2Q10 Financial Statement

BM&FBOVESPA S.A.
Bolsa de Valores, Mercadorias e Futuros The Brazilian Securities, Commodities and Futures Exchange Quarterly Financial Statements at June 30, 2010
.2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF THE SECOND QUARTER 2010

Dear Shareholders, We are pleased to present to you this discussion and analysis of our financial condition and results of operations for the second quarter 2010. OPERATING PERFORMANCE Our performance in overall volumes traded in the second quarter 2010 on markets comprising our BM&F segment increased by 6.3% when compared to the previous quarter, whereas volumes traded on markets comprising our Bovespa segment climbed 4.6% quarter on quarter. Additionally, quarter on quarter average daily traded volumes grew 2.8% in the BM&F segment and 1.3% in the Bovespa segment. Highlights for the quarter on BM&F markets include the high frequency participation, which reached 6.0% in overall volume, and the DMA system (Direct Market Access) reached 17.6% of total traded volume. Moreover, April 2010 achieved the second highest volume of trading on record, with average volume of 3.05 million contracts traded daily. In a quarter highlight for Bovespa markets, trading by local institutional investors accounted for a 34.6% of the traded value, as compared to 29.9% one quarter earlier. Additionally, the average daily traded value in May 2010 reached R$7.28 billion, and substantially contributed to the quarters average daily traded value of R$6.7 billion, since this average fell in June due to the impact of a decline in the average market capitalization of listed issuers and the slow pace of business during the FIFA World Cup matches. Set forth below is a discussion of our operating performance. BM&F segment The average daily traded volume in the quarter soared 54.2% year on year to 2.52 million contracts, from 1.64 million earlier, the highest on record for the segment. This high is attributable primarily to a 70.5% surge in volumes traded in BRL interest rate contracts and a 33.3% climb in FX contracts. The volume traded in interest rate contracts in the second quarter was positively influenced by different perceptions of the outlook for the benchmark interest rate. In previous meetings, the Copom had increased the benchmark rate (Selic rate) by an aggregate 1.5% and, just recently, it decided to raise it by an additional 0.50%, to 10.75%. Other factors leading to the increase in trading volume include heightened banking exposure to credit risk and the rise in net assets pooled in investment funds, in particular multi asset funds. Additionally, the average number of open interest of interest rate in BRL contracts jumped 172% year over year. On a quarter on quarter basis, volumes traded in 2Q10 picked up 2.8%, due primarily to a 16.6% growth in volumes traded in index-based contracts and mini contracts.
.3.
BM&F Segment Evolution in Average Daily Trading Volume - ADTV
(in thousands of contracts) Contracts BRL interest rate contracts FX contracts Index-based contracts USD interest rate contracts Commodities contracts Mini contracts OTC derivatives Total
_________________________________
2Q10 1,635.7 603.5 99.3 84.5 10.1 79.5 10.8 2,523.4
2Q09 959.3 452.0 80.1 73.9 9.4 51.2 9.8 1,636.3
1Q10 1,605.8 589.8 85.2 77.9 11.5 68.2 15.3 2,453.6
% 2Q10/2Q09 70.5% 33.3% 24.1% 14.3% 7.2% 55.2% 9.7% 54.2%
% 2Q10/1Q10 1.9% 2.3% 16.6% 8.5% -12.2% 16.6% -29.6% 2.8%
1H10 1,621.0 596.8 92.3 82.2 10.8 73.9 13.0 2,489.0
1H09 910.5 415.6 76.4 83.2 9.8 51.2 7.3 1,554.0
% 1H10/1H09 78.0% 43.6% 20.9% -2.4% 10.7% 44.4% 78.0% 60.2%
Source: BM&FBOVESPA
The 2Q10 average rate per contract (RPC) for BM&F markets, of R$1.14, dropped 17.5% year on year, primarily due to: the greater volume of trading in BRL interest rate contracts, which have a lower RPC in comparison with the RPC of other products the 18%1 appreciation of the Brazilian real against the U.S. dollar, which adversely impacted revenues from Fx, USD interest rate and commodities contracts, as the fee rates for these contracts are based on the foreign exchange rate, therefore having resulted in 21.2%, 29.3% and 10.7% declines in the average rate for these particular contracts, respectively; the fact that increases in volume correlate with drops in average rate per contract, as our pricing policy includes progressive discounts which apply as trading volume ranges go up; and the fee rate discounts given to DMA and high frequency trading activities, regarding which volumes have been rising significantly in the last few months. The table below sets forth data on RPC evolution. The rate per contract rose 1.7% quarter on quarter mainly due to the impact of volumes traded in BRL interest rate contracts, which picked up 8%.
BM&F Segment Evolution in Average Rate per Contract (RPC)
(in Brazilian reais) Contracts BRL interest rate contracts FX contracts Index-based contracts USD interest rate contracts Commodities contracts Mini contracts OTC derivatives Total
_________________________________
2Q10 0.91 1.84 1.52 1.16 2.11 0.13 1.77 1.14
2Q09 0.94 2.33 1.78 1.64 2.36 0.20 1.76 1.39
1Q10 0.84 1.93 1.53 1.22 1.88 0.13 1.53 1.13
% 2Q10/2Q09 -3.8% -21.2% -14.8% -29.3% -10.7% -34.0% 0.9% -17.5%
% 2Q10/1Q10 8.0% -4.7% -0.8% -4.5% 12.1% -3.4% 16.1% 1.7%
1H10 0.87 1,88 1.52 1.19 1.99 0.13 1.63 1.14
1H09 0.91 2.37 1.68 1.60 2.21 0.19 1.90 1.37
% 1H10/1H09 -4.6% -20.7% -9.2% -25.6% -10.2% -31.0% -14.2% -17.0%
Source: BM&FBOVESPA
DMA evolution
1
The average exchange rate for FX futures and options fell to R$1.775 from R$2.155 earlier.
.4.
The volume of trading via DMA (Direct Market Access) has been increasing consistently in the last few months to account for 17.6%2 of the overall volume in the second quarter, with record high average daily volume of 889 thousand contracts (both sides of the trade included). Our Traditional DMA channel continues to account for most DMA trading; however, the other DMA models, which include co-location services and DMA via Provider have been growing at even higher rates. The chart below sets forth a breakdown of monthly volumes by DMA model on a quarter-on-quarter and year-over-year basis, and as a percentage of the overall average daily trading volume.
DMA Evolution (ADTV in thousands of contracts)
1100 900
17.6%
13.9% 21 176 156 138
20% 16% 12%
700
500
300
100
5.5% 4 157
1Q09
7.5% 20 30 195
2Q09
CME Globex
11.3% 3 51 71 197
3Q09
14.4% 13 92 129 216

4Q09
223 148
8%
327
1Q10
380
2Q10
4% 0%
-100
Traditional DMA
Source: BM&FBOVESPA.
DMA Provider
CoLocation
% of DMA in overall ADTV
The flow of orders routed through the CME-Globex system achieved in the second quarter 2.9% of the overall trading volume on BM&F markets, with average 1483 thousand daily contracts (buys and sells sides included). The drop from the first quarter is mainly due to participants that traditionally used this access system migrate to co-location arrangements. The chart below sets forth data on evolution of the flow of orders routed to the CMEGlobex system for the periods indicated, by type of contract most actively traded, i.e., FX contracts, index-based contracts and mini contracts.
We determine this percentage by dividing the volume of contracts by two (2), as we take into account both sides of the trade, i.e. buy side and sell side, which is an industry practice adopted by exchanges across the world. 3 Includes FX contracts, index-based contracts and mini contracts, which account for an aggregate 147 thousand daily trades added to 1 thousand of other contracts.
.5.
Evolution of trading via CME-Globex (ADTV in thousands of contracts)
280 250 220 190 160 130 100
3.2%
2.9%
35 29 83
4.1%
59
2.5%
0.9%
45 39 39 58
70 40 10 (20)
0.1%
4
6 5 20
2 16 33
42
1Q09
FX
2Q09
Equities
3Q09
4Q09
Mini-Contracts
1Q10
2Q10
5,5% 5,0% 4,5% 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0%
% in Overall Volume
Moreover, increasingly and consistently high frequency trading has been gaining significance in terms of volume traded. May 2010 registered record high volumes from high frequency trading with average 410 thousand contracts traded daily (both buy and sell sides included), which accounted for nearly 9% of the overall volume for BM&F markets, mainly due to the peak levels of FX contracts that reached average daily traded volume of 670 thousand contracts, once this is the main contract traded by high frequency traders. The table below sets forth a breakdown (by type of contract, and as a percentage of the overall average daily trading volume) of data on high frequency volumes for the quarter, which accounted for 6.0% of the overall volume, with average 298 thousand daily contracts traded.
Evolution of high frequency trading (ADTV in thousands of contracts)
500 450 400 350 300 250 200 150 100 50 -
6.0% 3.8%
4.8% 2.8% 22 18 41
3Q09
93
0.3% 0 4
1Q09
1.0% 7 5 20
2Q09
53 44 50
4Q09
77 41 69
1Q10
50 155
2Q10
9,5% 8,5% 7,5% 6,5% 5,5% 4,5% 3,5% 2,5% 1,5% 0,5% -0,5%
FX
Equities
Mini-Contracts
% in Overall Volume
.6.
High frequency traders have been focusing largely on FX contracts, index-based contracts and mini contracts. The chart below sets forth data on evolution of high frequency trading by type of contract, where index-based and mini contracts stood out in June 2010, having accounted for 23.5% and 57.6% of the overall volume, respectively. This evolution tends to lower the rate per contract, not only due to rate discounts granted to high frequency traders, but also because of predominant day-trading activities which are charged at lower rates.
Volume of high frequency trades as a percentage of volume by type of contract
70% 60%
57.6%
50%
40% 30% 20%
23.5%
10% 0%
11.9%
FX contracts
Index-based contracts
Mini contracts
On a breakdown of volume by type of investor, second quarter trading by foreign investors increased to 25% from 22% in the prior quarter, positively swayed by growth in high frequency trading, as most of these traders are foreigners. In addition, volumes traded by institutional investors dropped to 27% of the overall volume from 29% in the previous quarter, whereas volumes traded by financial institutions kept at 43%.
Trading volume in BM&F segment by type of investor
9%
3%
8%
3%
8%
2%
6%
2%
4% 2%
22% 29%
4% 2% 25%
19%
21%
19%
24%
20% 26%
22%
25%
27%
48%
46%
44%
44%
43%
43%
1Q09 Central Bank
2Q09 Companies
Individuals
3Q09 4Q09 1Q10 Foreign Investors Institutional Investors
2Q10 Financial Institutions
.7.
Bovespa segment Second quarter average daily trading value of R$6.7 billion was up 28.2% year over year and 1.3% quarter on quarter. As measured in number of trades, this represented average 431 thousand daily trades, a 32.3% surge over the average volume of 326 thousand daily trades for the same period one year ago, and 6.1% over average 406 thousand daily trades in the prior quarter.
Average daily traded value (ADTV) and number of trades
10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 -
392 278 326

334
406
431
302
419
3.9
5.2
5.2
6.8
6.6
6.9
4.6
6.6
550 500 450 400 350 300 250 200 150 100 50 -
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
1H09
1H10
ADTV (BRL billions)

Number of Trades (thousands)
Average daily traded value (ADTV)

(in R$ millions, except as otherwise indicated)
Bovespa markets Stocks and equity derivatives Stocks (cash market) Equity derivatives Stock forwards Options on stocks + stock indices Fixed income and other debt securities cash market Total
_________________________________
2Q10
2Q09
1Q10
% 2Q10/2Q09
% 2Q10/1Q10
1H10
1H09
% 1H10/1H09
6,679.6 6,166.3 513.3 134.9 378.4 3.0 6,682.6
5,211.6 4,916.1 295.5 71.5 224.0 0.9 5,212.6
6,598.2 6,110.1 488.1 157.9 330.2 1.4 6,599.6
28.2% 25.4% 73.7% 88.6% 68.9% 225.4% 28.2%
1.2% 0.9% 5.2% -14.6% 14.6% 123.1% 1.3%
6,639.6 6,138.7 500.9 146.2 354.7 2.2 6,641.8
4,558.9 4,269.3 289.6 69.1 220.6 1.4 4,560.3
45.6% 43.8% 73.0% 111.7% 60.8% 61.7% 45.6%
Average daily number of trades

Bovespa markets Stocks and equity derivatives Stocks (cash market) Equity derivatives Stock forwards Options on stocks + stock indices Fixed income and other debt securities cash market Total
_________________________________
2Q10
2Q09
1Q10
% 2Q10/2Q09
% 2Q10/1Q10
1H10
1H09
% 1H10/1H09
431,120 348,130 82,990 1,485 81,505 13 431,133
325,774 267,397 58,377 1,103 57,274 6 325,779
406,420 326,660 79,761 1,923 77,838 10 406,431
32.3% 30.2% 42.2% 34.6% 42.3% 116.1% 32.3%
6.1% 6.6% 4.0% -22.8% 4.7% 21.3% 6.1%
418,973 337,571 81,402 1,700 79,702 12 418,984
302,049 242,021 60,028 1,020 59,008 7 302,055
38.7% 39.5% 35.6% 66.7% 35.1% 70.8% 38.7%
.8.
The market capitalization4 reached R$2.1 trillion at the end of the second quarter, up 16.2% year over year, but down 11.8% at the end of the first quarter. Based on a 3-month rolling average, turnover velocity5 rose to 69.2% in the quarter to June 2010.
Stock exchange capitalization (in R$ trillions)
1.5
1.8
2.1
2.3
2.4
2.1
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
The domestic Institutional investors were the most active traders on Bovespa segment in the second quarter and accounted for 34.6% of the overall value traded, followed by foreign investors and retail investors, which accounted for 28.7% and 26.1% of the overall second quarter value traded, respectively.
Share of value traded on Bovespa segment by type of investor
0% 6% 37% 25% 30%
0% 6%
0% 6%
2%
2%
2%
0% 10% 32% 27% 29%
2%
0% 9%
2%
8% 29%
2%
34% 24% 33%
35% 26% 30%
27%
30%
35%
26%
31%
1Q09 Individuals
Source: BM&FBOVESPA
2Q09 Institutional Investors
3Q09 Foreign Investors
4Q09 1Q10 Financial Insitutions Companies
2Q10 Others
The participation of foreign investors in the second quarter accounted for 28.7% of the overall value traded, up from 27.2% in the prior quarter. However, the net balance of foreign investment flows ended the quarter slightly negative due to the participation of those investors in May, when the net flow was negative in R$1.5 billion.
4
The stock exchange capitalization is measured as the sum total of the market capitalization of all listed companies in BOVESPA market; market capitalization in turn is a measurement of size of a public company equal to the share price times the number of shares outstanding by listed company. 5 Turnover velocity refers to the annualized ratio between value traded on the cash market in the period presented and average market capitalization for the same period.
.9.
Bovespa Segment Net flow of foreign investment (in R$ billions)
43.2 1.3
16.0 13.3 12.6

4.5
-0.1 (15.4) 2008 2009 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
In addition, retail investors accounted for 26.1% of the value traded in the second quarter, down from 31.4% in the quarter earlier and 30.4% one year ago. The number of active custody accounts at the end of the quarter to June 2010 was 579.6 thousand, virtually flat from March 2010 and 6.7% up from June 2009.
Number of active custody accounts (in thousands)
547.8
543.3
538.0
575.7
581.0
579.6
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
Source: BM&FBOVESPA
The quarterly retail trading via the Home Broker system declined to account for rates between 17% and 18% of the overall value traded over the last three months, as compared to an average of 21% in the prior quarter, explaining the decrease in financial value traded by retail investors in the period.
.10.
Home Broker trading as a percentage of average daily traded value (ADTV)
18%
17%
18%
20% 21% 19% 19%
21% 18%
22% 21% 17% 18% 18%
17%
17%
16% 17%
Source: BM&FBOVESPA
Exchange-traded funds ETFs In the second quarter, ETFs listed on the equities market traded between R$24 million and R$33 million per day. With the end of an additional round of bidding processes for index-funds, new ETFs are expected to launch in the near future, adding to the seven currently listed ETFs.
Average daily traded value (ADTV) by ETFs (in R$ millions)
33.1 23.5
22.0 20.3 11.4
26.6 25.6
21.721.5 22.2
27.1 18.3
29.1
25.3
24.5
16.9
8.8
5.3
Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun09 09 09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10
Source: BM&FBOVESPA
.11.
Public offerings In 2Q10, the capital raising activity totaled R$4.5 billion, as Mills and Julio Simes carried through with their market debuts, while Even, JBS and Hypermarcas conducted follow-on offerings. In addition, early in July Renova launched its IPO and Banco do Brasil a follow-on offering, such that total proceeds from offerings in 2010 already add to R$23.5 billion. Moreover, eight additional offerings are in the pipeline for 2010, including seven IPOs and one follow-on offering (Petrobras that released to the market its intention).
Volume of offering proceeds (in R$ billions)
IPO
Follow-On
14.5
22.2
15.1 4.3 4.5
2004
55.6
26.8
23.8 7.5
2007 2008 2009
16.1 7.4
2010*
8.5 5.4
2005
15.4
2006
* Preliminary data through August 04th, 2010

Source: BM&FBOVESPA
Securities lending The volume of open interest positions at the end of 2Q10 had climbed to R$20.3 billion, a 57.8% increase over June 2009 and 4.5% increase over March 2010. This growth largely correlates with volatility and stock prices rallies over the last few months, which swayed market exposure, and contributed to boost the average monthly number of transactions by 41.7%, to 83 thousand from 58.6 thousand one year ago.
.12.
Bovespa segment - Open interest in securities lending transactions
25,0 20,0 15,0

10,0 53.9
58.6
63.8
69.6 61.1 19.4
83.0
100,0 80,0 60,0
5,0 -
9.8
12.9
16.5
15.8
20.3
40,0
20,0 -
1Q09 2Q09 Open Interest (BRL billions)

Source: BM&FBOVESPA
3Q09
4Q09 1Q10 2Q10 Monthly Average Number of Trades (thousands)
CONSOLIDATED FINANCIAL PERFORMANCE

