2011 Reference Form BM&FBOVESPA S.A.

- Bolsa de Valores, Mercadorias e Futuros (BVMF)

BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros

The Brazilian Securities, Commodities and Futures Exchange

Reference Form
2011
(Free Translation)

Version 16,0 Last updated May 21, 2012.

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

1. Identification of persons responsible for the information provided in this form

I, Edemir Pinto, acting herein in the capacity of chief executive officer of BM&FBovespa S.A., hereby declare that (i) I have
reviewed this filled out Reference Form; (ii) the information contained herein fulfills the requirements of CVM Instruction No.
480 dated 2009, in particular the requirements under articles 14 through 19 thereof; and (iii) the totality of the information
provided herein truthfully, accurately and completely reflects the financial position and results of operations of our Company,
the risks inherent in its activities and its issued and outstanding securities.
I, Eduardo Refinetti Guardia, acting herein in the capacity of investor relations officer of BM&FBovespa S.A., hereby declare that
(i) I have reviewed this filled out Reference Form; (ii) the information contained herein fulfills the requirements of CVM
Instruction No. 480 dated 2009, in particular the requirements under articles 14 through 19 thereof; and (iii) the totality of the
information provided herein truthfully, accurately and completely reflects the financial position and results of operations of our
Company, the risks inherent in its activities and its issued and outstanding securities.
2. Independent Auditors
2.1.

Information regarding the independent auditors

2010

2009

2008

PricewaterhouseCoopers
Auditores Independentes

PricewaterhouseCoopers
Auditores Independentes

PricewaterhouseCoopers
Auditores Independentes

Name: Edison Arisa Pereira

CPF: 006.990.038-81

Name: Edison Arisa Pereira

CPF: 006.990.038-81

Name: Ricardo Baldin

CPF: 163.678.040-72

Phone number
(11) 3674-2000

Phone number
(11) 3674-2000

Phone number
(11) 3674-2000

Email:
[email protected]

Email:
[email protected]

Email:
[email protected]

Retention date

March 4, 2010

April 24, 2009

June 16, 2008

Agreed services

Auditing the full-year financial

statements; reviewing the
quarterly financial reports;
other audit-related services.

Auditing the full-year financial

statements; reviewing the
quarterly financial reports;
other audit-related services.

Auditing the full-year financial

statements; reviewing the
quarterly financial reports;
other audit-related services.

Name of the auditing firm

Lead auditor, taxpayer ID (CPF),

contact data

Not applicable

Not applicable

Not applicable

Replacement justification

Not applicable

Not applicable

Not applicable

Auditors reasons

Not applicable

Not applicable

Not applicable

Auditors replacement

2.2.
Total compensation paid to the independent auditors in the most recent full year, segregating fees paid
for auditing services and fees paid for any other services.
Fees paid to the independent auditors

(in R$ thousands)

Auditing services

1,261

Audit-related services

258

Cross border bond offering (global notes)

360

Total in 2010

2.3.

1,909

Other information the registrant may deem material to report.

Not applicable.
3. Selected Financial and Operating Information
3.1.

Consolidated financial statements

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

2009
(in R$ thousands)

2009
(in R$ thousands)

Shareholders equity .

19,419,048

19,342,893

Total assets ..

22,633,975

20,837,839

Net revenues.

1,889,757

1,502,544

Gross income.

1,592,515

1,186,574

Net income.
Number of shares issued and outstanding, not including treasury stock

1,144,486

882,069

(in number of shares)

(in number of shares)

1,979,921,193

2,004,766,312

(in Brazilian reais)

Shareholders equity per share ..

(in Brazilian reais)

9.807990

Earnings per share .

Basic earnings per share
Diluted earnings per share

9.648453

0.572058
0.568172

0.439983
0.436195

Our annual financial statements as of and for the year ended December 31, 2010, were prepared and presented in accordance
with Brazilian GAAP, which include first-time adoption of IFRS. As a result, for comparability purposes, we have adjusted our
financial information for the prior year and presented retrospective financial statements as of and for the year ended December
31, 2009, revised for adoption of such accounting standards, guidance and interpretations. However, similar adjustments have
not been made, and were not required to be made to our 2008 financial statements, for which reason they are not presented
herein. For additional information on significant changes to our accounting practices, see subsection 10.4 of this form.
3.2.

Non-GAAP financial measures

EBITDA for 2010 amounted to R$1,315,046 thousand, a 34.9% year-on-year rise from R$975,108 thousand in the prior year.
Likewise, the EBITDA margin (EBITDA divided by net income) climbed to 69.6% from 64.9% one year ago.
Net income
Minority interest in subsidiaries
Income tax and social contribution
Interest income, net
Depreciation and amortization
Share of net profit (loss) in associate (equity-method investment)
Tax on equity-method investment
EBITDA

EBITDA Margin

2010
1,144,561
(75)
448,029
(298,024)
54,818
(38,238)
3,975
1,315,046

69.6%

2009
881,050
1,019
304,505
(253,862)
42,396
975,108

64.9%

%
29.9%
-107.4%
47.1%
17.4%
29.3%
34.9%

4.7 pp

EBITDA information is developed by us as a measure of our operating performance. As used by us, EBITDA consists of net
income plus Minority interest in subsidiaries, income and social contribution taxes, interest income, depreciation and
amortization expenses, our share of the net profit or loss in the associate (equity-method investment) and tax on equitymethod investment. EBITDA is not a measure of financial performance under Brazilian GAAP, is not representative of cash flow
for the periods presented, and should not be considered in isolation, or as an alternative to net income as a measure of
operating performance or an alternative to operating cash flow as an indicator of liquidity. EBITDA has no standardized
meaning and our definition of EBITDA may not compare with EBITDA as used by other companies.
Given that Management uses EBITDA as a measure of performance, we understand it is important to provide this information
herein. Management believes EBITDA provides a deeper understanding of our operating performance and allows for better
comparability with other companies in the same industry as ours even if they calculate EBITDA somewhat differently.
3.3.

Subsequent events.

At a meeting held on February 17, 2011, our board of directors approved a supplementary dividend distribution out of net
income determined for December 31, 2010, in the amount of R$406,086 thousand, approved at the annual meeting held on
April 18, 2011 for payment as of May 16, 2011.
3.4.

Dividend and cash distributions policy

Topic

Years ended December 31, 2010, 2009 and 2008

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Topic

Years ended December 31, 2010, 2009 and 2008

Rules on earnings retention

From net income for the year, as determined after the deductions set forth in article 53 of our
Bylaws, we make the following allocations, as applicable:
(a) 5% allocation to the legal reserve, up to a legally prescribed limit; (b) The
remainder,
as
adjusted by allocations to contingency reserve or reversal thereof, as the case may be, is allocated to
the 25% mandatory annual dividend to shareholders, and any balance then outstanding is allocated
to a bylaws reserve which we may use for investments and for allocations to safeguard mechanisms
adopted to ensure transactions executed or registered in our trading, registration and securities
lending systems are properly cleared and settled; (c) However, the amount allocated to our bylaws
reserve pursuant to item (b) above must not exceed the amount of our capital stock;
(d) If our board of directors deems the bylaws reserve (item (b) above) sufficient to meet our
investment and safeguard requirements, it may propose (to the shareholders meeting) (i) that we
allocate to the bylaws reserve less than the portion required under the bylaws (item (b) above);
and/or (ii) a reversal of part of the bylaws reserve for distribution to shareholders in the form of
dividends; and (e)
After meeting the allocation requirements set forth in paragraph 1 of artic le 54
of the bylaws, the shareholders meeting may decide to retain that portion of net income for the year
which has been forecast in the capital expenditure budget approved pursuant to Article 196 of
Brazilian Corporate Law. In addition, while under Brazilian Corporate Law and our bylaws (article 55,
paragraph 1) we are required distribute a mandatory dividend every year, we are also allowed to
suspend this mandatory distribution if the board of directors reports to our annual shareholders
meeting that the distribution would be inadvisable given our financial condition.
We were not required to make any net income allocations to the legal reserve based on earnings
ascertained for the years ended December 31, 2010, 2009 and 2008, because at each of these dates the
amount of our legal reserve plus our capital reserves exceeded 30% of our capital stock, thereby
dispensing with the otherwise required allocation. Earnings retained based on allocations to our bylaws
reserve out of net income for the years ended December 31, 2008 and 2009, amounted to R$127,433
thousand and R$155,191 thousand, respectively. No earnings have been retained and no allocations to
the bylaws reserve made with regard to net income for the year ended December 31, 2010.

Rules on dividend
distributions

Under our Bylaws, shareholders are assured a mandatory distribution of dividends and interest on
shareholders equity in the aggregate corresponding at least to 25% of the net income for the year,
as adjusted pursuant to the corporate legislation. However, as noted in item (e) above, the mandatory
distribution may be suspended if our board of directors advises the shareholders that this would
inadvisable due to our financial condition.

Dividend distribution
frequency

Dividends are distributed pursuant to a decision of the annual shareholders meeting, which typically
takes place in April. However, our board of directors may decide (a) to declare dividends based on
income determined in semi-annual financial statements; (b) to declare dividends based on income
determined in interim financial statements drawn up for shorter periods, provided the total dividends
paid in any given six-month period must not exceed the amounts accounted for as capital reserves
(Brazilian Corporate Law, Article 182, paragraph 1); (c) to distribute interim dividends based on
retained earnings determined in the most recent annual or semi-annual financial statements; and (d) to
decide to pay interest on shareholders equity to shareholders, as often as it ma y deem fit, which in any
event may be computed as part of the mandatory dividends we are required to distribute.

Restrictions on dividend
distributions

Under Brazilian Corporate Law we are permitted to suspend the distribution of the mandatory dividend
contemplated in item (ii) of paragraph 1 of article 54 of our Bylaws in any year in which our board of
directors reports to the annual shareholders meeting that the distribution would be inadvisable given
our financial condition. In this case, the fiscal council, if active, should review the matter and issue an
opinion on the matter. Moreover, within five days after the date of the shareholders meeting,
Management would be required to file justification with the CVM. Net income not distributed on acco unt
of a suspension (paragraph 5 of article 56 of our Bylaws) must be allocated to a separate special reserve
and, if not absorbed by subsequent losses, is required to be distributed as dividends as soon as our
financial condition should permit it.

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

3.5.

Summary of distributions of net income and retained earnings.

2010

2009

2008

Adjusted net income (for distribution purposes)

1,144,561

881,050

645,596

Dividend distributions

1,144,561

705,000

512,762

(in R$ thousands, unless otherwise indicated)

Distributions, as a percentage of adjusted net income

100.0%

80.0%

79.4%

Distributions by kind and class of shares

See the table below

See the table below

See the table below

Distribution payment dates

See the table below

See the table below

See the table below

5.9%

4.5%

3.3%

Rate of return on shareholders equity (ROE)

Retained earnings (in R$ thousands)

Date of retention approval

Cash Distributions

Type of shares

Distribution
payment dates

155,191

127,433

ASM - April 20, 2010

ASM April 28, 2009

Gross distribution
per share
(in R$)

Total gross
distribution

(in R$ thousands)

Interest on shareholders equity

common stock

April 15, 2008

0.020320

20,539

Interest on shareholders equity

common stock

September 2, 2008

0.072995

149,203

common stock

September 2, 2008

0.069969

143,019

common stock

April 15, 2009

0.069307

139,376

common stock

May 12, 2009

0.030317

60,625

Dividends
Interest on shareholders equity
Dividends
Total for 2008

512,762

Interest on shareholders equity

common stock

May 29, 2009

0.055931

112,000

Interest on shareholders equity

common stock

August 26, 2009

0.070653

141,500

Dividends

common stock

August 26, 2009

0.016727

33,500

Dividends

common stock

November 24, 2009

0.074888

150,000

common stock

January 8, 2010

0.009976

20,000

common stock

May 14, 2010

0.123602

248,000

Interest on shareholders equity

Dividends
Total for 2009

705,000

Interest on shareholders equity

common stock

March 11, 2010

0.014951

Interest on shareholders equity

common stock

April 13, 2010

0.025406

60,000

Interest on shareholders equity

common stock

May 27, 2010

0.057996

137,000

Interest on shareholders equity

common stock

September 10, 2010

0.022422

45,000

Dividends

common stock

September 10, 2010

0.098957

198,600

Dividends

common stock

November 25, 2010

0.119101

235,875

common stock

January 19, 2011

0.016156

32,000

common stock

May 16, 2011

0.206723

406,086

Interest on shareholders equity

Dividends
Total for 2010

30,000

1,144,561

For additional information, see the discussion on dividend and other distributions policy in the above subsection 3.4.
3.6.
Dividends declared in the last three financial years out of retained earnings or other profit reserves
previously registered.
In the three most recent years we have not declared dividends out of retained earnings or other profit reserves previously
registered.
3.7.

Indebtedness level.

The table below sets forth information on the evolution of liabilities, as comprising current and noncurrent liabilities at year-end
of the last year.

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Year ended
December 31,

Amount
(in R$
thousands)

Type of debt ratio

Ratio

2010

3,214,927

Debt to Equity
Ratio

16.5%

2010

2010

2010

Debt ratio
or
Total Debt-to-Total
Assets

Debt-to-EBITDA
Ratio

EBITDA-to-Interest
Coverage Ratio

Index description and reason for use

- Method: D/E = (total current + non-current liabilities) / shareholders

equity.

5.1%

- Method: Total Debt to Total Assets = (short term debt + long term debt)
/ total assets
- Reason: This is a metric used to measure a companys financial risk by
determining how much of the companys assets have been financed
through debt. It is calculated as the ratio of the sum of short term debt
(interest payable on bonds issued abroad and loans) and long term debt
(bond issuance abroad and loans) divided by total assets (the sum of
current assets, fixed assets and other intangible assets such as goodwill).

0.8

- Method: Debt/EBITDA = (short term debt + long term debt) / EBITDA

- Reason: This is a measure of a companys ability to pay incurred debt. It
is calculated as the ratio of the sum of short term debt (interest payable
on bonds issued abroad and loans) and long term debt (bond issuance
abroad and loans) divided by EBITDA (earnings before interest, taxes
depreciation and amortization). This ratio gives the investor the
approximate amount of time that would be needed to pay off all debt,
ignoring the factors of interest, taxes, depreciation and amortization.
Debt/EBITDA is a common metric used by credit rating agencies to assess
the probability of defaulting on incurred debt.

40.0

- Method: EBITDA-to-Interest Coverage = EBITDA / Interest payments

- Reason: This is a metric used to assess a companys durability that by
examining whether it is profitable enough to pay off its interest expenses. It is
calculated by dividing a companys EBITDA (earnings before interest, taxes
depreciation and amortization) of one period by the companys interest
expenses (interest payable on bonds issued abroad and loans) in the
same period.

The above debt ratios indicate our company enjoys fairly conservative financial leverage ratios. For information on the particular
characteristics of our indebtedness, see subsection 10.1(f) below, in this form.
3.8.

Debt obligations by type and time to maturity

Year ended December 31, 2010

(data from our consolidated financial statements) in R$

thousands

Short-term
Type of Debt (*)

Current liabilities
Collateral for transactions
Earnings and rights on securities under custody
Suppliers
Salaries and social charges
Provision for taxes and contributions payable
Income tax and social contribution
Interest payable on bonds issued abroad and loans
Dividends and interest on shareholders equity payable
Other liabilities
Noncurrent liabilities

Unsecured
Unsecured
Unsecured
Unsecured
Unsecured
Unsecured
Unsecured
Unsecured
Unsecured

Bond issuance abroad and loans

Deferred income tax and social contribution
Provision for contingencies and legal obligations
Total Indebtedness (current + noncurrent liabilities)

Unsecured
Unsecured
Unsecured
Unsecured

maturing within
1 year

1,416,204
954,605
34,791
80,828
64,351
23,981
5,576
33,154
2,773
216,145
0

1,416,204

Long-term
maturing
maturing
within
within
1-3 years
3-5 years
(in R$ thousands)

Maturing
after
5 years

1,798,723

1,010,059
732,074
56,590
1,798,723

__________________________________________________
( )

* The type of debt classification (as defined by type of guarantee or absence thereof) is secured by collateral, by floating assets or unsecured.

We note that the line items collateral for transactions and earnings and rights on securities under custody recorded under
current liabilities are intrinsic to our activities as an exchange and are not operated in any particular or actually defined term.

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Likewise, movements in the line item deferred income tax and social contribution recorded under noncurrent liabilities have no
defined period.
While we understand our total debt classifies as unsecured debt, other items under liabilities are not categorized by type of
guarantee or absence thereof (collateral, floating assets or unsecured) but, rather, as defined by law in terms of liquidity.
3.9.

Other information deemed to be material.

Global Senior Unsecured Notes

On July 16, 2010 BM&FBOVESPA completed a cross-border offering of global senior unsecured notes priced at 99.635% of the
aggregate principal nominal amount of US$612 million, which after deducting underwriting discounts netted proceeds of
US$609 million (at the time equivalent to R$1,075,323 thousand). The notes mature on July 16, 2020, and pay interest of
5.50% per annum, with coupons payable every six months in January and July. However, as computed to include the
transaction expenses, in particular underwriting discounts, commissions paid to arranging and structuring banks and other
offering expenses, listing fees, legal fees, rating fees paid to Standard & Poors and Moodys, and ongoing administration and
custody expenses, the actual cost correlates with a rate of 5.64% per annum. As translated into Brazilian reais and including
accrued interest of R$30,179 thousand, the balance of our debt under the global notes as of December 31, 2010, was
R$1,041,238 thousand. We used the offering proceeds to purchase additional interest in the shares of the CME Group effective
July 16, 2010.
We have issued the notes as callable bonds, thus allowing us the prerogative exercisable in our discretion at any time and from
time to time of redeeming all or some of the notes prior to maturity. The redemption price was set at the greater of (i) 100% of
the principal of the notes called for redemption plus accrued interest to the date, and (ii) interest accrued to the date plus the
present value of the remaining scheduled payments on the notes, discounted to the redemption date, on a semiannual basis
(30/360 daycount basis), at a rate equal to the sum of the applicable U.S. Treasury Rate for the remainder of the term plus 40
basis points (0.40%) per annum. Accrued and unpaid interest will be paid to, but excluding, the redemption date.
Starting from the notes issue date, we have designated as hedging instrument that portion of the principal under the notes
which correlates with changes in exchange rates in order to hedge the foreign currency risk affecting that portion of our
investment in the CME Group Inc which attributable to the notional amount of US$612 million (a hedging instrument in a hedge
of net investment in a foreign operation, per Note 7 to our financial statements as of and for December 31, 2010). Accordingly,
we have adopted net investment hedge accounting pursuant to accounting standard CPC-38 (Financial Instruments:
Recognition and Measurement), for which purpose the hedging relationship has been formally designated and documented,
including as to (i) risk management objective and strategy for undertaking the hedge, (ii) category of hedge, (iii) nature of the
risk being hedged, (iv) identification of the hedged item, (v) identification of the hedging instrument, (vi) evidence of the actual
statistical relationship between hedging instrument and hedged item (retrospective effectiveness test) and (vii) a prospective
effectiveness test.
Under CPC 38 (IAS 39) we are required to assess the hedge effectiveness periodically by conducting retrospective and
prospective tests. On testing backward-looking effectiveness, we adopt the ratio analysis method, also called dollar offset
method, as applied on a cumulative and spot-rate basis. In other words, this method compares changes in fair values of the
hedging instrument and hedged item attributable to the hedged risk, as measured on a cumulative basis over a given period
(from the hedge inception to the reporting date) using the foreign currency spot exchange rate as of each relevant date in
order to determine the ratio of cumulative gain or loss on the notes principal amount to cumulative gain or loss on the net
investment in a foreign operation over the relevant period. And on testing forward-looking effectiveness, we adopt stress
scenarios which we apply to the hedged variable in performing foreign currency sensitivity analysis to determine degree of
sensitivity to changes in exchange rates.
We have tested the hedge effectiveness retrospectively and prospectively, having determined that at December 31, 2010, there
was no realizable ineffectiveness. Moreover, at that date, the fair value of our debt under the notes, as determined based on
market data, was R$1,037,774 (Source: Bloomberg).
Management information system implementation
We have implemented in 2010 a management information system (MIS) whose primary purpose is to allow for results to be
released by product, business area, market segment, customer segment and type of investor, in addition to meeting our
analysis and reporting requirements, which will contribute to nimbler decision-making and assist us in strategic planning and
costing and budgeting processes, as well as in projecting and maximizing resources. Early in 2011, we started to use our
PROPHIX system more broadly, in a number of contexts, including those that are listed below, but continue to work on further
enhancing the system and our ability to use it efficiently.

Objectives of our Management Information System

Prepare the revenue and expense budget;

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Follow-up on actual vs. forecast revenues and expenses;

Allocating expenses by cost center and revenues by product;
Assisting in the pricing of products and services;
Follow-up on efficiency indicators;
Controlling expenses by area allocating indirect costs pursuant to the ABC method (activity based costing);
Pricing the transfer of resources between areas, products and companies within the group.

Benefits

Greater agility and quality in determining and releasing management reports (revenues, expenses, cash flows, balance
sheets) for nimbler decision-making;
Detailed information for improved control, analyses and projections;
TOTAL synergy with our accounting;
Quantitative analysis of the variables particular to each business line;
Segmentation of results;
Flexibility for preparation of managerial reports at all company levels.

4. Risk Factors
4.1.
Discussion of risk factors that may influence investment decisions, in particular risk factors related to
the following:
a. Risks relating to the Company

In our role as central counterparty clearing house we are exposed to substantial credit risk from third parties,
including customers, counterparties and clearing agents.
Our clearinghouses act as central counterparty to ensure multilateral clearing and settlement of exchange or OTC transactions
carried out on, or registered in our trading systems, including securities lending transactions. In performing this role, we provide
central counterparty clearing for transactions in equities and equity derivatives and corporate debt securities (covering the local
cash, forwards, options and futures markets and the securities lending market), and for transactions in financial, credit and
commodity derivatives, including swaps and foreign exchange derivatives (covering the local cash, forwards, options and
futures markets), and for spot U.S. dollar transactions (dlar pronto) traded on the local interbank market, and for transactions
in Brazilian government bonds and debt securities (covering the spot, forwards and repo markets).
As a result, we are exposed to substantial credit risk from third parties, including clearing agents, the most frequent
counterparties, financial institutions that are counterparties to transactions settled in our foreign exchange clearinghouse, and
customer market participants as the brokerage firms and their customers. Default by any of these parties may expose us to
significant market risk, as our clearinghouses must assure settlement of all transactions carried out on our trading system.
The amount of such market exposure depends on open positions of market participants, as well as the type of guarantees
deposited as part of risk management policies we adopt. The likelihood of any default event is directly related to (i) high
volatility of prices and fees, in particular those that are used to define the value of our products and contracts settled in our
trading systems, (ii) the level of leverage in the market, (iii) uncertainties related to local and global macro-economic
environment, (iv) interruptions on liquidity flow of domestic and global markets, (v) systemic credit events on domestic and
global markets, (vi) drastic political changes in Brazil and in the main economies worldwide and (vii) events of major social
impacts in Brazil or abroad, such as wars or natural disasters.
Defaults by market participants on their obligations with our clearinghouses could cause our clearinghouses to use margins and
collateral deposited. We would suffer substantial losses in the event our policies and risk management mechanisms associated
with central counterparty activities fail to work properly. For more information about the risks inherent in our role as central
counterparty, see item 5 of this Reference Form.

We depend heavily on information technology for the operation of our business and any failure or malfunction of
our systems may adversely affect the course of business in our markets and us.
Our business depends on the integration and performance of computer systems and supporting communication systems.
Speed, scale and scalability, availability of hardware and software, reliability and ongoing updating of our technological
platforms constitute important factors for the performance of our operations, so as to attract a larger number of participants.
We operate in an industry that continues to undergo fast and significant technology changes. In recent years, securities and
derivatives traded through electronic platforms have grown significantly and our clients demand for diversified methods of
trade execution has increased. We are constantly required to make significant investments in our platforms to increase capacity
to handle growing demand for our services. In order to remain competitive, we must continue to improve and enhance the
functionalities, accessibility and response time of our systems, as well as the characteristics of our trading platforms, software
and communications systems and technologies. If we are unable to continue to improve and enhance our technology

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

infrastructure and systems, the brokers, clearing agents and financial institutions and other market participants that use our
platform could migrate to other preferable platforms, which would adversely affect our business.
In addition, systems and communication networks can be vulnerable to unauthorized access, computer viruses, human error
and other security problems, such as terrorist acts, natural disasters, sabotage, extended power shortages and other events
beyond our control, including events of force majeure. If our information security and business continuity measures are partially
or entirely compromised, or if there are interruptions or malfunctions in our systems or communications networks, there could
be a corresponding material adverse effect on our business, financial condition and operating results. In these situations, we
may need to incur significant expenses in order to remediate problems caused by security violations or system failures. We
intend to continue implementing security measures following market standards and strengthen the integrity and reliability of our
systems. However, if these measures do not prevent failures or delays in our computer systems or communications networks,
there may be a significant reduction in the trading volume on our trading systems, resulting in a material adverse effect on our
business, financial condition and operating results. The back-up systems and the preventive mechanisms that we adopt may not
be sufficient to prevent such failures and/or problems. These failures or a degradation of systems could result in complaints
from client and market participants to regulatory agencies, in lawsuits against us, or lead to regulatory investigations of
compliance failures with applicable laws and regulations.
The above risk factors apply to systems and networks acquired and operated directly by us or by third parties, including service
providers. In the case of systems or networks that belong to, or are operated by third parties, their failure or unavailability
could also adversely affect our operations.

We depend on the level of market activity, which is beyond our control.

The success of our business depends, in part, on our ability to sustain or increase the volume of transactions carried out and/or
registered in our trading, clearing and settlement systems. We offer a variety of products and trading channels to brokers,
clearing agents and financial institutions. If the level of activity on our markets were to decline or we were unable to retain
customers as brokerage firms and other market participants that represent a significant portion of the volume of transactions
from which we derive our revenues, this could materially and adversely affect our business, our revenues, results of operations
and financial condition.
We derive a significant portion of our overall revenues from fees we charge on transactions carried out on the equities markets
and fixed income markets comprising our Bovespa segment, meaning exchange and OTC markets for the trading of stocks,
other equity securities, equity derivatives and corporate debt securities. For this reason, we are highly dependent on the level of
activity on these markets and, therefore, also on the volume and price of securities and derivatives traded and on turnover
velocity, all of which significantly influence average daily value traded (ADVT) across these markets. Other factors influencing
performance include the market capitalization of listed issuers and the number of brokerage firms and other financial
institutions with access to our markets.
Another significant portion of our revenues we derive from fees we charge on transactions carried out within our BM&F
segment, which comprises derivatives markets for options, forwards and futures contracts based on financial and cash-settled
commodities, metals, energies, stock indexes, exchange rates and so forth, such that this segment too is highly dependent on
the level of market activity (as measured in terms of average daily trading volume, or ADTV). Decreases in the volume of
trading in derivative contracts, particularly exchange and interest rate futures contracts, which account for a significant portion
of our revenues for the segment, may adversely impact our revenues and profitability, thereby negatively affecting our
business, results of operations and financial condition.
We have no direct control over any of these variables, which depend, among other things, on the attractiveness of the
securities and derivatives listed to trade on markets we operate vis--vis other investments, as well as on our ability to be
perceived as an attractive venue for the trading of these securities and derivatives when compared with other exchanges and
trading platforms. These variables, in turn, are influenced by the overall economic conditions in Brazil, in Latin America and
worldwide, in terms of (i) growth levels, liquidity and political stability, (ii) the regulatory environment for securities and
derivatives, and (iii) activity, volatility and performance of global markets. Additionally, we may be more significantly affected by
global crises and capital market crises than financial and financial services institutions, given that these factors directly affect
average daily value and volume traded on these markets, which in turn impact our revenues from trading and settlement fees.
For example, in the period spanning the latter part of 2008 through to 2009, the global financial and financial services industries
and the capital markets experienced materially adverse conditions, including substantially heightened volatility, outflows of
customer funds and securities, losses resulting from declining asset values, defaults on securities, high deleveraging and thin
liquidity. Economic downturns, global financial crises or sudden changes in economic or market conditions, credit crunches,
market instability, volatility of market prices, reductions in spending, exchange rate instability, inflationary pressures and similar
other factors beyond our control have had, and may continue to have materially adverse effects on both the Brazilian economy
and the level of activity in capital markets, and, thus, significantly and negatively impact our revenues from trading and
settlement fees. In addition, financial institutions may be unable to renew, extend, or grant new lines of credit under
economically favorable conditions, or may even be unable or unwilling to honor existing obligations, all of which could materially
and adversely affect our revenues, profitability, results of operations and financial condition.

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Because our cost structure consists mostly of fixed costs, if our revenues decrease and we are unable to reduce
costs our profitability could be materially adversely affected.
Our cost structure consists mostly of fixed costs and is based on historical and expected levels of demand for products and
services offered to the participants in the markets in which we operate. If the demand for these products and services declines,
resulting in a decrease in our revenues, we may not be able to immediately adjust our cost structure to compensate. We may
also have to incur in substantial development costs and marketing and sales expenses to introduce new products or services in
the market, which may not generate the expected results, reducing our working capital and operating profit and thereby
adversely affecting our business.

Our businesses involve the use of technologies, products and services, and intellectual property rights may be
violated by us or by third parties.
We may be unable to prevent third parties from utilizing our technologies, programs, services or products developed by us
(such as indexes and negotiable instruments) without our authorization or from violating our intellectual property rights in any
other way. On the other hand, our competitors, as well as other companies and individuals, may have secured, or may secure
in the future, intellectual property rights relating to products or services similar to those we offer or plan to offer. We may be
unaware of all existing secured intellectual property rights, which may create litigation risks concerning ownership rights of
these products, services and technologies.
We cannot assure you that we will be successful if we pursue these violations through legal proceedings in order to enforce our
intellectual property rights or defend ourselves against allegations of violation. In addition, allegations of violations are a
common and costly reality in our industry, and lawsuits and complaints concerning such allegations, whether they are
successful or not, could give rise to substantial costs for us, thus adversely affecting our business.

We rely on members of our management team, who we may be unable to retain or replace with persons with
similar experience and qualification.
A significant portion of our future success depends on the skills and efforts of our management team. We compensate certain
members of our management team with fixed salaries, performance bonuses and a stock option plan in an effort to retain such
executives. If any of the members of our management team decides to leave us, we may not be able to hire professionals with
similar qualifications. For more information, see Management. The loss of any member of our management team and our
inability to hire professionals with similar experience and qualification may have a material adverse effect on our business.

Any damage to our reputation may have an adverse effect on us.

Our reputation may be compromised in different ways, including as a result of failures in our self-regulatory functions, our
technology or the settlement of transactions executed on our trading platforms. Our reputation may be further damaged by
events beyond our control, such as scandals involving other exchanges, which may affect investors perception of the securities
market as a whole. In addition, any inappropriate conduct by market participants, our employees, brokerage firms, may result
in disciplinary sanctions and harm our reputation.
Damage to our reputation may cause issuers to delist from our markets or to transfer their listings to other exchanges, as well
as discourage other parties from transacting on our markets, which may, in turn, reduce the value traded on our exchange. Any
of these events may have an adverse effect on us.

We intend to continue to explore acquisitions, investments and other strategic alliances. We may not be
successful in identifying opportunities or in integrating the acquired businesses. Any such transaction may not
produce the results we anticipate which could adversely affect our business and the market price of our shares.
We intend to continue to explore and pursue acquisitions and other strategic opportunities to strengthen our business and grow
our company, including the increase of our ownership interest in CME to 5.0%, which could help us penetrate new markets,
offer new products and services, and develop or enhance our trading systems and technologies. We may make acquisitions or
investments or enter into strategic partnerships, joint ventures and other alliances. There is no guarantee that our efforts will
be successful. We may not realize the anticipated growth and other benefits from strategic growth initiatives we have made or
will make in the future and we may have to incur significant expenditures to address the additional operational and control
requirements as a result of our growth, which may have an adverse impact on our financial condition and operating results.
Furthermore, some of our partnership agreements might restrict our ability to seek strategic alliances with other relevant
players in the market, preventing us from taking advantage of business opportunities presented by such players.

