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BM&FBOVESPA

Investor Relations Department

January 2014
1

Forward Looking Statements


This presentation may contain certain statements that express the managements expectations, beliefs and assumptions about future events or results. Such statements are not historical fact, being based on currently available competitive, financial and economic data, and on current projections about the industries BM&FBOVESPA works in. The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and other similar verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from those projected in this presentation and do not guarantee any future BM&FBOVESPA performance. The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPA services; (ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industries BM&FBOVESPA operates in; (iii) changes in (a) domestic and foreign legislation and taxation and (b) government policies related to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, including the implementation of enhanced functionality demanded by BM&FBOVESPA customers; (vi) ability to maintain an ongoing process for introducing competitive new products and services, while maintaining the competitiveness of existing ones; (vii) ability to attract new customers in domestic and foreign jurisdictions; (viii) ability to expand the offer of BM&FBOVESPA products in foreign jurisdictions. All forward-looking statements in this presentation are based on information and data available as of the date they were made, and BM&FBOVESPA undertakes no obligation to update them in light of new information or future development. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities Commission CVM Instruction 400 of 2003, as amended.
2

HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE BRAZILIAN MARKET OPPORTUNITIES MAIN GROWTH INITIATIVES OPERATIONAL PERFORMANCE
FINANCIAL HIGHLIGHTS APPENDIX (includes results for 3Q13)

HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency

History of BM&FBOVESPA
Important global exchange
1890: Foundation of Bolsa Livre (BOVESPA's predecessor) 1967: BOVESPAs Mutualization Aug 2007: BOVESPA Hld demutualization Oct 2007: BOVESPA Hld IPO (BOVH3)

1986: Start of BM&F activities

Sep 2007: BM&F demutualization

Nov 2007: BM&F IPO (BMEF3)

May 2008: integration between BM&F and BOVESPA Hld and creation of BM&FBOVESPA (BVMF3)

MARKET CAPITALIZATION (US$ billion) AND OPERATING MARGIN (%)


71% 58% 61% 57% 63% 54% 41% 28% 72% 56% 56% 35% 67%

26.3

25.7

19.5
HKEx

16.0
Deutsche Boerse

9.3
BVMF

7.8
JPX

7.7
LSE

6.7
Nasdaq

6.4
ASX

6.1
SGX

4.7
Moscow
Oper. Margin (2012)

3.2
BME

2.6
TMX

CME

ICE-NYSE

Diversified and integrated

Integrated (Derivatives)

Diversified but not integrated

12M to Jun. 28, 2012; 12M to Mar 31, 2012 (Mar 31, 2013 for JPX); 9M to Sep. 30, 2012. Source: Bloomberg (Dec. 30 ,2013).

Vertical model as a differential


Value gained across most of the chain
VALUE CHAIN

PRE-TRADING
Risk Analysis Access

TRADING
Risk Analysis (DMA) Trade Allocation Transfer

POST-TRADE
Clearing/risk analysis Position/ Auxiliary Settlement Collateral Depository Services

Vertically integrated
Trading Platform: equities, derivatives, government and

Services for issuers and brokers


Listing (stocks, funds, corporate bonds, securitization, among other) Trading access (brokers) Securities Lending Custody for clubs and foreign investors (2.689 account) Market Data (vendors) Indices Licensing Software Licensing OTC (derivatives and fixed income) Commodities certification

corporate bonds, funds, spot FX, among others


Post-Trade Platform:
Central Counterparty (CCP) : An entity that interposes itself between operations or contracts, becoming the guarantor of all business Settlement System (SSS): system that allows the transfer of securities or assets from investors, in which the transfer may be free or against payment Central Depository (CSD): performs centralized asset custody and treatment of corporate actions (dividends, stock splits, etc.)

Vertical model as a differential


BM&FBOVESPA present at all post-trade stages
BRAZIL (Internalization of orders is forbidden) US (Internalization of orders is allowed)
Trading Venues

Trading DTCC
Brokers A and B Brokers A and B Broker A Broker B

Post trade
CCP SSS CSD
Investors Investors Investors Investors

Model 100% vertical: clearing, settlement and central depository at the final beneficial owner level Brokers settle positions and control their clients portfolios through BM&FBOVESPAs infrastructure (impact on post-trade fees)

Clearing, settlement and custody occur at the brokerage houses Each prime broker has its own structure to control its customers portfolios and settle positions (impact on the prime brokers costs)
7

Brazilian market regulatory framework


Resilience and safety as priorities
Brokerage houses & investors

Regulations prohibit internalization of orders, dark pools and ATS/MTFs and simultaneous exchange/OTC equities trading Settlement and clearing of equities trading must be done through a CCP Settlement and clearing at the final beneficial owner level make the Brazilian market safer and more resilient

Trading

Under the prevailing regulations, potential competitors must provide an integrated solution with the same status regarding rules and transparency In Brazil the final investor pays the exchange: compared to other markets we have a competitive all-in-cost, as BM&FBOVESPA provides more services than other exchanges Naked access is not allowed Naked short selling is not possible
8

Post-Trade

Corporate Governance
Multidisciplinary knowledge in conducting business
BOARD OF DIRECTORS
Pedro Parente (Chairman) Independent Director, CEO of Bunge Brasil Marcelo Trindade (Vice Chairman) Independent Director, lawyer Alfredo Antnio Lima de Menezes Non Executive Director, Executive Officer of Bradesco Andr Esteves Non Executive Director, CEO of BTG Pactual Candido Bracher Non Executive Director, CEO of Ita BBA Charles Carey Independent Director, Director of CME Group Claudio Haddad Independent Director, engineer and professor Jos Berenguer Neto Non Executive Director, CEO of JP Morgan Brazil

EXECUTIVE OFFICERS
Edemir Pinto CEO Eduardo Guardia Chief Product / IRO Ccero Vieira COO Daniel Sonder CFO Luis Furtado CIO

COMMITTEES
Audit Committee Nominations and Corporate Governance Committee Compensation Committee Risk Committee Advisory Committee For The Securities Intermediation Industry

Jos Roberto Mendona de Barros Independent Director, economist and professor


Luiz Fernando Figueiredo Independent Director, Co-Founder of Mau Investments Luiz Nelson Guedes De Carvalho Independent Director, professor

Ownership structure
Widely-held shareholder base
4.4%

5.3% 8.4%
5.1% 6.6%

Funds managed by BlackRock, Inc. Funds managed by OppenheimerFunds, Inc. CMEG Brasil I Participaes Ltda.

