bvmf presentation - july 2010

7/30/2019 BVMF Presentation - July 2010

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July 2010


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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&F Bovespa 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 causeactual results to differ materially from those projected in this presentation and do not guarantee any future BM&F Bovespa

performance.

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

volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industries BM&F

Bovespa 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 functionalitydemanded by BM&F 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&F Bovespa products in foreign jurisdictions.

All forward-looking statements in this presentation are based on information and data available as of the date they were

made, and BM&F Bovespa 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 SecuritiesCommission CVM Instruction 400 of 2003, as amended.

2


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Business Model:

A Source of Competitive Strength

3


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Fully Integrated Business Model

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 the products)

Services for Issuers and

Commodities tradingTrading, Clearing and Depository Activities

Central Depository

(stocks and corporate bonds)

Securities Lending

(stocks and corporate bonds)

Custody

(services provided for

funds, and other market

participants)

Market Data

Indices Licensing

Software Licensing

(used by brokeragehouses and other

market participants)

Other Services

OTC Derivatives

Registration and

Collateral Management

4


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Diversified and Integrated

Exchanges

Integrated Derivatives

Exchanges

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

Diversified but Not

Integrated Exchanges*

Listed Exchanges Business Model

5


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18.3 17.715.1 13.7

7.8 7.6 6.0 4.5 4.1 2.8 2.2 2.1

71.3%

80.2%

64.9%

51.9%

62.7%

43.1%

60.8%

74.3%

48.7%44.5%

66.5%

56.7%

0,0

10,

20,

30,

40,

50,

60,

70,

80,

CME HKEx BVMF Deutsche

Boerse

ICE Nyse

Euronext

SGX ASX Nasdaq LSE BME TMX

EBITDA Margin 2009

Date: 07/30/2010

Diversified and integrated Derivatives Diversified but not integrated

Market Capitalization (US$ billions) and 2009 EBITDA Margin (%)

Business Model enhances Margins and Market Cap

Majority of Integrated Exchanges above 60% EBITDA Margin

6


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Excellence in IT Solutions and Post-Trading ServicesBusiness Model, regulation and competition

7

Brokers &

Investors

Trading

Post-Trading

Regulation prohibits internalization of orders, dark pools

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

simultaneously

Settlement and clearing of stocks trading must be done

through 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


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8

CHANGE IN REGULATION: POTENTIAL IMPACTS

Internalization of orders

Brokers and other market participants should adapt

their structure (the US prime brokers model does not

exist in Brazil)

Investors will face the broker risk

Regulators: potential increase in systemic risk

Adoption of the best execution practice in various

venues

Adoption would be difficult due to the size and

liquidity concentration (potential inefficiency in the

price discovery)

Brazilian equity market size is ~1% of the US market

Regulatory debate favors OTC transactions being

centrally cleared

Brokers &

Investors

Trading

Post-Trading


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9

CHANGE IN TRADING REGULATION: POTENTIAL IMPACTS

Allowing simultaneous Exchange and OTC trading

Potential inefficiency in the price discovery, risk of pricemanipulation and split of liquidity

Are there incentives for this change?

No cost reduction in the Sell side: investors pay the exchange

fee (no incentive for MTF venues)

Regulator: potential increase in market risk (inefficiency in pricediscovering and potential market manipulation)

Global competitors: the Brazilian market structure would be a

limitation and, besides, they would need to develop or hire post-

trading services

A NEW CLEARING?

Buy side: higher costs (no cross margining or collaterals)

Sell side: increase in OPEX and CAPEX due to new back-office IT

solutions necessities

Regulator: the BACEN considers the four clearinghouses operated

by BM&FBOVESPA as systemically important (BM&FBOVESPA plays

a key role in the Brazilian payment system)

Brokers &

Investors

Trading

Post-Trading


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Stock Market Trading Rules: efficient price discovery

General characteristics

The trading rules are applied to all exchange listed stocks (a stock cannot be traded

simultaneously in both Exchange and OTC markets)Main trading rules (auctions) established by CVM Instruction 168

There are maximum fluctuation limits for stock prices (automatically frozen by the

trading system):

For the most liquid stocks 3% oscillation is enough to trigger an auction procedure

