Presentation - Analyst Day SP - August 2013

8/11/2019 Presentation - Analyst Day SP - August 2013

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PLANEJAMENTO ESTRATGICO 1

Confidencial Restrita Confidencial Uso Interno PblicoSEP/2014 X

BM&FBOVESPA Analyst DaySo Paulo, SP


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BM&FBOVESPA Analyst Day SEP/14 2

Forward Looking Statements

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

assumptions about future events or results. Such statements are not historical fact, being based on currently

available competitive, financial and economic data, and on current projections about the industries BM&FBOVESPAworks 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 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-competitive

industries in which BM&FBOVESPA operates; (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 newentrants to the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, includingthe implementation 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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BM&FBOVESPA Analyst DaySchedule

OPENINGEdemir Pinto, Chief Executive Officer

PRODUCTS, CLIENTS AND PRICING POLICYEduardo Guardia, Chief Product and Investors Relations Officer

CLEARING BM&FBOVESPA AND CORE RISK MODELCcero Vieira, Chief Operations Officer

TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENTLus Furtado, Chief Technology Officer

FINANCIAL HIGHLIGHTSDaniel Sonder, Chief Financial and Corporate Affairs Officer

Q&A SESSION


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OPENING

Edemir Pinto, Chief Executive Officer

PRODUCTS, CLIENTS AND PRICING POLICY

Eduardo Guardia, Chief Product and Investors Relations Officer

CLEARING BM&FBOVESPA AND CORE RISK MODELCcero Vieira, Chief Operations Officer



Q&A SESSION


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REVENUEGROWTH AND

DIVERSIFICATION

OPERATINGEXCELLENCE

FOCUS ON THECUSTOMER

INSTITUTIONALSTRENGTHENING

Strategic Drivers


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Markets and Products DevelopmentSearching opportunities to accelerate growth

Pursuit of excellence in customer

service and in developingproducts and markets

Main goals

Customer segmentation andrelationship strengthening

To identify market demands andtrends

To link internal and external efforts(regulators and partners)

To increase efficiency and

assertiveness in addressing marketneeds

To execute the companyscommercial and pricing policies


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Products and Services DevelopmentCommercial and development areas

Active stance in relationship with customers and in identifyingtrends and demands

Segmentation:regulation, distinct

needs and demands

LocalInstitutional

Investors

BanksInsurers

Agribusiness

ForeignInvestors

CompaniesListed andUnlisted

Examples of demands and discussionsSecurities lending

Treatment of corporate actions; control improvements for theparticipants, and tax treatment

Fixed income / OTC derivatives

Strengthening the CCP service and gains from the optimization of

deposited margin due to CORE; new securities on the registrationplatform

New products

Fixed income ETFs

Derivatives: inflation, foreign index and agribusiness futures

New listings

Small and medium enterprises (SMEs) and unsponsored BDRs

Attracting new foreign customers

Conversations with MMs and HFTs that do not operate in Brazil yet

Dissemination of the securities lending platform

Regulatory discussions

ICVM 409 reform (qualified investor) and ICVM 476 (restricteddistribution)



Products and Services DevelopmentFocus on thecustomers demandsand needs

Long-term development of products, markets and services

Greater liquidity for listed products

Development 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 base

Incentive 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



Products and Services DevelopmentFocus on thecustomersdemands and needs

Greater number of listed companies

Discussions with the Government to encourage and facilitate IPOs by SMEs

Financial education for entrepreneurs and support in the companys planning

Fixed Income and OTC markets (product, market and revenue diversification)

Securities registration: (i) marketing of already-available products (CDB, LCA, LCI and COE); ii) newproducts (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 improvements

Use 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

Long-term development of products, markets and services


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Honing ofBM&FBOVESPAspricing policy andincentives

