Presentation - Analyst Day SP - October 2015

BM&FBOVESPA Analyst Day
So Paulo, SP
OCT/2015
Confidential
Internal Use
1
Public
Disclaimer
Esta apresentao pode conter certas declaraes que expressam expectativas, crenas e previses da
administrao sobre eventos ou resultados futuros. Tais declaraes no so dados histricos, estando baseadas
em dados competitivos, financeiros e econmicos disponveis no momento e em projees atuais acerca da
indstria na qual a BM&FBOVESPA se insere.
Os verbos antecipar, acreditar, estimar, esperar, prever, planejar, projetar, almejar e outros verbos
similares tm a inteno de identificar estas declaraes, as quais envolvem riscos e incertezas que podem resultar
em diferenas materiais entre os dados atuais e as projees desta apresentao e no garantem qualquer
desempenho futuro da BM&FBOVESPA.
Os fatores que podem afetar o desempenho incluem, mas no esto limitados a: (i) aceitao pelo mercado dos
servios prestado pela BM&FBOVESPA; (ii) volatilidade relacionada (a) economia e ao mercado de valores
mobilirios brasileiros e (b) indstria altamente competitiva na qual a BM&FBOVESPA opera; (iii) alteraes (a) na
legislao e tributao nacional e estrangeira e (b) nas polticas governamentais relacionadas aos mercados
financeiros e de valores mobilirios; (iv) crescimento da competio, com novos participantes nos mercados
brasileiros; (v) habilidade em adaptar-se s rpidas mudanas no ambiente tecnolgico, incluindo a implementao
de funcionalidades otimizadas requeridas pelos clientes da BM&FBOVESPA; (vi) habilidade em manter um processo
contnuo de introduo de competitivos novos produtos e servios enquanto mantm a competitividade dos j
existentes; (vii) habilidade em atrair novos clientes nas jurisdies nacional e estrangeira; (viii) habilidade em
expandir a oferta de produtos da BM&FBOVESPA em jurisdies estrangeiras.
Todas as declaraes nesta apresentao so baseadas em informaes e dados disponveis na data em que foram
feitas, a BM&FBOVESPA no se obriga a atualiz-las com base em novas informaes ou desenvolvimentos futuros.
Esta apresentao no se constitui em uma oferta de venda nem em uma solicitao de compra de qualquer valor
mobilirio; tampouco deve haver qualquer venda de valor mobilirio onde tal oferta ou venda pudesse ser ilegal
antes de registro ou qualificao de acordo com lei de valores mobilirios. Nenhuma oferta deve ser feita exceo
de um prospecto que atenda os requisitos da Instruo CVM 400 de 2003 e suas alteraes.
Programao
09:30 - 09:45 Overview: Edemir Pinto and Daniel Sonder
09:45 - 10:10 Excellence in IT, Operations and Risk: Ccero Vieira and Luis Furtado
10:10 - 10:25 Products and Markets Development: Eduardo Guardia
10:25 - 10:35 Profitability and Financial Robustness: Daniel Sonder
10:35 - 10:50 Other Relevant Matters for BM&FBOVESPA
10:50 - 11:30 Q&A
11:45 - 12:15 Breakout Groups: BM&FBOVESPA Clearinghouse and CORE
12:15 - 12:45 Breakout Groups: Products and Markets Development

3
Programao
10:50 - 11:30 Q&A

4
Programao
10:50 - 11:30 Q&A

5
Agenda
Excellence in IT,
Operations and Risk
Profitability and
Financial
Robustness
Products and
Markets
Development
Excellence in IT, Operations and Risk
Excellence in
IT, Operations
and Risk
Trading
System/
PUMA
Post-Trade
(derivatives
clearinghouse
V1)
Post-Trade
(equities
clearinghouse
V2)
PUMA Trading System - Performance

Enabling the increase of trades
Successive records broken in recent years, without delays or

availability failure
Development of the number of messages/days (in millions)
Source: BM&FBOVESPA.
PUMA Trading System Innovation and Stability

Constant development of the trading environment
Resilience and added value for the business

Stability and resilience
Redundant and scalable architecture
Disciplined environment management
25 mock tests held on Saturdays in 2014/2015

Mature process of development, tests and certification
Continuous development, with the addition of functionalities

Volatility bands for the BM&F markets
Market maker protection
Conflated market data feed
Performance improvements (RTT reduced by approximately 260 ms)
New indices platform
New trading screen for equities (e-PUMA)

Programmed options exercise
Integration of the Clearinghouses Derivatives

Capital efficiency generated by CORE
R$20 billion reduction in the total margin requirements benefitted

different types of participants and investors
50 biggest reductions to margin
requirements (accumulated %)
50 biggest reductions per type of customer

(% of the total)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
13
17
21
25
Source: BM&FBOVESPA. CloseOut Risk Evaluation
29
33
37
41
45
49
10
Integration of the Clearinghouses Derivatives (cont.)