Funds managed by Vontobel Asset Management Inc.


Other

70.3%

Treasury stock

GM of Apr. 15, 2013 Number of individual shareholders Number of institutional shareholders Total number of shareholders Free float (ON) 55,108 3,580 58,688 1,929,265,010 (97.4%) 10

BM&FBOVESPAs Sustainability Policy


Approved by the Board of Director

11

BRAZILIAN MARKET OPPORTUNITIES Main growth drivers

12

Opportunities in the Brazilian market


BM&FBOVESPA prepared to capture future growth
GROWTH DRIVES
Investment needed to promote growth EQUITIES MARKET Fall of interest rates in real terms
Porfolio diversification => opportunity for diversification of investments of institutional investors in equities

more resources being directed into equities


more listed companies

National savings still highly concentrated in fixed income

DERIVATIVES MARKET
more credit and more in fixed-rate government debt => more demand for hedging from financial institutions

more foreign trade => higher volumes in FX contracts


stock market growth, the launch and development of ETFs and more exposure to equity among institutional investors => growth in Index-based contracts

CAPITAL MARKETS WILL HAVE CENTRAL ROLE IN THE COMING YEARS


Total Credit/GDP Evolution in Brazil (%)
55.4%
13.25 11.25

Selic Interest Rate (% p.a.). Jan-07 to Nov-13


13.75 10.75 8.75 11.00 7.25 10.00

27.4%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source : Central Bank of Brazil. * For Brazil, considers only bank credit.

2007

2008

2009

2010

2011

2012

2013

13

Capital Market
Great opportunities in the equities and derivatives segments
NUMBER OF CUSTODY ACCOUNTS (thousand)
Number of retail investors represents only 0.3% of the population (lower than global average)

INVESTMENT FUNDS
Funds AUM evolution (in BRL billion). Global average of 40% for equities
2,189 2,344

Dec'13 617.6
Equities Fixed Income

Jan'05 128.6

657 11%

861 10%

899 11%

1,703 1,787 1,513 1,375 18% 18% 1,301 22% 1,070 15% 14% 11%

1,925 15%

14% 13%

Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2Q13

LISTED COMPANIES
Lower number of listed companies in comparison with other countries
6,856 4,916 4,041 3,972 3,481 3,200 2,767 2,056 1,784 364
India USA China/HK Canada Japan Spain UK Australia Korea Brazil

PENSION FUNDS
Participation of equities in the portfolio of pension funds
Fixed Income and Others
Equity

168
28%

216

256

295
31%

33% 37% 28%

352

436

419

492
33%

538
33%

574
30%

642
29%

630
29%

29% 30%

* 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source : BM&FBOVESPA, ANBIMA , WFE (Dec-12) and ABRAPP. *Updated to Jun/13

14

MAIN GROWTH INITIATIVES Investments, new products and focus on the customer

15

Update of strategic projects


PUMA Trading System - Multi-Asset Trading Platform
A high-performance, high-speed and high-capacity electronic trading platform RTT (Round Trip Time) of less than one millisecond Derivatives and FX module: implemented in Oct/11 Equities module: implemented in Apr/13

Clearinghouses integration
The integration of BM&FBOVESPAs clearinghouses will enhance the Companys competitive position Development of the new risk architecture (CloseOut Risk Evaluation - CORE)* will increase allocation efficiency for clients Tests for derivatives started in Jul/13, with conclusion scheduled for Mar/14

iBalco OTC Registration Platform


Registration of OTC derivatives and fixed income securities Deployment in Jul/13 (for FX non-deliverable forward no central counterparty)

Pricing Policy Changes for Cash Equities


First phase (Apr/13): reduction from 0.7 bps to 0.5 bps in trading fees and a realignment between the trading fees and post-trade fees of institutional investors and day traders Second phase (Dec/13): increased discounts per tier of volume for day traders and a progressive reduction of trading fees per tier of global volume

Initiatives for Small and Medium Enterprises (SMEs)


Establishment of the Technical Committee for Smaller Offerings composed of private sector and government agencies Developing proposals to facilitate capital raising through issuance of shares (incentives to SMEs, investors and intermediaries) Project was presented to the Ministry of Finance in Jul/13
*IPN/CORE implementation requires the authorization of the regulators.

