BVMF Presentation - January 2015

8/10/2019 BVMF Presentation - January 2015

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Confidencial Restrita Confidencial Uso Interno PblicoJAN/2015 X

Investor Relations DepartmentSo Paulo, SP


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Forward Looking Statements

This presentation may contain certain statements that express the managements expectations, beliefs andassumptions about future events or results. Such statements are not historical fact, being based on currentlyavailable competitive, financial and economic data, and on current projections about the industries BM&FBOVESPAworks in.The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and othersimilar verbs are intended to identify these forward-looking statements, which involve risks and uncertainties thatcould cause actual results to differ materially from those projected in this presentation and do not guarantee anyfuture BM&FBOVESPA performance.

The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPAservices; (ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitiveindustries 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 entrantsto the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, including theimplementation of enhanced functionality demanded by BM&FBOVESPA customers; (vi) ability to maintain anongoing process for introducing competitive new products and services, while maintaining the competitiveness ofexisting ones; (vii) ability to attract new customers in domestic and foreign jurisdictions; (viii) ability to expand theoffer 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 theywere made, and BM&FBOVESPA undertakes no obligation to update them in light of new information or futuredevelopment.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shallthere be any sale of securities where such offer or sale would be unlawful prior to registration or qualificationunder the securities law. No offering shall be made except by means of a prospectus meeting the requirements ofthe Brazilian Securities Commission CVM Instruction 400 of 2003, as amended.


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REGULATION, HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCESafety, resilience and transparency

BRAZILIAN MARKET OPPORTUNITIESMain growth drivers

MAIN GROWTH INITIATIVESBuilding an State-of-the-art platform

OPERATIONAL PERFORMANCENotable global exchange

FINANCIAL HIGHLIGHTSCost discipline and capital return to shareholders

3Q14 RESULTS

APPENDIX

MAIN GROWTH INITIATIVESInvestments, new products and focus on the customer


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Exchange sector Safety and market integrity as priorities

Capital and derivatives markets in Brazil

Stable and solid regulationCVM Trade and post-trade

BACEN Post-trade , banks andintermediaries

Main participants

Intermediaries local and internationalbrokers (linked to bank and independent)

Listed companies

Investors institutionals, foreign andindividual (retail)

Exchange market characteristics in Brazil

BVMF is the sole exchange, despite themarket being open for competitor since 2007

Stocks exclusively traded through an exchange(Dark pools, MTFs and internalization prohibit)

Identification of the final beneficial owner in

the entire trading and post-trading chainDerivatives trade predominantly through anexchange and OTC derivatives must beregistered mandatorily

Securities lending mandatorily through acentral counter-party (CCP)

The exchange is responsible for oversight andself-regulation of the markets in which itoperates


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State -of-the- art trading and post -tradingsystems: R$1,5 billion invested in resilience,

strength and safety

Consolidated market position: dominantposition in the domestic market and significant

presence in the global exchanges industry

Reference in corporate governancestandards: cutting edge in adopting best practices

to the market

High dividend payer : +80% of the net incomeand R$5,8 billion on distributed earnings since 2008

Revenue diversification: trading and post-trading services for stocks, derivatives, fixed income

and OTC

Constantly seeking operational efficiency:investments in technology and cost growth below

inflation

Why invest in BM&FBOVESPA? A global exchange

1890:Foundation of Bolsa

Livre (Bovespa'spredecessor)

Aug 2007:Bovespa Hld

demutualization

Oct 2007:Bovespa HldIPO (BOVH3)

1967:Bovespas

Mutualization

1986:Start ofBM&F

activities

Sep 2007: BM&Fdemutualization

Nov 2007:BM&F IPO(BMEF3)

May 2008:integration between BM&F and

Bovespa Hld and creation ofBM&FBOVESPA (BVMF3)

Practice of the period and amount distributed from Jan/2008 to Sep/2014; Expenses adjusted to Company s depreciation, stock granting plan principal and social charges -, stock options plan, tax ondividends from the CME Group, transfer of fines and provisions


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Services for the whole chain

Trading Platform: equities, derivatives, government andcorporate bonds, funds, spot FX, among others

Post-trading Platform:

Contraparte Central (CCP)

Settlement System (SSS)

Central Depository (CSD)Servios para Emissores e Participantes:

Listing

Trading access (brokers)

Securities lending

Custody for clubs and foreign investors (2689)Market Data (vendors)

Indices Licensing

Software Licensing

OTC (derivatives and fixed income)

COMMODITIES

FXINTEREST

CREDIT

EQUITY

CCP, SSS e CSD

Ps-Negociao

A VISTA

FUTUROOPO

TERMOSWAP

REGISTRO

Multi-asset and vertically integrated model Value gained across most of the chain


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DTCC

BRAZIL(Internalization of orders is forbidden)

USA(Internalization of orders is allowed)

POST-TRADINGCCPSSSCSD

TRADING

Brokers A and B

Investors Investors

Brokers A and B

Investors Investors

BrokerA

BrokerB

Model 100% vertical: clearing,settlement and central depository atthe FINAL BENEFICIAL OWNER LEVEL