The interpretation of Brazilian tax authorities on the effects of the conversion of BM&F and Bovespa into forprofit companies in 2007 may differ from our interpretation, which could result in material tax contingencies.
In response to a formal consultation presented by the Brazilian Exchanges Commission (Comisso Nacional de Bolsas), or CNB,
the Brazilian tax authorities have indicated that the demutualization of not-for-profit exchanges is not permitted pursuant to
current regulation since: (1) the section of the Brazilian Civil Code dealing with dissolution of not-for-profit organizations would

10

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

prevent the transfer of assets and liabilities to for-profit corporations; and (2) only a legal entity organized as a corporation
would be able to approve its spinoff, since there would be no legal provision authorizing not-for-profit organizations to
implement a spin-off.
Based on the opinion of counsel, we believe that the interpretation of the Brazilian tax authorities is not in accordance with the
applicable laws. Therefore, we presented a similar formal consultation to the Brazilian tax authorities specifically relating to our
demutualization, but the Brazilian tax authorities responded in a manner consistent with their response to the CNB and provided no
additional information. Current or future interpretations by the Brazilian tax authorities regarding our demutualization may result in
material tax contingencies, which could cause a material adverse effect on our results of operations and financial condition.
b. Risks relating to direct or indirect controlling shareholder or controlling group

We do not have a controlling shareholder or controlling group of shareholders, which may lead to shareholder
coalitions, control contests, shareholder activism, or similar other events correlated with the lack of a
controlling shareholder or controlling group of shareholders.
Ownership in our shares is fairly dispersed, and we currently do not have a controlling shareholder or controlling group of
shareholders. As a result, we may be vulnerable to takeover bids, including a hostile takeover, and similar other disruptions
correlated with lack of a controlling interest in our shares. If a successful bidder were to obtain control over a majority of
our shares, there could be sudden and unexpected shifts in our policies and strategic plans, and our directors and officers
could be replaced.
In addition, the lack of a person or group holding a controlling interest in our shares could negatively affect o ur decisionmaking processes, as there may be instances where the shareholders are unable to gather sufficient affirmative or negative
votes to meet the legally prescribed quorum to pass certain decisions at a shareholders meeting. Any sudden or
unexpected change in management team or our policies and strategic plans, or any attempt at obtaining a controlling stake
in our shares, and similar other disruptions could adversely affect our business and results of operations.
c.

Risks relating to our shareholders

Certain brokerage firms and other market participants, as well as financial institutions and other customers are
also our shareholders, which may engender conflicts of interest with our other shareholders and us.
Some of our shareholders are financial institutions that operate on our markets, whose sources of revenues include brokerage
activities, custody and settlement of securities, with respect to the Bovespa segment, and negotiation and clearing of
derivatives, with respect to the BM&F segment. For this reason, there is a risk that certain shareholders may try to interfere
with decisions for their own interests, through voting as a block in shareholders meetings or otherwise influencing our
management to reduce the price of our services, which may adversely affect us.

The relative volatility and illiquidity of the Brazilian securities market may substantially limit our
shareholders ability to sell their shares at the price and time at which they wish to sell them.
Investing in securities that trade on emerging markets, such as Brazil, often involves greater risk than investing in securities
traded on more developed and mature international markets, and such investments are generally considered to be more
speculative in nature. The Brazilian securities market is substantially smaller, less liquid, more concentrated and can be
more volatile than major international securities markets. Highly active and liquid markets comparatively experience less
volatility and enhanced order execution efficiency. As a result, the local market characteristics could substantially limit our
shareholders ability to sell their shares at the price and time at which they wish to sell them, which in turn could negativ ely
affect the market price of our shares. In addition, volatility could lead to substantial sales of our shares or to market
perception that such sales may occur, which could result in further declines in the market price of our shares.

Our bylaws include provisions aimed to protect share dispersion, which may hamper or delay transactions
that may be of interest to our shareholders.
Our bylaws contain provisions designed to avoid the concentration of our shares in the hands of a single or small number of
shareholders, in order to provide for a more dispersed shareholders base. One such provision requires a shareholder or
group of shareholders sharing similar interests, which becomes a holder of shares representing 30% or more of our capital
stock, to carry out or file a tender offer to purchase all our outstanding shares within 30 days of the date of the date of
purchase or event resulting in ownership interest in excess of the 30% threshold. Any such provision may hamper or
prevent takeover attempts, and may discourage, delay or hinder a merger or acquisition transaction, including a transaction
in which investors could receive a premium on the market value of their shares.
d. Risks relating to our subsidiaries and affiliates
Risk factors related to our subsidiaries and affiliates are the same as related to us and are discussed herein above.
e. Risks relating to our suppliers

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

We depend on third party suppliers and service providers for several services that are important to our business.
Interruptions of any of these material third-party services could materially and adversely affect on our business.
We depend on several suppliers, such as banking, clearing and settlement organizations, telephone operators, online service
providers, data processors and software and hardware vendors in connection with our registration, trading, clearing and
settlement systems, as well as other related support and maintenance systems. We cannot assure you that any of these
service providers will continue to provide such services efficiently, or that they will be able to expand their services to meet our
increasing needs. Interruption of material services provided by third parties and our inability to promptly make alternative
arrangements or perform such services internally could have a material adverse effect on our business.
f.

Risks relating to our customers

Our direct customers are the brokers, brokerage firms, and issuers listing securities to trade on our markets.

A significant portion of our revenues is highly dependent on the trading of securities of a limited number of
issuers.
As of December 2010, the top ten stocks most actively traded on our stock exchange market (Bovespa segment) accounted
for 43.42% of the overall value traded. Given the relative importance of the market activity of these securities on our
combined revenues, if one or more of these issuers were to delist from our exchange or if the outstanding shares of one or
more of these companies were to significantly decrease (including as a result of corporate restructuring, acquisition, merger
or exchange for shares of an unlisted issuer), our combined revenues and results of operations could be adversely affected.

We are highly dependent on the level of trading by foreign investors.

We are highly dependent on the level of activity of foreign investors. In 2010, foreign investors accounted for 29.6% of the
total value traded on markets comprising the Bovespa segment and 16.3% of the overall volume traded on derivatives markets
comprising the BM&F segment. The Brazilian government may implement changes in taxation that affect the flow of foreign
investments to Brazilian markets, including by investors that trade on our exchanges.
For instance, in October 2009, in an effort to curb the appreciation of the real against the U.S. Dollar, the Brazilian government
increased the IOF tax rate on inflows of foreign funds to invest in Brazilian securities from zero to 2.0%. Then, because the
actual impact of the tax (IOF) would have been to divert trading away from local markets, draining precious onshore liquidity, in
November 19 the Brazilian government announced a 1.5% IOF tax on issuances of American Depositary Receipts (ADRs).
Subsequently, on October 5, 2010, again in an effort to arrest the Brazilian currency appreciation against the U.S. dollar, the
Brazilian government increased to 4.0% (from 2.0% one year earlier, as indicated above) the IOF tax rate levied on inflows
directed to transactions in fixed income securities. And the Central Bank, on October 7, adopted a requirement for simultaneous
foreign exchange transactions to be closed at any time a foreign investor migrates to different types of portfolio investments as, for
example, from equities to fixed income or vice versa, despite the absence of an actual inflow, which is merely assumed. However,
as IOF tax is levied on these foreign exchange contracts, the new rule resulted also in a 2.0% levy on the cancellation of ADRs.
Soon thereafter, on October 18, the Brazilian government again raised the IOF tax rate levied on inflows directed to
transactions in fixed income securities, this time to 6.0% (from 4.0% a fortnight ago), while the IOF tax rate levied on collateral
margin posted in connection with transactions on futures markets climbed to 6.0% from 0.38% previously.
Such measures had a negative impact on our markets (mainly Bovespa segment markets), increasing the burden for foreign
portfolio investments in Brazil. It also created a certain level of uncertainty and concerns about any additional measures the
Brazilian government may implement. Moreover, given that the market prices of securities of Brazilian issuers are affected to
varying degrees by the inflow of capital from foreign investors, a decrease in the inflow of capital from foreign investors to
markets we operate may reduce average daily trading value (Bovespa segment) or volume (BM&F segment), which would
adversely affect our revenues and results of operations.
g. Risks relating to the exchange industry

We face significant competition in securities and derivatives trading, and we expect this competition to deepen
in the future.
We face significant competition from foreign exchanges, particularly concerning trading with securities and derivatives, and we
expect that this competition will intensify in the future. Our current and potential competitors are numerous and include stock
markets, both organized and over the counter, in Brazil and abroad, and other commodities and futures exchanges. We
compete with existing and new market participants in various aspects, including with respect to cost, quality and speed of
trades, conduct of business, liquidity, functionality, ease of use and performance of trading systems, variety of products and
services offered to the trading participants, and technological innovation. Entry of new competitors into our markets can also
increase price competition and reduce margins in all of the existing securities and futures markets, including those in which we
operate. In addition to traditional and new competitors, new technologies and the Internet may create environments that are
favorable for replication of our business, redirecting market participants to these new environments. The current international
stock market environment has encouraged the creation of new, alternative trading centers with different market structures and
new business models that would be replicated in our market in the future.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Well-capitalized competitors in other markets, such as the U.S. and Europe, could attempt to expand their operations into our
markets of operation. If we are not successful in promptly adapting to the structural changes in our markets, to technological
and financial innovation and to other competitive factors, we could be unable to maintain or increase the volume of transactions
carried out and/or registered on our trading, clearing and settlement systems, and our revenues, business, financial condition
and results of operations could be materially adversely affected.

In our BM&F and Bovespa segments, the average rate per contract, or RPC, and trading fees margin,
respectively, are subject to significant fluctuations due to a number of factors, and as a result you will not be
able to rely on our average RPC or trading fees margin in any particular period as an indication of our future
average RPC and future trading fees margin.
The average RPC in our BM&F segment, which impacts our results of operations, is subject to fluctuation due to shifts in the
mix of products traded, the trading venue and the mix of customers and the impact of our pricing structure. For example, we
earn a lower RPC for trades in short-term Real-denominated interest rate futures contracts. Likewise, we earn a lower RPC on
high frequency trades because under our policy we grant progressive discounts based on volume traded. And we also earn a
lower RPC in reais for contracts where the fees are U.S. dollar denominated (such as FX futures) if the real appreciates against
the U.S. dollar. Variations in each of these factors are difficult to predict but they do have an impact on our average RPC in the
relevant period. As a result, you may not be able to rely on our historical average RPC as an indication of future average RPC.
The margin in our Bovespa segment, which impacts our results of operations, is subject to fluctuation due to changes in the mix
of customers and to the share of each market in the overall ADTV. For example, we earn a lower margin on day trades and on
the trading from local institutional investors. Additionally, we charge higher fees on the forward and options market compared
to cash market transactions. In addition, the revenues we earn from trading in our Bovespa segment is subject to fluctuation
due to changes in the market prices for stocks, as we trading fees as a percentage on value traded, such that if market prices
drop this will ultimately affect our revenues from trading fees. In addition, we grant progressive discounts based on high
frequency value traded, which influences our trading fees margin. Variations in each of these factors are difficult to predict but
do impact on our average margin on value traded in the relevant period. Because of this fluctuation, you may not be able to
rely on our average transaction margin in any particular period as an indication of our future average trading fees margin.
h. Risks relating to the industry regulation

We operate in a highly regulated industry and are subject to existing and future regulations and restrictions,
and may be subject to penalty fines and other sanctions if we fail to comply with our legal and regulatory
obligations.
We operate in a highly regulated industry and are subject to extensive regulation. Our industry is subject to broad
governmental regulation and may be subject to increasing regulatory scrutiny. This regulation is designed to preserve the
integrity of the securities market and of other financial markets and to protect the interests of investors. Our operations depend
on the authorization of governmental agencies and on the continuity of this authorization. Our ability to comply with applicable
laws and regulations is highly dependent on our ability to maintain adequate systems and procedures.
The Brazilian Monetary Council (Conselho Monetrio Nacional), or CMN, and the CVM regulate Brazilian stock and futures
exchanges and have broad powers to audit, investigate and enforce compliance with their rules and regulations, as well as to
impose sanctions in the event of non-compliance. In recent years, a number of regulatory changes that have been introduced
have impacted our operations, including CVM Rule 461 in 2007 governing the organization, operation and dissolution of stock,
futures and commodity exchanges and OTC markets.
Any regulatory changes may have an adverse effect on us and on the current and future users of our services. For instance,
regulatory authorities may implement changes that reduce the attractiveness of listing on our markets or the use of our
services, or cause companies listed on our trading platform to migrate to alternative markets that may have more flexible
trading or corporate governance rules. The loss of a substantial number of users or a reduction in the level of the trading
activities on our exchange and OTC markets may have an adverse effect on us.
Additionally, the Central Bank may adopt rules or procedures regarding the clearing and settlement of securities, and also
require additional collateral for transactions executed occurring on our markets, which may result in changes to our existing
clearing, settlement and risk control procedures or in higher costs to comply with these requirements, all of which may have an
adverse effect on us.
As a consequence of the recent international financial crisis, stricter rules on financial institutions are being discussed
worldwide. If such rules are implemented abroad, the Central Bank and the CMN may also implement part of these stricter rules
in Brazil, which may impact our activities.
The Central Bank and the CVM have broad administrative powers to fine, suspend or interrupt our activities. In the event of
actual or alleged non-compliance with regulatory requirements, we may be subject to investigations, and administrative or legal
proceedings, which may lead to substantial penalties and, in extreme cases, the cancellation of our authorization to act as a
securities market operator. Any investigation or proceeding, regardless of the outcome, may result in substantial costs and may
also adversely affect our reputation and, therefore, our results of operations.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

We have self-regulatory responsibilities as a securities market operator and also operate a for-profit business,
which could create conflicts of interest.
The listing of our common shares on our Bovespa segment may generate conflicts of interest between our self-regulatory
functions and our interests as a listed company. As a securities market operator, we are responsible for establishing listing and
disclosure standards to be followed by issuers. Lowering these standards so as to benefit us as a listed company or encourage
additional securities listings in our market may harm our image and reputation.
i.

Risks relating to other countries in which the Company operates.

We have no operations elsewhere other than Brazil.

4.2.

Expectations that exposure to these risks will reduce or increase over time.

We continually assess and weigh the risk factors to which we and our business are exposed, in particular those with potential to
materially and adversely affect our business, financial condition and results of operations. With the aim of managing,
controlling and mitigating these and other risk factors, we adopt practices fo r continuing pursuit of improvements to our
infrastructure and services, which include (i) providing efficient, reliable and cost effective trading, clearing, settlement and
other systems to markets which we operate and manage; (ii) strengthening and expan ding our market data activities, for
more nimble, accurate and cost effective retrieval and transmission of market data to vendors, market participants,
investment research analysts, advisory services and, ultimately, the investment decisions of customer i nvestors; (iii)
continuing monitoring of changes in the macroeconomic outlook and how they influence market trends and our business;
(iv) strengthening and expanding the different ways to access our markets and trading systems; (v) implementing our
investor education programs, which include retail investors, local and foreign institutional investors; and (vi) implementing
and enhancing compliance and surveillance activities.
In addition, given that we act as central counterparty to ensure clearing and settl ement of transactions carried out on
equities markets, and provide clearing and settlement services to each of the markets we operate and manage, we adopt
risk management and safeguard structures at each of our clearing facilities with the aim of controlli ng and mitigating the
risks inherent in these activities. For further information on risk management and safeguard structures , see the information
under section 5 of this form.
4.3
Arbitration court and administrative proceedings (classified by legal nature, i.e., labor, tax, civil law or
other) having the Company or any subsidiary as a party, which (i) are not protected by absolute privilege; and
(ii) whose outcome could materially affect business.
The Company and its subsidiaries are parties to administrative and court cases relative to matters of tax, labor and civil law.
Our provisions policy has been established consistently with the guidelines provided under CVM Resolution No. 594 dated
September 15, 2009.
Given that the information presented herein in connection with court and administrative and arbitration proceedings include
outcome assessments based on criteria differing from those contemplated under CVM Resolution 594/09, the tables below
include also information about cases whose prospects for a defeat have been assessed as remote such that we have not
reserved their value at issue as contingent liabilities in our financial statements for periods preceding the date of this fo rm.
(I) Labor claims
As of December 31, 2011, the Company and subsidiaries were parties to 306 labor claims, which classify into two main
groups:
I Claims by former employees of the Company or subsidiaries. These refer to 109 labor cases (40.19% of the total)
involving claims for salary differences (mostly related to overtime, salary equalization and health hazard allowance, among
other things). In this group, 28 claims involving contingent liabilities of R$6,555,733.00 have been assessed as a probable
defeat, whereas 81 claims, which involve contingent liabilities of R$39,914,260.83, have been assessed as a possible
defeat. A total of 14 cases ended and the records are set for shelving.
Party

Number of claims
assessed as a
probable defeat

Contingent liabilities
under claims assessed as
a probable defeat

Number of claims
assessed as a
possible defeat

Contingent liabilities
under claims assessed as
a possible defeat

5,765,609.73
541,074.31
249,048.93

73
08
00

37,875,098.46
2,039,162.97

BBM

22
05
1

TOTAL

28

6,555,733.00

81

39,914,260.83

Company
BVRJ

II Third-party claims (other than former employees of ours). These refer to 183 claims (59.81% of the total) filed
by the former employees of outsourced providers and brokerage firms seeking to have the Company or a subsidiary held
jointly or secondarily liable for severance and other payments on grounds that Precedent 331 of the Superior Labor Court

14

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

(TST) is applicable. These claims substantially classify into three groups, as follows:
a.
This group comprises 63 claims, where 59 suits have been brought by former pit traders that used to work on
the exchange floor against a number of brokerage firms and the Company. The decisions thus far issued by the courts in
the records of some of these claims upheld our arguments to overrule the plaintiffs allegation tha t the Company holds
secondary liability in the issue. In addition, there are four other claims the Capital Market Workers Union ( Sindicato dos
Trabalhadores em Mercados de Capitais) brought against brokerage firms, banks, insurance companies and the Company on
behalf of unionized workers. The Union argues our former trading floor posed an environmental health hazard for traders and
other workers, which thus should have been compensated through payment of additional allowance for health hazards. A lower
court decision issued in the larger of these claims ruled in favor of the Company, setting aside the notion that we hold
secondary liability in the matter. However, these cases are still ongoing and appeals expected to be filed. Based on
evaluations by counsel, Management classifies the prospects for a defeat in these cases as remote, given that the actual
employers of these claimants and unionized workers were the brokerage firms and other co -defendants, the exchange floor
being merely the place at which they performed functions assigned by their employers, such that there are no valid legal
grounds to justify their claim of secondary liability for any severance or other payments to these workers, including health
hazard allowances, due to indirect employment relationship with us..
b.
84 lawsuits have been brought by former employees of outsourced providers of cleaning and security services.
These plaintiffs allege to be owed severance payments by their former employers.. As a result, we are susceptible of being
found secondarily liable in 27 of these claims, which were assessed as a probable defeat and involve contingent liabilities of
R$358,745.70. In another 57 claims, which involve contingent liabilities in the amount of R$4,592,131.51, the prospects for a
defeat have been assessed as possible. The other 14 claims are due to be shelved.
Number of claims
assessed as a
probable defeat

Contingent liabilities
under claims assessed as a
probable defeat

Number of claims
assessed as a
possible defeat

Company

26

1,355,127.12..,

55

BVRJ

01

3,618.58

02

168,521.06

TOTAL

27

1,358,745.70

57

4,592,131.51

Party

Contingent liabilities under

claims assessed as a possible
defeat

4,423,610.45.,

c.
22 claims have been brought by former employees of outsourced providers of IT services. The prospects for a
defeat in these cases have been assessed as possible. The table below sets forth data regarding the contingent liabilities
involved in these cases.
Party

Number of claims assessed as a

possible defeat

Contingent liabilities under claims assessed as a

possible defeat

22
23

Company
TOTAL

16,342,812.00..,
16,356,418.53..,

The Company makes accounting provisions for the amounts involved in claims where the prospects for a defeat are classified
as probable. For this reason, we understand that these labor claims do not represent a material risk to our business.

(II) Tax Cases

II.1 BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA)
II.1.1)
Court of origin

Case No. 2007.61.00.030994-8

4 th Lower federal court of the judiciary subsection of So Paulo (SP)

Stage (degree of jurisdiction)

Appellate degree

Filing date

November 12, 2007

Litigating parties

Plaintiff: Bolsa de Mercadorias & Futuros S.A. BM&F S.A. (merged with BM&FBOVESPA on May 8,
2008)
Defendant: Brazilian Government

Amounts, assets or rights

at risk

This is a declaratory action seeking a court decree recognizing the absence of taxation relationship
permitting the government to charge the Additional Social Security Cont ribution levied at a 2.5% rate
from financial institutions. The Company argues that while Decree No. 2173/97 (subsequently
replaced with Decree No. 3048/99) included commodities and futures exchanges as contribution
payers, this was an illegal move given that Supplementary Law No. 84/96, which established the levy
did not include commodities and futures exchanges as a potential contribution payer, such that no
charge of said contribution on the Company is admissible. In addition, the Company argues that
Decree No. 2173/97 illegally expanded the contribution calculation basis to encompass also the
payroll, whereas the law that established this contribution designated as calculation basis just the

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

aggregate payments made to independent service providers.

Purpose and
principal related facts

- In order to litigate the matter BM&FBOVESPA is required to make post collateral by making monthly
deposits with the court of the amount corresponding to the charge of Additional Social Security
Contribution. - The lower court decision acknowledged the absence of a taxation relationship. The
appeal is pending judgment by the 3 rd Regional Federal Court.

Prospects for a defeat

Legal obligation

Impact in case of a defeat

Because the amounts being litigated are deposited with the court, in the event of a defeat on final
judgment, the Company could lose the amount deposited, with no further impact.

Provisioned amount

R$15,121,757.40

II.1.2)
Court of origin

Administrative Case No. 16327.001536/2010-80

8 th Panel of the So Paulo Regional Tax Adjudication Division Brazilian Federal Revenue Service

Stage (degree of jurisdiction)

Lower administrative court

Filing date

November 26, 2010

Litigating parties

Claimant: Brazilian Federal Revenue Service

Respondent: BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros

Amounts,
at risk

This case initiated with a Federal Revenue Tax Delinquency Notice whereby the tax authority seeks to
collect corporate income tax (principal totaling R$301,686 plus defaul t interest and penalty fine) and
social contribution on net income, or CSLL (principal totaling R$108,525 plus default interest and
penalty fine), on alleged grounds that in 2008 and 2009 BM&FBOVESPA failed to pay income tax and
social contribution on the amortization of goodwill related to the merger of the shares of Bovespa
Holding S.A., approved at the shareholders meeting held on May 25, 2008.

assets

or

rights

Purpose and
principal related facts

Prospects for a defeat

Impact in case of a defeat
Provisioned amount

- BM&FBOVESPA received service of process on November 29, 2010, and on December 28, 2010, filed
opposition challenging the tax assessment.
- The lower court decision (Regional Tax Adjudication Division) was partially favorable to the
Company in that it cutback the amount of the tax assessment arguing the tax authority calcul ated the
tax basis relative to 2008 by erroneous criteria.
- We appealed this decision to the Appellate Tax Adjudication Board on November 21, 2011.
- A decision by the Appellate Tax Adjudication Board is now pending.
Remote
A final judgment of liability would entail obligation to pay the principal deemed delinquent, as
accruing interest and the penalty fine.
No amount has been provisioned.

(III) Civil law cases

III.1 BM&FBOVESPA and BVRJ
III.1.1)
Case No. 2007.001167284-8
Court of origin

2 nd lower business court of the judicial district of Rio de Janeiro (RJ)

Stage (degree of jurisdiction)

Appellate degree

Filing date

October 2, 2007

Litigating parties

Plaintiffs: Naji Robert Nahas, Selecta Participaes e Servios S/C Ltda. and Cobrasol Companhia
Brasileira de leos e Derivados
Defendants: BVRJ and Bovespa Association

Amounts, assets or rights at

risk

R$10,000,000,000.00 (claim for moral and actual damages)

Purpose and
principal related facts4

This is an action for damages (ordinary proceedings) in which plaintiffs seek to have BVRJ and the
Bovespa Association sentenced to pay indemnity for moral and actual damages allegedly incurred as a
result of certain stock trades late in the 1980s. Following the answers, replies and rebuttals, the
lower court decision found against the plaintiffs. Both plaintiffs and defendants filed motions to
clarify, which were partially granted. The plaintiffs next appealed the decision, which the Court of
Appeals of Rio de Janeiro rejected, so the plaintiffs filed special and extraordinary appeals, which the
higher court refused to entertain on grounds of ineligibility. This caused the plaintiffs to file
interlocutory appeal addressed to the Superior Court of Justice and the Supreme Federal Court. The
Supreme Court recently issued a certiorari order, accepting the case for review. The case records are
now set to be remitted to the Supreme Court.

Prospects for a defeat

Remote

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Impact in case of a defeat

In the unlikely event both the lower court and appellate court decisions were to be reversed by the
higher court, still an award for damages would not reach the level of the indemnity claimed by
plaintiffs.

Provisioned amount

No amount has been provisioned.

III.1.2)
Case No. 96.0037050-8
nd

Court of origin

22

Stage (degree of jurisdiction)

Appellate degree

lower federal court of the judiciary subsection of So Paulo (SP)

Filing date

November 19, 1996

Litigating parties

Plaintiffs: Rubens Taufic Schahin et Al.

Defendants: BM&FBOVESPA, BVRJ, CVM, Indstrias de Chocolate Lacta S.A., Kraft Suchard Brasil S.A.,
Kibon Indstrias Alimentcias Ltda. et Al.

Amounts, assets or rights

at risk

Indemnity for actual damages, if any, would be arbitrated in liquidation of award proceedings. The
value originally attributed on the action was amended to R$109,518,846.03 (as of November 1996),
which however is not reflective of the financial value intrinsic in the plaintiffs claim.

Purpose and
principal related facts

This is an action for damages where the plaintiffs seek compensation based on the difference
between the true value of the preferred shares of LACTA, of which plaintiffs allege to have been
deprived, and the amount actually paid, in addition to loss of earnings (in the form of dividends not
earned). The plaintiffs allege to have been compelled to sell their shares in an auction at the stock
exchange, after the courts had annulled the decision of a shareholders meeting authorizing a share
issuance in which plaintiffs purchased their equity interest in Lacta shares. Kraft filed counterclaim,
seeking repayment of dividends previously paid. After the answers, replies and rebuttals, the lower
court decision found the claim and counterclaim invalid, ordering the plaintiffs and Kraft to bear loss
of suit expenses, including fees of counsel. As a result, the plaintiffs and defendants Kraft, Silb
Participaes, CVM and Philip Morris appealed the decision. In addition, BM&FBOVESPA and BVRJ
filed adhesive appeal seeking to increase the arbitrated fees of counsel. The Regional Federal Court
rejected the plaintiffs appeals, whereas granting the co-defendants appeals in respect only of the
increase in arbitrated fees of counsel. The plaintiffs filed motion to clarify, which were rejected.
Plaintiffs and defendant Philip Morris then filed special appeals, counter-arguments of appeal were
filed and a decision on whether the appeals are to be entertained is currently pending.

Prospects for a defeat

Remote

Impact in case of a defeat

If the final decision were to award damages, the indemnity would be apportioned amongst the co defendants at an amount ultimately arbitrated in liquidation of award proceedings.

Provisioned amount

No amount has been provisioned.

III.2 BM&FBOVESPA
III.2.1)
Case No. 583.00.2010.172946-2
Court of origin

11 th lower civil court of the judicial district of So Paulo (SP)

Stage (degree of jurisdiction)

First degree of jurisdiction

Filing date

August 17, 2010

Litigating parties

Plaintiff: Bankruptcy estate of Spread Commodities Mercantil e Corretora de Mercadorias Ltda.

Defendant: BM&FBOVESPA (as successor of BM&F, following its demutualization, going -public and
merger with Bovespa Holding).

Amounts, assets or rights

at risk

Membership certificates in BM&F (then a mutualized non-profit entity, which subsequently was
demutualized, went public and merged with Bovespa Holding as BM&FBOVESPA). The estimated
value of a membership certificate as of February 2012 has been estimated at R$ 65,245,687.08

Purpose and
principal related facts

The trustee of the bankrupt estate of this former commodity broker has filed declaratory action
against BM&FBOVESPA seeking to annul the cancellation (due to defaulted of membership fees due
and payable) of Spreads membership certificates previously held in BM&F, which otherwise, the
trustee argues, would have represented 4,908,015 shares of BM&FBOVESPA. The trustees intent is
to have the equivalent of 3,278,554 shares of BM&FBOVESPA integrate the estate for the proceeds
from a sale of such shares to be paid to the creditors. Moreover, the trustee seeks compensation for
losses allegedly incurred with the certificates cancellation (which he estimates in the equivalent of
hypothetically selling 1,629,461 shares of BM&F S.A. in the companys 2007 IPO at the offering price
per share of R$20.00), in addition to indemnity for dividends and interest on shareholders equity
BM&FBOVESPA has since paid to shareholders, which he argues the certificates cancellation
prevented the bankrupt estate from receiving. On January 18, 2011, BM&FBOVESPA received service

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

of process and filed the answer shortly thereafter. On August 5, 2011, the lower court decision found
for the plaintiff in that it recognized the bankrupt estates ownership rights in 3,278,554 shares of
BM&FBOVESPA, ordering such number of shares seized to integrate the bankrupt estate for sale .
Additionally, the court granted the plaintiffs claim for redress of losses from the membership
certificates cancellation (arbitrated at R$32,589,220.00, i.e., the proceeds from a hypothetical sale of
1,629,461 shares in the 2007 IPO of BM&F S.A., plus 1% default interest accruing since the IPO plus
adjustment for inflation), and the claim for indemnity for dividends and interest on shareholders
equity BM&FBOVESPA (as successor) has paid to shareholders since the IPO of BM&F (arbitrated at
R$2,311,592.14, plus 1% default interest since accruing the IPO plus adjustment for inflation), and
any other payouts paid or payable to the aggregate number of shares thus attributed to Spreads
bankrupt estate. In addition, the court ordered the defendant to pay fees of counsel on behalf of the
bankrupt estate, arbitrated at 10% of the value at issue. We have since filed an appeal, on which a
decision by the So Paulo Court of Appeals is now pending.
Prospects for a defeat

Possible

Impact in case of a defeat

In his asset-recovery efforts, the trustee of the bankrupt estate seeks payment of a sum equivalent
to the market price of 3,278,554 shares of BM&FBOVESPA (in lieu of membership certificates), in
addition to compensation for losses supposedly ensuing from the impossibility to sell membership
certificates of the now extinct company (BM&F) estimated at R$32,589,220.00 (as of Nove mber
2007) supposedly derived from the cancellation of membership certificates, which allegedly
prevented the brokerage firm from selling BM&F shares in the going -public process. Additionally, the
bankrupt estate claims R$2,311,592.14 in unpaid dividends and interest on shareholders equity
BM&FBOVESPA declared over time since absorbing BM&F.

Provisioned amount

No amount has been provisioned.

III.2.2)
Case No. 583.00.2005.204334-9
Court of origin

11 th lower civil court of the judicial district of So Paulo (SP)

Stage (degree of jurisdiction)

Appellate degree

Filing date

November 30, 2005

Litigating parties

Plaintiff: Welinton Balderrama dos Reis

Defendant: BM&FBOVESPA (as successor to BM&F, following its demutualization, going -public and
merger with Bovespa Holding) and BM&F Association.

Amounts, assets or rights

at risk

Membership certificate in BM&F (then a mutualized non-profit entity, later demutualized and merged
into BM&FBOVESPA).