For the less liquid stocks the limit for oscillation is 10%

An auction can take from 5 minutes to 1 hour

Also, there are limits regarding the size of the trade (automatically frozen by the

trading system):

The auction can take from 5 minutes (quantity above 5 times the average of the last

30 trading sections) to 48 hours advanced announcement (quantity higher than 6%of common shares or 20% of preferred shares)

Also, there are other intermediary auction rules

Pre-trade limit analysis

For DMA access, before the order get in the matching engine, there is a tool (MegaLine

/ GTSLine) that analyze if the order is under the limits established by the broker10


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Brazilians Stock Trading Breakdown

28.4%

25.1%

14.6%

31.9%

Jul10

Source: Bloomberg (in USD traded value of 35 companies with ADRs programs )

End of CPMF

(Financial

Transaction Tax)Sarbanes-Oxley Act

(SOX)

*Updated until 08/12/2010

46.5%

53.5%

Novo Mercado

Launching

11

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* TotalIPOs - 1 - 7 9 26 64 4 6 8 125Follow ons 14 5 8 8 10 16 12 8 18 7 106Total 14 6 8 15 19 42 76 12 24 15 231

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

Public Offerings in Number of Companies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Othe r USA Ve nue s - B razi li an ADRs NYSE - Brazi li an ADRs BM& FBOVESPA - c ompani es wi th ADRs BM& FBOVESPA (e xce pt compani es wi th ADRs)


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- 3 months holding period- Brazilian Investment fund trade

- 1.5 Bp Broker Fee- Securities lending not considered

All in trading cost in Bovespa Segment

12

28.6% 27.2% 28.3%

36.3% 34.4% 35.9%

11.5% 10.9% 11.3%

23.7% 27.6% 24.4%

(Avg. ADR price) (Most expensive share price in Brazil) (Avg. share price in Brazil)

US$ 28 - Stock Price US$ 94 - Stock Price US$ 14 - Stock Price

USD 0.015 USD 0.050 USD 0.008

Broker trading Fee Exchange Trading fee Exchange Clearing fee Exchange Depository fee

1.5 Bp

1.9 Bp

0.6 Bp

1.3 Bp

Exchange Cost3.8 Bps


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New Pricing Policy

Released in June/10

Bovespa Segment

Discounts from 10% to 50% only for trading fee (cash and options), according to the

volume

Only for day traders / HFTs

BM&F Segment

Discounts up to 75%, according to the volume

Termination of the 70% flat discount for HFTs

New policy for day traders / HFTs

Both Segments discounts will need to be prior approved by a committee

Implementation: November, 2010


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Regulation and Taxation: IOF

IOF

October 20th: 2% charge on foreign capital inflow

November 19th: 1.5% charge on issuance of new DRs

Consequences

Equity trading declined by 5 to 7%, mainly due to the ADRs arbitrage

Reduction in non resident participation in Cash Market from 33-37% to 27-30% with

increased use of TRS (Swaps)

Increase in IOF unlikely

Brazilian capital market has become a very important source of funding to companies

like Petrobras, Banco do Brasil, Eletrobrs, government owned.

Massive investments will be needed in coming years to support growth

World Cup / Olympics / Pre Salt / Infrastructure

Government is not hostile to foreigners

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Excellence in IT Solutions and Post-Trading ServicesIT Developments

Post

Trading

Market

Access

Co-location Capacity: phase II implemented in Jul10

Co-location in Bovespa Segment: to be implemented in Sep10

ISVs: Trading Technology (TT) will provide screens for BM&F segment in

1Q11

Globex Technology: derivatives trading system: 1Q11

Capacity: phased in until Oct/10

BOVESPA Seg.: from 1.5 million to 3 million trades/day (Oct/10)

BM&F Seg.: from 200K to 300K trades / day (Aug 10)

from 300K to 400K trades / day (Oct/10)

Performance: improving performance in both systems (one digit latency)

Sungard/GMI Project (back office for FCMs): to be implemented in 3Q10

New Sinacor+ (back office for brokers): new version will be fully

implemented by the end of 2010

Clearing Integration: to be implemented in the end of 2011

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Business and Service Center (Single Gateway)

Central

Counterparty

Clearing

Facility

CentralDepository

Cross margining for Equities, Derivatives, Spot FX and Fixed Income

Single Settlement window

Greater capital efficiency

18

Post-Trading Services - Integration and Opportunities


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Market Makers (MMs) for Options:

Players: locals (only FI) and non-residents(all) - Implementation: Option on IBOVESPA and other securities - by the end

of 2010.