Clearing, settlement and depositoryoccur at the brokerage houses

Trading venues

Multi-asset and vertically integrated model Value gained across most of the chain


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Update in 11/03/2014

10,44%6,84%

5,32%

5,02%

3,15%

69,23%

Oppenheimer Funds Vontobel Asset ManagementCME Group Brasil BlackRock FundsTreasury stock Others

Corporate governance Reference in corporate governance practices

Listed in Novo MercadoOnly voting shares issued (ON)

No controlling shareholder and pulverizedcapital

Majority of the Board composed ofindependent members

No Board member is a Companys executive

Executives compensation system alignedwith shareholders long-term interests

Adoption of Best Practices Pulverized Capital


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Corporate Governance Multidisciplinary knowledge in conducting business

BOARD OF DIRECTORS

Independent members

Pedro Pullen ParenteChairman - Engineer

EXECUTIVE OFFICERS

Marcelo Fernandez TrindadeVice-chairman Lawyer

Claudio Luiz da Silva HaddadEngineer and professor

Jos Roberto Mendona de BarrosEconomist and professor

Luiz Fernando FigueiredoCo-Founder of Mau Investments

Luiz Nelson Guedes De CarvalhoProfessor

Andr EstevesCEO of BTG Pactual

Jos Berenguer NetoCEO of JP Morgan Brazil

Daniel Luiz GleizerDirector of Ita Unibanco

Alfredo Antnio Lima de MenezesExecutive Officer of Bradesco

Charles P. CareyMember of CME Groups Board of Directors

Edemir PintoCEO

Eduardo GuardiaChief Product and IRO

Ccero VieiraDCOO

Daniel SonderCFO

Luis FurtadoCIO

Audit Committee

Nominations and Corporate Governance Committee

Compensation Committee

Risk Committee

Advisory Committee For The Securities Intermediation Industry

COMMITTEES


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BM&FBOVESPAs Sustainability Policy Approved by the Board of Director


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3Q14 RESULTS

APPENDIX



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Growth opportunities in the Brazilian

equities and derivatives markets

Opportunities in the Brazilian market BM&FBOVESPA is ready to capture future growth

EQUITIES MARKETPortfolio diversification : diversification of institutional investorsportfolios with a higher participation of equities

Retail investors : small number of retail investors and growth of themiddle class

Listed companies : low number of listed companies, while importantsectors are not adequately represented on the exchange

DERIVATIVES MARKETGrowth of credit and fixed-rate government debt : higher demand forhedging from financial institutions and institutional investors

Growth of foreign trade : higher demand for hedging through FXcontractsEquities market development : growth in demand for index-basedcontractsOTC derivatives: capital requirements (Basel) should benefit OTCtransactions through a CCP


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Investors exposure to equities is low Investors portfolio opportunities shifting to equities

Funds AUM evolution (in BRL billion). Global average of 40% forequities

Investment Funds AUM (in BRL billion)

Number of Custody Accounts (in thousands) Pension Funds AUM (in BRL billion)Number of retail investors represents only 0.3% of thepopulation (lower than global average)

Participation of equities in the portfolio of pension funds

Investors portfolios are highlyconcentrated in fixed income

Historically high interest rates

Low level of sophistication of pension funds andsome asset managers

Lack of knowledge about the equity market,combined with retail investors fixed -incomemindset

Sources: BM&FBOVESPA, ANBIMA and ABRAPP. Nov/14 Jun/14


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3Q14 RESULTS

APPENDIX



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BM&FBOVESPA IT, Risk and Operating Development Building a state-of-the-art platform to boost market growth

BM&FBOVESPA isinvesting

more than USD650 million(2010 - 2015) to build state-of-the-art IT, Risk and Operating

infrastructure

Capital efficiency for clients

Attract and retain clients andstrengthen relationship withintermediaries

Development of markets andproducts

Operational leverage forBM&FBOVESPA

Innovate and enhance marketrobustness ahead of regulatorydemands

High performance : high availability, sub-milliseconds latency, standard deviationlowOperational leverage : easily scalablecapacity

OTC MARKET

Capital efficiency for clients : integratedrisk calculation (OTC and Exchange TradedDerivatives)Customer relationship : strengtheningrelationships with customers

NEWDATA CENTER

Customer relationship : able to hostparticipants and clients infrastructure

Significant capacity to expand co-location

Capital efficiency for clients : integratedrisk calculation (equities and derivatives -OTC and listed); and unification ofsettlement windowsRationalization and standardization ofrules, procedures and requirements

The implementation of IPN/CORE depends the approval of the regulators.


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PUMA Platform High availability and performance

BM&F segment

Bovespa segmentCapacity and resilience of thesystem tested in times of highvolatility and message peaksThe entire trading infrastructure must be

adequately sized for peak message traffic:

Bovespa Segment Apr. 29thPeak of msgs/min: 619,063Average msgs/min: 60,000 - 70,000

BM&F Segment Aug. 13thPeak of msgs/min: 85,388Average msgs/min: 7,000 - 8,000

RESILIENCE AND AVAILABILITY438 uninterrupted trading days*

* Until Sep. 26, 2014


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Clearinghouses Integration and New Risk Model (CORE) Post-trade environment evolution

Organization of the post-tradeenvironment by types of assets/products

4 rulebooks and4 manuals.