Purpose and
principal related facts

This is action seeks to annul a decision of the board of directors of BM&F (then a mutualized
Exchange), which excluded the plaintiff from membership by cancelling membership certificates due
to default of fees owed to the Exchange, in addition to seeking an appraisal to update the v alue of
the equity membership of common members, pursuant to the bylaws of the then mutualized
Exchange, as adjusted for inflation between 1990 and 1999. Following the answer, reply and rebuttal,
the lower court decision held the action invalid. While the appellate court rejected the plaintiffs
appeal, it also recognized the plaintiffs right to claim potential credits against BM&F. Both parties
filed motions to clarify; our (BM&FBOVESPA and BM&F Association) motion was partially granted,
whereas the plaintiffs was rejected. The plaintiff then filed both a special appeal and extraordinary
appeal, whereas BM&FBOVESPA and BM&F Association in view of the appellate courts judgment on
the motion, filed a second motion to clarify, which is now pending a decis ion.

Prospects for a defeat

Possible

Impact in case of a defeat

Payment of plaintiff's credits resulting due to elimination from BM&F membership (BM&F was then a
mutual entity), which we estimate to correspond to R$1,107,810.62 (as of December 2010).

Provisioned amount

No amount has been provisioned.

III.2.3)
Court of origin

Case No. 583.00.2010.206075-4

14 th lower civil court of the judicial district of So Paulo (SP)

Stage (degree of jurisdiction)

First degree of jurisdiction

Filing date

October 23, 2010

Litigating parties

Plaintiff: Esboriol Participaes e Empreendimentos Ltda. and Fernando Alexandre Esboriol

Defendant: BM&FBOVESPA (as successor to BM&F)*, BM&F Association and BM&FBOVESPAs CEO,
Mr. Edemir Pinto.
( )
* BM&F was originally a mutualized non-profit entity, which went public after a demutualization

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

process, and later merged and combined with Bovespa Holding. The surviving entity is
BM&FBOVESPA.
Amounts, assets or rights
at risk

An adjusted amount equivalent to the proceeds of a hypothetical sale of shares in the 2007 IPO of
BM&F (as a demutualized Exchange), assuming the courts recognize the plaintiffs hold ownership
rights in such shares, as arising from a conversion of the membership certificate special trader
category they once held in the predecessor mutualized entity.

Purpose and
principal related facts

The plaintiffs in this action seeks to annul certain board decisions and transactions (including, in
particular, a sale of membership certificates in a buyback program and a spin-off of BM&F and related
plan of substitution of shares for certificates) implemented in the course of the demutualization
process, on grounds of alleged defective consent. The plaintiffs intend to regain ownership rights in
membership certificates in order to have them replaced with an equivalent number of shares of
BM&FBOVESPA. Alternatively, the plaintiffs seek indemnity in the equivalent value of said number of
BM&FBOVESPA shares, including shares they supposedly would have been allotted were it n ot for
having given allegedly defective consent to certain demutualization transactions. The deadline for
the answer will start only after the officer of the court gives notice of having served process on every
defendant, which is now pending.

Prospects for a defeat

Remote

Impact in case of a defeat

A defeat would establish a negative precedent, which would encourage other former members selling
membership certificates in the buyback program implemented as part of the demutualization process
to pursue similar annulments and indemnities.

Provisioned amount

No amount has been provisioned.

III.2.4)
Case No. 583.00.2011.117867-5
Court of origin

8 th lower civil court of the judicial district of So Paulo (SP)

Stage (degree of jurisdiction)

First degree of jurisdiction

Filing date

February 25, 2011

Litigating parties

Plaintiff: Solidez Corretora de Ttulos e Valores Mobilirios Ltda.

Defendant: BM&FBOVESPA (as successor to BM&F)*, BM&F Association and BM&FBOVESPAs CEO,
Mr. Edemir Pinto.
( )
* BM&F was originally a mutualized non-profit entity, which went public after a demutualization
process, and later merged and combined with Bovespa Holding. The surviving entity is
BM&FBOVESPA

Amounts, assets or rights

at risk

An adjusted amount equivalent to the proceeds of a hypothetical sale of shares in the 2007 IPO of
BM&F (as a demutualized Exchange), assuming the courts recognize the plaintiffs hold ownership
rights in such shares, as arising from a conversion of the membership certificate commodity broker
category once held in the predecessor mutualized entity.

Purpose and
principal related facts

The plaintiff in this action seeks to annul certain board decisions and transactions (including in
particular, a sale of membership certificates in a buyback program adopted at the time) implemented
in the course of the demutualization process, on grounds of alleged defective consent. The plaintiff
intends to regain ownership rights in membership certificates, which it ultimately seeks to replace
with an equivalent number of shares of BM&FBOVESPA. Alternatively, the plaintiff seeks indemnity in
the equivalent value of said number of BM&FBOVESPA shares (35% of such hypothetical interest
valued at the price per share offering in the 2007 IPO, whereas 65% would be val ue at the present
stock market value, whereas allowing for certain adjustments). The answer and rebuttal have been
filed. The parties are now set to be notified to specify the evidence they intend to produce during
discovery.

Prospects for a defeat

Remote

Impact in case of a defeat

A defeat would establish a negative precedent, which would encourage other former members selling
membership certificates in the buyback program implemented as part of the demutualization process
to pursue similar annulments and indemnities.

Provisioned amount

No amount has been provisioned.

III.2.5)
Administrative Misconduct Actions Nos. 1999.34.00020289-0 and 1999.34.00019665-0;
Class Actions Nos. 1999.34.00.009903-7, 1999.34.00.010188-7, and 1999.34.00.012074-3
Court of origin

22 nd lower civil court of the Federal District judiciary section

Stage (degree of jurisdiction)

First degree of jurisdiction

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Filing date

Between April 20 and June 25, 1999

Litigating parties

Plaintiffs:
The Federal Public Prosecution Office, Plaintiff in the administrative misconduct actions;
Luiz Carlos Tanaka et Al, Plaintiffs in the class actions;
Defendants: Banco Marka S.A, Banco FonteCindam S.A, BM&F (Mercantile and Futures Exchange),
Edemir Pinto (in the capacity of Managing Director of BM&F, currently Chief Executive Officer of
BM&FBOVESPA), Antnio Carlos Mendes e Barbosa and Paulo Roberto Garbato (former officers of
BM&F) et Al.

Amounts, assets or rights

at risk

Refunding the Brazilian Treasury for alleged losses from certain futur es market trades between the
Central Bank and the two defendant banks (Marka and FonteCindam). The administrative misconduct
actions include claims for imposition of penalty fine and a writ banning the defendants from
transacting with the Government or being granted tax incentives.

Purpose and
principal related facts

These are actions that seek to quash certain transactions in USD-denominated futures which were
agreed between the Central Bank and the two banks (Marka and FonteCindam) in January 1999, and
claim indemnification for losses and damages from the persons involved in the transactions and their
beneficiaries. BM&F (then a mutualized non-profit Exchange, later demutualized, merged with
Bovespa Holding, and was succeeded by BM&FBOVESPA) and its officers at the time appear as codefendants for allegedly having participated in structuring the transactions, which supposedly
benefitted the Exchange, and for having elected to forgo with internal operations related to the
clearing and settlement process. The answers, replies and rebuttals followed. In its defense, BM&F
argued, among other things, that the Exchange was merely the futures market operator, and had had
no role, or taken any action to justify being named as co-defendant; additionally the Exchange
ascertained no benefit whatsoever from any of the Central Bank transactions that (January 1999) led
to the currency devaluation. The court granted requests for expert examination to be carried out. In
addition, given the identity of purposes found in these actions, the expert examination was accepted
as valid for each of the cases.
On March 15, 2012, the actions were adjudged, found valid and most defendants held jointly and
secondarily liable for redressing the Brazilian Treasury, including BM&FBOVE SPA (as successor to
BM&F). The value at issue may rise to R$7,005 million, which according to one of the decisions now
issued may be offset (up to R$5,431 million) against gains the Central Bank made by avoiding to use
its U.S. dollar reserves. These amounts have been stated as at January 1999 and, under the court
order, should be restated to include adjustment for inflation, interest in arrears and loss of suit
expenses. Furthermore, we note that some of the defendants were also charged with administrativ e
misconduct. In the case of BM&F (our predecessor and the only futures market operator at the time
the litigated events took place), the penalties for administrative misconduct would include a five -year
ban on transactions with the Government, and on its ability to receive direct or indirect tax incentives
and other benefits, and payment of a civil fine as of January 1999 amounting to R$1,418 million .
Mr. Edemir Pinto, our Chief Executive Officer, was exonerated, as the claims against him have been
found invalid.
We are set to appeal these decisions as soon as they are formally publicized by the court.

Prospects for a defeat

Remote

Impact in case of a defeat

A proportionate part of the award for refund, which pursuant to the lower court decisions woul d rise
to R$7,005 million, which according to one of the decisions now issued may be offset against gains
(up to R$5,431 million) the Central Bank made by avoiding to use its U.S. dollar reserves. These
amounts have been stated as at January 1999 and, under the court order, should be restated to
include adjustment for inflation, interest in arrears and loss of suit expenses. In addition, for
administrative misconduct, a civil fine as of January 1999 amounting to R$1,418 million, subject also
to monetary adjustment and interest in arrears, plus a five-year ban on transactions with the
Government, and on its ability to receive direct or indirect tax incentives and other benefits .

Provisioned amount

No amount has been provisioned.

III.2.4)
Case No. 000.00.612656-1
Court of origin

3 rd lower civil court of the judicial district of So Paulo (SP)

Stage (degree of jurisdiction)

Appellate degree

Filing date

September 18, 2000

Litigating parties

Plaintiff: Capitnea Distribuidora de Ttulos e Valores Mobilirios Ltda.

Defendant: BM&FBOVESPA

Amounts, assets or rights

at risk

This lawsuit seeks to annul the collection of fees charged (since established, on December 22, 1999)
for holders of rights to operate as Commodity Broker and Clearing Participant Member, whi ch was the

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

case of the plaintiff.

Purpose and
principal related facts

This is an annulment action filed against BM&F (then a mutualized entity, later demutualized, merged
into, and succeeded by BM&FBOVESPA) that seeks to quash a board decision dated Dece mber 22,
1999, which approved the charge of trading fees (emolumentos de prego) from holders of rights to
operate as Commodity Broker and Clearing Participant Member, including holders undergoing
extrajudicial liquidation, court-administrated reorganization or bankruptcy proceedings, which are not
permitted to operate. After the answer, reply and rebuttal, the lower court decision entered held the
action invalid, recognizing the charge as lawful. The plaintiff appealed, we responded, and the Court
of Appeals rejected the appeal. The plaintiff then filed motion to clarify, which was rejected . The
plaintiff then filed special and extraordinary appeals, which were also rejected and followed by
interlocutory appeal to reverse the rejection. The interlocutory appeal filed in the record of the
special appeal is now pending a decision.

Prospects for a defeat

Remote

Impact in case of a defeat

In the event of defeat, beyond the annulment of the access fees charged, the decision would
establish a negative precedent adversely affecting the collection of fees from market participants
undergoing extrajudicial liquidation, court-administrated reorganization or bankruptcy proceedings.

Provisioned amount

No amount has been provisioned.

4.4
Arbitration, administrative and court proceedings (not protected by absolute privilege) in which the
Company or a subsidiary participates as a party having as opposite party or parties any current or former
directors or officers or controlling shareholders or investors in its own securities or those of a subsidiary.
As of the date of this Reference Form there are no legal, administrative or arbitration proceedings (not protected by absolute
privilege) in which the Company or a subsidiary participates as a party having as opposite party or parties current or former
directors or officers or controlling shareholders or investors in our own securities or those of a subsidiary.
4.5
Impact and contingency in case of a defeat in disputes protected by absolute privilege whose outcome
could materially affect the Company or a subsidiary.
As of the date of this Reference Form there are no material confidential proceedings to which the Company or its controlled
companies were party that were not disclosed in the above items.
4.6
Arbitration, administrative and court proceedings of a labor, tax, civil law or other nature , not protected
by absolute privilege, and consisting of repetitive or connected cases as to the facts and rights on action, whose
outcome (taken collectively) could materially affect the Company or a subsidiary.

(I) Labor Cases

There are no arbitration or administrative or court proceedings consisting of repeti8tive or connected cases of a labor law
nature, whether or not protected by absolute privilege, whose outcome (taken collectively) could materially affect us or any of
our subsidiaries.

(II) Tax Cases

There are no arbitration or administrative or court proceedings consisting of repeti8tive or connected cases of a tax nature,
whether or not protected by absolute privilege, whose outcome (taken collectively) could materially affect us or any of our
subsidiaries.

(III) Civil Law Cases

(III.1)
Repetitive Cases I
Plaintiffs; original or
appellate courts;
case numbers

1) Ordinary Action Case Record No. 583.00.2008.125497-9 29 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Civil Appeal No. 994.09.324431-6 in the
Court of Appeals of So Paulo - Plaintiff: Carlos Rodrigues Jnior;
2) Ordinary Action Case Record No. 583.00.2008.125496-6 16 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Paulo Roberto Ferreira de Sena;
3) Ordinary Action Case Record No. 583.00.2008.125498-1 24 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal No. 9204350-79.2009.8.26.0000
(formerly case 994.09.032357-2) in the Court of Appeals of So Paulo Plaintiff: Jurandir Pinheiro de
Castro;
4) Ordinary Action Case Record No. 583.00.2008.125499-4 12 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 9138494-71.2009.8.26.0000
(formerly case 994.09.032149-9) Court of Appeals of So Paulo - Plaintiff: Walter Silva Jnior;
5) Ordinary Action Case Record No. 583.00.2008.136416-9 2nd Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Egemp Gesto Patrimonial Ltda.;

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Plaintiffs; original or
appellate courts;
case numbers

6) Ordinary Action Case Record No. 583.00.2008.129504-4 12 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Esborial Participaes e Empreendimentos Ltda;
7) Ordinary Action Case Record No. 583.00.2008.129505-7 9th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0129505-60.2008.8.26.0100
(formerly case 990.10.027374-4) in the Court of Appeals of So Paulo - Plaintiff: Reginaldo Goncales
da Silva;
8) Ordinary Action Case Record No. 583.00.2008.130365-7 8th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0130365-61.2008.8.26.0100
(formerly case 990.10.316027-4) in the Court of Appeals of So Paulo Plaintiff: Solidez Corretora de
Cmbio, Ttulos e Valores Mobilirios Ltda;
9) Ordinary Action Case Record No. 583.00.2008.125495-3 9th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0125495-70.2008.8.26.0100
(formerly case 990.10.116624-0) in the Court of Appeals of So Paulo Plaintiff: Roberto Duprat;
10) Ordinary Action Case Record No. 583.00.2008.129506-0 40 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Jair do Nascimento;
11) Ordinary Action Case Record No. 583.00.2008.130363-1 10 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Mrio Srgio Nunes da Costa;
12) Ordinary Action Case Record No. 583.00.2008.130364-4 15 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: So Paulo Corretora;
13) Ordinary Action Case Record No. 583.00.2008.130362-9 9 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0130362-09.2008.8.26.0100
(formerly case 990.10.180329-1), in the Court of Appeals of So Paulo Plaintiff: Aureum Corretora.;
14) Ordinary Action Case Record No. 583.00.2009.1017857 39 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0101785-84.2009.8.26.0100
(formerly case 990.10.405020-0), in the Court of Appeals of So Paulo Plaintiff: Banex Distribuidora de
Ttulos e Valores Mobilirios;
15) Ordinary Action Case Record No. 583.00.2008.243345-0 1st Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Carmine Enrique Filho;
16) Ordinary Action Case Record No. 583.00.2009.197829-0 12 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0197829-68.2009.8.26.0100
(formerly case 990.10.326960-8), in the Court of Appeals of So Paulo Plaintiff: Future Premium;
17) Ordinary Action Case Record No. 583.00.2008.212130-9 14 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Granleo Comrcio e Indstria de Sementes Oleagiosas e Derivados;
18) Ordinary Action Case Record No. 583.00.2009.197370-1 12 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0197370-66.2009.8.26.0100
(formerly case 990.10.493616-0), in the Court of Appeals of So Paulo Plaintiff: Marcelo Ferreira da
Costa;
19) Ordinary Action Case Record No. 583.00.2009.197372-7 9 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0197372-36.2009.8.26.0100
(formerly case 990.10.483040-0), in the Court of Appeals of So Paulo Plaintiff: Mario Cesar Nassif da
Fonseca;
20) Ordinary Action Case Record No. 583.00.2009.197375 20th Lower Civil Court of the Central
Courthouse Plaintiff: Miguel Jurno Neto;
21) Ordinary Action Case Record No. 583.00.2009.106268-2 37 th Lower Civil Court of the Central
Courthouse Plaintiff: Pedro Sylvio Weil;
22) Ordinary Action Case Record No. 583.00.2008.243341-9 37 th Lower Civil Court of the Central
Courthouse Plaintiff: Renato Enrique;
23) Ordinary Action Case Record No. 583.00.2008.212131-1 10 th Lower Civil Court of the Central
Courthouse Plaintiff: Shan Ban Chun;
24) Ordinary Action Case Record No. 583.00.2010. 184066-6 23 rd Lower Civil Court of the Central
Courthouse Plaintiff: Ademir C. do Nascimento;
25) Ordinary Action Case Record No. 583.00.2010.184184-2 15 th Lower Civil Court of the Central
Courthouse Plaintiff: Flavio Barreto Moreira;
26) Ordinary Action Case Record No. 583.00.2010.184065-3 39 th Lower Civil Court of the Central
Courthouse Plaintiff: Jos Carlos Citti de Paula;
27) Ordinary Action Case Record No. 583.00.2010.142878-5 28 th Lower Civil Court of the Central
Courthouse Plaintiff: Laeta S/A Participaes;
28) Ordinary Action Case Record No. 583.00.2010.184083-5 8 th Lower Civil Court of the Central
Courthouse Plaintiff: Ricardo Lombardi de Barros;
29) Ordinary Action Case Record No. 583.00.2010.104331-4 1st Lower Civil Court of the Central
Courthouse Plaintiff: Luiz Carlos Ferreira;
30) Ordinary Action Case Record No. 583.00.2010.184070-3 29 th Lower Civil Court of the Central
Courthouse Plaintiff: Alexandre de Freitas Nuzzi;
31) Ordinary Action Case Record No. 583.00.2010.184078-5 6 th Lower Civil Court of the Central
Courthouse Plaintiff: Rogrio Sandes Cardoso;
32) Ordinary Action Case Record No. 583.00.2010.183812-8 31st Lower Civil Court of the Central

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Plaintiffs; original and

appellate courts;
case numbers

Courthouse Plaintiff: Target Consultoria Financeira;

33) Ordinary Action Case Record No. 583.00.2010.184197-7 10 th Lower Civil Court of the Central
Courthouse Plaintiff: Shan Ban Chun;
34) Ordinary Action Case Record No. 583.00.2009.115872-8 19 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0317709-63.2009.8.26.0000
(formerly case 994.09.317709-3), in the Court of Appeals of So Paulo Plaintiff: Carlos Eduardo
Chamma Lutfalla et al.;
35) Ordinary Action Case Record No. 583.00.2009.115872-8 8 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0115872-45.2009.8.26.0100
(formerly case 990.10.058207-0), in the Court of Appeals of So Paulo Plaintiff: Cludio Coppola Di
Todaro;
36) Ordinary Action Case Record No. 583.00. 2007.256585-8 16 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0300971-97.2009.8.26.0000
(formerly case 994.09.300971-3), in the Court of Appeals of So Paulo Plaintiffs: Rivale
Representaes Ltda., Marisa Lojas, and Dcio Goldfarb;
37) Ordinary Action - Case Record No. 583.00.2007.264023-3 2nd Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Ernesto and Ike Rahmani;
38) Civil Appeal no. 994.07.018222-9 (originally lower court 527.322-4) Court of Appeals of So Paulo
Plaintiff: Terramar Navegao Ltda.;
39) Ordinary Action Case Record No. 0019453-43.2010.4.03.6100 12 th Federal Lower Court, Federal
Justice, So Paulo Judiciary Section Plaintiff: Carlos Eduardo Rodrigues;
40) Ordinary Action Case Record No. 0019455-13.2010.4.03.6100 7 th Federal Lower Court, Federal
Justice, So Paulo Judiciary Section Plaintiff: Roberto Cordeiro Simes;
41) Ordinary Action Case Record No. 0019454-28.2010.4.03.6100 16 th Federal Lower Court, Federal
Justice, So Paulo Judiciary Section Plaintiff: Robson Rodrigo de Souza.

Defendant

BM&FBOVESPA, as successor to BM&F Mercantile and Futures Exchange (a corporation, originally a

mutual association)

Amounts, assets or rights

at risk

Membership certificates held in BM&F (then a mutual association)

Purpose and principal

related facts

These are ordinary actions in which the Plaintiffs sustain irregularities have occurred relative to the 52 nd
Extraordinary General Meeting of the members of the former independent exchange known as BM&F
Mercantile and Futures Exchange, whose order of business was a decision concerning the proposed
demutualization and subsequent spin-off of the BM&F, then a mutual association. The Plaintiffs also
object to the valuation of their membership certificates and the plan of substitution for shares of the
resulting demutualized corporation, which they claim did not take into account earning retained since
1994. The Plaintiffs applied for interim relief in the form of an injunction annulling the meeting or, in the
alternative, as a secondary plea, annulling the members decision that approved the valuation of the
membership certificates, and an order for the Defendants to refund losses allegedly incurred by the
Plaintiffs on account of the value of membership certificates not having been adjusted on the basis of
the last and special balance sheet, prepared in connection with the demutualization. The application for
injunctions was rejected and the decision upheld by appellate and higher courts. These events did not
prevent the regular holding of an extraordinary members meeting o n September 20, 2007.
The actions listed under Nos. (39), (40 and (41), having as plaintiffs Messrs. Carlos Eduardo Rodrigues,
Roberto Cordeiro Simes and Robson Rodrigo de Souza, respectively, were filed before a federal court
because they include the Brazilian Securities Commission (CVM) as co-defendant. However, in each of
these courts the lower court judge decided the market regulator has no standing to be sued, thereby
referring the case to the competence of the State Judiciary. The plaintiffs filed interlocutory appeals
which are pending decision by the 3 rd Regional Federal Court.
As for the other cases, in their answers, the defendants sustained, as preliminary arguments, lack of
interest in the action and legal impossibility of the claim, while on the merits claiming for the invalidity of
the actions, adding appropriate arguments related to the peculiarities of each case.
In the following particular cases, a decision on the merits has been entered by the lower court judge,
which either found for the invalidity of the action or dismissed the action without prejudice: lawsuits filed
by Plaintiffs Carlos Rodrigues Junior item (1); Jurandir Pinheiro de Castro item (3); Walter Silva
Junior item (4); Esborial Participaes e Empreendimentos item (6); Reginaldo Goncales da Silva
item (7); Roberto Duprat item (9); Aureum Corretora item (13); and Solidez Corretora item (8);
Banex Distribuidora de Ttulos e Valores Mobilirios item (14); Egemp Gesto Patrimonial Ltda item
(5), Future Premium item (16), Marcelo Ferreira da Costa item (18), Mario Cesar Nassif item (19),
Mrio Srgio Nunes da Costa item (11), Miguel Jurno Neto item (20), Pedro Sylvio Weil item (21),
So Paulo Corretora item (12), Shan Ban Chun item (23), Carlos Eduardo Chamma Lutfalla et al.
item (34); Cludio Coppola Di Todaro item (35;) Rivale Representaes, Marisa Lojas and Dcio
Goldfarb item (36).
The decisions in the actions filed by Pedro Sylvio Weil (item 21) and Esborial Participaes (item 6) ha ve
become final and unappealable and we are executing the plaintiffs for the loss of suit expenses they are
required to pay. The decisions in the actions filed by Mrio Srgio Nunes da Costa (item 11), Miguel

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Jurno (item 20), Shan Ban Chun (item 23) and Ernesto Rahmani e Ike Rahmani (item 36) may still be
appealed for the deadline of the legal period for appeal has yet to come. In all other cases the decisions
have been appealed, and four of the appeals have been decided as follows: (a) Civil Appeal No. filed by
Aureum Corretora (item 13) upheld the lower court decision which found the action invalid; (b) Civil
Appeal No. 0197370-66.2009.8.26.0100, filed by Marcelo Ferreira Martins Costa (item 18), also upheld
the lower court decision which found for the invalidity of the action; (c) Civil Appeal No. 012950560.2008.8.26.0100, filed by Reginaldo Goncales da Silva (item 7) the appellate decision vacated the
lower court decision solely on grounds that it violated the principle of non infra petita , meaning the
decision contemplated less than all the matters of law and the claims of the plaintiff; c) Civil Appeal No.
994.07.018222-9, filed by Terramar Navegao Ltda (item 37), was decided against the appellant and
upheld the lower court decision that defeated the action. Terramar filed special appeal with the Superior
Court of Justice (STJ), which was followed by a court order that the condition precedent for entertaining
the appeal had not been met. This latter order was in turn again appealed (interlocutory appeal) and a
decision is currently pending. In addition, it should be noted that Aureum Corretora (item 13) and
Reginaldo Goncales da Silva (item 7) filed motions to clarify the appellate decisions issued against them
in each of their cases, which are currently pending a decision. And the legal period for Mr. Marcelo
Ferreira M. Costa (item 18) to file special appeals is still ongoing.
Practice originating the
contingency

Supposed irregularities related to the 52 nd Extraordinary General Meeting of the members of the former
independent exchange known as BM&F Mercantile and Futures Exchange, whose order of business was
the decision concerning the proposed demutualization and subsequent spin-off of BM&F, then a mutual
association. The Plaintiffs also objected to the valuation of their membership certificates and the plan of
substitution for shares of the resulting demutualized corporation.

Prospects for a defeat

Remote

Impact in case of a
defeat

Given the time elapsed since these actions were filed, and the general context within which these cases
have been evolving, we understand that the worst-case scenario would be one in which we would be
sentenced to pay compensation for losses. A decision annulling the demutualization decision at this point
would be highly unlikely for it would be almost impossible to revert to pre-demutualization state of
affairs. However, it is very difficult to estimate any amount as reasonable indemnity due to the multiple
factors that could be taken into account for this purpose. Thus, in the unlikely event we were to be
defeated in any of these cases, the court decision would have to establish guidelines for calculation of
the indemnity, as otherwise it seems impossible to assign value to the Plaintiffs supposed losses.

Provisioned amount

No amount has been provisioned.

(III.2)
Repetitive Cases II

Plaintiffs; original or
appellate courts;
case numbers

1) Ordinary Action Case Record No. 583.00.2008.155287-5 32 nd Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 924647329.2008.8.26.0000
(formerly case 994.09.320191-2), in the Court of Appeals of So Paulo Plaintiff: Lawrence Pih;
2) Ordinary Action Case Record No.583.00.2008.155286-2 37 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0155286-84.2008.8.26.0100
(formerly case 990.10.141540-2), in the Court of Appeals of So Paulo Plaintiff: Andr Arantes;
3) Ordinary Action Case Record No. 583.00.2009.119296-0 21st Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Civil Appeal No. 0289521-60.2009.8.26.0000
(formerly 994.09.289521-0), in the Court of Appeals of So Paulo - Plaintiff: Chao em Ming.;
4) Ordinary Action Case Record No.583.00.2009.113283-6 13 th Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Appeal no. 0113283-80.2009.8.26.0100
(formerly case 990.10.342920-6), in the Court of Appeals of So Paulo Plaintiff: Claudio Monteiro da
Costa;
5) Ordinary Action Case Record No. 583.00.2009.113286 23 rd Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Fernando Alexandre Esborial;
6) Ordinary Action Case Record No. 583.00.2009.113284-9 2nd Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Henrique S. Filho;
7) Ordinary Action Case Record No. 583.00.2009.135484-1 17 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Jos Ginaldo de Souza;
8) Ordinary Action Case Record No. 583.00.2009.113285-1 42 nd Lower Civil Court of the Central
Courthouse of So Paulo, currently at the appellate stage Civil Appeal No. 9177337-08.2009.8.26.0000
(formerly 994.09.276741-8), in the Court of Appeals of So Paulo Plaintiff: Seeich Abe.
9) Ordinary Action Case Record No. 583.00.2010.184100-2 18 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Carlos Eduardo Miranda Teixeira;
10) Ordinary Action Case Record No. 583.00.2010.184181-4 25 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Celso Rodrigues;
11) Ordinary Action Case Record No. 583.00.2010.184093-9 12 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Correta Corretora;
12) Ordinary Action Case Record No. 583.00.2010.184183-0 38 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Edilson Morais Alencar;

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

13) Ordinary Action Case Record No. 583.00.2010.184182-7 10 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Fabio Causso Feola;
14) Ordinary Action Case Record No. 583.00.2010.184076-0 27 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Izael Camillo dos Anjos;
15) Ordinary Action Case Record No. 583.00.2010.184060-0 27 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Marcos Bianco Bastos;
16) Ordinary Action Case Record No. 583.00.2010.184085-0 36 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Roberto Allan de Moraes Barros;
17) Ordinary Action Case Record No. 583.00.2010.184092-6 42 nd Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Ronaldo Caire;
18) Ordinary Action Case Record No. 583.00.2010.132917-9 7 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Srgio Prado Frigo;
19) Ordinary Action Case Record No. 583.00.2010.184067-9 28 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Henrique Bispo Pimentel;
20) Ordinary Action Case Record No. 583.00.2010.184068-1 36 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Paulo Srgio Albanezi;
21) Ordinary Action Case Record No. 583.00.2010.184196-1 11 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Pedro Augusto Spnola;
22) Ordinary Action Case Record No. 583.00.2010.184196-1 4 th Lower Civil Court of the Central
Courthouse of So Paulo Plaintiff: Ulisses Sandes Cardoso.
Defendant

BM&FBOVESPA, as successor to BM&F Mercantile and Futures Exchange (a corporation, originally a

mutual association)

Amounts, assets or rights

at risk

Membership certificates held in the old So Paulo Commodities Exchange ( Bolsa de Mercadorias de So
Paulo), or BMSP

Purpose and principal

related facts

These are actions against BM&FBOVESPA, as successor to former BM&F Mercantile and Futures
Exchange, seeking recognition of the ineffectiveness of the provisions of a certain Partial Spin-Off
Protocol and Justification entered into in September 2007 by and between the mutual association
named BM&F and the corporation named BM&F S.A. The Plaintiffs sustain that because the document
contemplated the termination of the membership certificates in the mutual association named BM&F
before the merger through consolidation with BMSP had been completed, this was in conflict with the
provisions of a 1991 Memorandum of Understanding between BMSP and the mutual association named
BM&F. Every decision thus far rendered in these lawsuits (Lawrence Pih item 1; Andr Arantes item
2; Chao em Ming item 3; Cludio Monteiro da Costa item 4; and Seeich Abe item 8) held the
actions invalid. However, the Plaintiffs appealed these decisions, which are now pending judgment by
the Court of Appeals of So Paulo.

Practice originating the

contingency

Supposed ineffectiveness of the provisions of the Partial Spin-Off Protocol and Justification entered into
in September 2007 by and between the mutual association named BM&F and the corporation named
BM&F S.A. The Plaintiffs argue that the ineffectiveness stems from the fact that the document addressed
the termination of the BM&F membership certificates before the consolidation of BM&F and BMSP had
been completed, which they allege to be inconsistent with the terms of a 1991 Memorandum of Intent
entered into by BM&F and BMSP.

Prospects for a defeat

Remote

Impact in case of a
defeat

Shares of BM&FBOVESPA (or the market value thereof) in the equivalent of the membership certificates
of the mutual association named BM&F.

Provisioned amount

No amount has been provisioned.

(III.3)
Repetitive Cases III

Plaintiffs; original or
appellate courts;
case numbers

1) Ordinary
Courthouse
2) Ordinary
Courthouse
3) Ordinary
Courthouse
4) Ordinary
Courthouse

Action
of So
Action
of So
Action
of So
Action
of So

Case Record No. 583.00.2010.184098-2

Paulo Plaintiff: Henrique Bispo Pimentel;
Case Record No. 583.00.2010.184069-4
Paulo Plaintiff: Marcos Bianco Bastos;
Case Record No. 583.00.2010.184096-7
Paulo Plaintiff: Seeich Abe.
Case Record No. 583.00.2010.184097-1
Paulo Plaintiff: Srgio Carnelosso.