Operating revenues Second quarter gross operational revenues climbed 25.3% to R$527.0 million from R$420.6 million in the same period one year ago, primarily due to the rebound in volumes traded on our markets and thus in revenues from transactions. Revenues from trading and settlement activities in the Bovespa segment, which accounted for 50.0% of the overall revenues, amounted to R$263.5 million and were up 29.2% from the same period one year ago. This climb correlates with a 28.2% year on year rise in volumes traded on Bovespa segment; and Revenues from trading and settlement activities in the BM&F segment which accounted for 35.1% of the overall revenues, amounted to R$184.9 million and were up 26.5% from the same period one year before. This climb likewise correlates with a 54.2% year on year rise in volumes traded on BM&F markets, which however were partially impacted by the reduction in RPC for the segment. As a result, revenues from trading and settlement activities in both equities and derivatives markets accounted for 85.1% of total revenues, as compared to 83.3% in the quarter to June one year ago. Other revenues (including dividends received from the CME Group) totaled R$78.5 million, up 11.5% from the same period in the prior year (R$70.4 million). This increase is due primarily to the following: Market data (vendors): fees from distribution of market data to vendors and other customers amounted to R$16.8 million, which accounted for 3.2% of total revenues. This revenue line dropped 16.7% year on year due mainly to appreciation of the Brazilian real against the U.S. dollar leading to a decline in revenues from fees charged from international customers. The average number of broadcast terminals or market data customers increased 4.0% year on year. Access fees charged from market participants: revenues of R$13.4 million in this line item, accounted for 2.5% of the total, as compared to R$10.2 million one year ago, a 31.4% year on year rise. This climb is attributable to increased demand from brokerage firms for access at more expensive ranges that allow for greater number of trades and larger order flows, which in turn correlate with the increase in trading activity.
.13.
Depository and custody services: revenues from depository and custody services surged 37.7% year on year, to R$22.3 million from R$16.2 million in the second quarter one year ago, and accounted for 4.2% of total revenues. Specifically, revenues derived by our central depository facility grew by 13.2%, to R$16.6 million from R$14.6 million in the earlier year, mainly due to the additional fee based on value of assets held in custody for resident investors, the impact of which has been felt starting from May 2009. In addition, the average number of custody accounts at the end of the quarter to June 2010 (580.1 thousand) went up 7.2% from one year ago (541.0 thousand), and the average value of assets held in custody (not including ADRs and foreign investors) soared 20.8% year on year to R$435.2 billion from R$360.2 billion earlier, thus positively swaying this revenue line. Securities lending: at R$12.3 million, this revenue line accounted for 2.3% of total revenues in 2Q10 and a 65.4% year on year gain (R$7.5 million in 2Q09), primarily as a result of the increase in average financial value of open interest positions, which totaled R$19.9 billion in the quarter, a climb of 78.2% when compared to R$11.2 billion one year before. Listing: revenues from listing, in the amount of R$10.8 million rose by 15.2% year on year and accounted for 2.0% of total revenues. The increase in revenues is due to a higher number of fillings for IPOs and Follow Ons, which have an analysis fee, to new listed companies in the last 12 months, and to the discount reductions rendered to the listed companies. Operating Expenses Second quarter operating expenses totaled R$140.6 million, picking up 9.7% from the same period one year ago. This rise is due mainly to changes in the following line items Personnel: expenses of R$64.4 million for the quarter fell 3.0% from the prior year primarily due to a drop in expenses with the 2010 stock option program (to R$7.0 million versus R$13.4 million in 2Q09); Data processing: expenses of R$24.6 million for the quarter were up 20.2% from the year before, mainly due to rent expenses related to the start of operations of our new contingency site and to expenses with projects related to the network structure implementation; Marketing and promotion: these expenses amounted to R$9.9 million, soaring 80.3% from the same quarter in the prior year, as a result mainly of costs incurred in bolstering our financial education programs and market popularization campaigns, in line with our strategy to educate and attract future and prospective retail investors and boost trading activities; and Sundry: second quarter sundry expenses amounted to R$8.5 million versus R$5.3 million one year ago, a 60.0% year on year surge correlated mainly with non-recurring expenses consisting of: o R$1.8 million write off of receivables attributable to BVRJ (Bolsa de Valores do Rio de Janeiro) in connection with brokers in litigation process. o R$1.1 million in intangibles written off (reversal of Capex); o R$0.5 million related to the contingent liability provision associated with civil lawsuits.
.14.
Interest Income, net Net interest income for the quarter to June 2010, in the amount of R$77.5 million, increased 41.4% from the same period one year ago. On a year over year comparison, financial revenues increased to R$83.6 million from R$68.0 million earlier, whereas financial expenses dropped to R$6.1 million from R$13.1 million the year before. Income tax and social contribution and deferred income tax and social contribution Income before taxes for 2Q10 totaled R$410.5 million, as compared to R$304.9 million in the quarter to June 2009, a 34.6% rise which correlates primarily with improved operating and net interest income results. The line item income and social contribution and deferred income and social contribution taxes totaled R$102.1 million and consists primarily of: Recognition of deferred tax liabilities of R$111.6 million related to temporary differences from yearly amortization of goodwill for tax purposes, with no impact on cash; Recognition of tax credits amounting to R$13.0 million related to tax losses carried forward which correlate mainly with payment of interest on shareholders equity to shareholders, and the social contribution loss for the quarter; and R$3.5 million related to other transitory provisions, as follows:
BRL Millions (-) Tax Liabilities (+) Recognition of tax credits (-) Other transitory Provisions Income tax and social contribution and Deferred income tax and social contribution 2Q10 -111.6 +13.0 -3.5 -102.1
EBITDA and net income EBITDA for the second quarter of 2010 was R$341.7 million, which is up 31.4% from R$259.9 million in the same period one year ago. In addition, the EBITDA margin rose to 72.1% from 68.7% one year ago. The rises in EBITDA and EBITDA margin correlate primarily with increase in volumes traded. Net income for the second quarter 2010, of R$308.8 million, was up 64.2% from R$188.1 million for the same period one year before. This increase in net income is due primarily to the following: Improved operating performance; Higher net interest income; and The recognition of deferred tax liabilities related to temporary differences from yearly amortization of goodwill for tax purposes, which we recognized only in the second quarter of 2009, such that the net impact for the entire first half of 2009 was reflected in the 2Q09 financials;
.15.
Main lines items under Assets Total Assets At the end of the quarter to June 2010, the consolidated balance sheet of BM&FBOVESPA reported total assets of R$21,304.4 million, down 3.2% from R$22,002.2 million in March 2010. Cash and cash equivalents; financial investments Cash and cash equivalents, including short- and long-term financial investments, amounted to R$4,262.4 million and accounted for 20.0% of total assets. This is 7.0% up from R$3,985.1 million in the previous quarter, when cash and cash equivalents accounted for 18.1% of total assets. This drop from the first quarter 2010 correlates with the fall in volume of collateral pledged by market participants, as recorded in the line item collateral for transactions under Current Liabilities, and the payment of dividends and interest on equity during the second quarter, which amount to R$248 million and R$137 million, respectively. Non-current assets Non-current assets totaled R$18,121.2 million, including long-term receivables (including long-term financial investments) of R$1,638.1 million, investments of R$39.0 million, property and equipment of R$275.2 million, and intangible assets (goodwill) of R$16,168.9 million. Intangible assets consist primarily of goodwill correlated with expectation of future profitability related to the acquisition of Bovespa Holding. Goodwill was tested for impairment in December 2009. The test was based on a valuation report prepared by a specialist firm and has not resulted in any necessity to adjust the carrying amount of goodwill. In the first semester, management has not identified any internal or external indicators which could change the conclusions reached regarding the absence of reasons requiring adjustments for recognition of impairment of goodwill. Main lines items under Liabilities and Shareholders Equity Current liabilities Current liabilities amounting to R$1,355.5 million accounted for 6.2% of total liabilities at the end of the quarter to June 2010, and are 17.6% down from R$1,645.6 million, representing 7.5% of total liabilities at the end of the previous quarter. This drop is due mainly to the lower amount of cash collateral pledged by market participants, which fell to R$901.7 million from R$1,171.4 million earlier. Long-term liabilities Long-term liabilities at the end of the quarter to June 2010 amounted to R$548.0 million, 26.7% higher than the previous quarter, and consist primarily of deferred income and social contribution taxes, as well as provision for contingencies and legal obligations. Shareholders equity Shareholders equity totaled R$19,385.1 million, down 0.6% from the previous quarter, and is composed basically of capital stock of R$2,540.2 million and a capital reserve of R$16,508.3 million.
.16.
OTHER FINANCIAL HIGHLIGHTS
Earnings distribution Earnings distributions in the six-month period to June 2010, which were paid by way of interest on shareholders equity, amount to an aggregate of R$227 million, as follows: R$ 30 million on March 11, 2010; R$60 million on April 13, 2010; and R$137 million on May 27, 2010. Risk management - Central Counterparty Risk BM&FBOVESPA manages the following central counterparty clearing facilities absorbed during the exchange integration process of BM&F and Bovespa: (i) equities and corporate debt clearing facility, (ii) derivatives clearing house, (iii) FX clearing house; and (iv) government securities clearing house. The Central Bank considers that these clearing facilities perform systemically material roles. They act as central counterparty (CPP) to ensure multilateral settlement of transactions carried out on the equities markets, the derivatives markets, the spot Fx market, and the government bonds and corporate debt securities markets. The central counterparty clearing facilities are responsible for providing efficiency and stability to the market by ensuring trades are properly cleared and settled. A CCP interposes itself between counterparties to financial transactions, becoming the buyer to the seller and the seller to the buyer. Acting in the capacity of central counterparty, our clearing houses absorb the risks of the counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities for financial settlement and clearing of securities and financial assets For proper risk mitigation, each clearing facility has its own risk management system and safeguard structure. These structures comprise the universe of mechanisms and remedies a clearing house may resort to cover losses from failed settlement by a participant. The key components of these safeguard structures include collateral deposited by market participants, often in the form of margin, plus special funds intended to cover possible losses due to defaults and, in addition, co-liability undertaken by broker and clearing agents regarding transactions they intermediate or clear. Transactions carried out on our markets are secured by collateral margins pledged in the form of cash, government bonds and corporate debt securities, bank letters of guarantee and stocks, among other things. As of June 30, 2010, pledged collateral totaled R$120.7 billion (versus R$102.6 billion as of June 30, 2009), 75.8% of which in the form of cash and government bonds. This compares to R$123.2 billion in total collateral at the end of March 2010, 74.8% of which in the form of cash and government bonds. The table below sets forth comparative data on pledged collateral at the end of the periods indicated.
In R$ billions
Clearing facility Derivatives Forex Debt Securities Equities (CBLC) TOTAL
June 30, 2010 75.8 4.3 0.8 39.8 120.7
March 31, 2010 76.9 3.8 0.8 41.7 123.2
December 31, 2009 60.6 3.8 0.8 36.4 101.6
June 30, 2009 68.0 3.1 0.9 30.6 102.6
.17.
The fall in pledged collateral at end of the quarter to June is due primarily to the decline in volumes traded in stocks (Bovespa segment), the aggregate guarantees of which dropped to R$39.8 billion from R$41.7 billion in the earlier quarter.
CME
Dated June 22, 2010, BM&FBOVESPA and the CME Group, Inc. executed the transaction documents contemplated in a February 11 Term Sheet, which implement our mutual global preferred strategic partnership. These documents include (i) a Share Purchase Agreement whereby we will increase to 5% (from 1.78%) our ownership interest in CME shares; (ii) a Technology Agreement contemplating the joint development of a multi-asset class electronic trading platform; and (iii) a Preferred Strategic Partnership Agreement whereby we agree to cooperate in identifying strategic co-investment opportunities, including commercial partnerships with other international exchanges, which operate equities and derivatives markets.
Bond offering
Dated July 16, 2010, BM&FBOVESPA completed a US$612 million global notes issuance. The notes will pay interest every six months, in January and July, at the annual rate of 5.50%. The proceeds of this offering were invested in our purchase of CME shares.
Credit Ratings
Moody's. On May 27, 2010, Moody's Investors Service assigned a local currency issuer rating of A1 on the global scale and Aaa.br on the Brazilian national scale to BM&FBOVESPA. The outlook on the ratings is stable. Also, Moodys assigned a Baa2 long-term foreign currency debt rating to the notes, with a positive outlook. Standard & Poors: Dated June 22, 2010, Standard & Poor's Ratings Services assigned its 'BBB+ (long-term) and A-2 (short-term)' counterparty credit ratings to BM&FBOVESPA. The outlook on the ratings is stable.
2Q10 HIGHLIGHTS
New Pricing Policy We have recently announced to the market the new pricing policy for high frequency trading (HFT) on both BM&F and Bovespa segments. Pursuant to this policy, high frequency traders will hold HFT registration accounts and the granting of progressive discounts based on ranges of volume traded will hinge on the account under which an investor registered as high frequency trader. The pricing policy implementation will be in two phases, the first on November 1, 2010, and the second on January 3, 2011. CHI X BM&FBOVESPA and Chi-X, a company specialized in electronic trading systems, recently executed a Term Sheet contemplating the joint development of data feed and order routing software system designed to convert stock quotes into different foreign currencies in real time, and give foreign investors the ability to transmit orders to the Brazilian
.18.
exchange in their local currencies. This transaction is part of our initiative to offer foreign investors, in particular retail investors, an efficient tool to simplify the trading of Brazilian equities on their local market. This order routing software will be designed to convert quotes from Brazilian reais into foreign currency at exchange rates provided in real time by local banks adhering to the project, for these quotes to be displayed in foreign currency in data feeds sent to brokerage firms, which will then display them to customers. Already Bradesco, Citibank, HSBC and Ita have adhered to the project, while other banks consider adhering. Continuing market popularization programs We are proceeding with our market popularization programs, which focus primarily on educating future and prospective retail investors through mass media initiatives (including free-to-air television, radio broadcasts and the Internet), in particular the Financial Education TV Show, Radio Web, free online courses, the SimulAo (investment simulator), a radio channel for our Mulheres em Ao (Women in Action) gateway, courses, Q&A sessions, lectures, and other education actions, such as Desafio BM&FBOVESPA (BM&FBOVESPA Challenge, a student contest), Dinheiro no Bolso (Saving Money), and our sponsorship of the Brazilian governments program known as National Financial Education Strategy (Estratgia Nacional de Educao Financeira), or ENEF. BDRs By end-April 2010 we announced the first ten local listings of Unsponsored Level I BDRs, which will trade on our Exchange and will be deposited with Deutsche Bank. We have conducted a bidding process to list ten additional BDR issuances, thus ensuring fair conditions are extended to institutions that wish to tap into this market. This bidding process was carried out with three bidders, with Citibank Distribuidora de Ttulos e Valores Mobilirios S.A emerging as the winning bidder. New ETFs On June 4, 2010, we announced bidding processes to register new ETFs. The first such bidding process took place for the launch of an ETF that mirrors the Financial Services Index (IFNC) and Itau-Unibanco S.A. won the bidding process and obtained a 3-year exclusive license for the use of the IFCN and the creation of its ETF (ETF IFCN). Technology developments In addition to initiatives related to pricing policies and new products, we invest continually in developing our trading platforms and the network for access to our markets, and in cutting latency down for efficient traffic. Technology development highlights for the period include: BVMF-CME joint development of multi-asset class trading platform: work is ongoing for development in cooperation with the CME Group of an electronic platform for the trading of equities, derivatives, foreign currency and fixed income securities. It has been designed as a fully integrated platform, which we will develop on the basis of the existing Globex technology. When fully implemented, this multi-asset class trading platform is expected to replace our GTS, MegaBolsa, Sisbex and BovespaFix systems. The joint project team includes 200 experienced professionals, each party contributing half of the team. Phase 1 of the project (derivatives and FX modules for replacement of the GTS system) is set to be implemented in the first quarter of 2011.
.19.
DMA modalities 2, 3 and 4: the Brazilian Securities and Exchange Commission (Comisso de Valores Mobilirios or CVM) has approved the implementation of the Direct Market Access trading platforms in BOVESPA segment, which will be offered via Provider, via Direct Connection and via Co-location (investor model), or DMA modalities 2, 3 and 4, respectively. Thus, starting as of September 1, 2010. Throughput capacity: we are now working to boost our systems throughput capacity to 3 million daily transactions in the Bovespa segment (from 1.5 million presently) and 400 thousand daily transactions in the BM&F segment (from the current 200 thousand). Implementation is set to take place in 4Q10. INDEPENDENT AUDITORS The Company and its subsidiaries have retained PricewaterhouseCoopers to audit the financial statements. The policy that governs the hiring of independent auditing services by the Company and subsidiaries is based on internationally accepted principles which preserve the independence of these services and include the following practices: (i) the auditors cannot hold executive or managerial positions in the Company and its subsidiaries; (ii) the auditors cannot perform operational activities in the Company and its subsidiaries which may compromise the audit work; and (III) the auditors must be impartial in order to avert conflicts of interest and loss of independence, and must be objective in their opinions and reports regarding the financial statements. In the six months ended, the independent auditors and their related parties have not provided services unrelated to the audit to the Company and its subsidiaries.
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros

Review Report of Independent Accountants on Quarterly Information June 30, 2010
Review Report of Independent Accountants

To the Board of Directors and Shareholders BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros
We have reviewed the accounting information included in the Quarterly Information (Parent Company and Consolidated) of BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (the Company) and subsidiaries for the quarter ended June 30, 2010, comprising the balance sheet, the statements of income, of comprehensive income, of changes in shareholders equity, of cash flows and of value added, explanatory notes and the management report. This Quarterly Information is the responsibility of the Company's management. Our review was carried out in accordance with specific standards established by the Institute of Independent Auditors of Brazil (IBRACON), in conjunction with the Federal Accounting Council (CFC), and mainly comprised: (a) inquiries of and discussions with management responsible for the accounting, financial and operating areas of the Company with regard to the main criteria adopted for the preparation of the Quarterly Information and (b) a review of the significant information and of the subsequent events which have, or could have, significant effects on the financial position and operations of the Company and its subsidiaries. Based on our review, we are not aware of any material modifications that should be made to the accounting information included in the Quarterly Information of the Parent Company referred to above in order that it be stated in accordance with technical pronouncement CPC 21 - Interim Statements, applicable to the preparation of Quarterly Information, consistent with the standards issued by the Brazilian Securities Commission (CVM). Based on our review, we are not aware of any material modifications that should be made to the accounting information included in the Consolidated Quarterly Information referred to above in order that it be stated in accordance with the accounting practices adopted in Brazil applicable to the preparation of Quarterly Information, consistent with the standards issued by the Brazilian Securities Commission (CVM).
BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros
As mentioned in Note 2, the Brazilian Securities Commission (CVM), through Deliberation CVM no. 603/09, provided that companies could submit their Quarterly Information during the year 2010 based on accounting standards effective until December 31, 2009, provided that those interim financial statements were subsequently restated, including comparative figures, to meet the new standards. Accordingly, the present Quarterly Information differ from that originally disclosed by the Company on August 12, 2010, in compliance with CVM Deliberation no. 603/09 and CVM Instruction no. 457/07. So Paulo, February 17, 2011
PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5
Edison Arisa Pereira Contador CRC 1SP127241/O-0
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros

at June 30 and March 31, 2010
(In thousands of reais) BM&FBOVESPA 6/30/2010 3.711.047 89.870 3.458.388 60.691 16.684 78.150 7.264 17.333.866 794.380 404.773 801 299.982 87.871 953 100.285 100.285 280.766 16.158.435 16.064.309 94.126 21.044.913 (A free translation of the original in Portuguese) Consolidated 6/30/2010 3.786.268 91.121 3.528.591 61.580 19.096 78.492 7.388 17.518.087 1.035.011 642.676 3.000 299.982 88.400 953 38.967 38.967 285.650 16.158.459 16.064.309 94.150 21.304.355
Assets Current assets Cash and cash equivalents Financial investments Accounts receivable - net Other receivables Taxes recoverable and prepaid Prepaid expenses Non-current Long-term receivables Financial investments Other receivables - net Deferred income tax and social contribution Judicial deposits Prepaid expenses Investments Interest in subsidiaries Investment Property Property and equipment Intangible assets Goodwill Software and projects Total assets
Notes
12/31/2009 3.424.607 46.746 3.257.365 39.042 21.598 51.143 8.713 17.212.509 746.476 378.537 626 283.824 83.489 100.791 100.791 236.941 16.128.301 16.064.309 63.992 20.637.116
12/31/2009 3.468.852 50.779 3.295.356 40.205 22.656 51.143 8.713 17.368.987 958.993 585.648 4.626 283.824 84.895 39.723 39.723 241.939 16.128.332 16.064.309 64.023 20.837.839
4 (a) 4 (b) 5 6
4 (b) 6 20 15 (g)
7 (a) 7 (b) 8 9
The accompanying notes are an integral part of this Financial Statements. 4
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Balance Sheet

at June 30 and March 31, 2010
(In thousands of reais) BM&FBOVESPA 6/30/2010 1.113.074 901.658 33.040 57.630 51.943 20.252 6.669 3.751 1.839 15.520 20.772 547.999 13 20 15 16 495.798 52.201 19.383.840 2.540.239 16.495.215 23.261 155.191 (209.549) 16.370 363.113 19.383.840 21.044.913 (A free translation of the original in Portuguese) Consolidated 6/30/2010 1.355.492 901.658 33.040 57.679 52.841 20.575 1.186 6.669 3.751 1.839 255.482 20.772 549.345 495.798 53.547 19.399.518 2.540.239 16.495.215 23.261 155.191 (209.549) 16.370 363.113 19.383.840 15.678 21.304.355
Liabilities and shareholders equity Current Collateral for transactions Earnings and rights on securities in custody Suppliers Salaries and social charges Provision for taxes and contributions payable Income tax and social contribution Financing Dividends and interest on own capital payable Redemption of preferred shares to be settled Other liabilities Unearned discount Non-current Financing Deferred income tax and social contribution Provision for contingencies and legal obligations Shareholders equity Capital Capital reserve Revaluation reserves Statutory reserves Treasury shares Valuation adjustments Additional Dividend proposed Retained earnings Interest of non-controlling shareholders Total liabilities and shareholders equity
Notes
12/31/2009 958.946 810.317 31.897 21.318 42.525 24.404 886 9.295 839 1.839 15.626 351.635 2.495 300.930 48.210 19.326.535 2.540.239 16.492.260 23.551 403.191 (230.102) 77.396 20.000 19.326.535
12/31/2009 1.142.076 810.317 31.897 21.444 43.237 24.616 3.697 9.295 839 1.839 194.895 352.872 2.495 300.930 49.447 19.342.891 2.540.239 16.492.260 23.551 403.191 (230.102) 77.396 20.000 19.326.535 16.356 20.837.839
18 10
11 13 12 14
20.637.116
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Income

