium enterprises (SMEs) and unsponsored BDRs Attracting new foreign customers Conversations with MMs and HFTs that do not operate in Brazil yet Dissemination of the securities lending platform Regulatory discussions ICVM 409 reform (qualified investor) and ICVM 476 (restricted distribution) BM&FBOVESPA Analyst Day SEP/14 7

8 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 BM&FBOVESPA Analyst Day SEP/14 8

9 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 Financial education for entrepreneurs and support in the company s planning 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 BM&FBOVESPA Analyst Day SEP/14 9

10 Products and Services Development Evolution and governance of pricing policy structure Honing of BM&FBOVESPA s pricing policy and incentives Main drivers Markets and products development Models review Discounts review Price recomposition Pricing new products BM&F seg. (disc. over exchange fees for HFTs) 2008 Annual fee adjustment for issuers BM&F seg. (prices per volume tiers) BOVESPA seg. (volume discount for HFTs) Rebalancing trading/pos- trade OTC Products BOVESPA seg. (disc. per volume day-trade and rebalancing) Charges on Depository amount in balance Market Data Pricing Policy Incentive program for Tesouro Direto Creation of an organizational structure for fees Incentive program for retail base Announc. pricing revision for Market Data, Issuers, DMA (BM&F seg.) and Sec. Lending BM&FBOVESPA Analyst Day SEP/14 10

11 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 Elimination of 10% discount for trades via DMA in Derivatives Market (BM&F Segment) MARKET DATA Price recomposition and pricing of new products and services Elimination of analysis fee discount on the annual fee ISSUERS Creation of analysis fee for Public Tender Offers, IPOs and Follow-ons BM&FBOVESPA Analyst Day SEP/14 11

12 Development Discussions with the Government Creating incentives and addressing important issues Addressing important issues to foster the long-term development of the Brazilian capital market Tax treatment for Retail Investors BM&FBOVESPA and the Brazilian IRS are developing a proposal to simplify tax treatment for individual investors in equities market Fixed income ETFs Tax treatment definition Incentives for SMEs Tax exemption on capital gains; reduction of maintenance costs of publicly-held companies; restricted distribution offering, and entrepreneurial and management qualification programs Securities Lending Tax treatment clarification on payouts(dividends and interest on capital) BM&FBOVESPA Analyst Day SEP/14 12

13 BM&FBOVESPA Analyst Day Schedule OPENING Edemir Pinto, Chief Executive Officer PRODUCTS, CLIENTS AND PRICING POLICY Eduardo Guardia, Chief Product and Investors Relations Officer CLEARING BM&FBOVESPA AND CORE RISK MODEL Cícero Vieira, Chief Operations Officer TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT Luís Furtado, Chief Technology Officer FINANCIAL HIGHLIGHTS Daniel Sonder, Chief Financial and Corporate Affairs Officer Q&A SESSION BM&FBOVESPA Analyst Day SEP/14 13

14 Clearinghouses Integration and the New Risk Model (CORE) Post-trade environment after Bovespa-BM&F merger The BM&FBOVESPA post-trade environment results from the historical evolution and merger of Bovespa and BM&F Markets CCP for the following products Equities, Equity Derivatives, Corporate Bonds Cash equities market, ETFs and BDRs Corporate bond cash market Options on single stocks and forwards Securities Lending (BTC) Derivatives Options and futures on BRL Interest Rates, FX, Inflation Indices, Equity Indices and agribusiness, energy and metal commodities OTC derivatives (swaps and flexible options) Foreign Exchange FX spot market (BRL vs. USD) Government Bonds Cash market & forward market for government bonds and Repos BM&FBOVESPA Analyst Day SEP/14 14

15 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 BM&FBOVESPA Analyst Day SEP/14 15

16 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 BM&FBOVESPA Analyst Day SEP/14 16

17 Clearinghouses Integration and New Risk Model (CORE) Timeline project evolution Publication of a White Paper proposing the unification of BM&FBOVESPA s Clearinghouses BM&FBOVESPA and IBM: survey into international trends in clearing processes and technology and the drawing up of a benchmark clearing house model Visit by international clearing houses and vendors: DTCC, CME, Nasdaq-OMX, Deutsche Börse, Euroclear, LCH.Clearnet Atos Origin, Sungard, Chi-Tech, Calypso, Markit, Fortis, Millenium and Cinnober Analysis of the degree of adherence of each vendor/clearinghouse to the created benchmark and the assessment of commercial and strategic aspects Short-list of vendors: Cinnober, Calypso and Millenium BM&FBOVESPA Analyst Day SEP/14 17

