bvmf presentation - december 2012

7/30/2019 BVMF Presentation - December 2012

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December 2012


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This presentation may contain certain statements that express the managements expectations, beliefs and assumptions

about future events or results. Such statements are not historical fact, being based on currently available competitive,financial and economic data, and on current projections about the industries BM&FBovespa works in.

The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and other similar

verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that could cause

actual results to differ materially from those projected in this presentation and do not guarantee any future BM&FBovespa

performance.

The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPA services;

(ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industriesBM&FBovespa operates in; (iii) changes in (a) domestic and foreign legislation and taxation and (b) government policies

related to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v)

ability to keep up with rapid changes in technological environment, including the implementation of enhanced

functionality demanded by BM&FBovespa customers; (vi) ability to maintain an ongoing process for introducing

competitive new products and services, while maintaining the competitiveness of existing ones; (vii) ability to attract new

customers in domestic and foreign jurisdictions; (viii) ability to expand the offer of BM&FBovespa products in foreign

jurisdictions.

All forward-looking statements in this presentation are based on information and data available as of the date they weremade, and BM&FBovespa undertakes no obligation to update them in light of new information or future development.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be

any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities

law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities

Commission CVM Instruction 400 of 2003, as amended.

Forward Looking Statements

2


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BVMF STOCK PRICE

Recent Performance

3


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BVMF3 Recent performance

Updated until 11/30/2012.

BVMF3 YTD: +31.0%

Ibovespa YTD: +1.3%

4

IOFs10/17

R$14.97

Goodwill

11/30

R$13.01

Competition

News

01/05

R$13.10

Rumors

about IOF

Exchanges Mergers

02/08

R$11.18

BATs

02/15

R$11.43

Reductions of VolumesEstimates by the Market

New IOF on

Derivatives

07/26

R$9.55

Direct Edge

11/21

R$10.11

Removal of

IOF on Equities

12/01

R$10,54

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

BM&FBOVESPA IBOVESPA

Oxera's Report

Release

06/18

Change of IOF

on foreign

exchange

transactions

06/14


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BRAZILIAN MARKET OPPORTUNITIES

5


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Source: ABRAPP, WFE and BM&FBOVESPA6

Equity Market (BOVESPA Segment)Low penetration in the Brazilian market

Clients base: huge potential in retail and pension funds segments

Number of custody accounts (thousands) Pension funds portfolio

Low penetration of equityand derivatives in the maininvestors portfolios

Stable and low interestrate environment encouragemore exposure in equities

Recent growth in the numberof retail investors, but stilllow compared to othermarkets

Listed Companies

Low number of listed companies compared toother countries

Lack of important economic sectors in theexchange, for instance: oil & gas, infrastructure,retail, IT and pharmaceutical,

Investment cycle may bring new companies andsectors to the exchange

Currently, SMEs are not able to raise moneythrough equity easily

Dec11 Listed Companies (27th in the World)

2002 2011

Equity

Fixed Income and Others

R$168 billion

R$574 billion

30.1%

27.7%

69.9%

72.3%

6.752

4.988

3.945 3.838 3.520 3.2762.886

2.079 1.816

373

India USA Canada China/HK Japan Spain UK Australia Korea Brazil


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7

Derivatives Market (BM&F Segment)Growth in the credit level will favor volumes

Credit: very low credit level and even lower in the case of mortgage transactions

Credit to GDP

Interest Rate in BRL contracts: growth in credit levels, specially in fixed rates, support the increase the activity offinancial institutions

FX contracts: growth in the amount of foreign trading and change in the culture of the Brazilian entrepreneurs canpush up volumes in this group of contracts, mainly in currencies other than US$

Index-based contracts: growth in cash equity market, the launching and development of ETFs and the growth ofexposure to equity by institutional investors can drive the growth of these contracts

Commodities contracts: cash settled contracts and the change in the behavior of farmers that are becoming moresophisticated

Trade Flow (total Imports + Exports in USD billions)

229

281

371

281

384

482

2006 2007 2008 2009 2010 2011

4.5%

5.8%

27.4%

51.0%Mortgage

Total Credit


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MAIN INITIATIVES

8


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Launching of new productsProduct diversification strengthens revenues and competitive position

15 ETFs currently tradedGrowth in ETFs

Market makers for options on 10 stocks and IBOVESPAMarket maker for

options

Cross-listing of futures contracts with CME Group (stock index-based and commodities contracts) and BRICS exchange (stockindex-based contracts)

Cross-listing ofderivatives with CME

and BRICS

A platform for retail investors to trade in government bondsthrough the Internet

Incentives granted to brokerage firmsTesouro Direto

Serves demand from trading or arbitrage strategies andborrowing demand to avoid settlement failsSecurities Lending