The customers benefitting from the 50 biggest reductions to margin

represent ~45% of total ADV, being relatively active in the option and
swaps markets
Customers benefitting from the 50 biggest reductions to margin
11

Examples of benefitted trades

Theoretical Portfolios
Futures versus Options
Old Margin CORE Margin Reduction

(R$)
(R$)
( %)
Position 1
Position 2
Buy US Dol. Fut. Jan/16
Sell US Dol. Call Jan/16
-73,084.6
-39,857.9
-45.5%
Buy Ibov Fut. Dec/15
Sell Ibov Call Dec/15
-21,379.0
-15,045.8
-29.6%
Buy Coffee Fut. Dec/15
Sell Coffee Call Dec/15
-11,844.7
-8,015.4
-32.3%
Buy US Dol. Fut. Jan/16
Sell DI x DOL Swap
-78,628.1
-58,556.2
-25.5%
Buy DI1 Fut. Jan/16
Sell DI x PRE Swap
-692.0
-482.1
-30.3%
Buy US Dol. Call Dec/15
Sell Dol Call Jan/16
-39,318.2
-3,890.1
-90.1%
Buy IDI Call Jan/16
Sell IDI Call Dec/15
-345.6
-23.0
-93.4%
Buy DI x DOL Swap Dec/15
Sell DI x US DOL Swap Jan/16
-12,693.4
-335.6
-97.4%
Buy DI x IPCA Swap 6 month
Sell DI x IPCA Swap 1 year
-929.9
-334.0
-64.1%
Sell DI Fut. Jan/21
Deposit 5-year LTN 5 as collateral
NA
NA
-16%
Sell Ibov Fut. Dec/15
Deposit BOVA11 ETF as collateral
NA
NA
-21%
Futures versus Swaps
Calendar Spreads with

Options
Curve Trades with

Swaps
Collateral Optimization
Considers a contract in Position 1 and the equivalent hedge or collateral of Position 2.
12

Making the market more efficient
The margin currently required from the 50 customers that most benefit from CORE is greater
than that required before its implementation (exchange rate increase, more open interest,
stress scenario changes etc.)
In the absence of CORE it is estimated that the margin required of these 50 customers would
be R$80 billion instead of R$60 billion, making their transactions at BM&FBOVESPA more
expensive
Development of margin requirement (R$ billions)

90
80
70
60
Implementation
of CORE
Simulation
of margin
required in
the old risk
system
50
40
30
13
Integration of the Clearinghouses Equities

Development for implementation in the equities market (BOVESPA Seg.)
The CORE methodology has been adapted for the equities market
(cash, forward, options and securities lending)
14
Integration of the Clearinghouses Equities (cont.)

Capital efficiency to be generated by CORE
Theoretical example of efficiency generated by a securities lending

operation (BTC)
Borrowed position of R$1.0 million of security XYZ1
Deposit of R$1.0 million of security XYZ2 as collateral

XYZ1 and XYZ2 perfectly correlated
Margin interval of +/-20% for the two securities
Quantities of XYZ1 and XYZ2 below the liquidity limits of CORE
Market (R$)
Calculated by the old Risk

System (R$)
Calculated by CORE
(R$)
Value of the borrower position

at BTC
(1,000,000)
(1,200,000)
(1,200,000)
Value of the security deposited

as collateral
1,000,000
800,000
1,200,000
Additional margin requirement
(400,000)
15
Integration of the Clearinghouses - Equities (cont.)

BTC practical example

Borrowed Position at BTC (R$)
Securities Deposited as Collateral (R$)
PETR4
100,000
PETR3
100,000
BBSE3
100,000
LREN3
100,000
ABEV3
100,000
BRFS3
100,000
JBSS3
100,000
EMBR3
100,000
KROT3
100,000
VIVT4
100,000
VALE5
100,000
VALE3
100,000
BBDC4
100,000
ITUB4
100,000
CIEL3
100,000
BBAS3
100,000
ITSA4
100,000
BBDC3
100,000
BVMF3
100,000
UGPA4
100,000
1,000,000
1,000,000
16
Integration of the Clearinghouses Equities (cont.)

BTC practical example (cont.)

Closeout strategy: Buy short position and sell collateral on T+2
Stress scenarios used
13 years of historical simulations (2002 to 2015)
Monte Carlo simulations through factor modeling
Prospective scenarios (ad hoc) for systemically relevant risk factors
Market (R$)
Calculation by the Old

Risk System (R$)
Calculation by
CORE (R$)
Value of the borrower position at

BTC
(1,000,000)
(1,216,000)
(944,000)
Value of the security deposited as

collateral
1,000,000
802,000
857,000
(414,000)
(87,000)
Additional margin requirement
Reduction of margin to 327,000 (= 414,000 87,000), reduction of 79% in

relation to the previous risk model, or of 32.7% in relation to the value of
the borrower position
17

Optimization of margin as a result of CORE in the BOVESPA segment,

examples:
Borrower/lender positions at BTC

Exclusively
considering BOVESPA
segment contracts
Long/short positions in equity forwards

Long/short positions in equity options
Equity portfolios deposited as collateral
Long/short positions in Ibovespa and IBRX futures

Long/short positions in equity index flexible options and swaps (OTC)
Also considering
BM&F segment
contracts
Deep-in-the-money positions in contracts in the BM&F and BOVESPA segments,

independently of the risk factors
Effect of portfolio diversification: low probability of the risk factors of large and
diversified accounts simultaneously suffering the worst possible movements foreseen in
the margin intervals. Probability reflected in the historical, statistical and prospective
scenarios used by CORE
18

Acceptance of collateral abroad
Distinct rules for the equity and derivatives markets

At present there is a distinct treatment for the deposit of collateral abroad in the equity and
derivatives markets
Equities
Clearinghouse
Any type of investor participant in the Clearinghouse