18 Clearinghouses Integration and New Risk Model (CORE) Timeline project evolution Development of a concept test for the Cinnober systems and other candidates at the BM&FBOVESPA Data Center Mini prototype of a Clearinghouse Implementation of selected products Functional and non-functional testing Contracting of Cinnober Transfer of source code Transfer of know-how Exclusivity in Brazil Other exchanges commercialization rights of the system Start of the development of systems of (Oct/2011) Registration of participants, registration of instruments Capture, allocation, give-up, position control, fee structure, settlement Price calculator, margin calculation, intraday risk, collateral, back-test Information services, legacy systems BM&FBOVESPA Analyst Day SEP/14 18

19 Clearinghouses Integration and New Risk Model (CORE) Timeline project evolution Continuation of IT development Contracting of the Finance Concepts consulting firm to aid the risk system s development Marco Avellaneda NYU (Quant of the Year in Risk Magazine) Rama Comt Columbia University Official presentation of the project to the board and president of BACEN Official launch of the project at an event with the participation of BACEN, CVM, FEBRABAN, ANBIMA and 400 guests BM&FBOVESPA Analyst Day SEP/14 19

20 Clearinghouses Integration and New Risk Model (CORE) Timeline project evolution Continuation of IT development Submission to BACEN of the rules and manual of the new Clearinghouse Access Rules Access Manual BM&FBOVESPA Clearinghouse Rules BM&FBOVESPA Clearinghouse Operating Procedures Manual BM&FBOVESPA Clearinghouse Risk Management Manual Start of participant certification Starts in July 2013 Staggered opening to the market of the system s modules Complete integrated tests as of November 2013 Execution of the mandatory testing script as of December 2013 BM&FBOVESPA Analyst Day SEP/14 20

21 Clearinghouses Integration and New Risk Model (CORE) Timeline project evolution Continuation of the certification of participants Start of parallel production in April 11 parallel production cycles Data migration at the weekend Old and new Clearinghouses running in parallel on Monday, Tuesday and Wednesday Checking of trades, positions and settlement prices Checking of risk calculation through an independent prototype Disaster recovery test Approval by BACEN of the New Clearinghouse s rules and systems Implementation of the new Clearinghouse on August 18, 2014 BM&FBOVESPA Analyst Day SEP/14 21

22 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 BM&FBOVESPA Analyst Day SEP/14 22

23 New Risk Model (CORE) derivatives market Simulations of positions and required collateral # Position 1 Position Buy 1 FX future 1 month maturity Sell 1 FX future 1 month maturity Sell 2 USD calls at the money 1 month maturity Sell 2 USD puts at the money 1 month maturity FX DERIVATIVES POSITIONS Position 1 (R$) Position 2 (R$) Sum (R$) Strategy (R$) Efficiency (%) 14, , , , % 14, , , , % 3 Buy 1 FX future 1 month maturity Sell DI X DOL swap 1 month maturity 14, , , , % 4 Buy 1 USD call at the money 1 month maturity Sell 1 USD call at the money 2 months maturities , , , % 5 Buy DI X DOL swap 1 month maturity Sell 1 USD call at the money 1 month maturity 12, , , , % BM&FBOVESPA Analyst Day SEP/14 23

24 New Risk Model (CORE) derivatives market Simulations of positions and required collateral IBOVESPA (INDICE) DERIVATIVES POSITION # Position 1 Position Buy 1 IBV future 1 month maturity Sell 1 IBV future 1 month maturity Sell 2 IBV calls at the money 1 month maturity Sell 2 IBV puts at the money 1 month maturity Position 1 (R$) Position 2 (R$) Sum (R$) Strategy (R$) Efficiency (%) 9, , , , % 9, , , , % 3 Buy 1 IBV future 1 month maturity Sell DI X IBV swap 1 month maturity 9, , , , % 4 Buy 1 IBV call at the money 1 month maturity Sell 1 IBV call at the money 2 month maturities , , , % 5 Buy DI X IBV swap 1 month maturity Sell 1 IBV call at the money 1 month maturity 18, , , % 6 Sell 1 IBV future 1 month maturity IBV ETF deposited as collateral 9, , , , % BM&FBOVESPA Analyst Day SEP/14 24