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ADTV(in R$ millions)

Average Assets under Management*

Consistent GrowthHistoric record of volumes keeping long term growth trend

(in R$ millions)

ETFs Exchange Traded Funds Tesouro Direto

Average Assets under Custody

(in R$ billions)

Average Number of Investors Retail Investors

(in thousands)

*Excluded PIBB11. 10

23.8 27.536.3 42.3

64.482.7 78.9 83.0 86.0

88.4 89.4

1.3 1.82.9

3.96.1

8.67.9 8.8

9.3 9.9 9.9

Hi h G h P d


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High Growth Products

Real Estate Funds (FII) and Agribusiness Credit Bills (LCA)

Agribusiness Credit Bills (LCAs)Real Estate Funds (FIIs)

FIXED INCOME AND REAL ESTATE PRODUCTS

0.1

25.4

Jan-11

Feb-11

ar-11

Apr-11

ay-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

ec-11

Jan-12

Feb-12

ar-12

pr-12

ay-12

Jun-12

Jul-12

Aug-12

Sep-12

Assets under custody (R$ billions)

60%40%

Mkt. Shar e BVMF Other

11

19.7

96.2

# of investors

23.8

22.5

0

5

10

15

20

25

30

ADTV (R$ MM) Mkt Cap (R$ BN)

h h d


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213.0 210.7

53.1 89.7

9M11 9M12

PETR + VALE Others

2.9

3.96.1

8.66.4

9.3

2009 2010 2011 9M12 3Q11 3Q12

80 89123

153 143119

2009 2010 2011 9M12 3Q11 3Q12

Focus on product and market development, supportinghigher sophistication of market participants

Selected fast-growth products accounted for 7.6% oftotal revenues in 3Q12 (7.3% in 3Q11)

High Growth ProductsIncreased sophistication of market participants

ETFs (ADTV - R$ MM) Tesouro Direto (custody - R$ Bn)

HIGH GROWTH PRODUCTS

Options on stocks/indices (ADTV - R$ MM) Stock index futures (ADVthd contracts) Securities Lending (Open Interest)

Ibovespa index-related products (options onIbovespa, stock indices futures and ETFs) werenegatively impacted by reduced volatility whencompared to 3Q11

-1.1%

+68.9% -17.3%CAGR: +24.1%-6.5%

+45.6%CAGR: +43.8%

+90.2%CAGR: +85.3%

(R$ billion)

12.720.5

30.2 30.9 31.6 29.5

2009 2010 2011 9M12 3Q11 3Q12

CAGR: +34.5%

18.6 28.548.7

118.5

53.8

102.3

2009 2010 2011 9M12 3Q11 3Q12

12


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Licensing TRADExpress Real Time Clearing system

Objective: integrating and modernizing our existing clearing facilities should proceed over 2012.

Integrated tests with the market and implementation of the systems scheduled to take place in 2013/2014

Partnership advantages: License to use the software

Access to the source code

Selling rights over our new clearing platform

Multi-asset trading platform (PUMA Trading System)

State of the art in trading technology and technological independency

Derivates module successfully implemented in 2H11 Equities market to be concluded in 2H12

Strategic Projects

Registration systems for OTC derivatives

Objective: modernize, improve and expand the range of our registration services for OTCderivatives, while offering our customers a streamlined, quality solution and thoroughregulatory reporting tool

One of the most flexible and complete engines for registration, price discovery, riskassessment, capture and lifecycle processing of these transactions

Three-module implementation: the first one is schedule to 2H12, the second one for1H13 and third module of the platform will be announced in due course

13

Cl i H I i


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Clearing Houses IntegrationBuilding a state of the art platform

Equity and Corporate

Debt (R$ 70 bn*)

Equity, ETFs and fixedincome cash market

Equity and indicesderivatives (options andforward)

Securities lending

Derivatives

(R$ 107 bn*)

Financial andcommodities derivatives(futures, options andforward)

OTC derivatives

FX

(R$ 4 bn*)

FX spot market

(US$ vs. R$)

Securities

(R$ 1 bn*)

Cash market and forwardmarket for governmentbonds

INTEGRATED CLEARING HOUSE=

Capital efficiency

* Aggregate of pledged collaterals at our clearinghouses totaled R$181.3 billion in September 30, 2012. 14

M i P j t


15/49*CORE, Close-out Risk Evaluation.

Main ProjectsDeliveries already implemented and programmed

INTENSE DELIVERY PHASE STARTING IN 4Q12

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 (...)

