BVMF Presentation - July 2012

7/30/2019 BVMF Presentation - July 2012

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July 2012July 2012


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Forward Looking Statements

This presentation may contain certain statements that express the managements 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 similarverbs 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

.

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&FBoves a o erates in iii chan es in a domestic and forei n le islation and taxation and b overnment olicies

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. ,

any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securitieslaw. 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.

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BVMF STOCK PRICE

3


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BVMF3 recent performance

BVMF3 YTD: +4,6%

Iboves a YTD: -4.2%IOFs130

140

BM&FBOVESPA IBOVESPA

10/17R$14.97

Goodwill CompetitionNews

120

R$13.01 01/05R$13.10 110 Change of

IOF on

Rumorsabout IOF

Reductions of Volumes Estimates by the Market

emova oIOF on Equities

12/01R$10,5490

100 exchange transactions

06/14

Exchanges Mergers02/08

R$11.18

BATs02/15

R$11.43New IOF on

80

Derivatives07/26R$9.55

rect ge11/21

R$10.11

60

70 Oxera's Report

Release06/18

Updated until 06/29/2012.4


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BRAZILIAN MARKET OPPORTUNITIES

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Equity Market (BOVESPA Segment)Low penetration in the Brazilian market

Number of custody accounts (thousands) Pension funds portfolio

Low penetration of equity and Jun'12 608.5

derivatives in the main investors portfolios

Stable and low interest rate environment encoura e more

Equity

Fixed Income and Others

69.9%'

exposure in equities

Recent growth in the number of retail investors, but still low

R$168 billion

30.1%27.7%

72.3%

128.6

n 0 5

u l 0 5

n 0 6

u l 0 6

n 0 7

u l 0 7

n 0 8

u l 0 8

n 0 9

u l 0 9

n 1 0

u l 1 0

n 1 1

u l 1 1

n 1 2

Listed Companies

th

J J J J J J J J J J J J J J J

Low number of listed companies compared to other countries

Lack of important economic sectors in the

6.752

4.988 , , , retail, IT and pharmaceutical,

Investment cycle may bring new companies and sectors to the exchange

3.945 3.838 3.520 3.276 2.886 2.079 1.816

Source: ABRAPP, WFE and BM&FBOVESPA6

Currently, SMEs are not able to raise money

through equity easily

India USA Canada China/HK Japan Spain UK Australia Korea Brazil


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Derivatives Market (BM&F Segment)Growth in the credit level will favor volumes

Credit to GDP Trade Flow (total Imports + Exports in USD billions)

50.1%

281

371

281

384

482

27.4%

Mortgage

Total Credit

4.5% 5.4%

Interest Rate in BRL contracts : growth in credit levels, specially in fixed rates, support the increase the activity of

2006 2007 2008 2009 2010 2011

FX contracts : growth in the amount of foreign trading and change in the culture of the Brazilian entrepreneurs can push up volumes in this group of contracts, mainly in currencies other than US$

Index based contracts : growth in cash equity market, the launching and development of ETFs and the growth of exposure to equity by institutional investors can drive the growth of these contracts

7

Commodities contracts : cash settled contracts and the change in the behavior of farmers that are becoming more sophisticated


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MAIN INITIATIVES

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Launching of new productsProduct diversification strengthens revenues and competitive position

14 ETFs currently tradedGrowth in ETFs

Bidding process initiated to select equity options market Market maker for

Cross listin of futures contracts with CME Grou stock index Cross listing of

based and

commodities

contracts)

and

BRICS

exchange

(stock

index based contracts)derivatives with

CME

and BRICS

A platform for retail investors to trade in government bonds through the Internet

Incentives granted to brokerage firms Tesouro Direto

Serves demand from trading or arbitrage strategies and Securities Lending

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Consistent GrowthHistoric record of volumes keeping long term growth trend

ADTV(in R$ millions)

ETFs Exchange Traded Funds Tesouro DiretoAverage Number of Investors Retail Investors

(in thousands)

19.5 23.8 27.5 36.3

42.3 64.4

77.1 79.1 80.5 81.7 83.0

18.6 28.5 48.7

97.6

155.8

Average Assets under Management* Average Assets under Custody 2009 2010 2011 1Q12 2Q12

(in R millions)

1.0 1.3 1.8 2.9

3.9 6.1

7.6 7.9 8.1 8.5 8.8

271 579

1,032 1,140

1,296

*Excluded PIBB11. 10


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Consistent GrowthHistoric record of volumes keeping long term growth trend

Average Open interest Stock Index Futures Contracts Options with Market Maker ADTV*(ITUB4, OGXP3, USIM5, IBOV, BVMF3, BBDC4, GGBR4, BBAS3 PDGR3, CSNA3, CYRE3)(in thousands of contracts)(in R$ millions)

8791,044

+85%

287 290 269 256528

2007 2008 2009 2010 2011 1Q12 2Q12

48.8

90.3

Securities Lending: open interest (average year)in R$ billions

*Considering the period between Jan11 and May12 , with speciific starting dates for the market maker.