25 New Risk Model (CORE) derivatives market Simulations of positions and required collateral BRL INTEREST RATES (DI) DERIVATIVES POSITION # Position 1 Position Sell 1 DI future 1 year maturity Buy 1 DI future 1 year maturity Sell 2 IDI call at the money 1 year maturity Sell 2 IDI put at the money 1 year maturity Position 1 (R$) Position 2 (R$) Sum (R$) Strategy (R$) Efficiency (%) 1, , , , % 1, , , , % 3 Buy 1 DI future 1 year maturity Sell DI X PRE swap 1 year maturity 1, , , , % 4 Buy 1 IDI call at the money 1 year maturity Sell 1 IDI call at the money 1.5 year maturity , , , % 5 Buy DI X PRE swap 1 year maturity Sell 1 IDI call at the money 1 year maturity 2, , , , % 6 Sell 1 DI future 1 year maturity LTN deposited 1 year maturity as collateral 1, , , % BM&FBOVESPA Analyst Day SEP/14 25

26 New Risk Model (CORE) derivatives market Simulations of positions and required collateral # Position 1 Position Buy 1 live cattle future 1 month maturity Sell 1 live cattle future 1 month maturity Buy 1 live cattle call at the money 1 month maturity AGRIBUSINESS DERIVATIVES POSITION LIVE CATTLE Sell 2 live cattle call at the money 1 month maturity Sell 2 live cattle put at the money 1 month maturity Sell 1 live cattle call at the money 2 month maturities Position 1 (R$) Position 2 (R$) Sum (R$) Strategy (R$) Efficiency (%) 1, , , , % 1, , , , % , , % AGRIBUSINESS DERIVATIVES POSITION - COFFEE # Position 1 Position 2 1 Buy 1 coffee future 1 month maturity Sell 2 coffee call at the money 1 month maturity Position 1 (R$) Position 2 (R$) Sum (R$) Strategy (R$) Efficiency (%) 5, , , , % 2 Sell 1 coffee future 1 month maturity Sell 2 coffee put at the money 1 month maturity 4, , , , % 3 Buy 1 coffee call 1 month maturity Sell 1 coffee call at the money 2 month maturities , , , % BM&FBOVESPA Analyst Day SEP/14 26

27 New Risk Model (CORE) derivatives market Simulations of positions and required collateral AGRIBUSINESS DERIVATIVES POSITION - CORN # Position 1 Position Buy 1 corn future 1 month maturity Sell 1 corn future 1 month maturity Buy 1 corn call at the money 1 month maturity Sell 2 corn call at the money 1 month maturity Sell 2 corn put at the money 1 month maturity Sell 1 corn call at the money 2 month maturities Position 1 (R$) Position 2 (R$) Sum (R$) Strategy (R$) Efficiency (%) , , , % , , , % , , % BM&FBOVESPA Analyst Day SEP/14 27

28 BM&FBOVESPA Analyst Day Schedule OPENING Edemir Pinto, Chief Executive Officer PRODUCTS, CLIENTS AND PRICING POLICY Eduardo Guardia, Chief Product and Investors Relations Officer CLEARING BM&FBOVESPA AND CORE RISK MODEL Cícero Vieira, Chief Operations Officer TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT Luís Furtado, Chief Technology Officer FINANCIAL HIGHLIGHTS Daniel Sonder, Chief Financial and Corporate Affairs Officer Q&A SESSION BM&FBOVESPA Analyst Day SEP/14 28