16

BM&FBOVESPA IT Developments
Building a world-class IT platform
Increasing competitive differentiation for derivative and cash equity markets
LATENCY
BM&F Segment (derivatives)
Core of the system (average latency milliseconds)
70

BOVESPA Segment (equities)


Core of the system (average latency milliseconds) Latency has been dramatically reduced
450

25

20

10-15 ~1 ~1 2012 <1 2013

Standard deviation of latency has been reduced by more than 200


2007

300

20 2008 2009

10-15 2010

10-15 2011

10-15 2012

<1 2013

2007

2008

2009

2010

2011

MACRO VIEW: PERFORMANCE OF CO-LOCATION


Co-location
Participant Network

Infrastructure of PUMA Trading System


Gateway + LiNe Matching Engines

~200 s

~500 s ~1000 s

~300 s

Network Infra Networks built for the development and deployment of PUMA platform

Gateway + LiNe Pre-trade risk control (LiNe) represents about 60% of Gateway + LiNe latency

Matching Engines Meet all auction rules and bands/fluctuation limits set out in regulations (100% of orders)

17

Clearinghouses Integration
Further differentiation in BM&FBOVESPA post-trade
Equities and corporate debt (BRL 76.5 bn*)
Equities, ETFs and corporate fixed income cash market
Equity and indices derivatives (options and forward) Securities lending

Derivatives (BRL 119.3 bn*)


Financial and commodities derivatives (futures, options and forwards) OTC derivatives

FX (BRL 4.9 bn*)


FX spot market (US$ vs. BRL )

Securities (BRL 0.8 bn*)


Cash market and forward market for government bonds

INTEGRATED CLEARINGHOUSE**
=

Capital efficiency

* Aggregate of pledged collateral at our clearinghouses totaled BRL 201.4 billion in Sep 30, 2013. **IPN/CORE implementation requires the authorization of the regulators.

18

Product and Market Development


Listed products, OTC and fixed income
LISTED PRODUCTS ETFs (exchange traded funds): Equities, fixed income, international and real estate funds Market maker: cash equities, options, commodities, futures Selic derivatives: Selic futures (OC1), FX spread (DCO), FX swap (SCS) Options on single stocks: New fee policy for HFTs/day traders

Ibovespa: methodology review


SMEs (small and medium enterprises): BOVESPA Mais Incentive programs: retail investors iBALCO PROJECT Derivatives Registration:
NDFs: deployed in Jul/13 Flexible options on single stocks COE: Structured Notes Swaps

Futures Contracts: Ethanol


BDRs: To Exchange from OTC Securities Lending: BTC platform

Fixed Income Registration:


LCAs (Agribusiness Credit Bill): improvements LCIs (Real Estate Credit Bill) and CDBs (time deposits): adaptation of the platform (pending regulatory approval) Corporate bonds and LFs (financial bills): changes to listing rules and procedures Trading platform for government and corporate bonds and changes to the fee policy

Trade of Fixed Income:

19

High growth products


Growing sophistication of market participants
Initiatives to develop and prompt higher volume in certain products; Performance shows that the initiatives are being well received by the market.
Options with Market Maker
(ADTV in BRL million)

Real Estate Funds (FIIs)


(ADTV in BRL million)

Securities Lending
(Open Interest - average for the period - in BRL billion)

+43.8%
CAGR(09-13): CAGR (09-13):

+141.5%

+33.8%

70.1 48.8

31.7 0.9 1.5


2010

14.6 3.7
2011 2012 2013*

12.7

20.5

30.2

31.9

40.8

ADTV before Market Maker

ADTV after Market Maker*

2009

2009

2010

2011

2012

2013*

ETFs
(ADTV in BRL million) CAGR (09-13):

Brazilian Treasury Direct - Tesouro Direto


(Custody in BRL billion) CAGR (09-13):

Agribusiness Credit Bills


(AUM in BRL billion)

BM&FBOVESPA has a 74% market share of the registered AUM (Sep-13).

+52.0%

+35.2%

115.9 28.5 2010 48.7 2011 2012

99.3

9.0 2.9 3.9 2010 6.1

9.7
52.0 3.6 20.0

18.6 2009

2013*

2009

2011

2012

2013**

2011

2012

Sep-13
20

*Updated to Dec. 30, 2013. **Updated to Sep. 30, 2013

OPERATIONAL PERFORMANCE Records in 2013

21

BOVESPA Segment
Operational highlights
AVERAGE DAILY TRADING VOLUME ADTV (BRL billion)*

4.9 1.2
2004

5.5
2008

5.3
2009

6.5

6.5

7.3 7.4

7.9

7.3

7.8

7.4

8.2

7.7

8.9 6.0

8.5

7.2

6.6

7.0

6.2

1.6
2005

2.4
2006 2007 2010 2011 2012 2013* Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

AVERAGE ANNUAL MARKET CAP (BRL trillion)

TURNOVER VELOCITY** (12 months average*)


66.6% 64.2% 63.2% 63.8% 56.4% 30.8% 70.0% 72.9%

38.7%42.3% 36.8%37.6%

29.4%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
*Updated to Dec 30, 2013. **Ratio of cash market trading volume to the market cap of the exchange.

22

Trading in ADRs of Brazilian companies


Liquidity migration process interrupted
Novo Mercado Launch (Dec. 2000) End of CPMF (Financial Transaction Tax) Sarbanes-Oxley Act (Jul. 2002) End of IOF Tax (2%) for foreign investors (Dec. 2011)
Dec13 26.8% 46.5% 19.7%

22.6% 53.5%

30.9%

Aug-13

Jul-13

Apr-13

May-13

Oct-13

Mar-13

Nov-13

Feb-13

Sep-13

Jan-13

Jun-13

Dec-13
Source: Bloomberg (in USD traded value of 35 companies with ADRs programs )

1996

2001

2002

2003

2008

2009

2010

1997

1998

1999

2000

2004

2005

2006

2007

2011

Other USA Venues - Brazilian ADRs BM&FBOVESPA - companies with ADRs

2012

NYSE - Brazilian ADRs BM&FBOVESPA (except companies with ADRs)

PUBLIC OFFERINGS IN NUMBER OF COMPANIES


IPOs Follow ons Total Dual Listings
*Updated to Dec. 30, 2013.