4 participantstructures

4 systems /back-officeprocesses

4 systems /processes for risk

management

4 pools ofcollateral

4 settlementwindows and 4

multilateralbalances

4 distinctenvironments /IT architectures

4 registrationsystems for

participants andclients.

OTCderivatives

Corporatefixed income

Interbank spot

foreignexchangeFutures, options,

forwards

Securitieslending

Other productsand assets

Equities, ETFs,BDRs

Rules and Manuals

Structure of market participants

Participants and customer registration

Allocation and transfer

Position control

Clearing and settlement

Risk management

Pool of collateral

GovernmentBonds

Organization of the post-tradeenvironment by process

Exchange and marketparticipation cost

reduction

Liquidity managementimprovement

More efficientallocation of capital by

investors

Operational andtechnological risk

reduction


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Clearinghouses Integration and New Risk Model (CORE) Derivatives clearinghouse migration results

Roughly R$20 billon released in collateral

R$15 billion reduction in required collateral

R$5 billion increase to the value of depositedcollateral

R$12 billion withdrawn in the early days ofactivity

More than 5,000 margin simulation exercisesper day


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3Q14 RESULTS

APPENDIX


P d d S i D l


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Long-term development of products, markets and services

Products and Services Development Focus on the customers demands and needs

Greater liquidity for listed productsDevelopment of infrastructure for expansion of MM and HFT activity

Capital efficiency generated by CORE enables/encourages the realization of new strategies

Development of the securities lending platform

Marketing listed products and attracting new customers

Expanding the retail investor baseIncentive program with market participants

Expanding the portfolio to attend to the investment profile of individuals (Tesouro Direto, FixedIncome ETFs, FIIs ...)

Discussion about tax treatment simplification in the equities market

Capture of institutional investors diversification into foreign securities Listing of foreign securities (non-sponsored BDRs and Foreign Index ETF)

Cross-listing of futures contracts

P d d S i D l


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Long-term development of products, markets and services

Products and Services Development Focus on the customers demands and needs

Greater number of listed companies

Discussions with the Government to encourage and facilitate IPOs by SMEsLaw 13.043 grants exemption on capital gains for eligible SMEs investors until 2023 Creation of investment fund with proper structure to invest in SMEsReduction of maintenance and public offer cost for listed companiesInclude stocks in the roll of restricted public distribution effortsBNDES support to foster IPOs on BOVESPA MAIS

Fixed Income and OTC markets (product, market and revenue diversification)Securities registration: (i) marketing of already-available products (CDB, LCA, LCI and COE); ii)new products (CDB - new types, Financial Bills, COE - physical delivery and repos)

OTC Derivatives: (i) benefits of CORE; (ii) SWAPs and Flexible Options migration to the newplatform (flexibility and operational efficiency); and (iii) development of SWAPs with cash flow

Corporate bonds: (i) acceptance of securities with restricted distribution efforts (ICVM 476);and (ii) migration of trading to PUMA

Constant fee structure and incentive improvementsUse of pricing policies and incentives as important tools for the development of products,markets and services, as well as alignment with market participants

Review and monitoring of existing pricing and incentives policies


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3Q14 RESULTS

APPENDIX


B S t


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AVERAGE DAILY TRADING VALUE ADTV(BRL billion)*

AVERAGE ANNUAL MARKET CAP(BRL trillion) TURNOVER VELOCITY (12 months average)

Bovespa Segment Operational highlights

Updated to December 30, 2014. Ratio of cash market trading volume to the market cap of the exchange.

BM&F S g t


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2006 2007 2008 2009 2010 2011 2012 2013 2014 D-13 J-14 F-14 M-14 A-14 M-14 J-14 J-14 A-14 S-14 O-14 N-14 D-14Inte re st rates in BRL 0.906 0.950 1.141 0.979 0.889 0.918 1.004 1.046 1.120 1.266 1.049 0.980 1.105 1.185 1.211 1.168 1.152 1.177 1.090 1.076 1.226 1.192

FX rates 2.244 1.859 2.065 2.161 1.928 1.894 2.205 2.535 2.669 2.832 2.629 2.633 2.616 2.555 2.594 2.659 2.619 2.578 2.464 2.654 2.980 3.173

Stock Indices 1.419 1.501 2.145 1.620 1.564 1.614 1.524 1.761 1.774 2.122 1.695 1.958 1.597 1.834 1.601 2.095 1.527 1.863 1.477 1.721 1.628 2.119

Inte re st rates i n USD 1.094 0.965 1.283 1.357 1.142 0.941 1.015 1.231 1.294 1.340 1.325 1.414 1.553 1.275 1.300 1.332 1.156 1.250 1.240 1.264 1.078 1.461