ADRs of Brazilian companies, US Treasuries, German Treasuries
Approximately R$6 billion deposited
BM&FBOVESPA
Clearinghouse
(former
Derivatives
Clearinghouse)
Exclusively nonresident investors trading agricultural contracts pursuant to the

provisions of Resolution 2687
US Dollars and US Treasuries
Approximately R$110 million
The need to review the rule for the acceptance of collateral abroad, as risk calculation will be integrated
with just one margin requirement and one margin call
19

Deposit of collateral by nonresident investors for financial derivatives

Nonresident investors represented around 40% of the ADV at BM&F Seg. between January and
September 2015
In 2011 the use of bank guarantees was prohibited to nonresident investors
Trades by nonresident investors with financial derivatives on BM&FBOVESPA require the deposit of
collateral in Brazilian Reals, which involves:
a) Approval of credit limits for the acquisition of Brazilian federal government bonds
b) Sale of US Dollars or other currencies and the purchase of Brazilian Reals
c) Acquisition of federal government bonds
d) Currency hedging for securities denominated in Brazilian Reals
e) Management of the securities in accounts and of the hedge (expirations, dividends, rollovers, tax,
remittances etc.)
f) Convertibility risk exposure
g) Withholding income tax at source in the case of an investor based in a tax haven
The need to deposit collateral in Brazilian Reals makes difficult and limits the leverage of foreign
investors in the financial derivatives markets of BM&FBOVESPA
20

The worlds main clearinghouses accept international currencies and

sovereign bonds of other countries as collateral
CURRENCIES
CLEARINGHOUSE
SOVEREIGN BONDS
CME
Danish Krone, Norwegian Krone, Swedish Krona,

Australian Dollar, Canadian Dollar, New Zealand Dollar,
Hong Kong Dollar, Singapore Dollar, Euro, Swiss Franc,
Yen, Pound Sterling
Germany, Canada, France, Japan, UK, Sweden
DTCC
Canadian Dollar
Canada
ICE Clear US
Canadian Dollar, Swedish krona, Norwegian Krone, Czech

Koruna, Australian Dollar, New Zealand Dollar, Euro,
Swiss Franc, Yen, Pound Sterling, South African Rand
ICE Clear
Europe
US Dollar, Euro, Pound Sterling
Germany, Austria, Belgium, Canada, Spain, US, Finland, France,

Holland, Italy, Japan, Sweden, Switzerland
Eurex
US Dollar, Swiss Franc, Pound Sterling
Australia, Canada, Denmark, US, Ireland, Italy, Japan, Norway,

UK, Sweden, Switzerland
ASX
US Dollar, New Zealand Dollar, Euro, Yen, Pound Sterling
US
SGX
US Dollar, Euro, Yen, Hong Kong Renminbi
Germany, US, France, Japan
HKX
US Dollar, Hong Kong Dollar, Euro, Yen, Yuan
US
21

Standardization of rules with maintenance of security and stability

It is important for the competitiveness of the local markets and their clearinghouses that the nonresident investors that are active in Brazil can have greater flexibility for the collateralization of their
trades, observing the following conditions sine qua non:
Greater flexibility cannot create challenges for the governments monetary policy
Greater flexibility cannot bring risks to the stability of clearing systems
Legal memoranda showed to BACEN suggests there is equivalent legal security to that offered in Brazil
for the constitution, maintenance and execution of collateral deposited abroad by investors :
Of determined jurisdictions of origin (US, UK and France)
Of determined types, by jurisdiction
With regard to monetary policy and increasing of FX volatility:
BM&FBOVESPA proposes to BACEN the creation of a limit that establishes a minimum margin
requirement linked to currency derivatives that should be covered by additional local securities
22
Integration of the Clearinghouses Derivatives (Performance)

Gains in efficiency, resilience and capacity expansion
Development of trade numbers and records (in thousands)
In one year...
Development of risk simulator use (in thousands)
10 trading records broken

+72MM risk calculations
+1.8MM risk simulations
+61MM trades captured
+126MM allocations
99.9% availability
23
Integration of the Clearinghouses - Equities (Project)

Challenges for implementation of the equities phase
Complexity of the equities phase...

The V1 phase is contained in V2, meaning that it encompasses:
Listed and OTC derivatives (V1)

Equities, BDRs, listed funds, ETFs, equity derivatives (options and forwards) and corporate fixed income
Securities lending (BTC)
Settlement on delivery (integration with the Central Securities Depository) and treatment of failure cycle
Corporate actions, gross settlement (IPOs, OPAs and follow-ons)
Development of CORE risk modeling: more instruments, more scenarios and more prices
New non-functional requirements: 10 million trades/day
Project for the Integration of the Clearinghouses Derivatives Phase (V1) vs Equities Phase (V2)
24
Integration of the Clearinghouses - Equities (Project)

Timetable for implementation of the equities phase
Plan for the development, tests and implementation of the

equities phase of the BM&FBOVESPA Clearinghouse
2014
Start
Oct/14
4Q
2015
1Q
2Q
3Q
2016
4Q
1Q
2Q
3Qi
End
DEVELOPMENT AND TESTS
Oct/16
INTEGRATED TESTS
CERTIFICATION
Derivatives
Parallel production cycles
(internal)
BACEN
Start of integrated End of Construction Start of