2001 14 14 -

2002 1 5 6 -

2003 8 8 -

2004 7 8 15 2

2005 9 10 19 1

2006 26 16 42 1

2007 64 12 76 -

2008 4 8 12 -

2009 6 18 24 1

2010 11 11 22 -

2011 11 11 22 -

2012 3 9 12 -

2013 10 7 17 -

Total 152 137 289 5 23

BM&F Segment
Operational highlights
AVERAGE DAILY TRADED VOLUME ADV (thousands of contracts)

3,591

3,658 3,166
341 100 491 352 145 468

3,980
424 105 507

2,899 2,848 2,505 2,701 336


805
187 86 110 422 2004

2,856
340 113 547

852
109 74 168 501 2005

1,167
124 68 266 711 2006

1,740 1,573 1,521


167 112 473 988 2007 162 88 535 789 2008
150 80 447

191 89 541

285 123 496

143 494

383 114 494

2,410
290 84 474

341 126 494

3,290
495 183 635

2,443
389 99 435 1,519

2,835
434 146 541 1,713

2,418 2,182 2,116 2,174


351 90 502 1,239 385 102 420 1,209 405 75 481 1,457 392 106 497 1,179

1,684

1,797

1,926

2,630 1,857 1,856 1,561

2,235

2,694

2,944 1,977

843 2009 2010 2011 2012 2013*

Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

BRL Int. Rate (Thousands)

FX (Thousands)

Index (Thousands)

Others (Thousands)

REVENUE PER CONTRACT - RPC (BRL)


2006 Interest rates in BRL FX rates Stock Indices Interest rates in USD Commodities Mini contracts OTC Total RPC 2007 2008 2009 2010 2011 2012 2013* D-12 1.037 2.453 1.981 1.152 3.360 0.112 2.475 1.303 J-13 1.032 2.368 1.547 1.073 2.449 0.120 1.988 1.266 F-13 M-13 A-13 M-13 0.843 2.347 1.408 0.928 2.550 0.116 1.428 1.020 J-13 1.099 2.590 1.867 1.280 2.595 0.119 1.418 1.361 J-13 1.067 2.691 1.590 1.370 2.632 0.114 1.839 1.320 A-13 1.112 2.731 1.938 1.309 2.385 0.117 1.160 1.397 S-13 1.222 2.720 1.656 1.412 2.766 0.126 1.477 1.511 O-13 1.203 2.624 1.816 1.246 2.613 0.120 1.118 1.418 N-13 1.115 2.611 1.664 1.359 2.430 0.120 1.266 1.367 D-13 1.266 2.832 2.122 1.340 2.760 0.128 0.978 1.575

0.906 0.950 1.141 0.979 0.889 0.918 1.004 1.046 2.244 1.859 2.065 2.161 1.928 1.894 2.205 2.535 1.419 1.501 2.145 1.620 1.564 1.614 1.524 1.761 1.094 0.965 1.283 1.357 1.142 0.941 1.015 1.231 4.749 3.195 3.587 2.307 2.168 2.029 2.239 2.534 0.034 0.054 0.162 0.176 0.128 0.129 0.116 0.119 1.571 2.111 2.355 1.655 1.610 1.635 1.769 1.409 1.247 1.224 1.527 1.365 1.134 1.106 1.191 1.282

1.013 1.037 0.945 2.305 2.273 2.292 1.974 1.413 1.846 1.140 1.121 1.093 2.415 2.382 2.349 0.122 0.119 0.118 2.868 1.642 1.460 1.191 1.190 1.114

*Updated to Dec. 30, 2013.

24

Investor participation in volumes


Equities and derivatives segments
BOVESPA SEGMENT (EQUITIES)
12% 33%
27% 10% 10%

8% 35% 27% 27%


2008

7% 34% 26% 31%


2009

8% 30% 33% 26%


2010

9% 35%

8%
40%

7%
44%

8% 40%

9%
41%

7%

9% 42%

7%

8%

6%
45%

9%

6%
46%

6% 44%

5%

7%
46%

36% 27% 25%


2006

35%
30% 23% 2007

43%

44%

44%

42%

47%

33%

32%

33%

35% 17%

33% 16%

32%

32% 15%

32% 16%

33% 13%

32% 16%

34%

32%

33% 15%

32% 15%

32% 13%

25%
2005

21%
2011

18%
2012

15%
2013

18%

14%

15%

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

Individuals

Institutional Investors

Foreign Investors

Financial Institutions

Companies

Others

BM&F SEGMENT (DERIVATIVES)


7%
24%

7%
25%

9% 23% 17%

8% 23% 19%

8% 24% 20%

4% 30%
22%

4% 33%

5%
34%

5% 36% 25% 32%


2013

4% 38% 23% 33%

3%

4% 38%

4%
37%

4%
32%

5%
36%

6% 35% 23% 34%

6% 37%

6% 33% 26% 32%

7%

5%

5% 35%

41%

34%
25%

34% 25% 34%

12%

15%

23%

25% 34%
2012

25%

26% 31%

26%

26%

25%
32%

25% 30%

28% 30%

56%

51%

49%

48% 45%

42%

38%
2011

29%

32% 37%

33%

2005

2006

2007

2008

2009

2010

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

Individuals

Institutional Investors

Foreign Investors

Financial Institutions

Companies

Central Bank

25

FINANCIAL HIGHLIGHTS Reduction in expenses. Return to shareholders

26

Income Statement
History
SUMMARY OF INCOME STATEMENT (CONSOLIDATED)

(in BRL thousand)


Net revenue Expenses
Adjusted expenses

2009
1,510,569 (569,832)
(446,677)

2010
1,898,742 (633,504)
(543,881)

2011
1,904,684 (816,664)
(584,521)

2012
2,064,750 (763,080)
(563,487)

Operating income Operating margin Equity method result Financial result Income before taxation of profit Income tax and social contribution Net income*
Adjusted net income

940,737 62.3% 245,837 1,186,574 (304,505) 881,050


1,223,761

1,265,238 66.6% 38,238 289,039 1,592,515 (448,029) 1,144,561


1,586,374

1,088,020 57.1% 219,461 280,729 1,588,210 (539,681) 1,047,999


1,545,627

1,301,670 63.0% 149,270 208,851 1,659,791 (585,535) 1,074,290


1,612,136

Adjusted EPS (BRL )


*Attributable to shareholders of BM&FBOVESPA.