Migration ofPUMA

TradingSystem(equities)

New integrated clearing house/ CORE*

Construction of the New Data Center

OTC DerivativesPlatform (Calypso)

Fixed income

tradingplatform

Fee structure redesigning and introduction of incentive programs

Development of new products / markets: ETFs, market making programs for the options market; dual listings

Fixed income

registrationplatform

Crosslisting

(...) (...)

(...) (...)

15

I i l P j


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Strengthening the sales force in other countries

- Offices in New York, London and Shanghai

Partnerships with international exchanges

- Strategic partnership with CME Group

- Asia: MoU and discussions with HKEx, Shanghaiand Shenzhen Exchanges

- Latam: MoU with Chile and Colombia exchangeand discussions with Peru and Colombia

- Cross-listing agreements signed with CMEGroup and BRICS exchanges

International ProjectsCreating a global market

16


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BUSINESS MODEL AND REGULATORY

FRAMEWORK

17


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Panel sponsored by CVM


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On June 29, CVM sponsored a discussion with stakeholders

Regulator: the study shows that competition in exchange industry is not urgent

Participants view

Regulator: market integrity and transparency are priorities

Brokers: most of them have doubts about the benefits and showed concerns related to cost risingand risks

Investors: in general have a perception that prices are in line with international benchmarks and are

concerned with market integrity Infrastructure providers (exchanges): non consensus regarding the necessity of opening the clearing

house or not in order to create the conditions for competition

BVMF main considerations:

Understates regulatory and IT/infrastructure cost for brokers

Disregards implicit costs of liquidity fragmentation and does not assess qualitatively the priceformation impacts

Compares inadequately the other market costs when does not use the All in cost

Market size is not big enough to embrace new exchanges

Recognizes the importance of clearing houses integration

19

Panel sponsored by CVMMain points

E it M k t S ttl t St t


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DTCC

BRAZIL(All the trades must be matched on an

exchange environment)

USA(Brokers can internalize orders)

BVMF

Post tradingClearing (CCP)

SettlementCentral Depository

Trading

BVMF

Brokers

A and B

Investors Investors

Brokers

A and B

Investors Investors

Broker

A

Broker

B

100% vertically integrated: clearing, settlement andcentral depository at the beneficial owner level

Brokers control their clients portfolios and settlepositions through BVMFs infrastructure (this

impacts the post-trade fees charged by BVMF)

DTCC does the clearing, settlement and centraldepository of securities at the brokers level

Each broker (prime broker) has its own structure tocontrol their clients portfolios and settle positions

(this impact the prime brokers costs)

Trading Venues

20

Equity Market Settlement StructureBrazil Compared with USA


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Updated until: 11/30/2012

Market Capitalization (US$ billions) and EBITDA Margin (%)

Listed Exchange Business Model

Diversified and Integrated Integrated Derivatives Diversified but Not Integrated*

* Do not provide post-trading services for the equity market

Business Model

21

Source: Bloomberg

* 12 mths to 30 June 2012.

18.3 17.312.0 10.9 9.6 6.0 5.7 5.4 4.2 4.0 2.7

1.8

65.5%

77.9%

61.6% 58.6%

69.7%

42.3%

62.2%

76.9%

49.1% 47.6%59.4%

72.0%

CME HKEx BVMF Deutsche

Boerse

ICE SGX Nyse

Euronext

ASX* LSE Nasdaq TMX BME

EBITDA Margin 2011Diversified and integrat ed Derivat ives Diversified but not integrat ed

Brazilian Market Regulatory Framework


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Brokers &

investors

Trading

Pos-Trading

Regulation prohibits internalization of orders, dark pools

and ATS/MTFs, stocks trading in both exchange and OTCsimultaneously

Settlement and clearing of stocks trading must be donethrough a CCP

Settlement and clearing at the beneficial owner level

make the Brazilian market safer and more resilient

Under the regulation in place, potential competitorswould be obliged to provide the same integrated

solution, with the same rules and transparency

The final investor pays the exchange fee

Other exchanges have been seeking integrated models(self clearing models)

Naked access is not allowed

Naked short selling is not possible

22

Brazilian Market Regulatory FrameworkLegal requirements: resilience, transparence, clear rules.