Options with Market Maker ADTV: 1Q11 vs. 1Q12in R$ millions

ADTV Before ADTV After

1Q111Q12

Options with market maker take

20.530.2 34.0 29.2

248261

1Q12

place in 91% of this amount

. .12.7

2007 2008 2009 2010 2011 1Q12 2Q12

11

1Q1134

84

Petro and Vale Other Stocks


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Revenue Diversification

1Q12 Revenue

Securities en ing BTC :~R$21.1 million

Stock Indices Fut.: ~R$12.3 million

Tesouro Direto : ~R$4.7

million

Options with market maker: ~R$6.4 million

Exchange Traded Funds (ETFs):~R$2.6 million

~R$47.1 million ~R$47.1 million ((8.48.4% of total revenue)% of total revenue)12


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Strategic Projects

Multi asset trading platform (PUMA Trading System)

State of the art in trading technology and technological independency

Derivates module successfully implemented in 2H11

Licensing TRADExpress Real Time Clearing system

Equities market to be concluded in 2H12

Objective: integrating and modernizing our existing clearing facilities should proceed over 2012.

Integrated tests with the market and implementation of the systems scheduled to take place in 2013/2014

Partnership advantages:

cense o use e so ware

Access to the source codeSelling rights over our new clearing platform

Registration systems for OTC derivatives

Objetive: modernize, improve and expand the range of our registration services for OTC

derivatives, while offering our customers a streamlined, quality solution and thorough

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

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International ProjectsCreating a global market

Strengthening the sales force in other countries Offices in New York, London and Shanghai

Partnerships with international exchanges Strategic partnership with CME Group Asia: MoU and discussions with HKEx, Shan hai

and Shenzhen Exchanges Latam: MoU with Chile and Colombia exchange

and discussions with Peru and Colombia Cross listing agreements signed with CME

Group and BRICSexchanges

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BUSINESS MODEL AND REGULATORY FRAMEWORK

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Possible CompetitionImportant considerations

EASING REGULATION IS NOT EXPECTEDMain 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 POSTTRADING) ARE PAID BY THE FINAL INVESTORDifferently from USA and Europe, the final investors is the one who pays the exchange fees

Brokers couldnt increase their share in the all in trading cost pie in case of reduction on the exchange fees

STOCKS TRADING ALLIN COST IN BVMF IS COMPETITIVE

Despite the misleading perception, all in cost in BVMF is competitive compared to other markets

Comparing only the trading fees among exchanges is misleading. BVMF provides higher portion of services than the

IT INFRASTRUCTURE MOVING TO STATE OF THE ART

Increasing participation of HFT via Co location (moving to sub millisecond latency)

RECENT BM&FBOVESPA INITIATIVES REBALANCING OF FEES STRUCTURE

Shift between trading and post trading fees

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Equity Market Settlement Structure Brazil Compared with USATwo different regulatory frameworks

BRAZIL(All the trades must be matched on an

exchange environment)

USA(Brokers can internalize orders)

BVMFTradingTrading Venues

DTCCBVMF

BrokersA and B

BrokersA and B

Broker A

BrokerB

Clearing (CCP)Settlement

Central Depository

Investors InvestorsInvestors Investors

100% vertically integrated: clearing, settlement and central depository at the beneficial owner level

Brokers control their clients portfolios and settle

DTCC does the clearing, settlement and central depository of securities at the brokers level

Each broker ( prime broker ) has its own structure to positions through BVMFs infrastructure (this

impacts the post trade fees charged by BVMF)control their clients portfolios and settle positions

(this impact the prime brokers costs)

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Business Model

Listed Exchange Business ModelDiversified and Integrated Integrated Derivatives Diversified but Not Integrated*

Updated until: 06/30/2012

Market Capitalization (US$ billions) and EBITDA Margin (%)

* Do not provide post trading services for the equity market

Source: Bloomberg

65.5%77.9%

58.6% 61.6%

69.7%78.1%

62.2% 59.4%

72.0%

0,7

0,8

5

0

17.8 15.310.4 10.1 9.9 6.5 5.3 5.3 4.3 3.9 3.4 1.7

42.3% 42.1% .