0.6104

0.7929

0.7932

0.8351

27

Revenue and Expense breakdowns


Diversified revenue sources as a differential, costs under control
REVENUE BREAKDOWN (3Q13)
EXPENSE BREAKDOWN (3Q13)

Gross Revenue: BRL 596.8MM

Expense: BRL 194.1MM

28

Adjusted Opex* Budget


Focus on cost control

Adjusted expenses increase below inflation


Focus on expenses control offset most of the inflationary adjustments over the past years 2013 budget reaffirmed 2013e vs 2012: 1.2% IPCA 2013e: 5.70% 2014e vs. 2013e: 6.1% IPCA 2014e: 5.95% CAGR 2010-14e: 2.7% IPCA 2010-14e: 6.0%

Considers the mid-point of 2013 and 2014 budgets; IPCA in 2014 based on market expectations released by the Central Bank in Dec. 13, 2013; Considers the mid-point of 2014 budget.
*

Adjusted to Company s depreciation, stock options plan, tax on dividends from the CME Group and provisions.

29

Capex Budget
Investments phase

Review of the 2014 Capex budget


Impacted by some projects that were revisited and FX rate 2013 budget reaffirmed Review of 2014 budget: to R$230 260 million from R$170 200 million
FX rate exposure of ~25% Update of the clearinghouses integration project Deepening initiatives (securities lending, market makers, pre-trade risk controls, among others)

Capex is expected to decline from 2015


2015e: R$190 220 million

30

Growth Path
Growth in business and results
GROWTH IN ADJUSTED EARNINGS PER SHARE
(in BRL)

GROWTH IN REVENUES AND RESULTS


(in BRL million)

31

Financial Highlights
Focus on cash generation and total shareholder return
HISTORY OF PROCEEDS
(in BRL million)

100% 80% 3.4% 87%


4.5%

100% 4.8% 4.5%

1,145 304 841 2010


Interest on capital

705
274 432 2009
Dividends

912 150 762 2011


Dividend Yield*

1,074 90 984 2012


Payout ratio (%)

SHARE BUYBACK: MAXIMIZING RETURN


(in BRL millon)

1,224 881 8.3%

1,586 1,145 9.4%


1,579

1,546 1,048 8.4%


1,518 606 912
2011
Buyback

1,612 1,074 8.9%

Adj. Net income Net income

ROIC

780 75 705
2009

435 1,145
2010
Total payout

1,091 16 1,074
2012

*Dividend Yield is the result of the sum of earnings per share distributed during the year divided by the average share price during the year. ROIC: Return on Invested Capital.

32

Financial Soundness
High liquidity and low indebtedness
Sound financial position - an important factor for the Company, given its role as CCP, guaranteeing the settlement of trades executed by global and Brazilian investors
SOUND FINANCIAL POSITION
R$ million Available funds Indebtedness Dec/10 1,677 1,043 Dec/11 1,582 1,172 Dec/12 1,964 1,279 Sep/13 1,960 1,375

CASH POSITION
R$ million

Standard & Poor s BBB+ (counterparty credit rating) A-2 (issuer) Moody s A3 (global scale issuer) A3 (Brazilian local currency issuer) Baa1 (global notes)

*Includes collateral pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed. **Includes third party collateral and restricted funds at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA).

33

APPENDIX

34

Financial Highlights
P/E analysis
Since 2009, the goodwill tax benefit has been recognized as deferred liability (being cash neutral), reducing the GAAP earnings
Tax Book in 2012 Current

R$ millions EBT (-) Goodwill amortization (-) Interest on capital (=) Taxable earnings Tax (34%)

Simulation without goodwill

GAAP Book in 2012 R$ millions EBT Deferred Tax Other taxes /credits Total taxes GAAP Net income

Current 1,511 539 (14) 525 1,074

Simulation without goodwill


1,511 282 1,228 : 14.2%

1,511 1,586 90 (165) (56)

1,511 680(2) 831 282

EPS 2012

P/E3

Estimated GAAP EPS (A)


Earnings without goodwill = (A) x :1,142

0.56 0.64
0.64 0.84

24.8 21.7
20.1 16.5

Stock price discounted by goodwill NPV (R$1.00 per share) / Earnings without goodwill
Adjusted Earnings

15-20% impact on P/E multiple Difference between GAAP EPS and the EPS adjusted to non existence of goodwill simulation

Different earnings impact the P/E calculation and distort comparisons and market consensus The reported adjusted net income reflects better the companys cash generation

1 Excludes

the investment in associate (CME Group) accounted under the equity-method. 2 Simulates the Interest on Capital amount that would be approved if there was no goodwill tax benefit; 3 Stock at R$13.79 (March 12th, 2013).

35

BOVESPA Segment
Raising Capital
PUBLIC OFFERINGS (BRL billion)
Updated to Dec. 30, 2013.

Follow-On
IPO

70.1 46.0 34.3


7.5 14.5 26.8 23.8 22.2

74.4
11.2

30.4 8.8
4.5 4.3

55.6

13.9
5.4 8.5

15.4 15.1

63.2

18.0
7.2 10.8

23.0
13.2
3.9 9.3 17.3 5.7

2004

2005

2006

2007

2008

2009

2010*

2011

2012

2013

PIPELINE: OFFERINGS ANNOUNCED SO FAR TO THE MARKET There are 3 offerings in the pipeline
IPOs (2): Ouro Verde Locao e Servio; Unidas; Follow-ons (1): Fras-le;

Additionally, there are 12 Real Estate Funds filed with CVM: estimated value of R$ 2.8 billion
* Excludes the portion acquired by the Brazilian government in the Petrobras offering, via the transfer of rights in barrels (BRL 74.8 billion).