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33.5%

30.4%

9.0%

27.1%

Nov12

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

End of CPMF

(Financial

Transaction Tax)

Sarbanes-Oxley Act

(Jul. 2002)

*Updated until 11/30/2012

36.1%

63.9%

Novo Mercado

Launching

(Dec. 2000)

23

Brazilians stock trading breakdown

Public Offerings in Number of Companies*2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total

IPOs - 1 - 7 9 26 64 4 6 11 11 3 142

Follow ons 14 5 8 8 10 16 12 8 18 11 11 6 127Total 14 6 8 15 19 42 76 12 24 22 22 9 269

Dual Listings (IPO) - - - 2 1 1 - - 1 - - - 5

End of IOF Tax (2%) for

foreign investors

(Dec. 2011)

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Apr-11

May-1

1

Jun-1

1

Jul-11

Aug-1

1

Sep-1

1

Oct-11

Nov-1

1

Dec-1

1

Jan-1

2

Feb-1

2

Mar-12

Apr-12

May-1

2

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct-12

Nov-1

2

Other USA Venues - Brazilian ADRs NYSE - Brazilian ADRs

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


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OPERATIONAL HIGHLIGHTS

24


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**Relation of the trading value in the cash market and the market cap of the exchange. Updated until 10/31/2012. 25

BOVESPA Segment: operational highlights

Average Daily Traded Value ADTV (BRL billions)

Number of Custody Accounts (Thousands) Turnover Velocity** (12 months average)



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BOVESPA Segment: capital raising activity

26* Excludes the capitalization with barrels reserves by federal government - BRL74.8 billion in Petrobras offering.

Public Offerings (BRL billions)

There are 7 offerings in the pipeline:

IPO (4): VIX Logstica; AutoBrasil Participaes; Cia. Estadual de guas Esgotos CEDAE; Lynx S.A

Follow-on (3): IdeiasNet S.A.; Equatorial Energia S.A.; Aliansce Shopping Centers S.A.

Additionaly, there are 16 Real Estate Funds filed in CVM: estimated value of R$2,6 billion

Pipeline: already announced to the market


4.3 8.5 15.1 14.526.8 22.2

63.2

10.8 6.44.55.4

15.4

55.67.5 23.8

11.2

7.23.9

8.8 13.9

30.4

70.1

34.3

46.0

74.4

18.0 10.3

2004 2005 2006 2007 2008 2009 2010* 2011 2012

Follow-On

IPO

BOVESPA Segment


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15.2%

14.1%

1.8%

4.7%

16.2%

3.9%0.6%

6.8%

10.4%

26.4%

Oil, Gas and Biofuels Basic Materials Capital Goods and Services Construction and TransportationConsumer Non Cyclical Consumer Cyclical Information Technology Telecommunications

Public Utilities Financial

15.7%

21.6%

2.5%

3.6%

8.6%

2.6%

0.3%

11.1%

11.5%

22.4%

177%

126% 121%

109%100%

136%

67%75%

87%

72%

129%

100%

39%

174%

137%

158%

119%107%

129%

75% 76%

96%

72%

138%

80%

44%

129%

110% 109% 104%

89% 87%

60%57% 55% 50% 49% 46%

35%

Singapore Canada Chile USA Korea Australia Japan France India Brazil UK China Mexico

2009 2010 2011

Market Capitalization to GDP (%)*

Market Capitalization by Economic Sector

BOVESPA SegmentPotential to increase the number of listed companies

* Source: World Bank

27

Dec11 Dec05

Hong Kong : 438% 481% 365%


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28

BM&F Segment: operational highlights

Average Daily Traded Volume ADTV (Thousands of contracts)

Rate per Contract - RPC (BRL)

2006 2007 2008 2009 2010 2011 2012* O-11 N-11 D-11 J-12 F-12 M-12 A-12 M-12 J-12 J-12 A-12 S-12 O-12 N-11*Interest rates i n BRL 0.906 0.950 1.141 0.979 0.889 0.918 1.001 0.927 0.843 1.086 1.045 1.064 0.926 0.948 0.922 1.059 1.026 1.076 1.130 0.924 1.044

FX rates 2.244 1.859 2.065 2.161 1.928 1.894 2.183 1.991 1.870 2.082 2.106 1.929 1.876 1.991 2.015 2.237 2.325 2.453 2.481 2.506 2.370

Stock Indices 1.419 1.501 2.145 1.620 1.564 1.614 1.495 1.635 1.518 1.719 1.316 1.674 1.328 1.502 1.233 1.708 1.403 1.750 1.407 1.752 1.400

Interest rates in USD 1.094 0.965 1.283 1.357 1.142 0.941 1.004 1.066 0.836 0.930 0.958 0.804 0.911 0.991 1.021 0.955 1.143 1.027 1.086 1.024 1.164

Commodities 4.749 3.195 3.587 2.307 2.168 2.029 2.190 2.645 2.302 2.385 1.688 2.033 2.183 2.228 1.945 2.099 2.014 2.270 2.840 2.680 2.485

Mini contracts 0.034 0.054 0.162 0.176 0.128 0.129 0.116 0.128 0.122 0.132 0.131 0.130 0.130 0.122 0.113 0.116 0.111 0.110 0.109 0.112 0.107

OTC 1.571 2.111 2.355 1.655 1.610 1.635 1.739 1.234 2.051 2.444 2.438 1.515 1.822 1.880 1.203 1.321 1.523 2.693 1.139 1.738 1.711

Total RPC 1.247 1.224 1.527 1.365 1.134 1.106 1.182 1.166 1.040 1.293 1.236 1.227 1.079 1.100 1.074 1.272 1.222 1.277 1.314 1.098 1.242

*Updated until 11/30/2012.