00,10,20,30,40,5

,

5 0 5

Diversified and integrated Derivatives Diversified but not integrated

18* 12 months ended on Jun/11

CME HKEx Deutsche Boerse

BVMF ICE Nyse Euronext

ASX * SGX * LSE Nasdaq TMX BME

EBITDA Margin 2010 EBITDA Margin 2011


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Brazilian Market Regulatory FrameworkLegal 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

Settlement and clearing at the beneficial owner level make the Brazilian market safer and more resilient

Trading Under the regulation in place, potential competitors would be obliged to provide the same integrated solution with the same rules and trans arenc

PosTrading

The final investor pays the exchange fee

Other exchan es have been seekin inte rated models (self clearing models )

Naked access is not allowed

Naked short selling is not possible

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Brazilians stock trading breakdown

Jun12

End of CPMF(Financial Transaction Tax) Sarbanes Oxley Act

(SOX)

Novo MercadoLaunching

End of IOF Tax (2%) for foreign investors

24.3%34.6%

23.6%

.

65.4%

41.8%

Source: Bloomberg (in USD traded value of 35 companies with ADRs programs )

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

A p r

1 1

M a y

1 1

J u n 1 1

J u l 1 1

A u g

1 1

S e p 1 1

O c t

1 1

N o v

1 1

D e c

1 1

J a n 1 2

F e b 1 2

M a r

1 2

A p r

1 2

M a y

1 2

J u n 1 2

Other USA Venues Brazilian ADRs NYSE Brazilian ADRsBM&FBOVESPA companies with ADRs BM&FBOVESPA (except companies with ADRs)

Public Offerings in Number of Companies*2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total

IPOs 1 7 9 26 64 4 6 11 11 3 142 Follow ons 14 5 8 8 10 16 12 8 18 11 11 4 125

*Updated until 06/30/2012 20

Total 14 6 8 15 19 42 76 12 24 22 22 7 267

Dual Listings 2 1 1 1 5


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OPERATIONAL HIGHLIGHTS

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BOVESPA Segment: operational highlights

v y u Updated until 06/30/2012.

4.9 5.5

5.3 6.5 6.5

7.4

6.1 5.9 5.7

7.7

6.37.1

5.9 6.2 6.3

. 7.0 7.3 7.4

.

1.2 1.6 2.4

Number of Custody Accounts (Thousands) Turnover Velocity** (12 months average)

2004 2005 2006 2007 2008 2009 2010 2011 2012 May 11 Jun 11 J u 11 Aug11 Sep 11 Oct 11 Nov11 Dec 11 Jan 12 Fe 12 Mar 12 Apr12 May 12 Jun 12

42.3%

56.4%63.2%

66.6%

63.8% 64.2%68.1%

70.0%

559 576

640 626 632 622 611 598 605

30.8% 29.4%. . .

**Relation of the trading value in the cash market and the market cap of the exchange. Updated until 06/30/2012. 22

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20122008 2009 2010 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12


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BOVESPA Segment: capital raising activity

Public Offerings (BRL billions)Updated until 06/30/2012.

74.4 FollowOn

63.2 55.6

7.5 23.8

11.2

30.4 34.3 46.0 IPO

4.3 8.5 15.1 14.5 26.8 22.2 10.8 4.04.5 5.4

15.4

7.2

4.08.8 .

. 8.0

2004 2005 2006 2007 2008 2009 2010* 2011 2012

Pipeline: already announced to the market

There are 7 offerings in the pipeline:IPO (5): CPFL Energias Renovveis S.A.; VIX Logstica S.A.; BIOSEV S.A.; Manabi Holding S.A.; Empreendimentos Pague Menos S.A.;

23

* Excludes the capitalization with barrels reserves by federal government BRL74.8 billion in Petrobras offering.

o ow on : e u ose ran . .; ransm ssora ana e nerg a r ca . .


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*

BOVESPA SegmentPotential to increase the number of listed companies

130%

170%

129 % 126%

168% 166%

138% 137% 118%

2008 2009 2010

Hong Kong : 617% 1,095% 1,208%

78% 95%

70% 67% 82%

53% 53% 62

53%

66%

36%

107% 100% 85%

100%

75% 67% 73%

39%

107% 93%

81% 75%

75% 74%

44%

21%

Chile Singapore United Kingdom Canada USA Korea India China France Japan Brazil Mexico

Market Ca italization b Economic Sector* Source: World Bank

15,2%

26,4%

15,7%22,4%

Dec11 Dec05

14,1%

1,8%10,4%

21,6%11,5%

4,7%

16,2%

3,9%0,6%

6,8%

2,5%

3,6%8,6%

2,6%

0,3%11,1%

Oil, Gas and Biofuels Basic Materials Capital Goods and Services Construction and Transportation Consumer Non Cyclical Consumer Cyclical Information Technology Telecommunications

Public Utilities Financial 24


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BM&F Segment: operational highlights