36

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

*Updated to Dec 30, 2013.

37

BOVESPA Segment
Potencial to increase the number of listed companies
MARKET CAPITALIZATION TO GDP (%)*

2009
177% 174% 151%

2010

2011

2012

Hong Kong :
158%
137% 126% 111% 121% 110% 136% 129% 107% 105% 100% 89% 85% 87% 96% 87%

438%

481%

365%
138% 129%

421%

129%

117% 119% 119% 109% 104% 109%

124%
100%

75% 76% 75% 70% 67% 62% 60% 57%

69% 72% 72%


55% 55% 50% 49%

80% 44% 46% 45% 44% 35%

39%

Cingapura

Canad

Chile

EUA

Coria

Austrlia

Japo

Frana

ndia

Brasil

Inglaterra

MARKET CAPITALIZATION BY ECONOMIC SECTOR Dec05


15.7% 22.4%

China Mxico * Source: World Bank

Dec12
11.2% 26.8% 14.3%
11.5% 21.6%

2.2% 8.8% 20.4% 5.5% 0.4% 5.4% 5.1%

8.6% 11.1% 0.3% 2.6% 3.6%

2.5%

Oil, Gas and Biofuels Consumer Non Cyclical Public Utilities

Basic Materials Consumer Cyclical Financial

Capital Goods and Services Information Technology

Construction and Transportation Telecommunications

38

Regulatory Framework
STOCK EXCHANGE ACTIVITY
CVM Instruction 461 of Oct. 23, 2007

CLEARINGHOUSES ACTIVITIES
Law 10.214 of Mar. 27, 2001
Clearinghouses considered systemically important by the BCB should ensure settlement (i.e., act as CCPs)

Regulates the security markets and decides on the formation, organization, operation and dissolution of stock exchanges, futures and commodities exchanges and OTC markets Establishes the organization and minimal corporate governance structure of organized market management bodies Establishes self-regulation activities of the in the organized market management bodies

BCB Resolution 2.882 of Aug. 30, 2001


Clearinghouses shall guarantee, at least, settlement of the highest net amount owed

Access criteria must be public and allow wide participation

Circular BCB 3.057 of Aug. 31, 2001


Rules, manuals and safeguard mechanisms must be approved by BCB

Maintenance of a secondary data center and contingency procedures


Supervision by BCB

CVM Instruction 441 of Nov. 10, 2006


Securities lending with guaranteed settlement - final beneficiary model

39

BM&FBOVESPA Market Supervision (BSM)


Self-Regulation Entity
BSM is is a not-for-profit association organized as a self-regulatory and market surveillance organization, responsible for regulatory and oversight activities relative to the markets we operate. Main activities of BSM

Organizational chart

Monitor 100% of the participants transactions Assess 100% of intermediaries Enforcement Education

Supervision Board (12 members*)

Atribuies da BSM estabelecidas na BSM Instruo duties established in CVM Instruction CVM 461/2007:

461/2007
Monitor and supervise transactions in the organized markets Determine deficient compliance with the rules and norms Monitor the activities of the Stock Exchange Initiate and prosecute disciplinary administrative legal proceedings Apply penalities
Self regulation Officer

Strategic Committee

Audit

Market supervision

Legal dept.

Analysis and strategy


40

* 9 independent

RESULTS FOR 3Q13

41

3Q13 vs. 3Q12 Highlights


Solid results despite the challenging environment
FINANCIAL HIGHLIGHTS
Total revenue: R$596.8 million, +2.7% BOVESPA seg.: R$257.1 million, -2.4% BM&F seg.: R$228.6 million, +4.3% Other revenue: R$111.0 million, +12.5% Net revenue: R$535.4 million, +2.6% Adjusted expenses: R$150.2 million, +10.4% Operating income: R$341.3 million, -1.6% Adjusted net income: R$403.7 million, +0.8% Adjusted EPS: R$0.211, +1.7% Dividends: payment of R$225.3 million in 3Q13, R$0.118 per share (80% of GAAP net income) EBITDA: R$417.1 million, +2.2% and margin of 77.9%
(according to CVM Rule 527/12 that does not exclude equity method accounting).
1Expenses

OPERATIONAL HIGHLIGHTS
BOVESPA segment: ADTV: R$7.2 billion, +0.8% Margin: 5.361 bps, -6.4% BM&F segment:

ADV: 2.5 million contracts, -7.5%


RPC: R$1.404, +10.6% High growth products and market segment: Securities Lending: +26.0% average of open interest LCAs (agribusiness credit bills): assets registered +190.6% (R$73.8 billion in Sep/13) HFTs: volumes increased 32.8% in the Bovespa Segment and 19.6% in the BM&F segment

MAIN PROJECTS AND UPDATES


Ibovespa: new methodology announced in Sept/13

Changes in options fee policy: volume discounts for all day trade transactions in the options on single stock market, in line with the change announced for cash equity in Mar/13
Fixed income fee policy: changes regarding new issuances analysis, custody, account maintenance and trading SMEs: proposals for developing the access market
42

adjusted to Companys depreciation, stock options plan, tax on dividends from the CME Group and provisions. 2Net income adjusted by: i) the effect of deferred liability recognition in connection with temporary differences from amortization of goodwill for tax purposes; ii) the impact of the stock options plan; iii) investment in affiliates (CME Group) accounted for under the equity method, net of taxes; and iv) taxes paid overseas to be compensated.