Interest Rate in BRL Contracts


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29

Interest Rate in BRL ContractsStructural changes behind the growth in volumes

Interest Rate in BRL Contracts Breakdown by Maturity (thousands of contracts)

Uncertainty in consensus impacts short term contracts

Fixed Rate Credit in BRL billions Public Debt / Fixed Rate - in BRL billions

Source: Brazilian Central Bank

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

Jan'05:

BRL 180.0

Sep'12:

BRL 820.8

Jan'05:

BRL 151.4 bn

Sep'12:

BRL 725.0 bn

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

BM&F Segment


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BM&F SegmentGrowth in interest rate contracts with longer maturity

30

BRL INT. RATE: ADV PER MATURITY (MILLIONS OF CONTRACTS)

BRL INT. RATES: REVENUES (IN R$ MILLION)

CAGR: -16%

CAGR: +19%

CAGR: +3%

CAGR: -5%

CAGR: +13%

CAGR: +9%

11.9 11.0

25.8 24.9 23.5

47.240.7

75.389.9 96.1

59.151.7

101.1114.8 119.6

3Q08 3Q09 3Q10 3Q11 3Q12

1st-4th Maturity 5th Maturity Total

0.20.3

0.8 0.80.6

0.5 0.4

0.81.0

1.2

0.7 0.8

1.7

1.8 1.8

3Q08 3Q09 3Q10 3Q11 3Q12

1st-4th Maturity 5th Maturity Total

Hi h F T di (HFT)


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31

High Frequency Trading (HFT)

BM&F SegmentHFT (ADTV in thousands of contracts and mkt. share)

Bovespa SegmentHFT (ADTV in BRL billions and mkt. share)

Co-location(ADTV in thousands of contracts and mkt. share)

Co-location(ADTV in BRL billions and mkt. share)

0.6

1.10.8

1.0 0.9 0.8 0.81.0

0.91.1

1.2 1.21.0 1.1 1.0

0.8 0,8

0.3

0.4

0.3

0.30.3

0.2 0.3

0.4

0.3

0.30.3 0.2

0.2 0.3 0.3

0.2 0,20.2

0.2

0.2

0.20.2

0.1

0.2

0.4 0,31.0

1.7

1.31.5

1.3

1.1 1.1

1.4

1.2

1.41.5 1.5

1.3 1.3

1.51.4 1,3

8.6% 11.4%10.4%10.3%11.5% 9.3% 8.7% 8.4% 8.4% 9.0% 10.3% 8.8% 10.3%10.0% 9.1% 10.2% 10.1%

Jul-11 Aug-11Sep-11 Oct-11Nov-11Dec-11 Jan-12 Feb-12Mar-12Apr-12May-12Jun-12 Jul-12 Aug-12Sep-12 Oct-12Nov-12

ADTV (Foreigners) ADTV ( Indiv iduals) ADTV ( Institutionals) % of overall market

199 228

574720 725

1,1361,425

1,283 1,313

1.5% 1.8%

4.3%5.6% 5.1%

7.4%9.9% 9.6% 9.9%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Oct/12 Nov/12


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FINANCIAL HIGHLIGHTS

32

Highlights 3Q12 vs. 3Q11


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FINANCIAL HIGHLIGHTS

Gross Revenue: R$581.3 million, +6.2%

Bovespa Seg.: R$263.4 million, +5.9%

BM&F Seg.: R$219.3 million, +6.8%

Other revenues: R$98.7 million, +5.8%

Net Revenue:R$521.6 million, +5.7%

Adjusted Expenses:R$136.0 million, -0.2%

Operating Income: R$346.8 million, +7.0%

EBITDA: R$375.6 million, +8.1%

EBITDA Margin:72.0%

Adj. Net Income:R$400.6 million, +0.3%,

Adj. EPS: R$0.208, +1.7%

Payout: R$221.2 million in dividends and interest oncapital, 80% of GAAP net income in 3Q12

OPERATING HIGHLIGHTS

Bovespa Segment:

ADTV: +8.7%

Margin: flat

BM&F Segment:

RPC: +14.7%

ADV: -4.0%

High growth products:

ETFs: +90.2% ADTV

Tesouro Direto: +45.6% AUM

FII : strong growth in market capitalization andnumber of investors

LCA: consistent increase of register volume

MAIN PROJECTS FOR 4Q12 Cross listing: listing of S&P 500 mini contracts at BVMF

and Ibovespa at CME

PUMA Trading System: equities module

Registration Platforms

g g Q QGrowth in all business lines and costs under control

1 Excludes stock options plan, depreciation, provisions and tax on dividends from CME Group. 2 Excludes deferred liability recognized in correlation with temporary differences from amortization ofgoodwill for tax purposes, the impact of the stock options plan, the investment in associate (CME Group) accounted for under the equity method of accounting, net of taxes related to dividends and

recoverable taxes paid overseas to be compensated. 33

Financial Highlights


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OPERATING CASH GENERATION

Payout:R$221.2 million, R$131.2 million in dividendsand R$90.0 million in interest on capital, 80%ofGAAP net income in 3Q12.

Share buyback program: up to 60 million sharesauthorized for repurchase until June 28, 2013

+6.9%

g gFocus on cash generation and shareholders return

*Includes collaterals pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed.

** Includes third party collaterals and restricted funds at BM&F Settlement Bank (Banco BM&F).

RETURNING CAPITAL TO SHAREHOLDERS

CASH AND FINANCIAL INVESTMENTS

(R$ million) (R$ million)

Budget range : R$230-260 million

Actual 3Q12: R$52.3 million

Actual 9M12: R$124.2 million

CAPEX BUDGET FOR 2012

340.5 364.1

3Q11 3Q12

1,270

1,551

1,207

1,443

1,166

468

380

383

340

343

284

270

354

363

390

1,487

1,582

1,714

1,979

2,100

3,508

3,782

3,658

4,125

3,999

3Q11

4Q11

1Q12

2Q12

3Q12

Market participants cash collateral and others* Restricted funds

Subsidiaries** Available funds

34

Revenue Breakdown in 3Q12


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9.2%

30.1%

1.4%

3.8%

14.3%

22.7%

18.5%

37.0%: Financial/Commodities Derivatives

14.3%: Trading

22.7%: Post-trading

39.3%: Cash Equities

9.2%: Trading

30.1%: Post-trading

5.2%: Derivatives on Stocks and Indices

1.4%: Trading

3.8%: Post-trading

4.5%: Depository, Custody and back-office3.2%: Securities Lending

3.1%: Vendors

2.2%: Trading Access (brokers)

1.9%: Listing

3.6%: Others

QDiversified revenue sources as a differential

REVENUE BREAKDOWN (3Q12)

Gross Revenue:R$581.3 million

18.5%: Other revenues

35

Expenses in 3Q12


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47%

14%

14%

8%

2%

15%

Personnel

Data. Proc.

Depr./

Amort.

ThirdParty

Marketing

Other

-0.2%

ADJUSTED EXPENSES: 3Q11 vs. 3Q12

pFocus on cost control and higher operating efficiency

ADJUSTED EXPENSES

Expenses:R$174.8 MM

TOTAL EXPENSES BREAKDOWN (3Q12)

(R$ million)

ADJUSTED EXPENSES: 2Q12 vs. 3Q12

(R$ million)

(R$ million)

136.3

163.9

125.4 127.9136.0

3Q11 4Q11 1Q12 2Q12 3Q12

127.9

136.0

2.5

(0.3)

4.8 0.1

(0.8)

1.7

2Q12 Adj.Exp. Personnel Data proc. Third Party Commun. Marketing Others 3Q12 Adj.Exp.

136.3 136.0

1.5

(0.7)

2.4

(1.1)(2.5)

0.1

3Q11 Adj.Exp.

Personnel Data proc. Third Party Commun. Marketing Others 3Q12 Adj.Exp.

36

Reduction in OpEx Budget


37/49

p gFocus in cost control

2012 adjusted OpEx budget range lowered to R$560 million - R$580 million,

from R$580 million - R$590 million

37

268

204

9M12:

124

230-260

2010 2011 2012

CapEx budget (R$ MM)

2012 ADJUSTED OPEX BUDGET REVISED DOWNWARDS

Nominal reduction in expenses: inflationary growth in expenses fullycounterbalanced by greater operating efficiency

Budget includes planned transfer of resources to BSM of approximately

R$15 million in 4Q12

Budget range : R$230-260 million

Actual 3Q12: R$52.3 million

Actual 9M12: R$124.2 million

544(actual)

585(actual)

585(mid-point)

570(mid-point)

00

50

00

50

00

50

00

50

00

50

00

2010 2011 2012e

(old budget)

2012e

(revised budget)

Adjusted expenses budget (R$ MM)