Non-Sponsored BDR Level 1

Product: issued by a Brazilian depository institution

Authorized investors: Financial institutions, mutual funds, Portfolio managers and Consultants for securities authorized

by the CVM, in relation to their own funds

Implementation: 3Q - 10 big stocks listed in the US (DB)

+ 10 granted to Citibank

ETFs and Indexes

New ETFs to be launched - New Indexes: Financial Index

7 ETFs trading around BRL30 million per day

Launched of a Competitive Model to select new ETFs issuers

New Products Pipeline

19

Products

Order Book in Foreign Currencies


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(Brazil Easy Investing)

20

BM&FBOVESPA and Chi-X Global Term Sheet for joint development ofsoftware

Trading system of stocks listed in Brazil with simultaneous FX execution -allows non residents to match stocks in US$ and other currencies

Legal requirements to invest in Brazil keep unchanged (2689 Account)

Facilitates the foreign investor access to Brazilian market, especially retail



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BVMF

BROKERAGEHOUSE

BROKERBVMF

Other Countries

Brazil

Chi-FXBrazil

BROKER

BVMF

BROKER

BVMF

BROKER

BVMF

INVESTOR2689

INVESTOR2689

INVESTOR2689NET

,

NETTradingSystem

INVESTOR2689

FinancialInstitution

thatprovides FXtransaction

2Buy BVMF3at US$ 8.00

CompradeBVMF3US$

8.00

3US$ FX Sell at R$

1.80

3Sell BVMF3at R$ 14.4

3Buy BVMF3at R$ 14.4

1BVMF3 Price at US$8.00


(Brazil Easy Investing)


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447520

30

2009 2010e

REVIEWED OPEX AND CAPEX BUDGETS

22

Actual

Reviewed Budget

Budget Reduction

Opex (5.4% reduction)

Capex (10% reduction)

In R$ millions

96

272

30

2009 2010e


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Round Trip Time, in milliseconds 2007 2008 2009 2010e

Equity Market 450 300 10 One digit

Derivatives Market 70 25 10 One digit

*Includes outsourced services** Related to May/2008

*** Updated until 07/30/2010

Throughput in thousands of trades

Equity Market

Average Capacity 390 770 1,500 3,000e

Daily Average 153 245 332 416***

Market peaks 343 414 591 634

Derivatives Market Average Capacity 55 200 200 400e

Daily Average 23 29 39 68***

Market peaks 42 49 76 152

Number of employees* 1,828** 1,487 1,306 1,471

Network Carrier RCCF`s Sole Provider 8 Networks (RCB)

Improving the IT capacity and performance

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OPERATIONAL PERFORMANCE

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Daily Average Number of Trades (Thousands)

Average Daily Traded Value - ADTV (BRL Billions)

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

**Relation of the trading value in the cash market and the market cap of the exchange*Updated until: July 30th, 2010

Bovespa Segment: Operational Highlights

25

30.8% 29.4%36.8% 37.6% 38.7%

42.3%

56.4% 63.2%

66.6%

66.6%

2001 2002 2003 2004 2005 2006 2007 2008 2009

508540 551

559 548 543 538576 581 580

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

1.21.6

2.4

4.95.5 5.3

6.5 6.8 6.6 6.56.9 7.3

5.85.4

2004 2005 2006 2007 2008 2009 YTD* Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10

54 6287

153

245

332

416 424 409 393 405

489

399 395



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Preliminary DataUpdated until August 2nd

Public Offerings (BRL billions)

Public Offerings in 2009/2010

24 public offerings in 2009 (6 IPOs and 18 Follow-Ons), raised more than BRL 46.0 bi

15 public offerings in 2010 (8 IPOs and 7 Follow-Ons), raised BRL 23.5 bi*

Pipeline

Also, there are 7 additional offerings in the pipeline

IPOs (6): WTORRE Empreendimentos Imobilirios, Sonae Sierra Brasil S/A, Norskan Offshore