Creation of anorganizational

structure for fees

BOVESPA seg. (disc.per volume day-trade

and rebalancing)Rebalancing

trading/pos- trade

2009 2010 2011 2012 2013 2014

Incentive programfor Tesouro Direto

Annual fee adjustmentfor issuers

2008

Market Data PricingPolicy

Charges onDepository amount in

balance

OTC Products

Products and Services DevelopmentEvolution and governance of pricing policy structure

Markets and products development

Models review

Discounts review

Price recomposition

Pricing new products

BM&F seg. (pricesper volume tiers)

Main drivers

Incentive program forretail base

BOVESPA seg. (volumediscount for HFTs)

BM&F seg. (disc. overexchange fees for

HFTs)

2015...

Announc. pricingrevision for

Market Data,Issuers, DMA

(BM&F seg.) andSec. Lending


11/43


Products and Services DevelopmentRecent changes in pricing policy and incentives

Products / Market Main changes

SECURITIES LENDINGElimination 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


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Tax treatment for Retail Investors

BM&FBOVESPA and the Brazilian IRS are developing aproposal to simplify tax treatment for individual investorsin equities market

Fixed income ETFs

Tax treatment definitionIncentives for SMEs

Tax exemption on capital gains; reduction of maintenancecosts of publicly-held companies; restricted distributionoffering, and entrepreneurial and managementqualification programs

Securities Lending

Tax treatment clarification on payouts(dividends andinterest on capital)

Addressing important issues to foster the long-term development of theBrazilian capital market

Development Discussions with the GovernmentCreating incentives and addressing important issues


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OPENING



CLEARING BM&FBOVESPA AND CORE RISK MODEL

Ccero Vieira, Chief Operations Officer



Q&A SESSION


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Clearinghouses Integration and the New Risk Model (CORE)Post-trade environment after Bovespa-BM&F merger

The BM&FBOVESPA post-trade environment results from the

historical evolution and merger of Bovespa and BM&F

Markets CCP for the following products

Equities, Equity

Derivatives, CorporateBonds

Cash equities market, ETFs and BDRs

Corporate bond cash market

Options on single stocks and forwards

Securities Lending (BTC)

Derivatives Options and futures on BRL Interest Rates, FX, Inflation Indices, Equity Indices and

agribusiness, energy and metal commodities

OTC derivatives (swaps and flexible options)

Foreign Exchange FX spot market (BRL vs. USD)

Government Bonds Cash market & forward market for government bonds and Repos


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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 4multilateral

balances

4 distinctenvironments /IT architectures

4 registrationsystems for

participants andclients.

OTCderivatives

Corporatefixed income

Interbank spot

foreignexchange

Futures, options,forwards

Securities

lending

Other productsand assets

Equities, ETFs,BDRs

Rules and Manuals

Structure of market participants

Participants and customer registrationAllocation 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)Benefits from Clearinghouse integration

1. DETERMINING

THE CLOSEOUT

STRATEGY

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&L

CALCULATION

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 RISKResult: Two risk measuresmarket andliquiditythat are estimated both jointly andconsistently

PERMANENT LOSS TRANSIENT LOSS

OVERVIEW: CLOSEOUT RISK CALCULATION IN THREE STEPS

( )


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2014

Clearinghouses Integration and New Risk Model (CORE)Timeline project evolution

Publication of a White Paper proposing the unification of BM&FBOVESPAs Clearinghouses

BM&FBOVESPA and IBM: survey into international trends in clearing processes andtechnology and the drawing up of a benchmark clearing house model

Visit by international clearing houses and vendors:

DTCC, CME, Nasdaq-OMX, Deutsche Brse, Euroclear, LCH.Clearnet

Atos Origin, Sungard, Chi-Tech, Calypso, Markit, Fortis, Millenium and Cinnober

Analysis of the degree of adherence of each vendor/Clearinghouse to the createdbenchmark and the assessment of commercial and strategic aspects

Short-list of vendors: Cinnober, Calypso and Millenium

2013201220112010

l i h i d i k d l( )