Zero nominalgrowth


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38

Appendix

38

Fully integrated Business Model


39/49

Listing(stocks, bonds, funds,

asset-backed securities,Among others )

Commodities

Certification

Trading(stocks, derivatives, corporate and government

Bonds, funds, spot US Dollar, among others)

Central Counterparty (CCP)Clearing and Settlement

(for all products)

Central Depository

(stocks and corporate bonds)

Securities Lending

(stocks and corporate bonds

Custody(services provided for fundsand other market

participants)

Market Data

Indices Licensing

Software Licensing

(used by brokerageHouses and other

market participants)

OTC Derivatives

(registration and collateralmanagement)

y gDiversified sources of revenues

Services for issuers, brokers and

commodities tradingTrading, Clearing and Depository Activities Others Services

39

Trading Access

(Brokers)

New Products Pipeline

High Frequency Trading - HFT


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New Products Pipeline

40

New pricing policy (both segments)

Main Characteristics

Differentiated fees by tier only for day trades transactions executed by a registered HFT

A HFT Committee created to approve and monitor the HFTs

The new pricing policy was implemented in Nov10

Bovespa Segment

In the Bovespa Segment, different tiers were created for individuals and non-individuals HFT investors

BM&F Segment

In the BM&F Segment, the 70% flat discount was replaced by a volume tiered based discount, only for day trades,divided into trading and registration fees

Individuals

ADTV tier (BRL millions)

Trading Fee

(bps)

Settlement

Fee (bps) Total

Up to 4 (inclusive) 0.70 1.80 2.50

From 4 to 12.5 (inclusive) 0.50 1.80 2.30

From 12.5 to 25

(inclusive) 0.20 1.80 2.00

From 25 to 50 (inclusive) 0.05 1.75 1.80

Above 50 0.05 1.55 1.60

Non-individuals

ADTV tier (BRL millions)

Trading Fee

(bps)

Settlement

Fee (bps) Total

Up to 20 (inclusive) 0.70 1.80 2.50

From 20 to 50 (inclusive) 0.50 1.80 2.30From 50 to 250

(inclusive) 0.20 1.80 2.00From 250 to 500(inclusive) 0.05 1.75 1.80

Above 500 0.05 1.55 1.60

BOVESPA Segment: foreign investment flow


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*Includes regular trades and public offering. Updated until Sep. 30, 2012.

Monthly Net Flow of Foreign Investments* (in BRL billions)

BOVESPA Segment: foreign investment flow

41

(0.6)

0.5

3.43.8

6.1

4.2

6.4

1.7

5.2

9.0

2.11.4

(1.6)

0.3

6.5

1.5

(1.5)

3.7 3.5

(0.6)

10.0

4.4

2.10.7

0.4

1.7

(1.3)

0.3

3.41.92.2

(0.4)(0.2)

0.81.0

(2.4)

7.2

(1.1)(1.3)

3.9

(2.3)

0.3(0.3)1.1

(4.2)

(1.2)

0.5

Operational highlights: investor s participation in Total Volume


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Operational highlights: investor s participation in Total Volume

42

Bovespa Segment (Investors Participation in Total Value)

BM&F Segment (Investors Participation in Total Volume)

Investment Funds


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Investment Funds

43

AUM Evolution (in BRL billions)

Source: ANBlMA (Jul-12) and Investment Company Institute ICI (2Q12).

Percent of Equity Fund Assets

Worldwide Brazil

Equity

funds14%

657861 899

1,070

1,301

1,5131,375

1,703 1,7871,925

2,180

11%

10% 11%11%

15%22% 14%

18% 18%15%

14%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Nov-12

EquitiesFixed Income

Equity

funds

40%


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3Q12 EARNINGS

44

Bovespa Segment


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ADTV growth and flat margins


ADTV and margin in basis-points

Average market cap and turnover velocity

HFTs: ADTV (R$ millions) and participation of volume (%)

3Q12 x 3Q11:

+8.7% ADTV => 9.8% growth of cash equitiesADTV

foreign investors ADTV went up 26.2% => foreignHFTs ADTV rose 24.9%

all-time-high monthly ADTV of R$8.4 billion inSep-12

record of 1.5 million trades in 9/14

stable trading margins at 5.7 bps

higher turnover velocity of 70.4%

6.6% growth in the average market capitalization

3Q12 x 2Q12: ADTV 6.1% down compared to the previous

record of R$7.6 billion in 2Q12

margins 4.2% higher => lower participation ofinstitutional investors and day trades, which paylower fee rates

6.6 6.4 7.2 7.6 7.2

5.71 5.58 5.91 5.50 5.73

3Q11 4Q11 1Q12 2Q12 3Q12

ADTV (R$ billions) Margin (bps)