Quarters and six month periods ended June 30, 2010 and 2009
(In thousands of reais, unless otherwise stated) (A free translation of the original in Portuguese) BM&FBOVESPA 2009 Accumulated 763.425 271.913 260.645 11.155 113 356.515 258.919 92.508 5.088 134.997 13.590 19.953 33.302 23.066 31.692 1.500 11.894 (77.105) (68.668) (8.437) 686.320 (268.424) (150.395) (45.575) (17.950) (17.298) (4.910) (10.142) (1.201) (1.031) (7.502) (472) (2.701) (9.247) 2.142 119.002 539.040 (123.930) 35.503 (159.433)
Notes Gross operating revenues Trading and/or settlement system - BM&F Derivatives Foreign exchange Assets Trading and/or settlement system - Bovespa Negotiation trading fees Transactions clearing and settlement Other Other operating revenues Loans of marketable securities Listing of marketable securities Depository, custody and back office Trading participant access Vendors quotations and market information Commodity classification fee Other Deductions of revenue PIS and COFINS taxes Taxes on services Net operating revenue Operating expenses Administrative and general Personnel and related charges Data processing Depreciation and amortization Outsourced services Maintenance in general Communications Rents Supplies Promotion and publicity Taxes Board and committee members compensation Sundry Equity in the results of subsidiaries Financial results Income before taxation of profit Income tax and social contribution Current Deferred 20 (c)
2nd Quarter 522.437 184.138 178.799 5.319 20 259.309 185.739 68.277 5.293 78.990 12.345 10.754 22.270 13.431 16.819 209 3.162 (52.962) (47.022) (5.940) 469.475 (136.163) (61.800) (23.746) (11.074) (9.502) (2.191) (6.417) (541) (755) (9.724) (2.258) (1.830) (6.325) (669) 74.839 407.482 (101.836) (101.836)
2010 Accumulated 1.028.554 354.351 344.280 10.023 48 515.803 373.368 132.514 9.921 158.400 22.865 22.265 43.160 25.877 36.447 486 7.300 (104.121) (92.637) (11.484) 924.433 (263.056) (123.061) (44.212) (19.926) (18.511) (4.708) (12.329) (1.071) (1.205) (14.852) (3.294) (2.878) (17.009) (2.178) 141.060 800.259 (210.146) (210.146)
2nd Quarter 416.270 145.471 139.939 5.463 69 200.798 147.655 50.112 3.031 70.001 7.463 9.332 16.718 12.150 18.906 1.285 4.147 (42.039) (37.788) (4.251) 374.231 (123.677) (65.649) (19.562) (9.444) (8.723) (2.309) (5.180) (530) (566) (5.316) (156) (1.572) (4.670) 548 53.450 304.552 (116.422) 35.774 (152.196)
21
22
21 7
Net income for the period Attributable to: Shareholders of the parent Non-controlling interest (1)Information relating to earnings per share are presented in Note 16(g)
305.646
590.113
188.130
415.110
305.646 -
590.113 -
188.130 -
415.110 -
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Income

(In thousands of reais, unless otherwise stated) (A free translation of the original in Portuguese) Consolidated 2009 Accumulated 772.499 271.913 260.645 11.155 113 356.515 258.919 92.508 5.088 144.071 13.590 19.953 33.302 23.066 31.692 1.500 2.656 4.023 14.289 (77.709) (69.033) (8.676) 694.790 (276.958) (151.799) (47.177) (18.838) (18.822) (5.392) (10.240) (1.490) (1.057) (7.767) (834) (2.701) (10.841) 122.716 540.548 (125.394) 34.039 (159.433)
Notes Gross operating revenues Trading and/or settlement system - BM&F Derivatives Foreign exchange Assets Trading and/or settlement system - Bovespa Negotiation trading fees Transactions clearing and settlement Other Other operating revenues Loans of marketable securities Listing of marketable securities Depository, custody and back office Trading participant access Vendors quotations and market information Commodity classification fee Bolsa Brasileira de Mercadorias Bank Other Deductions of revenue PIS and COFINS taxes Taxes on services Net operating revenue Operating expenses Administrative and general Personnel and related charges Data processing Depreciation and amortization Outsourced services Maintenance in general Communications Rents Supplies Promotion and publicity Taxes Board and committee members compensation Sundry Financial results Income before taxation of profit Income tax and social contribution Current Deferred 20 (c)
2nd Quarter 526.986 184.139 178.799 5.320 20 259.309 185.739 68.277 5.293 83.538 12.345 10.754 22.270 13.431 16.819 209 1.056 1.921 4.733 (53.365) (47.325) (6.040) 473.621 (143.474) (64.371) (24.642) (11.524) (10.126) (2.332) (6.470) (678) (764) (9.870) (2.340) (1.830) (8.527) 77.546 407.693 (102.473) (637) (101.836)
2010 Accumulated 1.037.646 354.352 344.280 10.024 48 515.803 373.368 132.514 9.921 167.491 22.865 22.265 43.160 25.877 36.447 486 2.170 3.820 10.401 (104.897) (93.212) (11.685) 932.749 (277.278) (128.089) (45.908) (20.826) (19.763) (5.014) (12.441) (1.343) (1.236) (15.198) (3.485) (2.878) (21.097) 145.242 800.713 (211.278) (1.132) (210.146)
2nd Quarter 420.581 145.471 139.939 5.463 69 200.798 147.655 50.112 3.031 74.312 7.463 9.332 16.718 12.150 18.906 1.285 1.250 2.052 5.156 (42.339) (37.967) (4.372) 378.242 (128.198) (66.337) (20.494) (9.887) (9.703) (2.566) (5.249) (665) (580) (5.475) (339) (1.572) (5.331) 54.857 304.901 (117.022) 35.174 (152.196)
21
22
21
Net income for the period Attributable to: Shareholders of the parent Non-controlling interest (1)Information relating to earnings per share are presented in Note 16(g)
305.220
589.435
187.879
415.154
305.646 (426)
590.113 (678)
188.130 (251)
415.110 44
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Comprehensive Income

Quarters and nine month periods ended June 30, 2010 and 2009
(In thousands of reais) BM&FBOVESPA 2009 Accumulated 415.110 94.824 94.824
2nd Quarter Net income for the quarter Valuation adjustments (1) Mark to market of financial assets available for sale 305.646 (43.775) (43.775)
2010 Accumulated 590.113 (61.026) (61.026)
2nd Quarter 188.130 28.832 28.832
Total comprehensive income for the quarter Attributable to: Shareholders of the parent Non-controlling interest
261.871 261.871 261.871 -
529.087 529.087 529.087 -
216.962 216.962 216.962 -
509.934 509.934 509.934 -
(1) As informaes relacionadas ao lucro por ao esto apresentadas na nota explicativa 16(g).
As notas explicativas so parte integrante das informaes trimestrais. 8
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Comprehensive Income

Quarters and nine month periods ended June 30, 2010 and 2009
(In thousands of reais) Consolidado 2009 Accumulated 415.154 94.824 94.824
2nd Quarter Net income for the quarter Valuation adjustments (1) Mark to market of financial assets available for sale 305.220 (43.775) (43.775)
2010 Accumulated 589.435 (61.026) (61.026)
2nd Quarter 187.879 28.832 28.832
Total comprehensive income for the quarter Attributable to: Shareholders of the parent Non-controlling interest
261.445 261.445 261.871 (426)
528.409 528.409 529.087 (678)
216.711 216.711 216.962 (251)
509.978 509.978 509.934 44
(1) As informaes relacionadas ao lucro por ao esto apresentadas na nota explicativa 16(g).
As notas explicativas so parte integrante das informaes trimestrais. 9
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Changes in Shareholders Equity
Quarter and semester ended June 30, 2010
(In thousands of reais) Atribuvel aos acionistas da controladora Reservas de lucros Reservas Aes em Ajustes de estatutrias tesouraria avaliao (Nota 16(d)) (Nota 16(b)) patrimonial 403.191 (230.102) 20.553 77.396 (61.026) -
Nota At December 31, 2009 Realization of revaluation reserve - subsidiaries Disposal of treasury shares - exercised options Recognition of stock option plan Mark to market adjustment Dividend proposed approval Net income for the period Appropriation of net income: Dividends Interest on own capital At June 30, 2010 19 19
Capital social 2.540.239 -
Reserva de capital 16.492.260 (13.056) 16.011 -
Reservas de reavaliao (Nota 16(c)) 23.551 (290) -
Dividendo adicional proposto 20.000 (20.000) -
Lucros Acumulados 590.113
Total 19.326.535 (290) 7.497 16.011 (61.026) (20.000) 590.113
Participao dos acionistas no controladores 16.356 (678)
Total do patrimnio lquido 19.342.891 (290) 7.497 16.011 (61.026) (20.000) 589.435
16(f) 16(f)
2.540.239
16.495.215
23.261
(248.000) 155.191
(209.549)
16.370
(227.000) 363.113
(248.000) (227.000) 19.383.840
15.678
(248.000) (227.000) 19.399.518
At March 31, 2010 Realization of revaluation reserve - subsidiaries Disposal of treasury shares - exercised options Recognition of stock option plan Mark to market adjustment Net income for the period Appropriation of net income: Dividends Interest on own capital At June 30, 2010 19 19
2.540.239 -
16.490.348 (2.144) 7.011 -
23.406 (145) -
403.191 -
(214.889) 5.340 -
60.145 (43.775) -
194.467 305.646
19.496.907 (145) 3.196 7.011 (43.775) 305.646
16.104 (426)
19.513.011 (145) 3.196 7.011 (43.775) 305.220
16(f) 16(f)
2.540.239
16.495.215
23.261
(248.000) 155.191
(209.549)
16.370
(137.000) 363.113
(248.000) (137.000) 19.383.840
15.678
(248.000) (137.000) 19.399.518
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Cash Flows

(In thousands of reais) (A free translation of the original in Portuguese) BM&FBOVESPA 2009 Accumulated
2nd Quarter Cash flows from operating activities Net income for the period Adjustments for: Depreciation and amortization Profit on sale of property and equipment Deferred income tax and social contribution Equity in results of subsidiaries Expenses related to the stock option plan Others Variation in financial investments and collateral for transactions Variation in taxes recoverable and prepaid Variation in accounts receivable Variation in other receivables Variation in prepaid expenses Variation in judicial deposits Variation in earnings and rights on securities in custody Variation in suppliers Variation in provision for taxes and contributions payable Variation in provisions for income tax and social contribution Varition in salaries and social charges Variation in other liabilities Variation in unearned discount Variation in provision for contingencies Net cash provided by operating activities Cash flows from investing activities Receipt on sale of property and equipment Payment for purchase of property and equipment Dividends received Receipt on sale of assets held for sale Capital increase in subsidiaries Variation in software and projects 220 (40.259) 3.394 (960) (27.504) 305.646 11.074 101.837 669 7.011 108.563 (21.790) 11.089 (2.518) (1.678) (2.779) 1.550 30.091 (3.503) 14.792 1.156 (10.923) 1.785 552.072
2010 Accumulated
2nd Quarter
590.113 19.926 (5) 210.147 2.178 16.011 (228.381) (27.007) (21.649) (2.123) 497 (4.382) 1.143 36.312 (4.152) (886) 9.418 (106) 20.772 3.991 621.817
188.130 9.444 134 152.196 (548) 13.445 (8.714) (146.947) (52.415) 24.479 (2.028) 2.885 (2.332) (2.212) (5.435) 465 (271) 9.403 6.938 (12.688) 853 174.782
415.110 17.950 322 159.433 (2.142) 32.204 (10.986) (167.373) (59.761) (8.021) (5.362) 4.513 (4.825) (1.864) (11.682) (21.760) 18.324 7.058 19.385 1.918 382.441
412 (61.254) 6.863 (1.962) (33.040)
387 (19.760) 50 (390) (5.644)
805 (27.180) 718 (1.307) (10.532)
Net cash (used in) provided by investing activities Cash flows from financing activities Disposal of treasury shares - stock options exercised Repurchase of shares Variation in financing Redemption of preferred shares Payment of dividends and interest on own capital Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
(65.109)
(88.981)
(25.357)
(37.496)
3.196 (2.559) (444.065) (443.428) 43.535 46.335 89.870
7.497 (5.121) (492.088) (489.712) 43.124 46.746 89.870
14.315 12.884 (2.293) (293.370) (268.464) (119.039) 153.945 34.906
17.347 (75.125) 12.367 (2.293) (303.256) (350.960) (6.015) 40.921 34.906
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Cash Flows

(In thousands of reais) (A free translation of the original in Portuguese) Consolidated 2009 Accumulated
2nd Quarter Cash flows from operating activities Net income for the period Adjustments for: Depreciation and amortization Profit on sale of property and equipment Deferred income tax and social contribution Equity in results of subsidiaries Expenses related to the stock option plan Others Variation in financial investments and collateral for transactions Variation in taxes recoverable and prepaid Variation in accounts receivable Variation in other receivables Variation in prepaid expenses Variation in judicial deposits Variation in earnings and rights on securities in custody Variation in suppliers Variation in provision for taxes and contributions payable Variation in provisions for income tax and social contribution Varition in salaries and social charges Variation in other liabilities Variation in unearned discount Variation in provision for contingencies Net cash provided by operating activities Cash flows from investing activities Receipt on sale of property and equipment Payment for purchase of property and equipment Dividends received Receipt on sale of assets held for sale Variation in software and projects 220 (40.405) 3.394 (27.504) 305.220 11.524 101.837 7.011 -
2010 Accumulated
2nd Quarter
589.435 20.826 (5) 210.147 16.011 -
187.879 9.887 134 152.196 13.445 (8.848)
415.154 18.838 322 159.433 32.204 (11.830)
98.914 (22.004) 10.985 (1.636) (1.649) (2.241) 1.550 30.091 (3.397) 406 14.925 8.226 (10.923) 1.767 550.606
(291.385) (27.348) (21.375) (1.693) 373 (3.505) 1.143 36.235 (4.041) (2.511) 9.604 60.587 20.772 4.100 617.370
(72.810) (52.414) 24.637 (5.238) 2.816 (2.354) (2.212) (5.439) 458 358 9.581 74.516 (12.688) 990 314.894
(280.009) (59.760) (8.288) (10.982) 4.437 (4.865) (1.864) (11.644) (21.779) (955) 18.539 124.546 19.385 2.054 382.936
412 (61.551) 6.863 (33.040)
387 (19.757) 50 (5.640)
805 (27.208) 718 (10.524)
Net cash (used in) provided by investing activities Cash flows from financing activities Disposal of treasury shares - stock options exercised Repurchase of shares Variation in financing Redemption of preferred shares Payment of dividends and interest on own capital Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period
(64.295)
(87.316)
(24.960)
(36.209)
3.196 (2.559) (444.065) (443.428) 42.883 48.238 91.121
7.497 (5.121) (492.088) (489.712) 40.342 50.779 91.121
14.315 12.884 (2.293) (293.370) (268.464) 21.470 14.524 35.994
17.347 (75.125) 12.367 (2.293) (303.256) (350.960) (4.233) 40.227 35.994
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Value Added

(In thousands of reais) (A free translation of the original in Portuguese)
2th Quarter 1 - Revenues Trading and/or settlement system Other operating revenues 2 Goods and services acquired from third parties Operating expenses (a) 522.437 443.447 78.990 58.660 58.660
2010 Accumulated 1.028.554 870.154 158.400 112.826 112.826
2th Quarter 416.270 346.269 70.001 46.325 46.325
BM&FBOVESPA 2009 Accumulated 763.425 628.428 134.997 95.704 95.704
3 Gross value added (1-2)
463.777
915.728
369.945
667.721
4 - Retentions Depreciation and amortization
11.074 11.074
19.926 19.926
9.444 9.444
17.950 17.950
5 Net value added produced by the company (3-4)
452.703
895.802
360.501
649.771
6 Value added transferred from others Equity in results of subsidiaries Financial income
75.905 (669) 76.574
141.544 (2.178) 143.722
60.984 548 60.436
129.767 2.142 127.625
7 Total value added to be distributed (5+6)
528.608
1.037.346
421.485
779.538
8 - Distribution of Value Added Personnel and related charges Board and committee members compensation Income tax, taxes and contributions (b) Interest and rents (c) Interest on own capital and dividends Net income for the period retained
528.608 61.800 1.830 157.056 2.276 137.000 168.646
1.037.346 123.061 2.878 317.561 3.733 227.000 363.113
421.485 65.649 1.572 158.618 7.516 112.000 76.130
779.538 150.395 2.701 201.508 9.824 112.000 303.110
(a) Operating expenses (excludes personnel, Board and committee members compensation, depreciation, rents and taxes) and includes transfer of trading fees Bovespa. (b) Including: taxes, PIS, COFINS, ISS and income tax and social contribution (current and deferred). (c) Including: rents and financial expenses.
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros Statement of Value Added