3,904

verage a y ra e o ume ousan s o con rac s

496 539 501

586 487 524

509 593

89 123 170

114

195

120 184 148 123 166 123

205 245

158 191 285

330

292

340

350 289

292 315 334

285 308

385

350 1,740

2,505 2,701 3,035

2,430

2,107

3,418

2,831 2,606 2,716

2,065

2,615 2,497 2,994

,

2,590

422 501 711 988 789 843

1,684 1,797 1,995

1,493 1,220

2,383 1,774 1,589 1,789 1,234 1,636

1,452 2,061

2,497 2,681

1,561 110 168

266 473 535 447

531 491 438

545 520

86 74 68

112 88 80 110 148

187 109 124

167 162 150 805 852

1,167 , ,

2004 2005 2006 2007 2008 2009 2010 2011 2012 un/11 jul/11 ago/11 set/11 out/11 nov/11 dez/11 an/12 fev/12 mar/12 abr/12 mai/12 jun/12

BRL Int. Rate (Thousands) FX (Thousands) Index (Thousands) Others (Thousands)

* *

a e per on rac

2006 2007 2008 2009 2010 2011 2012* J 11 J11 A11 S11 O 11 N 11 D11 J12 F12 M 12 A12 M 12 J12*

Interest rates in BRL 0.906 0.950 1.141 0.979 0.889 0.918 0.978 1.053 1.092 0.910 0.991 0.927 0.843 1.086 1.045 1.064 0.926 0.948 0.922 1.059 . . . . . . . . . . . . . . . . . . . .

Stock Indices 1.419 1.501 2.145 1.620 1.564 1.614 1.451 1.864 1.410 1.616 1.350 1.635 1.518 1.719 1.316 1.674 1.328 1.502 1.233 1.708Interest rates in USD 1.094 0.965 1.283 1.357 1.142 0.941 0.939 0.944 0.844 0.847 0.914 1.066 0.836 0.930 0.958 0.804 0.911 0.991 1.021 0.955Commodities 4.749 3.195 3.587 2.307 2.168 2.029 1.998 2.131 1.948 1.757 1.969 2.645 2.302 2.385 1.688 2.033 2.183 2.228 1.945 2.099

Mini contracts 0.034 0.054 0.162 0.176 0.128 0.129 0.122 0.140 0.132 0.125 0.111 0.128 0.122 0.132 0.131 0.130 0.130 0.122 0.113 0.116

25

OTC 1.571 2.111 2.355 1.655 1.610 1.635 1.620 1.535 1.606 1.830 1.575 1.234 2.051 2.444 2.438 1.515 1.822 1.880 1.203 1.321

Total RPC 1.247 1.224 1.527 1.365 1.134 1.106 1.150 1.220 1.216 1.027 1.129 1.166 1.040 1.293 1.236 1.227 1.079 1.100 1.074 1.272*Updated until 06/30/2012.


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Interest Rate in BRL ContractsStructural changes behind the growth in volumes

Interest Rate in BRL Contracts Breakdown by Maturity (thousands of contracts)Uncertainty in consensus impacts short term contracts

2007 2008 2009 2010 2011 Jan 11 Feb 11 Mar 11 Apr11 May 11 Jun 11 Jul11 Aug11 Sep 11 Oct 11 Nov11 Dec 11 Jan 12 Feb 12 Mar 12 Apr12 May 12 Jun 12

1st. Maturit 2nd. Maturit 3rd Maturit 4th. Maturit 5th Maturit

Fixed Rate Credit in BRL billions Public Debt / Fixed Rate in BRL billions

May'12:BRL 719.3

May'12:BRL 784.9

Jan'05:BRL 151.4 Jan'05:

BRL 180.0

26Source: Brazilian Central Bank

Jan05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12Jan05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12

I R i BRLC


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Interest Rate in BRL ContractsSustainable growth revenue from contracts with long term maturities

Revenue (in R$ millions) ADTV (in thousands of contracts)

1st 4th. Maturity1st 4th. Maturity

963

1,274

33.8

.

29.9

397 15.3

1Q09 1Q10 1Q11 1Q121Q09 1Q10 1Q11 1Q12

853

1,113

.

CAGR:+34%

63.0

77.4 CAGR:+35%

464 642

31.3 47.0

Note: 1st-4th maturity: up to 84 business day and 5th maturity: above 84 business day (limited to 105 business day)

1Q09 1Q10 1Q11 1Q121Q09 1Q10 1Q11 1Q12

27


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FINANCIAL HIGHLIGHTS

29

2012 Budgets


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2012 BudgetsCommitment to cost control

Adjusted Operating Expenses 2012 Budget CAPEX 2012 Budget

u ge : e ween m on an m on

Maintenance of headcount

Steadily effort

to

reduce

other

expenses

lines

Continuity of IT investments

Equities segment of PUMA Trading System

2012 budget in the samerange of 2011

Clearings integration

New OTC platform

Im rovements in infrastructure

Maintenance expenses adjusted to 2012

R millions

R$ millions590580

543.9 584.5

268

204

260

230

1 Adjusted Expenses exclude depreciation, stock option program, provisions and tax on dividends from CME. 30

1Q12 revenues breakdown


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1Q12 revenues breakdownDiversification of revenues is clear after revenues rebalancing

1Q12 revenues: BRL560 million

9.2%17.0%

0.7% as ar et ra ng

Cash Market (Post Trading)

Equities Derivatives (Trading)

30.4%Equities Derivatives (Post Trading)

Other Revenue BOVESPA Seg.

