Annual and Extraordinary Shareholders' Meeting - 04.20.2010 - Practical Guide

7/30/2019 Annual and Extraordinary Shareholders' Meeting - 04.20.2010 - Practical Guide

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So Paulo, March 19, 2010.

Dear Shareholders,

I am pleased to invite you to our combined annual and extraordinary shareholders meetings,

which will be held on April 20, 2010, at 11 a.m. It may have come to your attention (per

our call notice published in Valor Econmico and the Ocial Gazette o the State o So

Paulo) that exceptionally this year these meetings will be held in our premises at Rua XV de

Novembro 275, downtown in the city o So Paulo, state o So Paulo, Brazil, rather than at

the registered oce address.

We, at BM&FBOVESPA, welcome this opportunity to provide you with an update on ourgrowing business at a time when, having gone through the initial stage o integrating BM&F

and Bovespa, the two leading local exchanges, amid the uncertainties brought about by the

global nancial crisis and economic slowdown, we are now on course to enjoying a period

o growth and expansion to other international markets.

In addition to capturing synergies, enhancing management and consolidating our business

as an integrated securities, commodities and utures exchange, we have been working

steadastly towards implementing signicant developments in our technology inrastructure,

negotiating strategic international alliances, identiying cross border opportunities or

partnerships, and strengthening our sustainability practices, while generating value or

shareholders.

This is the background scenario or many o our initiatives in recent months, some o which

now bearing ruit and reected in the nancial statements you will be judging at the annual

meeting this coming April 20. This is also the backdrop or the decision we will be asking

you to make at the extraordinary meeting. The order o business has been provided in the

call notice and in the practical guide I am now pleased to hand over to you. At the annual

meeting you will be asked to review and judge the 2009 nancial statements, decide on

the net income allocation proposal and management compensation proposal or 2010.

Lastly, but no less importantly, at the extraordinary meeting you will be asked to vote on the

meaningul investment opportunity reported in our notice o material act dated February12, 2010, meaning the acquisition o shares in the CME Group Inc., the exchange operator

o our designated U.S. contract markets, i.e., CME (the Chicago Mercantile Exchange), CBOT

(the Chicago Board o Trade), NYMEX (the New York Mercantile Exchange), and COMEX

(Commodity Exchange, Inc.).

We value your opinion and consider extremely important that you participate in these

meetings. Shareholders meetings provide a unique venue or discussions about the business,

nancial condition and perormance o BM&FBOVESPA, and or inormed decision-making

on matters o consequence or our uture.

Thereore, as part o our commitment to ollow best corporate governance and transparency

practices, and or your convenience, we will be making available to you the Online General

Meetings platorm provided by Assembleias Online or electronic voting or voting by proxy,


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which you may access at www.onlinegeneralmeetings.com or www.assembleiasonline.com.

br, as you preer, or instructions in English or in Portuguese.

Furthermore, I would recommend that you read the Shareholders Meeting Guide careully,as well as the other documents available to you at our investor relations gateway at www.

bmbovespa.com.br/ri/, or the Companys website at www.bmbovespa.com.br or that o

the Brazilian Securities Commission (Comisso de Valores Mobilirios), or CVM, at www.cvm.

gov.br. You will nd in the Guide inormation related to matters included in the order o

business, along with detailed inormation on what to do to participate in these meetings,

documents we may require rom you, and so orth, including proxy and power o attorney

orms.

Come join us on April 20. I look orward to meeting you then.

Yours sincerely,

Arminio Fraga Neto

Chairman o the Board


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Table o ConTenTs

A practical guide ................................................................................................................................................7

a. Annual Shareholders Meeting ................................................................................................................7

b. Extraordinary Shareholders Meeting ..................................................................................................7

C. How to participate; Appointing a delegate ........................................................................................8

C.1. Proxy .................................................................................................................................................8

C.1.1 Electronic proxy orm. ...................................................................................................8

C.1.2 Paper proxy orm. ........................................................................................................ 10

C.1.2.1 Prior registration. ...................................................................................................... 12

C.2. Public proxy solicitation .......................................................................................................... 13

D. Matters in the Order o Business ......................................................................................................... 13D.1 Annual Shareholders Meeting ............................................................................................. 13

D.2. Extraordinary Shareholders Meeting ............................................................................... 16

e. Dcumt rtd t mttr i t rdr ui

t cmid rdr mtig bM&boVesPa ...................................... 17

attcmt ..................................................................................................................... 19

Attachment I Managements Discussion and Analysis ................................................................. 19

Attachment II Required inormation on net income allocation proposal

(CVM Instruction 481/09) ............................................................................................................................55

Attachment III Board and Management Compensation Proposal(Reerence Form, Section 13) .................................................................................................................... 63


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PRACTICAL GUIDE TO THE APRIL 20, 2010 COMBINED ANNUAL ANDEXTRAORDINARY SHAREHOLDERS MEETINGS OF BM&FBOVESPA

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PRACTICAL GUIDE TO THE APRIL 20, 2010COMBINED ANNUAL AND EXTRAORDINARY

SHAREHOLDERS MEETINGS OF BM&FBOVESPA

a PRaCTICal GUIDe

This guide contains practical and substantive inormation aimed to acilitate attendance

and participation at the combined annual and extraordinary shareholders meetings o

BM&FBOVESPA called to convene on April 20, 2010.

This initiative seeks to bring together communication practices currently adopted by the

Company in the interest o enhanced transparency towards shareholders and the ormal

requirements o Brazilian Corporate Law (Law No. 6,404 dated December 15, 1975, as

amended) and CVM Instruction 481 issued by the Brazilian Securities Commission (Comisso

de Valores Mobilirios), or CVM (Instruction No. 481 dated December 17, 2009).

a. annUal shaReholDeRs MeeTInG

Pursuant to Brazilian Corporate Law, the Management o BM&FBOVESPA has called the

u rdr mtig, which is scheduled to be held on:

Dt: April 20, 2010

Pc: Rua XV de Novembro, 275, downtown, in So Paulo,

state o So Paulo, Brazil

Tim: 11 a.m.

The order o business or the annual meeting includes considering and deciding on the

ollowing matters:

(1) Management report and the nancial statements as o and or the year ended

December 31, 2009;

(2) Proposal on allocation o net income or the year ended December 31, 2009; and

(3) Proposal on aggregate yearly compensation payable in 2010 to members o the board

o directors and the board o executive ocers.

Substantive inormation on each o these matters is provided in item D.1 below and the

attachments to this guide.

b. exTRaoRDInaRy shaReholDeRs MeeTInG

In addition, such as permitted by Brazilian Corporate Law, the Management o BM&FBOVESPA

has called the trrdir rdr mtig, which or convenience o the


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shareholders will be held in combination with the annual meeting, on the same date, and at

the same time and place:

Dt: April 20, 2010Pc: Rua XV de Novembro, 275, downtown, in So Paulo,

state o So Paulo, Brazil

Tim: 11 a.m.

The order o business at the extraordinary meeting calls or a decision on BM&FBOVESPAs

proposed acquisition o shares in the CME Group, Inc. (CME), as submitted by Management

and previously announced in a notice o material act released on February 2, 2010.

Inormation regarding the proposed acquisition is provided in item D.2 o this guide.

C. how To PaRTICIPaTe; aPPoInTInG a PRoxy

Your participation is extremely important to the Company.

Under the Bylaws, a quorum to convene the combined annual and extraordinary shareholders

meetings requires attendance by holders o record representing at least 25% o the shares

o capital stock, such that, absent a quorum, the Company will announce another date

or the combined meetings to convene on second call with any number o attending

shareholders.

Shareholders may attend and participate i pr, or as rprtd ppitd

dgt rprttiv, or attorney-in-act, as a delegate, or proxy, would qualiy under

Brazilian law.

In addition to arranging or prior registration, pursuant to instructions set orth below in this

item, the documents required or shareholders in attendance are the ollowing, as applicable:

Natural persons Idticti dcumt (either the original or a certied copy)

Legal persons Crprt dcumt vidcig cpcit t ct grprttiv r t rdr (either the original or a

certied copy)Idticti dcumt t g rprttiv (either theoriginal or a certied copy)

C.1. PRoxy (PoweR o aTToRney)

C.1.1 ectric Pr rm

In order to acilitate attendance and encourage shareholder participation, BM&FBOVESPA

will be making available to you the Online General Meetings platorm provided by

Assembleias Online

or electronic voting or voting by proxy.

Shareholders that wish to vote by proxy may do so using a valid digital certicate, whether

issued by a private certicate provider or by ICP Brasil, the certication authority or the


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Brazilian public key inrastructure, established pursuant to Provisional Measure No. 2200-2

dated August 24, 2001.