S.A, Multiner, Autometal and Brasil Insurance

Follow-Ons (1): Petrobras

BOVESPA Segment: Capital Raised Activity

26

BOVESPA Segment: Capital Raised Activity

2004 2005 2006 2007 2008 2009 2010*

4.5 5.415.4

55.6

7.5

23.87.44.3

8.5

15.1

14.5

26.8

22.2

16.1

IPO Follow-On


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422 501 711

988 789 843

1.6941,135 1,255

2,270 2,171

1,483 1,278

2,121

110 168266

473535 447

579

525642

603 611

670530

477

8674

68

11288 80

90

78106

75 96

106

96

75

187109

124

167162 150

180

168181

170 176

220

159

189


BRL Int. Rate (Thousands) FX (Thousands) Index (Thousands) Others (Thousands)

BM&F Segment: Operational Highlights

Average Daily Traded Volume - ADTV (thousands of contracts)

Rate per Contract - RPC (BRL)

*Updated until: July 30th, 2010

27

2,063

805852

1,167

1,740

1,573

2,544

1,9062,184

3,117 3,054

2,479

1,521

2,863

2004 2005 2006 2007 2008 2009 YTD* J-10 F-10 M-10 A-10 M-10 J-10 J-10

Interest rates in BRL 0,887 0,962 0,906 0,950 1,141 0,979 0,876 0,971 0,977 0,722 0,780 0,961 1,044 0,893

FX rates 4,002 2,858 2,244 1,859 2,065 2,161 1,894 1,968 2,005 1,837 1,872 1,752 1,908 1,983

Stock Indices 1,561 1,688 1,419 1,501 2,145 1,620 1,503 1,466 1,716 1,372 1,616 1,313 1,643 1,372

Interest rates in USD 1,999 1,385 1,094 0,965 1,283 1,357 1,173 1,104 1,319 1,239 1,203 1,145 1,137 1,086

Commodities 7,159 5,693 4,749 3,195 3,587 2,307 1,992 1,711 2,029 1,934 2,281 1,890 2,216 2,021

Mini contracts - 0,038 0,034 0,054 0,162 0,176 0,130 0,133 0,139 0,129 0,136 0,122 0,133 0,124

OTC 1,199 1,703 1,571 2,111 2,355 1,655 1,639 1,588 1,408 1,626 1,790 1,646 1,895 1,684

Total RPC 1,620 1,467 1,247 1,224 1,527 1,365 1,127 1,254 1,308 0,961 1,031 1,171 1,274 1,084


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BM&F Segment Open Interest

28

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10

Interest Rates in BRL

Total Open Interest

Derivatives Open Interest (in millions of contracts)


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10.5%

26.6%

59.4%

0%

10%

20%

30%

40%

50%

60%

70%

FX contracts I nde x- based contracts Mini contracts

4 2041 50 69

155118

226

118 92

05

1844

41

5047

62

4240

4

722

5377

93

72

120

8485

0.3%1.0%

2.8%

4.8%3.8%

6.0%

4.2%

8.9%

6.3%4.0%

-0,5%

0,5%

1,5%

2,5%

3,5%

4,5%

5,5%

6,5%

7,5%

8,5%

9,5%

-

50

100

150

200

250

300

350

400

450

500

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Apr-10 May-10 Jun-10 Jul-10

FX Equities Mini contracts % in Overall Volume

157 195 197 216327 380

451 416276 367

4 30 71129

156 148161 214

7048

5192

176 223279 204

189254

203

13

21138

84 164

162

151

5.5%7.5%

11.3%14.4%

13.9%

17.6%16.0% 20.1%

16.9%13.5%

0%

4%

8%

12%

16%

20%

-100

100

300

500

700

900

1100

Tra di tiona l DMA CME Globex DMA Provider CoLoca tion % of DMA in overa ll ADTV

CME-Globex ADTV in thousands of contractsDMA ADTV in thousands of contracts

High Frequency Traders

ADTV in thousand of contracts Participation per type of contract

22 active participants in Jul10

BM&F Segment: DMA and CME Order Routing Evolution

29* Updated until July 30, 2010

420 33

42 5883 81

126

4327

5

16

3939

29 37

39

129

62

45

59 3543

49

15

110.1%

0.9%

2.5%

4.1%

3.2% 2.9%2.6%

4.3%

1.7%0.8%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

5,0%

5,5%

(20)

10

40

70

100

130

160

190

220

250

280

FX Equities Mini contracts % in Overall Volume

D i f BM&F d BOVESPA S HFT


30/56

30

Drivers for BM&F and BOVESPA Segments: HFT

Colocation (Jul10)

33 half racks hired

45 units in the pipeline:

13 units for the BovespaSegment,

32 units for both Segments.