BOVESPA Segment Performance


Flat ADTV despite the challenging environment
AVERAGE DAILY TRADING VALUE (ADTV) AND TRADING MARGIN

3Q13 vs. 3Q12:


ADTV: R$7.2 bn (+0.8%): Increased turnover velocity, which reached 73.7% 32.8% increase in HFTs volumes 2.2% decrease of average market capitalization Margin: 5.361 bps vs. 5.728 (-6.4%): Lower fees from options on single stocks, reflecting higher volumes of market makers Higher participation of HFTs in the overall ADTV
5.728 5.573
5.706 5.314 5.361

7.2
3Q12

7.0
4Q12

7.5
1Q13

8.3

7.2
3Q13

2Q13
Margin (bps)

ADTV (R$ billions)

TRADING MARGIN (in basis point - bps)


Market
Cash market Derivatives on single stocks Options Market Forward Market Total BOVESPA

AVERAGE MARKET CAP. AND TURNOVER VELOCITY


3Q12 5.308 13.788 14.091 12.999 5.728

3Q13 4.989 13.007 13.010 12.998 5.361

43

BM&F Segment Performance


Higher RPC offsets volumes fall
AVERAGE DAILY VOLUME (ADV) AND AVERAGE REVENUE PER CONTRACT (RPC)
3Q13 vs. 3Q12: ADV: 2.5 million contracts (-7.5%): -15.4% ADV of Brazilian Real interest rate contracts, +8.8% ADV of FX contracts and +22.3% ADV of minisized contracts RPC: +10.6% (mix effect and FX rate appreciation): Brazilian Real interest rate: lower participation in overall volume; and higher RPC (+4.8%) due to lengthening of contracts FX and USD Interest rate contracts (+12.4% and +25.0%, respectively): FX rate appreciation (USD/R$)
(in millions of contracts)

REVENUE PER CONTRACT AND FX RATE


(in R$) ~45% of derivatives revenue was priced in USD in 3Q13

INTEREST RATES IN R$ - ADV BY MATURITY


(in millions of contracts)

*Average FX

rate (R$/US$) in the quarter, considering the closing price for each month.

44

Revenue Breakdown in 3Q13


Diversified revenue sources as a differential
REVENUE BREAKDOWN

CASH MARKET TRADING REVENUE ACCOUNTED FOR 6.2% OF TOTAL

DERIVATIVES REVENUES (BM&F + BOVESPA) ACCOUNTED FOR 42.2% OF THE TOTAL


37.6%: Cash Market 6.2%: Trading

6.2% 20.2%

31.4%: Post-Trade 4.6%: Stock and Indices Derivatives2

2.8% 2.3% 14.4%

Total Revenue 31.4% R$596.8 million

37.6%: Financial/Commodity Derivatives2 18.1%: Brazilian Real interest rate contracts 14.4%: FX Contracts 2.3%: USD interest rate contracts 2.8%: Other Financial/Commodity Derivatives 20.2%: Other Revenues 4.3%: Securities Lending 5.1%: Depository, Custody and Back-Office 3.0%: Vendors 1.9%: Trading Access 2.0%: Listing 45

4.6% 18.1%

Revenue breakdown for the cash market (trading + post-trade) reflects the pricing policy changes which came into force in Apr/13. i) Reduction of trading fee to 0.5 bps from 0.7 bps for all investors ii) Post-trade increase to 2.0 bps from 1.8 bps for institutional investors and day trades 2Trading and Post-trade

The Business Model Strengthens


Resilience from diversified revenue sources
Bovespa Segment new clients, products development and higher market sophistication
Revenues in R$ millions

Revenues have been supported by a higher turnover velocity CAGR 2009-13 8.7% - HFTs - Options on single stocks - Securities lending activity - Strategies

BM&F Segment credit expansion, volatility, FX rate changes and market sophistication
Revenues in R$ millions

CAGR 2009-13 15.5%

Revenues from the two most significant groups of contracts are growing consistently - Market sophistication, volatility and the recent currency depreciation

Other revenue development of markets and new products and services


Revenues in R$ millions

Revenues from selected products growing consistently CAGR 2009-13 9.6% - Sec. lending also complements cash, option and future markets - Tesouro Direto and LCAs as part of the Companys strategy in the fixed income market 46

3Q13 Expenses
Continuous focus on cost control and operational efficiency
TOTAL EXPENSE BREAKDOWN ADJUSTED EXPENSE
(in R$ millions)

Expense: R$194.1 million

ADJUSTED EXPENSE INCREASED 10.4% OVER 3Q12 IN LINE WITH THE 2013 BUDGET (R$560-580 MILLION)
Adjusted Personnel: +16.9%, basically due to the effects of annual union bargain in Aug/13 and decrease in capitalized personnel costs related to ongoing projects. Data processing: +31.8%, due to higher expenses for services and maintenance of software and hardware that support IT platforms recently deployed. Third Party: -34.8%, due to lower costs with consulting and legal advisors.
*Includes expenses with maintenance in general, marketing, communication, taxes adjusted by the dividends from CME Group, board and committee members compensation and others (excluding provisions).

47

Financial Highlights
Returning cash to shareholders
CASH AND FINANCIAL INVESTMENTS
(In R$ millions)

RETURN TO SHAREHOLDERS BUYBACK PROGRAM


From Jul/13 to Oct/13, 13.1 million shares were repurchased, totaling R$158.9 million (more than 0.6% of the Companys capital stock) The current buyback program allows BM&FBOVESPA to repurchase up to 60 million shares until Jun/14.

PAYOUT

Market participant cash collateral includes R$0.7 billion


pledged in the FX Clearinghouse that was settled on Oct 1st, 2013.