Financial Derivatives (Trading)

Financial Derivatives (Post Trading)

Spot FX

2.0%

5.2%13.7%

31

0.3%

Expenses Details


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Expenses DetailsFocus on costs controls: delivering efficiency

17%

Expenses Breakdown 1Q12 Adjusted Expenses

Others (In R$ millions) -10.8%

47%5%

3%

140.6 143.7 163.9

-23.5%

PersonnelThird Party Serv.

Marketing

15%

13% . .

1Q11 2Q11 3Q11 4Q11 1Q12

Depr./Am.

Data Processing

Breakdown of Adjusted Expenses

(in R$ millions) -10.8%.

2.8+1.2

1.3 1.8125.4

8.5 2.1

1Q11 Adj. Expenses

Personne l Data processing Third Party Serv. Communication Marketing Others 1Q12 Adj. Expenses

32


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Appendix

33

Fully integrated Business Model


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Fully integrated Business ModelDiversified sources of revenues

Listing Custody

,

commodities trading Trading, Clearing and Depository Activities Others Services

(stocks, bonds, funds, asset backed securities,

Among others )

ra ng(stocks, derivatives, corporate and government

Bonds, funds, spot US Dollar, among others)

(services provided for fundsand other market

participants)

Commodities Certification

Central Counterparty (CCP)Clearing and Settlement

(for all products)

Market Data

Central Depositorystocks and cor orate bonds

Indices Licensing

Software LicensingTrading Access

(Brokers)

Securities Lending

(used by brokerageHouses and other

market participants)

(stocks and corporate bonds OTC Derivatives(registration and collateral

management)

34

N P d t Pi li

High Frequency Trading HFT


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New Products PipelineHigh Frequency Trading HFTNew 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 Nov10

Bovespa Segment

In the Bovespa Segment, different tiers were created for individuals and non individuals HFT investors

Individuals

ADTV tier (BRL millions)Trading Fee

(bps) SettlementFee (bps) Total

Non individuals

ADTV tier (BRL millions)Trading Fee

(bps) SettlementFee (bps) Total

U to 20 inclusive 0.70 1.80 2.50p o nc us ve . . .

From 4 to 12.5 (inclusive) 0.50 1.80 2.30From 12.5 to 25 (inclusive) 0.20 1.80 2.00

From 20 to 50 (inclusive) 0.50 1.80 2.30From 50 to 250 (inclusive) 0.20 1.80 2.00

From 250 to 500

BM&F Segment

From 25 to 50 (inclusive) 0.05 1.75 1.80

Above 50 0.05 1.55 1.60

(inclusive) 0.05 1.75 1.80

Above 500 0.05 1.55 1.60

35

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


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BOVESPA Segment: foreign investment flow

Monthly Net Flow of Foreign Investments* (in BRL billions)

9.0 10.0

3.4 3.8 6.1

4.2 6.4

1.7

5.2

2.1 1.4

6.5

1.5 3.7 3.5

4.4

2.1 1.7 3.4

1.9 2.2 1.0

.

3.9

(0.6)

.

(1.6)

.

(1.5)(0.6)

. 0.4

(1.3)

.

(0.4)(0.2)

(2.4)(1.1)(1.3)

(2.3)(0.7)

*Includes regular trades and public offering. Updated until June 30, 2012.36

Operational highlights: investor s participation in Total Volume


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Operational highlights: investor s participation in Total Volume

BM&F Segment (Investors Participation in Total Volume)7% 7% 9% 8% 8% 4% 4% 5% 5% 5% 5% 5% 5% 3% 5% 5% 5% 5% 4% 5%

12% 15% 17% 19% 20% 22% 23% 23% 25% 26% 27% 25% 23%16% 23% 26% 26% 26% 25% 27%

24% 25% 23% 23% 24% 30% 33% 31% 33% 35% 32% 34% 34% 34% 32% 32% 34% 34% 34% 32%

45% 42% 38% 39% 35% 32% 35% 35% 36%46%

39% 35% 35% 33% 34% 34%

Bovespa Segment (Investors Participation in Total Value)

Individuals Institutional Inves tors Foreign Investors Financial Institutions Companies Central Bank