UAT
10/30
certification
10/01t
12/01
Start of Expected End

parallel
of BACEN
production Approval
03/01r
Process
June
TESTS AND DEVELOPMENT

Model Definitions
Requirements
Developments
Internal Tests
CERTIFICATION
Connectivity
Registrations
Settlement
Risk & Collateral
Expected
BACEN
Approval
Expectation of
implementation V2
(depending on test
results and approval by
the regulator)
August
25
Products and Markets Development
Products and
Markets
Development
Increase
liquidity
New products
(local and
international)
Enhance
prices and
incentives
OTC market
26
Products and Markets Development

Increasing the liquidity of existing products
Commercial and operating levers for speeding up and maximizing

volumes and generation of revenues
The MM performs a significant role in the development
of the product and BM&FBOVESPA offers benefits to
attract these MMs
Market Maker
(MM)
Marketing
Requests to
Regulator
Stimuli boost the development of the product (discount

by volume; investor profile; characteristics of the
product, such as liquid and illiquid tenors...)
Prices,
incentives and
awards
Operating
improvements
Minor changes to operating questions may be important

leverage for stimulating liquidity
Requests to and discussions with the regulator about

matters that might remove obstacles or stimulate the
development of products and markets
Disseminating information regarding the characteristics
and use of the products, via two fronts: commercials and
educational campaigns
27
Products and Markets Development (cont.)

The use of levers has helped raise the revenue of these products
from R$45 million in 2013 to R$95 million between Jul/14 Jun/15
Tesouro Direto (open interest in R$ billion)
Incentive programs for brokerage houses
Marketing and education
Operating changes (partnership with STN)
Selic Futures OC1 (outstanding contracts in millions)

Price incentives for investors
Marketing Regulatory requests
Requests to regulator
Equity options with MM (ADTV in R$ millions)

Price incentives for MMs
Targeting potential new MMs
Requests to regulator
Source: BM&FBOVESPA. Updated to September 2015.
28

Attracting new MMs through the marketing of products and markets,

the adoption of price incentives and the greater flexibility of programs
MM programs sponsored by BM&FBOVESPA
Products
(number of programs)
2015
Active
Announced but not

started
Options on equities
and indices
19
10
Financial and
commodity
derivatives
Total
Start of activities foreseen for the coming months. Pipeline subject to change.
Prospects of new
annoucements
Total
29
12-18
22-28
51-57
29

Securities lending as a stimulus for liquidity

International investors (amount with the depositary in R$ billion)
Investors without restrictions:
Investors with restrictions:
Hedge Funds, Treasuries, Sovereign Funds, Endowments
Mutual/Pension Funds (USA - ERISA and 1940 Act);

UCITS Funds (EUR - ESMA)
Initiatives:
Initiatives:
Roadshows e Webinars
Hiring an international law office
Interaction with ISLA and RMA
Access to the regulators - SEC and ESMA
Due Diligence with Agent Lenders
Position at the end of June /15
30

Securities lending as a stimulus for liquidity

Local institutional investors (amount with the depositary in R$ billion)
Investors without restrictions:
Investors with restrictions:
Investment funds
Pension Funds (internal restrictions), Insurers and open

pension funds
Initiatives:
Initiatives:
Coverage activity of asset managers
Operating improvements (intraday market data and

trading screen)
Request to regulators: CVM, Susep and Previc
Position at the end of Jun/15
31

Increase the family of products that complement each other
Development of families of products increases the possibilities for the

composition of investors portfolios and has a positive impact on the liquidity of
products
Inflation Family
ETF FI
IPCA
Options
DI1 to 4
Options
IDI
Options
Govt Bonds
NTN-B
Futures
OTC
Derivatives
FRA
DI1
DAP
Currency swap
DOL
Options
Spot Dollar
DOL
EUR
Futures
EUR
Option
JPY
Futures
JPY
Option
GBP
Futures
GBP
Option
OC1
FI index
futures
DI x IPCA
Swap
DI x Pr
Swap
DOL Rollover
ITC
Option
Benefits of CORE (Integrated Risk)

Principal contract
Adjacent
contract
Mini
DOL
Mini
Rollover
Contracts to be
assessed
Inflation coupon Futures Contracts; Forward Rate Agreement on coupon ; One-day repos (Selic futures)
32

Diversification of the portfolio of products listed on the equity and derivatives
The increase and diversify of the revenue with still

unexplored indices, through the listing of new ETFs
and derivative contracts
From index creation to product listing
Conception
Development of the index: discussions with

the market, methodology, criteria...
Developments
Launch of 5 indices
Enhanced Value
Low Vol
Momentum
Launch
Commercial
Derivatives
contracts
Presentation and publication

of the indices to the market
and potential clients
(managers)
Licensing: open
and closed funds,
ETFs, COEs,
structured
notes...
Listing of futures
and options
Quality
Inverse Risk Weighted
Development of fixed income

indices
Advantages and differentials
Creation of indices with global
standard methodology the same
methodologies as globally
established indices
33

In search of business opportunities
Financial integration of Latin America is a process that is already in course that can
create new opportunities for BM&FBOVESPA in the medium and long term
Strategy
1. Acquisition of minority stakes in the main

exchanges in the region through a disciplined
investment process
2. Participate on the Board of these exchanges to
speed along the joint process of the
Development of Products and Markets, and
making the relationship with the regulators
closer
3. Explore the potential for attracting issuers and
investors, the launch of depositary receipts and
the cross listing of products
Recent developments
1. Acquisition of 8.3% of the Santiago Stock