Payment of R$225.3 million in dividends, equivalent to R$0.118 per share and 80% of GAAP net income

Payment on Nov. 27, 2013 based on shareholders position dated Nov. 11, 2013

FINANCIAL RESULTS
Financial result of R$49.6 million, up 8.9% YoY

CAPEX
In 3Q13, investments amounted to R$82.1 million, totaling R$202.5 million in 9M13 CAPEX budget ranges: 2013: between R$260 290 million 2014: between R$170 200 million (under review)

Financial income up 16.9%, reflecting, basically higher interest rates


Financial expenses rose 33.4%, reflecting the currency depreciations impact on the interest of notes issued overseas

*Includes collateral pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed. **Includes third party collateral and restricted funds at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA).

48

High growth products


Increasing revenue diversification
OPERATIONAL FIGURES
CAGR: +181% CAGR: +27%

REVENUE

CAGR: +39%

CAGR: +56%

CAGR: +35%

CAGR: +280%

CAGR: +37%

Strong revenue growth of selected products In 9M13, representing 7.6% of total revenue, or R$141.4 million Products well received by clients Continuous developments to maintain strong growth trend
49

Summary of Balance Sheet (Consolidated)


ASSETS LIABILITIES AND SHAREHOLDERS EQUITY

(in R$ millions)
Current assets Cash and cash equivalents Financial investments Others Non-current assets Long-term receivables Financial investments Others Investments Property and equipment, net Intangible assets Goodwill Total Assets

9/30/2013 3,940.9 754.7 2,978.6 207.6 21,351.2 1,040.3 764.5 275.8 3,270.0 391.8 16,649.1 16,064.3 25,292.1

12/31/2012 3,536.3 43.6 3,233.4 259.3 20,610.8 808.9 573.6 235.2 2,928.8 361.0 16,512.2 16,064.3 24,147.1

(in R$ millions)
Current liabilities Collateral for transactions Others Non-current liabilities Debt issued abroad Deferred inc. tax and social contrib. Others Shareholders' equity Capital Capital reserve Others Non-controlling interests Liabilities and Shareholders' Equity

9/30/2013 2,287.1 1,617.9 669.2 3,667.3 1,357.0 2,156.6 153.7 19,337.6 2,540.2 16,051.5 730.1 15.8 25,292.1

12/31/2012 1,660.6 1,134.2 526.4 3,072.6 1,242.2 1,739.6 90.7 19,413.9 2,540.2 16,037.4 820.3 16.0 24,147.1

50

Reconciliation 3Q13
ADJUSTED NET INCOME RECONCILIATION
(in R$ millions, unless otherwise indicated) GAAP net income* Stock options plan Deferred tax liabilities Equity in income of investees (net of taxes) Recoverable taxes paid overseas Adjusted net income
* Attributable to BM&FBOVESPA shareholders.

3Q13 281.6 5.6 138.9 38.2 15.8 403.7

3Q12 276.5 7.8 134.8 32.6 14.1 400.6

Change 3Q13/3Q12 1.8% -28.0% 3.1% 17.4% 11.7% 0.8%

2Q13 350.8 7.8 138.9 46.3 18.3 469.6

Change 3Q13/2Q13 -19.7% -28.1% 0.0% -17.4% -13.7% -14.0%

ADJUSTED EXPENSES RECONCILIATION

(in R$ millions, unless otherwise indicated) Total Expenses Depreciation Stock options plan Tax on dividends from the CME Group Provisions Adjusted Expenses

3Q13 194.1 (32.5) (5.6) (5.1) (0.6) 150.2

3Q12 174.8 (24.1) (7.8) (4.7) (2.1) 136.0

Change 3Q13/3Q12 11.1% 35.0% -28.0% 9.5% -70.5% 10.4%

2Q13 176.8 (28.8) (7.8) (5.1) (1.9) 133.2

Change 3Q13/2Q13 9.8% 12.8% -28.1% 0.2% -66.5% 12.8%

51

Summary of Income Statement (consolidated)

3Q13 Net Revenues Expenses 535.4

3Q12 521.6

Change Change 2Q13 3Q13/3Q12 3Q13/2Q13 2.6% 599.8 -10.7% 9.8% 11.1% (176.8)

(194.1) (174.8)

Operating Income
Operating margin Equity in Income of Investees Financial Result EBT

341.3
63.7% 43.3 49.6 434.2

346.8
66.5% 37.2 45.5 429.6

-1.6%
-275 bps 16.4% 8.9% 1.1%

423.0
70.5% 51.4 43.1 517.5

-19.3%
-678 bps -15.7% 15.1% -16.1%

Net Income*
Adjusted Net Income Adjusted EPS (in R$) Adjusted Expenses

281.6
403.7 0.211

276.5
400.6 0.208

1.8%
0.8% 1.7%

350.8
469.6 0.244

-19.7%
-14.0% -13.5% 12.8%

(150.2) (136.0)

10.4% (133.2)

* Attributable to BM&FBOVESPA shareholders.

52

Final Remarks

REVENUES AND RESULTS Resilient revenues and results in a challenging market environment Growing diversification of products and revenues INVESTMENTS Commitment with the maintenance of market integrity Strengthening the competitive edge by delivering efficiency to the market FOSTERING CLIENTS AND MARKET Strengthening ties with market participants and clients Becoming a one-stop-shop by increasing the diversity of products for clients

COMMITMENT TO CAPITAL RETURN FOR SHAREHOLDERS Maintained focus on cost control High payout ratio combined with share buyback
53

BM&FBOVESPA INVESTOR RELATIONS


+55 (11) 2565 4729 / 4418 / 4834 / 7073 / 4007 ri@bmfbovespa.com.br

ir.bmfbovespa.com.br
54