7th Lower Civil Court of the Central

1st Lower Civil Court of the Central
2nd Lower Civil Court of the Central
3rd Lower Civil Court of the Central

Defendant

BM&FBOVESPA and Association BM&F (as successors to BM&F, originally a mutualized entity.

Amounts, assets or rights

at risk

The hypothetical present value of the purchase price attributable to certificates BM&F (then a mutualized
entity) used to issue granting access rights for certain commodity traders to operate in the agricultural
commodities market (called special agricultural commodities trader) or, in the alternative, 10% of the
special trader membership certificate (which granted both equity and market access rights).

Purpose and principal

These are actions against BM&FBOVESPA and Association BM&F which object to, and challenge, the

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

related facts

cancellation of BM&F membership certificates attributable to Special Commodities Trader at the time of
the demutualization process, on the allegation that such cancellation hinged on the plaintiffs consent or
indemnity in the equivalent value. They seek to annul the cancellation or, in the alternative, as a
secondary plea, to have BM&FBOVESPA and Association BM&F held liable for paying indemnification.
These actions were filed in September 2010 for attributed value on the action of R$50,000.00. Both
BM&FBOVESPA and Association BM&F answered each of these lawsuits sustaining, as preliminary
argument, insufficciency of action (lack of legal grounds to substantiate the claim) and, on the merits,
the invalidity of the claims, as the certificates had no intrinsic economic value, merely granting market
access rights, which were sustained after the demutualization, the going-public process and, later,
sustained by BM&FBOVESPA, as successor and market operator, through market access permits whose
issuance grants trading rights. No decision has yet been entered in any of these suits.

Practice originating the

contingency

Cancellation of BM&F certificates granting rights as special agricultural commodities trader in the
course of the demutualization process carried out in preparation of the subsequent corporate
restructuring and going-private processes. In any event, after the demutualization, it was no longer
necessary to hold a certificate in order for any brokerage or trader to be grante d market access rights.

Prospects for a defeat

Remote

Impact in case of a
defeat

Award for damages requiring payment of indemnification at the hypothetical present value of the
purchase price attributable to special agricultural commodities trader certificates or, in the alternative,
10% of the special trader membership certificate.

Provisioned amount

No amount has been provisioned.

4.7

Other material contingent liabilities not previously discussed.

As of the date of this Reference Form neither we nor any of our subsidiaries has additional contingent liabilities other than the
legal or administrative proceedings discussed under subsection 4.3 above.
4.8
Information on the rules applying in the jurisdiction of the issuers home country, if based abroad, and
on the rules applying in the foreign jurisdiction in which securities are held under custody.
BM&FBOVESPA has been duly organized and is regularly existing under the laws of Brazil. Our stocks have been listed to trade
on a stock exchange in our home country, under the jurisdiction of Brazil. As we have not registered securities elsewhere, this
subsection is not applicable to us.
5. Market risks
5.1.
Quantitative and qualitative disclosure of exposure to market risks, including risks of changes in
exchange rates and interest rates.

The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian
economy, which could impact our business.
The Brazilian government frequently intervenes in the domestic economy and occasionally makes significant changes in its
policies and regulations.
The Brazilian governments actions to curb inflation and to implement other policies has in the past included increases in
interest rates, changes in fiscal policy and tax regulations, price controls, currency devaluations, capital controls, and certain
limits on imports of goods and services. Our business, financial condition, results of operations and cash flow, and the market
price of our shares, could be adversely affected by changes in policies or regulations involving or affecting certain factors,
including interest rates; foreign exchange controls and restrictions on capital flows; fluctuations in exchange rates; inflation
rates; liquidity in the domestic financial and capital markets; fiscal policy and taxation system; and other policy, social and
economic developments in Brazil or affecting domestic economic conditions.
Uncertainty over whether the Brazilian government will implement changes in fiscal policy, in taxation or the labor laws, or
whether it will adopt a more restrictive interpretation of existing rules that affect these or other factors in the future contributes
to economic uncertainty and heightens market volatility, which could adversely affect the markets we operate, our business and
the operations of other market participants. The Brazilian federal government has, from time to time, intervened in the
domestic economy and the capital markets and financial services industry. Government intervention in the past has included
changes in the taxation system, implementation of tax reforms, changes in tax rates and, occasionally, the creation of transitory
taxes whose proceeds are allocated to funding certain government programs. The effects of any of these or other changes
involving taxation are difficult to quantify or predict. In particular, changes in the charge of tax on financial transactions and
transactions in securities and derivatives could deter trading and adversely affect our business. Additionally, the Brazilian courts
or the federal revenue could adopt a more restrictive interpretation of existing tax rules in the future, which could change the
taxation system as currently applying to us and the capital markets.

Inflation and government measures to curb inflation could significantly influence the domestic economic

26

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

landscape and adversely affect our results of operations.

Brazil has in the past experienced extremely high rates of inflation. Inflation, along with government measures to curb inflation
and speculation about future government actions, have significantly and negatively affected the Brazilian economy in the past,
contributing to economic uncertainty and heightened volatility in the Brazilian capital markets. Future government measures to
contain inflationary pressures, including cuts in interest rates, intervention in the foreign exchange market and actions to adjust
or stabilize the real, could negatively impact the domestic economy and our business.
If Brazil again experiences high inflation, we may not be able to adjust the prices we charge our customers to offset the effects
of inflation on our cost structure, which would cut down our net and operating margins.

Political and economic developments and the perception of risk in other countries, especially emerging market
countries, could adversely affect the Brazilian economy, our business and the market price of our shares.
The market price of securities of Brazilian issuers is affected to varying degrees by the capital flows and the economic and
market conditions in other countries, including other emerging market countries. Heightened risk aversion in our markets could
have detrimental effects and push down the market prices of securities of Brazilian issuers.

Exchange rate fluctuations could adversely affect our company and the market price of our shares.
Over the past four decades the Brazilian government implemented a number of economic plans and different exchange rate
policies, including sudden devaluations, periodic mini-devaluations (during which the timing of adjustments has ranged from
daily to monthly), exchange controls, dual exchange rate markets and a floating rate system. From time to time, there were
significant fluctuations in Brazilian real exchange rate to U.S. dollar and other currencies.
Depreciations of the Brazilian real relative to the U.S. dollar could create additional inflationary pressures in Brazil and lead to
increases in interest rates, which would negatively affect the Brazilian economy as a whole, the trading activities on our stock
and contract markets and the market price of our shares.
Additionally, depreciations of the Brazilian real could significantly impact the cost of our debt denominated in U.S. dollars
and negatively affect the market value of our securities portfolios. In contrast, the appreciation of the Brazilian real relative
to the U.S. dollar and other foreign currencies could result in deterioration of the Brazilian current accounts denominated in
foreign currency and a slowdown in exports growth. Depending on the circumstances, a steep depreciation or appreciation
of the Brazilian currency could materially and adversely affect the conditions for growth of the Brazilian economy, thereby
affecting our strategic growth plans, our business, financial condition and results of operations.
There have been from time to time significant fluctuations in the Brazilian real exchange rate to the U.S. dollar and other
currencies. In 2002 the Brazilian real depreciated 52.3% against the U.S. dollar, partially due to political uncertainties a bout
the presidential election and the effects of a global economic slowdown. While the Brazilian real exchange rate appreciated
against the U.S. dollar by 11.8%, 8.7%, 17.2%, 25.5% and 11.7% in 2005, 2006, 2007 and 2009 and 2010, respectively, in
2008 it depreciated by 31.9% primarily due to the global financial crisis. We can give no assurances that the Brazilian real
will depreciate or appreciate against the U.S. dollar in the future. As of December 31, 20 10, the PTAX selling rate compiled
and released by the Central Bank was R$1.67/US$1.00.
Moreover, in 2010, approximately 32.0% of our revenues from derivatives and 14.0% of our overall revenues from trading
fees were denominated in U.S. dollars, and correlated primarily with transactions in Fx futures and options, in particular
where the underlying is the exchange rate for the Brazilian real against the U.S. dollar, and US dollar-denominated interest
rate futures contracts. Given that we charge fees in U.S. dollars for these contracts and options, appreciation of the
Brazilian real against the U.S. dollar could discourage trading in these contracts and options, which would adversely affect
our revenues and results of operations.

Fluctuations in interest rates may negatively affect our business and results of operations.
Since 2001 there have been frequent adjustments of the basic interest rate. As a result, interest rates have fluctuated
significantly. During the second half of 2003 and first half of 2004 the basic interest rate was gradually cut by the Centra l
Bank. Then, in August 2004, as a measure to curb inflationary pressures, the Central Bank raised the basic interest to 16%
and again in May 2005 to 19.75% by year. Over the next two years, the favorable macroeconomic landscape and low and
stable inflation, controlled through inflation targeting, drove the Central Bank to resume the gradual cuts in interest rates,
which in December 2005 and September 2007 had declined to 18% and 11.25%, respectively. However, between April and
June 2008, inflationary pressures and market expectations of a spike in inflation ra tes spurred 0.5% monthly jumps in the
basic interest rate, which by June 2008 had climbed to 12.25% by year. The 2008-2009 global financial crisis prompted
measures to curb economic slowdown and expand credit availability, as well as another round of cuts in the benchmark
reference rate, or Selic rate, which by July 2009 had dropped to 8.75% per annum. This rate was sustained through April
2010, when the Central Bank reversed this declining trend to increase the basic rate to 9.5% , then to 10.25% in June 2010
and 10.75% p.a. in July 2010, in an effort to curb the inflationary trend.
High inflation and interest rates, as well as sudden shifts in monetary and other Brazilian government policies could materially
and adversely affect economic growth and macroeconomic conditions in Brazil, which could lead to significant declines in the
market prices of securities traded on Brazilian capital markets, in particular our equities and derivatives markets, thereby

27

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

materially and adversely affecting our revenues, financial condition and results of operations.

Risks relating to our role as Central Counterparty Clearing House (CCP)

Through our clearing facilities (derivatives, FX, debt securities and equities clearinghouses) we act as central counterparty
(CCP) to ensure multilateral clearing and settlement for the derivatives market (including futures, forward, options and swap
markets), and the spot FX market, the government debt securities markets (cash, forward, and repo and securities lending
markets) and, in addition, for the equities markets (including cash, forward, options, futures and securities lending markets)
and the private debt securities markets (cash and securities lending markets). We are directly or indirectly exposed to
important credit risks, which are intrinsic to our role as central counterparty to clearing and settlement transactions and
correlate with the roles of the following participants:
Clearing participants, clearing agents and participant brokerage firms that operate at our clearinghouses;
Customers of participant brokerage firms that operate at our clearinghouses; and
Financial institutions that are participants in our FX clearinghouse.
A default by a clearing participant, clearing agent, brokerage firm or participant in our FX clearinghouse could correlated with
factors as a bankruptcy, intervention, extrajudicial liquidation, lack of liquidity or operating failure, among other factors beyond
our control.
While our clearing facilities are not directly exposed to market risks because they do not carry net long or short positions in
any contract or financial asset traded on our markets, default by a market participant would entail our exposure to market
risks associated with a third-party position which our clearinghouse would be required to clear and settle, as it is pledges to
do in any transaction where a participant acts as intermediation agent. Market risks that correlate with exposure to thirdparty positions include:
The market price of stocks and stock indices traded on our equities markets;
Liquidity and the value of collateral posted as margin and positions intermediated by market participants;
The Brazilian real to U.S. dollar exchange rate;
The interbank rate denominated in Brazilian reais;
U.S. dollar-denominated Brazilian yield curve (cupom cambial) e
The market prices of agricultural commodities.
The potential value at risk associated with these and other market risk factors essentially correlate with the value of open
positions in default, and on the nature of collateral posted as part of the risk management mechanisms adopted by our
clearinghouses. Typically, the prospects for materialization of risk associated with events of default are positively correlated
with the following factors:
Heightened volatility in market prices and rates, in particular those that define the value of securities and contracts
cleared and settled in our systems;
Heightened degree of financial leveraging;
Uncertainties about macroeconomic conditions in Brazil and across the world;
Disruption of the liquidity flows in local and international markets;
Developments in the local or international credit markets, which affect institutions the Central Bank considers to be
systemically important;
Sudden political changes in Brazil or in advanced market economies;
Catastrophic events, such as natural disasters or war.
Acting in the capacity of central counterparty, we absorb the risks of the counterparties in -between a trade transaction and
its clearing and settlement, carrying out multilateral activities for financial settlement and clearing of securities and other
financial assets, such that in the event of default we may have to resort to certain established safeguard mechanisms, or in
extreme situations we may have to resort to our own net assets.

Risks relating to our financial investments

In addition to the risks factors previously discussed, we are exposed to market risks that correlate with the normal course of our
business. These risks may affect us in different ways that essentially correlate with changes in rates and market prices, and our
role as central counterparty to clearing and settlement transactions. The discussion below provides further information on these
market risks.

Interest rate risk

Interest rate risk correlates with fluctuations in interest rates in the future (at expiration) affecting the spread between interestearning assets and interest-bearing liabilities, with impact on the fair value of our transactions.

Floating rate positions. Given the advisability of, and need for securing immediate liquidity with as little as possible mismatch

resulting from fluctuations in interest rates, our policy on financial investments calls for financial assets and liabilities to track
either floating or pegged rates. The chart in subsection 5.2(d) of this Form, under the heading Risk Factors (consolidated
data), sets forth consolidated data on investments in bank deposit certificates (CDBs, which track the interbank deposit rate),

28

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

and in government bonds, repo transactions, and units of open-ended funds benchmarked to the interbank deposit rate (DI) or
the base interest rate (Selic rate). This strategy mitigates the impact eventual fluctuations in interest rate may have on the fair
or present value of our financial assets and liabilities. We consider exposure to interest rate volatility an important risk factor.
Accordingly, consistent with the CVM requirement, we present the table below, which sets forth data concerning the impact on
year-end interest income of 25% and 50% fluctuations in the Selic rate over a 3-month probable scenario.
At December 31, 2010

Impact on interest income (3 month probable scenario)

Risk factor

Probable
scenario

25%

50%

66,094

87,282

108,079

128,502

8.27%

11.03%

13.79%

16.54%

-50%

-25%

Financial investments (in R$ thousands)

Selic rate * CDI rate **

44,497

Assumed annualized rate (%)

Selic rate (*) CDI rate (**)

5.51%

( )

( )

* Selic rate is the benchmark reference rate compiled and released by the Central Bank;
(
**) CDI rate refers to Brazils overnight interbank deposit rate (known DI-Over) compiled by CETIP as the daily average annualized rate
calculated by the number of business days in the month, of the one-day interbank deposit rates. CDIs are one-day interbank deposit certificates.

Fixed rate positions: As part of our financial investments is pegged to fixed rates, so is our net exposure to interest rate risk

inherent in these investments. However, such as shown in the chart in subsection 5.2(d) of this Form, under the heading Risk
Factors (consolidated data), we consider the impact of possible materialization of risk in these cases would not be material.

Exchange rate risk

Exchange rate risk correlates with exchange rate fluctuations affecting the purchase price of equipment and materials, the
selling price of products and the price of transactions in financial instruments, where any of these prices is denominated in
foreign currency. Fluctuations in foreign exchange rates may have a negatively impact on the equivalent value in Brazilian reais.
In addition to receivables and payables denominated in foreign currency, which include interest payable under our global senior
notes, we also record foreign currency liabilities consisting of third-party collateral pledged by foreign investors to secure the
settlement of transactions carried out on our markers, as well as our own financial resources located abroad. As of December
31, 2010, our net exposure to exchange rate risk amounted to negative R$1,820 thousand (versus positive R$16,930 thousand
as of December 31, 2009 and positive R$30,165 thousand as of January 31, 2009. However, per percentage data shown in the
chart in subsection 5.2(d) of this Form, under the heading Risk Factors (consolidated data), we consider the impact of
possible materialization of risk in these cases would not be material.

Positions in inflation indexes and gold derivatives

As a percentage of the total, pursuant to data set forth in the chart in subsection 5.2(d) of this Form, under the heading Risk
Factors (consolidated data), we consider the impact of possible materialization of risk in these cases would not be material.
5.2.

Market risk management policy

a.

risks against which protection through hedging is sought

1)

Our role as Central Counterparty Clearing House (CCP)

Given that our clearing facilities are potentially subject to market risks associated default under third-party trade positions, our
risk management systems take into account an extensive number of risk factors, whether or not associated with the type of
assets and contracts cleared and settled though our clearinghouses. Risk factors we take into account when assessing market
and other risks have been discussed in item 5.1 above.
2)

Risks related to our equity investment in the CME Group

Starting from the issue date of our global notes, we have designated as hedging instrument that portion of the principal under
the notes which correlates with changes in exchange rates in order to hedge the foreign currency risk affecting that portion of
our investment in the CME Group Inc which attributable to the notional amount of US$612 million (a hedging instrument in a
hedge of net investment in a foreign operation, per Note 7 to our financial statements as of and for December 31, 2010).
Accordingly, we have adopted net investment hedge accounting pursuant to accounting standard CPC-38 (Financial
Instruments: Recognition and Measurement), for which purpose the hedging relationship has been formally designated and
documented, including as to (i) risk management objective and strategy for undertaking the hedge, (ii) category of hedge, (iii)
nature of the risk being hedged, (iv) identification of the hedged item, (v) identification of the hedging instrument, (vi) evidence
of the actual statistical relationship between hedging instrument and hedged item (retrospective effectiveness test) and (vii) a
prospective effectiveness test.
Under CPC 38 (IAS 39) we are required to assess the hedge effectiveness periodically by conducting retrospective and
prospective tests. On testing backward-looking effectiveness, we adopt the ratio analysis method, also called dollar offset
method, as applied on a cumulative and spot-rate basis. We have tested the hedge effectiveness retrospectively and
prospectively, having determined that at December 31, 2010, there was no realizable ineffectiveness.
3)

Risks related to our financial investments

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Our policy for investment of cash balances recommends that we focus on lower -risk investment alternatives, which
translates into substantial portions invested in Brazil government bonds or repurchase agreements whose underlying are
government bonds from our portfolio, which we originally acquire through investment funds or directly in the market. In
any event, our policy on investment of cash balances calls for preservation of capital and allocation of cash balances to
conservative, highly-liquid, lower risk financial investments readily convertible into cash. As a result, we customarily hold
positions substantially consisting of Brazil government bonds which for the most part pay floating rates that track either
the Selic rate or the CDI rate.
b.

hedging strategies
1)

Our role as Central Counterparty Clearing House (CCP)

Hedging strategies we use are designed to cover potential losses related to our role as central counterparty (CCP) to
clearing and settlement transactions. These strategies correlate primarily with potential market risks intrinsic in our
central counterparty activities and aimed to protect us against these risks. The safeguard structure of a clearing facility
represents a set of resources and mechanisms we may use to hedge potential loss arising from failed delivery or
settlement by one or more market participants. The formation of these safeguard structures is contemplated under
article 4 of Law No. 10,214 dated March 27, 2001, which governs activities performed by clearing and settlement facilities
within the realm of the Brazilian payment system and the capital markets. At BM&FBOVESPA a risk management
safeguard structure includes these safeguard mechanisms, a set of policies, standards, procedures and systems and
practices.
2)

Risks related to our equity investment in the CME Group

As previously discussed, in July 2010 we issued global notes for a nominal amount of US$612 million, which mature in
July 2010. The purpose of this bond issuance was to finance our purchase of additional shares in the CME Group , thereby
increasing our aggregate holdings to 5% of the outstanding shares. Starting from the notes issue date, we have
designated as hedging instrument that portion of the principal under the notes which correlates with changes in exchange
rates in order to hedge the foreign currency risk affecting that portion of our investment in the CME Group Inc which
attributable to the notional amount of US$612 million (a hedging instrument in a hedge of net investment in a foreign
operation, per Note 7 to our financial statements as of and for December 31, 2010). For additional information, see
subsection 5.2(a) above.
3)

Risks related to our financial investments

While for a relatively moderate portion of our financial investments (as set forth in subsection 5.2(c) below) we do seek hedge
protection through investing in exclusive investment funds, which is explained by the very low risk profile associated the large
portion which we do not hedge, we have nonetheless decided not to adopt hedge accounting.
c.

hedging tools used for protection

1)

Our role as Central Counterparty Clearing House (CCP)

Pursuant to our strategy which prefers solid mechanisms to mitigate exposure to potential materialization of risk intrinsic
in our role as central counterparty to ensure multilateral clearing and settlement transactions, we have developed specific
risk management systems and safeguard mechanisms for each of the clearing facilities we operate. These systems and
safeguard structures are described in detail in the operating regulations and procedure manuals adopted by each of these
facilities. In addition, these systems and structures have been tested and approved by t he Brazilian National Monetary
Council (CMN) and the Central Bank pursuant to CMN Resolution No. 2,882/01 and Central Bank Circular Directive No.
3,057/01. Data on key components of these safeguard structures are set forth below.

Derivatives Clearinghouse
Collaterals pledged by participants of the derivatives clearinghouse (futures contracts and other derivatives).
The table below sets forth data on the positions in different types of collaterals pledged to our derivatives clearinghouse.
Pledged collaterals

Brazil government bonds

Bank letters of guarantee
Stocks
Bank Deposit Certificates (CDBs)
Gold
Cash collateral
BM&F FoF (FIC Banco BM&F)
BB-BM&F Financial Investment Fund

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

76,979,261
3,538,492
4,934,328
1,150,998
105,958
652,290
173,340
-

53,754,858
1,479,341
3,351,593
1,307,762
60,865
555,106
95,595
-

89,760,722
3,690,835
2,678,991
2,161,736
319,831
327,644
78,130
29,049

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

(FIF BB-BM&F)
Rural Commodity Notes (CPRs)
Total

343

829

87,534,667

60,605,463

99,047,767

At the derivatives clearinghouse, the intermediation agents to a transaction (brokerage firm and clearing participant)
are co-liable for these transactions and for meeting margin calls.

Special Clearing Participant Fund (Fundo de desempenho operacional) Derivatives Clearinghouse. This special

clearing participant fund (year-end positions amounting to R$1,162,122 thousand (versus R$1,126,126 thousand in
2009, R$1,145,908 thousand in 2008) was set up as a mutual fund to ensure the settlement of collateralized
transactions in the event of default by one or more clearing participants and holders of access permits granting
settlement and trading rights. The minimum contribution clearing participants are required to make to the fund vary
in correlation to the type of settlement rights ( direitos de liquidao , or DL) granted under the access permit issued
to any particular clearing participant (R$5,500 thousand, R$6,500 thousand and R$7,500 thousand for Type 1,Type 2
or Type 3 settlement rights, respectively. The minimum contribution commodity brokerages are required to make to
the fund amounts to R$6,000 for holders of permits granting full trading rights, and R$4,000 for holders of permits
granting restricted trading rights (for trading in interest rate contracts, exchange rate contracts, equity index
contracts). Participants holding rights to trade in derivatives cleared and settled at our derivatives clearing facility
contribute minimum R$3,000 thousand. The minimum contribution for certain traders we define as Locals amoun ts
to R$1,600 thousand both in the case of locals holding full trading rights and holders of permits granting restricted
rights to traded in interest rate contracts, exchange rate contracts and equity index contracts. Finally, permit holders
with rights to trade in other futures contracts cleared and settled at our derivatives clearing facility contribute
minimum R$1,000 thousand;
Contributed assets

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

921,678
172,210
52,801
15,358
75

859,804
156,200
81,310
20,098
1,781
582
6,351

863,451
160,730
98,683
17,647
4,177
1,220

Total contributions

1,162,122

1,126,126

1,145,908

Minimum membership contribution of

clearing agents and trading participants

(989,200)

(1,009,500)

(1,026,700)

172,922

116,626

119,208

Brazil government bonds

Bank letters of guarantee
Bank Deposit Certificates (CDBs)
Stocks
BM&F FoF (FIC Banco BM&F)
Gold
Cash collateral

Surplus contributions

Agribusiness Operating Fund (Fundo de operaes do mercado agropecurio ) Derivatives Clearinghouse . This fund
(R$50,000 thousand as of December 31, 2010, 2009 and 2008) was set up as a safeguard mechanism for the
settlement of transactions in agricultural commodities;

Clearing Participant special fund (Fundo especial dos membros de compensao) Derivatives Clearinghouse. This
special clearing fund (R$40,000 thousand as of December 31, 2010, 2009 and 2008) was set up to ensure settlement
of transactions, regardless of the type of contract being settled;

Clearing Fund (Fundo de liquidao de operaes) Derivatives Clearinghouse.

This clearing fund (R$408,509

thousand as of December 31, 2010 versus R$378,113 thousand and R$387,236 thousand as of December 31, 2009
and 2008, respectively) was set up to ensure settlement of transactions registered and accepted at the derivatives
clearinghouse in the event of default by one or more clearing agents, if other safeguard mechanisms run out of
assets with which to ensure clearing and settlement and completed. The minimum individual contributions amount to
R$2.000 thousand, R$3.000 thousand and R$4.000 thousand, for holders of access permits granting Type 1, Type 2
and Type 3 settlement rights. Moreover, each clearing participant is required to pay R$500 thousand by designated
holders of trading rights for whose activities the clearing participant undertakes certain responsibilities.
Contributed assets

Brazil government bonds

Bank letters of guarantee
Bank Deposit Certificates (CDBs)
Stocks

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

314,304
33,000
20,200
6,634

324,979
30,000
18,560
7,763

354,256
35,012
14,700
4,541

31

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Gold
Cash collateral
BB-BM&F Financial Investment Fund
(FIF BB-BM&F)
Total contributions
Minimum membership contributions from
clearing agents and trading participants

2,925
1,050

1,928
4,005

408,509

378,113

387,236

(313,000)

(319,500)

(333,500)

95,509

58,613

53,736

Surplus contributions

Pursuant to article 5 of Law No. 10,214 dated March 27, 2001, and article 19 of Central Banks Circular Directive No.
3,057 dated August 31, 2001, which govern and regulate activities by clearing and settlement facilities within the
realm of the Brazilian payment system and the capital markets, as of December 31, 2010 our derivatives
clearinghouse operated with especially allocated net assets worth R$34,807 thousand (versus R$31,678 thousand and
R$28,808 thousand in 2009 and 2008, respectively).

Equities Clearinghouse
Collaterals pledged by participants of the equities clearinghouse (stocks, equity securities and private debt securities);
Collaterals

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

22,749,941
25,809,847
736,905
580,066
448,054
235,806
4,955

15,665,732
17,208,344
1,944,896
997,944
296,442
247,477
2,476

10,185,946
9,101,835
1,219,499
467,649
239,625
101,927
25,958

6,092

8,179

6,140

Other

130,873

65,884

132,692

Total

50,702,537

36,437,374

21,481,271

Brazil government bonds

Stocks
Foreign government bonds
Bank Deposit Certificates (CDBs)
Bank letters of guarantee
Cash collateral
Gold
BB-CBLC Financial Investment Fund

(FIF BB-CBLC)

At the equities clearinghouse, the intermediation agents to a transaction (brokerage firm and clearing participant) are coliable for these transactions and for meeting margin calls.

Settlement Fund (Fundo de liquidao) - Equities Clearinghouse. As of December 31, 2010, the settlement fund had

contributed assets worth R$485,409 thousand (versus R$322,268 thousand and R$350,209 thousand in 2009 and 2008,
respectively) as a result of contributions from clearing and settlement agents for assurance of completion of clearing and
settlement transactions;
Contributed assets

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

Brazil government bonds

BM&FBOVESPA investments in exclusive funds,
Brazils bonds and repo transactions
Cash collateral

485,409

322,261

190,629

159,580

Total contributions

485,409

322,268

350,209

Pursuant to article 5 of Law No. 10,214 dated March 27, 2001, and article 19 of Central Banks Circular Directive No. 3,057
dated August 31, 2001, which govern and regulate activities by clearing and settlement facilities within the realm of the
Brazilian payment system and the capital markets, as of December 31, 2010 our equities clearinghouse operated with
especially allocated net assets worth R$37,210 thousand (versus R$33,877 thousand and R$30,374 thousand in 2009 and
2008, respectively.

FX Clearinghouse
Collaterals pledged by FX market participants;
Collaterals

Brazil government bonds

Cash collateral

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

3,855,147
66,520

3,766,090
-

3,550,223
174,060

32

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Total contributions

3,921,667

3,766,090

3,724,283

Participation fund (Fundo de participao) FX Clearinghouse. The participation fund (year-end positions amounting to

R$162,235 thousand versus R$154,056 thousand and R$140,584 thousand in 2009 and 2008, respectively) was set up to
cover financial losses resulting from risks related to the banking operations in our FX clearinghouse. Bank contributions
may be in the form of currencies or financial instruments;
Contributed assets

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

Brazil government bonds

162,235

154,056

140,584

Operating Fund FX Clearinghouse. The operating fund was set up to cover losses from failed executions and participant

clerical errors during the trading cycle. As of December 31, 2010, 2009 and 2008 the fund held contributed assets worth
R$50,000 thousand;

Guarantor fund for the spot U.S. dollar pit (Fundo garantidor da roda de dlar pronto) FX Clearinghouse. Starting

from mid-2009, this fund was discontinued. Contributions to the guarantor fund formerly included deposits in cash and
assets made by us and participants to cover financial losses resulting from mistakes or clerical errors during the trading
cycle, as from exchange rate fluctuations between a trade on the spot U.S. dollar pit and the final acceptance by the
bank for which the trade was intended. As of June 30, 2009, when we shut down the trading floor and the spot pit, this
fund was discontinued. Total contributed assets then amounted to R$27,759 (as of that date our contributions totaled
R$15,000);
Contributed assets

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

Brazil government bonds

Bank letters of guarantee
Cash collateral
BM&FBOVESPA contribution

13,812
240
480
15,000

Total contributions

29,532

Pursuant to article 5 of Law No. 10,214 dated March 27, 2001, and article 19 of Central Banks Circular Directive No. 3,057
dated August 31, 2001, which govern and regulate activities by clearing and settlement facilities within the realm of the
Brazilian payment system and the capital markets, as of December 31, 2010 our FX clearinghouse operated with especially
allocated net assets worth R$34,848 thousand (versus R$31,714 thousand and R$28,808 thousand in 2009and 2008,
respectively).

Debt Securities Clearinghouse

Collaterals pledged by participants in the bonds market;
Collaterals

At December 31,2010

At December 31,2009

At December 31,2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

Brazil government bonds

928,786

832,125

1,423,484

Operating Fund Debt Securities Clearinghouse. The operating fund was set up to cover losses from failed executions and

participant clerical errors during the trading cycle. As of December 31, 2010, 2009 and 2008 the fund held contributed
assets worth R$40,000 thousand;
Pursuant to article 5 of Law No. 10,214 dated March 27, 2001, and article 19 of Central Banks Circular Directive No. 3,057
dated August 31, 2001, which govern and regulate activities by clearing and settlement facilities within the realm of the
Brazilian payment system and the capital markets, as of December 31, 2010 our Debt Securities clearinghouse operated
with especially allocated net assets worth R$24,536 thousand (versus R$22,373 thousand and R$20,277 thousand in 2009
and 2008, respectively).
2)

Risks related to our equity investment in the CME Group

In order to hedge the foreign currency risk affecting that portion of our investment in the CME Group Inc which is attributable
to the notional amount of US$612 million, and correlates with the nominal amount of our July 2010 bond issuance whose
proceeds funded said portion of our investment in CME shares, we have designated the latter a hedging instrument in a hedge
of net investment in a foreign operation (per Note 7 to our financial statements as of and for December 31, 2010) that portion
of the principal under the global notes which correlates with changes in exchange rates. Accordingly, we have adopted net
investment hedge accounting pursuant to accounting standard CPC-38 (Financial Instruments: Recognition and Measurement).
For additional information on the hedge accounting, see subsection 5.2(a) above.
3)

Risks related to our financial investments

33

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Derivative financial instruments in which we transact include futures contracts and options based on the local inter est
rate, which are recognized at their market value. These financial instruments make part of the portfolios of exclusive
funds, which were consolidated and are user with the aim of covering exposure to fixed rate risks by acquiring a similar
position in floating rate (CDIs) contracts. The table below sets forth our hedged position as of December 31, 2010.
Year ended December 31,2010

Interest rate

Futures contract short position

LTN (National Treasury Bills)
Net position

d.