(In thousands of reais) (A free translation of the original in Portuguese)
2nd Quarter 1 - Revenues Trading and/or settlement system Other operating revenues 2 Goods and services acquired from third parties Operating expenses (a) 526.986 443.448 83.538 62.731 62.731
2010 Accumulated 1.037.646 870.155 167.491 120.657 120.657
2nd Quarter 420.581 346.269 74.312 49.396 49.396
Consolidated 2009 Accumulated 772.499 628.428 144.071 101.294 101.294
3 Gross value added (1-2)
464.255
916.989
371.185
671.205
4 - Retentions Depreciation and amortization
11.524 11.524
20.826 20.826
9.887 9.887
18.838 18.838
5 Net value added produced by the company (3-4)
452.731
896.163
361.298
652.367
6 Value added transferred from others Financial income
83.642 83.642
156.413 156.413
67.979 67.979
142.282 142.282
7 Total value added to be distributed (5+6)
536.373
1.052.576
429.277
794.649
8 - Distribution of Value Added Personnel and related charges Board and committee members compensation Income tax, taxes and contributions (b) Interest and rents (c) Minority interest Interest on own capital and dividends Net income for the period retained
536.373 64.371 1.830 158.178 6.774 (426) 137.000 168.646
1.052.576 128.089 2.878 319.660 12.514 (678) 227.000 363.113
429.277 66.337 1.572 159.700 13.789 (251) 112.000 76.130
794.649 151.799 2.701 203.937 21.058 44 112.000 303.110
(a) Operating expenses (excludes personnel, Board and committee members compensation, depreciation, rents and taxes). (b) Including: taxes, PIS, COFINS, ISS and income tax and social contribution (current and deferred). (c) Including: rents and financial expenses.
BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros Notes to the Financial Statements at June 30, 2010 and 2009
(All amounts in thousands of reais)
Operations
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) is a publicly traded corporation with headquarters in So Paulo, whose main objective is to invest in companies engaged in the following activities: Management of organized markets of marketable securities, providing for the organization, performance and development of free and open markets for the negotiation of any types of securities or contracts, that have as reference or objective financial assets, indices, indicators, rates, goods, currencies, energy, transportation, commodities and other assets or rights directly or indirectly related to such assets, for spot or future delivery; Maintenance of proper environments or systems for carrying out purchases, sales, auctions and special operations involving marketable securities, securities, rights and assets, in the stock exchange market and in the organized over-the-counter market; Rendering services of registration, offset and settlement, both physical and financial, through an internal agency or a company especially incorporated for this purpose, assuming or not the position of central counterparty and guarantor of the definite settlement, under the terms of the legislation in force and its own regulations; Rendering services of central depository and fungible and custody of non-fungible goods, marketable securities and any other physical and financial assets; Providing services of standardization, classification, analysis, quotations, statistics, professional education, preparation of studies, publications, information, libraries and software on matters of interest to the BM&FBOVESPA and the participants of markets directly or indirectly managed by it; Providing technical, administrative and managerial support for market development, as well as carrying out educational, promotional and publishing activities related to its objective and to the markets managed by it; Performance of other similar or correlated activities explicitly authorized by the Brazilian Securities Commission (CVM); and Investment in the capital of other companies or associations, headquartered in Brazil or abroad, as a partner, shareholder or member pursuant to the regulations in force. BM&FBOVESPA organizes, develops and provides for the operation of free and open securities markets, for spot and future delivery. Its activities are organized through its trading systems and
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clearinghouses and include transactions with securities, interbank foreign exchange and securities under custody in the Special System for Settlement and Custody (Selic) markets. BM&FBOVESPA develops technology solutions and maintains high performance systems, providing its customers with security, agility, innovation and cost efficiency. The success of its activities depends on the ongoing improvement, enhancement and integration of its trading and settlement platforms and its capacity to develop and license leading-edge technologies required for the proper performance of its operations. Its subsidiary Bolsa Brasileira de Mercadorias is involved in the registration and settlement of spot, forward and options transactions involving commodities, assets and services for physical delivery, as well as the securities representing these products, in the primary and secondary markets. With the objective of responding to the needs of clients and the specific requirements of its markets, its wholly-owned subsidiary Banco BM&F de Servios de Liquidao e Custdia S.A. provides its members and its clearinghouses with a centralized custody service for the assets pledged as collateral for transactions. BM&F USA Inc., a wholly-owned subsidiary located in the city of New York (USA), with a representative office in Shanghai (China) and a wholly-owned subsidiary in London (BM&FBOVESPA (UK) Ltd. constituted in the last quarter of 2009), represents BM&FBOVESPA abroad through relationships with other exchanges and regulatory agents, as well as assisting in the procurement of new clients.
Preparation and Presentation of the quarterly information
This quarterly informationwas approved by the Board of Directors of BM&FBOVESPA on February, 17, 2011. As provided by Deliberation CVM no. 457/07 and Deliberation CVM no. 603/09, the companys management decided to present its Quarterly Information using the accounting practices adopted in Brazil up to December 31, 2009. Therefore, this quarterly information is different from that presented on August 12, 2010 and has been restated according to the new accounting practices. The quarterly financial information - ITR were prepared and have been presented in accordance with accounting practices adopted in Brazil, in compliance with the provisions contained in the Brazilian Corporate Law, and embody the changes introduced through the Law 11,638/07 and 11,941/09, complemented by new pronouncements, interpretations and guidelines of Accounting Pronouncements Committee CPC, approved by resolutions of the Federal Accounting Council CFC and rules of Brazilian Securities Commission CVM. Additionally the quarterly information
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contemplate the disclosure requirements established by CPC 21 Intermediate Statements, as well as other information deemed relevant. As stated by CVM Deliberation 609/09 (CPC 37 Initial Adoption of international accounting standards) and CVM 610/09 (CPC 43 Initial Adoption of Technical Pronouncements), the international standards and/or the changes in the accounting practices were implemented retroactively as from January 1, 2009 For presentation purposes, reclassifications of revenues have been made during the quarter and period ended June 30, 2009, according to the financial statements of the year ended December 31, 2010, with no changes to net income. The reconciliation of shareholders equity and net income for the period between the accounting practices previously adopted and the new accounting practices is presented below:
Shareholders equity reconciliation Shareholders equity disclosed in accordance with previous accounting practices (CPC 1 to 14)
BM&F BOVESPA and Consolidated 01/01/2009 06/30/2009 12/31/2009
19,291,724
19,642,050
19,709,749
Impairment of investment in CME Group (a) Mark to market adjustment of shares of CME Group classified as available for sale (b) Additional to the minimum mandatory dividend before the balance sheet date (c) Contribution to constitution of BSM previously treated as investment
(460,610) 200,001 (20,000) 19,011,115
(460,610) 48,374
(460,610) 77,396 - 20,000 (20.000) 19,326,535
(20,000) 19,172,199
Non-controlling shareholders interest (e) Shareholders equity disclosed in accordance with new accounting practices
15,339
16,412
16,356
19,026,454
19,187,582
19,342,891
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Net income reconciliation Net income disclosed in accordance with previous accounting practices (CPC 01 to 14) Non-controling shareholders (e) Net income disclosed in accordance with new accounting practices
BM&FBOVESPA and Consolidated 06/30/2010 12/31/2009
415,110 44
881,050 1,019
415,154
882,069
(a) In accordance with the standards in effect until December 31, 2009, the investment in CME Group was recorded at historical cost in Permanent Assets, in accordance with CPC 14, and the value of the investment was submitted to impairment analysis considering the discounted cash flow (Value in Use), as determined by CPC 1 for investments recorded under the cost method. With the adoption of CPC 38 in 2010, the investment was reclassified to financial instruments, in the category of Financial Assets Available for Sale, and adjusted to fair value. Also according to the referred pronouncement, the price of the asset being used to determine the fair value has become his stock in an active market (Stock Exchange). Upon classification in this category, the impairment analysis is performed by the comparison of the market value of the shares with the cost of acquisition(CPC 38), and an indicator of impairment is the significant or prolonged decline in the market price of the shares. As a result, an impairment loss on the investment in CME Group, in the amount of R$ 460,610, net of tax, was recognized in Shareholders equity at December 31, 2008, the as of adoption date for the new accounting standards effective in 2010, given the significant decline in the market price of the shares of CME Group in the fourth quarter of 2008. Thus, the new cost basis for the investment was established at R$ 578,306 at December 31, 2008. b) During the year 2009, based on the new level of cost of the investment, CME Group shares, as a result of the change in fair value, generated a positive effect of marking to market in the amount of R$77,396 for the year and R$ 94,824 for the quarter, net of tax.
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(c) In According to the Technical Interpretation ICPC08 - Accounting for Proposed Dividend, the portion that exceeds the mandatory minimum dividend (including interest on own capital) must be maintained in equity, in a specific account until final determination of shareholders (d) The revision of the new useful lives for depreciation purposes according to Technical Interpretation ICPC 10, was performed for all fixed assets with the results recorded prospectively as from January 1, 2010. The economic lives of assets were evaluated by specialists and in line with guidelines of the Brazilian Institute of Evaluations and Expert Engineering (IBAPE) and ASA (American Society of Appraisers). The table below presents the changes in the annual rates of depreciation of fixed assets: Previous 4% 10% 10% 20% 10% 10% 10% to 20% Current 2,5% 10% 10% 25% 10% 20% 11% to 33%
Buildings Furniture and fixtures Machinery and equipment Computer equipment Facilities Telephone equipment Other
(e) Other CPCs implemented in 2010 that did not generate impacts in the balance sheet and income statement include: i. Segment Reporting (CPC 22) - The BM&FBOVESPA is disclosing the consolidated quarterly financial information by operating segment (Note 24);
ii. Presentation of the Financial Statements (CPC 26) - The interest of non-controlling shareholders was reclassified to shareholders equity;
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iii. Earnings per Share (CPC 41) - Earnings per share is now presented based on the net income of the period and the weighted average outstanding shares during the year, excluding treasury shares. The diluted earnings per share is also disclosed, taking into consideration the potential impact of the stock options that may dilute the net income by increasing the number of shares. (f) Application of new accounting practices: The interim financial information has been presented in accordance with CPC 21,. BM&FBOVESPA prepared the reconciliation of the quarterly information previously presented with the new accounting practices. The information of prior periods, which has been restated for comparison purposes, was prepared using the same accounting practices adopted in the preparation of the financial information of June 30, 2010. (g) Exemptions to the retrospective application In preparing the financial information in accordance with the new accounting practices adopted in Brazil, the BM&FBOVESPA applied the mandatory material exceptions and certain optional exemptions in relation to the retrospective full application of the new accounting practices outlined below, following the prerogatives of CPC 37. The main exemptions listed in CPC 37 are not applicable to the BM&FBOVESPA considering the reasons listed below:
(i) Business combinations - BM&FBOVESPA has applied the business combinations

exemption described in CPC 37 and therefore did not restate the business combinations that occurred before January 1, 2009, the transition date; (ii) Deemed cost of fixed assets - BM&FBOVESPA has opted to use the values recorded under previous accounting practices and did not use the exemption of deemed cost on the transition date;
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(iii) Leases - BM&FBOVESPA chose to reassess the contracts within the scope of IFRIC 4,
considering the facts and circumstances of the transition date. No impacts were identified as the previously adopted practices were already aligned;
(iv) Share-Based Payment - The Brazilian accounting practices are already aligned
(v) Assets and liabilities of subsidiaries - The initial adoption of new practices were implemented concurrently and consistently in all subsidiaries. (h) Exceptions to the retrospective application The estimates used in preparing these financial statements as of December 31, 2009 are consistent with estimates made on the same dates in accordance with accounting practices previously adopted in Brazil. The other mandatory exceptions did not apply because there were no significant differences with regard to accounting practices previously adopted in Brazil.
Principles for the consolidation of the Financial Statements

The consolidated financial statements include the balances of BM&FBOVESPA and its subsidiaries, as well as the special purpose entities, comprising the exclusive investment funds (CVM Instruction 408/2004), as presented below: Stake % Subsidiaries and controlled entities Banco BM&F de Liquidao e Custdia S.A. (Banco BM&F) Bolsa Brasileira de Mercadorias Bolsa de Valores do Rio de Janeiro BVRJ (BVRJ) BM&F USA Inc. Exclusive investment funds Supremo Renda Fixa Fundo de Investimento em Cotas de Fundos de Investimento Bradesco Fundo de Investimento Multimercado Letters In preparing the consolidated financial statements, the balances of assets and liabilities of the subsidiaries and the exclusive investment funds were consolidated, except for those investing in retail funds shares. The shareholders equity of the subsidiaries and the balances of assets and 100.00 50.12 86.09 100.00
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liabilities resulting from transactions carried out between the consolidated subsidiaries and consolidated entities are eliminated, and minority interests in the shareholders equity and statement of income are separately disclosed.
Significant Accounting Practices
a. Revenue Recognition
Revenues from the Trading and/or settlement system are recognized upon the completion of the transactions or the provision of service, under the accrual method of accounting. The amounts received as annual fees, as in the cases of listing of securities and certain contracts of sale of market information, are recognized pro rata on monthly over the contractual term.
b. Cash and cash equivalents

The balances of cash and cash equivalents for cash flow statement purposes comprise cash and bank deposits.
c. Financial instruments (i) Classification and calculation

The BM&FBOVESPA classifies its financial assets in the following categories: recorded at market value through profit or loss, loans and receivables, held to maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of the financial assets when they are first recorded.
Financial assets recorded at fair value through profit or loss

The financial assets recorded at fair value through profit or loss are financial assets held for active and frequent trading or assets designated by the entity, when first recorded, as measurable at fair value through profit or loss. Derivatives are also classified as held for trading and accordingly, are recorded in this category. The assets in this category held for trading are classified as current assets. Gains or losses arising from the fair value variations of financial assets recorded at fair value through profit or loss are recorded in the statement of income in "financial results" for the period in which they occur.
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Loans and receivables

These comprise loans granted and receivables which are non-derivative financial assets with fixed or determinable payments, not quoted in an active market. Loans and receivables are included in current assets, except for those with maturity of more than 12 months after the balance sheet date (which are classified as non-current assets). The Company's loans and receivables comprise trade accounts receivable and other accounts receivable. Loans and receivables are recorded at amortized cost, based on the effective interest rate method.
Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives which are classified in this category or not classified in any other. They are included in non-current assets, unless the management intends to sell the investment within 12 months subsequent to the balance sheet date. Available-for-sale financial assets are recorded at fair value. Interest on available-for-sale securities, calculated based on the effective interest rate method, is recognized in the statement of income as financial income. The amount relating to the fair value variation is recorded in shareholders' equity, in the Carrying value adjustments account, and is realized in net income when the asset is sold or becomes impaired.
Fair value
Fair values of investments with public quotations are based on current market prices. For financial assets without an active market or public quotation, the BM&FBOVESPA determines fair value through valuation techniques, such as option pricing models. BM&FBOVESPA evaluates, at the balance sheet date, if there is objective evidence that a financial asset or a group of financial assets is deteriorated.
(ii) Derivative instruments and hedge activities

Initially, the derivatives are recognized at fair value on the date on which the derivative agreement is signed and, subsequently, they are recalculated at their fair value, with the fair value variations recorded in income. The fair value of the derivatives is disclosed in Note 4
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d. Accounts receivable, other receivables and allowance for doubtful accounts

Accounts receivable are the amounts receivable for services in the normal course of activities of the BM&FBOVESPA. If the deadline for receipt is equivalent to one year or less (or another period that meets the normal cycle of BM&FBOVESPA), the accounts receivable are classified as current assets. Otherwise, they are presented as noncurrent assets. Accounts receivable are initially recognized at fair value less provision for doubtful debts (PDD). In practice they are usually recognized at the invoice amount, adjusted for a provision if necessary.
e. Prepaid expenses
Prepaid expenses mainly recognize amounts related to software maintenance contracts and insurance premiums, which are amortized based on the terms of the contracts in force.
f. Investments
Investments in entities and subsidiaries are recorded and evaluated based on the equity accounting method, with the related income (or expense) recognized in income for the year as operating income (or expense). The accounting practices of the subsidiaries are consistent with the practices adopted by the BM&FBOVESPA.
g. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, such as goodwill.
Goodwill
Goodwill represents the positive difference between the amount paid and / or payable for the acquisition of a business and the net fair value of assets and liabilities of the acquired subsidiary. Goodwill from acquisitions of subsidiaries is recorded in "intangible assets". If the difference is negative, representing a discount to fair value, it must record the amount as a gain in income at the date of acquisition. Goodwill is tested annually for impairment. Goodwill is stated cost value less accumulated impairment losses. Recognized impairment losses on goodwill are not reversed. Software and projects
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Software licenses acquired are capitalized and amortized over their estimated useful life, at the rates described in Note 9. Costs of software development or maintenance are expensed as incurred. Expenditures directly associated with identifiable and unique software, controlled by the Company and which will probably generate economic benefits greater than the costs for more than one year, are recognized as intangible assets. Direct expenditures include remuneration of the software development team. Expenditures for development of software recognized as assets are amortized using the straight-line method over their useful lives, at the rates described in Note 9.
h. Step Acquisition of affiliate

The cost of an affiliate acquired in steps is measured by the total amount paid in each transaction. The gains or losses previously recognized in other comprehensive income, while classified as available for sale, are reversed against the investment account to recompose the cost. Goodwill is calculated at each step of acquisition as the difference between the acquisition cost and the fair value of net assets in proportion to the interest acquired.
i. Property and equipment

Recorded at cost of acquisition or construction. Depreciation is calculated on the straight-line method and takes into consideration the useful economic life of the assets. Subsequent costs are included in the carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the item and that the cost of the item can be measured reliably. All other repairs and maintenance are recorded in income, when incurred.
j. Contingent assets and liabilities and legal obligations

The recognition, measurement, and disclosure of contingent assets and liabilities and legal obligations comply with the criteria defined in CPC 25. Contingent assets - These are not recorded, except when management has full control over their realization or when there are secured guarantees or favorable decisions to which
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no further appeals are applicable, such that the gain is almost certain. Contingent assets with realization considered probable, where applicable, are only disclosed in the financial statements. Contingent liabilities - These are recognized based on a number of factors including: the opinion of legal advisors; the nature of the lawsuits; similarity to precedents; the complexity of the proceedings; and prior court decisions. They are recognized whenever the loss is evaluated as probable, since this would give rise to a probable outflow of resources for the settlement of the obligations, and the sums involved are measurable with sufficient reliability. The contingent liabilities classified as possible losses are not recorded and are only disclosed in the notes to the financial statements, and those classified as remote are neither recognized nor disclosed. Legal obligations These result from tax lawsuits in which the Company is discussing the validity or constitutionality of certain taxes and charges. These are fully recognized in the financial statements, regardless of the assessment of their probability of success.
k. Judicial deposits
Judicial deposits are monetarily restated and presented in non-current assets.
l. Other assets and liabilities