33% 36% 35%35% 34% 30% 35% 34% 34% 35% 33%

37%34% 36% 35%

39%37%

40%38%

40% 42% 42%

12% 10% 10% 8% 7% 8% 9% 10% 8% 9% 8% 10% 8% 9% 8% 9% 7% 9% 8% 9% 8% 8%

25% 25% 23% 27% 31% 26% 21% 21% 22% 21% 24% 20% 23% 20% 22% 18% 21% 19% 21% 18% 17% 15%

27% 27% 30% 27% 26% 33% 33% 34% 33% 33% 35% 32% 34% 33% 33% 32% 33% 31% 32% 33% 32% 32%

37

2005 2006 2007 2008 2009 2010 2011 Apr 11 May 11Jun 11 Jul 11 Aug11 Sep 11 Oct 11 Nov 11Dec 11 Jan 12 Feb 12 Mar 12 Apr12 May 12Jun 12

Individuals Institutional Investors Foreign Investors Financial Institutions Companies Others

Investment Funds


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AUM Evolution (in BRL billions)

1 703 1,787 1,925

2,073Equities

861 899 1,070

1,301 1,513

1,375

15%

22% 14%

18% 18%15%

657

11%10% 11%

Percent of Equity Fund Assets

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Mar 12

Worldwide Brazil

Equity funds15%Equity

funds40%

38Source: ANBIlMA and Investment Company Institute ICI (2T12).


39/52

1Q12 EARNINGS

39

BOVESPA Segment Performance


40/52

Increased HFT activity and growth of turnover velocity

ADTV evolution by type of investors and Margin1Q12 vs. 1Q11

ADTV grew 6.3% and reached R$7.2 bn (all 6.0 5.9 5.7 5.6 5.9 5,45,86,26,67,0

8,09,0

10,0

( i n R $ b i l l i o n s

)

Turnover velocity was positively impacted by market volatility

1Q12 vs. 4Q11 2.3 2.1 2.2 2.1 2.3

2.3 2.1 2.3 2.42.8

0.70.7 0.7 0.7

0.7

0,61,01,41,82,22,63,03,43,84,24,6

,

2,03,04,05,06,07,0 6.2

.. 6.4

Increasing in margin driven by growth in options volumes and reduction of HFT share

1.5 1.3 1.5 1.3 1.4(1,(0,(0,

,

0,01,0

1Q11 2Q11 3Q11 4Q11 1Q12

Individuals Institutional Investor s Foreign Investors Others Margin in bps

Average market capitalization and Turnover VelocityHFT: ADTV

and

share

of

trading

volume

+47%

61.8% 59.5%69.3% 66.6% 66.2%

5

7

2,5 3,0 3,5

319.3 249.2 325.3

174.6 146.0 6.1%7.4%

10.3% 10.3% 8.5%

898.6

1,329.1 1,311.9 1,199.1 8.6%

10.8%

2.5 2.5 2.2 2.2 2.5 1

3

0,5 1,0 1,5 2,0

318.6 447.3

835.1 916.7 873.9 290.8 267.2

205.0 184.1

.

81Q11 2Q11 3Q11 4Q11 1Q12

Average Market Capitalization (BRL trillions) Turnover Velocity

1Q11 2Q11 3Q11 4Q11 1Q12

Foreigners Individuals Institutionals % of overall market

40

BM&F Segment Performance


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High growth of stock index and mini sized contracts

1.04 1.13 1.11 1.16

1.17

1,10 1,20 1,30

4.04.55.0

1Q12 vs. 1Q115.3%ADTV decrease im acted b 18.6% reduction

ADTV in (thds of contracts) and RPC (in R$)

536 489 525 543

422 310 275 326 306 229

136 160 143 101 88

0,70

0,80 0,90 1,00

1.5

2.02.53.03.5

in ADTV of interest rates contracts in R$RPC rose 12.7%: higher participation of long term maturity contracts, FX futures, index bases futures 27.1% and 55.5% res ectivel

1,730 1,532 1,810 1,720 ,

0,40 0,50

,

501.0

1Q124Q113Q112Q111Q11

Interest Rates in BRL FX Rates Others Stock Index RPC

HFTs volumes up 95%

ADTV : Mini sized and stock index (in thds of contracts)HFT: ADTV (thds of contracts) and share of ADTV (%)

40%

0.84 0.93 0.98 0.94 1.00

0 ,50

1 ,00

2 . 0 0 0 . 0 0 0

2 . 5 0 0 . 0 0 0

2,127

1,720 1,810

1,532

1,73024

25 101

7.8%

7.2%

8.0%420

335

413

350 400 450

+

31%18% 16% 23%

6%

13%4% 10%

6%

7%

4%8% 6%

13%

46% 57%51% 64%

( 1 , 5 0 )

(1 , 0 0 )

(0 , 5 0 )

5 0 0 . 0 0 0

1 . 0 0 0 . 0 0 0

1 . 5 0 0 . 0 0 0

67 101

148 120 129

84 95

140 135 17

10 3.9%

.