In any event, whether to vote or lodge the electronic proxy orm, you will be required toregister at the Assembleias Online, applying or the cost ree certicate (or registering your

existing IVP Brasil-issued certicate) and take other steps prior to the date o the meeting.

Digital certication or this purpose is ree o cost. Assembleias Online is prepared to start

your registration process, and you may do so now by accessing their website at www.

onlinegeneralmeetings.com or www.assembleiasonline.com.br, as you preer. In the ormer

gateway instructions are provided in English; in the latter, instructions are in Portuguese.

Step 1 Registration

a) Access the site at www.onlinegeneralmeetings.com or instructions in English,

and click on register and receive you digital certicate or ree. Select I already

have a certicate or, as the case may be, I do not have a certicate. You will

be asked to select your investor prole as a Brazilian resident or non-resident

individual (retail) investor, or as a local or oreign institutional investor. This

page includes a link to the list o documents you will be required to remit by

mail ater you register (see step 2).

b) You should ll out the registration orm, enter the orm, and conrm your data.

You will then be given access to the terms o adherence orm, i you are an

individual investor, or a corporate representation orm, i you are a legal person.

You must print the orm, initial all pages, sign it, have your signature certied

by a notary, and proceed as instructed.

I you currently hold a certicate issued by ICP-Brasil, you may register and

then have the terms o adherence digitally signed. This will qualiy you to

vote remotely at this website. I you wish to lodge a proxy you may do so ater

promptly registering, and proceed as set orth in Step 3.

Step 2 Registration validation process; Issuance o digital certicate

a) In response to your registration, Assembleias Online will send you an emaillisting the documentation required or the registration validation, including

the terms o adherence orm. These documents must be sent by mail to

Assembleias Online, at the address stated in the email.

b) Promptly upon veriying the documents and validating your registration,

Assembleias Online will send you conrmation by email, indicating the

procedure regarding issuance o the certicate to you.

c) Following the certicate issuance you will be qualied to participate in the

electronic voting process o the shareholders meetings o BM&FBOVESPA.

Step 3 Electronic proxy orm

a) Ater completing the above steps, in order to vote by proxy, you will just log


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in at www.onlinegeneralmeetings.com or www.assembleiasonline.com.br, as

you preer, select the link to shareholders meetings o BM&FBOVESPA, vote

and lodge the proxy orm by signing it digitally;

b) Assembleias Online will provide you with email conrmation that your votehas been registered.

The period to appoint your delegate and lodge the proxy orm through the

Assembleias Online website will open on April 6 and close on April 18, 2010.

C.1.2 Ppr pr rm

I you would rather appoint a delegate by means o a paper proxy orm (or power o attorney,

as a proxy qualies under local legislation) you may do so in accordance with Brazilian

Corporate Law, by appointing any o the persons listed under article 126, paragraph 1, othe law, meaning by appointing any shareholders, lawyer, nancial institution, or director or

ocer o the Company as your delegate.

In any event, in case you cannot attend the meetings or would have diculty appointing

a delegate to vote or you at the annual and extraordinary shareholders meetings, the

Company ofers you the alternative o appointing three o our executive ocers, who would

vote your shares pursuant to your voting instructions and the proxy orm provided below.

The executive ocers that would act as your delegates are:

to vote the shares IN FAVOR o the proposals and matters included in the order o1)

business:

edmir Pit, Brazilian, married, chie executive ocer, domiciled in the Capital City o the

State o So Paulo, at Praa Antonio Prado, 48, bearer o Identity Card RG No. 6.572.298 and

enrolled with the Individual Taxpayers Registry under CPF/MF No.614.304.988-20;

to vote the shares AGAINST o the proposals and matters included in the order o2)

business:

Cr K l rrir, Brazilian, married, chie nancial ocer, domiciled in the Capital

City o the State o So Paulo, at Praa Antonio Prado, 48, bearer o Identity Card RG No. 7.272.675,and enrolled with the Individual Taxpayers Registry under CPF/MF No. 043.046.308-14;

to ABSTAIN FROM VOTING the shares regarding the proposals and matters included3)

in the order o business:

Ccr augut Viir nt, Brazilian, married, economist, chie operations ocer, domiciled

in the Capital City o the State o So Paulo, at Praa Antonio Prado, 48, bearer o Identity

Card RG No. 14.189.028-9, and enrolled with the Individual Taxpayers Registry under CPF/

MF No. 128.501.208-98.

The pr rm is provided below.

The Company will not require the shareholders to have their proxy orms notarized and/or

consularized.


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PRoxy oRM PoweR o aTToRney

PRoxy oRMPoweR o aTToRney

[NAME OF SHAREHOLDER], [IDENTIFICATION INFORMATION] (the Pricip), acting in its/his/

her capacity o holder o record o shares (the Shares) issued by bM&boVesPa s.a. - b d

Vr, Mrcdri utur, (the Company), hereby names and appoints:

edmir Pit, Brazilian, married, chie executive ocer, domiciled in the Capital City o the State

o So Paulo, at Praa Antonio Prado, 48, bearer o Identity Card RG No. 6.572.298, enrolled with the

Individual Taxpayers Registry under CPF/MF No.614.304.988-20, to vote the Shares IN FAVOR o

the proposals and matters included in the order o business, strictly in accordance with the express

voting instructions o the Principal, as provided and set orth below.

Cr K l rrir, Brazilian, married, chie nancial ocer, domiciled in the Capital City

o the State o So Paulo, at Praa Antonio Prado, 48, bearer o Identity Card RG No. 7.272.675,

enrolled with the Individual Taxpayers Registry under CPF/MF No. 043.046.308-14, to vote the

Shares AGAINST the proposals and matters included in the order o business, strictly in accordance

with the express voting instructions o the Principal, as provided and set orth below.

Ccr augut Viir nt, Brazilian, married, economist, chie operations ocer, domiciled in

the Capital City o the State o So Paulo, at Praa Antonio Prado, 48, bearer o Identity Card RG No.

14.189.028-9, enrolled with the Individual Taxpayers Registry under CPF/MF No. 128.501.208-98,

to ABSTAIN FROM VOTING the Shares regarding the proposals and matters included in the order

o business, strictly in accordance with the express voting instructions o the Principal, as providedand set orth below.

Each to act as proxy and attorney-in-act or, and represent the Principal in its/his/her capacity

o shareholder o the Company, or which purpose the Principal hereby grants them powers to

attend and represent it/him/her at the Annual and Extraordinary Shareholders Meetings o the

Company called to convene on April 20, 2010, at 11 a.m., exceptionally at Rua XV de Novembro,

275, Downtown, City o So Paulo, State o So Paulo, and not at the registered oce address, and

therein to review and speak in the name and on behal o the Principal and, in particular, to vote the

Shares regarding the proposals and matters included in the order o business, doing so strictly in

accordance with the express voting instructions o the Principal, as provided and set orth below.

ordr bui

I at t au srdr Mtig:

(1) To review o the management report, and to review, deliberate and vote the nancial

statements as o and or the year ended December 31, 2009;

I vr agit ati

(2) To consider the proposal on allocation o net income or the year ended December 31, 2009.

I vr agit ati


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(3) To set the aggregate compensation payable to members o the board o directors and the

board o executive ocers in 2010, pursuant to a board proposal.

I vr agit ati

II at t etrrdir srdr Mtig:

(1) To vote on BM&FFBOVESPAs proposed acquisition o shares o common stock o the CME

Group, Inc. (CME), pursuant to the Notice o Material Fact released on February 12, 2010.

I vr agit ati

For purposes o this power o attorney, the powers granted herein are meant only or the delegates

(attorneys-in-act) appointed herein to attend the Annual and the Extraordinary Shareholders

Meetings and vote the Shares pursuant to the voting instructions set orth herein. This instrumentneither includes nor assumes any right or obligation or any proxy to take any action other than

as strictly required or aithul perormance hereo. The delegates are hereby authorized to abstain

rom voting the Shares on any matter concerning which, in his discretion, proper and suciently

detailed voting instructions have not been provided.

This power o attorney has a term o efectiveness o two (2) months, commencing rom the date

hereo.

[City], [Month] [day], [2010]

_____________________________

Principal

By:

Title

This document will not require being notarized or consularized.

C.1.2.1 Prir Rgitrti

In case you elect to issue a paper proxy orm, the original or certied copies o the documents

listed under C.1.1 and C.1.2 may be delivered to the registered oce o BM&FBOVESPAup until beore the meetings on April 20.

However, in the interest o a smooth admittance process on the date o the meetings, a

special request is made or any documents to be delivered to the Company as soon as

practical starting rom April 6, 2010.

However, original or certied copies o documents delivered by ax or email only will still

be required to be delivered to the registered oce o BM&FBOVESPA beore the time o the

combined shareholders meetings.