Exchange (Chile)
Investment value: R$43.6 million
Help in the creation of a market for listed
derivatives
2. Discussions underway with the main exchanges

in the region
34

iBalco: expansion of complementary business to the core business
Intrinsic advantages (synergy with the listed, differentiation of product / service)

and simplicity of price policy
Available Products
Banks raising
capital and other
fixed income
products
OTC derivatives
Recent Initiatives
CDB
CRA
CRI
LCI
CPR
CCI
LCA
CDCA
COE
LF
CDAWA
Active commercial effort

Simple and effective pricing
Expansion of functionalities and other
markets (brokerage houses)
New products
COE with physical delivery
Active commercial effort
NDF c/CCP
NDF
Swap c/CCP
Swap
Op.Flex FX,
Indices, ETFs
w/CCP
OF FXs
New platform & improvements to

functionalities
OF
Indices
Challenge: New Products
Retention of market with CCP
35

Creation of value and stimulus for the development of products and markets
Enhancement of Price and Incentives Policies

OTC derivatives
fee structure
Readjustment of
Issuers annual fee
Rebalancing
Trading/post-trade
Prices p/ volume
Tiers in Derivatives
2008
Charge (BPs) on
amount in
depository
Price policy for
Mkt Data
2009
2010
2011
Transfers fee
structure at CSD
Equities Market
Fee Structure
2012
Organizational
Structure for Fee
Structure
2013
2014
2015
Fee Structure of
OTC Products
Fee structure of
interest rate
derivatives
Review of prices and
incentives: BTC, DMA,
Market Data, Issuers and
Depository
36
Profitability and Financial Solidity
Balance Sheet
Management
Profitability and
Financial
Solidity
OPEX &
CAPEX
Allocation of
Income
37
Balance Sheet Management

Benefits of the partnership and partial divestment of CME Group shares
Strategic partnership with CME Group
Start of Broadening to global
partnership preferred strategic
(BM&F)
partnership
2007
2008
2010
Order
Routing
2011
PUMA
(Corp. bonds)
Cross
listing
2012
PUMA
(Derivatives)
2013
2014
2015
Divestment of CME Group shares

Operation: divestment of 20% of the stake in CME
Group (equivalent of 1% of the shares, or ~R$1.2
billion)
Reason: reduce risk of exchange rate variation and of

the CME Group share price
PUMA
(Equities)
Merits and fruits of the partnership
Development of investment in CME Group
Association with the largest group of exchanges in

the world provides the benefit of discussing
opportunities, trends, regulation, risks
Technology
Operations
Commercial
Technological
innovation
Trading
Incentives
Risk mgt
New products
Regulation
Client targeting &

management
Connectivity
Source: Bloomberg e BM&FBOVESPA. 09/08/15 (before sale), 09/09/15 (after sale), Jun/15.
38
OPEX & CAPEX Efficiency gains

Effective expense control neutralizing increased inflation and exchange rates
5.2% nominal accumulated growth of adjusted expenses
Focus on expense control has resulted in an efficiency gain
R$ million
+35.7%
+5.2%
2015 Budget reaffirmed, despite the challenges
Challenges for the coming years
Budget did not consider:
Inflation and exchange rate variations
Speeding inflation rate
Reducing staff expense capitalization after integration

of the clearinghouses
Sharp exchange rate depreciation
Implementation of new systems, platforms and

functionalities
Expenses adjusted by depreciation and amortization, stock grant plan principal and charges stock options plan, tax related to dividends received from CME group, passing along of
fines and provisions. Adjusted by (i) IPCA from 2011 to 2014 and the expectation for 2015 (Focus Bulletin Oct 09, 2015); (ii) Collective bargaining for 2011 to 2015; and (iii) average
exchange rate variation 2011 to 2014 and expectation for 2015 (Focus Bulletin Oct 09, 2015); Others encompasses administration of services and goods, consulting and attorneys fees
39
OPEX & CAPEX Focus on Developing the Business

Technological transformation cycle nearing completion
The Capex program begun in 2010

renewed the Companys IT platform,
operations and services
Key factors to be considered

Projects begun, implemented,
completed
Inflation
Exchange rate
PUMA: derivatives, equities, corporate bonds
Integration of clearinghouses: derivatives
Integration of clearinghouses : equities
Data Center: construction and migration of infrastructure

iBalco: registration of fixed income and OTC derivatives
40
Allocation of Results
Conservative profile of cash management, given BM&FBOVESPA role as CCP
Cash position (R$ millions)
Third party
Total
Restricted
Available
2Q15
4,033
Subsidiaries &
affiliates
Client funds held by
BM&FBOVESPA
Settlement Bank
Collateral
Safeguards
Cash collateral deposited

by clients (total collateral
pool was R$283 billion in
Jun/15)
Special assets
Matching
contribution to
settlement funds
required from
market participants
Maintenance of cash
available
Sufficient to meet
clearinghouses
potential requirement
in stress scenarios with
simultaneous defaults
by major clients
Maintenance of
minimum operational
flexibility
BM&FBOVESPAs investment grade ratings

maintained (above sovereign)
Moodys: Baa2 (issuer global scale / global notes)
S&P: BBB- (counterparty credit) / A-3 (issuer)
Additional cash of
~R$1.2 billion from sale
of shares in CME in
3Q15
Includes earnings from and rights on securities in custody. Does not include investment in the Bolsa de Comercio de Santiago, hold by BM&FBOVESPA, traded as
financial investment.
41
Allocation of Results (cont.)