Benchmark
(in R$ thousands)

Market price
(in R$ thousands)

Accumulated result
((in R$ thousands)

(10,094)
11,038

(10,768)
11,454

(186)
214

944

686

28

guidelines adopted in managing these risks

1)

Our role as Central Counterparty Clearing House (CCP)

The safeguard structures we adopt at our clearing facilities are based to a large extent on a loss sharing model known as
Defaulter Pays, pursuant to which any shortfall in settlement obligations is apportioned either on the basis that this is covered
by the defaulting party (defaulter pays model) or absorbed by the participants in the clearing arrangement, which for this
purpose will have put up collateral, on which we and they rely to absorb possible losses from default. As a result, our margin
requirements and margin calls constitute key components of the risk management structure we adopt to tackle risk exposure
inherent in our role as central counterparty to multilateral clearing and settlement transactions.
For most contracts and transactions in financial assets we calculate and size margin so as to cover the market risks inherent in
the relevant transaction, i.e., price volatility over an expected time horizon, which is the expected timeline to settlement of
positions by a potentially defaulting participant. This time horizon varies in correlation to the nature of a contract or the
financial asset for which margin requirements are calculated.
Typically, the models we use in margin requirement calculation are based on stress testing. Stress testing uses a particular
methodology to gauge market risk considering not only recent historical price volatility, but also the possibility that unexpected
events could modify historical price and market patterns.
The main parameters we use in margin calculation models are stress scenarios defined by our market risk committee for those
market risk factors that affect the prices of contracts and assets traded on our markets. In defining stress scenarios, the
market risk committee adopts a combination of quantitative and qualitative analysis. Quantitative analysis is conducted with the
support of statistical models of risk estimation, such as the Extreme Value Theory (EVT), estimation of implied volatilities, and
GARCH family models, besides historical simulations. Qualitative analysis in turn considers aspects related to the domestic and
international economic outlook and political landscape, as well as possible impacts on the markets we operate.
2)

Risks related to our equity investment in the CME Group

For net investment hedge accounting, we adopt the guidelines and parameters provided by accounting standard CPC-38 (IAS
39) (Financial Instruments: Recognition and Measurement). Accordingly, we have formally designated and documented the
hedging relationship as a hedging instrument in a hedge of net investment in a foreign operation, and assess the hedge
effectiveness periodically by conducting retrospective and prospective tests. For more information, see subsection 5.2(a) above.
3)

Risks related to our financial investments

Our risk management policy calls for cash balances to be invested in low-risk investment alternatives, earning floating or fixed
interest rates. This strategy mitigates the impact eventual fluctuations in interest rate may have on the fair or present value of
our financial investments.
The table below sets forth data on exposure to market risk factors related to financial instruments, which we use to structure
financial investment strategies:

Financial element

CDIs
Fixed interest rate
Gold
Exchange rate (USD)
Inflation rate

Risk Factors (consolidated data)

Risk factor
base: December 2010
2010

A fall in CDI rates

A rise in fixed rate
A fall in market price
Appreciation of BRL to USD rate
A fall in inflation rate

34

Percentages at December 31
2009

2008

99.35%
0.35%
0.25%
0.05%
0.00%

98.03%
1.27%
0.20%
0.50%
0.00%

96.68%
1.78%
0.17%
1.37%
0.00%

100.00%

100.00%

100,00%

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

e.
in case the issuer transacts in financial instruments other than to hedge risks, identify the purposes of
said transactions;
1)

Our role as Central Counterparty Clearing House (CCP)

Such as previously discussed, our clearing facilities do not carry net long or short positions in any contract or financial asset
traded on our markets. In addition, these clearing facilities do not trade in other markets seeking to hedge positions.
2)

Risks related to our equity investment in the CME Group

Not applicable.
3)

Risks related to our financial investments

While we do not seek hedge protection for a significant portion of our financial investments, because of the very low risk profile
associated with them, we do hedge certain positions representing a relatively moderate portion of our financial investments,
such as set forth in subsection 5.2(c) above, and in these cases we consistently transact in financial instruments that provide
hedging protection.
f.

organizational risk management and control structure

1)

Our role as Central Counterparty Clearing House (CCP)

Risk management policies adopted at our clearing facilities are established by our market risk committee use in line with the
guidelines and framework set by our board and executive officers.
In May 2009 we established the Risk Committee as a board advisory body whose primary responsibilities include mo nitoring
economic and market developments, and evaluating and accessing market, liquidity, credit and systemic risks related to
markets we operate and manage, substantially through a strategic and structural approach. The risk committee is composes
of four members, including the chairman and independent directors. Currently appointed members of our risk committee
include Arminio Fraga Neto (independent director and chairman of our board), Jos Roberto Mendona de Barros
(independent director), Julio de Siqueira Carvalho de Arajo (director) and Luis Stuhlberger (director).
Under our bylaws, the market risk committee is a body whose members include the chief executive for risk management and
the clearing and depository facilities, the chief operations officer, the chief product development officer, the risk management
officer, settlements officer, operating officer, strategy and planning officer, products of derivatives officer, corporate risk and
fixed income and FX officer. The responsibilities of the market risk committee include (i) assessing the domestic policy and
macroeconomic conditions and their impact on the markets we operate; (ii) determining the models we use for margin
requirement calculation and for control of the intraday risk underlying transactions carried out in our markets; (iii) setting
parameters for these models, in particular stress scenario parameters for each type of risk factor; (iv) establishing the list of
acceptable collaterals, and the collateral valuation methods, usage limitations and risk-based haircuts; and (v) other research
and analyses.
Our risk management officer is responsible for executing the risk management policies set by the market risk committee in
connection with our activities as central counterparty to multilateral clearing and settlement transactions, and responsible also
for continually monitoring policy suitability vis--vis current market conditions. As of December 31, 2010, our risk management
department included 38 active employees.
2)

Risks related to our equity investment in the CME Group

We systematically monitor the hedge effectiveness retrospectively and prospectively relative to the hedging instrument in a
hedge of net investment in a foreign operation, according to accounting standard CPC-38 (IAS 39). This is done because we
have adopted net investment hedge accounting, the objective being to hedge the foreign currency risk affecting that portion of
our investment in the CME Group Inc which is attributable to the notional amount of US$612 million, which correlates with the
nominal amount of our July 2010 bond issuance whose proceeds funded said portion of our investment in CME shares, and
also, more specifically, with that portion of the principal under the global notes which correlates with changes in exchange
rates. This we have formally designated a hedging instrument in a hedge of net investment in a foreign operation, and are
required to test for effectiveness. For more information, see subsection 5.2(a) above.
3)

Risks related to our financial investments

Our policy on financial investments was established by our board of directors. Management routinely monitors our financial
investments and compliance with the policy.
g.
suitability of the operating structure and internal controls for assessment of the effectiveness of the risk
management policy
1)

Our role as Central Counterparty Clearing House (CCP)

Such as discussed in the preceding item, the decision-making structure related to risk management processes associated with
our role as central counterparty to multilateral clearing and settlement transactions involves a number of professionals at
different levels (strategic, management, operational), from different departments and practice areas, and is instrumental in

35

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

prompting awareness and adherence to the policies guidelines and standards, in addition to spurring objective and sharp
evaluations of effectiveness.
2)

Risks related to our equity investment in the CME Group

We systematically monitor the hedge effectiveness retrospectively and prospectively relative to the hedging instrument in a
hedge of net investment in a foreign operation, according to accounting standard CPC-38 (IAS 39). This is done because we
have adopted net investment hedge accounting, the objective being to hedge the foreign currency risk. For more information,
see subsection 5.2(a) and (f) above.
3)

Risks related to our financial investments

We routinely and systematically monitor, and periodically evaluate our financial investments, review and consistently seek to
improve our internal controls operating structure to ensure our policies are adequately and effectively implemented.
5.3.

Significant changes in exposure to primary market risks or the risk management policy in the last year
1)

Our role as Central Counterparty Clearing House (CCP)

There have been no significant changes to the key risk factors related to our activities as central counterparty (CCP) to
multilateral clearing and settlement transactions.
2)

Risks related to our equity investment in the CME Group

There have been no changes related to the principal market risk factors related to the net investment in a foreign operation
which we hedge as previously discussed (see subsection 5.2(a) above). We have tested the hedge effectiveness retrospectively
and prospectively, having determined that at December 31, 2010, there was no realizable ineffectiveness.
3)

Risks related to our financial investments

There have been no changes in our exposure to market risks associated with our financial investments.
5.4.

Additional information deemed to be material.

Other than as discussed above, there is no additional information on market risks which has not been discussed in this Section 5.
6. Corporate history
6.1.

Incorporation

Date: December 14, 2007, is the date of incorporation of T.U.T.S.P.E. Empreendimentos e Participaes SA , the company
which originated BM&FBOVESPA. In its current configuration, BM&FBOVESPA SA Securities, Commodities and Futures
Exchange is the result of the integration of the Brazilian Mercantile & Futures ExchangeBM&F SA and BOVESPA Holding SA, as
approved by their respective Extraordinary General Meetings of Shareholders held on May 8, 2008.
Corporate type: Corporation (under Brazilian law, a companhia)
Country of incorporation: Brazil
6.2.

Term of duration

The Company has been established for an indefinite period of time.

6.3.

History

BM&FBOVESPA is the company that emerged from the integration process that through certain merger transactions combined
two formerly independent exchanges, i.e., the futures and commodities exchanged known as BM&F and the So Paulo stock
exchange operated by BOVESPA Holding. The corporate restructuring process that implemented the integration process was
approved at extraordinary shareholders meetings held on May 8, 2008. Set forth below is a brief history of each of these two
formerly independent exchanges and ours, as BM&FBOVESPA.
Since this integration process we have, for convenience, grown used to referring to markets previously operated by Bovespa as
our Bovespa Segment, meaning exchange and OTC markets for the trading of stocks, other equity securities and equity
derivatives, in addition to corporate debt securities traded on the fixed income market. Likewise, we now use BM&F Segment
when referring to markets previously operated by BM&F as an independent exchange, i.e., derivatives markets for options,
forwards and futures contracts based on financial and cash-settled commodities, metals, energies, stock indexes, exchange
rates and so forth.

BM&F Segment history

BM&Fs trajectory of success and unprecedented accomplishments started in January 1986 out of its founding members
realization that it was high time for the local markets embrace some of the risk-transfer instruments and derivatives dealing
practices of major international markets, such as the U.S. and the U.K. markets. In the early 1990s, BM&F and the So Paulo
commodities exchange, or BMSP, agreed a merger which strengthened its position in the domestic market and ultimately
consolidated BM&F as a major Latin American venue for the trading of derivatives and commodities.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Then, in 1993, in a move to narrow its relationship with foreign exchanges and regulatory agencies, it created BM&F USA Inc.,
based in New York City, to act as representative office and, among other things, identifying opportunities for strategic alliances.
In 2002, aiming to structure integrated multi-asset market solutions, BM&F acquired a controlling interest in the Rio de Janeiro
Stock Exchange (BVRJ) and coordinated the creation of the Brazilian Commodities Exchange, or BBM, based in Rio de Janeiro.
In addition, it introduced the foreign exchange clearing house, made possible in the aftermath of the Brazilian governments
initiative to remodel the Brazilian Payment System. The FX clearing house was followed in 2004 by a clearing house for debt
securities, including government bonds, and the organization of the BM&F Settlement Bank, both of which widened the scope of
the strategic position BM&F now occupied in the Brazilian capital markets.
Until 2007 BM&F had been operating as a not-for-profit mutual association whose membership was composed of brokers and
broker-dealers holding market access rights. A demutualization process began in 2007 in preparation of a going public process.
At the time, the members equity rights were detached from the market access rights and ultimately converted into equity
interest in the shares of the for profit corporation (BM&F) that emerged from the corporate restructuring process that followed
the demutualization.
BM&F was now oriented towards strengthening the business and building long-term shareholder value. As part of these
objectives, on September 20, the shareholders of BM&F authorized the management to pursue an initial public offering. In
addition, also in September 2007, General Atlantic LLC and BM&F agreed an acquisition agreement whereby General Atlantic
purchased a 10% interest in BM&F shares worth R$1.0 billion. . One month later, in October, BM&F and the CME Group agreed
a partnership involving a cross-investment arrangement and the interconnection of their communications networks for adoption
of two-way order routing systems so investors in both countries could trade in each others products. The order routing system
now includes Bovespa segment listings and, in addition, in February 2010 the scope of the partnership with CME has been
widened, as set forth below under BM&FBOVESPA History.
Finally, in November 30, 2007, BM&F shares started trading under ticker symbol BMEF3 on the Novo Mercado listing segment
of the Sao Paulo Stock Exchange (BOVESPA). Since August 20, 2008, after the integration with BOVESPA completed, and the
shares had been converted at a 1:1 ratio, BM&FBOVESPA shares trade under ticker symbol BVMF3.

BOVESPA Segment history

BOVESPAs origin dates back to 1890 when Bolsa Livre was created. Beginning in the 1960s, BOVESPA became a mutualized
not-for-profit stock exchange, whose membership comprised securities brokers and broker-dealers holding both equity and
market access rights. Also in the 1960s, when new legislation was enacted to regulate the Brazilian capital markets, the name
Sao Paulo Stock Exchange was adopted.
The Bovespa Index (Ibovespa) was launched in 1968 as an indicator of average market behavior. The integrity of its historical
series has been maintained since its inception, with no any methodology modifications.
In the 1970s the stock exchange implemented an automated system for the registration of trades. In addition, price quotes and
other market data regarding listed securities began to be promptly disseminated in electronic form. By the late 1970s BOVESPA
pioneered the trading of stock options.
Early in the 1980s two key factors were decisive in further driving development within the realm of the stock market: one was
introduction of mutual funds, including equity-oriented funds and pension funds, and two, the transition to an electronic
booking system for the securities custody services, which contributed to more efficient clearing and settlement processes
ultimately boosting liquidity.
In the early 1990s BOVESPA introduced a computer-assisted trading system, or CATS, developed by the Toronto Stock
Exchange, which operated in conjunction with the open outcry trading sessions, using remote terminals installed in the facilities
of its broker members. By the mid-1990s the electronic trading system was replaced by an advanced system developed by the
then Paris Bourse (currently NYSE Euronext). In addition, the Brazilian Clearing and Depository Corporation (CBLC) was
organized to operate as central securities depository and tackle the clearing process, for which banking institutions were
authorized to operate as clearing agents.
Later, in 2000, in an effort to drive growth in the domestic stock market and consolidate all Brazilian equity trading in a single
exchange, BOVESPA led an integration program with the other eight stock exchanges then active in Brazil to become the only
local exchange operator for equities, accessed by brokers all over the country. During the integration process, BOVESPA
acquired the Settlement and Custody Company (CBLC), which was then in charge of settlement and custody services for
securities traded on the Rio de Janeiro Stock Exchange (BVRJ).
Moreover, in the same year BOVESPA launched three special listing segments that adopted additional and more stringent
corporate governance requirements, i.e., the Novo Mercado and Corporate Governance Levels 1 and 2. In 2001 it launched
BOVESPA FIX, an electronic platform for the trading of fixed-income securities, and in 2002, with the takeover of SOMA, an OTC
market, BOVESPA expanded operations, organized the market, which grew to concentrate all local trading in OTC equities and
equity-based securities. Then, in September 2005 BOVESPA closed its trading floor and became a fully-integrated electronic
market.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

On August 28, 2007, the demutualization of BOVESPA was approved, equity and market access rights were detached in
preparation of the ensuing corporate restructuring process, upon whose implementation all of the former members and
shareholders of BOVESPA and CBLC became shareholders of BOVESPA Holding. In October 2007 the initial public offering of
BOVESPA Holding launched and the shares first traded on the Novo Mercado segment under ticker symbol BOVH3.
Later, in May 2008, the integration with BM&F (futures and commodities exchange) was approved, a merger and corporate
restructuring process ensued, and on August 20, 2008, the shares of Bovespa Holding were converted into shares of
BM&FBOVESPA, the combined company that emerged from the process, at a ratio of 1:1.42485643 common shares (ticker
symbol BVMF3) plus 0.1 preferred share. These preferred shares were subsequently redeemed at a price of R$17.15340847 per
preferred share.

BM&FBOVESPA history
BM&FBOVESPA was incorporated on December 14, 2007, as a holding company existing under the name T.U.T.S.P.E.
Empreendimentos e Participaes SA. Shareholder action decided on April 8, 2008, changed the corporate name to Nova
Bolsa SA., meaning the New Exchange.
On May 8, 2008, the integration process that combined the activities of BM&F and BOVESPA Holding was approved. The
ensuing corporate restructuring process included a merger of BM&F assets and liabilities into Nova Bolsa SA; a merger of the
shares of BOVESPA Holding into Nova Bolsa SA, and adoption of the corporate name BM&FBOVESPA SA Bolsa de Valores,
Mercadorias e Futuros (Securities, Commodities and Futures Exchange).
This combined company gave rise to one of the largest exchanges across the world by market capitalization, the second
exchange in the Americas and leading exchange in Latin America. BM&FBOVESPA adopts a fully integrated business model,
which comprises the entire chain of trading, clearing and settlement, risk management, CCP and CSD, through integrated, fullyelectronic systems, based straight-through processing. As a result, beyond offering a fully-integrated and automated venue for
the trading of stocks and other equity and debt securities, including government bonds, ETFs, equity, financial and commodity
derivatives and other financial instruments, on cash, futures, options and forward markets, BM&FBOVESPA also offers listing
services for issuers and ETFs, operates market data sales and distribution services, index production, system and software
development, and technology enhancements, in addition to operating a central securities depository (CSD) and complete
custody system. Furthermore, BM&FBOVESPA operates four clearing houses (equities, derivatives, debt securities and forex) for
the clearing and settlement of transactions carried out on markets it operates, and in doing so it acts as central counterparty
clearing house, provides risk management and securities lending services and operates safeguard mechanisms to ensure
customer market participants and investors are provided with a modern and efficient structure for their dealings.
In its present configuration, BM&FBOVESPA provides customer market participants and investors with a wide array of
transaction possibilities ranging from buy and sell trades, execution of hedging strategies, arbitrage between markets or
financial assets, leverage techniques, portfolio diversification and so forth.
In February 2010 we agreed the Term Sheet of a 15-year global preferred strategic partnership with the CME Group (1) for the
two exchanges to cooperate in identifying and pursuing opportunities for co-investment in, and joint commercial partnerships
with, third-party international exchanges on a shared and equal basis; (2) for the two exchanges to combine efforts for joint
development of a multi-asset class electronic trading platform; and (3) for us to acquire additional shares in CME and increase
to 5% our total ownership interest in CME shares, an aggregate investment of approximately US$1 billion, and (4) for us to
designate a representative to be elected to the CME Board. The transaction was approved in an extraordinary general meeting
held in April 20, 2010.
On June 22, 2010, we executed the definitive agreements with the CME Group, and in July, following completion of a US$612
million bond offering, the proceeds thereof were use in the purchase of an additional 3.2% interest in CME shares, thus totaling
a 5% aggregate ownership interest and reportedly becoming the largest CME shareholder. As result, beginning from July 2010,
we now account for this investment under the equity method of accounting (a 5% interest in CMEs shareholders equity), and
recognize gains and losses from investment in associate through profit or loss (in the statement of income).
Furthermore, the joint development and implementation of a multi-asset class electronic trading platform, which will include
acquiring the technology and related intellectual property licensing, are set to take place on a phased basis. For completion, we
estimate investments on the order of US$175.0 million over the coming 10 years (meaning present value of US$100.0 million).
For information on our product offerings, see section 7 of this Form.
6.4.

Registration as a public company

Dated August 12, 2008, the Brazilian Securities Commission (CVM) registered BM&FBOVESPA as a public company.
Additionally, we are also subject to the regulatory authority of the CVM in our capacity as operator of securities and
derivatives markets. For this reason, following the integration process previously discussed and our going public process, the
CVM issued SMI Circular Letter No. 018/09 dated June 18, 2009, confirming our registration as market operator.
6.5.
Principal corporate transactions involving the Company, subsidiaries and affiliates (including merger &
acquisition transactions, transfer of control, purchase or sale of material assets)

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

As reported in items 6.1 and 6.3 above, in its current configuration BM&FBOVESPA is the result of an integration and corporate
restructuring process that combined BM&F and BOVESPA Holding. The principal related corporate transactions were approved
at the following shareholders meetings:

The BM&F Extraordinary Shareholders Meeting held on May 8, 2008, approved the merger of BM&F assets and
liabilities into Nova Bolsa SA;

The Nova Bolsa SA Extraordinary Shareholders Meeting held on May 8, 2008, approved the merger of BM&F assets
and liabilities into Nova Bolsa SA;

The Nova Bolsa SA Extraordinary Shareholders Meeting held on May 8, 2008, approved the merger into Nova Bolsa SA
of all shares issued and outstanding of BOVESPA Holding. Action was taken also to change the companys name to
BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros.

It should be noted that the share merger did not imply termination of Bovespa Holding, which was still an ongoing concern
and now a wholly-owned subsidiary of the mergor, i.e., BM&FBOVESPA. Bovespa Holding in turn owned and controlled Bolsa
de Valores de So Paulo S.A . (or Sao Paulo Stock Exchange) and Companhia Brasileira de Liquidao e Custdia (or CBLC,
the Brazilian Clearing and Depository Corporation). The principal corporate transactions related to the corporate
restructuring process that ultimately combined these companies into BM&FBOVESPA were approved at the following
shareholders meetings:

The So Paulo Stock Exchange Extraordinary Shareholders Meeting held on August 29, 2008, approved the merger of
the Sao Paulo Stock Exchange into BOVESPA Holding;

The BOVESPA Holding Extraordinary Shareholders Meeting held on August 29, 2008, approved the merger of the Sao
Paulo Stock Exchange into BOVESPA Holding and changed the name of the mergor to Nova BVSP as a result of the
merger the company named Bolsa de Valores de So Paulo S.A (So Paulo Stock Exchange) terminated, and BOVESPA
Holding was now named Nova BVSP (BVSP being an acronym for Sao Paulo Stock Exchange);

The Nova BVSP Extraordinary Shareholders Meeting held on November 28, 2008, approved the merger of company
into BM&FBOVESPA;

The CBLC Extraordinary Shareholders Meeting held on November 28, 2008, approved the merger of CBLC into
BM&FBOVESPA;

The BM&FBOVESPA Extraordinary Shareholders Meeting held on November 28, 2008, approved the merger of each of
Nova BVSP and CBLC into BM&FBOVESPA. Upon implementation of the mergers, these two companies were
terminated.

As a result of these corporate restructurings, the companies Brazilian Mercantile & Futures ExchangeBM&F SA, Bovespa
Holding SA, Sao Paulo Stock Exchange SA and Brazilian Clearing and Depository Corporation (CBLC) ceased to exist and were
all merged into BM&FBOVESPA SA Securities, Commodities and Futures Exchange.
Moreover, at the combined annual and extraordinary shareholders meeting of BM&FBOVESPA held on April 20, 2010, the
shareholders approved our acquisition of additional shares of the CME Group, agreed in connection with our global preferred
strategic partnership, by virtue of which we increased to 5% our aggregate ownership interest in CME shares. The crossholdings structure discussed above in subsection 6.3, under BM&F Segment history has been maintained.
6.6.

Bankruptcy or recovery proceedings

No application has been filed by us or any other party seeking a bankruptcy order or judicial or extrajudicial recovery.
6.7.

Other information deemed to be material

There is no additional information deemed to be material in connection with matters discussed under this section.
7. Business
7.1.

Overview of the business of the Company and its subsidiaries

BM&FBOVESPA S.A., the Securities, Commodities and Futures Exchange

BM&FBOVESPA is the Brazilian exchange operator and manager of organized securities and derivatives markets, provider of
registration, clearing and settlement services for transactions carried out on its trading platforms, acting as central
counterparty, or CCP, to ensure multilateral clearings and settlements. We at BM&FBOVESPA adopt a vertically integrated
business model, pursuant to which we offer a wide range of products and services for the trading of stocks and other securities
and contracts, including fixed-income securities, exchange-traded derivatives based on equities, stock indices, exchange or
interest rates, commodities, foreign currencies, and other financial assets, in addition to currency trading on the spot market.
We also provide listing services for the registration of securities, depositary receipts and debt securities, and operate a central
securities depository and a securities lending facility. Moreover, we developed, update and license the software named Sinacor,
a brokers management integrated system with capacity to process several middle and back-office activities for brokerage firms

39

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

and other financial institutions. Additionally, acting through Bovespa Superviso de Mercados, or BSM, a market surveillance
mutual entity in which we hold material membership interest, we perform activities as a self-regulatory entity in charge of
overseeing activities by market participants and all trading, clearing and settlement transactions performed within the realm of
the markets we manage.

BM&F Settlement Bank (Banco BM&F de Servios de Liquidao e Custdia S.A.)

With the purpose of providing services that meet the specificities and peculiarities of the markets in which it operates,
BM&FBOVESPA established the BM&F Settlement Bank, a wholly-owned subsidiary which offers our clearing houses and
participants with access to our clearing houses facilities that simplify the clearing, settlement and custody of securities and
other financial assets.
Conceived as an operating support vehicle, the BM&F Settlement Bank operates pursuant to the same high standards of
efficiency and security adopted by the clearing houses that integrate the BM&FBOVESPA system, offering custody and
settlement-related services in an exclusive, transparent, technical and skilled environment.
Service offerings include settlement of transactions registered and accepted at our clearing houses, the operation of a
depositary facility and the central registration facility; clearing and settlement of bonds, securities, derivatives and foreign
exchange transactions; local representation and custody services for non-resident investors; and support to investment clubs.
The BM&F Settlement Bank provides important risk mitigation and operational support for our clearing houses and for market
participants. It performs activities in line with the strategies and guidelines of the parent and in accordance with its corporate
purposes.

BM&F (USA) Inc.

BM&F (USA) Inc. is a wholly-owned subsidiary based in New York, which also operates a representative office in Shanghai,
China, which opened in November 2009. Its operations in these bases consist of acting as cross-border representative office of
BM&FBOVESPA, establishing professional relationships with other exchanges and market regulators, and prospecting customers
for BM&FBOVESPA markets, in particular investors and intermediaries.

BM&FBOVESPA (UK) Ltd.

In the second half of 2010, we started a restructuring process involving our subsidiaries abroad. According to corporate
documents and agreements dated February 1, 2011, BM&FBOVESPA (UK) Ltd., based in London, which previously was a whollyowned subsidiary of BM&F (USA) Inc is now directly controlled by BM&FBOVESPA. It has similar objectives as BM&F (USA) Inc.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

The Brazilian Commodities Exchange is a mutualized entity in which BM&FBOVESPA holds a majority membership interest. It
operates under contract with Companhia Nacional de Abastecimento (CONAB), the Brazilian Food Supplies Corporation, in
implementing the Policy on Assured Minimum Prices (Poltica de Garantia de Preos Mnimos), and in providing public and
private electronic auction services for the trading of commodities and agribusiness services, centralizes the trading of
agricultural commodities and OTC agribusiness securities, such as rural product notes, or CPRs, of farming certificates of
deposit and related farming warrants, or CDAs and WAs, agribusiness credit bills, or LCAs, agribusiness credit certificates, or
CDCAs, and agribusiness receivables certificates, or CRAs.

Rio de Janeiro stock exchange, or BVRJ (Bolsa de Valores do Rio de Janeiro)

BVRJ is an inactive stock exchange. Beginning from 2004 it rents out space in its main office building (the former exchange
premises, now converted into a convention center. The Rio Exchange Convention Center leases space for seminars, congresses,
conferences, professional training sessions, private meetings, and similar other events. The space allows for different set-up
configurations and types of social or institutional events.
7.2.

Operating segments included in the most recent full year financial statements
a.

Products and services offerings

BM&F Segment
The BM&F segment comprises operations, products and services to support and manage the principal stages of the trading and
settlement cycles of debt securities and derivatives contracts. These services include: (i) electronic trading systems for
electronic and web-based trading; (ii) registration system, clearing and settlement systems integrated into a robust financial
safeguard structure and a sophisticated risk management system; and (iii) custody systems for agribusiness securities, gold
certificates and other financial assets and securities.
Moreover, the BM&F segment comprises the trading of agricultural and other commodities, currency trading on the spot market
and trading of government bonds and securities, in addition to the services offered by the BM&F Settlement Bank and the
Brazilian Commodities Exchange.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Clearing houses for the BM&F segment

Along with the BM&F Settlement Bank, our three clearing houses, which we call Derivatives Clearinghouse, Foreign Exchange or
FX Clearinghouse, and Securities Clearinghouse, provide integrated risk management, clearing and settlement services, in
addition to registration, clearing and settlement of transactions taking place on the organized OTC market. Our clearing houses
and the BM&F Settlement Bank are fully integrated to ensure the integrity and efficient operation of our markets.
Our clearing houses act as central counterparties for trades executed on our systems and in collateralized OTC transactions.
This allows for the efficient netting of collateral obligations, thereby reducing the number of payment orders participants are
required to make in executing and settling trading orders, which also serves to reduce transaction costs and operational risks
for market participants. Additionally, given that our clearing houses act as central counterparties for multilateral netting of
obligations, this mitigates exposure to credit risks incurred by market participants that operate in our markets. To help mitigate
and manage credit risk, we have implemented risk assessment and management systems, procedures and methodologies,
based on which we operate to calculate risk intrinsic to each transaction for some contracts almost in real time, but often in
real time, immediately before bids and asks are matched and to determine the margin our clearing houses will be required to
call to effectively cover these risks.
Our Derivatives Clearinghouse manages risks and settles exchange-traded futures and options contracts, as well as
OTC-traded swap contracts upon the parties request.
Our FX Clearinghouse is responsible for the registration, clearing, settlement and risk management of spot U.S. dollar
transactions (dlar pronto) traded on the Brazilian interbank market. Trades registered and accepted in our FX
Clearinghouse may be executed pursuant to private deals, and are cleared and settled by means of physical delivery of
local currency (deposited into an account the FX Clearinghouse holds at the Central Bank) against delivery of U.S.
dollars (deposited into accounts the FX Clearinghouse holds at correspondent banks in New York City). By adopting
payment versus payment settlement, or PVP, our clearing house has eliminated the risk of default on principal, using
collateral pledged to mitigate volatility risk.
Our Securities Clearinghouse is responsible for the registration, clearing, settlement and risk management of
transactions involving Brazilian government-issued securities, which includes buy and sell transactions for prompt or
forward settlement, and repurchase (repo) and lending transactions. Trades registered and accepted by our Securities
Clearinghouse can originate from private trading on the OTC market or from online trading through our Sisbex
electronic system.
The BM&F Settlement Bank performs an important supplementary role for the operation of our three clearinghouses and risk
management systems. Through the BM&F Settlement Bank, these clearinghouses can promptly access the intraday Central
Bank credit facility, which mitigates possible liquidity risks, particularly when it is necessary to access customer collateral and/or
liquidate government securities pledged as collateral. In addition, the BM&F Settlement Bank provides market participants, in
particular commodity brokers and clearing agents, with services and solutions designed to facilitate efficient and cost-effective
settlement processes and management of collaterals, assets and securities under custody.

Custody systems for agribusiness securities, gold certificates and other securities and financial assets
In addition to our trading, settlement and risk management systems, our clearinghouses and the BM&F Settlement Bank also
offer custodial services for agribusiness securities, gold certificates and other financial assets and securities, which are provided
in a supplementary and integrated manner through our vertical business model.

Custody system for agribusiness securities. Through our Agribusiness Securities Custody Registration System (Sistema
de Registro de Custdia de Ttulos do Agronegcio), or SRCA, we provide custody of rural product notes, or CPRs, of
farming certificates of deposit and related farming warrants, or CDAs and WAs, agribusiness credit bills, or LCAs,
agribusiness credit certificates, or CDCAs, agribusiness receivables certificates, or CRAs, and other agribusiness
securities. These securities are registered in our SRCA system to trade on the Brazilian Commodities Exchange.
Certain of these securities may also be pledged as collateral for transactions registered in the Derivatives
Clearinghouse systems. In the future, we may also accommodate physical delivery of certain agribusiness futures
through agribusiness securities registered in our SRCA system. This added capability is expected to improve trading in
agricultural commodity derivatives.