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Development of a concept test for the Cinnober systems and other candidates at theBM&FBOVESPA Data Center

Mini prototype of a Clearinghouse

Implementation of selected products

Functional and non-functional testing

Contracting of Cinnober

Transfer of source code

Transfer of know-how

Exclusivity in Brazil

Other exchanges commercialization rights of the system

Start of the development of systems of (Oct/2011)

Registration of participants, registration of instruments

Capture, allocation, give-up, position control, fee structure, settlement

Price calculator, margin calculation, intraday risk, collateral, back-test

Information services, legacy systems

20142013201220112010


Cl i h I i dN i k d l(CO )


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Continuation of IT development

Contracting of the Finance Concepts consulting firm to aid the risk systemsdevelopment

Marco AvellanedaNYU (Quant of the Year in Risk Magazine)

Rama ComtColumbia University

Official presentation of the project to the board and president of BACEN

Official launch of the project at an event with the participation of BACEN, CVM,FEBRABAN, ANBIMA and 400 guests

20142013201220112010


Cl i h I i dN Ri kM d l(CORE)


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Continuation of IT development

Submission to BACEN of the rules and manual of the new Clearinghouse

Access Rules

Access Manual

BM&FBOVESPA Clearinghouse Rules BM&FBOVESPA Clearinghouse Operating Procedures Manual

BM&FBOVESPA Clearinghouse Risk Management Manual

Start of participant certification

Starts in July 2013

Staggered opening to the market of the systems modules

Complete integrated tests as of November 2013

Execution of the mandatory testing script as of December 2013

20142013201220112010


Cl i h I t ti dN Ri kM d l(CORE)


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Continuation of the certification of participants

Start of parallel production in April

11 parallel production cycles

Data migration at the weekend Old and new Clearinghouses running in parallel on Monday, Tuesday and Wednesday

Checking of trades, positions and settlement prices

Checking of risk calculation through an independent prototype

Disaster recovery test

Approval by BACEN of the New Clearinghouses rules and systems

Implementation of the new Clearinghouse on August 18, 2014

20142013201220112010


Cl i h I t ti dN Ri kM d l(CORE)


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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

N Ri kM d l(CORE) d i ti k t


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New Risk Model (CORE)derivatives marketSimulations of positions and required collateral

FX DERIVATIVES POSITIONS

# Position 1 Position 2

Position 1

Collateral(R$)

Position 2

Collateral(R$)

CollateralSum (R$)

Collateral

Strategy(R$)

Efficiency(%)

1Buy 1 FX future 1month maturity

Sell 2 USD calls at themoney 1 monthmaturity

14,392.24 52,117.39 66,509.63 40,260.78 -39%

2Sell 1 FX future 1

month maturity

Sell 2 USD puts at themoney 1 month

maturity

14,372.09 30,457.36 44,829.46 25,805.53 -42%

3Buy 1 FX future 1month maturity

Sell DI X DOL swap 1month maturity

14,392.24 28,965.85 43,358.09 27,604.17 -36%

4Buy 1 USD call atthe money 1 monthmaturity

Sell 1 USD call at themoney 2 monthsmaturities

0.00 26,107.45 26,107.45 1,125.75 -96%

5Buy DI X DOL swap 1month maturity

Sell 1 USD call at themoney 1 monthmaturity

12,927.47 26,058.69 38,986.16 26,058.70 -33%

N Ri kM d l(CORE) d i ti k t


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IBOVESPA (INDICE) DERIVATIVES POSITION


Position 1

Collateral(R$)

Position 2

Collateral(R$)

CollateralSum (R$)

Collateral

Strategy(R$)

Efficiency(%)