Return of surplus capital to shareholders
Distribution of most of the cash generation, reaffirming the

commitment to return capital to shareholders
Payout
(% of net income)
2009: 80%
2010: 100%
2011: 87%
2012: 100%
2013: 80%
2014: 80%
1H15: 80%
Cash Generation after Investment and Interest Payments

(Total for Jan/09 through Jun/15, in R$ millions)
Share Buyback
About 15% of free float
repurchased in 7-year
period (2H08-1H15)
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 Dec 2014 and excludes third party resources (investors collateral, resources deposited in the BM&FBOVESPA Bank and others).
42
Allocation of Results (cont.)

Impact of maximum interest on capital on return of capital to shareholders
Simulation of cash distribution

in 2015-17
Simulation of cash distribution

after 2018
(Remaining period for goodwill amortization)
(After goodwill amortization and until credit depletion)
Growth of net income but no impact on cash

generation
Buyback will decline if distribution of 80% of net
income continues
Credits generated in 2015-17 will be used to reduce

tax liability, driving growth of cash generation but
not affecting net income
Buyback can be increased if distribution of 80% of
net income continues
For the purposes of simulation and simplification, it is assumed that the company will continue to distribute practically all surplus cash from operations and at least 80% of net income in the form of
dividend/interest on capital(IoC. Important note: the Board of Directors reserves the right to change this policy without notice.
43
Programao
10:50 - 11:30 Q&A

44
Other Relevant Matters

International Qualification of BM&FBOVESPAs Clearinghouses
Qualified Central Counterparty (QCCP)

In the context of the Basel III rules, QCCP status is relevant to determining capital allocation by financial
institutions with exposure to CCP credit risk
Generally speaking, a CCP is considered qualified if it substantially complies with the 24 risk
management guidelines established in BIS/IOSCOs Principles for Financial Market Infrastructures
(PFMI)
Credit risk weighting factor:
Qualified CCP: 2%
Non-qualified CCP : 20%-150%
The Central Bank of Brazil has established a credit risk weighting factor of 2% for transactions by
domestic banks settled via domestic clearinghouses
In the United States, whether a CCP is qualified is decided by the bank and not by the regulators. US
banks that operate in Brazil reportedly consider BM&FBOVESPAs clearinghouses qualified
45

International Qualification of BM&FBOVESPAs Clearinghouses (cont.)
Process for obtaining QCCP status in Europe

In Europe, according to the European Market Infrastructure Regulation (EMIR), a CCP in a nonEuropean Union jurisdiction is considered qualified if:
The European Commission (EC) recognizes as equivalent the normative framework applicable to
clearing and settlement service providers in the country concerned
The CCP is recognized by the European Securities Market Authority (ESMA)
In 2014 BM&FBOVESPA submitted a complete application for clearinghouse qualification to ESMA
However, Brazil is still awaiting recognition of the equivalence of its normative framework by the EC
Until December 15, 2015, all clearinghouses worldwide have been granted provisional QCCP status
Provisional QCCP status is believed likely to be renewed
46

Process for obtaining QCCP status in Europe (cont.)

The prerequisites for EC recognition of a non-EU countrys normative framework as equivalent to the
EMIR are as follows:
Risk management requirements applicable to the countrys CCPs must be deemed equivalent
The supervision regime applicable to the countrys CCPs must be deemed equivalent
The country must have an analogous procedure for recognition of foreign CCPs (reciprocity
clause), so that foreign CCPs can provide clearing services to clear members or trading platforms
established in the country
47


In October 2014, the EC recognized the equivalence of the following jurisdictions:
Australia
Japan
Singapore
Hong Kong
In September 2015, the EC published draft equivalence recognition decisions regarding:
South Africa
Canada
South Korea
Mexico
Switzerland
Brazil and the US are among the jurisdictions that are awaiting the ECs decision on equivalence
48


With regard to the reciprocity clause, some of the aforementioned countries have adopted hybrid
solutions, which:
Allow duly recognized foreign CCPs to provide services to clearing members or trading platforms
established in the country concerned
Establish mechanisms for cooperation between regulators regarding foreign CCPs and/or direct
supervision of foreign CCPs by local regulators
Reserve certain services and specific market niches to local CCPs
49

Process for obtaining QCCP status in Europe reciprocity adopted by other

countries
Japan
Clearing services must be provided by Japanese CCPs in the case of OTC transactions that may
materially affect the stability of Japans financial markets owing to their characteristics
Australia
Authorization granted for OTC and exchange-traded derivatives, as well as debt securities. Stocks listed
on ASX were excluded from the authorization and equities trades must be settled by the Australian CCP
South Korea
Authorization granted solely for OTC derivatives. All contracts and securities traded on South Korean
exchanges must be settled by Korean CCPs
50

Process for obtaining QCCP status in Europe proposal presented by

BM&FBOVESPA
BM&FBOVESPAs proposal to facilitate recognition of Brazilian CCPs by the EC and ESMA is for Brazil to
adopt a mechanism for recognition of international CCPs established by a National Monetary Council
(CMN) resolution or a Central Bank of Brazil circular that:
Defines the criteria for authorizing the provision of clearing services by foreign CCPs
Defines the markets in which foreign CCPs can operate and restrictions on their operations with the
aim of preserving the health of the Brazilian Payment System (SPB), its supervision, and adequate
management of systemic risk
51