Fungible custody for gold. Fungible custody of gold consists of book-entry registration of gold bars, which permits
trading in our systems and use of these assets for settlement of futures and options contracts based on gold. Gold can
also be pledged as collateral in our Derivatives Clearinghouse.

Custody of other financial assets and securities. The BM&F Settlement Bank operates its own structure to provide

custodial services for financial assets in general. Its growth plan includes expanding the provision of custodial services
to a wider universe of non-resident investors seeking portfolio investments in the local capital markets (pursuant to
mechanisms regulated under Brazilian National Monetary Council Resolution No. 2.689).

Registration services for OTC transactions

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In addition to other offerings related to clearing and settlement of trades carried out on our exchange markets, our Derivatives
Clearinghouse provides registration services for dealings on the OTC market, including swaps and exotic options based on
exchange rates, interest rates, inflation indexes and stock indexes. We believe our OTC products provide customers with tailormade hedging alternatives that address the specific requirements of their businesses and investment portfolios.

Primary sources of revenues

We derived revenues primarily from fees we charge for the use of our trading, registration, clearing, settlement and risk
management systems. These fees represent the operating costs customers incur to transact in our systems and are expressed
in Brazilian currency for payment through the settlement processes implemented at our clearing houses. The exceptions are
agricultural commodity derivatives contracts, which are settled in U.S. dollars in New York City, United States (under the rules
of Brazilian National Monetary Council Resolution No. 2.687). According to their nature, these fees can be classified as follows:

Exchange or trading fees. We charge fees for the execution of any transaction on our trading platforms, including
position closeouts or transfers. Exchange fees are calculated for groups of products with similar characteristics and
purposes or for products based on the same underlying asset.

Registration fees.

These are charged for the registration of transactions at the Derivatives, FX or Securities

Clearinghouses.

Permanence fees. These are fees we charge to manage open positions at the Derivatives Clearinghouse. We calculate
permanence fee based on a customers number of contracts outstanding at the end of business on a daily basis.

Physical delivery fees.

These are charged in connection with clearing futures contracts based on agricultural
commodities through physical delivery.

Financial and commodity derivatives

Trading activities in our derivatives markets include transactions in derivatives contracts based on the local interest rate (or
Real-denominated interest rate contracts), the local interest rate denominated in U.S. dollars, and derivatives based on
exchange rates, stock indices and commodities, in addition to mini-sized derivative contracts and OTC derivatives traded on the
organized OTC market.
Fees we charge at the Derivatives Clearinghouse differ based on the type of contract and time to expiration or maturity. In
addition, on setting fee rates for the different contracts and contract periods we also take into account the contracts implied
volatility, the existing market conditions and the fees charged in competing markets, among other things. Typically, contracts
implying greater volatility, i.e., riskier contracts are charged at higher fees than less risky contracts. The most actively traded
contracts on the derivatives markets are Real-denominated interest rate contracts, charged at fees that vary in correlation with
the contract period; exchange rate contracts, where the fees primary variable is the actual Brazilian real exchange rate against
the U.S. dollar; and derivatives based on stock indices, the average fees for which, while set at fixed rates, vary based on type
of transaction and investor category.
Certain factors influenced our average rate per contract in different periods, which correlate with the review of our pricing policy
in the second half of 2008 and the impact of the fluctuation of the Brazilian real to U.S. dollar exchange rate (the fees we
charge on FX derivatives, on contracts based on the spread between interest rate and exchange rate fluctuation, and on
commodity derivatives vary based on the exchange rate). The relevant data on average rate per contract are included in the
comparison of 2009 to 2008 and 2008 to 2007.
The amendments to the pricing policy observed the following stages:
On August 25, 2008, we discontinued a policy whereby we used to grant a universal 5% discount to member brokers,
and a 25% discount to former holders of minimum 10 thousand BM&F shares (traded under ticker symbol BMEF3, i.e.,
BM&F prior being absorbed into BM&FBOVESPA);
On November 17, 2008, we implemented a transitory policy of granting a universal 40% discount to all market
participants, and a 50% discount to trades executed via Direct Market Access, or DMA, which gives investors the ability
to rout orders without need to contacting a broker by phone), and a 70% discount to high frequency traders, which
was meant to offset the impact of the increase in fees, and as a result in rate per contract, expected to take place
after the end of this transitory discount policy in August. Additionally, at the same time we adopted certain changes in
the manner we charge fees, according to which, for example, we adopted fixed fee rates for futures on stock indices;
Subsequently, on February 16, 2009, a new pricing policy took effect whereby we grant discounts based on
progressive volume bands. According to this new policy, trading via DMA were granted 10% discounts, whereas high
frequency trading continued to enjoy 70% discounts.
A revised pricing policy for high frequency trading for both segments (Bovespa and BM&F) took effect on November 1,
2010, which grants holders of HFT registration accounts progressive discounts based on intraday trading volume
bands.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In addition to making for more competitive products and fees, this new pricing policy is more cost effective for market
participants and more adequate for the new market reality, in addition to spurring liquidity by encouraging trading by liquidity
providers and high frequency traders.

Trading volumes and rate per contract

Years ended December 31, 2010 and 2009

The volumes traded in the BM&F segment in 2010 reached daily average of 2.50 million, a 64.7% year-on-year rise. The
heightened volume of trading in Brazilian-interest rate contracts is due not only to structural growth of the domestic market,
but also to deepening volatility and uncertainty about a possible uptrend in the Selic rate (benchmark reference rate), and
expectations about the Central Banks decision on the matter.
Market structural growth is evidenced by widespread increase in exposure to fixed rates, whether under private loans and
financing arrangements or the Brazilian governments public debt, which requires lenders and market participants holding debt
securities to hedge exposure to fluctuations in interest rates in an attempt at mitigating risk that interest rates or the fixed
rates implied volatility will change. According to data compiled by the Central Bank, at December 31, 2010, the overall volume
of fixed-rate loans had climbed 26.7% year-over-year, to R$623.6 billion from R$492.2 billion one year ago, whereas in the
same period the portion of national debt paying fixed interest rate had grown 29.0%, to R$608.4 billion from R$471.5 billion
previously.
The other component that explains the heightened volume of trading in Brazilian-interest rate contracts correlates with volatility
triggered by the diversity of opinions and expectations of market participants about the direction of the base rate and, as a
result, of other interest rates. Over the course of the year the Central Bank has changed the base rate three times, in April,
June and July. A monthly analysis of average daily traded volumes shows these volumes peaked in the months in which the
Selic rate changed, preceded by a build-up process in the months leading up to these rate moves. The analysis also indicates a
substantial build-up in the months of November and December, which we believe is substantially attributable to expectations
about additional rate moves, which materialized in January 2011.
In addition, in peak months the volumes traded in Brazilian-interest rate contracts largely concentrate in short-term contracts
(first and second maturity dates), as speculative moves and bets on the Central Banks decisions tend to focus on these
maturity dates. A natural effect of this, given that our pricing policy does take maturity date into account, is the negative impact
of volume concentration on our yearly average rate per contract for Brazilian-interest rate contracts, which in 2010 fell 9.1%
year-over-year.
The average RPC has dropped across derivatives markets influenced also by the heightened volume concentration on Brazilianinterest rate contracts, which accounted for 67.2% of the overall volume for 2010 (versus 55.5% in the prior year).
Forex contracts were the second group more actively traded over the year. The average daily traded volume rose by 20.9%
year-over-year, again the highest on record. This performance was particularly positive in the first half of the year, a period of
heightened volatility in the foreign exchange market.
Years ended December 31, 2009 and 2008

The volumes traded in the BM&F segment in 2010 reached daily average of 1.52 million, a 3.3% drop year-on-year from 2008,
primarily due to 16.4% and 8.7% falls in volumes traded in FX and stock-index contracts, respectively. These declines in turn
were counterbalanced by a 7.0% rise in average daily volume traded in Real-denominated interest rate contracts, to 843.5
thousand from 788.7 thousand previously. The average daily volume traded in 2008 was 1.57 million, down 9.6% from the
prior year.
Average rate per contract (RPC) in the BM&F segment amounted R$1.365 in 2009, down 10.3% year-on-year. The fall in RPC
for 2008 and, to a lesser extent, for 2009 were due in part to the transition to the new pricing policy implemented in February
2009, and for a while increased the RPC for 2008 thus affecting comparability.
On a year-on-year comparison of 2009 versus 2008, these revenues declined due to the slump in volumes traded in derivatives
(except for Real-denominated interest rate contracts) and the drop in rate per contract (except for USD interest rate and
exchange rate contracts).
The tables below set forth data on evolution of average daily trading volumes and average rate per contract for the periods
indicated, by group of derivatives contracts.
BM&F segment Average Daily Trading Volume ADTV
Year

Realdenominated
interest rate

USDdenominated
interest rate

788,665
843,480
1,683,623

94,281
78,298
89,714

Exchange
rate

Equities

Commodities

(In number of contracts)

OTC
market

Mini
contracts

ADTV
)

2008
2009
2010

534,922
447,093
540,623

87,632
80,015
89,406

43

14,916
10,236
12,898

12,447
9,273
12,866

40,478
52,637
75,605

1,573,342
1,521,032
2,504,736

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

2009/2008
2010/2009

7.0%
99.6%

-17.0%
14.6%

-16.4%
20.9%

Realdenominated
interest rate

USDdenominated
interest rate

1.141
0.979
0.889
-14.2%
-9.1%

1.283
1.357
1.142
5.8%
-15.8%

-8.7%
11.7%

-31.4%
26.0%

Average rate per contract RPC

Year

2008
2009
2010
2009/2008
2010/2009

Exchange
rate

2.065
2.161
1.928
4.6%
-10.8%

Equities

-25.5%
38.7%

30.0%
43.6%

-3.3%
64.7%

(In Brazilian reais)

Commodities

2.145
1.620
1.564
-24.5%
-3.4%

OTC
market

3.587
2.307
2.168
-35.7%
-6.1%

Mini
contracts

2.355
1.655
1.610
-29.7%
-2.7%

0.162
0.176
0.128
8.5%
-27.0%

ADTV

1.527
1.365
1.134
-10.6%
-16.9%

As a percentage of 2010 overall volume for the segment, the share contributed by institutional investors increased to 29.6%
from 24.3% one year ago, while the share foreign investors contributed to the overall yearly volume for the segment rose to
22.4% from 20.0% in the earlier year. In the period between 2008 and 2009, the share contributed to volumes traded in
derivatives by type of investor changed primarily as follows: volumes traded by financial institutions fell to 45% from 48%
previously; the order flow from foreign investors increased to 20% from 19% of the consolidated volume one year earlier;
volumes from institutional buyers rose to 24% from 23% in the prior year. For comparison, in the period between 2007 and
2008 the shares of overall volumes traded in derivatives attributable to financial institutions fell to 48% from 49% previously,
whereas the order flow from foreign investors increased to 19% from 17% of the consolidated volume for the prior year.
In the three-year period between 2008 and 2010, the shares of overall volume traded in derivatives by foreign investors and
institutional buyers increased considerably, whereas volumes traded by financial institutions fell. Growth in volumes,
particularly in volumes traded by foreign investors, speaks of the significant development and stature achieved by the domestic
derivatives markets, mainly on account of repeated surges in high frequency trading volumes (see further data below). The
table below sets forth additional data on participation in volumes traded by type of investor.
BM&F segment Shares of overall volume by investor category
Year

Institutional
buyers

Foreign
investors

Retail
investors

Financial
institutions

Corporate
investors

Central Bank

2008
2009
2010

22.60%
24.26%
29.61%

18.79%
20.02%
22.40%

7.97%
7.63%
3.88%

47.60%
45.46%
42.40%

2.90%
2.53%
1.71%

0.15%
0.11%
0.00%

1.65 p.p.
5.36 p.p.

1.23 p.p.
2.38 p.p.

-0.34 p.p.
-3.75 p.p.

-2.14 p.p.
-3.06 p.p.

-0.37 p.p.
-0.82 p.p.

-0.04 p.p.
-0.11 p.p.

2009/2008
2010/2009

Evolution of trading volume by group of derivative contracts

Real-denominated interest rate contracts. These comprise futures contracts and options based on local interest rates, in
addition to inflation-indexed derivatives, meaning contracts based on local inflation indexes. The average rate per contract
(RPC) in these cases varies based on expiration date. The underlying in the most actively traded contract in this group is the
interbank deposit rate (depsito interfinanceiro), or DI.
As a result, DI futures are also the most liquid derivative contract in the segment. DI futures basically allows for trading in the
fixed interest rate most commonly used in the financial market for different periods of time. DI futures are very important for
the Brazilian financial system and are often traded as a hedging mechanism for debt obligations under loans and financing
arrangements, or to hedge obligations referenced to Brazilian government bonds, or to leverage positions or in arbitrage
strategies. Options on DI futures and options on DI index (or IDI) are also very popular amongst our customers for it allows for
more sophisticated hedging strategies.
The table below sets forth data on average daily trading volumes (ADTV) by group of futures contracts, also showing the fee
rate by maturity, as applicable.
Real-denominated interest rate futures contracts (by expiration)
2008
Realdenominated
interest rate

1st maturity

ADTV(*)

RPC(**)

0.293

ADTV(*)

1st maturity

2010
RPC(**)

Realdenominated
interest rate

113,905

0.233

1st maturity

ADTV(*)

RPC(**)

270,598

0.224

2 maturity
3rd maturity

80,611
80,459

0.555
0.802

2 maturity
3rd maturity

123,265
88,302

0.432
0.529

2nd maturity
3rd maturity

360,283
175,592

0.412
0.515

4th maturity
5th maturity

34,597
513,748

1.038
1.121

4th maturity
5th maturity

51,905
466,104

0.814
1.063

4th maturity
5th maturity

104,194
772,955

0.804
1.066

nd

80,073

2009
Realdenominated
interest rate
nd

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Total

789,488

_____________________________________________

1.140

Total

843,480

0.979

Total

1,683,623

0.889

( )

* ADTV - Average daily trading volume is expressed in number of contracts

**) RPC Average rate per contract is expressed in Brazilian real

The average daily trading volume for 2010 soared 99.6% year-on-year, whereas average RPC dropped 9.1% to R$0.889 from
R$0.979 one year ago, due primarily to greater concentration of trades in short-term contracts, for which we charge lower fee
rates (see the above table). In turn, ADTV for 2009 went up 7.0% year-on-year, whereas average rate per contract fell 14.2%,
to R$0.979 from R$1.141 in 2008.
As of December 2010, the most active investors in this type of contracts included financial institutions, institutional buyers and
foreign investors, with shares of 47.3%, 36.7% and 13.4% of the volume, respectively.
FX derivative contracts. These encompass futures contracts based on the Brazilian real to U.S. dollar exchange rate (the
most actively traded) and the Brazilian real exchange rates to Euro, to Australian dollar, to Canadian dollar, to Pound Sterling,
to Mexican Peso, in addition to options based on the Brazilian real to U.S. dollar exchange rate. The average rate per contract
in these cases is denominated in U.S. dollars, such that fluctuations in the currency rate affect our average rate per contract.
The most actively traded contracts in this group are US dollar futures, which may not be settled by physical delivery, rather
requiring the loss/gain (as determined on the basis of the Brazilian real to U.S. dollar exchange rate (PTAX) compiled and
disclosed daily by the Central Bank) to be cash-settled upon expiration. Investors typically trading in these contracts include
bank treasurers, fund managers and non-resident investors, in addition to trading and other companies engaging in import and
export activities. For the most part these trades are sought to hedge receivables and debt obligations denominated in U.S.
dollars, or in arbitrage opportunities that may appear in other currency markets or to leverage positions. Options on U.S. dollar
futures and options on spot U.S. dollar are very liquid contracts as well and are frequently used as part of the currency hedging
strategies designed by our customers.
Average daily volume traded in FX contracts in 2010 went up 20.9% year-on-year, whereas the related average RPC dropped
10.8% year on year to R$1.928 from R$2.161 in 2009. This drop in RPC is due mainly by two factors, one being the 11.7%
year over year appreciation of the Brazilian real against the U.S. dollar, since we charge U.S. dollar-denominated fee rates on
these transactions; two, being the greater share of the volume (8.1% in 2010) attributable to high frequency trading, regarding
which we charge fee rates that enjoy progressive discounts determined by intraday trading volume band.
Average daily trading volume for 2009 went down 16.4% year-on-year, whereas average RPC climbed 4.6% to R$2.161 from
R$2.065 in 2008. This high in RPC correlates mainly with the depreciation of the average exchange rate between the two
periods, which nonetheless was partially counterbalanced by increase in high frequency trading, which in December 2009
accounted for 4.4% of the yearly average volume traded in exchange rate contracts.
As of December 2010 the most active investors in these types of contracts were financial institutions, foreign investors and
institutional buyers, with shares of 45.3%, 26.4% and 22.5% of the overall average volume, respectively.
US dollar-denominated interest rate contracts. These encompass futures based on the local interest rate denominated in
U.S. dollars, or on Brazils Global Bonds or on U.S. Treasury Notes.
Futures based on the U.S. dollar-denominated local interest rate consist of futures on the spread between the local interbank
deposit rate and the exchange rate fluctuation, i.e., a U.S. dollar-denominated local yield curve futures (locally also called
ID versus USD spread futures contract, or futuro de cupom cambial), which may be traded either as a standardized futures
contract or pursuant to a structured transaction under a forward rate agreement. A FRA strategy permits the customer to meet
its own operating requirements by combining in a single transaction the buying and selling of a short position in the underlying
yield curve with the buying and selling of a long position in the same underlying. The average RPC for these futures contracts
varies based expiration date and the actual Brazilian real to U.S. dollar exchange rate.
Average daily trading volume for 2010 climbed 14.6% and the average RPC declined 15.8%, to R$1.142 from R$1.357 one year
ago, whereas the average daily trading volume for 2009 had fallen 17.0% from the prior year and the average RPC had climbed
5.8% to R$1.357 from R$1.283 one year earlier.
As of December 2010 the most active investors in these contracts were financial institutions, institutional buyers and foreign
investors, with shares of 62.9%, 24.4% and 12.0% of the overall volume, respectively.
Index-based derivatives contracts. These encompass futures contracts based on the Bovespa Index, or Ibovespa, and the
IBrX-50, or Brazil 50 Index, in addition to options on Bovespa index futures.
Bovespa index futures is the third most liquid derivative contract traded within BM&F segment and an efficient, cheap and
highly liquid alternative for investors seeking to hedge long positions in listed stocks, in particular in bear market periods. It is
also an attractive investment alternative for investors seeking to bet on a stock market bullish trend.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In the case of index-based derivatives we charge trading fees at a fixed rate, instead of a rate based on the index points. The
average rate per contract will vary in correlation to day trading volumes and the order flow from high frequency traders, as
these enjoy progressive discounts based on intraday volume traded.
Average daily volume traded in index-based derivatives in 2010 climbed 11.7% year on year, whereas average RPC gave back
3.4%, down to R$1.564 from R$1.620 in 2009, primarily due to a rise in high frequency trading volume, which in December
2010 accounted for 20.7% of the overall volume trade in index-based futures contracts. High frequency traders make use of
statistics and mathematical models to enter large orders designed to capitalize on minute-by-minute changes in the market.
Under our pricing policy, high frequency traders holding HFT registration accounts with us enjoy progressive discounts granted
per intraday traded volume bands. In the year to December 2009, trading in index-based derivatives accounted for 23.9% of
the overall volume traded for the segment.
As of December 2010 the most active investors in these derivatives were foreign investors, institutional buyers and financial
institutions, with shares of 35.4%, 29.4% and 17.3% of the overall volume, respectively.
In August 2009, the Commodity Futures Trading Commission, or CFTC, granted approval for us to offer and sell in the United
States full-sized and mini-sized futures contracts and options based on the Bovespa Index (or Ibovespa).
Commodity derivatives. Our offerings of commodity derivatives include futures contracts based on Arabica coffee, Conillon
coffee, livestock, feeder cattle, soybean, denatured fuel ethanol, corn, crystal sugar, cotton and gold, in addition to options on
these futures.
The average rate per commodity derivative contract (RPC) varies in correlation to the contract combination making up the
volume traded in any particular period, given that for some of them we charge fees at a rate set in Brazilian reais while in other
cases the fee rates are denominated in U.S. dollars.
Average daily volume traded in commodity derivatives in 2010 went up 26.0% year over year, while average RPC dropped
6.1% to R$2.168 from R$2.307 in 2009, due primarily to appreciation of the Brazilian real against the U.S. dollar, as the fee
rates we charge for a number of these derivatives are denominated in that currency. For comparison, the ADTV for 2009 fell
31.4% from the earlier year and average RPC dropped to R$2.307 from R$3.587 in 2008, mainly on account of changes in our
pricing policy.
As of December 2010 the most active investors in these derivatives were retail investors, corporate investors and financial
institutions, with shares of 50.9%, 27.9% and 12.8% of the volume, respectively.
Highlights in terms of volumes traded in commodity derivatives in 2010 are livestock futures and options on futures with
average 5.5 thousand daily contracts, as compared to 3.6 thousand one year ago, a 50.3% year on year climb, and cash-settled
corn futures and options on futures, with record high daily average of 2.0 thousand contracts, a 72.8% rise year over year.
In addition, cash-settled denatured fuel ethanol futures and options on futures s were authorized for trading in May 2010, and
cash-settled soybean futures and options on futures started trading in January 2011.
Mini-sized contracts. Mini-sized contracts are smaller-sized versions of the equivalent full-sized derivative contracts. Most
our mini-sized contract offerings consist of derivatives based on stock indices (20% of the full-sized contract) and forex futures
(10% of the full-sized contract). Changes in average RPC per type of mini-sized contract correlate with the changes in RPC for
the equivalent full-sized derivative contract.
Average daily volume traded in mini-sized contracts in 2010 went up 43.6% year-on-year, while the average RPC fell 27.0% to
R$0.128 from R$0.176 one year ago, in line with the drop in average RPC for the equivalent full-sized contracts, most consisting
of stock index and exchange rate based derivative contracts. This fall in average RPC was further influenced by the larger
year-on share of high frequency volumes traded in mini-sized contracts (54.7% for 2010), as high frequency traders enjoy
progressive fee discounts by band of intraday volume traded. For comparison, average daily trading volume in 2009 went up
30.0% year-on-year, while the average RPC climbed to R$0.176 from R$0.162 in the earlier year.
As of December 2010 the most active investors in these derivatives were foreign investors, retail investors and institutional
buyers, with shares of 38.8%, 32.9% and 20.7% of the overall volume, respectively.
OTC derivatives. OTC derivatives include interest rate swaps (for both fixed and floating interest rates), inflation index
swaps, forex and currency swaps (for U.S. dollar, Euro and Yen), equity swaps (the equity leg may include stock indexes, such
as Ibovespa or IBrX-50 or a basket of selected stocks), and gold, in addition to flexible barrier options on the U.S. dollar rate, or
the Bovespa index, or the local interest rate, with the customer setting expiration date, size, strike price, exercise style, in
addition to trigger and knock-in or knock-out barrier).
Average daily volume traded in these OTC derivatives in 2010 climbed 38.7% year-on-year and the average RPC dropped slight
2.7% to R$1.610 from R$1.655 one year ago. For comparison, the 2009 average daily trading volume had fallen 25.5% yearon-year, while average RPC had dropped 29.7% from the earlier year, to R$1.655 from R$2.355.
As of December 2010 the most active investors in these derivatives were financial institutions, institutional buyers and corporate
investors, with shares of 75.1%, 20.7% and 3.0% of the overall volume, respectively.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

DMA (Direct Market Access)

We continue to implement our plans towards enhancing the electronification of trading processes, in particular by broadening
direct market access (DMA) alternatives. The volume of trades executed via DMA has been increasing consistently as new
access models are launched. In 2010, trading via any of our DMA models has increased to 16.2% of the overall volume, as
compared to 9.7% in 2009. While implemented relatively recently, DMA provided pursuant to co-location arrangements is
regarded as highly efficient, a window into the evolution and technology changes which can be expected for the derivatives
markets, and was the best performing model in terms of volume growth, having accounted for 3.1% of the overall volume for
the fourth quarter of 4Q10, as compared to 0.4% for the same quarter one year ago.
The better example of this transformation is high frequency trading. High frequency dealings on our markets began in 2009, a
year in which the HFT order flow accounted for 2.2% of the overall trading volume, while in 2010 it accounted for 4.8% of the
total. The peak HFT volume occurred in the second quarter of 2010, particularly in May 2010, when volatility in forex contracts
surged, an environment in which HFT strategies typically thrive. The HFT volume in May 2010 accounted for 18.3% of the
volume traded in forex contracts and 8.9% of the overall volume traded on derivatives markets.
BM&F segment HFT average daily volumes (buy + sell)
(in thousands of contracts)

6.0%
4.8%

93

13
88

3.8%
50

4.8%

41

44

21
17
29

94

2009

Equities

4Q09

1Q10

Mini contracts

2Q10

Interest Rates

42
93

43

38

74

77

3Q10

4Q10

155

69

50

2010

FX

90

77

53

43

2.2%

4.8%
4.4%

% in Overall Volume

While forex contracts, stock index futures and mini-sized forex and stock index futures contracts remain the most actively
traded derivatives, there are signs high frequency traders may have been looking for opportunities provided by other contracts,
in particular Brazilian-interest rate contracts and commodities derivatives. While high frequency traders still account for a
relatively small share of total volume traded in contracts within this contract group, the fourth quarter trading volume implies
positive suggestion that the HFT flows could be further drawn to these contracts.
BM&F segment share of the HFT volume by contract group
70,0%

60,0%

54.7%

50,0%

40,0%
30,0%
20,0%

20.7%

10,0%

8.1%
1.5%
1.3%

0,0%

Mini contracts

Equities

FX

Interest Rates

Commodities

Forex market
At our FX Clearinghouse we transact with customers and settle exchange rate transactions carried out on the spot interbank
market. These contracts, which we call spot U.S. dollar contracts ( dlar pronto), are traded for physical delivery on T+0, T+1
or T+2.
Our trading fees for spot U.S. dollar contracts are calculated daily and allocated on a daily basis by applying different fee rates
to value-traded bands based on the gross amount of transactions registered and settled in our systems. We currently adopt
five different value-traded bands to determine our fees. For any given customer, the higher the amounts traded, the lower the
fees we charge. Our fees are payable to us in Brazilian currency.
In addition, our FX Clearinghouse provides transaction registration, clearing and settlement services, as well as risk
management services for trades carried out in the interbank spot U.S. dollar market. In providing these services, we act as

47

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

central counterparty to ensure clearing and settlement on a payment-versus-payment basis, or PVP, which eliminates the risk of
default.
The financial value traded and settled in this market in 2010 hit R$1,313 billion, a 4.1% year over year increase from R$1,262
billion in 2009, as compared with 1.8% year-on decline from 2008, when trading value reached R$1,268 billion. These
movements are largely explained by appreciation of the Brazilian real exchange rate against other currencies, mainly U.S.
dollars, over 2010 and, conversely, depreciation of the Brazilian currency over 2009.

Bonds and Debt Securities

Our Clearinghouse for Bonds and Debt Securities is responsible for the registration, clearing, settlement and risk management
of transactions involving Brazilian government bonds and debt securities, including buy and sell transactions for prompt or
forward settlement, repo and lending transactions, which we clear and settle on a delivery-versus-payment basis, or DVP,
thereby averting the risk of default.
We charge registration fees to register trades and transaction fees for the clearing and settlement of transactions in debt
securities. In addition, given that transactions registered in our clearinghouse have a relatively short settlement cycle, we do
not charge permanence fee.
Transactions in government bonds and other debt securities are eligible for registration, clearing and settlement at our Debt
Securities Clearinghouse include the following:
Cash or forward buy and sell transactions in Brazilian government bonds and debt securities (which may earn fixed or
floating interest rates, or track an inflation index or the Brazilian real to U.S. dollar exchange rate); and
Repurchase (repo) or securities lending transactions in Brazilian government bonds and debt securities.
The average volume traded in government bonds and debt securities in 2010 dropped 1.6% year over year, whereas in 2009
trading volume had declined 76.9% from 2008 due to sustained downward trends in the market for government bonds and
other debt securities in the relevant periods.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

The Brazilian Commodities Exchange operates under contract with the National Supplies Corporation ( Companhia Nacional
de Abastecimento ), or CONAB, in implementing the Brazilian governments Policy on Assured Minimum Prices ( Poltica de
Garantia de Preos Mnimos ). In operating electronic systems for the provision of public and private electronic auctions for
the trading of commodities and agribusiness securities, the Brazilian Commodities Exchange centralizes the trading of
agricultural commodities and OTC agribusiness securities, such as rural product notes, or CPRs, of farming certificates of
deposit and related farming warrants, or CDAs and WAs, agribusiness credit bills, or LCAs, agribusiness credit certificates, or
CDCAs, and agribusiness receivables certificates, or CRAs.
The Brazilian Commodities Exchange stands out as a transaction venue for the agribusiness. In the year to December 2010 a
total of 7.9 million tons of agricultural commodities worth R$778.6 million were sold in CONAB auctions operated by the
Brazilian Commodities Exchange. Moreover, the highlight among transactions in OTC-traded agricultural commodities were
cotton contracts whose financial value reached R$6.9 billion, whereas trading in OTC agribusiness securities registered financial
value of R$3.4 billion. Highlights for 2009 included (i) 6.7 million tons of agricultural commodities sold in CONAB auctions
totaling R$1.84 billion; (ii) 2.3 million tons of agricultural commodities sold in CONAB options auctions; (iii) OTC-traded cotton
contracts in aggregate financial value of R$3.5 billion, and; (iv) trades in OTC agribusiness securities with financial value of
approximately R$4.4 billion. In 2008, 4.1 million tons of agricultural commodities worth R$1.038 billion were sold in trades at
CONAB auctions. Coffee auctions administered by the Brazilian Ministry of Agriculture, Livestock Breeding and Supply totaled
R$33 million. In addition, transactions for physical delivery of agricultural commodities and trades in agribusiness securities
totaled R$2.77 billion.

BM&F Settlement Bank

The BM&F Settlement Bank offers our clearing houses and participants with access to our clearing houses facilities that simplify
the clearing, settlement and custody of securities and other financial assets. Service offerings include settlement of transactions
registered and accepted at our clearing houses, the operation of a depositary facility and the central registration facility;
clearing and settlement of bonds, securities, derivatives and foreign exchange transactions; local representation and custody
services for non-resident investors; and support to investment clubs.
The BM&F Settlement Bank provides important risk mitigation and operational support for our clearing houses and for market
participants. It performs activities in line with the strategies and guidelines of the parent and in accordance with its corporate
purposes.

Bovespa segment
Trading. We offer market participants several tools and mechanisms for the trading of variable and fixed-income securities
and equity-based derivatives. We operate the only domestic exchange and organized OTC markets for the trading of equities

48

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

and equity-based securities, including stocks, share receipts, depository receipts representing shares of Brazilian and foreign
issuers (Brazilian Depository Receipts, or BDRs), equity-based derivatives, subscription warrants, stock warrants, units of
closed-end investment funds, units representing cinematic investment certificates (certificados de investimento audiovisual),
and for the trading of corporate debt securities and other securities authorized by the CVM, all of which are traded cleared and
settled in our integrated electronic systems, resulting in a fully automated process covering the entire chain of trading.