2.2 2.2 2.5 2.4 2.4

69.3% 66.6% 66.2% 75.0% 70.4%

-

3Q11 4Q11 1Q12 2Q12 3Q12

Average Stock Market Capitalization (BRL trillions) Turnover Velocity (%)

835.1 916.7 873.91,185.6 1,043.5

319.3 249.2 325.3

268.3251.6174.6 146.0 -

0,273,8

1,329.1 1,311.91,199.1

1,454.1 1,368.9

10.3% 10.3%8.5%

9.4% 9.8%

3Q11 4Q11 1Q12 2Q12 3Q12

Foreigners Individuals Institutionals % of overall market

45

BM&F Segmenth


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15% 3% 6%

16%7% 2%

4%

4% 2%

8%

7% 22%

57%79% 68%

3Q11 2Q12 3Q121s t Maturity 2nd Maturity 3rd Maturity 4th Maturity 5th Maturity

Average RPC growth


ADV (millions of contracts) and RPC (R$)

HFTs: ADV (thd contracts) and participation of volume (%)

BRL Int. Rates - volumes by maturities (%)

3Q12 x 3Q11:

+14.7% RPC

=> depreciation of R$/US$ rate impacting RPCof FX (+36.2%) and USD int. rates (+25.3%)contracts;

=> 10.1% increase in RPC for BRL int. rate due toconcentration of trading in longer maturitiescontracts (4th and 5th)

-4.0% ADV => drop in ADV of BRL int. rate (-2.4%), indices (-17.3%) and FX (-13.8%) wentdown

Lower participation of HFTs, due mainly to areduction in ADV of FX and indices contracts

3Q12 x 2Q12:

+12.0% RPC => reflecting the depreciation ofR$/US$ rate (-6.5%) and reduction of day tradeoperations of BRL int. rates

-19.8% ADV compared to the previous record ofR$3.4 million contracts in 2Q12

65% 86% 90%

1.8 1.5 1.7 2.3 1.8

0.5 0.5 0.50.5

0.50.3 0.3 0.3

0.30.4

2.8 2.5 2.73.4

2.7

1.1061.157 1.172 1.133

1.269

3Q11 4Q11 1Q12 2Q12 3Q12

Int. Rate BRL FX Indices Others RPC (BRL)

68.2 50.9 46.5 68.7 58.3

148.3119.9 129.5 140.0 73.8

178.7

139.6 134.8

224.0

209.1

24.4

24.8101.4

9.8

0.9

7.8% 7.2% 8.0% 6.3% 6.7%

419.5335.2

412.2 442.5342.2

-

100,0

200,0

300,0

400,0

500,0

3Q11 4Q11 1Q12 2Q12 3Q12

Equities FX Mini contracts Others % in Ove rall Volume

46

Net incomeN i i d b f ll i fi i l i


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399.6

27.9

(3.9)

(37.1)

14.1

400.6

3Q11

Adjusted net

income

Net revenues Expenses* Financial

Income

Income tax 3Q12

Adjusted net

income

324.1 346.8

3Q11 3Q12

375.6347.5

3Q123Q11

Net income impacted by a fall in financial income

Adjusted net income did not fully capture the revenue growth due to a plunge in

interest income

Financial Income: 3Q12 vs. 3Q11

+8.1%

EBITDA growth in line with operating income

growth

ADJUSTED NET INCOME EBITDA

R$45.5 million,down 44.9%

Financial Revenue: R$67.6 million, down 33.7% due mainlyto lower interest rates

Financial Expenses: R$22.1 million, a 14.0% growth due todepreciation of 24.0% in R$/US$

OPERATING INCOME

(R$ million)

(R$ million)

+7.0%

(R$ million)

* Excludes stock options planand tax on dividends from CME Group.47

Final RemarksBVMF b d i i


48/49

BVMF better prepared to capture opportunities

OPPORTUNITIES IN BRAZILIAN MARKETS

New reality of lower interest rates

Capital markets set to become a moreimportant alternative for long-termfunding

MAINTAINING MARKET INTEGRITY

Control, governance, transparency and

market security Strengthening the integrity of Brazilian

capital markets targeting growth

WHAT IS BVMF DOING?

Investing intensively in trading and post-trading platforms

Increasing focus on customers (brokers and investors): revisiting the fee structure, investingin product development

Stringent cost controls

Ensuring market integrity by establishing efficient controls and strengthening BSM

WHAT IS ALREADY HAPPENING!

Operating leverage materialization

Revenue growth, despite slow economic growth scenario and international instability

High potential products have been showing strong growth

48


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bvmf presentation - december 2012

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