Commodities 4.749 3.195 3.587 2.307 2.168 2.029 2.239 2.534 2.390 2.760 2.401 2.199 2.683 2.587 2.883 2.223 2.152 2.084 2.315 2.295 2.510 2.631

Mini contracts 0.034 0.054 0.162 0.176 0.128 0.129 0.116 0.119 0.117 0.128 0.122 0.123 0.119 0.118 0.120 0.123 0.120 0.115 0.107 0.113 0.120 0.118

OTC 1.571 2.111 2.355 1.655 1.610 1.635 1.769 1.409 2.092 0.978 1.077 1.069 1.155 1.501 2.679 3.027 3.862 3.236 2.069 1.911 1.517 2.689

Total RPC 1.247 1.224 1.527 1.365 1.134 1.106 1.191 1.282 1.350 1.575 1.294 1.261 1.393 1.411 1.406 1.431 1.335 1.373 1.249 1.284 1.405 1.481

BM&F SegmentOperational highlights

AVERAGE DAILY TRADED VOLUME ADV(thousands of contracts)

REVENUE PER CONTRACT - RPC(BRL)


I t ti i ti i l


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Investor participation in volumes Equities and derivatives segments

BM&F SEGMENT (DERIVATIVES)

Bovespa SEGMENT (EQUITIES)



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3Q14 RESULTS

APPENDIX


IncomeStatement


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Income Statement History of income statement results (consolidated)

(in BRL thousand) 2009 2010 2011 2012 2013 9M14

Net revenue 1,510,569 1,898,742 1,904,684 2,064,750 2,131,795 1,657,209

Expenses (569,832) (633,504) (816,664) (763,080) (797160) (558,304)

Adjusted expenses (446,677) (543,881) (584,521) (563,487) (575,764) (417,449)

Operating income 940,737 1,265,238 1,088,020 1,301,670 1,334,635 942,147

Operating margin 62.3% 66.6% 57.1% 63.0% 62.6% 62.8%

Equity method result - 38,238 219,461 149,270 171,365 144,673

Financial result 245,837 289,039 280,729 208,851 181,535 154,881

Income before taxation of profit 1,186,574 1,592,515 1,588,210 1,659,791 1.687,535 1,241,701

Income tax and social contribution (304,505) (448,029) (539,681) (585,535) (606,588) (496,570)

Net income 881,050 1,144,561 1,047,999 1,074,290 1,081,516 745,131

Adjusted net income 1,223,761 1,586,374 1,545,627 1,612,136 1,609,769 1,105,422

Adjusted EPS (BRL) 0.6104 0.7929 0.7932 0.8351 0.8389 0.6007

Attributable to shareholders of BM&FBOVESPA.

Revenuebreakdown


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REVENUE BREAKDOWN (3Q14) MAIN LINES DYNAMICS

Total revenue:R$594.7million

Equities and equities derivatives :

Market Capitalization of listed companies

Level of activity in the market (turnover velocity)

Type of investors

Type of operation and asset traded

Financial and commodities derivatives:

Type of contract traded

Type of investors

Type of operation

BRL/USD quote

Other

Number of investors/account in the depository

Market Capitalization of listed companies

Type of investors

Number and type of users of the data signal

BRL/USD quote

Revenue breakdown Diversified revenue sources as a differential

Adjustedexpensesand investmentbudget


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Focus on expenses control offset most of the inflationary adjustments

over the past years(in BRL million)

ADJUSTED EXPENSES BUDGET

INVESTMENTS BUDGET: 2015 Capex budget reviewed by R$10 million

Adjusted expenses and investment budget Focus on cost control and investments phase

The CAPEX program initiated in 2010 renewed the Company's IT,operations and service platform

2014 budget reaffirmed

2014e vs. 2013: 3.34%IPCA 2014e: 6.38% 2015e vs. 2014e: 1.26%4IPCA (average) 2015e: 6.50% CAGR 2010-15e: 2.70%4

IPCA (average) 2010-15e: 6.23%

2014 budget reaffirmedReview of 2015 budget: fromR$190 220 million to R$200 230 million

Update of the timeline and budgetof the Companys main projects

Capex is expected to decline in2016

2016e: R$165 195 million

(in BRL million)

Expenses adjusted to Company s depreciation, stock granting plan principal and social charges -, stock options plan, tax on dividends from the CME Group, transfer of fines and provisions. Considersthe high point 2014 budget IPCA for 2014 and 2015 based on market expectations released by the Central Bank in Dec. 05, 2014; 4 Considers the mid-point of 2015 budget and high point 2014 budget

1H14 Expenses Breakdown


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1H14 Expenses BreakdownPursuit of greater efficiency and controlling expenses

Prioritization of activities, review of contracts and enhancement ofprocesses has resulted in greater efficiency

129.8

154.4

1H11

1H14 P e r s o n n e l

e x p e n

d i t u r e

46.7

55.4

1H11

1H14 D a t a

p r o c e s s i n g

21.1

17.7

1H11

1H14 T h i r

d p a r t y

s e r v i c e s

24.1

5.2

1H11

1H14 M a r k e t i n g

Diligent process of managing resources and headcount sizing

Average annual wage increase of 7.2% and recognition ofindividual talents

Prioritization of activities and projects

Review of contracts

Strategic review of marketing activities

R$ MM

19.0%

-15.9%

-78.4%

Nominal Var. Real Var.