Documents addressed to the Company must be delivered to:

Praa Antonio Prado, 48, 4 andar, Centro, CEP: 01010-901, So Paulo, SP Brazil

Care o the Investor Relations Department


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Telephone numbers +55 11 2565-5133 +55 11 2565-5151 + 55 11 2565-5152

Fax number +55 11 3101-0028

Email: [email protected].

C.2. PUblIC PRoxy solICITaTIon

Pursuant to Brazilian Corporate Law and CVM Instruction 481, shareholders whose interest

in BM&FBOVESPA shares is in excess o hal a percent (0.5%) o the shares o stock may enter

proxy solicitations in the at the Assembleias Online system.

Proxy solicitations must include a drat proxy orm and the inormation and documents

required by CVM Instruction 481, in particular under Annex 23 o the Instruction, and must

also be delivered to:

Praa Antonio Prado, 48, 7 andar, Centro, CEP: 01010-901, So Paulo, SP BrazilCare o: Chie Financial and Investor Relations Ocer, Mr. Carlos Kawall Leal Ferreira.

The Company and its directors and ocers bear no responsibility or any inormation

included in any proxy solicitations by shareholders.

The Company will take steps to have public proxy solicitations rom shareholders included in

the Assembleias Online system within two (2) business days ater receipt thereo, and be given

the same visibility as any other document the Company is making available in that platorm.

D. oRDeR o bUsIness oR The CoMbIneD annUal anD The

exTRaoRDInaRy shaReholDeRs MeeTInGs o bM&boVesPa

D.1 annUal shaReholDeRs MeeTInG

Under Brazilian Corporate Law, a corporation is required to hold the annual shareholders meeting

within our months ater the end o the year, at which shareholders typically review and judge the

nancial statements; decide on the allocation o net income or the year; decide on the mandatory

dividend distribution, establish the aggregate annual compensation payable to directors and

ocers and, as the case may be, establish the scal council and elect the scal council members.

Set orth below is additional inormation on the matters listed in the order o business or

the annual shareholders meeting:

irt itm i t rdr ui To review the management report; to review,

deliberate on, and vote on the nancial statements

as o and or the year ended December 31, 2009.

At a board meeting held on February 23, 2010, the directors approved the management

report, the nancial statements prepared under responsibility o management as o and orthe year ended December 31, 2009, and the relevant independent auditors report, which

were published on February 24, 2010 in the Valor Econmico newspaper and in the Ocial

Gazette o the State o So Paulo.


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ici sttmt

The annual nancial statements express the nancial condition o BM&FBOVESPA as o

and or the year presented, and the changes in shareholders equity occurred in the year,

permitting shareholders to assess the business, results o operations, the net equity and thelevel o protability o the Company.

Our nancial statements include the balance sheet, the statement o changes in shareholders

equity, the cash ow statement, the income statement and the value added statement. These

nancial statements are supplemented by related notes and inormation added at the end

o the nancial statements as an additional source o inormation or shareholders and or

clarication on line-items that are part o the nancial statements.

Mgmt rprt

The management report is a section o a companys annual report which discusses thenancial condition and results o operations o the Company, including the main line items

o the income statement, providing an overview o the previous year o operations and how

the company ared in that time period, in addition to providing statistical and operating

inormation. It also typically discusses the company in many other dimensions, including,

or example, the business, the industry, the subsidiaries and aliates, corporate governance,

sustainability and corporate responsibility, among other things.

Idpdt uditr rprt

PricewaterhouseCoopers Auditores Independentes has audited our nancial statements and

issued a report stating that in their judgment the nancial statements present airly, in all material

respects, the nancial position and results o operations o the Company and its subsidiaries.

Dcumt t rd i umittig t rdrAvailable at the Companys registered oce and in the investor relations website, and in the

websites o BM&FBOVESPA and the Brazilian Securities Commission (Comisso de Valores

Mobilirios), or CVM, are the ollowing documents related to this item o the order o business:

a) Management report;

b) Financial statements;

c) Managements discussion and analysis o nancial condition and results o operations,

such as required under section 10 o the Reerence Form adopted pursuant to CVMInstruction 480 dated December 7, 2009, and attached hereto as Attachment II;

d) Independent auditors report;

e) The annual inormation orm, also known as standardized nancial statement

(demonstraes nanceiras padronizadas, or DFP), as required by the CVM; and

) Audit committee report, which presents the ndings and conclusions o our audit

committee regarding the audit activities perormed in the previous year.

scd itm i t rdr ui To consider the proposal on allocation o the net

income or the year to December 2009.

Rather shortly put, BM&FBOVESPAs net income or the year ended December 31, 2009, in the

amount o R$881,050,370.16, as adjusted pursuant to the requirements o Brazilian Corporate

Law.


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At a meeting held on February 23, 2010, the board o directors approved and put orward a

proposal regarding the ollowing allocations o net income or the year to December 2009,

which totaled R$881,050,370.16:

(a) R$20,859,264.91 to ofset losses related to sales o treasury stock;

(b) R$155,191,105.25 to the bylaws reserve or investments and the special saeguard unds

and clearing and settlement mechanisms adopted by the Company;

(c) R$705,000,000.00 to the dividend account.

A breakdown o this R$705,000.000.00 allocation is set out as ollows: the amount o

R$183,500,000.00 corresponds to interim dividends distributed in the course o 2009;

R$273,500,000.00 is the amount previously distributed by way o interest on shareholdersequity; and the balance o R$248,000,000.00 we propose to distribute as dividends. This is the

proposal Management is submitting to the annual meeting, which also sets May 14, 2010, as

the dividend payment date. As estimated by Management, the proposal will correspond to

a distribution o R$0.12360196 per share (which amount may change as a result o treasury

stock being reissued or ulllment o stock options exercised pursuant to the Companys

stock option plan).

Attachment II to this guide provides the inormation on allocation o net income required

pursuant to Annex 9-1-II o CVM Instruction 481

Tird itm i t rdr ui To set the aggregate compensation payable to

members o the board o directors and the board o

executive ocers in 2010.

At the February 23 meeting, the board approved and put orward a compensation proposal

or the Company to pay to members o the board o directors an aggregate annual amount

up to R$4,074,538.92, and to members o the board o executive ocers an aggregate annual

amount up to R$15,307,807.26.

Set orth in the table below is the nancial data related to the compensation proposal:

Cmpti Prp r 2010 i tud R$

Dirctr

d/

cutiv cr

id

rmurti

srt-trm vri

rmurti

mimum mut

bt ToTal

Board members 4,074 4,074

Board o executive ocers 4,420 10,154 734 15,308

ToTal 8,494 10,154 734 19,382


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id rmurti d t

The xed remuneration is paid in 13 installments, adjusted on a yearly basis as required

under the collective bargaining agreement. Benets represent the aggregate o the amounts

attributable to health and dental care plan, lie insurance, meal vouchers, car, and pensionund.

srt-trm vri rmurtiThe key perormance indicator the board elected as the 2010 target perormance will be

the adjusted net income, as determined on a quarterly basis. The aggregate amount o the

2010 short-term variable remuneration payable to executive ocers and employees o the

Company will represent 3.5% o adjusted net income actually ascertained, i the amount

thus ascertained is within the range o 70% to 130% o the target.

I adjusted net income actually ascertained alls under 70% o the target, the short-term vari-able remuneration will be reduced to 2.0% o adjusted net income.

However, i adjusted net income actually ascertained exceeds 130% o the target, the aggre-

gate o the short-term variable remuneration will equal the sum o: (i) the amount that cor-

responds to 3.5% computed over 130% o the target, and (ii) the amount that corresponds to

2.0% computed over that portion o adjusted net income which exceeds 130% o the target.

A portion o this aggregate amount will be attributable to the executive ocers, as allocated

pursuant to certain base salary multiples that will difer based on individual perormance.

The aggregate compensation amount submitted to annual meeting, as set orth in the above

table, assumes that quarterly adjusted net income is 10% above the elected target. In caseadjusted net income ascertained at year-end exceeds this 10% threshold, it is conceivable

the remuneration payable to the executive ocers pursuant to the compensation policy set

orth herein could exceed the aggregate remuneration proposed or approval at the annual

meeting, in which event the excess amount will require conrmation rom shareholders at-

tending the 2011 annual meeting.

Set orth in Attachment III to this guide is inormation on board and management

compensation which CVM Instruction 480 requires to be provided under section 13 o the

Reerence Form.

D.2 exTRaoRDInaRy shaReholDeRs MeeTInG

ordr ui To vote on BM&FBOVESPAs acquisition o shares o common stock

o the CME Group, Inc. (CME), pursuant to the Notice o Material

Fact released on February 12, 2010.