Source of the goodwill: summary of the transaction
Objective: Merger of operations from BM&F S.A. and Bovespa Holding in a single entity.
Stages of the transaction
EGM approval of the merger, by asset value, of BM&F S.A into Nova Bolsa S.A (creation of a new
Company)
EGM approval of the merger of Bovespa Holding shares into Nova Bolsa S.A for R$17.942 billion and
change in the corporate legal name from Nova Bolsa S.A to BM&FBOVESPA S.A.
Redemption of preferred shares in cash (~R$ 1.2 billion) on behalf of the former shareholders of
Bovespa Holding
52

Source of the goodwill: summary of the transaction
Valuation of Bovespa Holding: in addition to the valuation carried out by financial institutions, an Economic and
Financial Appraisal Report of Bovespa Holding S.A. was performed by Deloitte Touche Tohmatsu
The methodology of the Appraisal Report was the discounted Free Cash Flow valuation, projected for the
period between Jan. 01, 2008 and Dec. 31, 2017
The conclusion of the Appraisal Report was that, as of December 31, 2007, the fair value of all Bovespa Holding
shares was between R$20,724 million and R$ 22,319 million, representing a range of R$28.67 to R$30.87 per
share.
In addition to the Economic and Financial Appraisal Report of Bovespa Holding, there was also the
performance of:
- A property valuation report of real estate owned by BVSP and CBLC (which indirectly made up the totality
of the Bovespa Holding assets)
- An appraisal report of intangible assets of Bovespa Holding SA and appraisal report of arts
Price of the transaction: in possession of the Bovespa Holding Appraisal Report by the methodology of
Discounted Free Cash Flow Valuation and other reports, the management of Nova Bolsa and Bovespa Holding
determined the purchase/acquisition price of Bovespa Holding shares through the average price in the last 30
trading sessions, totaling R$17.942 billion, as supported by the Appraisal Report.
Goodwill: the goodwill arises from the split of the acquisition cost of Bovespa Holding into shareholders equity
(R$1.544 billion, which is recognized by the equity method) and goodwill on acquisition of equity interest
(R$16.396 billion)
The goodwill that is subject to amortization for tax purposes totaled R$13.460 billion, since BM&FBOVESPA
adjusts the goodwill by discounting the value of goods and intangibles, only amortizing the portion related to
future profitability.
53

Goodwill: timeline of the Assessment Notices
12/05/2013: The
Administrative Council
for Tax Appeal (CARF)
denies the voluntary
appeal presented by
BM&FBOVESPA related to
2008/2009 Goodwill.
11/29/10:
Assessment notice
receipt for the
period from 2008
and 2009 ("Goodwill
2008/2009").
2010
2011
2012
21/10/11: Knowledge of
the RFB decision on the
2008/2009 Goodwill,
which made an
administrative objection of
BM&FBOVESPA partially
valid.
2013
2014
05/09/2014:
Knowledge of CARF
decision which denied
the voluntary appeal
of BM&FBOVESPA
related to the
2008/2009 Goodwill.
25/03/2015: CARF did

not accept the motion
to clarify presented by
BM&FBOVESPA related
to the 2008/2009
Goodwill.
May 29, 2015: Special

Appeal presented for
the goodwill case of
2008 and 2009
Aug. 20, 2015
Special Appeal
accepted for judgment
by the superior court of
CARF
2015
04/02/2015:
Assessment notice
receipt for the
period from 2010
and 2011
("2010/2011
Goodwill").
04/30/2015:
Submitted an
administrative
objection for the
2010/2011 goodwill.
Assessment notice related to the fiscal benefit of 2008-2009: value in Jun/15 de R$1,037,186 thousand, classified as
a remote chance of loss
Assessment notice related to the fiscal benefit of 2010-2011: value in Jun/15 de R$2,003,087 thousand, classified as
a remote chance of loss
54
Programao
10:50 - 11:30 Q&A

55
Agenda
Profitability and
Financial Solidity
Excellence in IT,
Operations and Risk
Balance Sheet Management

OPEX & CAPEX
Allocation of Income
Trading/ PUMA
Post-Trade
Der. clearinghouse V1
Equities clearinghouse V2
Products and Markets

Development
Increase liquidity
New products
(local and international)
Enhance prices and incentives
OTC market
56
Programao
10:50 - 11:30 Q&A

57
Breakout Groups
BM&FBOVESPA Clearinghouse and CORE
BM&FBOVESPA Participants:
Ccero Vieira Chief Operating Officer
Andr Monteiro Chief Risk Management Officer
Viviane Basso Managing Director, Settlement
Luiz Furtado Chief Information Officer
Rodrigo Nardoni Managing Director, Post-Trade Systems Development
Development of Products and Markets

BM&FBOVESPA Participants:
Eduardo Guardia Chief Product Officer
Andr Demarco Managing Director, Product & Service Engineering
Claudio Jacob Managing Director, International Sales & Business Development
Cristiana Pereira Managing Director, Sales & Issuer Development
Fabio Dutra Managing Director, Sales & Business Development
Tarcsio Morelli Managing Director, Commercial Planning & Project Analysis
58
ANNEXES
59
Trading System (PUMA)

Enabling the increase of trades
Importance of the system be able to process peaks of trades

many-fold the average of the day
Bovespa Seg. - Intraday distribution of the number of messages/minute (in thousand)
BM&F Seg. - Intraday distribution of the number of messages/minute (in thousand)
Source: BM&FBOVESPA. Trading day 10/15/2015, Trading day 10/23/2015.
60
Clearinghouse Integration Equities (cont.)