-37.7%

-84.0%

-3.3%

12.3

7.1

1H11

1H14 C o m m u n i c a t

.

Reduced costs from the posting of trading and custodystatements, as a result of changes to the submission process

Higher expenses with maintenance of new IT platforms

Expenses reduction with service providers and deprecation oflegacy IT platforms

18.8% -12.0%

-41.9% -57.0%

Includes personnel capitalization and excludes stock option and bonus expenses, Calculated based on the annual wage increase between 2011 and 2013 for personnel expenditure and the IPCAof services accumulated from July, 2011 to June, 2014 for the other lines of expenses

Financial Highlights


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Financial HighlightsFinancial solidity combined with return of excess capital to shareholders

Distribution of most of the cash generation, reaffirming thecommitment to return capital to shareholders

Payout(% of GAAP earnings)

2009: 80%2010: 100%2011: 87%

2012: 100%2013: 80%9M14: 80%

BuybackAlmost 13% of free

float repurchased inalmost 6 years (2H08-9M14)

+

(Accumulated between January, 2009 and September, 2014, in R$ million)

Cash Generation after Investments and Interest PaymentsCash PositionR$2,091 MM

IndebtednessR$1,513 MM

RatingMoodys Baa1 (issuer global scale)

Baa2 (issuer BR scale)

Baa1 (global notes)

S&PBBB+(counterparty cred.)

A-2 (issuer)

Data of BM&FBOVESPA (not consolidated): excludes variation in financial transactions and collateral pledged by participants, proceeds raised in connection with the acquisition of CME Group shares in 2010.Data from September, 2014 and excludes third party resources (investors collateral, resources deposited in the BM&FBOVESPA Bank and others).


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3Q14 RESULTS

APPENDIX


3Q14 Highlights


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3Q14 HighlightsSolid results in a challenging environment; one-off charge

Total revenue: R$594.7 MM, -0.4%

BM&F seg.: R$228.7 MM, flatBovespa seg.: R$263.6 MM, +2.5%

Other: R$102.4 MM, -7.8%

Net revenue: R$546.0 MM, +2.0%

Adjusted expenses : R$146.8 MM, -2.3%

Operating income: R$352.2 MM, +3.2%

EBITDA: R$431.2 MM, +3.4%(EBITDA margin 79.0%)

Financial Results: R$47.3 MM, -4.6%

Adjusted net income : R$357.4 MM, -11.5%

Adjusted EPS: R$0.195, -7.5%

Payout: R$190.7 MM in 3Q14, 80% of GAAP net incomeShare buyback: Jul-Oct14: 12.4 MM shares (0.7% of thefree float) 11.2 MM repurchased in October.

FINANCIAL HIGHLIGHTS (3Q14 vs. 3Q13)

RETURNING CAPITAL TO SHAREHOLDERS

Better volumes quarter-over-quarter for both segmentsOct14 volumes : Bovespa seg. +64.0% yoy (all time high);and BM&F seg. +38.0% yoy

MAIN PROJECTS AND UPDATES

VOLUME HIGHLIGHTS

Clearinghouses Integration: derivatives module fullyimplemented on August 18, 2014Indices development: partnership with S&P DJI

Dispute related to the deductibility of expenses fromBovespa Holdings IPO Amount under dispute reduced from R$123.0 MM toR$69.2 MM one-off net impact of R$63.1 MM (R$18.1MM as financial expense and R$45.0 MM as income tax)

TAX RELIEF PROGRAM (REFIS) ONE-OFF CHARGE

1 Excludes stock options plan cost, depreciation, tax on dividends from CME Group and provisions. According to CVM Rule 527/12 that does not exclude equity method accounting. Excludes deferredliability recognized in correlation with temporary differences from amortization of goodwill for tax purposes, stock options plan cost, investment in associate (CME Group) accounted under the equitymethod of accounting, net of taxes related to dividends and taxes paid overseas to be compensated.

Bovespa Segment Performance


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Bovespa Segment Performance Margins positively impacted by the mix effect

3Q14 vs. 3Q13: +0.8%Roughly flat at R$7.29 billion, mainly due to:

9.9% increase in average market capitalization

Lower turnover velocity yoy

Volatility related to elections in Brazil positivelyimpacted volumes from mid-August

AVERAGE DAILY TRADING VALUE (ADTV)

MARKET CAPITALIZATION AND TURNOVER VELOCITYTRADING MARGINS (in basis point - bps)

Market 3Q14 3Q13Cash market 5.061 4.991Derivatives on single stocks 13.115 13.021

Options market (stocks / indices) 13.145 13.029Forward market 12.999 12.999

Total Bovespa 5.502 5.3633Q14 vs. 3Q13: +2.6%Trading/post-trade margins impacted by the mix effect:

Lower participation of local institutional investors

Higher participation of equity derivatives

Lower participation of day traders

BM&F Segment Performance


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BM&F Segment Performance Mix effect and FX rate drove RPC down, offsetting ADV growth

3Q14 vs. 3Q13:ADV: 2.7 million contracts, +7.3%

+47.3% ADV of mini contracts

+38.9% ADV of Interest Rates in USD contractsRPC: -6.4%

Mix effect: higher participation of lower pricedcontracts (mini contracts and options) coupled withhigher participation of day traders

2.5% Real appreciation against USD in the period

35

AVERAGE DAILY VOLUME (ADV) AND AVERAGE REVENUE PER CONTRACT (RPC)

MINI CONTRACTS

(in millions of contracts)

REVENUE PER CONTRACT AND FX RATE(in R$)

~44% of derivatives revenue was priced in USD in 3Q14

Contracts with RPC referenced in USD represented ~26%of derivatives ADV in 3Q14

215.1 202.8 249.4255.1

316.8

8.6% 9.1% 8.8%

11.3% 11.9%

3Q13 4Q13 1Q14 2Q14 3Q14

ADV (millions of contracts) % Total

*Average FX rate (R$/US$) in the quarter, considering the closing price for previous month.

3Q14RevenueBreakdown


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3Q14 Revenue Breakdown Diversified revenue base

37.8%: Financial/Commodity Derivatives

38.1%: Cash Market

5.9%: Trading32.2%: Post-Trade

5.7%: Stock and Indices Derivatives

Total RevenueR$594.7 million

3.2%: Securities Lending 3.1%: Depository, Custody and Back-Office3.1%: Vendors2.0%: Listing1.6%: Trading Access

18.4%: Other Revenue

36

REVENUE BREAKDOWN

CASH EQUITIES TRADING REVENUE

ACCOUNTED FOR5.9% OF TOTAL

DERIVATIVES REVENUE

(BM&F + Bovespa) ACCOUNTED FOR43.5% OF THE TOTAL

18.1%: Brazilian Real interest rate contracts 13.5%: FX Contracts2.9%: USD interest rate contracts3.3%: Other Financial/Commodity Derivatives

Trading and Post-trade

3Q14 Expenses Breakdown


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3Q14 Expenses Breakdown Delivering efficiency on a diligent expense management

Adjusted Expenses (-2.3%) Adjusted personnel (-2.2%): (i) headcount downsizing;(ii) reduction to profit-sharing accrual; and (iii) higherpersonnel expenses capitalizedData processing (-11.5%): 3Q13 was impacted by theconcentration of expenses for software service andmaintenance of IT platforms

Communication (-30.3%): reduction in mail serviceexpenses, reflecting improvements and electronificationof the statements mailing processOther (+120.0%): higher donations and contributionsincluding, particularly:

Contribution to the Federal Government educationalprogram called Cincias sem Fronteiras

Transfer of fines due to failures in the financial andphysical settlement processes, which are nowdestined to BSM

(in R$ millions)

*Include expenses with maintenance in general, taxes adjusted by the dividends from CME Group, board and committee members compensation and others.

9M14 Expenses Breakdown


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9M14 Expenses Breakdown Pursuit of greater efficiency and controlling expenses

P e r s o n n e l

e x p e n

d i t u r e

D a t a

p r o c e s s i n g

T h i r

d p a r t y

s e r v i c e s

M a r

k e t i n g

Nominal Var. Real Var.

Average annual wageincrease of 7.0%

Higher expenses from newIT platforms maintenanceand inflationary contract

adjustments

Inflationary contractadjustments

Inflationary contractadjustments

4.9% -2.2%

3.5% -3.0%

2.9% -3.6%

-23.2%-18.0%

260.6

264.2

81.3

84.2

26.5

25.7

9.9

8.1

Prioritization of activities, review of contracts and enhancement of processes has resulted ingreater efficiency 9M14 adjusted expenses grew 2.5% yoy, significantly bellow inflation

Main forces pressuringexpenses

Main factors offsettingexpenses growth

Diligent management ofassets and headcount

dimensioning; lower profitsharing

Review of contracts,legacy system deprecated

Contracts review

Strategic review ofmarketing activities;ongoing process ofexpenses review

(in R$ millions)

C o m m u n i c a t

.

Inflationary contractadjustments-27.6%-22.8%10.2

13.2Improvements and

eletctronification of themailing process for

statements successfullyimplemented

Includes personnel capitalization and excludes stock option and bonus expenses, Calculated based on the annual wage increase between 2013 and 2014 for personnel expenditure and the IPCA of servicesaccumulated from September, 2013 to September, 2014 for the other expenses lines.