Clearing and settlement. We are the only CCP for the domestic equities and corporate debt securities markets, provider of

risk management services and other protection mechanisms we adopt to handle payment default or failed delivery. We act as
central counterparty for all clearing agents, absorbing the risks of the counterparties in-between a trade transaction and its
clearing and settlement, carrying out multilateral activities to ensure the financial settlement and clearing of securities. In
addition, we provide gross settlement services without acting as CCP, so participants may set date and time for settlement. We
also provide clearing and settlement services for securities offerings that take place on the non-organized OTC market.
The average financial value cleared and settled by us relative to transactions carried out on exchange and OTC markets within
the Bovespa segment varies in close correlation to the average value traded on these markets.
The primary revenue components related to activities we perform within the Bovespa segment are trading fees and fees for
clearing and settlement transactions, which we charge at rates that in either case vary depending on type of investor and type
of transaction. The table below sets forth data on our fee rates, as extracted from our fee schedule.
Equities markets
Cash market
Retail and other investors
Investment funds; investment clubs
Day traders (regardless of investor type)
Options exercise of written call positions
Options on indices exercise of spread options
Options market
Retail and other investors
Investment funds; investment clubs
Day-traders (regardless of investor type)
Options on indices market
Retail and other investors
Investment funds; investment clubs
Day-traders (regardless of investor type)
Forward market
Retail and other investors
Investment funds; investment clubs

Trading

Clearing & settlement

Transaction registration

TOTAL

0.0285%
0.019%
0.019%
0.019%
0.0275%

0.006%
0.006%
0.006%
0.006%
0.006%

0.058%
0.040%
0.025%

0.006%
0.006%
0.006%

0.070%
0.049%
0.014%

0.134%
0.095%
0.045%

0.033%
0.024%
0.025%

0.006%
0.006%
0.006%

0.045%
0.030%
0.014%

0.084%
0.060%
0.045%

0.031%
0.031%

0.006%
0.006%

0.028%
0.028%

0.065%
0.065%

0.0345%
0.025%
0.025%
0.025%
0.0335%

Our equities markets, meaning the markets for stocks, equity-based securities and derivatives that comprise the Bovespa
segment, include the cash market, a forward market, options market, single-stock futures market and fixed-income market. Set
forth below are brief descriptions of each of these markets.

Cash market. This is the market where buy and sell orders are executed for immediate delivery within a three-businessday settlement cycle. Stocks traded on this market are bought and sold either as round lots (and their multiples) or as
odd lots (less than the standard trading unit).

Forward market. This is the market where buy and sell orders are executed for clearing and settlement as of a date set

by both buyer and seller based on any of a number of dates predefined by us. Based on the agreed conditions for
clearing and settlement, a forward transaction may relate to: (i) ordinary forward contracts, an agreement to buy or sell
an asset at an agreed price with clearing and settlement taking place at a specified future time; (ii) flexible forwards,
agreements to buy or sell where the underlying stocks deliverable at expiration may be replaced with the equivalent; or
(iii) index forwards, in which case the agreed price is adjusted by an agreed index or rate on a daily basis in the period
between the execution date and the settlement date (while other indices or rates may be used, indexation is frequently
agreed on the basis of the foreign exchange rate or the IGPM, an inflation index).

Options market. This is the market for the trading of option contracts where a seller gives the option buyer the right,

but not the obligation, to buy (call) or to sell (put) a specified stock, equity-based security or stock index (the
underlying) on or before the option expiration date, at an agreed price (strike price), pursuant to option series that are
previously authorized for trading by us. Depending on whether or not they are exercisable at any time before the option
expiry date, or only upon expiration, these put or call options are said to be American-style or European-style options
(respectively). The following types of options may be traded on this market: (i) stock options, which are rights to buy or
sell stock lots exercisable at specified exercise dates at a predefined strike price; and (ii) index options, which are rights
to buy or sell the index on or before the expiration date. Exercising a stock option entails making physical delivery of
the underlying stocks, whereas exercising an index option implies paying or receiving upon exercise or at expiration an
amount of cash equal to the difference between the strike price and the closing price for the underlying index. In any

49

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

event the strike price under a stock option or a stock index option may be indexed to either the foreign exchange rate or
the IGPM or any other index.

Fixed-Income market. We provide two platforms for the trading of corporate debt securities, namely, Bovespa Fix, a
trading platform on our stock exchange, and Soma Fix, a trading platform on our organized OTC market. Trading,

clearing and settlement transactions in our fixed-income markets, in addition to custodial services, are carried out
through our integrated fully-electronic systems. Assets traded on these platforms include debentures (bonds),
commercial papers and securities originating in the securitization market, as well as real estate receivables certificates,
or CRIs, units of receivables investment funds, or FIDCs, and units of receivables funds of funds, or FIC-FIDCs.
The average daily value traded in 2010 on markets within the Bovespa segment hit the historical record high of R$5.6 billion, a
22.7% climb from 2009. The year-end exchange market capitalization of R$2.6 trillion was up 10.1% year-over-year, with the
year-on average capitalization having soared 27.8%.
In contrast, at the end of 2009 the average daily value traded had fallen 4.3% year-on-year, to R$5.3 billion from R$5.5 billion
in 2008, whereas the average exchange market capitalization had declined by 10.3%.
Exchange market capitalization

2010

2009
(in R$ billions)

2008

2010 vs. 2009

2009 vs. 2008

(%)

(%)

Year-end exchange market capitalization

2.569,41

2,334.72

1,375.27

10.1%

69.8%

Average exchange market capitalization

2.334,86

1,826.91

2,037.27

27.8%

-10.3%

The average daily number of trades, which in 2008 had climbed 60.1% from the prior year, picked up 35.7% year-on-year in
2009. As a result, we saw a reduction in the average ticket which is currently down to R$15.9 thousand from R$32.0 thousand
in 2007 primarily due to the increase in number of retail investors, in particular those that trade through our HomeBroker
platform, as the flow from orders entered through this platform accounted for about 18.0% of the overall volume for the
segment in 2009.
Equities Markets
2010

Average daily trading value

Cash market
Forward market
Options market
Total

2009
(in R$ millions)

2008

4,943.7
96.5
245.0
5,285.2

5,162.3
177.8
180.2
5,520.3

6.031,6
147,4
307,9
6.488,6

2010 vs.2009
(%)

2009 vs.2008
(%)

22.0%
52.7%
25.7%
22.8%

-4.2%
-45.7%
36.0%
-4.3%

Financial value traded by investor category. The order flow from institutional buyers accounted for 33.3% of the average value
of executed trades carried out on the equities markets. The chart below sets forth data on shares of the 2010 average daily
trading value by investor category.
Bovespa segment Share of average trading volume by investor category
10%

2%

10%

2%

8%

3%

2%

7%

8%

36%

35%

35%

34%

30%

27%

30%

27%

26%

33%

25%

23%

27%

31%

26%

2006

2007

RetailFsicas Institutional
buyers
Pes.
Institucional

2008

2009

Foreign
Investors
Estrangeiro

Financial
Institutions
Inst. Financ.

2%

2010
Corporate
Empresas

Other
Outros

As for market concentration, the table below sets forth data indicating the concentration of volumes traded in the 10, 50 and
100 most liquid stocks listed on our exchange between 2008 and 2010. The share of overall value traded attributable to the 10
most liquid stocks declined to 43.42% over this two-year period (from 54.97% in 2008), primarily due to a higher number of
listings and heightened liquidity of stocks of issuers conducting follow-on offerings over the same period.
Stock Market Concentration
Concentration of volumes traded

2010 (%)

In the largest, most liquid stock ..................................................................................

In the top 10 largest, most liquid stocks ......................................................................
In the top 50 largest, most liquid stocks ......................................................................

50

10.5
43.42
81.08

2009 (%)

9.80
44.84
82.92

2008 (%)

19.92
54.97
87.35

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In the top 100 largest, most liquid stocks ....................................................................

95.18

95.31

96.75

In addition, the tables below set forth data on market concentration by issuer industry, including financial intermediaries, which
currently concentrate 21.1% of the overall exchange capitalization and 14.0% of the average daily trading value; oil & gas, and
biofuels, which concentrate 17.9% of the exchange capitalization and 27.1% of the value traded; mining, with 11.3% of the
exchange cap and 22.2% of value traded, which figures are attributable mainly to top stocks of issuers as ItauUnibanco,
Bradesco and Banco do Brasil (banks; financial intermediaries), Petrobras (oil & gas, and biofuels) and Vale (mining).
Market capitalization by industry
Industry

2010

2009

(in R$ billions)

Financial intermediaries
Oil & gas, biofuels
Mining
Electric power
Beverages
Telecommunications
Metallurgy, iron and steel
Processed food
Transportation
Financial services
Other
TOTAL

542.48
458.97
290.89
189.08
144.42
128.77
111.13
72.80
72.57
66.27
492.02

21.1%
17.9%
11.3%
7.4%
5.6%
5.0%
4.3%
2.8%
2.8%
2.6%
19.1%

2,569.41

100.0%

2008

(in R$ billions)

520.91
403.23
254.01
186.00
98.31
133.78
129.70
83.16
58.50
70.36
396.75
2,334.72

(in R$ billions)

22.3
17.3
10.9
8.0
4.2
5.7
5.6
3.6
2.5
3.0
17.0

298.93
241.13
141.92
137.52
56.60
115.87
72.46
49.35
24.67
30.43
206.40

21.7
17.5
10.3
10.0
4.1
8.4
5.3
3.6
1.8
2.2
15.0

100.0

1,375.27

100.0

Financial value traded by industry

Industry

2010

2009

(in R$ billions)

Oil & gas, biofuels

Mining
Financial intermediaries
Metallurgy, iron and steel
Financial services
Electric power
Processed food
Transportation
Telecommunications
Beverages
Other
TOTAL

288.5
236.3
149.6
111.4
70.1
66.6
41.0
40.6
34.3
16.4
303.0

21.2%
17.4%
11.0%
8.2%
5.2%
4.9%
3.0%
3.0%
2.5%
1.2%
22.3%

1.357.8

100.0%

(in R$ billions)

223.7
188.6
129.9
108.3
78.0
66.5
32.5
24.9
45.0
12.0
199.8
1,109.2

2008
%

20.2%
17.0%
11.7%
9.8%
7.0%
6.0%
2.9%
2.2%
4.1%
1.1%
18,.%
100.0%

(in R$ billions)

273.6
200.7
133.3
124.7
55.6
82.3
30.8
19.7
52.4
15.0
185.4
1,173.7

23.3%
17.1%
11.4%
10.6%
4.7%
7.0%
2.6%
1.7%
4.5%
1.3%
15.8%
100,0%

Other services
Securities lending
Our equities clearinghouse operates a securities lending facility known as BTC, which permits investors to lend or borrow
securities traded on our exchange against collateral posted by borrowers that engage in short-selling or arbitrage transactions,
thereby adding liquidity to these securities.
We act as central counterparties to ensure the settlement of all securities lending transactions. In doing so, we adopt strict
lending and risk management standards to ensure this market operates in an orderly fashion. Increase in the financial value of
securities lending transactions has played a significant role in increasing stock market liquidity in the last few years. To a large
extent, this increase in liquidity is a result of securities borrowed for sale in arbitrage transactions, followed by purchases of
other securities with the proceeds from the arbitrage sale. When a lending transaction matures, reverse arbitrage takes place.
As the facilitating agent in the lending process, our securities lending facility contributes to improving the efficiency of the
clearing and settlement process related to these transactions, as in the event of failed delivery the BTC will promptly intervene
and compulsorily procure so-called automatic loans to ensure the transaction is properly cleared and settled.
Borrowers are charged fees on each lending transaction registered in our system, which fees are set at rate of 0.25% per
annum on the financial value of open interest positions, calculated on a pro rata basis. The financial value of an open interest
position is determined based on either the average market price for the borrowed securities as of the trading session
immediately preceding the lending transaction date (i.e., on its registration), or the average market price for the underlying as
of the trading session immediately preceding the maturity date, as defined by lender and borrower upon registering the
transaction (such date being designated the fee base date). Additionally, we charge minimum R$10.00 fee per registered
transaction. However, we do not charge minimum fees if we are required to procure automatic loans.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

With the aim of pushing volume growth in the securities lending market, in May 2009 our securities lending facility adopted a
0.05% rebate payable to local securities lenders.
The volume of securities lending transactions taking place in our securities lending facility in 2010 hit record high R$465.6 billion
and 971 thousand lending transactions, surging 80% year over year. The 2010 average number of open interest positions
soared 61.5% from the year-ago average, whereas the 4Q10 average boomed 43.0% from the prior year fourth quarter.
of 2010 of financial value transacted one year ago did bounce back from the financial crisis.
In contrast, the financial value of open interest positions by end-2009 had soared 127.6% year-on-year, to R$15.8 billion from
R$6.9 billion in 2008, after having plunged 71% year-on-year from the average for 2007. However, due to cooler demand in
the first half of 2009, the average financial value of open interest positions had dropped 24.8% from the previous year average.
The table below sets forth data on evolution of average financial value of open interest positions and average monthly number
of transactions for the periods presented.
Evolution of average financial value of open interest positions and number of lending transactions
25,0

100,0

Open interest

20,0

80,0

59.3
15,0
10,0
5,0

22.6

47.4

52.3

18.5

16.9

60,0

20.5

40,0

12.7

20,0

6.6

Number of trades

81.0

2006

2007

2008

Average Open Interest (BRL billions)

2009

2010

Average Monthly Number of Trades (thousands)

Securities listings
We maintain different listing segments on our exchange and the organized OTC market. Listing activities performed by us
correlate with registering, i.e., placing on a list (or board) securities issued by a particular company (the issuer) to trade on our
exchange or, as the case may be, the organized OTC market.
Our revenues from the activity correlate with fees we charge from issuers on a annual basis at a rate computed over the
amount of each issuers capital stock, the minimum fees currently amounting to R$35,000.00 and the maximum capped at
R$850,000.00. In addition, from investment funds, incentivized companies and other companies whose units or shares are
listed on our organized OTC market we charge fixed annual listing fees of R$7,700.00.
Effective from early 2009, the new price schedule for listing and annual fees contemplated a transition period spanning two
years (2009 and 2010) during which we granted discounts on our revised fee rates.
At the end of the year to December 2010 we registered 471 listings on our stock exchange, versus 434 and 439 in each of the
prior years, respectively. Listings on the organized OTC market totaled 70 (versus 77 in 2009 and 89 in 2008).
Total listings

Stock market listings (1)

Organized OTC market listings
Funds; other
Total

2010

2009

2008

471
70
143
684

434
77
131
642

439
89
149
677

(1)

This number of listings includes securitization firms, bond issuers and issuers of real estate receivables certificates whose shares are not listed to trade on a
stock exchange and, thus, are not taken into account in our calculation of exchange market capitalization.

Equity offering market

A 2010 highlight, the equity offering market rebounded to hit record high proceeds of R$74.4 billion from IPOs, follow-on and
seasoned offerings, totaling R$74.4 billion, above the R$70.1 billion famously grossed in 2007. If we were to include the oil
reserves assignment the Brazilian government and Petrobras have agreed in connection with the seasoned offering conducted
by Brazils oil and gas giant Petrobras, the overall proceeds from offerings would rise to R$149.2 billion. A total of 22 offerings
were completed over 2010, 11 of them IPOs, the remainder consisting of follow-on and seasoned offerings. This compares with 24
offerings in 2009, six being IPOs and the remainder 18 being follow-on or seasoned offerings which in the aggregate raised gross

52

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

proceeds of R$46.0 billion, versus 12 offerings (four IPOs, 8 follow-on offerings) and gross proceeds of R$34.3 billion in 2008.
Bovespa segment Equity offerings
(in R$ billions)

74.4

70.1

14.5
46.0

8.8

4.3
4.5

2004

63.2

34.3

30.4

22.2

55.6

13.9
8.5
5.4

15.1

2005

2006

26.8
23.8

15.4

7.5
2007

IPOs

2008

2009

11.2
2010

Follow on

Listing segments
Issuers listing securities to trade on our stock exchange may elect to have them trade on any of four segments: the Novo
Mercado, Corporate Governance Standards Level 1 or Level 2 (Nvel 1 or Nvel 2 ) or the traditional market. The Novo Mercado,
Nvel 2 and Nvel 1 segments are special listing segments that require companies to voluntarily adopt additional corporate
governance practices not prescribed by law or applicable regulations. These requirements typically focus on (i) achieving more
transparent corporate management practices through heightened disclosure and reporting standards, and (ii) better balancing
the rights of shareholders to ensure both controlling and minority shareholders are extended fair treatment.
Adherence to any of these special listing segments is voluntary and takes place by means of execution of an agreement
between the issuer, its controlling shareholders and management team (including members of the board of directors, fiscal
council members and executive officers), and our company. Additionally, an issuer must amend the bylaws for compliance
with the set of requirements particular to each segment.
As of December 31, 2010, listings on our special corporate governance segments included securities of 167 issuers, meaning
112 Novo Mercado listings, 18 Level 2 listings and 37 Level 1 listings. In addition, as of that date there were 295 listings on our
traditional market.
In addition, we have established the Bovespa Mais, a special trading segment for the organized OTC market mirrored on the
stock exchanges Novo Mercado segment, which also adopts heightened corporate governance standards. The Bovespa Mais
segment was established with the aim of enhancing the role of the capital markets as a source of financing for a wider universe
of domestic companies, and a natural path for a move onto the Novo Mercado listing segment. Bovespa Mais is a segment
designed for companies that wish to adopt a more measured approach towards accessing the capital markets, such as issuers
that wish to launch lower volume equity offerings than would be typical in the Novo Mercado or other segment, or issuers
seeking to conduct offerings designed for a limited number of investors or even those that would only conduct an offering at a
later date after listing the shares.
Listings

At December 31, 2010

At December 31, 2009

At December 31, 2008

167
112
18
37
9
295
471
1

159
105
19
35
10
265
434
1

160
99
18
43
9
270
439
1

Stock exchange special listing segments

Novo Mercado
Corporate Governance Standards Level 2 (Nvel 2 )
Corporate Governance Standards Level 1 ( Nvel 1 )
Foreign issuers
Traditional stock market
Total exchange listings
BOVESPA Mais (organized OTC market)

The specific requirements to join each of our special listing segments have been all included in their respective listing
regulations and generally aim at enhancing transparency in corporate management, promoting widespread share ownership,
and better balancing the rights of shareholders.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Central Securities Depository (CSD); Custody and back-office services

We operate the only central securities depository, or CSD, existing in Brazil. As such we provide depository and safe custody
services to customers in our equities and fixed-income securities markets. We also provide fungible custody services pursuant
to which we hold fiduciary title to securities under custody. For assurance of the integrity of these securities we adopt a
process for daily reconciliation with the underlying assets, and keep the securities in book-entry form, as identified by an ISIN
code (International Securities Identification Number) under a segregated account structure that identifies the ultimate beneficial
owner.
These service offerings are provided to issuers and investors in equities and in fixed-income securities alike, and include custody
accounts identified by investor, provision of account and position statements by mail or online through the Internet; incident
treatment, money transfer and payment receipt, recording of conversion, exchange and other transactions in the securities, and
account operations processed in real time. In addition, we communicate with issuers and fiduciary agents to facility interaction
with customer investors for more streamline processes.
The number of active investors in the Bovespa segment went up 11.2% year-on-year, to a universe comprising 640.2 thousand
investors at the end of 2010 from 575.7 thousand one year ago. Retail investors accounted for about 95.4% of this total, or a
universe of 610.9 thousand investors. In the three year period between 2008 and 2010, the number of active investors grew
on average 3.1% by year, reflecting the sound performance of the stock market in recent years and our concentrated efforts in
making the stock market a popular investment alternative.
CSD financial value of assets held in custody and number of custody accounts
2.400,0

558.6

575.7

640.2

700,0

600,0

477.9

1.800,0

500,0

400,0
1.200,0

233.7

300,0

1,123.3

600,0

729.8

650.4

872.6

1,239.8

200,0

100,0

2006

2007
2008
Value under custody (BRL billions)

2009
# of accounts (thousands)

2010

Revenues we derive from depository and custodial activities correlate with charges of a monthly fee of R$6.90 by custody
account registered at our depository facility and, since May 2009, also a percentage fee we charge for open interest positions in
excess of R$300 thousand.

Custody fees.
We charge custody fees as a rate of the financial value of assets held in custody, calculated on a pro rata basis. The tables
below set forth data on our current fee schedule, as revised and effective from June 2010.
Custody fee schedule (charged on assets under custody)

Variable and fixed income securities

Value range
From R$0 to R$1,000,000.00
Between R$1,000,000.01 and R$10,000,000.00
Between R$10,000,000.01 and R$100,000,000.00
Between R$100,000,000.01 and R$1,000,000,000.00
Between R$1,000,000,000.01 and R$10,000,000,000.00
In excess of R$10,000,000,000.01

Yearly rate
0.013000%
0.007200%
0.003200%
0.002500%
0.001500%
0.000500%

Participant access permits

Under applicable legislation and regulations, trading activities on regulated organized markets, including ours, are typicall y
performed through intermediation agents, in particular brokerage firms. In our structure, intermediation agents holding
permits for access to our exchange and organized OTC markets are called market participants. The requirements applicable
to intermediation agents applying for rights of access to our trading markets and clearing and settlement facilities have been
released by means of Circular Letter No. 078/2008, and include the following:

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

a.

Fee requirements Permit applications for access rights to either of BM&F or Bovespa markets. Applicants for
permits granting access rights to either market segment are required to commit to the following fee requirements:
Licensing fee: this is a one-time charged for the application processing and licensing procedure;
Trading rights access fee: this is a one-time fee charged upon issuance of a permit granting trading rights;
Settlement rights access fees: this is a one-time fee charged upon issuance of a permit granting clearing and
settlement rights; and,
Annual fees: this fee is intended to cover brokerage auditing costs. It is charged at 5% over the base access
fee (permits granting trading or settlement rights, as applicable). As of the date of this Form, we have yet to
start collecting this fee.

b.

Technology infrastructure Brokerage firms holding (or applying for) permits for access to our markets are required
to meet certain technology infrastructure and other IT requirements which are set forth in our Manual for Access to
BM&FBOVESPAs Technology Infrastructure, released through our Circular Letter 038/2010 (or OC-038/2010). In
addition, our service provision policy was disseminated through circular letters 031/2010 and 016/2011, which set
forth our rates, among other things, for the following:
MegaBolsa workstations (MegaBolsa being a trading system);
Gateways for transmission of orders;
Additional contingency SLC servers for use at trading desks and brokerage branches;
Contracting of order turnaround by minute, based on agreed volume bands, as selected pursuant to the order
flow (volume) and operating strategy of each particular brokerage firm.

As of December 31, 2010, 85 licensed brokerage firms had been granted permits for access to our equities markets, while 6 7
held permits to operate in our derivatives markets, 38 held permits for the forex market and 61 held permits to operate in
the bonds market. Brokerage firms are entitled to apply for permits to operate in more than one market or segment.
Registered brokerage firms
Equities markets
Derivatives markets
Forex market
Bonds market

2010

2009

2008

85
67
38
61

81
62
66
80

76
119
90
124

Market Data
We distribute to local and international authorized vendors across the world market data and information generated in our
equities and fixed-income markets, in our financial and commodity derivatives markets, and information on our stock indices, in
addition to news reports on market developments.
We currently authorize vendors and brokers to broadcast our information signals. Vendors are companies that purchase directly
from us the rights to broadcast or retransmit our information signals, thereby benefiting from our infrastructure and technical
support for the receipt of signals directly transmitted by us or indirectly by other intermediating vendors.
We also distribute market data and information to brokers and broker-dealers, who access our information signals in either of
two ways: (i) directly from us, in which case they benefit from our infrastructure and technical support for signal receipt, or (ii)
indirectly through a vendor or HomeBroker provider.
As of December 31, 2010, we had 365,1 thousand vendor customers for our market data, 346.4 thousand being local
customers and 18.7 thousand international customers, down 11.1% from one year ago, as set forth in the table below.
Customers

December 31, 2010

December 31, 2009

December 31, 2008

Brazil

346,421

391,386

363,183

Overseas
Total

18,694
365,115

19,130
410,516

18,319
381,502

Commodity classification services

We operate commodity classification and grading facilities through which we provide services for classification and grading of
cotton and coffee beans.
We provide cotton classification services from our facilities located in city of So Paulo and in the cities of Sorriso and
Rondonpolis, the latter two located in the state of Mato Grosso (the region is the largest cotton producer in Brazil). These
facilities have combined yearly capacity to classify 2.7 million samples, which corresponds to approximately 30% of domestic
cotton production. In 2010 the cotton classification volume increased by 24% from the prior year due mainly to growth of the
customer base.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Coffee beans are classified and graded with the ultimate aim of determining bean quality (best cup quality) and thereby
securing higher market prices. In order to ensure proper clearing and settlement of transactions carried out on our
commodities markets for physical delivery of Arabica Coffee, we require the coffee beans to have been classified and graded.
We provide classification and grading services from our facilities located in the cities of So Paulo (classification) and Santos
(grading). Additionally, to ensure accurate, high quality grading we have established a panel of experienced, well-recognized
grading experts.
For improved competitiveness, based on demand from international markets, we now require the coffee beans deliverable
under contracts we settle to have been graded at least type 4-25 4/5, which allows for maximum 36 defects and -25 point
rating. The minimum grade previously required was type 6 (86 defects, -100 point rating).
b.

Revenues derived by each relevant operating segment, including as a percentage of total net revenues.

For clearer presentation and better comparability of our consolidated financial information, in 2010 we reclassified certain line
items in the revenues group, with no impact on net income, shareholders equity or cash flows. However, because of the
integration and corporate restructuring processes that in 2008 combined the two former independent exchanges into
BM&FBOVESPA, which also had diverse charts of accounts, we have not prepared retrospective financial information, nor
incorporated these changes into our financial information for the year ended December 31, 2008, which thus allow for limited
comparability only.

Gross operating revenues

Transaction fees - BM&F segment markets
(trading, clearing, settlement)
Derivatives
Forex
Debt securities
Transaction fees - Bovespa segment markets
(trading, clearing, settlement)
Trading trading fees
Clearing and settlement transactions fees
Other
Other operating revenues
Securities lending fees
Listing fees
Depositary, custody and back-office fees
Participant access fees
Market data sales (vendors)
Commodity classification fees
Brazilian Commodities Exchange
BM&F Settlement Bank
Other

c.

Years ended December 31,

2010
2009
(in R$ thousands)
%
(in R$ thousands)
2,102,554
100,0%
1,672,894

Variation

10 vs. 09

100.0%

25.7%

722,065
701,545
20,427
93

34,3%
33,4%
1,0%
0,0%

534,189
513,185
20,849
155

31.9%
30,7%
1,2%
0,0%

35.2%
36.7%
-2.0%
-40.0%

1,049,300
737,074
254,904
57,322

49,9%
35,1%
12,1%
2,7%

837,326
605,244
207,914
24,168

50.1%
36,2%
12,4%
1,4%

25.3%
21.8%
22.6%
137.2%

331,189
49,443
44,392
88,263
48,234
67,629
3,898
5,669
8,043
15,618

15,8%
2,4%
2,1%
4,2%
2,3%
3,2%
0,2%
0,3%
0,4%
0,7%

301,379
32,989
39,549
72,167
46,051
64,650
4,304
7,146
8,290
26,233

18.0%
2,0%
2,4%
4,3%
2,8%
3,9%
0,3%
0,4%
0,5%
1,6%

49.9%
12.2%
22.3%
4.7%
4.6%
-9.4%
-20.7%
-3.0%
-40.5%

9.9%

Income (loss) ascertained by each relevant operating segment, including as a percentage of total net income.

We do not calculate income or loss for each operating segment.

7.3.

Products and services comprising each operating segment discussed under 7.2 above
a.

Production process characteristics

Organized markets
The regulated securities markets include the exchange market and the organized OTC market (organized markets). Features
typically found in these organized markets include:
Provision of electronic trading systems and environments for the registration of previously agreed transactions;
Trading system or environments that adopt specific price formation standards;
Permission to trade directly with no assistance from an intermediation agent;
Permission to delay disclosure of market data and information;
The order flow entered and executed in a markets electronic systems;
Type of investor for whom a market caters.
Brazilian law grants powers and authority for the Brazilian Securities Commission, or CVM, the Brazilian National Monetary
Council (CMN) and the Central Bank to regulate activities in the Brazilian financial and capital markets, each of them acting
within its own sphere of competence. As the operator of organized markets (meaning securities and derivatives exchanges, as

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

well as OTC market), our company is required to perform a dual role of market manager and regulatory entity licensed by the
CVM. For this purpose applicable regulations and the CVM recognize BM&FBOVESPA as a self-regulatory entity with powers and
authority to regulate activities in these markets and those of market participants.

Exchange markets
Exchange markets typically operate centralized and multilateral platforms for trading (entry, matching and execution of buy and
sell orders) in securities, with assistance from an intermediation agent, or having as counterparty a market maker which is
required to hit bids and take offers posted by other market participants for fulfillment of its market making role.
A particular trait of exchange markets is that securities and derivatives traded on these markets consist of standardized
securities and contracts, such that those that have similar characteristics constitute fungible things which are mutually
replaceable for thins of the same kind and volume.
We manage two exchange markets, one being the derivatives market, or BM&F segment, for trading in derivatives contracts,
spot U.S. dollar, and government debt securities, the other being the equities market, or Bovespa segment, for trading in
equities and private debt securities. In either segment we adopt a vertically integrated business model and our service
offerings include the entire trade life cycle (from order entry to matching to execution, to risk management, to clearing and
settlement activities, where we consistently act as CCP to ensure multilateral settlement). In addition, we provide
intermediation agents and investors with access to trading systems and provide depository, custodial and back-office services
(except derivatives, for which we provide registration services only).

Organized and non-organized OTC markets

An OTC market may operate in either of two ways:
centralized and multilateral platforms for trading (entry, matching and execution of buy and sell orders) in securities,
whether or not with assistance from an intermediation agent, or having as counterparty a market maker which is
required to hit bids and take offers posted by other market participants,
or, in the alternative,
through the registration of previously agreed transactions.
OTC derivatives are tailor-made, or standardized privately-negotiated agreements traded (and privately negotiated) directly
between two parties, without going through an exchange or other intermediary, the value is derived from the value of an
underlying asset which unlike certain exchange-traded equities and fixed-income securities, are typically not fungible. In
addition, trading sand price formation standards and practices differ from those that are adopted in a stock exchange market.
OTC derivatives transacted in the BM&F segment are non-standard registerable contracts, whereas OTC equities traded on the
Bovespa segment include lower liquidity shares of mid- to small-cap issuers or issuers that adopt a gradual access strategy, in
addition to private debt securities, units of funds and units of funds of funds and other securities.

Trading and post-trade

Evolution of the electronic trading platforms
For a great many years trading activities on stock exchanges and on futures exchanges were performed on the trading floor, in
open outcry environments where traders and stock brokers gathered around the pit would hand signal frantically to outdo the
competition in buying and selling equities, futures and other derivatives, with demand determining market prices. Such was the
case with trading activities performed on Bovespa and BM&F segments. In recent years however technology developed to a
point where the market was ready to forego the trading floor, which in both our segment markets was replaced with electronic
trading systems, platforms and environments where matching engines replaced hand signaling in matching orders for
execution.
This transformation deeply changed the pace of business, as technology developments permitted the
electronification of the entire trading cycle, providing the market with all sorts of communication resources and ever faster,
higher-capacity data feeds, trade-matching and quoting engines.
In the context of electronic trading, we believe having the ability to offer very low latency, high throughput capacity and
scalability to support market growth are crucial factors and key competitive strengths, which require us to make substantial
investments in technology. We invest heavily in developing our technology infrastructure and, in particular, our trading
platforms for BM&F segment (GTS system), for Bovespa segment (MegaBolsa system), the Sisbex system for the trading of
government bonds and securities, and the BovespaFix system, for the trading of private debt securities.