These are stated at their known and realizable/settlement amounts plus, where applicable, related earnings and charges and monetary and/or exchange rate variations up to the balance sheet date.
m. Impairment of assets
Property, plant and equipment and other non-current assets, including goodwill and intangible assets, are reviewed annually to identify evidence of unrecoverable losses, and also whenever events or changes in the circumstances indicate that the book value may not be recoverable. In this case, the recoverable value is calculated to verify if there is any loss. Loss is recognized at the amount by which the book value of the asset exceeds its recoverable value, which is the higher between the net sales price and the value in use of an asset. For evaluation purposes, assets are grouped at the lowest level for which there are separately identifiable cash flows.
n. Leases
Leases of property and equipment in which the Company substantially assumes all ownership
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risks and benefits are classified as financial leases. These financial leases are recorded as a financed purchase, recognizing at the beginning of the lease a property and equipment item and a financing liability (lease). Property and equipment acquired in finance leases are depreciated at the rates of its useful lives. A lease in which a significant portion of the ownership risks and benefits remains with the lessor is classified as an operating lease. Operating lease payments (net of all incentives received from the lessor) are charged directly to results.
o. Provisions
Provisions are recognized when the Company has a legal or informal present obligation as a result of past events, a cash outflow to settle the obligation is probable and a reliable estimate of the amount can be made.
p. Employee benefits (i) Pension obligations
The BM&FBOVESPA has no defined benefit plans. The Company offers its employees a defined contribution plan and pays contributions on contractual or voluntary bases. Once the contributions have been made, the BM&FBOVESPA has no obligations related to additional payments. The regular contributions comprise net periodic costs for the period in which they are payable and, therefore, are included in the personnel costs.
(ii) Share-based remuneration (stock options)

The BM&FBOVESPA offers to its employees and executives share-based remuneration plans, to be settled in BM&FBOVESPA stock, according to which the BM&FBOVESPA receives services in consideration for stock options. The fair value of options granted related to services to be provided is recognized as an expense during the period in which the right is obtained, i.e., the period during which specific vesting conditions must be met. On the date of the balance sheet, the BM&FBOVESPA revises the estimated number of options which will vest and subsequently, recognizes the impact of the change on initial estimates, if any, in the statement of income, with a contra-entry to the capital reserve in shareholders' equity on a prospective basis.
(iii) Profit sharing

The provision is recorded as an accrual basis in accordance with the remuneration policy of the BM&FBOVESPA
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q. Financing and Borrowings

Financing is initially recognized at fair value, upon receipt of the funds, net of transaction costs. Subsequently, the financing is presented at amortized cost, that is, plus charges and interest in proportion to the period incurred ("pro rata temporis").
r. Current and non-current Assets and Liabilites

Segregation in current and non-current is made considering the term of 365 days, from the date of the quarterly information.
s. Foreign currency translation

Transactions in foreign currency are translated into reais using the exchange rates effective on the transaction dates. Balance sheet account balances are translated at the exchange rate in effect on the balance sheet date. Foreign exchange gains and losses resulting from the settlement of these transactions and from the translation of monetary assets and liabilities denominated in foreign currency are recognized in the income statement. The items included in the quarterly information for each of the consolidated companies of BM&FBOVESPA are measured using the currency of the primary economic environment in which the company operates ("functional currency"). The quarterly information is presented in Brazilian reais, which is the functional currency of BM&FBOVESPA and also the presentation currency of the consolidated. The transactions with foreign currencies are translated into the functional currency, using the exchange rates prevailing on the transaction dates or evaluation dates. The foreign exchange gains and losses arising from the settlement of these transactions and of the translation, at the exchange rates at the end of period, of assets and liabilities in foreign currencies, are recognized in the income statement, except when deferred in equity as part of a hedge of net investment abroad.
t. Taxes and contributions

BM&FBOVESPA is a for-profit business corporation and accordingly its income is subject to certain taxes and other contributions which are listed below.
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Provisions for income tax, social contribution and other taxes are calculated at the rates presented below: Income tax Additional income tax CSLL PIS COFINS 15.00% 10.00% 9.00% 1.65% 7.60%
Banco BM&F de Servios de Liquidao e Custdia S.A. calculates the contributions to PIS and to COFINS at the rates of 0.65% and 4%, respectively, and CSLL at 15%. The subsidiaries Bolsa Brasileira de Mercadorias and BVRJ are not-for-profit entities and calculate the contribution to PIS at the rate of 1% on payroll.
u. Deferred income tax and social contribution

Deferred taxes are calculated on income tax and social contribution losses and the temporary differences between the tax calculation bases of assets and liabilities and the respective book values in the financial statements. The currently defined tax rates of 25% for income tax and 9% for social contribution are used to calculate deferred tax assets and liabilities. Deferred tax assets are recognized to the extent that it is probable sufficient future taxable profit will be available to be offset by temporary differences and/or tax losses, considering projections of future income prepared based on internal assumptions and future economic scenarios which may, accordingly, undergo change. Deferred tax liabilities are recognized in relation to all taxable temporary differences, that is, differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled.
v. Net income per share

For purposes of disclosure of earnings per share, the basic earnings per share is calculated by dividing the net profit attributable to shareholders of the parent by the average number of outstanding during the period. The diluted earnings per share is calculated similarly, except that the quantities of outstanding shares are adjusted to reflect the additional outstanding shares with potentially dilutive effects, due to the stock option plan (Note 16g), had been issued during the respective periods.
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w. Dividends distribution
The dividend distribution to shareholders of the BM&FBOVEPA is recognized as a liability in the quarterly information at the end of the period, based on the BM&FBOVESPAs bylaws. Any amount above the minimum required is only recognized when approved by shareholders General Meeting.
x. Segment Report presentation

The report by operating segments is presented in a consistent manner with the internal report provided to the management, which is responsible for the main operational and strategic decisions of the Company.
y. Critical accounting estimates and judgments
a) Impairment Annually, BM&FBOVESPA performs tests of impairment, specifically related to goodwill and fixed assets, according to the accounting policy described in note 3. b) Classification of financial instruments BM&FBOVESPA classifies the financial assets in the categories of (i) measured at fair value through profit or loss and (ii) available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at initial recognition. The record of financial assets, starting with its original classification, is described in Note 3.c. c) Stockoption planBM&FBOVESPA offers a stock option plan to its employees and executives. The fair value of these options is recognized as expense over the period in which the right is acquired. Management reviews the estimated amount of options that will achieve the conditions for vesting and subsequently recognizes the impact of changes in initial estimates, if any, in the statement of income, with an offset to the reserve account in equity, as shown in note 3.p.
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4
a.
Cash and Cash Equivalents and Financial Investments

Cash and Cash Equivalents For the purposes of the statement of cash flows, the following balances are being considered as cash and cash equivalents: BM&FBOVESPA 12/31/2009 62 46,684 46,476
Details Banks - deposits in domestic currency Banks - deposits in foreign currency Total
06/30/2010 104 89,766 89,870
Details Banks - deposits in domestic currency Banks - deposits in foreign currency Total
06/30/2010 349 90,772 91,121
Consolidated 12/31/2009 160 50,619 50,779
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b.
Financial Investments The breakdown of financial investments by nature and time to maturity is as follows:
BM&FBOVESPA More than 3 months and More than 12 up to 12 months and months up to 5 years
Details
Without maturity
Up to 3 months
More than 5 years
06/30/2010
12/31/2009
Measured at fair value through profit and loss (3) Financial investment funds (1) Bank Deposits Certificates (CDB) Securities purchased under resell agreements Financial Treasury Bills National Treasury Bills Shares Other investments Available for sale CME Group shares 603,109 603,109 695,572 1,509,112 11,781 7,437 1,528,330 39,511 60 39,571 557 1,286,611 171 39 1,287,378 504 404,172 97 404,773 1,509,112 1,061 1,326,122 404,343 196 11,781 7,437 3,260,052 1,518,855 4,656 1,015,439 383,353 213 11,604 6,210 2,940,330
Total financial investments
2,131,439
39,571
1,287,378
404,773
3,863,161
3,655,902
Short term Long term
3,458,388 404,773
3,257,365 378,537
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CONSOLIDATED More than 3 months and up to 12 months More than 12 months and up to 5 years
Details
Without maturity
Up to 3 months
More than 5 years
09/30/2010
12/31/2009
Measured at fair value through profit and loss (3) Financial investment funds (1) Bank Deposits Certificates (CDB) Securities purchased under resell agreements Financial Treasury Bills National Treasury Bills Shares Other investments Available for sale CME Group shares (2) 603,109 603,109 695,572 939,478 13,133 7,437 960,048 589,873 40,654 3,199 9,686 633,786 557 1,296,071 22,457 2,838 1,331,748 504 583,715 31,354 616,181 26,495 26,495 939,478 1,061 1,885,944 673,321 37,391 13,133 17,123 3,568,158 977,428 6,320 1,488,578 644,407 40,333 13,126 15,027 3,185,432
Total financial investments
1,563,157
633,786
1,331,648
616,181
26,495
4,171,267
3,881,004
Short term Long term
3,528,591 642,676
3,295,356 585,648
(1) Investments in funds that invest in quotas of other financial investment funds, the portfolios of which mainly comprise investments in federal government bonds, securities purchased under resell agreements and bank certificates of deposit and have the CDI as their profitability benchmark. The balances presented in the table of BM&FBOVESPA also include the exclusive investment funds which were consolidated in the financial statements according to the nature of the portfolio. The net assets of the exclusive investment funds included in the process of consolidation of the quarterly information are: (i) Supremo Renda Fixa - FICFI - R$ 377,283 at June 30, 2010 (R$
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364,792 at December 31, 2009), (ii) Bradesco FI Multimercado Letters - R$ 192,351 at June 30, 2010 (R$ 176,550 at December 31, 2009). The main investment funds that were not consolidated are detailed in the table below: BM&FBOVESPA and Consolidated 06/30/2010 12/31/2009 664,742 642,020 274,422 335,177
Fund FIC Megainvest FIC Referenciado DI Federal
Bank Details Santander Exclusive fund that invests in quotas of retail funds; Bradesco Retail fund that invests in quotas of other investment funds;
The government bonds are held in custody at the Special System for Settlement and Custody (SELIC), the quotas of investment funds are held in custody with their respective managers and the shares are in the custody of BM&FBOVESPAs. Classification Considering the nature and objective of the BM&FBOVESPA and its financial investments, these are classified as financial assets recorded at fair value through profit or loss, designated by management when they are first recorded. Fair value The fair value of the main financial investments is calculated as follows: Quotas of investment funds fair value calculated based on the amount of the quota determined on the last business day prior to the balance sheet date, as disclosed by the corresponding Manager. Federal government securities calculated based on the amounts and prices disclosed by the Brazilian Association of Financial and Capital Market Institutions (ANBIMA) or, when these are unavailable, on the price defined by management which best reflects the sales price, determined based on information gathered from other institutions.
Derivative financial instruments

The derivative financial instruments comprise One-Day Interbank Deposit Futures Contracts (DI1) and are stated at their market values. These contracts are included in the exclusive fund portfolios
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which were consolidated (Note 2) and are used to cover the fixed interest rate exposure, swapping the interest rate to floating (CDI). Even though these derivatives are designed to provide protection, hedge accounting is not adopted. The net result from derivative transactions and the related financial instrument refers to the short position contracts for future interest rates, with market value R$ 1,448 on June 30, 2010 (R$ 396) on December 31,2009 The DI1 contracts have the same maturity dates as the National Treasury Notes (fixed interest rate) to which they are related.
Financial risk management policy

The BM&FBOVESPA investment policy for the cash balance that favors alternatives with very low risk, which translates into significant proportion of federal government securities in its portfolio, being purchased directly, through repurchase agreements backed by government bonds and also through exclusive and non-exclusive funds. Thus, in general, the BM&FBOVESPA has on principle directing most of its applications in conservative financial assets, high liquidity and with sovereign risk, whose overall performance is tied to the Selic rate / CDI
Sensitivity analysis
The table below presents a summary of the financial instruments exposure classified by market risk factors at June 30, 2010 and December 31, 2009: Risk Factors (Consolidated) 09/30/2010 Risk Percentage Falling CDI 98.68% Rising fixed rate 1.37% Falling dollar 0.26% Falling gold 0.21% 100.00%
Risk factor CDI Fixed interest rate USD Gold price
12/31/2009 Percentage 98.03% 1.27% 0.50% 0.20% 100.00%
Interest Rate Risk This risk arises from the possibility that fluctuations in future interest rates for the corresponding maturities could affect the fair value of the Companys transactions. Floating-rate Position
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As a financial investment policy and considering the need for immediate liquidity with the least possible impact from interest rate fluctuations, the Company maintains its financial assets and liabilities indexed to floating interest rates. The table of Risk Factors (Consolidated) includes the investments in CDB, securities purchased under resell agreement and quotas of retail investment funds which use CDI/SELIC as a benchmark. This strategy minimizes the impact on the fair value or present value arising from possible variations in future interest rates. Accordingly, the effective impact of these fluctuations on the fair value of financial investments is not material. Fixed-rate Position The BM&FBOVESPA has a portion of its financial investments bearing fixed interest rates with results in a net exposure to fixed interest rates. However, in terms of percentage, considering the amounts involved as presented in the table of Risk Factors (Consolidated), the effects on the portfolio are not considered material. Exchange rate risk This arises from the possibility that fluctuations in the exchange rates for the acquisition of services, product sales and the contracting of financial instruments could have an impact on the related domestic currency amounts. In addition to the amounts payable and receivable in foreign currencies, the Company has thirdparty deposits in foreign currency to guarantee the settlement of transactions by foreign investors and also own funds in currency abroad. At June 30, 2010 the Companys net foreign currency exposure amounted to R$9,508 (R$16,930 at December 31, 2009). Considering the amounts involved, as presented in percentage terms in the table of Risk Factors (Consolidated), the effects on the portfolio are not considered material. Inflation index and gold position Considering the amounts and percentages involved, as detailed in the table of Risk Factors (Consolidated), the effects on the portfolio are not considered material.
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Accounts Receivable
BM&FBOVESPA 12/31/2009 10,979 2,719 9,657 10,383 11,288 (5,984) 39,042 Consolidated 12/31/2009 11,632 2,719 9,657 10,383 11,798 (5,984) 40,205
The breakdown of accounts receivable is as follows: Details Trading, other fees receivable Annuity Vendors Signal broadcast Trustee and custodial fees Other accounts receivable Provision for doubtful accounts Total 09/30/2010 15,013 17,313 9,485 14,706 11,599 (7,425) 60,691
Details Trading, other fees receivable Annuity Vendors Signal broadcast Trustee and custodial fees Other accounts receivable Provision for doubtful accounts Total
06/30/2010 15,324 17,313 9,485 14,706 12,177 (7,425) 61,580
Of the amounts presented above, approximately 90% mature within 60 days.
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Other Receivables
Other receivables comprise the following: BM&FBOVESPA 12/31/2009 959 13,859 3,333 1,293 2,154 21,598
06/30/2010 Current Advances to employees (1) Amounts receivable - related parties (note 17) Receivable Dividends Warehouse Other Total Non-current Other Total 4,443 9,775 1,262 1,204 16,684
801 801
626 626
09/30/2010 Current Advances to employees (1) Restricted deposits Amounts receivable - related parties (note 17) Receivable Dividends Warehouse Other Total Non-Current Brokers in liquidation (2) Other Total 4,528 2,102 9,254 1,262 1,950 19,096 2,200 800 3,000
Consolidated 12/31/2009
970 1,776 11,674 3,333 1,293 3,610 22,656 4,000 626 4,626
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(1) Represented mainly in anticipation of the first tranche of the 13th salary made on June 30, 2010. (2) Balance of accounts receivable from brokers in liquidation, which considers the equity as collateral of secured debtor
Investments
a. Investments in subsidiaries
Investments in subsidiaries comprise the following:
BM&F BOVESPA Adjusted Total number shareholders' of common equity shares Equity in income Accumulated 2010 Equity in income Accumulated 2009
Subsidiaries and controlled entities Subsidiaries Banco BM&F de Liquidao e Custdia S.A. Bolsa Brasileira de Mercadorias Bolsa de Valores do Rio de Janeiro -BVRJ BM&F USA Inc.
Adjusted net income
% Stake
Investment 09/30/2010
41.514 15.402 57.486 1.562
24.000 405 115 1.000
100 50,12 86,09 100
41.514 7.719 49.490 1.562
1.559 (294) (2.095) (1.348)
2.236 (586) 1.844 (1.352)
Total
100,285
(2,178)
2,142
Summary of main financial information of subsidiaries and affiliates:

Bolsa de Valores do Rio de Janeiro-BVRJ 59,282 1,796 3,219
Description Assets Liabilities Revenue
Banco BM&F 284,492 242,979 3,842
Bolsa Brasileira de Mercadorias 16,954 1,552 2,899
BM&F USA Inc 1,564 -
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b. Investment Property
Represented by leased properties owned by the subsidiary BVRJ - Bolsa de Valores do Rio de Janeiro, presented in the group of Investment Properties and depreciated, according to the estimated useful lives of the asset, in 50 years.
Property and Equipment

BM&FBOVESPA 06/30/2009 12/31/2009 Net
The breakdown of property and equipment is as follows:
Details
Cost
Depreciation
Net
Buildings Furniture and fixtures Apparatus and equipment Computer-related equipment Land Facilities Telephone system Other Construction in progress Total
185,815 37,066 76,976 179,944 21,591 35,239 3,932 69,464 1,021 610,993
(99,939) (24,987) (68,027) (81,985) (11,201) (2,281) (41,883)

-
85,897 12,079 8,949 97,959 21,591 24,038 1,651 27,581 1,021 280,766
86,055 12,500 8,650 60,468 21,591 19,023 1,906 26,784 236,941
(330,227)
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Consolidated 06/30/2009 Details Cost Depreciation Net 12/31/2009 Net
Buildings Furniture and fixtures Apparatus and equipment Computer-related equipment Land Facilities Telephone system Other Construction in progress Total
187,944 37,593 77,141 180,688 21,743 36,270 3,932 71,908 1,021 618,240
(100,544) (25,349) (68,110) (82,673) (11,688) (2,281) (41,945)

-
87,400 12,244 9,031 98,015 21,743 24,582 1,651 29,963 1,021 285,650
87,601 12,684 8,741 60,535 21,743 19,618 1,906 29,111 241,939
(332,590)
Intangible Assets
Goodwill The goodwill in the amount of R$16,384,911 is based on estimated future income and supported by an economic and financial appraisal report of the investment. In accordance with the pronouncements issued by CPC in 2008, the portion based on the expectation of future profitability is no longer amortized as from January 1, 2009. However, it is subject annually to impairment testing, pursuant to Technical Pronouncement CPC 01 (value in use method). The goodwill based on expected future income was tested for impairment in 2009. The test, based on an appraisal report prepared by specialists, did not reveal the need for any adjustments to the goodwill amount. In the period ended June 30, 2009, Management found no indicators arising from internal or external sources that could indicate changes the conclusions reached in December 2009 that recognition of impairment of goodwill was not necessary.
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Software and projects The balance comprises costs for the acquisition and development of software and systems in the net amount of R$41,523 (R$20,361 at December 31, 2009), with amortization rates of 20% to 33% per annum, and expenditures in the amount of R$52,603 (R$43,631 at December 31, 2009) for the implementation and development in progress of new systems and software.
10 Earnings and Rights on Securities in Custody