211 251

50

100 150 200 250

15% 9% 11% ( 2 , 0 0 )

1Q11 2Q11 3Q11 4Q11 1Q121st Maturity 2nd Maturity 3rd Maturity4th Maturity 5th Maturity RPC

44 45 68 51 47

1Q11 2Q11 3Q11 4Q11 1Q12

Equities FX Mini contracts Interest Rates % in Overall Volume41

Revenues: 1Q12


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BOVESPA Segment (47% of total)

Cash market

Market / Product / Service Fee Model3% 12%

Cash Market

Forward MarketOptions Market

9 In bps85%Forward Market

Options Market

BM&F Segment (36% of total)

12% Interest Rate BRLInterest Rate

Exchange Rates (FX)Indices

Commodities

9 Fee per contract55%33%

FX

Others

Other Revenues

Depository and custody: 4%

Securities Lending: 4%Vendors: 3%

9 Fixed cost: R$6,90 + additional fee9 25 bps per year (open interest)9 Fixed fee

17%

L st ng: 2Trading access: 2%

Annual fee: based on the social capital9 Fixed fee

Financial HighlightsS h i


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Strong cash generation

Cash and

Financial

Investments

(in

R$

millions)

1,207 383 354 1,714 1Q12 3,658R$65.5 million in 1Q12 , increase of 3.7% over 1Q11

Financial Income

1,551 380 270 1,582 4Q11 3,782

nanc a ncome o . m on, . up, ma n y ue to growth in the Companys average cash position

Financial Expenses of R$21.2 million increased 15.3%

due to the FX devaluation

Market participants cash collateral and others* Restricted funds

Subsidiaries** Available funds Buyback program

Higher level of market exposure requires more collaterals

The approved

buyback

program

allows

BM&FBOVESPA

to

repurchase up to 60 million shares until Jun12 (29.6mn bought)

Collateral Deposited in the Clearinghouse (in R$ billions)

143

179 182

Earnings distribution (payout)

.

102 Approval of R$224.3 million as dividends, 80% Payout ratio in 1Q12

Dec/09 Dec/10 Dec/11 Mar/12

43*Includes collaterals pledged by participants in the form of cash, receivables and rights in securities under custody , as well as payouts still undisbursed ** Includes third party collaterals (R$118 million in the 4Q11 and R$181 million in the 1Q12) and restricted funds (R$12 million in the 4Q11 and 1Q12) at Banco BM&F

BM&FBOVESPA Financial HighlightsP/E l i


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P/E analysis

Since 2009, the goodwill tax benefit has been recognized as deferred liability (being cash neutral), reducing the GAAP earnings

ax oo nBRL millions Current

mu at on without goodwill

EBT 402.2 402.2() goodwill amortization 404.4 0 (1)

oo nBRL millions Current

mu at on without goodwill

EBT 402.2 402Deferred Tax 137.7

(=) Taxable earnings 2.2 221Tax 0 75

.Total Taxes 145 75Net Income GAAP 280.4 327

EPS 0.142 0.165 : 16.6%

EPS 2012e

P/E

st mate . .Earnings without goodwill = (A) x 16.6% 0.72 14.8

Stock price discounted by goodwill NPV (R$1.00

0.72 13.4

25 30% impact on P/E multipleDifference between EPS GAAP and the EPS adjusted to non existence

Different earnings impact the P/E calculation and distort comparisons and market consensus.

Adjusted Earnings 0.84 12.8o goodwill simulation

The reported adjusted net income reflects better the companys cash generation

Simulates the Interest on Capital amount that would be approved if there was no goodwill tax benefit; EPS market estimative for 2012; Stock at BRL10.72 (April 30, 2012). 44

2012 2013 important technological delivering yearsKey investments to support growth


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Key investments to support growth

260.0

Investments (CAPEX) 2010 2013: ~R$1 billion

260.0

(in R$ millions)~90% of CAPEX to IT projects to:

1Q12 CapEx totaled R$26.7 million

268.4

30.0

230.0

preserve current revenues catch up technology

support growth204.0 .