Under article 16, item (j) o the Bylaws it is incumbent on the extraordinary shareholders

meeting to authorize the Company to take ownership interest in another company in case

the investment transaction is in excess o 3% o shareholders equity, as determined in the

most recent year-end nancial statements.


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Accordingly, at the February 23 meeting, the board o directors decided to call the extraordinary

meeting or the shareholders, pursuant to the Bylaws, to decide on BM&FBOVESPAs

proposed acquisition o shares in the CME Group, Inc. (CME), such as announced in the

notice o material act released on February 12, 2010. Assuming the consummation o thisshare acquisition, the Company would increase the equity interest it holds in CME shares to

approximately 5% rom 1.8% currently.

The proposed transaction represents an investment by the Company on the order o US$620

million, which added by the market value attributable to existing shares as o the date o the

notice o material act will equate to total market value o US$1 billion. In addition, lock-up

restrictions will apply to the shares through to February 26, 2012, which is the same lockup

period originally applicable to the parties cross holdings.

This proposal is submitted with a recommendation or you to approve the investmentand authorize the Companys Management to proceed with the negotiations o denitive

agreements and complete the transaction, pursuant to terms and conditions announced in

the notice o material act.

e. DoCUMenTs RelaTeD To MaTTeRs In The oRDeR o bUsIness o

The CoMbIneD shaReholDeRs MeeTInGs o bM&boVesPa

The ollowing documents are available to shareholders at the Companys registered oce,

and in the investor relations website (www.bmbovespa.com.br/ri/), the Companys website(www.bmbovespa.com.br) or that o the CVM (www.cvm.gov.br):

Notice o shareholders meetings

Financial statements as o and or the year ended December 31, 2009(management report, nancial statement, independent auditors report and

audit committee report)

Annual inormation orm, also known as standardized nancial statement(demonstraes nanceiras padronizadas), or DFP Form

Audit committee report

Minutes o the Board meeting held on February 23, 2010, with the net income

allocation proposal.Board proposal, including the inormation on net income allocation required inAnnex 9-1-II o CVM Instruction 481.

Managements discussion and analysis, pursuant to section 10 o the ReerenceForm required by CVM Instruction 480.

Inormation on board and management compensation, pursuant to section 13o the Reerence required by CVM Instruction 480.

For additional clarication you should contact the investor relations department through

the phone (+55 11 2565-4007, 2565-4729, 2565-4418 or 2565-4834) or by e-mail addressed

to [email protected].


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ATTACHMENT I

ManaGeMenTs DIsCUssIon anD analysIs o InanCIal ConDITIon anD

ResUlTs o oPeRaTIons

seCTIon 10 o The ReeRenCe oRM


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21

Mgmt dicui d i ci cditi d rut

prti, rquird udr scti 10 t Rrc rm

udr CVM Itructi n. 480 dtd Dcmr 7, 2009

10. Mgmt dicui d i

10.1 Mgmt ud dicu t ig it rgrd t t ci

ttmt:

t ci cditi d t quit piti;

The year 2009 dawned in anxiety, amid the uncertainties o a distressed economic

environment, bleak projections or the global economic uture, which redoubled at every

turn o events, and with every news headline or market development. This was the economicoutlook that emerged rom the subprime mortgage crisis started in the United States in

2007 to turn into the worst global nancial crisis since the Great Depression in the 1930s.

In the years beore the crisis, in the olly o the housing derivatives eeding renzy, lending

behavior changed, credit policies became ever more liberal, securitization ubiquitous,

players operated in highly-leveraged mode, regulation was lax or lacking, and there was too

little transparency in over-the-counter transactions. As a result, the scenario that emerged

early in 2009 ater the crisis peaked was one o severe credit crunch, pointing to general

deleveraging, amidst a lively debate over the need or more stringent and ecient regulation

or the nancial and capital markets, strong contraction in the prices o commodities and

nancial assets, and governments across the board moving towards quantitative easing.

This combination o actors directly impacted perormance in markets BM&FBOVESPA

operates. In the equities market (Bovespa segment), volumes tumbled due mainly to the

alling prices o stocks prompted by bearish sentiments and risk aversion, whereas in the

derivatives market (BM&F segment), hedging activities sank due mainly to the credit crunch,

which coupled with general risk aversion and deleveraging signicantly depressed volumes.

This low-volume scenario prevailed or most o the rst hal o 2009.

However, despite the doom-and-gloom acing world economies, Brazil diferently rom

developments in previous crises reacted positively and was one o the ew countries toemerge relatively unscathed rom the crisis. While the level o economic activity did decrease,

the country was less afected by the downturn than most other countries, ow o oreign

investment increased in strides in the second hal o the year, pushing strong appreciation

in the Brazilian real against the U.S. dollar.

In the latter hal o the year, an improved landscape and brighter prospects or the domestic

economy positively impacted the equities markets. The Bovespa Index soared in the highest

rise on record, the biggest gainer among securities markets across the world. The IPO market

rebounded and boomed as the worlds most active ater China, closing 2009 as our second

best year on record in total proceeds, making Brazil the 4th

best perorming country in termso proceeds rom IPOs, and 7th by overall ofering proceeds, in addition to having hosted the

countrys largest IPO ever, conducted by Banco Santander Brasil. These movements were

topped by a surging stock market, which in the ourth quarter reached the highest ever


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22

average daily trading volume.

Meanwhile, in the BM&F segment the market move towards deleveraging continued to

afect volumes traded negatively including in the second hal o 2009. Key indicators that

directly afect our overall perormance include the ollowing:

lThe target interest rate, or Selic Meta, dened by the Brazilian Monetary Policy

Committee (Comit de Poltica Monetria), or Copom, ell to 8.75% in December2009 rom 13.75% at start-o-year, evidencing the expansionist monetary policy the

Brazilian government has adopted;

lThe exchange rate or the Brazilian real against the U.S. dollar (per the PTAX selling

rate compiled by the Central Bank) closed the year at R$1.7412, down 25.5% in the

year rom a March 3 peak o R$2.4218, but up rom November 9 when it reached its

lowest at R$1.7024;

lAvailability o domestic credit grew, with the credit-to-GDP ratio going up to 45.0% in

December rom 40.0% in January 2009; and

lThe market prices or some o the most actively traded commodities produced in

Brazil and exported by the country, such as oil, pulp and soybean, rebounded.

However, while these improvements in the economic landscape and the outlook or the local

market positively impacted our perormance and results o operations or the second hal o the

year, they were insucient to prevent 2009 revenues rom alling on a year-over-year basis.

Another actor inuencing perormance in our markets was the creation o two new types

o taxes on nancial transactions (IOF). On October 20, 2009, with the stated objective o

arresting the appreciation o the Brazilian real, the government adopted a 2.0% tax on

money inows or portolio investments (stocks, xed-income securities and derivatives)

in domestic capital markets Then, because the actual impact o the tax (IOF) would have

been to divert trading away rom the local markets, draining precious onshore liquidity, onNovember 19 the Brazilian government announced a 1.5% IOF tax on issuances o American

Depositary Receipts (ADRs), admittedly in a move to eliminate the competitive disadvantage

it had created with the IOF tax on money inows, or it increased the cost o raising capital in

the Brazilian market. These two measures negatively impacted our markets, in particular the

equities markets, both because o the increased cost oreign investors now incur to invest

in the local market and as a result o uncertainty about additional measures the Brazilian

government could take.

These two government measures impacted the ow o oreign capital to our markets and

negatively afected trading activities particularly in the Bovespa segment, as they increasedthe cost o trading in local markets, in addition to having added to the equation an element

o uncertainty about other measures the government may take in the uture.

Finally, diferently rom the economic outlook at the end o 2008, this time there are good

prospects or Brazilian economy to resume the growth trend, whereas there are encouraging

signs recovery is on course in most economies. I the positive projections do materialize, this

will positively impact our results o operations. In addition, while 2010 should continue see the

roaring debate evolve around re-regulating the international nancial and capital markets, which

was so pervasive last the year, in Brazil substantive regulation already is in place, more or less in

keeping with the models in debate, including in the orm o regulation by BM&FBOVESPA, which

encourages and preers transactions in exchange-traded assets to over-the-counter trades.

t cpit tructur d ikid rdmpti r r qut,

icudig:


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23

i) events o redemption;

ii) reimbursement value calculation method.

Other than as legally provided, the Company is not contemplating any share redemption,

nor any event that would trigger redemption rights.

c t Cmp cpcit t rvic it dt;

Our nancial income or the year to December 2009 reached R$253,862 thousand and breaks

down as ollows: interest income R$289,686 thousand, down 20.6% year-on-year, mainly

due to decline in the benchmark interest rate paid to nancial investments; and R$35,824

thousand in nancial expenses, which were 39.2% down rom a year ago.