1Buy 1 IBV future 1month maturity

Sell 2 IBV calls atthe money 1month maturity

9,978.51 21,866.37 31,844.89 22,898.02 -28%

2Sell 1 IBV future 1

month maturity

Sell 2 IBV puts atthe money 1

month maturity

9,965.79 28,686.52 38,652.31 27,298.53 -29%

3Buy 1 IBV future 1month maturity

Sell DI X IBV swap1 month maturity

9,978.51 13,897.11 23,875.62 19,014.06 -20%

4Buy 1 IBV call at themoney 1 monthmaturity

Sell 1 IBV call atthe money 2month maturities

0.00 11,938.80 11,938.80 2,321.21 -81%

5Buy DI X IBV swap 1month maturity

Sell 1 IBV call atthe money 1month maturity

18,989.09 11,906.08 30,895.17 19.957.02 -35%

6Sell 1 IBV future 1month maturity

IBV ETF depositedas collateral

9,886.34 2,477.20 12,363.54 8,874.32 -28%


NewRiskModel(CORE) derivativesmarket


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BRL INTEREST RATES (DI) DERIVATIVES POSITION


Position 1

Collateral(R$)

Position 2

Collateral(R$)

CollateralSum (R$)

Collateral

Strategy(R$)

Efficiency(%)

1Sell 1 DI future 1year maturity

Sell 2 IDI call at themoney 1 yearmaturity

1,352.44 8,199.29 9,551.73 8,254.90 -14%

2Buy 1 DI future 1

year maturity

Sell 2 IDI put at themoney 1 year

maturity

1,462.51 5,973.76 7,436.27 5,059.93 -32%

3Buy 1 DI future 1year maturity

Sell DI X PRE swap 1year maturity

1,462.51 2,818.85 4,281.36 3,286.75 -23%

4Buy 1 IDI call at themoney 1 yearmaturity

Sell 1 IDI call at themoney 1.5 yearmaturity

0.00 4,950.55 4,950.55 2,475.91 -50%

5Buy DI X PRE swap1 year maturity

Sell 1 IDI call at themoney 1 yearmaturity

2,818.85 4,099.65 6,918.50 4,099.65 -41%

6Sell 1 DI future 1year maturity

LTN deposited 1 yearmaturity as collateral

1,348.03 13.46 1,361.49 1,333.93 -2%




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AGRIBUSINESS DERIVATIVES POSITIONLIVE CATTLE


Position 1

Collateral (R$)

Position 2

Collateral(R$)

Collateral

Sum (R$)

Collateral

Strategy(R$)

Efficiency

(%)

1Buy 1 live cattle future1 month maturity

Sell 2 live cattle call atthe money 1 monthmaturity

1,513.22 5,122.21 6,635.42 6,264.55 -6%

2Sell 1 live cattle future 1month maturity

Sell 2 live cattle put atthe money 1 monthmaturity

1,459.98 4,119.83 5,579.81 5,067.12 -9%

3Buy 1 live cattle call atthe money 1 monthmaturity

Sell 1 live cattle call atthe money 2 monthmaturities

0.00 2,566.52 2,566.52 693.91 -73%

# Position 1 Position 2Position 1Collateral

(R$)

Position 2Collateral

(R$)

CollateralSum (R$)

CollateralStrategy

(R$)

Efficiency(%)

1 Buy 1 coffee future1 month maturity

Sell 2 coffee call at themoney 1 month maturity

5,056.81 16,169.32 21,226.13 15,218.66 -28%

2Sell 1 coffee future1 month maturity

Sell 2 coffee put at themoney 1 month maturity

4,988.16 23,750.46 28,738.61 22,093.67 -23%

3Buy 1 coffee call 1month maturity

Sell 1 coffee call at themoney 2 monthmaturities

0.00 10,413.74 10,413.74 2,387.78 -77%


AGRIBUSINESS DERIVATIVES POSITION - COFFEE



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Position 1

Collateral(R$)

Position 2

Collateral(R$)

CollateralSum (R$)

Collateral

Strategy(R$)

Efficiency(%)