Financial Highlights


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Financial Highlights Consistently returning capital to shareholders

3Q14: R$47.7 MM (R$153.7 MM in 9M14)

Capex budget ranges:

2014 : between R$230 260 MM2015 : between R$200 230 MM

PayoutR$190.7 MM in dividends (80% of the 3Q14 GAAP netincome): payment on November 28 th (shareholders position of November 17 th)

Share BuybackMar- Oct14 : 41.5 MM shares (R$456.9 MM) under thecurrent program (up to 100 MM shares until Dec14)

YTD14: 78.4 MM shares (R$827.4 MM) reaching 4.1% ofthe free-float

FINANCIAL RESULT

CAPEX

RETURNING CAPITAL TO SHAREHOLDERS

Financial result of R$47.3 MM, down 4.6% from 3Q13,explained mainly by R$18.1 MM interest payment inconnection with the settlement of a tax dispute under theREFIS

(In R$ millions)

CASH AND FINANCIAL INVESTMENTS

3,842

3,497

5,077

4,871

4,4981,686

2,134

2,441

1,131

1,390

497

457

432

404

360

355

359

897

909

1,037

1,960

1,921

1,307

1,053

1,055

3Q13

4Q13

1Q14

2Q14

3Q14

Market participants cash collateral and othersSubsidiariesClearinghouses' required safeguardsAvailable funds

Clearinghouses required safeguards: growth in linewith additional collateral pledged by marketparticipants

Includes earnings and rights on securities in custody. Includes third party collateral at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA).

Resilient ITInfrastructure


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Resilient IT Infrastructure Capacity and resilience of the system tested in times of high volatility

Msgs BM&F Seg.(08/13/14)

Investments in trade and post-trade platforms ensured the resilienceof our systems in a period of messages and trades peaks

486 uninterrupted trading days

Until Nov. 13th, 2014

Less than three months afterits launch, the new

Clearinghouse has alreadyhandled record volumes in theBM&F Segment

Msgs Bovespa Seg. (04/29/14)

# of Trades in the Bovespa Seg. (million)

0

1

2

3

Jan-14 Feb-14Mar-14 Apr-14May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14

Oct-27-14Record # of Trades

2,582,718

# of Trades in the BM&F Seg. (million)

Oct-16-14Record # of Trades

376,741

0

100

200

300

400

Jan-14 Feb-14Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14

GrowthProducts


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Growth ProductsIncreasing revenue diversification

Products well accepted by clients, with continuous developments to maintain growthtrend

Securities LendingTesouro DiretoMarket maker for options on single stocksExchange traded funds (ETF)Agribusiness credit bills (LCA)Real estate investment funds (FII)Non sponsored Brazilian Depositary Receipts (BDRs N1 NP)

CAGR(2010-14):+22.9%

(In R$ millions)

Financial Statements


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a c a State e tsSummary of Balance Sheet (Consolidated)

(in R$ millions) 9/30/2014 12/31/2013 (in R$ millions) 9/30/2014 12/31/2013

Current assets 3,025.6 4,319.5 Current liabilities 1,888.7 2,710.8

Cash and cash equivalents 370.0 1,196.6 Collateral for transactions 1,333.4 2,073.0

Financial investments 2,337.0 2,853.4 Others 555.3 637.9

Others 318.5 269.5 Non-current liabilities 4,386.1 3,886.9

Non-current assets 22,214.7 21,577.2 Foreign debt issues 1,493.2 1,426.2Long-term receivables 1,517.3 1,135.4 Deferred Inc. Tax and Social Contrib. 2,718.7 2,295.8

Financial investments 1,134.2 820.8 Others 174.2 165.0

Others 383.1 314.6 Shareholders equity 18,965.4 19,298.9

Investments 3,544.6 3,346.3 Capital stock 2,540.2 2,540.2

Property and equipment 421.0 423.2 Capital reserve 15,213.7 16,056.7Intangible assets 16,731.7 16,672.3 Others 1,196.4 687.3

Goodwill 16,064.3 16,064.3 Minority shareholdings 15.1 14.7

Total Assets 25,240.3 25,896.7 Liabilities and Shareholders equity 25,240.3 25,896.7

LIABILITIES AND SHAREHOLDERS EQUITY ASSETS

Financial Statements


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Net income and adjusted expenses reconciliations

ADJUSTED NET INCOME RECONCILIATION

ADJUSTED EXPENSES RECONCILIATION

* Attributable to BM&FBOVESPA shareholders.

3Q14 3Q13Change

3Q14/3Q13 2Q14Change

3Q14/2Q14 9M14 9M13Change

9M14/9M13Net Income* 238.4 281.6 -15.3% 250.1 -4.7% 744.6 899.4 -17.2%

Stock options plan 7.3 5.6 30.2% 7.6 -3.2% 21.8 21.4 2.0%Deferred tax liabilities 138.6 138.9 -0.2% 138.6 0.0% 415.9 416.7 -0.2%Equity in income of investees (net of taxes) (43.7) (38.2) 14.3% (39.8) 9.9% (128.1) (117.0) 9.4%Recoverable taxes paid overseas 16.7 15.8 5.6% 16.3 2.5% 51.2 47.4 7.9%