EBITDA was R$975,108 thousand, representing a 6.7% rise rom R$913,493 thousand in the

previous year, whereas EBITDA margin rose to 64.9% rom 57.0% previously.

Net income or the year amounted to R$881,050 thousand, 36.5% up year-on-year, primarily

due to the reduction in expenses. Our year-end consolidated balance sheet registered total

assets o R$21,201,183 thousand, where 15.3% or R$3,236,211 thousand represent cash and

cash equivalents and nancial investments.

As a percentage, non-current assets o R$18,422,215 thousand accounted or 86.9% o

total assets, under which the main account is intangible assets o R$16,117,930 thousand,

ollowed by investments totaling R$1,319,439 thousand.

As a percentage o total liabilities, current liabilities o R$1,162,075 thousand accounted or 5.5%

and correlates mainly with cash collaterals received rom customers in the amount o R$810,317

thousand, and liabilities under repurchase agreements on the order o R$144,513 thousand.

Non-current liabilities o R$313,002 thousand accounted or 1.5% o total liabilities, primarily

made up o deerred income tax and social contribution amounting to R$261,060 thousand,

which correlate with the provision on temporary diferences rom tax amortization o

goodwill in the year.

Shareholders equity as o December 31, 2009, totaled R$19,709,749 thousand, composed

by capital stock o R$2,540,239 thousand (12.9%), capital reserve o R$16,666,489 thousand

(84.6%), revaluation reserves o R$23,551 thousand (0.1%), statutory reserves o R$706,119

thousand (3.6%), legal reserve o R$3,453 thousand (0.02%) and in addition, by treasurystock resulting rom the share buyback program and recorded in a contra-equity account at

R$230,102 thousand.

We should note that our policy calls or low risk investment o cash balances, earning relatively

low interest rates, which correlates with a substantial volume o government bonds in our

portolio, oten bought through investment unds. We typically direct our nancial investments

to more conservative investment unds, whose assets are invested in diversied bond portolios

whose perormance benchmark ollows the interbank deposit rate or the Selic rate.

Given the above, reecting our consolidated short- and long-term liabilities, our low

indebtedness, and liquidity and cash positions, we understand our Company is ully capable

o paying the service o out short- and long-term indebtedness.

d t urc cig r rkig cpit d cpit pditur -

currt t;


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24

t urc cig r rkig cpit d cpit pditur -

currt t, ic t Cmp p t u t cvr iquidit dcici;

We primarily nance our working capital and investments in non-current assets rom our

operating cash ow.

In addition, we have entered into certain leasing agreements, which substantially correlate

with IT-related equipment. Pursuant to the accounting standard under pronouncement CPC06 Leases, approved by CVM Resolution 554/08, we classiy lease contracts as either nancial

or operating leases based on the characteristics o each. The balance o lease arrangements

as o December 31, 2009 was R$11,790 thousand, with uture payments through to 2011,

versus a balance o R$4,087 thousand as o December 31, 2008.

t v idtd v d t crctritic uc dt igti,

icudig t ig prticur irmti:i) material nancing arrangements and loan agreements;

ii) other long-term arrangements with nancial institutions;

iii) degree o subordination o debt obligations;iv) restrictions possibly applicable to the registrant under existing nancing

arrangements, including in particular restrictions concerning indebtedness level

and capacity to undertake new debt, and on dividend distributions, asset sales,

issuance o new securities and disposition o control;

Not applicable.

g imitti u t prcd cig prviu udrtk;

Not applicable.

igict cg t i itm i t ci rprt;

Statements of income comparison - Years ended December 31, 2009 and 2008

Gross operating revenues

Gross operating revenues in the amount o R$1,672,894 thousand or the year to December

31, 2009, declined 6.2% rom R$1,783,358 thousand one year ago, primarily as a result o

a 4.3% all in volumes traded on the equities markets and a 3.3% drop in volumes or the

derivatives markets, in either case due to actors correlated with the global nancial crisis

which peaked in 2008 but continued to adversely afect the capital markets primarily in the

rst hal o 2009.

Trading and/or settlement system BM&F segment

The revenues rom transaction ees we charge on trading and clearing activities on the

derivatives markets (BM&F segment) tumbled 12.9% to R$552,492 thousand at year-end

rom R$634,230 thousand in the prior year. This decrease correlates mainly with the ollowing

items:

Derivatives

The revenues rom ees charged on derivatives trading and clearing transactions (derivatives


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25

clearinghouse) ell 14.2% year-on-year, to R$516,052 thousand or the year rom R$601,275

thousand previously, as a result o the 3.3% decline in volume traded in derivatives contracts

and 10.3% slump in average revenue per contract (RPC).

Foreign exchange

The revenues rom ees charged on orex trading and clearing transactions (oreign exchange

clearinghouse) tossed 2.1% year-on-year, to R$20,849 thousand or the year rom R$21,302thousand in the earlier year, due mainly to appreciation o the Brazilian real against the U.S. dollar.

Government securities

The revenues rom ees charged on trades in government bonds and debt securities, and

on clearing transactions (debt securities clearinghouse) sank 53.0% year-on-year, to R$155

thousand at end o year rom R$330 thousand the year beore, as a result o the 76.9% plunge

in volume traded.

Bolsa Brasileira de Mercadorias

The revenues rom trades in agricultural commodities on the exchange operated through

Bolsa Brasileira de Mercadorias ell 9.1% year-on-year, to R$7,146 thousand or the year rom

R$7,865 thousand in the year beore, due to the all in volume traded in agricultural notes.

Settlement bank

The revenues rom the operations o BM&FBOVESPAs settlement bank increased by 139.7%

year-on-year, to R$8,290 thousand at end o year rom R$3,458 thousand previously, as a

result o the rise in volume o services sold.

Trading and/or settlement system Bovespa segment

The revenues rom trading and transaction ees we charge on trading and clearing activities

in the equities markets (Bovespa segment) ell 2.2% year-on-year, to R$1,032,201 thousand

or the year rom R$1,055,028 thousand one year earlier. This drop correlates mainly with the

ollowing items:

Trading trading ees

The revenues rom ees charged on trading in equities tossed 2.2% year-on-year, at R$617,000

thousand at year-end rom R$635,091 thousand one year ago, reecting the 4.3% decline involumes traded on the equities markets.

Clearing and settlement transaction ees

The revenues rom ees charged on clearing and settlement transactions tumbled 10.5%

year-on-year, to R$232,166 thousand at the close o year rom R$259,355 thousand in the

year beore, also the 4.3% decline in volumes traded on the equities markets and due to a

change in our pricing policy.

Loans o marketable securities

The revenues rom securities lending services through the depository acility known as CBLC

ell 32.0% year-on-year, to R$48,528 thousand or the year rom R$32,989 thousand in the


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prior year, due to a slump in the volume o securities lending.

Listings o marketable securities

The revenues rom listing ees we charge on securities listings climbed 32.8% year-on-

year, to R$39,549 thousand rom R$29,776 thousand in the previous year, mainly due to

implementation o a new price schedule or listings o securities which we adopted in

January 2009, gradually terminating discounts we had been granting in the last ew years topromote listings in our special corporate governance trading segments.

Depository, custody and back oce

The revenues rom ees charges or depository, custody and back-oce services increased

by 12.3% year-on-year, to R$62,523 thousand at year-end rom R$70,231 thousand in the

earlier year, primarily as a result o a 3.1% increase in the number o custody accounts, and

to implementation o our new pricing policy as o May 2009, which adopted a custody ee

by volume deposited with the depository acility.

Participant access ees

We charge access ees rom participants acquiring trading rights or access to our markets.

The revenues rom access ees soared 103.8% year-on-year to R$40,266 thousand rom

R$19,755 thousand one year ago, due primarily to the new policy or access to our markets

which we adopted in January 2009.

Other operating revenues

Other operating revenues decreased 6.3% year-over-year, to R$88,201 thousand rom R$94,100

thousand in the previous year. This drop correlates mainly with the ollowing items:

Vendors market data

The revenues rom distribution and sale o market data comprising quotations and other

market inormation were up 33.1% year-on-year to R$57,691 thousand rom R$43,359

thousand the year beore, as a result o our new pricing policy or these services implemented

as o April 2009.

Commodity classication ees

The revenues rom ees we charge or grading commodities have climbed 21.8% year-over-year, to R$4,304 thousand at end o year rom R$3,535 thousand in the prior year, due mainly

to increase in the volume to cotton bags graded at our testing acilities.

Other

Other revenues dropped 44.5% year-on-year, to R$26,206 thousand at end o year rom

R$47,206 thousand in the earlier year, due primarily to lower than average dividends paid to

us by the CME Group, and to the reversal o provisions recorded in previous years.