Average Daily Traded Volume via Co-location

(thousands of contracts)

Seven active investors

* Updated until July 30, 2010

0 1 3 712 15 13 17 20

25

84

164 162151

1.4%

3.3%

-0,5%

0,5%

1,5%

2,5%

3,5%

4,5%

5,5%

6,5%

-

20

40

60

80

100

120

140

160

180 2.6%3.2%


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APPENDIX

31


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BRAZIL USA

BVMF

BVMF

BVMF

DTCC

DTCC

NYSE Nasdaq

BATS Direct Edge

TRF Dark Pools

Beneficial Owner Level

Broker Level

All the trades

must be

matched on an

exchange

environment

Brokers can internalize

orders

Central Depository

Clearing (CCP)

Trading on the Exchange

Broker

Equity Market Settlement Structure: Brazil compared with USA

32


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Managed growth to support retail and high frequency trading

DMA Implementation (Direct Market Access)

Trading Systems: reduce latency and increase capacity

RCB Development (new BM&FBOVESPA Communication Network)

Via DMACo-location

TraditionalDMA

Via DMAProvider

DirectConnection

NET

NET

NET

NET

Remote accesstracking and maintenance

Application ofCo-location

NET

Providerof DMA

Excellence in IT Solutions and Post-Trading Services

33


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BRAIN Brazil Investments & Business


35/56

Foundation Members

BRAiN seeks to articulate, with the public

and private sectors, projects in various areas:

Brazils image abroad

Business infrastructure

Institutional connections International trade

Education and talents

Financial products, services and channels

Regulation, taxation, and bureaucracy

BRAIN Brazil Investments & Business

Mission

Reinforcing Brazils position as an international investment and business hub

with regional focus and global connections, contributing to the sustainable

economic and social development of Brazil and Latin America.

35

Turn Brazil into the business hub for Latin Americ

Develop global projection and links

Develop local market strengthening

Brazilian ecosystem competitiveness

Strategic Objectives


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1Q10 EARNINGS

36

Highlights of 1Q10 x 1Q09


37/56

227.0 282.6 245.7

403.2

1Q09 1Q10 1Q09 1Q10

176.7

334.6

1Q09 1Q10

55.8%

72.9%

BM&F segment all time high Trading Volume: 2.4 million contracts per day in

1Q10 and 3.1 million in Mar10

Colocation and High Frequency Traders (HFT): Colocation and HFT from BM&F

Segment in Apr10 hit new record highs, ADTV of 84K and 244K (buy + sell),respectively

New Pricing Policy for HFT: market hearing launched in Apr10

Products: Market Maker on Options, Non Sponsored BDR Level 1, Hydrous

Ethanol Futures and Options and Foreign NDFs / Futures

HIGHLIGHTS

Net Income (BRL Millions)EPS (GAAP): BRL 0.14 in 1Q10 and Adjusted EPS: BRL 0.20 compared with BRL

0.12 in 1Q09

Adjusted Net Income (adjusted by non-cash items)*: 64.1% higher than 1Q09

EBITDA Margin: 72.9% in 1Q10 versus 55.8% in 1Q09 and 65.1% in 4Q09

Adjusted Operating Expenses*: increase by 12.1% vs 1Q09 and 13.1% lower

than 4Q09

Guidance: both BRL550 million OPEX (adjusted) and BRL302 million CAPEX

budgets will be revised downwards

Interest on Capital: BRL227 MM (BRL90 MM previously paid and BRL137 MM,

BRL 0.068 per share, to be paid), equivalent to 80% payout on GAAP net

income

Adjusted net income in 1Q10 excludes stock options plan and impacts from deferred liabilities tax and in1Q09, excludes stock options plan. Adjusted expenses in 1Q10 excludes depreciation and stock options plancosts and in 1Q09 excludes depreciation, stock options plan and severance costs

GAAP Adjusted

1Q10 EARNINGS

EBITDA (BRL Millions) / EBITDA Margin (%)