2010 2011 2012e

strengthen market integrity

Key infrastructure investments

PUMA Trading System:

New Multi Asset Tradin Platform

Performance and capacity improvements; cross asset arbitrage promotion; sub millisecond RTT latency

Clearing Integration

Capital efficiency: Cross market risk calculation methodology

Data Centers

Scalability and reliability; co location (additional space) Offering of services for market participants and bringing new synergies to the

BVMF ecosystem

OTC Platform

Modernization, improvement and expansion of the range of registration services

Flexibility to meet specific demands Offering to our customers a rationalized quality solution and thorough reporting tool

45

Prioritizing customer and operational excellence


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PUMA Trading System: equities module in tests Increasing capital efficiency by integrating clearing facilities

Guaranteeing excellence and market integrity

New OTC platform: building one stop shop Improving supervision and market monitoring

Strengthening Institutional Position

Well placed to capture Brazilian growth potential Leveraging growth through product development (new products

and arbitrage/strategies among markets/products)Consistently increasing

and diversifying revenues

Products development materialized in revenues and broadening market sophistication: market maker for options, ETFs, HFTs, cross listing and Tesouro Direto

Strengthening ties with investors and participants

market participant relationship

Focus on Cost Control adjusted Opex is decreasing in real terms in 2012, according to the announced budgetConsistently delivering

Maximizing shareholders return: high payoutsoun nanc a resu ts

46

Income Statement Summary


47/52

R$ millions 1Q12 1Q11 Change 1Q12 / 1Q11

4Q11 Change1Q12 / 4Q11

Gross Revenues 560.4 525.5 6.6% 522.0 7.4%

Net Revenues 502.8 472.2 6.5% 471.2 6.7%

Expenses (166.2) (188.7) 11.9% (291.6) 43.0%

. . . . .

Equity accounting 37.5 37.5 0.0% 131.5 71.5%

Financial Income 65.5 63.2 3.7% 64.1 2.3%

Income before Taxes 439.7 384.2 14.5% 375.2 17.2%

Net Income* 280.4 270.8 3.6% 191.0 46.8%EBITDA 368.3 308.1 19.6% 204.4 80.2%

EBITDA Marg n 73.3 65.2 801 ps 43.4 2,988 ps

Adjusted Net Income 409.2 384.2 6.5% 352.7 16.0%

Adjusted earnings per share (in R$) 0.211962 0.195648 8.3% 0.182885 15.9%

Adjusted EBITDA 376.7 332.6 13.3% 307.1 22.7%

Adjusted EBITDA Margin 74.9% 70.4% 448 bps 65.2% 974 bps

Adjusted Expenses (125.4) (140.6) 10.8% (163.9) 23.5%

47

* Attributable to BM&FBOVESPAs Shareholders

Balance SheetIn R$ millions


48/52

In R$ millions

ASSETS 03/31/2012 12/31/2011 LIABILITIES AND SH. EQUITY 03/31/2012 12/31/2011

Current assets 2,806.7 2,401.1 Current liabilities 1,853.8 1,929.9

Cash and cash equivalents 34.3 64.6 Collateral for transactions 1,155.8 1,501.0

Financial investments 2,533.3 2,128.7 Others 698.0 428.9

Others 239.1 207.8 Non current liabilities 2,498.5 2,402.5

Non current assets 20,590.6 21,188.8 Financing 1,106.1 1,138.7

Long term receivables1,247.0 1,767.4

.

Contrib.1,338.5 1,204.6

Financial investments 1,090.8 1,589.1 Others 53.8 59.2

ers . . are o ers equ y , . , .

Capital 2,540.2 2,540.2

Investments 2,627.5 2,710.1 Capital reserve 16,024.2 16,033.9

Property and equipment

344.5 357.2 Others 464.0 666.9

Intangible assets 16,371.6 16,354.1 Minority interest in

16.5 16.5

48

TOTAL

ASSETS23,397.2 23,589.9

TOTAL LIAB. AND

SHAREHOLDERS' EQUITY23,397.2 23,589.9


49/52

SUSTAINABILITY

49

BM&FBOVESPA Sustainability Mission


50/52

BM&FBOVESPAs Sustainabilit Mission

Support, promote and practice the concepts and actions towards economic,

social and environmental responsibility with the purpose of contributing to sustainable development

Novo Valor BM&FBOVESPA

Program created in 2010 to guide sustainability actions of BVMF.

Induce and promote the sustainable development of the BM&FBOVESPA and the capital market, involving all audiences,

50

, .

BM&FBOVESPA Sustainability ProgramWorking in four dimensions


51/52

1. Natural Resources Mgt GHG Inventory Materials recycling program

Green IT Member of Carbon Disclosure Project South America Board of Empresas pelo Clima, FGV

2. Governance4. Stakeholder Engagement

Advisory Boards

Sustainability Committee Sustainability Comission

Stakeholders

Global Compact Signatory (1st exchange) PRI Signatory (Principles for Responsible Investment) Organization Stakeholder GRI (Global Reporting

Initiative) ; Member of Board for GRI Brazil

. ro uc s an erv ces Indexes: ISE, ICO2 and IGC/IGCT Carbon Market Em Boa Companhia ( program with companies)

51


52/52

Documents

BVMF Presentation - July 2012