29 BM&FBOVESPA Clearinghouse Challenges in the implementation of the derivatives phase Highlights of the first phase of Clearinghouse s Integration P A R T I C I P A N T E S / B A C E N P A R T I C I P A N T E S / B A C E N PUM A SDM XML NEG XML ESP EC ARQ FIX SPE ML C BMF SER TR/T VIÇ OS A MQ MQ SMP MTA/ XFB CIP CED CEI PUM A SDM XML NEG XML ESP EC ARQ FIX SPE ML C BMF SER VIÇO TR/T A S MQ MQ SMP MTA/ XFB CIP CED CEI R T R T TRS MF C O R P MF BMFI NFRA P MUM MUM DIN IPN CONTR OL-M TRS MF C O R P MF BMFI NFRA P MUM MUM DIN IPN CONTR OL-M SITE SITE C A C A RTC RGT CORP ADAP TER LIG GA RISC O CLF PD LNR LFC STB TF SI BM FC A RTC RGT CORP ADAP TER LIG GA RISC O CLF PD LNR LFC STB TF SI BM FC A SG G MU M CA S SG G MU M CA S LI G CAU LI G CAU NGA COR E NEA R SLF PLF LNR LFC Fee/B RM TAX SI SINC AD DFSC ORPA CAC NGA COR E NEA R SLF PLF LNR LFC RRT Fee/B RM TAX SI SINC AD DFSC ORPA CAC RRT S G G S G G Ra da r MUM STB Blc CLS Ra da r MUM STB Blc CLS Project +400 employees involved; 23 simultaneous projects 46 legacy systems were deprecated and 31 new other were installed Almost 1,000 new servers (physical and virtual) State-of-the-art technology; Trade technology applied to Post- Trade Multiple stakeholders +65 market participants (the majority adopts SINACOR) +20 workshops 6 months of certification tests Partnership with regulators (BACEN and CVM) Consistent and safe migration 11 parallel production cycles Low occurrence of incidents Multiple records of trades in the BM&F segment Sept ,314 trades Sept ,669 trades BM&FBOVESPA Analyst Day SEP/14 29

30 BM&FBOVESPA Clearinghouse and CORE New services for the market Deepening the relationship with participants The risk systems (CORE and NEAR) demand complex development Require robust and sophisticated infrastructure As an example, calculate and process +1.3bn instrument prices We have built a dedicated Simulation environment, meeting demands from market participants The simulator can be used by screen or by messages and files Production # of transactions simulated (in thousands) Simulation BM&FBOVESPA Analyst Day SEP/14 30

31 BM&FBOVESPA Clearinghouse Challenges in the implementation of the equities phase The derivatives phase represented an important step and now we have a new and complex challenge ahead Examples of new developments needed for the equities phase Integration with the CSD Settlement of securities (restrictions, failures, integration with securities lending system) Securities lending Covered options and forward transactions Corporate actions (split, reverse split, dividends / interest on capital and others) Unification of registration system procedures Settlement window unification Higher volumes Risk more risk factors, higher volume of calculations BM&FBOVESPA Analyst Day SEP/14 31

32 New Data Center Expanding capacity and greater operational efficiency New data center will allow IT infrastructure consolidation and the expansion of services provided to customers 2Q14: Conclusion of commissioning 2H14: Infrastructure (installation of racks and telecoms infrastructure, cabling) 1H15: Connectivity with participants and with other Data Centers; NPROD environments migration 2H15: Certification and parallel production environment for the equities phase of the BM&FBOVESPA Clearinghouse Feb/13 Jun/13 Oct/13 BM&FBOVESPA Analyst Day SEP/14 32

33 Continuous Development of the PUMA Platform High availability and constant evolution RESILIENCE AND AVAILABILITY 438 uninterrupted trading days* PROJECTS SUCCESSFULLY COMPLETED ONGOING MAINTENANCE Migration of corporate fixed-income trading (BovespaFIX / SOMA FIX) to PUMA Volatility bands for the BOVESPA segment, preventing distortions generated by sudden price changes in a very short timeframe Changes to the Ibovespa methodology Beginning of the migration to the new trading screen Estação epuma in the BOVESPA segment (elimination of performance bottlenecks of the current screen) Conclusion of the migration to the new trading screen in BM&F segment (eliminating performance bottlenecks) Volatility bands for the BM&F segment New system for indice calculation (replacing the current system licensed from Euronext) MM Structure: new monitoring system, allowing the expansion and protections of MM programs (avoids undue executions of orders at times of high volatility) New market data system (for low investment customers) Evolution of the LiNe pre-trade risk system (new features; lower latency and standard deviation) New contingency FIX session for orders cancellation * Until Sep. 26, 2014 BM&FBOVESPA Analyst Day SEP/14 33