These comprise dividends and interest on capital received on behalf of the owners of securities from listed companies, which will be transferred to the custody agents and subsequently to their clients, who are the owners of the shares.
11 Provision for Taxes and Contributions Payable

At June 30 and December 31, 2009, the breakdown of this balance was as follows: BM&FBOVESPA 12/31/2009
Details Withholding taxes and contributions payable PIS/Cofins ISS (Municipal service tax) Total
06/30/2010
4,098 14,013 2,141 20,252
7,783 14,471 2,150 24,404
Details Withholding taxes and contributions payable PIS/Cofins ISS (Municipal service tax) Total
06/30/2010
Consolidated 12/31/2009
4,281 14,119 2,175 20,575
7,838 14,596 2,182 24,616
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12
Redemption of Preferred Shares to be Settled
At June 30 2010, the remaining balance amounts to R$1,839 (R$1,839 at December 31, 2009) and mainly refers to amounts payable to foreign investors.
13
Financing
BM&FBOVESPA has financial leases of computer equipment. The balance at June 30, 2010 is R$ 6,669 (R$ 11,790 at December 31, 2009), maturing in April 2011.
14 Other liabilities
BM&FBOVESPA 12/31/2009 4,108 281 4,946 1,398 791 4,102 15,626
Details Custody agents Finep - Carbon credits Amounts payable - related parties (Note 17) Third parties services Electricity, water and telephone Other Total
06/30/2010 4,195 273 2,270 2,287 691 5,804 15,520
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Details Custody agents Finep - Carbon credits Demand deposits (1) Liabilities for securities purchased under resell agreements (1) Amounts payable - related parties (Note 17) Outsourced services Electricity, water and telephone Other Total (1) Balances related to the transactions of Banco BM&F.
06/30/2010 4,195 273 66,339 174,548 41 2,433 691 6,962 255,482
Consolidated 12/31/2009 4,108 281 35,468 144,513 3,264 1,398 791 5,072 194,895
15 Contingent Assets and Liabilities

a. Contingent assets
BM&FBOVESPA has no contingent assets recognized in its balance sheet, and at present no lawsuits which are expected to give rise to future gains.
b. Contingent liabilities
BM&FBOVESPA and its subsidiaries are defendants in a number of labor, tax and civil lawsuits which have arisen during their normal operating activities. . The lawsuits are classified by their probability of loss (probable, possible or remote), based on an evaluation by the BM&FBOVESPA and its legal advisors, using parameters such as previous judgments and the history of loss in similar suits. The proceedings in which the loss is evaluated as probable mainly comprise the following: Labor claims mainly filed by employees of outsourced service providers, on account of alleged noncompliance with labor legislation. There are also claims filed by former BVRJ
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employees, specifically as regards to noncompliance with rules related to collective bargaining agreements; Civil proceedings, mainly consisting of matters pertaining to civil liability for losses and damages. Tax claims are mainly related to the incidence of PIS and Cofins on (i) the BM&FBOVESPA's revenues and (ii) receipt of interest on equity.
c. Legal obligations
These are almost entirely proceedings in which BM&FBOVESPA seeks exemption from social security additional contributions on payroll and payments to self-employed professionals, as well as discussions over the legality of Labor Accident Insurance (SAT). A provision for the amounts related to legal obligations is recorded in full.
BM&FBOVESPA Civil 3,671 60 (25) 51 209 3,966 Labor 4,108 1,246 (393) 258 5,219 Legal obligations 28,608 1,331 796 30,735 Tax 11,823 458 12,281 Total 48,210 2,637 (418) 51 1,721 52,201
At december 31, 2009 New provisions Reversals Reassessment of contingent risks Price-level restatement At June 30, 2010
Consolidated Civil 4,227 60 (25) 51 215 4,623 Labor 4,458 1,356 (420) 282 5,676 Legal obligations 28,608 1,331 796 30,735 Tax 12,154 465 12,619 Total 49,447 2,747 (456) 51 1,758 53,547
At december 31, 2009 New provisions Reversals Reassessment of contingent risks Price-level restatement At June 30, 2010
According to the characteristic of provisions there is no cash disbursement forecast.
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d. Possible losses
The proceedings classified as a possible loss are so classified as a result of uncertainties surrounding their outcome. They are lawsuits for which jurisprudence has not yet been defined or which still depend on verification and analysis of the facts, or even involve specific aspects that reduce the chances of loss. BM&FBOVESPA and its subsidiaries have tax, civil and labor lawsuits involving risks of loss classified by management as possible, based on the evaluation of their legal advisors, for which no provision has been recorded. These proceedings comprise mainly the following: Labor proceedings, mainly claims filed by employees of outsourced service providers, on account of alleged noncompliance with labor legislation. The amounts related to the lawsuits classified as possible at June 30, 2010 are R$24,632 in the parent company (are (R$21,534 at December 31, 2009) and R$26,396 on a consolidated basis (R$23,047 at December 31, 2009); Civil proceedings mainly consist of matters pertaining to civil liability for losses and damages. The total amount involved in the lawsuits classified as possible at June 30, 2010 is R$63,158 in the parent company and on a consolidated basis (R$64,474 at December 31, 2009). The majority of this amount is related to a possibility of the Company being required to deliver shares of BM&FBOVESPA (surviving company of the merger with BM&F S.A.), in an amount corresponding to the shares resulting from the conversion of the shares of a commodities broker in the former BM&F, or indemnify the corresponding amount, if the cancellation of the shares in the former BM&F is found to be illegal, as alleged by a commodities broker in bankruptcy; The tax proceedings of BM&FBOVESPA and its subsidiaries mainly involve a dispute over the classification of exchanges as subject to the payment of social contributions. Most of these amounts are related to two lawsuits filed by BM&FBOVESPA against the Federal Government arguing that the Company was not subject to the payment of social contributions prior to the 1999 fiscal year. The amount involved in the aforementioned proceedings as of June 30, 2010 is R$43,614 (R$42,393 at December 31, 2009). The total amount involved in tax proceedings classified as possible is R$67,883 in the parent company and on a consolidated basis (R$65,388 at December 31, 2009).
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e. Remote losses
BM&FBOVESPA, as successor of the former BOVESPA, and the subsidiary BVRJ are defendants in an action for material damages and pain and suffering filed by Mr. Naji Robert Nahas, Selecta Participaes e Servios SC Ltda. and Cobrasol - Companhia Brasileira de leos e Derivados, on the grounds of alleged losses in the stock market sustained in June 1989. The amount attributed to the cause by the plaintiffs is R$10 billion. In relation to the material damages and pain and suffering claimed, the plaintiffs ask that BVRJ and BM&FBOVESPA be sentenced in proportion to their responsibilities. On December 18, 2009, a sentence was published in which the claims made by the plaintiffs were considered completely unfounded. The authors appealed to the Court, still waiting for a trial. The BM&FBOVESPA and its legal advisors consider that the chances of loss in this lawsuit are remote.
f. Judicial deposits
06/30/2010 30,735 52,113 2,525 2,498 87,871 BM&FBOVESPA 12/31/2009 28,563 50,673 1,949 2,304 83,489 06/30/2010 31,073 52,113 2,525 2,689 88,400 Consolidated 12/31/2009 28,563 51,005 1,949 3,378 84,895
Details Legal obligations Tax Civil Labor Total
Of the total judicial deposits, R$ 31,805 (R$30,731 at December 31, 2009) relates to one of the processes involving a dispute over the classification of exchanges as subject to the payment of social contributions, classified as possible by management, as described in e above. Given the existence of judicial deposits related to tax processes classified as of possible loss, the amount of tax contingencies and legal obligations is lower than the total deposits related to tax claims.
g. Law 11,941/09
In November 2009, the BM&FBOVESPA enrolled in the Tax Recovery Program, instituted by Law 11,941/09 and Provisional Measure (MP) 470/09, aimed at cash payment of the amount of R$ 2,365, related to a portion of the amount disputed in the COFINS court case, and the amount is deposited in escrow and constituted as probable liability contingency. The value of R$ 2,151 will be converted to government revenue and R$214 will be recorded in favor of the Company, representing a discount of 45% of arrears interest, as permitted by those laws. The provision
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remains in effect until the approval of the request to cancel part of the application of the lawsuit, because it is a condition for further discharge of the debt pursuant to the Tax Recovery Program.
16 Shareholders equity
a. Capital
BM&FBOVESPAs capital is R$2,540,239, comprising 2,044,014,295 nominative common shares with voting rights and no par value, of which 2,044,014,295 outstanding ordinary shares at June 30, 2010 (2,002,454,141 ordinary shares on June 30, 2009). BM&FBOVESPA is authorized to increase its capital up to the limit of 2,500,000,000 (two billion, five hundred million) common shares, through a resolution of the Board, without amending the bylaws.
b. Treasury Shares
Share buyback program In a meeting held on August 12, 2010, the Board of Directors approved a new Share Buyback Program, aiming to maximize value creation for shareholders through an efficient management of the capital structure. The term for the acquisition of those shares is 141 days, ending on December 31, 2010. The maximum amount of shares to be purchased is 31,000,000 common shares, representing 1.55% of total shares outstanding. The shares acquired under the Share Buyback Program will be canceled or used to fulfill the exercise of the stock options by the beneficiaries of the Stock Option Plan of the Company. The Company purchased shares between August 18 and October 21, 2010, respecting the period of restrictions on trading as determined by CVM Instruction 358. During this period the Company repurchased 26,377,900 shares, representing 85.09% of the total in the program.
We present below the activity of treasury shares during the semester:
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Number of Shares At December 31, 2009 Sold shares - stock option (Note 19) At March 31, 2010 Sold shares - stock option (Note 19) At June 30, 2010 Average cost of treasury shares Value of treasury shares Market value of treasury shares 39,247,983 (2,594,913) 36,653,070 (910,745) 35,742,325 5.863 209,549 414,611
c. Revaluation reserves
Revaluation reserves were established as a result of the revaluation of works of art in BM&FBOVESPA and of the property of the subsidiary BVRJ on August 31, 2007, based on independent experts appraisal reports. At June 30, 2010 and December 31, 2009, the breakdown of the revaluation reserve was as follows: BM&FBOVESPA 06/30/2010 Own assets Works of art BVRJs assets Property Land 8,308 12/31/2009 8,308 Realization method Disposal
12,373 2,435 14,808 23,116
12,808 2,435 15,243 23,551
Depreciation Disposal
Total
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d. Statutory reserves
Their purpose is to form funds and safeguard mechanisms required for the adequate development of the activities of BM&FBOVESPA, assuring the proper settlement and reimbursement of losses arising from the intermediation of transactions carried out in its auction systems and/or registered in any of its trading, registration, clearing and settlement systems, and from custody services.
e. Valuation adjustments
Have the purpose of recording the effects of mark-to-market adjustments of the shares of CME Group (Note 2b).
f. Dividends and interest on own capital

Pursuant to the bylaws, the shareholders are guaranteed interest on own capital or dividends, based on the net income of the Company, adjusted under the terms of corporate law, at a minimum percentage of 25%. Interest on own capital and dividends distributed are detailed below:
per share (gross) (R$) 0.014951 0.029890 0.068231 Total amount (gross) 30,000 60,000 137,000 227,000
Description Interest on own capital Interest on own capital Interest on own capital Total deliberated on period
Deliberation RCA BVMF - 02/23/2010 RCA BVMF - 03/25/2010 RCA BVMF 05/11/2010
At the Annual General Meeting held on April 20, 2010, it was approved the proposal for payment to shareholders in the amount of R$248,000, as a supplement to the result of dividends for the year ended December 31, 2009. At December 31, 2009, the Company resolved interest on own capital R$20,000 above the minimum required, which was fully paid on January 8, 2010
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g. Earnings per share

BM&FBOVESPA and Consolidated 2009 2nd Quarter 188,130 Accumulated 415,110
Basic 2 Quarter Numerator Net income available to shareholders Denominator Weighted average of outstanding shares Basic earnings per share (in R$) 305,646
nd
2010 Accumulated 590,113
2,007,952,039 0.152218
2,007,654,956 2,001,690,319 0.293931 0.093986
2,002,237,492 0.207323
Diluted 2 Numerator Net income available to shareholders Denominator Weighted average of outstanding shares, adjusted for the effects of stock option plans Diluted earnings per share (in R$)
nd
2010 Quarter 305,646 Accumulated 590,113 2nd Quarter 188,130
BM&FBOVESPA and Consolidated 2009 Accumulated 415,110
2,021,224,655 0.152218
2,021,368,133 2,018,801,317 0.291937 0.093189
2,017,611,432 0.205743
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17 Related Party Transactions

a. Transactions and balances with related parties
Assets / (liabilities) 2010 BM&FBOVESPA 06/30/2010 12/31/2009 2 Quarter
n2
Revenue / (expenses) 2009 2 Quarter

nd
Accumulated
Accumulated
Bolsa de Valores do Rio de Janeiro - BVRJ Accounts payable Contribution on membership certificates Banco BM&F de Servios de Liquidao e Custdia S.A. Cash and cash equivalents Accounts receivable Foreign exchange operations Recovery of expenses Bolsa Brasileira de Mercadorias Accounts receivable Accounts payable Minimum contribution on membership certificates Recovery of expenses BM&FBOVESPA Superviso de Mercados Accounts receivable Recovery of expenses 445 1,257 650 1,284 602 1,170 48 (152) 88 (157) (287) 69 (630) 87 102 480 9 473 9 543 3,549 1,297 2,678 1,383 2,746 (2.077) (1,893) (119) (238) (119) (238)
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(Continnuing) Assets / (liabilities) BM&FBOVESPA Mechanism of reimbursment of losses Accounts receivable Accounts payable Instituto BM&FBOVESPA Accounts receivable Accounts payable Associao BM&F Accounts receivable Accounts payable Associao Bovespa Accounts receivable Accounts payable Outras empresas Accounts receivable Accounts payable 14 (8) 6 (10) 360 (15) 5 (15) 6,910 (9) 6,901 (9) 1,507 1,501 (9) 18 9 (2,907) 06/30/2010 12/31/2009
The main transactions with related parties are listed below and were carried out under the following conditions: BM&FBOVESPA pays a minimum fee to BVRJ and Bolsa Brasileira de Mercadorias as a member of these associations. BM&FBOVESPA, by request of Banco BM&F, Bolsa Brasileira de Mercadorias and Associao BM&F, contracts companies specialized in providing information technology services designed to support the activities of these entities and transfers the respective costs incurred, in full, to the first two entities.
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Banco BM&F entered into an agreement with BM&FBOVESPA which, in addition to granting occupancy of a building owned by the latter, also establishes the utilization of its technology infrastructure and also its personnel, with transfer of the corresponding costs. BSM has entered into an agreement with BM&FBOVESPA for the transfer and recovery of costs which establishes the reimbursement to BM&FBOVESPA of the net amount paid monthly for expenses incurred in contracting resources and for the infrastructure made available to BSM to assist in the performance of its supervisory activities.
b.
Remuneration of key management personnel
Key management personnel include Members of the Board, Executive Officers, the Head of Internal Audit, the Director of Banco BM&F and the Director of Human Resources.
2010 Accumulated 2009 Accumulated
Management benefits Short-term benefits (salaries, participation in results, etc.) Post-employment benefits Employment contract rescission benefits Share based remuneration (1)
2 Quarter
nd
2 Quarter
nd
6,587 4 493 2,288
11,921 12 493 4,165
2,900 12 566 2,971
5,949 24 10,228 5,950
(1) Represents the expense calculated for the period in relation to the stock options granted to key management personnel, which was recognized in accordance with the criteria described in Note 19.
18 Safeguard Structure
a. Risk management
Credit risk - Performance of BM&FBOVESPA as a central counterparty (CCP) guarantor of markets (Clearing) BM&FBOVESPA manages four clearinghouses considered systematically important by the Central Bank of Brazil, i.e. the Derivatives, Foreign Exchange and Securities Clearinghouses and the Equity and Corporate Debt Clearinghouse (CBLC). The activities carried out by the clearinghouses of BM&FBOVESPA are governed by Law 10,214, of March 27, 2001, which authorizes the multilateral clearing of obligations, establishes
52
the central counterparty role of the systemically important clearinghouses and permits the utilization of the collateral obtained from the defaulting participants to settle their obligations in the clearinghouse environment, including in cases of civil insolvency, composition with creditors, intervention, bankruptcy and out-of-court liquidation. Through these Clearinghouses, BM&FBOVESPA acts as a CCP in the derivatives market (futures, forwards, options and swaps), in the equity market (spot, forwards, options, futures and securities loans), the foreign exchange market (spot US dollar), the federal government bond market (spot and forward transactions and securities loans) and private debt securities (spot and securities loans). In other words, by assuming the role of a central counterparty, BM&FBOVESPA becomes responsible for the proper settlement of trades carried out and/or registered in its systems, as established in the regulations in force. The performance of BM&FBOVESPA as a central counterparty exposes it to the credit risk of the participants that utilize its settlement systems. If a participant fails to make the payments due, or to deliver the assets, securities and/or commodities due, it will be incumbent upon BM&FBOVESPA to resort to its safeguard mechanisms, in order to ensure the proper settlement of the transactions in the established time frame and manner. In the event of a failure or insufficiency of the safeguard mechanisms of its Clearinghouses, BM&F BOVESPA might have to use its own equity, as a last resort, to ensure the proper settlement of trades. The BM&FBOVESPA Clearinghouses are not directly exposed to market risk, as they do not hold net long or net short positions in the various contracts traded. However, the increase of price volatility can affect the magnitude of amounts settled by the various market participants, and can also heighten the probability of default by these participants. Furthermore, as already emphasized, the Clearinghouses are responsible for the settlement of the trades of a defaulting participant, which could result in losses for BM&FBOVESPA if the amounts due surpass the amount of collateral available. Accordingly, despite the fact that there is no direct exposure to market risk, this risk can impact and increase the credit risks assumed. To mitigate the risks assumed, each BM&FBOVESPA Clearinghouse has its own risk management system and safeguard structure. The safeguard structure of a Clearinghouse represents the set of resources and mechanisms that it can utilize to cover losses relating to the settlement failure of one or more participants. These systems and structures are described in detail in the regulations and manuals of each Clearinghouse, and have been tested and ratified by the Central Bank of Brazil, in accordance with National Monetary Council (CMN) Resolution 2,882/01 and BACEN Circular 3,057/01. The main components of the safeguard structure of the Derivatives Clearinghouse are described below: Collateral deposited by derivatives market participants;
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Joint responsibility for trade settlement by the brokerage house and clearing member which acted as intermediaries, as well as the collateral deposited by these participants; Operational Performance Fund, in the amount of R$1,139,586 (R$1,126,126 at December 31, 2009), formed by resources transferred by holders of settlement rights at the Derivatives Clearinghouse (clearing members) and holders of full trading rights, for the exclusive purpose of guaranteeing the operations; Agricultural Market Trading Fund, in the amount of R$50,000 at June 30 and December 31, 2009, intended to hold resources of BM&FBOVESPA allocated to guarantee the proper settlement of transactions involving agricultural commodity contracts; Special Clearing Member Fund, in the amount of R$40,000 at June 30 and December 31, 2009, formed by a capital transfer from BM&FBOVESPA., intended to hold BM&FBOVESPA resources allocated to guarantee the proper settlement of transactions, regardless of the type of contract; Clearing Fund, in the amount of R$399,552 (R$378,113 at December 31, 2009), formed by collateral transferred by clearing members, intended to guarantee the proper settlement of transactions after the resources of the two previous funds have been used; Special equity, in the amount of R$33,060 (R$31,678 at December 31, 2009), in compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001. The main components of the safeguard structure of the Foreign Exchange Clearinghouse are described below: Collateral pledged by foreign exchange market participants; Participation fund, in the amount of R$149,721 (R$154,056 at December 31, 2009), formed by collateral transferred by Clearinghouse participants, intended to guarantee the proper settlement of transactions; Operational Fund of the Foreign Exchange Clearinghouse, in the amount of R$50,000 at June 30 and December 31, 2009, with the purpose of maintaining funds of BM&FBOVESPA to cover losses resulting from operating or administrative failures; Special equity, in the amount of R$33,098 (R$31,714 at December 31, 2009), in compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001.
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The main components of the safeguard structure of the Securities Clearinghouse are described below: Collateral deposited by federal government bond market participants; Operational Fund of the Securities Clearinghouse, in the amount of R$40,000 at June 30, 2010 and at December 31, 2009, with the purpose of maintaining funds of BM&FBOVESPA to cover losses resulting from operating or administrative failures of participants; Special equity, in the amount of R$23,357 (R$22,373 at December 31, 2009), in compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001. The main components of the safeguard structure of the Equity and Corporate Debt Clearinghouse (CBLC) are described below: Collateral deposited by CBLCs market participants; Joint responsibility for trade settlement by the brokerage house and clearing member that acted as intermediaries, as well as the collateral deposited by these participants; Settlement Fund, in the amount of R$336,626 (R$322,268 at December 31, 2009), formed by collateral transferred by clearing members, intended to guarantee the proper settlement of transactions; Special equity, in the amount of R$35,356 (R$33,877 at December 31, 2009), in compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001. The risk management policy adopted by the Clearinghouses is established by the BM&FBOVESPA Market Risk Committee, in which BM&FBOVESPA officers participate, including the Clearinghouses Chief Officers, the Depositary Chief Officer and the Risk Chief Officer, the Operations and IT Chief Officers, the Products Chief Officer, as well as the Risk Management Officer and the Settlement Officer, among others. The main duties of the Committee are (i) the evaluation of the macroeconomic and political environment and of its impacts on the markets managed by BM&FBOVESPA. (ii) the determination of the models utilized for calculation of collateral and for control of the intraday risk of the transactions performed, (iii) the definition of parameters utilized by these models, especially the stress scenarios referring to each type of risk factor, (iv) the assets accepted as collateral, their form
55
of valuation, maximum limits of use and applicable haircut factors, and (v) other studies and analyses. In view of the amounts involved, the collateral pledged by the participants who carry out the transactions represents the most significant component of the Clearinghouses safeguard structures. For most of the contracts, the amount required as collateral is calculated so as to cover the market risk of the transaction, i.e. its price volatility, during the time frame of two days, which is the maximum time expected for the settlement of the positions of a defaulting participant. This time frame may vary depending on the nature of the contracts and assets negotiated. The models utilized in the margin requirement calculation are based on stress testing, a methodology that seeks to gauge market risk considering not only the recent historical price volatility, but also the possibility of unexpected events that could modify the historical patterns of prices and of the market in general. The main parameters utilized by the margin calculation models are the stress scenarios, defined by the Risk Committee for the risk factors that affect the prices of contracts and securities traded at BM&FBOVESPA. Among the main risk factors are the Brazilian real/US dollar exchange rate, the term structure of the local fixed interest rate, the term structure of the US dollar interest rate, the Bovespa Index and the cash prices of shares, among others. In the definition of stress scenarios, the Risk Committee utilizes a combination of quantitative and qualitative analyses. The quantitative analysis is conducted with the support of statistical models of risk estimation, such as the Extreme Value Theory (EVT), estimation of implied volatilities, and GARCH family models, besides historical simulations. The qualitative analysis, in turn, considers aspects related to the domestic and international economic and political environments, and their possible impacts on the markets managed by BM&FBOVESPA. Market risk - Investment of cash funds Considering the importance of BM&FBOVESPAs equity as a last resource available in the safeguard structure of its Clearinghouses, its investment policy emphasizes low risk cash alternatives, normally federal government bonds, including exposure through exclusive and retail investment funds. As a result, in general, there is a significant proportion of federal securities in the portfolio of applications of BM&FBOVESPA, being purchased directly, via repurchase agreements backed by government bonds and also through exclusive and non-exclusive investment funds. Thus, in general, the BM&FBOVESPA has on principle directing most of its applications in conservative financial assets, high liquidity and with sovereign risk, whose overall performance is tied to the Selic rate / CDI
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b. Collateral for transactions