Operating Expenses (BRL Millions)

37

Highlights of 1Q10 x 1Q09

Summary of Financial Statements


38/56

Summary of Financial Statements

In BRL (thousands) 1Q10 1Q09% Change

1Q10/ 1Q094Q09

% Change

1Q10 / 4Q09

Gross Operating Revenues 510,660 351,918 45.1% 473,890 7.8%

Net operating revenues 459,128 316,548 45.0% 424,759 8.1%Operating expenses (136,632) (148,760) -8.2% (160,372) -14.8%

Operating income 322,496 167,788 92.2% 264,387 22.0%

Income before Taxes 390,192 235,647 65.6% 338,491 15.3%

Income Tax and Social Contribution (107,843) (8,372) 1,188.1% (118,371) -8.9%

Net Income 282,601 226,980 24.5% 220,174 28.4%

Net margin 61.6% 71.7% -10.2 pp 51.8% 9.7 pp

EBITDA 334,626 176,739 89.3% 276,399 21.1%EBITDA margin 72.9% 55.8% 17.0 pp 65.1% 7.8 pp

Adjusted net income 403,248 245,739 64.1% 315,313 27.9%

Adjusted Operating Expenses (115,502) (103,050) 12.1% (132,866) -13.1%

Adjusted EBITDA 343,626 195,498 75.8% 291,893 17.7%

Adjusted EBITDA margin 74.8% 61.8% 13.1 pp 68.7% 6.1 pp

Adjusted earnings per share 0.200885 0.122869 63.5% 0.157282 27.7%

In 1Q10, the net impact from the adjustments on the bottom line

amounted to BRL 120.6 million, composed by 2 non-cash items:

BRL 111.6 million added Recognition of deferred liabilities

related to the goodwill amortization in 1Q10;

BRL 9.0 million - Stock Options Plan;

In 1Q09, the net income was adjusted by the Stock Option Plan inBRL 18.8 million

38

NET INCOME RECONCILIATION

BRL Millions 1Q10 1Q09Var.

1Q10/1Q09

Adjusted Net Income 403.2 245.7 64.1%

Adjustments

Deferred Tax Liabi li ties 111.6

Stock Options Plan 9.0 18.8

Corporate Net Income 282.6 227.0 24.5%

Revenues Breakdown

Revenues Breakdown


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33%

51%

16%

Trading / Clearing Systems - BM&F

Trading / Clearing Systems-Bovespa

Other Operational Revenues

In BRL (thousands) 1Q10 1Q09% Change

1Q10/ 1Q09

Operating Revenues 510,660 351,918 45.1%

Trading / Clearing Systems - BM&F 170,935 127,170 34.4%

Trading / Clearing Systems-Bovespa 259,835 158,196 64.2%

Other Operating Revenues 79,890 66,552 20.0%

Depository and custody 20,436 16,084 27.1%

Vendors 15,941 11,521 38.4%

Trading access (Brokers) 12,521 9,475 32.1%

Listing 11,511 10,621 8.4%

Securities Lending 10,520 6,127 71.7%

Bolsa Brasileira de Mercadorias 1,114 1,406 -20.8%

Bank 1,899 1,971 -3.7%

Others 3,513 3,976 -11.6%

Dividends (CME) 2,435 5,371 -54.7%

Revenues Breakdown

1Q09

1Q10

39

Revenues Breakdown

36%

45%

19%

Revenues Breakdown

Operational performance by Segment 1Q10 1Q09Change

1Q10/1Q09

BM&F ADTV - in millions of contracts 2,453.6 1,471.7 66.7%

BM&F RPC - in BRL 1.126 1.345 -16.3%

BOVESPA ADTV - in BRL millions 6,599.6 3,908.1 68.9%

BOVESPA Margin - in bps 6.56 6.64 -1.1%

Others Revenues

Other Revenues: 1Q10x1Q09


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555 581

1Q09 1Q10

Others Revenues

Vendors: +38.4%Due to the new pricing policy (Apr09) and the

growth of the average number of users (+16.6%)