Deductions rom revenues

The deductions rom revenues decreased by 6.1% to R$170,350 thousand at end o year rom

R$181,347 thousand previously, which is consistent with the all in gross operating revenues.


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Net operating revenue

As a result o the year-over-year changes in revenues discussed above, net operating revenue

ell 6.2% to R$1,502,544 thousand or the year versus R$1,602,011 thousand one year ago.

Operating expenses

The operating expenses tossed 21.3% year-on-year to R$569,832 thousand rom R$723,658

thousand one year ago, due primarily to the synergy identication plan we established in

connection with the integration o BM&F S.A. and Bovespa Holding S.A., and implemented

with the aim o capturing synergy savings by eliminating duplicate work and through action

related to the items discussed below.

Personnel and related charges

The expenses with personnel and related charges increased by 17.2% year-on-year to

R$289,806 thousand rom R$247,349 thousand in the previous year, due primarily to increasein expenses or the year with stock options granted to key management personnel 2009,

which reached R$59,634 thousand versus R$26,359 thousand in the year beore.

Data processing

The data processing expenses dropped 27.4% year-on-year to R$102,596 thousand rom

R$141,282 thousand in the prior year, due primarily to synergy savings captured rom the

integration process (Bovespa and BM&F).

Depreciation and amortization

The expenses with depreciation and amortization increased by 20.6% year-on-year to

R$42,396 thousand rom R$35,140 thousand one year earlier, due primarily to acquisitions

in the asset group o computer equipment and IT acilities.

Outsourced services

The expenses with outsourced services remained virtually unchanged with slight rise o 3.3%,

to R$45,495 thousand or the year versus R$44,043 thousand the year beore. The synergy

savings we had captured in connection with this line item were more than cancelled out by

expenses with outsourced services related to specic and strategic projects, in particular

in the quarter to December 2009 when ongoing projects included, among other things,some o the magnitude o the partnerships with the CME Group and Nasdaq OMX, and the

operating qualication program (PQO) or brokerage rms.

General maintenance

The expenses with general maintenance dropped by 18.7% year-on-year to R$11,007

thousand rom R$13,536 thousand in the earlier year, due to synergy savings captured rom

the integration process (Bovespa and BM&F).

Communications

The expenses with communications were up 25.1% year-on-year to R$23,428 thousand rom

R$18,721 thousand in the prior year, due mainly to increase in volume traded on Bovespa


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markets, as the exchange sends notices o trade execution by mail addressed to the investors,

or conrmation o the transactions.

Rents

The expenses with rents incurred in the year to December 31, 2009, dropped 30.0% to

R$3,032 thousand rom R$4,351 thousand one year ago, due to synergy savings captured

rom the integration process (Bovespa and BM&F).

Supplies

The expenses with supplies ell 30.8% year-on-year to R$2,510 thousand rom R$3,629 thousand

one year ago, due to synergy savings captured rom the integration process (Bovespa and BM&F).

Promotion and marketing

The expenses with promotion and marketing declined 37.8% year-on-year to R$19,555

thousand rom R$31,446 thousand the year beore, due to synergy savings captured romthe integration process (Bovespa and BM&F).

Taxes

Taxes on ees paid by us increased by 40.4% year-on-year to R$2,323 thousand rom R$1,655

thousand one year ago, primarily due to taxes charged on remittances abroad or payment

o outsourced services related to certain specic and strategic projects o ours.

Board members compensation

The expenses with remuneration paid to directors in the year to December 31, 2009,

dropped 43.0% year-on-year to R$5,252 thousand rom R$9,219 thousand in the earlier year.

This decline is due to the existence o two exchanges and two diferent boards prior to the

May 2008 integration process that combined Bovespa and BM&F into BM&FBOVESPA, and

due also to the act that the members o both boards continued to provide services to our

Company or a ew more months during the transition period towards our consolidation.

Integration expenses

The expenses with the integration process amounted to R$129,576 thousand in the year

ended December 31, 2008, and did not recur in the year to December 31, 2009.

Sundry

Sundry expenses dropped 48.7% year-on-year to R$22,432 thousand orm R$43,711

thousand one year earlier, due to synergy savings captured rom the integration process

(Bovespa and BM&F).

Goodwill amortization

The expenses with amortization o goodwill which in the year to December 31, 2008,amounted to R$324,421 thousand collapsed to R$0 (naught) in the year to December 31,

2009, due to the change in the accounting standard determining the accounting treatment

o goodwill, as under certain CPC pronouncements issued in 2008, starting rom January 1,


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2009, goodwill is no longer subject to amortization recognized in the income statement.

Financial income

Financial inorm or the year ended December 31, 2009, dropped 17.0% to R$305,972

thousand rom R$ 253,862 thousand in the prior year, due mainly to the decline in interest

rates that remunerate our demand deposits and nancial investments.

Income beore taxes

Income beore taxes increased by 38.0% to R$1,186,574 thousand or the year rom R$859,904

thousand a year ago, and correlates mainly with the 21.3% decrease in operating expenses

and the change in the accounting standard that determines the accounting treatment o

goodwill, as previously discussed.

Income tax and social contribution

Income tax and social contribution or the year increased 43.1% and amounted to R$304,505thousand at end o year, as compared to R$212,741 thousand one year earlier as ollows:

l The line item or current income tax and social contribution, which at December 31,

2008, registered an expense o R$331,879 thousand, at December 31, 2009, registered

revenue o R$32,085 thousand, or a 109.7% decrease.

l The line item or deerred income tax and social contribution, which at December 31,

2008, registered a revenue o R$119,138 thousand, at December 31, 2009, registered

an expense o R$336,590 thousand, or a 382.5% decrease.

Ater Bovespa Holding S.A. merged with BM&F S.A. in November 2008, the goodwill came to

be deductible or purposes o income tax and social contribution on net income. As a result,

starting rom December 2008 we took advantage o the tax benet, such that the portion

o goodwill which had been amortized but not taken as a deduction gave rise to income tax

and social contribution credits recorded as tax assets in the amount o R$76,702 thousand.

In addition to recording tax assets rom amortized goodwill, we recorded tax assets or tax

losses in the amount o R$35,036 thousand.

Deerred income tax and social contribution liabilities as o December 31, 2009, derived rom

recognition o the temporary diference between the tax base o goodwill and its carrying

value in the balance sheet, considering that while goodwill continued to be amortized or

tax purposes, starting rom January 1, 2009, goodwill is no longer amortized or accountingpurposes, thus resulting in a goodwill tax base that is lower than its carrying value. As o

December 31, 2009, the total deerred tax liabilities related to amortization o goodwill or

tax purposes was R$333,917 thousand.

In the second quarter o 2009, we recognized income tax and social contribution credits in

the amount o R$35,503 thousand, as related to tax losses and negative tax base o social

contribution o the ormer Bovespa Holding, which had not been used at the time o the

merger o Bovespa Holding due to the supposed deductibility limitation set at 30% o

adjusted net income. Our Company reconsidered this procedure in the second quarter o

2009, in conjunction with our legal advisors, based on the understanding that this limitationis not applicable in the event o a merger o the investee, as in such case there is no continuity

and the investee ceases to exist, such that thereore the purported limitation on deductibility

is removed and the tax losses may be used in ull. As a result, the Company has recorded the


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tax credits previously mentioned.

Minority interests

Minority interests reer to those portions o our subsidiaries Bolsa Brasileira de Mercadorias

and Bolsa de Valores do Rio de Janeiro consolidated in our nancial statements, which are

not owned by us. Minority interests amounted to R$1,019 thousand in the year to December

31, 2009, versus R$1,567 thousand the year beore, a 35.0% decrease.

Net income or the year

Net income or the year o R$881,050 thousand surged 36.5% year-over-year rom R$645,596

thousand one year ago. This rise is due primarily to the 21.3% reduction in operating expenses

and expenses rom the change in the accounting standard determining the accounting

treatment o goodwill, which were only partially counterbalanced by the 43.1% increase in

the income tax and social contribution line item, resulting rom recognition o deerred tax

liabilities.

Cmpri t mi i itm i t c t yr dd Dcmr 31,

2009 d 2008

Current assets

Current assets as o December 31, 2009, increased 41.4% year-on-year to R$2,778,968

thousand (13.1% o total assets) rom R$1,965,461 thousand one year earlier (9.6% o total

assets). The main changes to current assets were the ollowing:

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with

short- and long-term, liquid investments through prime banks, nancial investment unds,

government bonds and so orth. As o December 31, 2009, cash and cash equivalents and

nancial investments amounted to an aggregate o R$3,236,211 thousand, which accounted

or 15.3% o our total assets at that date, and represented increase o 34.0% over R$2,414,241

thousand one year ago, when they accounted or 11.8% o our total assets. This increase

in cash and cash equivalents and nancial investments was pushed by the higher volume

o cash collaterals deposited by market participants as margin or transactions, which in

turn was driven by the soaring volume o trades on the equities markets in the quarter to

December 2009, versus the same quarter one year earlier. The collaterals are included incurrent assets and in current liabilities.