Risks and challenges deriving from acceptance of foreign currencies

and securities as collateral
CONTROL TOOLS AVAILABLE TO CLEARINGHOUSE AND/OR CENTRAL BANK
Collateral market risk
Conservative haircuts for securities and exchange rate. BRL/USD exchange rate positively correlated with
country risk.
Collateral credit risk
Accept only sovereign bonds rated AA or AAA, i.e. better than Brazilian bonds. Diversify risk.
Collateral liquidity risk
Set conservative limits linked to BM&FBOVESPAs cash position and volume of credit taken out by
BM&FBOVESPA for sale and monetization of foreign securities and currencies
Legal risk
Accept foreign securities and currencies only (i) from jurisdictions and (ii) types of investor for which collateral
execution is explicitly permitted in a default situation, including intervention, special administration, out of
court liquidation etc., based on an independent legal opinion
Challenges for
exchange-rate policy
Establish gradual implementation rule 3 years to avoid risk of immediate replacement of large volume of
domestic securities by foreign securities
Set limit for use of foreign securities as collateral for exchange-rate derivatives
61
Clearinghouse Integration Equities (cont.)

Investor categories in jurisdiction of origin

Jurisdiction
Investor category in jurisdiction of origin

1. Certain Debtors Subject to the US Bankruptcy Code: mutual fund, hedge fund, non-financial entity organized as corporation / limited
liability company / partnership / business trust, futures commission merchant (FCM)
2. Investment bank, broker (including broker-dealer registered as FCM with the CFTC)
USA
3. Nationally- and state-chartered commercial bank (that takes deposits insured by the Federal Deposit Insurance Corporation - FDIC)
4. Systemically important financial institution (financial company that could be (1) or (2) above but whose failure and resolution under an
otherwise applicable legal regime would have, as determined by the US Secretary of the Treasury, serious adverse effects on the financial
stability of the US)
5. NY State licensed branch of non-US bank (branch licensed under NY law/supervised by NY Department of Financial Services - NYDFS)
1. Investment firm (Including investment bank, broker and fund manager; not including credit institution, local firm (cf. CRR) and firm not
authorized to provide the ancillary service (cf. MiFID) and not permitted to hold money/securities belonging to clients and which may not
at any time place itself in debt with clients)
UK
2. English credit institution

3. UK-regulated branch of third country credit institution and investment firm
4. Other UK-incorporated entity (not English investment firm or English credit institution)
France
1. Credit institution (tablissement de crdit)

2. Investment firm (entreprise dinvestissement)
62
www.bmfbovespa.com.br
Department of Investor Relations

55 11 2565-4729 / 4418 / 4834 / 7938 / 4207
ri@bmfbovespa.com.br
63

Presentation - Analyst Day SP - October 2015

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BM&FBOVESPA Analyst Day

12:15 - 12:45 Breakout Groups: Products and Markets Development

12:15 - 12:45 Breakout Groups: Products and Markets Development

12:15 - 12:45 Breakout Groups: Products and Markets Development

Excellence in IT, Operations and Risk

PUMA Trading System - Performance

Successive records broken in recent years, without delays or

PUMA Trading System Innovation and Stability

Resilience and added value for the business

25 mock tests held on Saturdays in 2014/2015

Continuous development, with the addition of functionalities

New trading screen for equities (e-PUMA)

Integration of the Clearinghouses Derivatives

R$20 billion reduction in the total margin requirements benefitted

50 biggest reductions per type of customer

Source: BM&FBOVESPA. CloseOut Risk Evaluation

Integration of the Clearinghouses Derivatives (cont.)

The customers benefitting from the 50 biggest reductions to margin

Integration of the Clearinghouses Derivatives (cont.)

Examples of benefitted trades

Futures versus Options

Old Margin CORE Margin Reduction

Buy US Dol. Fut. Jan/16

Sell US Dol. Call Jan/16

Buy Ibov Fut. Dec/15

Sell Ibov Call Dec/15

Buy Coffee Fut. Dec/15

Sell Coffee Call Dec/15

Buy US Dol. Fut. Jan/16

Sell DI x DOL Swap

Buy DI1 Fut. Jan/16

Sell DI x PRE Swap

Buy US Dol. Call Dec/15

Sell Dol Call Jan/16

Buy IDI Call Jan/16

Sell IDI Call Dec/15

Buy DI x DOL Swap Dec/15

Sell DI x US DOL Swap Jan/16

Buy DI x IPCA Swap 6 month

Sell DI x IPCA Swap 1 year

Sell DI Fut. Jan/21

Deposit 5-year LTN 5 as collateral

Sell Ibov Fut. Dec/15

Deposit BOVA11 ETF as collateral

Futures versus Swaps

Calendar Spreads with

Curve Trades with

Considers a contract in Position 1 and the equivalent hedge or collateral of Position 2.

Integration of the Clearinghouses Derivatives (cont.)

Making the market more efficient

Development of margin requirement (R$ billions)

Integration of the Clearinghouses Equities

Integration of the Clearinghouses Equities (cont.)

Theoretical example of efficiency generated by a securities lending

Deposit of R$1.0 million of security XYZ2 as collateral

Calculated by the old Risk

Value of the borrower position

Value of the security deposited

Additional margin requirement

Integration of the Clearinghouses - Equities (cont.)

BTC practical example

Securities Deposited as Collateral (R$)

Integration of the Clearinghouses Equities (cont.)