1Buy 1 corn future 1month maturity

Sell 2 corn call at themoney 1 monthmaturity

759.39 1,847.66 2,607.05 1,859.93 -29%

2Sell 1 corn future 1

month maturity

Sell 2 corn put at themoney 1 month

maturity

704.20 2,275.20 2,979.40 2,348.57 -21%

3Buy 1 corn call atthe money 1 monthmaturity

Sell 1 corn call at themoney 2 monthmaturities

0.00 1,188.86 1,188.86 543.54 -54%


AGRIBUSINESS DERIVATIVES POSITION - CORN

BM&FBOVESPA Analyst Day


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OPENING





TECHNOLOGICAL INFRASTRUCTURE DEVELOPMENT

Lus Furtado, Chief Technology Officer


Q&A SESSION


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BM&FBOVESPAClearinghouseandCORE


30/43


The risk systems (CORE and NEAR) demand complex development

Require robust and sophisticated infrastructure As an example, calculate and process +1.3bn instrument prices

We have built a dedicated Simulation environment, meeting demands from market participants

The simulator can be used by screen or by messages and files

Production

Simulation

BM&FBOVESPA Clearinghouse and CORENew services for the market

Deepening the relationship with participants

# of transactions simulated (in thousands)

BM&FBOVESPA Clearinghouse
http://wiki.intraservice.corp/wiki/images/4/4c/Modelo_fisico.gifhttp://wiki.intraservice.corp/wiki/images/4/4c/Modelo_fisico.gifhttp://wiki.intraservice.corp/wiki/images/4/4c/Modelo_fisico.gifhttp://wiki.intraservice.corp/wiki/images/4/4c/Modelo_fisico.gif


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The derivatives phase represented an important step and now wehave a new and complex challenge ahead

BM&FBOVESPA ClearinghouseChallenges in the implementation of the equities phase

Examples of new developments needed for the equitiesphase

Integration with the CSD

Settlement of securities (restrictions, failures, integrationwith securities lending system)

Securities lending Covered options and forward transactions

Corporate actions (split, reverse split, dividends / intereston capital and others)

Unification of registration system procedures

Settlement window unification

Higher volumes

Riskmore risk factors, higher volume of calculations

NewDataCenter


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New Data CenterExpanding capacity and greater operational efficiency

Feb/13 Jun/13 Oct/13

New data center will allow IT infrastructure consolidation and theexpansion of services provided to customers 2Q14: Conclusion of commissioning 2H14: Infrastructure (installation of racks and telecoms infrastructure, cabling)

1H15: Connectivity with participants and with other Data Centers; NPROD environments migration

2H15: Certification and parallel production environment for the equities phase of the BM&FBOVESPAClearinghouse

ContinuousDevelopmentofthePUMAPlatform


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Migration of corporate fixed-income trading(BovespaFIX / SOMA FIX) to PUMA

Volatility bands for the BOVESPA segment,preventing distortions generated by sudden pricechanges in a very short timeframe

Changes to the Ibovespa methodology

Beginning of the migration to the new trading screenEstao ePUMAin the BOVESPA segment

(elimination of performance bottlenecks of thecurrent screen)

Conclusion of the migration to the new tradingscreen in BM&F segment (eliminating performancebottlenecks)

Volatility bands for the BM&F segment

New system for indice calculation (replacing thecurrent system licensed from Euronext)

MM Structure: new monitoring system, allowing theexpansion and protections of MM programs (avoidsundue executions of orders at times of high volatility)

New market data system (for low investmentcustomers)

Evolution of the LiNe pre-trade risk system (newfeatures; lower latency and standard deviation)

New contingency FIX session for orders cancellation

PROJECTS SUCCESSFULLY COMPLETED ONGOING MAINTENANCE

Continuous Development of the PUMA PlatformHigh availability and constant evolution

RESILIENCE AND AVAILABILITY

438uninterrupted trading days*

* Until Sep. 26, 2014

PUMAPlatform


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PUMA PlatformHigh availability and performance