Securities Lending: +71.7%

Depository and Custody: +27.1%Extra fee after April 2009

Trading Access (Brokers): +32.1%The market recovery lead brokers to migrate to

more expensive bandwidth

40

Other Revenues: 1Q10x1Q09

9.812.9

16.5 15.819.4

53.958.6 63.8 61.1 69.6

-

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

-

5,0

10,0

15,0

20,0

25,0

1Q09 2Q09 3Q09 4Q09 1Q10

u

berofTrades

OpenInterest

Open Interest (BRL billions) Monthly Average Number of Trades (thousands)

Securities Lending - BTC

Number of Accounts (Average) in thousands


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Expenses Breakdown

Expenses Breakdown


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130120

103 105 109

133115

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

Adjusted Operational Expenses* (BRL millions) Synergies associated with 2007 expenses** (BRL millions)

* In 1Q10 excludes depreciation and stock options expenses and in 1Q09 excludes depreciation, stock options and severance expenses

** 2007 Operational expenses as adjusted for inflation and OPEX budget excludes depreciation and stock options

42

Expenses Breakdown

Adjusted Operational Expenses: 12.1% higher than 1Q09

Adjusted Personnel Expenses: 12.4% higher than 1Q09

IT: 20.3% reduction vs. 1Q09 due to projects that are being revised and costs reduction related to equipments

maintenance

Marketing: 132.5% growth in comparison with 1Q09 (low base) showing the efforts in the financial educationcampaign

Others: CAPEX write off (BRL 3.7 million) and provisions of litigation (BRL 1.9 million)

Adjusted Operational Expenses*: BRL 115 million in 1Q10

Guidance: Both BRL550 million OPEX (adjusted) and BRL302 million in CAPEX budgets will be revised downwards

Expenses Breakdown

Financial Highlights


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Cash and Cash Equivalents

43

Financial Highlights

CAPEX

BRL26.4 million, (BRL23.6 million in IT and BRL2.8

million in other projects)

4Q09 - BRL 31.5 million

2009 BRL 95.6 million

Financial Income

BRL 67 million in 1Q10 and in 1Q09

Cash distributions BRL227 million Interest on Capital in 1Q10,

representing 80% of GAAP net income, as follow:

BRL90 million already paid during the 1Q10; and

BRL137 million, equivalent to BRL 0.068 per share,

to be paid on May 27th, based on the ownership

structure prevailing as of May 12th, 2010

In BRL billions

1.2

0.5

2.2

Mar10: BRL 4 billion

Collateral Clearings safeguard structure Own Cash

Balance Sheet


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In BRL thousands

ASSETSMar'10 Dec'09

LIABILITIES AND SHAREHOLDERS'

EQUITY Mar'10 Dec'09

Current Assets 3,532,520 2,778,968 Current Liabilities 1,645,579 1,162,075

Cash and cash equivalents 48,238 50,779 Collateral for transactions 1,171,426 810,317

Financial investments 3,320,428 2,599,784 Others 474,153 351,758

Others 163,854 128,405 Non-current Liabilities 424,727 313,002

Non-current Assets 18,469,670 18,422,215 Financing 163 2,495

Long-term receivables 749,176 715,951 Deferred Inc. Tax and Social Contrib. 372,784 261,060

Financial investments 616,412 585,648 Others 51,780 49,447

Others 132,764 130,303 Minority interest in subsidiaries 16,378 16,357

Investments 1,319,386 1,319,439

Shareholders' Equity 19,915,506 19,709,749

Property and equipment 278,277 268,895 Capital 2,540,239 2,540,239

Capital reserve 16,675,489 16,666,489

Intangible assets 16,122,831 16,117,930 Others 699,778 503,021

TOTAL ASSETS22,002,190 21,201,183 TOTAL LIAB. AND SHAREHOLDERS' EQUITY 22,002,190 21,201,183

44

Balance Sheet
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APPENDIX

Operational data

45


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Performance of BOVESPA Segment: Individuals Investors


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0

100

200

300

400

500

600

700

Jan-05

Apr-05

Jul-05

Oct-05

Jan-06

Apr-06

Jul-06

Oct-06

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Performance of BOVESPA Segment: Individuals Investors

47

Jul10

628 k

Investors Account

1.51.8

2.1 2.32.4 2.3 2.1 2.1 2.3

1Q09 2Q09 3Q09 4Q09 1Q10 Apr10 May10 Jun10 Jul10

Market Capitalization (BRL trillions)

Bovespa Segment: Foreign investment flow


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Bovespa Segment: Foreign investment flow

*Includes regular trades and public offering; updated until July 30th, 2010.