Accounts receivable, net

Accounts receivable largely comprise trading and transactions and other ees receivable rom

customers, and market data transmission ees receivable rom vendors. Accounts receivable

dropped by 61.8% year-over-year, to R$40,205 thousand rom R$105,169 thousand in the

prior year. This all is attributable to change in the due date or payment o most trading and

transaction ees charged in the equities markets, which starting rom October 1, 2009, we

collect as o the third business day ater the trade date, whereas previously these ees wouldbe paid up to two months ater the trade date.

Deerred income tax and social contribution


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Deerred income tax and social contribution recorded under both current and non-current

assets were reduced by 61.9% year-on-year, rom R$122,070 thousand in the prior year

to R$46,541 thousand as o December 31, 2009. This decrease resulted rom a change in

the accounting standard related to the accounting treatment o goodwill amortization,

according to which we now recognize a deerred tax liability on tax amortizations o goodwill.

The balance o deerred tax assets recorded one year ago (in the amount o R$76,702

thousand) was reclassied as a liability in 2009, thus representing the net amount o tax

credit attributable to goodwill.

Non-current assets

Non-current assets were substantially unchanged, with slight drop o 0.2% to R$18,422,215

thousand as o December 31, 2009 (86.9% o total assets) rom R$18,464,628 thousand one

year ago (90.4% o total assets). Other than previously explained, the main changes to non-

current assets were the ollowing:

Judicial deposits

Judicial deposits totaled R$84,895 thousand at end o year, a 9.6% declined as compared to

R$93,885 thousand in the prior year. This drop correlates mainly with deposits withdrawn

rom court in 2009.

Other investments

Other investments which at end o year amounted to R$1,319,439 thousand, representing 6.2%

o total assets, kept a steady line rom the year beore when it totaled R$1,318,282 thousand

representing 6.5% o total assets. This line item correlates primarily with our ownership

interest in the CME Group recorded at R$1,276,199 thousand. In 2010 this investment will

be reclassied pursuant to the standard provided by technical pronouncement CPC 38, as

discussed in item 10.4.b below.

Property and equipment

Property and equipment climbed 8.5% to R$268,895 thousand at end o year, representing

1.3% o total assets, rom R$247,850 thousand one year earlier when it represented 1.2% o

total assets, mainly as a result o increase in computer equipment and IT acilities.

Intangible assets

Intangible assets went up slightly by 0.2% year-on-year to R$16,117,930 thousand rom

R$16,089,633 thousand previously. Intangible assets comprise (i) goodwill, which kept a

steady line at R$16,064,309 thousand at end o year in either year, and represented 75.8%

and 78.6% o total assets as o December 31, 2009 and 2008, respectively; and (ii) sotware

and projects, which went up 111.7% to R$53,621 thousand at end o year rom R$25,324

thousand one year ago, due mainly to acquisition, implementation and development o

new sotware and systems.

Current liabilities

Current liabilities rose 8.0% to R$1,162,075 thousand as o December 31, 2009 (5.5% o total

liabilities) rom R$1,075,744 thousand one year earlier (5.3% o total liabilities). The main

changes to current liabilities were the ollowing:


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Collaterals or transactions

Collateral or transactions which at end o year amounted to R$810,317 thousand (3.8% o

total liabilities) jumped 38.3% when compared to R$585,963 thousand one year ago (2.9%

do total liabilities). This change correlates with an increase in margin received rom market

participants and deposited in the orm o cash, as a result mainly o volume growth in the

quarter to September 2009 as compared to the same period in the prior year.

Earnings and rights on securities in custody

The 11.4% decline in earnings and rights on securities in custody, which at end o year

amounted to R$31,897 thousand as compared to R$36,020 thousand one year ago, is due

primarily to the all in earnings rom judicial deposits.

Financing

The 127.4% climb in nancing, which at end o year amounted to R$9,295 thousand

as compared to R$ 4,087 thousand in the year beore, is due mainly to nancial leasearrangements or IT-related equipment.

Other liabilities

The line item other liabilities climbed 15.7% to R$194,895 thousand at end o year (0.9% o

total liabilities) rom R$168,404 thousand in the previous year (0.8% o total liabilities), which

correlates primarily with deposits and repurchase agreements related to the operations o

Banco BM&F, the settlement bank.

Non-current liabilities

Non-current liabilities in the amount to R$313,002 thousand at December 31, 2009, (1.5% o

total liabilities) surged 569.8% when compared to R$46,729 thousand at the end o the prior

year (0.2% o total liabilities). This change is due primarily to our having recognized deerred

income tax and social contribution at end o year in the amount o R$261,060 thousand, as

derived rom the temporary diference between the tax base o goodwill and its carrying

value in the balance sheet, considering that while goodwill continues to be amortized or

tax purposes, starting rom January 1, 2009, goodwill is no longer amortized or accounting

purposes, thus resulting in a goodwill tax base that is lower than its carrying value.

Shareholders equity

Shareholders equity rose 2.2% to R$19,709,749 thousand at December 31, 2009, when it

represented 93.0% o total liabilities, rom R$19,291,724 thousand one year earlier, when

it represented 94.4% o total liabilities, and as resulting rom the ormation o a reserve

or investments and unding o saeguard mechanisms and guarantee unds we keep in

connection with clearing and settlement activities, as required under our bylaws (under the

statutory reserve line item) and pursuant to the proposal on allocation o net income or

the year.

10.2 Mgmt i pctd t dicu:

T rut prti d, i prticur:


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i Imprtt rvu cmpt;

Our consolidated gross operating revenues or the year ended December 31, 2009, totaled

R$1,672,894 thousand, down 6.2% rom R$1,783,358 thousand one year ago, primarily

reecting the ollowing:

l revenues rom transaction ees we charge on trading and clearing activities on the

equities markets (Bovespa segment) accounted or 50.8% o gross operating revenues,

or R$849,166 thousand, in a 5.1% year-on-year decline as a result o the 4.3% drop involumes traded when compared to the prior year. Despite having tumbled in the rst

hal o 2009, volumes bounced signicantly in the second hal, and revenues rom ees

on trading and clearing transactions surged 34.5% over the period to June 2009, to

peak in the quarter to December 2009, which registered record high volumes; and

l revenues rom transaction ees we charge on trading and clearing activities in BM&F

markets accounted or 32.1% o gross operating revenues, or R$537,056 thousand,

plunging 13.8% year-over-year. This decline correlates with a 10.3% all in average revenue

per contract (RPC), while overall volume traded tossed 3.3% rom one year earlier.

As a result, revenues derived rom transaction ees we charge on trading and clearingactivities in the equities and derivatives markets accounted or 82.9% o our total revenues

in the year to December 2009, versus 85.1% o total revenues or 2008.

Taxes charged on these revenues amounted to R$170,350 thousand, or approximately 10.2%

o our gross operating revenues.

ii ctr tt v mtri ctd t rut prti;

Income tax, social contribution and goodwill amortization

Income beore taxes or the year amounted to R$1,186,574 thousand. The income tax and

social contribution line item totaled R$304,505 thousand, substantially represented by

deerred income tax and social contribution in the aggregate o R$336,590 thousand, and

with no efect on cash ow.

As recorded, income tax and social contribution resulted rom the ollowing:

l deerred tax liabilities amounting to R$333,917, and recognized in relation to taxable

temporary diferences rom amortization o goodwill in the year, with no impact on

cash ow;

l recognition o tax credits in the amount o R$35,503 thousand related to tax losses and

negative tax base o social contribution absorbed rom ormer Bovespa Holding.

EBITDA o R$975,108 thousand rose 6.7% year-over-year rom R$913,493 thousand, whereas

EBITDA margin climbed to 64.9% rom 57.0% one year ago.

Net income or the year to December 2009, in the amount o R$881,050 thousand, is 36.5%

up rom the year beore, due mainly to certain previously mentioned cost savings. In addition,

(i) unlike 2008, when we incurred R$129,576 thousand in non-recurring expenses rom the

integration o the ormer two exchanges, BM&F S.A. and Bovespa Holding S.A., in 2009 we

incurred no such expenses; (ii) also in 2008 we recognized through prot and loss the expense

related to proportionate amortization o goodwill rom the merger o shares o BovespaHolding S.A., in the amount o R$324,421 thousand, with net impact o R$235,075 thousand;

whereas (iii) in the year we recorded deerred tax liabilities o R$333,917 thousand on temporary

diferences rom tax amortization o goodwill in the year, with no impact on cash ow.