Transactions performed in the BM&FBOVESPA markets are backed by cash margin deposits, government bonds and corporate securities, letters of credit and other financial instruments. At June 30, 2010, the pledged collateral totaled R$120,666,161 (R$101,640,805 at December 31, 2009), as follows:
06/30/2010 Derivatives Clearinghouse Federal government bonds Letters of credit Equities Bank certificates of deposit (CDBs) Gold Cash (1) Other Subtotal Foreign Exchange Clearinghouse Federal government bonds Cash (1) Subtotal Securities Clearinghouse Federal government bonds Equity and Corporate Debt Clearinghouse CBLC Federal government bonds Equities International bonds (2) Bank certificates of deposit (CDBs) Letters of credit Cash (1) Other Subtotal Total 17,111,589 19,359,439 1,884,931 806,636 237,179 268,165 111,883 39,779,822 120,666,161 15,665,732 17,208,344 1,944,896 997,944 296,442 247,230 76,539 36,437,127 101,640,805 68,357,744 2,072,435 3,170,297 1,359,409 70,114 573,807 148,493 75,752,299 12/31/2009 53,754,858 1,479,341 3,351,593 1,307,762 60,865 555,106 95,938 60,605,463
4,257,596 54,030 4,311,626 822,414
3,766,090 3,766,090 832,125
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(1)
The balance of collateral recorded in current liabilities refers to deposits in currency. The availability of these funds is managed, and their utilization is dependent on the fluctuation of the required margin balance. US and German federal government bonds, as well as ADRs (American Depositary Receipt).
(2)
c.
Other information - Clearing Fund (Derivatives Clearinghouse)
This is formed by funds invested by the clearing members, with the exclusive purpose of guaranteeing transactions, and may include bank letters of credit, government bonds and corporate securities, cash, gold and other assets, at the sole discretion of BM&FBOVESPA. Collateral represented by securities and other assets depends on prior approval from BM&FBOVESPA. The liability of each clearing member is joint and limited, individually. The Clearing Fund was comprised as follows: Composition Federal government bonds Letters of credit Bank certificates of deposit (CDBs) Equities Gold Cash(1) Amounts deposited Amounts that ensure clearing member/trader participation Excess collateral 06/30/2010 337,743 37,935 15,100 4,943 3,181 650 399,552 12/31/2009 314,304 33,000 20,200 6,634 2,925 1,050 378,113
(314,000) 85,552
(319,500) 58,613
(1) The balance of collateral recorded in current liabilities refers to deposits in currency. The availability of these funds is managed, and their utilization is dependent on the fluctuation of the required margin balance. The minimum contribution for each clearing member is R$2,000, R$3,000 and R$4,000, depending on whether this member is the holder of a type 1, type 2 or type 3 settlement right,
58
respectively, in the Derivatives Clearinghouse. In addition, each clearing member must contribute R$500 per participant entitled to trade under their responsibility. The total amount deposited in the Clearing Fund is R$314,000 (R$319,500 at December 31, 2009), while the remainder refers to the surplus of non-enforceable deposited collateral.
d. Operational Performance Fund (Derivatives Clearinghouse)

This fund is formed by resources transferred by holders of settlement rights in the Derivatives Clearinghouse (clearing members) and holders of full trading rights, with the exclusive purpose of guaranteeing transactions. These resources can take the form of bank letters of credit, government bonds and corporate securities, cash, gold and other assets, at the sole discretion of BM&FBOVESPA. Collateral represented by securities and other assets depend on prior approval from BM&FBOVESPA. The Operational Performance Fund presents the following position: Composition Federal government bonds Letters of credit Bank certificates of deposit (CDBs) Equities Other Cash (1) 06/30/2010 869.255 172.488 76.227 16.010 600 5006 1,139,586 Amounts deposited Amounts that ensure clearing member/trader participation Excess collateral (993,600) 145,986 12/31/2009 859,804 156,200 81,310 20,098 2,363 6,351 1,126,126 (1,009,500) 116,626
(1) The balance of collateral recorded in current liabilities refers to deposits in currency. The availability of these funds is managed and their utilization is dependent on the fluctuation of the required margin balance. The minimum contribution for each Clearing Member is R$5,500, R$6,500 and R$7,500, depending on whether this member is the holder of a type 1, type 2 or type 3 settlement right, respectively, in the Derivatives Clearinghouse.
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The minimum contribution for each commodities broker is R$6,000 for holders of full trading rights. The minimum contribution of the holders of full trading rights of interest rates, exchange rates and Ibovespa is R$4,000. The minimum contribution for the holders of the trading rights of other contracts settled in the Derivatives Clearinghouse is R$3,000. The minimum contribution for each special operator is R$1,600 for the holders of full trading rights and restricted trading rights of interest rates, exchange rates and Ibovespa. For the holders of trading rights of other contracts settled in the Derivatives Clearinghouse, the minimum required contribution is R$1,000.
e. Participation fund (Foreign Exchange Clearinghouse)

Formed by deposits, in assets and currencies, required for the authorization of participants in the Foreign Exchange Clearinghouse. Their purpose is to guarantee performance of the obligations assumed by them. The Participation Fund presents the following position: Composition Federal Government Bonds 06/30/2010 149,721 12/31/2009 150,219
f. Guarantor Fund of the Floor-Traded Spot US Dollar Market (Foreign Exchange Clearinghouse)
It was formed by deposits in assets and currencies by the foreign exchange clearinghouse participants. The Guarantor Fund presented the following position:
Composition Federal government bonds Cash (1)
06/30/2010
12/31/2009
336,626 338,626
322,261 7 322,268
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(1) The balance of collateral recorded in current liabilities refers to deposits in currency. The availability of these funds is managed and their utilization is dependent on the fluctuation of the required margin balance.
g. Guarantee funds and Mechanism for reimbursement

BM&FBOVESPA maintains a Guarantee Fund, in the form of a statutory reserve, in the amount of R$92,342 for the sole purpose of assuring its clients that hold trading and settlement rights the reimbursement of certain losses provided for in the regulations. The subsidiaries Bolsa Brasileira de Mercadorias and Bolsa de Valores do Rio de Janeiro (BVRJ) also maintain Guarantee Funds, special purpose entities without a legal status. The maximum liability of these Guarantee Funds is limited to the sum of their net assets. BSM also manages a Mechanism for Reimbursement of Losses, the sole purpose of which is to assure reimbursement of loss to clients of brokerage firms that trade in BM&FBOVESPA upon the occurrence of events determined in the regulation. The purpose of these funds is to assure that their members clients are refunded for losses resulting from errors in the execution of orders accepted and from inadequate or irregular use of funds belonging to clients, under the terms of CVM Instruction 461/07. We present below a summary of the main accounting balances of these mechanisms:
09/30/2010 Guarantee Fund Bolsa Brasileira de Mercadorias Guarantee Fund Bolsa de Valores do Rio de Janeiro Mechanism for Reimbursement of Losses 761 (2,029) 273,880 12/31/2009 735 (1,358) 255,700
19 Employee Benefits
Stock options BM&F S.A. (Transferred to BM&FBOVESPA)
At the AGE held on September 20, 2007, approval was given for an option plan for shares issued by BM&F S.A. for the purpose of granting purchase rights on a number of shares, for recognition and retention of the employees of BM&F S.A. and, subsequently, of the Company, after May 8, 2008, up to a limit of 3% of the Companys capital stock. The stock options granted under the stock option purchase plan of the extinct BM&F were assumed by BM&FBOVESPA, as decided at the AGE of May 8, 2008.
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On December 18, 2007, 27,056,316 stock options were granted under the plan with a fixed exercise price of R$1.00 per share. Subsequent to this date, no further stock options were granted or vesting conditions changed under this plan. During the period, some employees acquired the rights to exercise their options as a result of their dismissal. The number of stock options that have not yet vested at June 30, 2010 totaled 7,483,092 options which did not acquire the condition of vesting yet. The Plan was mainly devised to provide managers and employees of the former BM&F (i) with consideration for services carried out by the beneficiaries during the period prior to the demutualization process and also (ii) to retain professionals for a period of four years subsequent to the approval of the Plan and IPO. The main items used as a basis for acknowledging these services and for allocating the options granted were: (i) (ii) (iii) (iv) Exercise price fixed at R$1.00; Right to exercise options even if the beneficiary is dismissed by the Company, as well as on retirement, dismissal as a result of disability or death of the beneficiary; Number of years of service of each beneficiary; Different period for each exercise of options.
As a result of the acceleration of vesting in the cases of dismissal, the Company recognized, during the period, the expenses related to the stock options of the employees dismissed that otherwise would have been recognized in future periods. In addition, the Company recognized the expenses related to the stock options of the remaining employees that have not yet vested, recognizing a total expense of R$9,661 during the period (R$3,712 during the quarter). The Company considered in this calculation an estimated turnover of 5%, i.e. the estimated number of options which will not vest due to employees who opt to leave the Company. Stock options BM&FBOVESPAs Plan On May 8, 2008, at the AGE of BM&FBOVESPA, approval was given to institute a stock option plan within the authorized limit of 2.5% of the Companys capital, having as its main objective to align the interests of shareholders with those of directors, managers, employees and service providers who are considered strategic, and employees considered as talents of BM&FBOVESPA and its subsidiaries. On December 19, 2008, the first series of options was granted at an exercise price of R$5.174 per share, corresponding to the average closing price of trading in the 20 days that preceded the date on which the options were granted, observing the vesting periods for exercising the options.
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4,531,850 stock options were granted, distributed equally on four vesting dates over a four-year period. Some employees that had stock options related to the series granted in 2008, acquired the rights to exercise their options as a result of their dismissal. As a result of the acceleration of vesting in the cases of dismissal, the Company recognized, during the period, the total expenses related to 815,200 stock options of the employees dismissed that otherwise would have been recognized in future periods. At June 30, 2010, there are 1,640,221 stock options granted in 2008 that have not yet vested. On January 20, 2009, the Board of Directors approved the 2009 stock option program ( "2009 Program"), which set the date of grant on March 1, 2009. The exercise price of R$ 6.60 per share corresponds to the average closing price of 20 trading days preceding the date of the grant program in 2009, as established in the plan approved in the shareholders General Meeting on 8 May 2008. The 2009 program refers to the period from January 1, 2009 to December 31, 2009, the base period for the performance assessments of the program beneficiaries. At the meeting on December 17, 2009, the Board confirmed the allocation of individual stock options within the 2009 program, according to the performance assessment of the Company and the beneficiaries, in the total amount of 9,947,000 stock options, divided into four qualifying dates (vesting). At June 30, 2010 there were 7,149,000 stock options granted in 2009 which did not acquire the condition of vesting. As a result, the Company recognized expenses in the statement of income related to both grants of this plan in the total amount of R$6,350 during the period (R$3,299 during the quarter), with a counter-entry to capital reserves in shareholders equity. The Company considered in this calculation an estimated turnover of 5%, i.e. the estimated number of options which will not vest due to employees who opt to leave the Company or whose employment is terminated by the Company before achieving vested rights to exercise the options. Considering both programs, the Company has granted stock options corresponding to 0.67% of the Companys capital (0.22% and 0.45%, respectively). The remainder 1.83% of the authorized limit will be used to grant new series of stock options for the following years.
As the options are exercised by the employees, the Company will issue new shares, increasing its capital, or use treasury shares.
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Plan BM&F S.A. BM&F S.A. BM&F S.A.
Grant date
Vesting period up to
Exercise price (in reais) 1.00 1.00 1.00
Granted 6,652,596 6,329,396 6,244,396 19,226,388
Exercised during previous periods (4,077,396) (2,216,750) (2,216,750) (8,510,896)
Canceled -
Exercised during 9 months period (2,180,800) (285,100) (281,600) (2,747,500)
Ongoing contracts in 06/30/2010 394,400 3,827,546 3,746,046 7,967,992
Fair value of options on grant date (in reais) 21.81 21.54 21.32
12/18/2007 12/18/2009 12/18/2007 12/18/2010 12/18/2007 12/18/2011
BM&FBOVESPA 12/19/2008 BM&FBOVESPA 12/19/2008 BM&FBOVESPA 12/19/2008 BM&FBOVESPA 12/19/2008
6/30/2009 6/30/2010 6/30/2011 6/30/2012
5.174 5.174 5.174 5.174
1,132,966 1,132,966 1,132,959 1,132,959 4,531,850
(540,500) (233,675) (233,675) (233,675) (1,241,525)
(28,225) (37,112) (37,112) (84,675)
(151,138) (9,000) (9,000) (9,000) (178,138)
441,324 862,062 862,063 862,063 3,027,512 1,906,730 2,485,500 2,383,000 2,383,000 9,158,230 20,153,734
3.71 3.71 3.71 3.71
BM&FBOVESPA BM&FBOVESPA BM&FBOVESPA BM&FBOVESPA
3/1/2009 3/1/2009 3/1/2009 3/1/2009
12/31/2009 12/31/2010 12/31/2011 12/31/2012
6.60 6.60 6.60 6.60
2,486,750 2,486,750 2,486,750 2,486,750 9,947,000
(9,752,421)
(1,250) (103,750) (103,750) (208,750) (293,425)
(580,020) (580,020) (3,505,658)
2.93 2.93 2.93 2.93
Total
33,705,238
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Total options exercised during the period As regards the plan transferred to BM&FBOVESPA, 2,747,500 options were exercised during the period as follows:
Average Market Price 13.17 12.51 11.84
Exercise Month January February March Options exercised during 1st Quarter 2010 April May June Options exercised during 2nd Quarter 2010 Total of exercised options
Quantity carried 1,168,600 424,600 680,500 2,273,700
11.78 11.55 11.85
261,300 211,000 1,500 473,800 2,747,500
As regards BM&FBOVESPAs plan, 758,158 options were exercised during the period as follows:
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Exercise Month January February March Options exercised during 1st Quarter 2010 April May June Options exercised during 2nd Quarter 2010 Total of exercised options
Average Market Price 13.07 12.51 11.84
Quantity carried 90,213 108,252 122,748
321,213 11.82 11.55 11.85 213,195 143,750 80,000
436,945
758,158
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Consolidated activity during the year Quantity At December 31, 2009 Options exercised (Note 16(b)) Options cancelled At March 31, 2010 Options exercised (Note 16(b)) Options cancelled At June 30, 2010 23,952,817 (2,594,913) (54,450) 21,303,454 (910,745) (238,975) 20,153,734
The percentage of capital dilution to which the current shareholders could be subject in the event that all the options outstanding at June 30, 2010 are exercised is neat to 1.02%. Effects arising from the exercise of the options
First Quarter Amount received on sale of shares Stock options exercised (-) Cost of treasury shares sold Effect of disposal of shares Second Quarter Amount received on sale of shares Stock options exercised (-) Cost of treasury shares sold Effect of disposal of shares
Amount 4,301 (15,213) (10,912) Amount 3,196 (5,340) (2,144)
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Option Pricing Model, To determine the fair value of the options granted, the Company has taken into account the following aspects: a) The stock options that were granted by the Company allow the exercise in advance as from a specific future date (vesting date) which is situated between the grant date and the option expiry date; b) The shares pay dividends between the grant date and the option expiry date. Accordingly, these options present characteristics from the European model (exercise in advance is not allowed) until the vesting date and characteristics from the American model (possibility of exercise in advance) between the vesting date and the option expiry date. These options are known as Bermuda or Mid-Atlantic type and their price must be between the price of a European option and the price of an American option with similar characteristics. In relation to the dividend payment, there are two impacts on the price of the option that should be taken into account: (i) the fall in share prices after the dates on which they become ex-dividend and (ii) the influence of such payments on the decision to exercise the option in advance. Considering the aspects above, the Binomial method was used to determine the fair value of the options granted. This method produces results which are equivalent to the results of the Black & Scholes model for non-complex European options, having the advantage of being able to incorporate the characteristics of an exercise in advance and the payment of dividends in relation to the stock options considered. The main assumptions considered in the options fair value determination were: a) The options were evaluated based on the market parameters effective on each of the grant dates of the different plans; b) To estimate the risk-free interest rate, the Company used the future interest contracts negotiated for the maximum exercise period of each option; c) The liquidity of the stock options, comprising the respective programs, was low on the grant dates and accordingly the implied volatilities in these contracts are atypical and it would not be feasible to use them for estimating volatility. In addition, since the Company was a recently listed entity at the time the plans were granted, historical volatility does not provide sufficient information on share volatility, considering the contractual term for exercising the options. As a result, the Company used as a basis for estimating the volatility of its shares the implied volatility of similar entities (international stock exchanges) over periods in which liquidity was sufficient to guarantee the quality of the data gathered; d) The share prices were adjusted in order to take into account the impact of dividend payments; and
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e) The maximum period for exercising the options granted was used to determine the maturity of the options. The remaining usual assumptions related to option pricing models, such as inexistence of arbitrage opportunities and constant volatility over the period, were also considered in the calculation.
Pension plan
The private pension fund Fundo de Penso Multipatrocinado das Instituies do Mercado Financeiro e de Capitais (MERCAPREV) is structured as a defined contribution retirement plan and is sponsored by the following entities: Adeval, Ancor, BM&FBOVESPA, Sindival and the brokerage firms Theca, Souza Barros and Talarico. Contributions to the pension plan for the period ended June 30, 2010 amounted to R$1,392 (R$1,209 at june 30, 2009) by BM&FBOVESPA and for the consolidated.
20 Income Tax and Social contribution on Net Income