Adjusted Net Income 357.4 403.7 -11.5% 372.8 -4.1% 1,105.4 1,267.9 -12.8%

3Q14 3Q13Change

3Q14/3Q13 2Q14Change

3Q14/2Q14 9M14 9M13Change

9M14/9M13Total Expenses 193.8 194.1 -0.2% 178.2 8.7% 558.3 543.7 2.7%

Depreciation (29.5) (32.5) -9.2% (28.0) 5.2% (87.1) (88.4) -1.5%Stock options plan (7.3) (5.6) 30.2% (7.6) -3.2% (21.8) (21.4) 2.0%Tax on dividends from the CME Group (5.8) (5.1) 13.2% (5.3) 9.2% (16.6) (14.8) 12.1%Provisions (4.3) (0.6) - (3.2) 36.7% (15.4) (11.8) 30.4%

Adjusted Expenses 146.8 150.2 -2.3% 134.1 9.5% 417.4 407.3 2.5%


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3Q14 RESULTS

APPENDIX


High growth products


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g g pGrowing sophistication of market participants

Securities Lending Real Estate Funds (FIIs)Options with Market Maker

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

Initiatives to develop and prompt higher volume in certain productsPerformance shows that the initiatives are being well received by the market

ETFs Brazilian Treasury Direct - Tesouro Direto Agribusiness Credit Bills

(ADTV in BRL million)

+43.1%

(ADTV in BRL million)

(ADTV in BRL million) (Custody in BRL billion)

CAGR(09-14): +85.7% CAGR (10-14): +12.4%

CAGR (10-14): +37.5% CAGR (10-14): +33.5%

(AUM in BRL billion)

Updated to December 30,2014.

Bovespa Segment


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p gRaising Capital

PUBLIC OFFERINGS(BRL billion)

PIPELINE: OFFERINGS ANNOUNCED SO FAR TO THE MARKETThere are 5 offerings in the pipeline

IPO:T4U, Ouro Verde, JBS, AZUL and PAR Corretora de Seguros

Additionally, there are 4 Real Estate Funds filed with CVM: estimated value of R$ 700 million

Update to December 30, 2014Excludes the portion acquired by the Brazilian government in the Petrobras offering, via the transfer of rights in barrels (BRL 74.8 billion).

Trading in ADRs of Brazilian companies


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g pLiquidity migration process interrupted

December14

Source: Bloomberg (in USDtraded value of 35 companieswith ADRs programs )

Sarbanes-Oxley Act(Jul. 2002)

Novo MercadoLaunch

(Dec. 2000)

PUBLIC OFFERINGS IN NUMBER OF COMPANIES

End of IOF Tax (2%) forforeign investors

(Dec. 2011)

End of CPMF(Financial

Transaction Tax)

37.3%

25.6%

9.6%

27.6%

37.0%

63.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TotalIPOs - 1 - 7 9 26 64 4 6 11 11 3 10 1 153Follow ons 14 5 8 8 10 16 12 8 18 11 11 9 7 1 138Total 14 6 8 15 19 42 76 12 24 22 22 12 17 2 291

Dual Listings - - - 2 1 1 - - 1 - - - - - 5

Bovespa Segment


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p gForeign investment flow

MONTHLY NET FLOW OF FOREGIN INVESTMENTS(in BRL billons)

Includes public offering (primary market) and regular trades (secondary market).

Products and Services Development


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pRecent changes in pricing policy and incentives

Products / Market Main changes

SECURITIES LENDING Elimination of 0.05% incentive for national lenders (settlement rate forvoluntary loan maintained at 0.25% p.a.)

DMA Elimination of 10% discount for trades via DMA in Derivatives Market(BM&F Segment)

MARKET DATA Price recomposition and pricing of new products and services

ISSUERS

Elimination of analysis fee discount on the annual fee

Creation of analysis fee for Public Tender Offers, IPOs and Follow-ons

DepositoryAdjustment of maintenance fees of custody accounts for a certain groupof investors; and creation of fees for ownership transferring within thedepository

Clearinghouses Integration and New Risk Model (CORE)


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Benefits from Clearinghouse integration

1. DETERMININGTHE CLOSEOUTSTRATEGY

T+0 T+1 T+2 T+3 T+4 T+N ...

Defines the portfolio closeout strategy which,respecting the settlement restrictions of theportfolio of assets/markets, should minimizethe risk of a loss associated with the closeoutprocess, preserving existing hedge strategies

2. RISK EVALUATION

T+0 T+1 T+2 T+3 T+4 T+N ...

Defines the (stress) scenarios associated withthe dynamics of each risk factor relevant tothe portfolio. All assets and contracts arereevaluated considering the scenarios definedin this step ( full valuation ).

3. POTENTIAL P&LCALCULATION

T+0 T+1 T+2 T+3 T+4 T+N ...

Calculates and aggregates intertemporally P&Lassociated with each scenario, considering thedefined closeout strategy

CLOSEOUT RISK Result: Two risk measures market andliquidity that are estimated both jointly andconsistently

PERMANENT LOSS TRANSIENT LOSS

OVERVIEW: CLOSEOUT RISK CALCULATION IN THREE STEPS


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www.bmfbovespa .com.br

Departamento de Relaes com Investidores55 11 2565-4729 / 4418 / 4207/4834

[email protected]

BVMF Presentation - January 2015

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