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Taking the above amounts into account, the actual tax rate or 2009 was 25.7%.

a vriti i rvu ttriut t cg i pric, cg rt,

ifti rt, cg i vum d rig prduct d rvic;

Variations in our revenues correlate primarily with changes in our pricing policy and the

impact o uctuations in exchange rates, as set orth below.

l Listing ees: a 32.8% year-over-year climb in listing ees, due to a change in prices

and the end o certain discounts previously granted to companies listing securities to

trade on our special corporate governance trading segments;

l Depository acility: revenues rom depositary and custody and back oce services

went up 12.3% rom one year ago, ollowing a change in our pricing policy which

established an additional ee charged rom Brazilian-resident investors holding

custody accounts in excess o R$300,000 thousand, which is based on the market

price o securities and other assets held in custody;

l Access ees: revenues rom access ees surged 103.8%, as a result o the policy or

access to markets within both segments;

l Sales o market data to vendors: sales o market data rose 33.1% year-on-year due to

implementation o our revised pricing policy in April 2009;

l Securities lending: revenues rom securities lending dropped 32.0% primarily due

to the plunge in transaction volume in the rst hal o 2009, ater which however

volumes in this market bounced back to show signicant improvement; and

l Average revenue per contract (RPC) traded on BM&F markets: RPC ell 10.3% rom a

year ago primarily due to (i) the August 2008 decision to terminate certain discounts

on transaction ees ater November 2008. The discount period had pushed volumes

driving revenue per contract upwards in the period; (ii) strong appreciation o the

Brazilian real against the U.S, dollar, which negatively inuenced revenues rom FC

contracts, rom USD interest rate contracts, and rom commodities contracts; and (iii)

the granting o discounts or access to our systems via certain DMA (Direct Market

Access) models, and or high requency traders.

c T impct ifti, cg i t pric r t pricip r mtri

d tr uppi, d cg i cg d itrt rt, trut prti d ci cditi.

For inormation on impacts o our pricing policies and changes in exchange rates impacting

the results o operations, see item (b) under paragraph 10.2 above.

10.3 Mgmt ud dicu t mtri ct t vt itd

v d r r pctd t v t ci ttmt d rut

prti:

rmti prtig gmt; dipiti prtig gmt;

No new operating segment has been ormed and not operating segment was disposed o

by the Company in the years to December 2009 and 2008, and no such event has had or is


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expected to have efects on our nancial statements and results o operations.

orgizti cit titi, cquiiti r dipiti quit itrt;

On February 11, 2010, we released a notice o material act disclosing negotiations held

within the scope o the relationship we maintain with the CME Group, Inc, which resulted in

the execution o a protocol o intent pursuant to which the two exchanges agree a global

preerred strategic partnership (i) or both parties to cooperate in identiying and pursuingopportunities or co-investment in, and joint commercial partnerships with, third-party

international exchanges on a shared and equal basis; (ii) or the two exchanges to combine

eforts or joint development o a multi-asset class electronic trading platorm; and (iii) or

the Company to acquire additional shares in the CME, and increase to 5% its total ownership

interest in CME shares, which as o the date o the notice o material act would represent

aggregate investment o approximately US$1 billion. The investment the Company will be

making in raising its equity interest in the CME is on the order o US$620 million, and will give

BM&FBOVESPA the right to designate a representative to the CME board. The transaction

will require approval rom our shareholders.

In addition, the denitive transaction documents or implementation o this global

strategic partnership will require, among other things, approval rom our board o directors.

Depending on the terms o the denitive agreements, ater consummated our investment

could be designated investment in an associate entity, meaning one where the investor has

signicant inuence but not control or joint control o the entity, which under the accounting

standard provided in CPC 18 would require us to record the investment pursuant to the

equity method o accounting.

c spci vt d prti.

In the years to December 31, 2009 and 2008, there were no special or unusual events or

operations related to the Company and/or its activities, which have had, or are expected to

have a material impact on our nancial statements or results o operations.

10.4 Mgmt ud dicu:

sigict cg i ccutig prctic;

l 11,638/07 d Prvii Mur 449/08,

cvrtd it l 11,941/09

With the enactment o Law 11,638/07 and publication o Provisional Measure 449/08, converted

into Law 11,941/09, certain provisions o Brazilian Corporation Law were changed, revoked and

introduced as regards accounting practices and the presentation o the nancial statements,

efective as rom the scal year ended December 31, 2008. The main purpose o this law and

MP was to adapt Brazilian corporate legislation to acilitate the process o convergence o the

accounting practices adopted in Brazil with the International Financial Reporting Standards

issued by the International Accounting Standards Board (IASB). Moreover, as a result o the

enactment o this law and provisional measure, certain accounting pronouncements were

published in 2008 by the Brazilian Accounting Pronouncements Committee (CPC), applicable

to all corporations, including publicly traded and large-sized companies.

The main changes to the accounting practices and their efects on the nancial statements

o BM&FBOVESPA as o and or the years ended December 31, 2009 and 2008 include the


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ollowing:

(i) Share-based Compensation Pursuant to CPC 10 Share-based compensation,

approved by CVM Deliberation 562/08, BM&FBOVESPA recognized as expense

portions o the contracts existing at December 31, 2008 relating to the Stock Option

Plans granted to administrators and employees. The main eatures and inormation

relating to the stock option plans are presented in Note 19.

(ii) Deerred Charges Expenditures recorded in deerred charges related to sotware

licenses acquired and sotware development were reclassied to intangible assets.(iii) Non-operating results MP 449/08, converted into Law 11,941/09, eliminated the

segregation o the non-operating result group in the statement o income or the

year. The revenues and expenses previously presented as non-operating results are

now presented in the operating results group.

(iv) Financial Leases BM&FBOVESPA had nancial lease agreements mainly related to

inormation technology equipment. In accordance with the provisions determined in

accounting pronouncement CPC 06 Leases, approved by CVM Resolution 554/08,

the Company classied the lease agreements as either nancial or operating, based

on their specic characteristics.

The IT equipment leased under the nancial lease agreements was recorded in property and

equipment and the corresponding obligation in the Financing account. In the addition, the

related efects were recognized in the statement o income.

Rct accutig Prucmt

The standards and interpretations listed below were published and are mandatory or

nancial years starting as o or ater January 1, 2010. Besides these, other standards and

interpretations were published that change generally accepted accounting principles

adopted in Brazil, or BR GAAP, in the process o convergence towards International Financial

Reporting Standards, or IFRS. The standards and interpretations set orth below are expected

to impact our nancial statements:

CVMResolution577/2009CPC20BorrowingCosts;

CVMResolution581/2009CPC21InterimReporting;

CVMResolution582/2009CPC22SegmentReporting;

CVMResolution583/2009CPC27FixedAssets;

CVMResolution592/2009CPC23AccountingPractices,Changes inAccounting

Estimates and Correction o Errors;

CVMResolution593/2009CPC24EventsAftertheBalanceSheetDate;

CVMResolution594/2009CPC25Provisions,ContingentLiabilities,ContingentAssets;

CVMResolution595/2009CPC26PresentationofFinancialStatements;

CVMResolution597/2009CPC30Revenues;

CVM Resolution 598/2009 CPC 31 Non-Current Assets Held for Sale and

Discontinued Operations;

CVMResolution599/2009CPC32IncomeTaxes;

CVMResolution600/2009CPC33EmployeeBenets;

CVMResolution601/2009ICPC08AccountingforProposedDividendPayments;

CVM Resolution 604/2009 CPC 38 Financial Instruments: Recognition and

Measurement; CVMResolution604/2009CPC39FinancialInstruments:Presentation;

CVMResolution604/2009CPC40FinancialInstruments:Disclosures;

CVMResolution605/2009CPC18InvestmentsinAssociates;


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CVMResolution606/2009CPC19InterestsinJointVentures;

CVMResolution607/2009CPC35SeparateFinancialStatements;

CVMResolution608/2009CPC36ConsolidatedFinancialStatements;

CVMResolution609/2009CPC37First-timeAdoptionofInternationalFinancial

Reporting Standards;

CVM Resolution 610/2009 CPC 43 First-time Adoption of Accounting

Pronouncements CPC 15 to 40;

CVMResolution613/2009ICPC03SupplementalAspectsofLeaseAccounting; CVMResolution614/2009ICPC04ScopeofAccount

Annual and Extraordinary Shareholders' Meeting - 04.20.2010 - Practical Guide

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Transcript of Annual and Extraordinary Shareholders' Meeting - 04.20.2010 - Practical Guide