(a) Deferred income tax and social contribution
The balance of deferred tax assets and liabilities is as follows: BM&FBOVESPA and Consolidated Details Tax, labor and civil contingencies Tax loss carryforwards Impairment of investment in shares of CME Group (2) Temporary differences Total deferred tax assets Goodwill amortization
Marking to market of available for sale 06/30/2010 12/31/2009
5,197 53,276 237,283 4,226 299,982 (480,511) (8,433) (6,854) (495,798)
4,742 35,285 23,283 6,514 283,824 (257,216) (39,870) (3,844) (300,930)
( Other ) Total deferred tax liabilities
69
(1) Deferred income tax and social contribution liabilities arising from temporary differences between the tax basis of goodwill and its carrying value on the balance sheet, considering that goodwill is still amortized for tax purposes, but is no longer amortized as from January 1, 2009 in the accounting records, resulting in a tax base smaller than the carrying value of goodwill. This temporary difference may result in amounts to be added when calculating the taxable income of future periods, when the carrying amount of the asset will be reduced or liquidated, thereby requiring the establishment of a deferred tax liability (2) As described in note 2(a), with the application of CPC38, the investment in CME Group was impaired in R$ 697,893
(b)
Estimated realization period
The deferred income tax and social contribution assets arising from temporary differences are recorded in the books taking into consideration the probable realization of these tax assets, based on projections of future results prepared in accordance with and supported by internal assumptions and future economic scenarios that may, accordingly, undergo change. It is expected that deferred tax assets will be realized as follows: R$23,038 (2010), R$3,307 (2013), R$19,436 (2014) and R$16,918 (2015). At June 30, 2010, the present value of the deferred tax assets amounts to R$46,840. As the income tax and social contribution taxable bases arise not only from the profit that may be generated, but also from the existence of non-taxable income, non-deductible expenses, tax incentives and other variables, there is no immediate correlation between the Company's net income and the income subject to income tax and social contribution. Therefore, the expectation of the use of deferred tax assets should not be used as the only indicator of future income of the Company. The goodwill amount deductible in the income tax and social contribution calculation for tax purposes amounts to R$11,784,274 at June 30, 2010. The realization of the deferred tax liability will occur as the difference between the tax base of goodwill and its carrying amount is reversed, that is, once the carrying value of goodwill in the balance sheet is either reduced or liquidated.
70
(c)
Reconciliation of the income tax and social contribution expense
The income tax and social contribution amounts presented in the parent company and consolidated statements of income at nominal rates are reconciled as follows:
BM&FBOVESPA
2010
2 Quarter
th
2009
2 Quarter
th
Accumulated
Accumulated
Income before income tax and social contribution Income tax and social contribution before additions and exclusions Additions: Adjustments from Law 11,638/07 Non-deductible expenses Exclusions: Equity Interest on own capital
407,482
800,259
304,552
539,040
(138,544) (8,303) (2,384) (5,919) 46,352 (228) 46,580 (9)
(272,088) (13,155) (5,444) (7,711) 76,439 (741) 77,180 (9)
(103,547) (6,653) (4,572) (2,081) (41,313) 186 38,080 (79,579) 35,091
(183,273) (14,968) (10,950) (4,018) 38,808 728 38,080 35,503
Other (1) Income tax and social contribution
(101,836)
(210,146)
(116,422)
(123,930)
71
Consolidated
2010
2 Quarter
th
2009
2 Quarter
th
Accumulated
Accumulated
Net income before income tax and social contribution Income tax and social contribution before additions and exclusions Additions: Adjustments from Law 11,638/07 Non-deductible expenses Exclusions: Equity Interest on own capital Other (1) Income tax and social contribution
407,693
800,713
304,901
540,548
(138,614) (8,397) (2,384) (6,013) 46,580 46,580 (2,042) (102,473)
(272,242) (13,328) (5,444) (7,884) 77,180 77,180 (2,888) (211,278)
(103,667) (6,649) (4,572) (2,077) (41,499) 38,080 (79,579) 34,793 (117,022)
(183,787) (15,235) (10,950) (4,285) 38,080 38,080 35,548 (125,394)
(1)
During the second quarter of 2009 there were recognized tax credits for income tax and social contribution of R$35,503 relating to tax losses and negative basis of social contribution of the former Bovespa Holding, untapped at the time of the merger on grounds of alleged limitation to use only 30% of net income. The Company has reassessed this procedure during the second quarter of 2009 along with its legal counsel, based on the understanding that this limitation would not apply to cases of incorporation of the legal entity, because in these cases there is no continuity of the Company and therefore does not exist limitations for the entire existing tax loss. Accordingly, the Company made the recording of tax credits. Transitional Tax System
(d)
Provisional Measure 449/08, converted into Law 11,941/09, introduced the Transitional Tax System (RTT) for taxable income determination purposes, addressing the tax adjustments arising from the new methods and accounting criteria introduced by Law 11,638/07. The Company declared its option for the RTT when filing the Corporate Income Tax Return (DIPJ) for 2008. As a result of the option to use the RTT, the income tax (IRPJ) and social contribution on net income
72
(CSLL) payable for the two-year period 2008-2009 will continue to be determined based on the provisions of Brazilian Corporation Law in force at December 31, 2007. From 2010, the RTT is now mandatory and consistent with the practices adopted in 2008 and 2009.
21 Sundry Expenses
BM&FBOVESPA
2010 2009
2th Quarter Accumulated
Details Contributions and donations Electricity, water and sewage Travel Sundry provisions Intangible loss Insurance Other Total
2th Quarter
Accumulated
846 1,746 1,163 236 1,115 213 1,006 6,325
2,552 3,529 1,359 2,368 4,802 551 1,848 17,009
757 1,706 774 1,205 202 26 4,670
1,293 3,139 1,052 3,001 302 460 9,247 Consolidated
Details
2thQuarter
2010
Accumulated 2thQuarter
2009
Accumulated
Contributions and donations Electricity, water and sewage Travel Sundry provisions Intangible loss Insurance Other Total
873 1,797 1,309 2,598 1,115 213 622 8,527
2,607 3,632 1,569 6,819 4,802 551 1,117 21,097
898 1,760 888 1,368 202 215 5,331
1,428 3,260 1,243 3,169 302 1,439 10,841
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22 Other operating revenues

BM&FBOVESPA
2010 2009
2ndQuarter Accumulated
Details Dividends from equity interests Other recoveries Profit on sale of assets Sundry Total
2ndQuarter
Accumulated
2,485 309 368 3,162
4,920 1,403 977 7,300
2,459 261 1,071 356 4,147
7,830 1,143 1,959 962 11,894
Consolidated
2010 2009
2ndQuarter Accumulated
Details Dividends from equity interests Other recoveries Profit on sale of assets Subscriptions Congress- Capital Markets Sundry Total
2ndQuarter
Accumulated
2,485 1,535 318 395 4,733
4,920 3,002 1,470 1,009 10,401
2,459 1,349 174 1,071 103 5,156
7,830 2,728 714 1,959 1,058 14,289
23 Information about business segments

We present below consolidated information based on reports used by management for making decisions, with the segments comprising Bovespa, BM&F, Corporate products, Institutional and Other.
74
Bovespa Segment Offers various mechanisms and tools for trading of fixed and variable income securities, on stock markets and Over the Counter (OTC). It is responsible for managing the only national stock market and OTC market for trading of variable income securities, including stocks, stock receipts, Brazilian Depository Receipts, stock derivatives, subscription bonuses, various types of closed investment funds, shares representing audiovisual investment certificates, non-standard options (warrants) to purchase and sell securities and other securities authorized by the CVM. BM&F Segment The BM&F Segment covers the main steps of the cycles of trading and settlement of securities and contracts, i.e.: (i) trading systems in an environment of electronic trading and trading via internet (WebTrading), (ii) recording, clearing and settlement systems, integrated with a robust and sophisticated risk management system to ensure the proper settlement of the transactions recorded, and (iii) custodian systems for agribusiness securities, gold and other assets In addition, this segment includes the trading of commodities, foreign exchange, and public debt, and services provided by Banco BM&F and the Brazilian Commodities Exchange. Corporate products Refer basically to services provided as depository of securities, as well as loans and listing of securities (registration of issuers of trading securities on our systems), data services, classification of commodities and design of technological products. Currently there is no segment allocation for operating expenses and other results, which are therefore shown in the Other column, below. Other Refers, basically, to revenues generated by the businesses of its subsidiaries and dividends from shares. Institutional Currently there is no segmented allocation of operational expenses, financial income and taxes, therefore, they are presented in Institutional column.
75
Information by segment Bovespa Segment Gross operating revenue Deductions from revenue Net operating revenue Operating expense Depreciation and Amortization General and administrative expenses Operating income Equity Financial income Taxes on income Net income 463,831 317,018 139,995 11,905 515,803 (51,972) 463,831 BM&F Segment 354,352 (37,334) 317,018 Corporate Products 151,555 (11,560) 139,995 Other 15,936 (4,031) 11,905 (277,278) (20,826) (256,452) (277,278) 145,242 (211,278) (343,314) Institutional
June 30,2010 Total 1,037,646 (104,897) 932,749 (277,278) (20,826) (256,452) 655,471 145,242 (211,278) 589,435
Information by segment Bovespa Segment Gross operating revenue Deductions from revenue Net operating revenue Operating expense Depreciation and Amortization General and administrative expenses Operating income Financial income Taxes on income Net income 319,994 243,419 111,937 19,440 356,515 (36,521) 319,994 BM&F Segment 271,913 (28,494) 243,419 Corporate Products 123,497 (11,560) 111,937 Other 20,574 (1,134) 19,440 (276,958) (18,834) (258,120) (276,958) 122,716 (125,394) (279,636) Institutional
June 30,2009 Total 722,499 (77,709) 694,790 (276,958) (18,834) (258,120) 417,832 122,716 (125,394) 415,154
76
24 Insurance
BM&FBOVESPA searches in the market for insurance consultant support to establish coverage compatible with its size and operations. The main coverage, at June 30, 2010, was contracted at the amounts indicated below, according to the insurance policies:
Insurance lines Amounts at risk, material damages, property and equipment Civil liability Works of art
Amounts insured 272,790 62,720 16,133
25 Subsequent Event
a. Conclusion of contracts with the CME Group, Inc BM&FBOVESPA announced on June 22, 2010, a series of agreements with the CME Group, Inc., based on the Term Sheet signed on February 11, 2010, including: i. Share purchase agreement whereby the company will increase its ownership interest in CME from the current 1.78% to 5% (see item (b)); ii. Technology agreement contemplating the joint development of a multi-asset class electronic trading platform; and iii. Preferred Strategic Partnership Agreement whereby both companies must cooperate with each other, to jointly identify opportunities of strategic investment operations and commercial partnerships with other international exchanges, which operate equities and derivatives markets.
77
b. Issue of securities abroad On July 16, 2010, BM&FBOVESPA concluded the private issuance of unsecured securities abroad, in the amount of US$ 612 million, maturing in 2020. The notes will pay semiannual coupons of 5.50% per year in January and July. The Company invested the proceeds of this offering to purchase shares of CME Group in the amount of R$ 1,070,526, now holding 5% of the capital. Management understands, concerning the equity interest, that the qualitative characteristics of the relationship between the two companies indicate the existence of significant influence of BM&FBOVESPA on the CME Group. In this scenario, the investment will be recorded under the equity method (under the terms of CPC 18), applying the percentage of the ownership of BM&FBOVESPA in the shareholders equity of CME Group, with effects recorded in the income statement as from July, 2010. * * *
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BM&FBOVESPA S.A.

MANAGEMENTS DISCUSSION AND ANALYSIS OF THE SECOND QUARTER 2010

2Q10 1,635.7 603.5 99.3 84.5 10.1 79.5 10.8 2,523.4

2Q09 959.3 452.0 80.1 73.9 9.4 51.2 9.8 1,636.3

1Q10 1,605.8 589.8 85.2 77.9 11.5 68.2 15.3 2,453.6

% 2Q10/2Q09 70.5% 33.3% 24.1% 14.3% 7.2% 55.2% 9.7% 54.2%

% 2Q10/1Q10 1.9% 2.3% 16.6% 8.5% -12.2% 16.6% -29.6% 2.8%

1H10 1,621.0 596.8 92.3 82.2 10.8 73.9 13.0 2,489.0

1H09 910.5 415.6 76.4 83.2 9.8 51.2 7.3 1,554.0

% 1H10/1H09 78.0% 43.6% 20.9% -2.4% 10.7% 44.4% 78.0% 60.2%

2Q10 0.91 1.84 1.52 1.16 2.11 0.13 1.77 1.14

2Q09 0.94 2.33 1.78 1.64 2.36 0.20 1.76 1.39

1Q10 0.84 1.93 1.53 1.22 1.88 0.13 1.53 1.13

% 2Q10/2Q09 -3.8% -21.2% -14.8% -29.3% -10.7% -34.0% 0.9% -17.5%

% 2Q10/1Q10 8.0% -4.7% -0.8% -4.5% 12.1% -3.4% 16.1% 1.7%

1H10 0.87 1,88 1.52 1.19 1.99 0.13 1.63 1.14

1H09 0.91 2.37 1.68 1.60 2.21 0.19 1.90 1.37

% 1H10/1H09 -4.6% -20.7% -9.2% -25.6% -10.2% -31.0% -14.2% -17.0%

20% 16% 12%

14.4% 13 92 129 216

% of DMA in overall ADTV

280 250 220 190 160 130 100

500 450 400 350 300 250 200 150 100 50 -

1Q09 Central Bank

3Q09 4Q09 1Q10 Foreign Investors Institutional Investors

2Q10 Financial Institutions

392 278 326

ADTV (BRL billions)

Number of Trades (thousands)

Average daily traded value (ADTV)

6,679.6 6,166.3 513.3 134.9 378.4 3.0 6,682.6

5,211.6 4,916.1 295.5 71.5 224.0 0.9 5,212.6

6,598.2 6,110.1 488.1 157.9 330.2 1.4 6,599.6

28.2% 25.4% 73.7% 88.6% 68.9% 225.4% 28.2%

1.2% 0.9% 5.2% -14.6% 14.6% 123.1% 1.3%

6,639.6 6,138.7 500.9 146.2 354.7 2.2 6,641.8

4,558.9 4,269.3 289.6 69.1 220.6 1.4 4,560.3

45.6% 43.8% 73.0% 111.7% 60.8% 61.7% 45.6%

Average daily number of trades

431,120 348,130 82,990 1,485 81,505 13 431,133

325,774 267,397 58,377 1,103 57,274 6 325,779

406,420 326,660 79,761 1,923 77,838 10 406,431

32.3% 30.2% 42.2% 34.6% 42.3% 116.1% 32.3%

6.1% 6.6% 4.0% -22.8% 4.7% 21.3% 6.1%

418,973 337,571 81,402 1,700 79,702 12 418,984

302,049 242,021 60,028 1,020 59,008 7 302,055

38.7% 39.5% 35.6% 66.7% 35.1% 70.8% 38.7%

0% 10% 32% 27% 29%

34% 24% 33%

35% 26% 30%

2Q09 Institutional Investors

3Q09 Foreign Investors

4Q09 1Q10 Financial Insitutions Companies

16.0 13.3 12.6

Number of active custody accounts (in thousands)

20% 21% 19% 19%

22% 21% 17% 18% 18%

22.0 20.3 11.4

* Preliminary data through August 04th, 2010

25,0 20,0 15,0

69.6 61.1 19.4

100,0 80,0 60,0

1Q09 2Q09 Open Interest (BRL billions)