34 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: BOVESPA segment BOVESPA Segment Apr. 29th Peak of msgs/min: 619,063 Average msgs/min: 60,000-70,000 BM&F Segment Aug. 13th Peak of msgs/min: 85,388 Average msgs/min: 7,000-8,000 BM&F segment BM&FBOVESPA Analyst Day SEP/14 34

35 BM&FBOVESPA Analyst Day Schedule OPENING Edemir Pinto, Chief Executive Officer PRODUCTS, CLIENTS AND PRICING POLICY Eduardo Guardia, Chief Product and Investors Relations Officer CLEARING BM&FBOVESPA AND CORE RISK MODEL Cícero Vieira, Chief Operations Officer TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT Luís Furtado, Chief Technology Officer FINANCIAL HIGHLIGHTS Daniel Sonder, Chief Financial and Corporate Affairs Officer Q&A SESSION BM&FBOVESPA Analyst Day SEP/14 35

36 Financial Highlights Expenses control discipline without sacrificing business development The CAPEX program initiated in 2010 renewed the Company's IT, operations and service platform Capex R$ MM Property and equipment + Intangibles (R$ MM)¹ E 2015E ,031 1,079¹ BTC NEW DATA CENTER Market Maker SINACOR... ¹ Intangibles value disregards goodwill; 2014 data related to June, BM&FBOVESPA Analyst Day SEP/14 36

37 Financial Highlights Expenses discipline without sacrificing business development Expenses control provides efficiency gains for the company Adjusted expenses R$ MM Budget review Adjusted OPEX 2014 budget reduced to R$ MM (from R$ MM ) Expenses are expected to grow significantly below inflation based on the new budget E Half year adjusted expenses R$ MM Adj. Expenses corrected by inflation¹ Adj. expenses H11 1H12 1H13 1H14 Consistent reduction to expenses Enhancement in management tools and budget practices within the company Review of contracts and prioritization of activities Headcount management ¹ Consider the IPCA of services variation from July, 2011 to June, BM&FBOVESPA Analyst Day SEP/14 37

38 Financial Highlights Pursuit of greater efficiency and an active stance in controlling expenses Third party services Personnel expenditure¹ Data processing 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 BM&FBOVESPA Analyst Day SEP/14 38

39 Financial Highlights Stock Granting accounting Honing of the Company s long-term remuneration practices Alignment of interests and retaining executives Link executives remuneration to the performance of the stocks Increase the perceived value of the stock of securities granted Ensure that the Company s incurred expenditure is effective Main changes and impacts Executives begin to receive stocks Payment of 60.3% in social charges will result in increased expenses and have an impact on cash Expenses from charges vary according to the price of the stock on delivery date (volatility of expenses) 100% of expenses are deductible (principal + social charges), which neutralizes most of the impact on the net income Expenses impacted from 2015 onwards, which will have grown during the transition period (4 years) BM&FBOVESPA Analyst Day SEP/14 39

40 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% 1H14: 80% + Buyback Almost 12% of free float repurchased in almost 6 years (2H08-1H14) Cash Generation after Investments and Interest Payments (Accumulated ¹ between January, 2009 and June, 2014, in R$ million) Cash Position² R$1,962 MM Indebtedness R$1,381 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 June, 2014 and excludes third party resources (investors collateral, resources deposited in the BM&FBOVESPA Bank and others). BM&FBOVESPA Analyst Day SEP/14 40

41 Strategic Drivers REVENUE GROWTH AND DIVERSIFICATION OPERATING EXCELLENCE FOCUS ON THE CUSTOMER INSTITUTIONAL STRENGTHENING BM&FBOVESPA Analyst Day SEP/14 41

42 BM&FBOVESPA Analyst Day Schedule OPENING Edemir Pinto, Chief Executive Officer PRODUCTS, CLIENTS AND PRICING POLICY Eduardo Guardia, Chief Product and Investors Relations Officer CLEARING BM&FBOVESPA AND CORE RISK MODEL Cícero Vieira, Chief Operations Officer TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT Luís Furtado, Chief Technology Officer FINANCIAL HIGHLIGHTS Daniel Sonder, Chief Financial and Corporate Affairs Officer Q&A SESSION BM&FBOVESPA Analyst Day SEP/14 42

43 Departamento de Relações com Investidores / 4418 / 4207/4834 ri@bmfbovespa.com.br BM&FBOVESPA Analyst Day SEP/14 43