BM&F segment

BOVESPA segment

Capacity and resilience of the system tested in times of highvolatility and message peaks

The entire trading infrastructure must beadequately sized for peak message traffic:

BOVESPA SegmentApr. 29th

Peak of msgs/min: 619,063 Average msgs/min: 60,000 - 70,000

BM&F SegmentAug. 13th

Peak of msgs/min: 85,388 Average msgs/min: 7,000 - 8,000



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OPENING






FINANCIAL HIGHLIGHTS

Daniel Sonder, Chief Financial and Corporate Affairs Officer

Q&A SESSION

Financial Highlights


36/43


Intangibles value disregards goodwill; 2014 data related to June, 2014.

Financial HighlightsExpenses control discipline without sacrificing business development

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

268

204

258289

230-260

190-220

2010 2011 2012 2013 2014E 2015E

NEW

DATA CENTER

Capex R$ MM

...Property andequipment

+Intangibles(R$ MM)

519 647 809 1,031 1,079

MarketMaker

BTC SINACOR



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253 257 271

Adj. expenses

284

306332 363

1H11 1H12 1H13 1H14

Adj. Expenses corrected by inflation

Expenses control provides efficiency gains for the company

Budget review

Adjusted OPEX 2014 budget reduced toR$585-595 MM (from R$595-615 MM )

Expenses are expected to grow significantlybelow inflation based on the new budget

585 563 576

585 - 595

2011 2012 2013 2014E

Consider the IPCA of services variation from July, 2011 to June, 2014.

Consistent reduction to expenses

Enhancement in management tools and

budget practices within the company Review of contracts and prioritization of

activities

Headcount management

Adjusted expenses R$ MM

Half year adjusted expenses R$ MM

Financial HighlightsExpenses discipline without sacrificing business development



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129.8

154.4

1H11

1H14Personnel

expenditure

46.7

55.4

1H11

1H14Data

pro

cessing

21.1

17.7

1H11

1H14Thirdparty

services

24.1

5.2

1H11

1H14Marketing

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

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

Financial HighlightsPursuit of greater efficiency and an active stance in controlling expenses

R$ MM

19.0%

-15.9%

-78.4%

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

Nominal Var. Real Var.

-37.7%

-84.0%

-3.3%

12.3

7.1

1H11

1H14Communicat.

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 of

legacy IT platforms

18.8% -12.0%

-41.9% -57.0%



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Financial HighlightsStock Grantingaccounting

Honing of the Companys long-term remuneration practices

Main changes and impacts

Executives begin to receive stocks

Payment of 60.3% in social charges will resultin increased expenses and have an impact on

cash Expenses from charges vary according to the

price of the stock on delivery date (volatilityof expenses)

100% of expenses are deductible (principal +social charges), which neutralizes most of the

impact on the net income Expenses impacted from 2015 onwards,

which will have grown during the transitionperiod (4 years)

Alignment of interests andretaining executives

Link executives remunerationto the performance of thestocks

Increase the perceived value ofthe stock of securities granted

Ensure that the Companysincurred expenditure iseffective



40/43


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

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%1H14: 80%

BuybackAlmost 12% offree

float repurchased inalmost 6 years (2H08-

1H14)

+

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

Cash Generation after Investments and Interest PaymentsCash Position

R$1,962 MM

Indebtedness

R$1,381 MM

Rating

Moodys

Baa1(issuer global scale)

Baa2 (issuer BR scale)

Baa1 (global notes)

S&P

BBB+ (counterparty cred.)

A-2 (issuer)

St t i D i


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REVENUEGROWTH AND

DIVERSIFICATION

OPERATINGEXCELLENCE

FOCUS ON THECUSTOMER

INSTITUTIONALSTRENGTHENING

Strategic Drivers



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Presentation - Analyst Day SP - August 2013

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Transcript of Presentation - Analyst Day SP - August 2013