48

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

-1.0

0.9

-0.6

6.0

2.9

-2.8

-7.3

5.3

-1.8

-4.7

-1.2-0.4-0.6

0.51.4

5.7 6.1

4.2

5.5

2.5

5.2

9.1

2.11.4

-2.1

0.7

5.8

1.5

-1.5

-0.1

7.3

Operational Highlights: Investors Participation in Total Volume


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Operational Highlights: Investor s Participation in Total Volume

BM&F Segment (Investors Participation in Total Volume)

Bovespa Segment (Investors Participation in Total Value)

49

56% 51% 49% 48% 45% 43% 43% 42% 44% 43% 40% 41%

24%25%

23% 23% 24% 27% 26% 30% 26% 25% 29% 32%

12% 15%17%

19%20% 22% 23%

22% 24% 26% 25%22%

7% 7% 9% 8% 8%5% 5% 3% 4% 4% 4% 3%

2% 2% 2% 3% 3% 2% 3% 2% 2% 2% 1% 1%

2005 2006 2007 2008 2009 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10Central Bank Companies Individuals Foreign Investors Institutional Investors Financial Institutions

25% 25% 23% 27% 31% 31% 32% 31% 25% 27% 26% 28%

27% 27% 30% 27%26% 29% 29% 30% 35% 34% 35% 36%

33% 36% 35% 35% 34%28% 28% 27% 28% 30% 28% 28%

12% 10% 10% 8% 7% 9% 9% 9% 9% 7% 8% 7%2% 2% 2% 3% 2% 2% 2% 2% 2% 2% 2% 2%

2005 2006 2007 2008 2009 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10

Individuals Institutional Investors Foreign Investors Financial Insitutions Companies Others


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Institutional investors will broaden their participation incapital markets : Investments Funds


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55% 52%63% 54% 47% 48% 44%

44%

28% 29%

17%23% 24% 23%

24% 23%

10% 11%

12%

13%14%

16%

18% 18%

8% 8%

8%10%

15%12%

15%15%

2003 2004 2005 2006 2007 2008 2009 May/10

Fixed Income Multimarkets Others* Equities

768.8724.8

914.81,119.9

1,279.5

1,150.0

1,458.5 1,497,0

51

capital markets : Investments Funds

Investments Funds: Portfolio Breakdown (in BRL billions )

Investments Funds: Multimarket and Equities Funds Evolution (in BRL billions)

* Brazilian Hedge Funds

* Others include: Asset backed securities, real estate, FX, off-shore and retirement funds

Source: Anbima

281 286 285 308320 332 338

338 346 339 340 340 345351

165 174 171 178180 190 195 205 214 213 211 215 210 204

Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10

Multimarkets Funds* Equities Funds


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Capital Markets in Brazil:

A Story of Growth

52

Modest exposure of Investment Funds


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Number of investoraccounts in

investment funds

270 million(~60% of population)

USA

BRAZIL

10.2 million

(5% of population)

USA (Apr/10) World(Dec/09) Brazil (May/10)

% in Equities

53%39%

14%

Source: ICI- Investment Companies Institute and Anbima

Modest exposure of Investment Funds

53

Brazilian Capital Market Indicators are still Incipient whenCompared to World Benchmarks


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Nasdaq KEx Shanghai DB Borsa

Italiana

NYSE BME Tokyo LSE AUX TSX NSEI HKEx SGX BVMF

1,027%

243%229%

171% 162% 161%146% 129% 107% 98% 96% 88% 84% 67% 67%

Brazil places 28th in the WFE ranking, with 386 listed companies in Dec/09

High potentialfor growth

Source: WFE

446%

Shenzhen

Compared to World Benchmarks

Turnover Velocity (2009)

54

Modest Development in Fixed-Income and AgriculturalCommodity Derivatives


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Real Estate Credit to GDP Ratio

Agricultural commodityderivatives to total

exchange industry*:

World 5.3%Brazil 0.7%* Jan-Sept/200944%

15%11%

3%

62%

USA Spain Chile Mexico Brazil

Source: FIA

Source: CDES Social and Economic Development Board and World Bank

Commodity Derivatives

55


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bvmf presentation - july 2010

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