BM&F segment
The electronic trading system for derivatives first launched in 2000 as the GTS platform (acronym for Global Trading System).
This first version of the platform had been developed by then Bourse de Paris (currently NYSE Euronext). Early in 2008 that
system was replaced with a new proprietary system we developed and implemented internally, but still call GTS platform. After
the trading floor shut down in June 2009, all trading activity for the derivatives markets is processed through the GTS platform.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In addition, technology developments implemented in recent years and over the course of 2009 brought the round-trip time, or
RTT, down to 10 milliseconds at year-end from 70 milliseconds at end of year in 2007. Throughput capacity in turn supports
200.0 thousand daily trades since before 2009, for average daily demand at year-end comprising approximately 50.0 thousand
daily trades. RTT is the time required to send a signal in both directions over a particular communication link and is the soonest
that it is possible to receive acknowledgement of a message through a particular system. In the context of electronic trading
systems, RTT is the primary metric to determine a trading systems performance. Our investments in technology aim to place
our GTS system amongst the most advanced across the world. Throughput capacity in turn currently supports 400.0 thousand
daily trades, up from 55.0 thousand daily trades at the end of 2007.
BM&F segment
Round-trip time (in milliseconds)
Derivatives markets
Throughput (in thousands of daily trades)
Derivatives markets
Daily average
Peaks

2010
10-15
2009
400
66
152

2009
20
2009
200
39
76

2008
25
2008
200
29
49

2007
70
2007
55
23
42

Bovespa segment
The electronic trading system of Bovespa, then an independent exchange, first launched in 1990 as the CATS trading platform
(acronym for Computer Assisted Trading System). Later, in 1997, it was replaced with the MegaBolsa system, an advanced
system developed by then Bourse de Paris (currently NYSE Euronext). Since then, the MegaBolsa underwent different stages of
development to reach the current configuration as V900 version of the MegaBolsa system.
As with the GTS system, technology developments implemented in recent years and over the course of 2009, including the
upgraded version for the MegaBolsa system, brought the round-trip time, or RTT, down to 10 milliseconds at year-end from 450
milliseconds at end of year in 2007, whereas throughput capacity increased tenfold.
Bovespa segment
Round-trip time (in milliseconds)
Stock market
Throughput (in thousands of daily trades)
Stock markets
Daily average
Peaks

2010
10-15
2010
3,000
431
800

2009
20
2009
1,500
332
591

2008
300
2008
770
245
414

2007
450
2007
390
153
343

Common investments in technology

In 2010 we entered into a technology agreement with the CME Group whereby we will cooperate in the development and
implementation of a multi-asset class electronic trading platform with throughput capacity below one millisecond, which in time
will replace our existing trading platforms.
While we were quite successful in cutting latency down in both our GTS and MegaBolsa systems (round-trip time in each
system decreased by 80% and 97%, respectively), we are still planning to develop and implement a new and improved multiasset class electronic trading platform. Our investment plan contemplates, among other things, a system designed to operate
with on-peak 50% idle capacity.
Beyond offering lower latency and higher throughput capacity, improvements recently implemented also included investments
in direct access infrastructure and connectivity. For example, in July 2009 we launched the BM&FBOVESPA Communication
Network, or RCB, which was designed to supply demand associated with the expansion and increased sophistication of the
Brazilian capital markets and to supplement services previously offered through the Financial Community Communication
Network, or RCCF. The RCB is an open communication network for high speed connectivity between market participants and
the exchanges electronic trading systems, based on a high performing structure with heightened data transmission capacity
and greater flexibility, which gives participants the ability to make choices as to alternative telecommunications providers, data
transmission technologies, network capacity and velocity, and contingency resources.
Furthermore, we adopt the FIX protocol (Financial Information eXchange) in our messaging and trading systems. FIX protocol is
an open specification intended to streamline electronic communications in the financial securities industry, which supports
multiple formats and types of communications between market participants and the trading systems, including email, trade
allocation, order submissions, execution reporting. It is technology commonly used in our industry, making it easier for new
participants to access our markets.

DMA program development

In addition to reducing latency and increasing capacity, we implemented a number of alternative types of connection to our
systems thus ensuring we provide customers with efficient channels for direct market access, or DMA, to our trading systems,
while at the same time enhancing our market data distribution and transmission capacity. Moreover, developing efficient direct
market access through electronification of the entire flow, whereas offering streamlined order execution and friendly

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

environments for high frequency trading (high frequency traders make use of computer programs to enter orders with the
computer algorithm deciding on aspects of the order, such as timing, price, and quantity). Already high frequency trading
accounts for significant portions of the volumes traded in sophisticated international markets, but in Brazil high frequency flows
are still incipient, and account for a very small portion of consolidated volumes (in December 2010 high frequency volumes
accounted for 3.9% of the volumes traded in derivatives and 4.0% of the financial value traded in equities.).
The rationale behind the concept for our DMA program is to give investors the ability to access from his workstation our market
data feeds and the order book for a number of securities, and to enter buy and sell orders directly into our trading systems.
However, we should note that provision of these services will not dispense with the role of the intermediation agents, as any
investor will only be permitted to have access to DMA facilities through his brokers and under their authorization given in the
context of a fully established commercial relationship. In addition, a broker offers services that no access model could fulfill and
performs a key role in the trade life cycle and liability chain, which therefore also includes the clearing and settlement process.
The figure below shows how the DMA models operate.
NET

Traditional
DMA

NET

Via DMA
Provider

NET

Provider
of DMA

NET

Direct
Connection
NET

Via DMA
Co-location

Application of
Co-location
Remote access
tracking and maintenance

Below is a brief description of each of the four DMA models we have implemented:

Type 1 Traditional DMA - takes advantage of the infrastructure of participant brokerage firms to connect end users to
the Exchange;

Type 2 DMA via Provider - uses the infrastructure of online routing providers for the order routing process, including
order routing to the CME Globex system;

Type 3 DMA via Direct Connection - permits users to hire a direct link to the Exchange and forego usage of brokers
trading screens or specific interface tools; and

Type 4 DMA via Co-location arrangement - we host the customers server in our data center for automated order
execution and registration.

These four DMA models were previously available to participants and investors dealing within the BM&F segment, and have
been fully operational and generating business for over one year. The traditional DMA connection (Type 1) and access for
order routing to the CME Globex system (Type 2) were implemented in August and September 2008, respectively. These were
followed by implementation of all other connections for DMA via Provider (Type 2), which now includes five licensed providers.
Then in June 2009 we implemented the DMA via Co-location model (Type 4) and in October 2009 the DMA via Direct
Connection.
These same DMA models are available to market participants and investors doing business within the Bovespa segment since
September 1, 2010. However, none of these models dispenses with broker intermediation, which is a legal requirement. Our
traditional DMA model first launched in 1999 to provide retail investors with direct market access to our HomeBroker platform.

Post-trade activities at our clearing houses

In the course of the exchange integration process that merged BM&F and Bovespa into BM&FBOVESPA, we absorbed the
following clearing facilities, which act as central counterparty clearing houses and the Central Bank deems to perform
systemically material roles: (i) equities clearinghouse (formerly known as CBLC), (ii) derivatives clearinghouse, (ii) FX
clearinghouse; and (iii) government securities clearinghouse.
Our clearing facilities operate pursuant to Law No. 10,214 dated March 27, 2001, which authorizes mul tilateral clearings and
settlements, regulates the role of central counterparty performed by systemically material clearing facilities, and permits t he

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

use of collaterals posted by defaulting participants to settle their obligations within the scope of our clearing and central
counterparty activities, including in the event of insolvency, intervention, bankruptcy and extrajudicial liquidation.
As trades are executed in one of our trading segment, data on these trades are automatically fed to the systems in our clearing
houses and promptly relayed to intermediation agents for them to designate the actual principal under each transaction, in a
process known as specification. In the next phase of the trading cycle, the relevant clearing house will act for physical delivery
(for transfer of the security or the underlying or, as the case may be, for registration of the transaction) or financial settlement
(for transfer of monetary resources) to be carried through, as applicable. In doing so, our clearing houses may act or not act
as central counterparty to ensure multilateral settlement. The role as central counterparty is mandatory for the clearing and
settlement of exchange-traded derivatives, FX derivatives, government securities and stocks, but is voluntary where the clearing
and settlement of trades in OTC derivatives and private debt securities.
Our clearing houses typically act as central counterparty (CCP) for the derivatives market (including futures, forward, options
and swap markets), the spot U.S. dollar market, the government debt securities markets (cash, forward repo and securities
lending markets), for the equities markets (cash, forward options, futures and securities lending markets) and the private fixedincome securities market (cash and securities lending markets).
Our central counterparty clearing houses are responsible for providing efficiency and stability to the market by ensuring trades
are properly cleared and settled. A CCP interposes itself between counterparties to financial transactions, becoming the buyer
to the seller and the seller to the buyer. Acting in the capacity of central counterparty, our clearing houses absorb the risks of
the counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities for financial
settlement and clearing of securities and financial assets, in the event of default resorting to certain safeguard mechanisms, or
in extreme situations resorting to our own net assets. In modeling and managing CCP risks, we focus on calculation, controls
and mitigation of credit risk intrinsic to clearing participants.
For proper risk mitigation, each clearing house has its own risk management system and safeguard structure. These structures
comprise the universe of mechanisms and remedies a clearing house may resort to in order to cover losses from failed
settlement by a participant. he key components of these safeguard structures include collateral deposited by market
participants, often as margin, plus special funds intended to cover possible losses due to defaults and, in addition, co-liability
undertaken by broker and clearing agents regarding transactions they intermediate or clear.
The models we adopt in calculating margins are stress-test based, meaning they seek to assess market risk by taking into
account not only recent historical volatility in market prices, but also the possibility that unexpected events could change
historical behavior patterns for prices and the market as a whole.
The principal parameters we use in calculating margin are stress scenarios our market risk committee defines for risk factors
that typically affect the prices of securities, contracts and financial instruments traded on our markets. The primary risk factors
for stress testing include, among other things, the Brazilian real to U.S. dollar rate, the Real-denominated fixed rate curve; the
forward structure of the U.S. dollar-denominated Brazilian yield curve (cupom cambial), the Bovespa index and the cash prices
for stocks.
As of December 31, 2010, collaterals posted by participants totaled an aggregate of R$143,087.7 million, up 40.8% from
R$101,641.1 million in the prior year. This fall correlates mainly with a 44.4% climb in the volume of collaterals pledged in
connection with the clearing and settlement of transactions in derivatives and a 39.1% rise in the volume of collaterals pledged
for transactions in stocks and other equity or debt-based securities, in either case a clear indication of more active trading and
the improved market conditions in the periods under observation.
Pledged collaterals
Clearinghouses

Equities and corporate fixed-income securities

Government bonds
Stocks
Other*
Derivatives
Government bonds
Bank letters of guarantee
Other*
Forex
Debt securities
Total

December 2010
(in R$ millions)

December 2009
(in R$ millions)

December 2008
(in R$ millions)

50,702.5
22,749.9
25,809.8
2,142.7
87,534.7
76,979.3
3,538.5
7,016.9
3,921.7
928.8
143,087.7

36,437.4
15,665.7
17,208.3
3,563.3
60,605.5
53,754.9
1,479.3
5,371.3
3,766.1
832.1
101,641.1

21,481.3
10,185.9
9,101.8
2,193.5
99,047.8
89,760.7
3,690.8
5,596.2
3,724.3
1,423.5
125,676.8

BM&F Settlement Bank

With the purpose of providing services that meet the specificities and peculiarities of the markets in which we operate, we have
established the BM&F Settlement Bank, a wholly-owned subsidiary which offers our clearing houses and holders of access rights
to our clearing houses custodial services for securities and financial assets pledged as collateral for transactions carried out in

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

our markets. Conceived as an operating support vehicle, the BM&F Settlement Bank operates pursuant to the same high
standards of efficiency and security adopted by us and our clearing houses, offering custody and settlement-related services in
an exclusive, transparent, technical and skilled environment.
Service offerings include settlement of transactions registered with the registration facility, the depository and the central
registration system; clearing and settlement of securities, derivatives and foreign exchange; local representation and custodial
services provided to non-resident investors; and support services provided to investment clubs. The BM&F Settlement Bank
provides important risk mitigation and operational support for the clearing houses that integrate the BM&FBOVESPA system,
and for market participants. It performs activities in line with the strategies and guidelines of the parent company and in
accordance with its corporate purposes.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

Acting through the Brazilian Commodities Exchange we provide services and an electronic transaction facility for agribusiness
products, public and private electronic auction services for the trading of commodities and agribusiness services, centralizing
the trading of agricultural commodities and OTC agribusiness securities. We also provide clearing and settlement services,
acting as central counterparties to ensure multilateral settlement, in addition to offering depositary services for agribusiness
securities.
b.

Features of the distribution process

Distribution channels
Commodity and securities brokerage firms are market participants with direct access to our trading systems, entitled to
engage in proprietary trading and perform intermediation activities on behalf of their customers. Brokerage firms currently
licensed by us and holding permits that give them rights to access our markets include 67 brokerage firms operating as
participants in derivatives markets, 85 securities brokerage firms operating as participants in the equities markets, 38 firms
operating in the foreign exchange market and 61 brokerage firms operating in the bonds market.
With the purpose of organizing and expanding our base of participants, thereby driving volume growth to BM&F segment,
we created different categories of access permits which grant different rights of access to our markets. Brokerage firms are
eligible to apply for one or more categories of access permit provided they fulfill certain related requirements. These
requirements include minimum net equity and net current assets for protection of liquidity, in addition to professional
qualification, technology infrastructure, operating and other requirements. Permit cate gories are classified according to
market and practice area.
Permits granting rights of access to Bovespa segment markets in turn are granted only to securities firms, and are classified
into (i) full access permits; (ii) regional access permits; and (iii) pioneering access permits. In addition to brokerage firms,
investment banks and securities dealers are also eligible to apply for permits to access our fixed-income market and
organized OTC markets.
Permits granting access rights for participants to trade and intermediate trading on BM&F segment markets may entail either
full or restricted trading rights, depending on the terms of the permit application. In the latter case, a permit would carry
rights to trade or intermediate trading on certain markets and in certain types of derivatives, including, as the case may be,
trading in financial derivatives or commodity derivatives (grains, coffee, sugar) or OTC derivatives or government bonds and
debt securities, or rights for access to the spot FX market (foreign currency for physical delivery). Moreover, a permit
carrying restricted rights for the trading of financial derivatives may restrict trading to certain types of contracts (such as
interest rate contracts or FX derivatives or index-based derivatives or energy or metal derivatives, or a combination thereof).
Our board of directors reviews and evaluates applications for access permits submitted by any new brokerage firm.

Operational Qualification Program PQO

Brokers and brokerage firms typically represent important distribution channels for our products. For the very nature of their
business they work actively in prospecting and expanding our end customer base. In addition, because broker-intermediated
trading is a requirement of Brazilian law, we take concerned in ensuring local brokerage firms operate pursuant to high
standards. For this reason, we launched in 2005 a quality certification program for brokers and brokerage firms operating in
derivatives markets. More recently, we expanded the program to encompass brokers and brokerage firms that operate in
any market within each of the BM&F and Bovespa segments. Our quality certification program includes training and
professional guidance on standards with the aim of strengthening their position as market participants, whereas ensuring
minimum efficiency and performance standards in intermediation activities, as well as sound market practices. In addition,
we adopted several criteria to grant qualification seals, which include segmentation by category of intermediation activities.
Accordingly, qualification seals may be granted under any of the following five categories of brokerage activities:

Home Broker this seal identifies individuals or brokerage firms that focus on a customer base primarily made up of
retail investors to whom they provide direct market access (typically through the Internet) pursuant to simple,
objective guidance requiring very little human interference.
Retail Broker this seal identifies individuals or brokerage firms whose customer base comprises mainly corporate

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

investors (which trade in a wider range of financial products), and whose qualification requirements include
professional trading education skills and advisory capabilities, trade capture and distribution capabilities.
Agro Broker this seal identifies individuals or brokerage firms that operate within the BM&F segment focusing
mainly on intermediation of transactions in agricultural commodity derivatives. Agro brokers frequently interact with
participants across the commodities production chain. The agro broker qualification requirements include customer
interaction and commercial penetration skills, financial planning and financial structuring capabilities, in addition to
tax knowledge.
Carrying Broker this seal identifies individuals or brokerage firms that in addition to providing trading intermediation
services focus on operating as clearing agents and as custodians for securities. The qualification requirements for
carrying brokers include heightened capabilities and efficiency in sizing and managing customer positions, in tackling
the clearing and settlement cycles and credit-related issues, including securities lending and collateral management,
risk management and position consolidation skills.
Execution Broker this seal identifies individuals or brokerage firms that focus on providing professional trading
services, and pursue nimbleness and efficiency in high-speed, high-volume execution and order flow management

For purposes of obtaining a qualification seal, brokerage firms are required to operate pursuant to certain standards and
practices based on which qualification is recognized. Every brokerage firm is required to observe and practice certain genera l
standards, which constitute minimum qualification requirements, in addition to special standards applicable to each
qualification category, which a brokerage firm must meet and practice.
Adherence to both general and special quality standards is verified pursuant to audit processes conducted by exchange
auditors. In addition, a qualification seal is granted only upon issuance of an opinion by our PQO Qualification Committee
(composed of exchange executives and officers) advising that the applicable requirements are fulfilled and recommending
the brokerage qualification. At the end of 2010 we had granted qualification seals to 90 brokerage firms that operate within
the BM&F segment.
The high standards by which brokerage firms operate in our markets underpin the development of Brazilian capital markets,
and provide an important channel for efficient distribution of our products and services. For this reason, started from 2010,
we extended our qualification program to the participants of the Bovespa segment, and plan to grant the same categories of
certification seal discussed above, except the agro broker certification.
c.

Market characteristics in relevant operating segments, in particular:

i.

Share of each relevant market segment

Because we operate the only domestic exchange markets for listed equities and derivatives, in December 2010 our share of
these markets was 100%. In the case of the organized OTC markets, our share of the market for OTC equity securities was
close to 100%, while our share of the market for OTC derivatives was approximately 20%.
In addition, as compared to other Latin American exchanges, at the end of 2010 our exchange accounted for approximately
81.0% of the financial value traded in equities and 59.6% of the overall combined market capitalization of all Latin American
exchanges.
Shares of the overall financial value traded

Share of the combined overall Latin American

Distribuio da capitalizao de mercado das empresas

market
capitalization
listadas
na Amrica(December
Latina - dez2010)
2010

Distribuio
Volume
Financeiro
Negociado
na
ondoLatin
American
Exchanges
in 2010
Amrica Latina - 2010

8%

12,7%

11%
11,3%
16,4%

59,6%

81%

BM&FBOVESPA Mexico
Mxico
BM&FBOVESPA

Outras
Other

BM&FBOVESPA
BM&FBOVESPA

Mxico
Mexico

Santiago
Santiago

Outras
Other

Source: World Federation of Exchanges (WFE)

In addition, transactions carried out on our stock exchange accounted 55.43% of the overall financial value traded in stocks of
Brazilian issuers over 2010, whereas the remainder has been traded on U.S. exchange markets, such as the New York Stock
Exchange, or NYSE, in the form of depositary receipts. In 2009 and 2008 transactions in stocks of Brazilian issuers carried out
on our stock exchange accounted for 51.73% and 46.42%, respectively, of the overall financial value traded in these stocks,
whereas trades on U.S. exchange markets accounted for the remainder. In 2009 and 2008 trades on our stock exchange
accounted for 51.73% and 46.42%of the overall financial value traded, respectively. It should also be noted that between 2007
and 2010 our stock market registered 85 new listings, with just one entrant applying for dual listing (with us and the NYSE).

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Bovespa segment

USA

53.12%
46.42%
51.73%
55.43%

46.88%
53.58%
48.27%
44.57%

2007
2008
2009
2010

ii. Competitive market conditions

Brazilian Stock Market Industry

The Brazilian stock market industry began in 1845 with the creation of the Rio de Janeiro Stock Exchange ( Bolsa de Valores do
Rio de Janeiro), or BVRJ. Other stock exchanges emerged later, including in 1890 the So Paulo Stock Exchange, under the
name of Free Exchange (Bolsa Livre), which in 1895 changed to So Paulo Government Funds Exchange (Bolsa de Fundos
Pblicos de So Paulo). In the mid-1960s it was renamed BOVESPA.
In 2000 an agreement was signed to consolidate the nine stock exchanges then operating in Brazil. Pursuant to this
agreement, all trading of equity securities on stock exchanges in Brazil moved to Bovespa. Five of those exchanges were later
terminated by their members.
In the case of the derivatives market, BM&F was organized in 1985 under the name Brazilian Mercantile & Futures Exchange,
and has since been the only domestic exchange for the trading of derivatives contracts.
Two well-defined trading segments emerged from the consolidation of the domestic stock markets into Bovespa, meaning the
equities and fixed-income securities segment operated by Bovespa, and the derivatives segment, comprising the trading of
commodities, derivatives based on equities, indices, interest rates and currency rates, in addition to federal, state and local
government debt securities, which was operated by BM&F.
Then, on May 8, 2008, the shareholders of Bovespa Holding S.A. and of BM&F S.A. approved the integration of the two
exchanges under a single company named BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros, the Brazilian
Securities, Commodities and Futures Exchange.
As of December 31, 2010, we had no local competition in either the securities or the derivatives exchange markets, or in the
organized OTC market for equity securities. However, we did have competition in the OTC markets for derivatives and
government and private debt securities, in addition to having competition for certain of the services provided by the BM&F
Settlement Bank.
The tables below set forth 2010 information on rankings of world exchanges both by financial value traded and market
capitalization, based on data compiled by the World Federation of Exchanges, or WFE. At December 31, 2010 our exchange
ranked 15th by financial value traded and 11th by exchange market capitalization. In addition, according to data released by the
Futures Industry Association, or FIA, our derivatives market ranked 6th in number of contracts traded.
Top 10 largest Exchanges across international markets
By financial value traded
Exchange
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

NYSE Euronext (US)

NASDAQ OMX
Shanghai SE
Tokyo SE Group
Shenzhen SE
London SE
NYSE Euronext (Europe)
Deutsche Brse
Korea Exchange
Hong Kong Exchanges
TSX Group
BME Spanish Exchanges
Australian SE
Taiwan SE Corp.
BM&FBOVESPA
National Stock Exchange India
SIX Swiss Exchange
NASDAQ OMX Nordic Exchange
Istanbul SE
MICEx

By market capitalization

(In US$ millions)

Year ended
December 31, 2010

Exchange

17,795,600.20
12,659,197.92
4,496,193.54
3,787,952.33
3,572,529.12
2,741,324.64
2,018,076.73
1,628,496.44
1,607,247.27
1,496,432.51
1,368,953.60
1,360,909.64
1,062,649.54
903,061.74
868,813.04
801,017.16
788,360.82
750,278.69
411,203.43
408,078.05

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Source: WFE

NYSE (Euronext) US
NASDAQ OMX
Tokyo SE Group
London SE Group
NYSE Euronext (Europe)
Shanghai SE
Hong Kong Exchanges
TSX Group
Bombay SE
National Stock Exchange India
BM&FBOVESPA
Australian SE
Deutsche Brse
Shenzhen SE
SIX Swiss Exchange
BME Spanish Exchanges
Korea Exchange
NASDAQ OMX Nordic Exchange
MICEx
Johannesburg SE

Source: WFE

63

(In US$ millions)

Year ended
December 31, 2010
13,394,081.80
3,889,369.88
3,827,774.20
3,613,063.97
2,930,072.44
2,716,470.22
2,711,316.16
2,170,432.73
1,631,829.54
1,596,625.26
1,545,565.66
1,454,490.57
1,429,719.05
1,311,370.08
1,229,356.54
1,171,624.98
1,091,911.46
1,042,153.74
949,148.86
925,007.15

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

2010 Top-10 Futures Exchanges

Rank

(data as at December 2010)

Exchange

Number of contracts traded (2010)

1
2
3
4
5

Korea Exchange
Chicago Mercantile Exchange (CME)
Eurex (includes ISE)
NYSE Euronext (includes all EU and US markets)
National Stock Exchange of India

3,748,861,401
3,080,492,118
2,642,092,726
2,154,742,282
1,615,788,910

BM&FBOVESPA

1,422,103,993

7
8
9
10

Chicago Board Options Exchange (includes CFE)

Nasdaq OMX Group (includes all EU and US markets)
Multi Commodity Exchange of India (includes MCX-SX)
Russian Trading Systems Stock Exchange

1,123,505,008
1,099,437,223
1,081,813,643
623,992,363

Sources: WFE; FIA

d.

Seasonality, if any.

We have no records suggesting our business is significantly influenced by seasonal factors, as we observe that trading volumes
may fluctuate for a number of reasons not clearly attributable to any seasonal event.
e.

Principal raw materials and supplies

Our relationships with suppliers and service providers are conducted in strict compliance with the notion of cooperative
relationships based on mutual good faith commercial relations. Our main suppliers are technology and IT solutions providers,
including servers, network equipment, mainframes and other hardware, equipment maintenance services, technical support and
specialist providers (in the case of special projects).
Typically, contracts and prices are negotiated by project or program. Where the price is agreed in foreign currency we will be
subject fluctuations in exchange rate, and where agreed in Brazilian reais there may be adjustments for inflation, which typically
track the fluctuations of either the extended consumer price index (IPCA) or the general market price index (IGPM). In some
cases the price may be tied to performance, such as in the case of the MegaBolsa trading system, as the maintenance fees for
this system closely correlate with throughput.
We have a service agreement with Primesys, the network communications provider for the Financial Community
Communication Network (Rede de Comunicao da Comunidade Financeira ), or RCCF, the open communication network for
connectivity between market participants and our trading systems. We rely on Primesys for the provision of network
communications related to post-trade services.
Our main suppliers and service providers include the following:
IT (software and hardware): HP; EMC Computer; Hitachi Data System; IBM; Compusoftware; AtosEURONEXT (NYSE);
Services:
7COMm; IBM; Multirede; Hitachi Data Systems
Specialist providers:
7COMm; GPTI; 3CON Consultoria and Stefanini.
7.4.

Customers whose purchases account for over 10% of total net revenues

In our case customer revenue concentration is not a factor of dependence, as our customer are the principals in trades carried
out on our markets, who for this purpose use our services.
7.5.

Material effects of government regulations on the business

a.

Special licensing requirements related to the business; track record of relation with licensing
authorities.

Regulation of the industry

Overview
The Brazilian capital markets and financial system are regulated by several government agencies. The overall regulatory
framework governing the Brazilian financial system and capital markets, however, is based on two main laws: (i) Law
No. 4,595/64, dealing with the organization of the Brazilian financial system and the roles of its agents, including the Central
Bank; and (ii) Law No. 6,386/76, or Brazilian Securities Market Law, dealing with the organization of the Brazilian capital
markets and the role of its agents, creating the CVM, and defining its powers, sphere of competence and responsibilities.

Market Regulators
The Brazilian National Monetary Council (Conselho Monetrio Nacional), or CMN, the Central Bank and the Brazilian Securities
Commission (Comisso de Valores Mobilirios), or CVM, are primarily responsible for regulating activities conducted in the Brazilian
financial and capital markets and for monitoring the participants in these markets, each within its own sphere of competence.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

CMN
The CMN consists of the Minister of Finance, the Minister of Planning and Budgets and the Governor of the Central Bank. It was
created with the purpose of formulating the monetary and credit policies for the financial and capital markets. These policies
address matters as systemic credit availability, form of remuneration for credit transactions, operating limits attributable to
financial institutions, regulations regarding foreign investments in Brazil and foreign exchange.

Central Bank
The Central Bank is a federal agency under the Ministry of Finance responsible for implementing the monetary and credit
policies established by the CMN, regulating the foreign exchange market and foreign investment flows in Brazil, licensing
financial institutions to operate in the domestic market and overseeing the operations of financial institutions.
Additionally, acting within the realm of the Brazilian payment system, the Central Bank is responsible for issuing operating
licenses to clearing facilities and clearing and settlement agents.

CVM
The CVM is the primary regulatory and market oversight entity for the Brazilian capital markets. It is a federal agency under
the Ministry of Finance, dedicated to regulating and monitoring the capital markets and its agents. Financial institutions and
other institutions licensed to operate by the Central Bank are also subject to CVM oversight when conducting business in the
capital markets.
In order to have the ability to ensure the capital markets operate properly and to prevent or correct improper behavior, the
CVM has authority to: (i) approve, suspend or cancel registrations; (ii) approve, suspend or cancel public offerings of securities;
(3) oversee the activities of publicly held companies, and the stock, commodities and futures markets, as well as the members
of the securities distribution system; (4) release information or set guidelines for clarification or guidance to market participants;
(5) forbid market participants from engaging in practices, and ban practices that could be detrimental to the capital markets
and the investors in these markets, and to impose sanctions in the event of violations of applicable rules.

Government licenses and consents

As stated in article 3 of the Bylaws, three of the activities included in our corporate purposes are particularly important for
purposes of determining the applicability of certain regulatory licensing and consent requirements, as follows: (i) operation and
management of organized securities markets; (ii) provision of services for registration, clearing and settlement of transactions
carried out in any of our markets; and (iii) provision of services as central securities depository and (iv) provision of fungible
and non-fungible custodial services for securities and bonds.
Under article 18 of the Brazilian Securities Market Law, the operation and management of organized securities markets by us
are subject to consent and oversight by the CVM.
In addition, dated 2007 the CVM issued Instruction 461/07, which regulates the formation, organization, operation and
extinction of exchange markets (whether for stocks, commodities or derivatives) and of organized over-the-counter market
markets, or OTC markets. This means our organization and operations are subject to oversight directly by the CVM, which in
addition has authority to validate regulatory rules we may issue in connection with the operation of markets we manage,
including rules concerning requirements for the granting of access permits to prospective market participants and events of
access permit withdrawal, issuance of standard-setting rules and guidelines, definition of contract specifications, rules on order
characteristics and on transactions permitted in markets we manage as well as rules on surveillance and auditing structures and
processes, among other things.
Following the completion of the integration process that combined the activities of Bovespa and BM&F into a single company
named BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros, and in accordance the requirements of CVM
Instruction 461/07, the CVM full board in a plenary session held on May 19, 2009, confirmed our license to operate and manage
organized exchange and OTC markets.
Under article 17, paragraph 1 of the Brazilian Securities Market Law, we are a market manager and clearing and settlement
facility operator which in such capacity acts as an ancillary regulatory and market surveillance entity, responsible for monitoring
market participant activities and the transactions carried out in our markets. BM&FBOVESPA Superviso de Mercados (BSM)
was established as a not-for-profit mutual association, a financially autonomous functional entity, with its own budget,
infrastructure and specialized employees, to perform market surveillance activities, ensuring market integrity, enhanced investor
protection and sound market practices. BSM and the CVM maintain close relations. BSM is also responsible for keeping the CVM
abreast of market developments and provide it with periodic reports on its market surveillance activities
Moreover, pursuant to CVM Instruction 89/88, which provides on granting of licenses for provision of securities bookkeeping and
custodial services, and CVM Instruction 115/90, which issued rules on provision of fungible custodial services, the CVM is
responsible for licensing our Company to provide these services. Accordingly, on November 28, 2008, which was the date of the
merger with CBLC (formerly named Brazilian Clearing and Depository Corporation) as part of the abovementioned integration
process, our Company was licensed to operate these services. Prior to the merger, these services were provided by CBLC.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Under Law No. 10,214/01, activities involving clearing and settlement services, which we provide through our four clearing
facilities (the derivatives, FX and debt securities clearinghouses for BM&F segment and the equities clearinghouse for Bovespa
segment) are subject to the regulatory and oversight authority of both the CVM and the Central Bank. Law No. 10,214/01
governs clearing and settlement activities within the scope of the Brazilian Payment System. Supplementary regulations have
been issued by the CMN and the Central Bank, in particular under CMN Resolution 2,882, which regulates payment systems and
transactions related to securities and delegates authority for the Central Bank to issue additional regulation concerning (i)
clearing facilities, (ii) licenses for the operation of clearing and settlement systems; and (iii) surveillance of these activities and
enforcement of related rules, include imposition of sanctions.
Pursuant to Communiqu 9,419 dated April 18, 2002, the Central Bank granted BM&F licenses to operate the derivatives
clearinghouse and the FX clearinghouse and, in addition, granted Bovespa and CBLC a license to operate the equities
clearinghouse; Communiqu 13,750 dated September 29, 2005, authorized the derivatives clearinghouse to expand the range
activities and services; and Communiqu 12,789 dated December 21, 2004, granted BM&F license to operate the debt securities
clearinghouse.
We are in close contact with both the Central Bank and the CVM due to both the nature of our business and their oversight
responsibilities.
b.

Adopted environmental responsibility policy and practices, including adherence to international

environmental protection standards; compliance costs.

We have not expressly adhered to international environmental standards and our activities are not subject to special
environmental regulatory requirements because the nature of our business is not one entailing direct negative impact on the
environment. As a result we incur no material compliance costs and do not adopt any particular set of practices for protection of
the environment.
Still, sustainability as well as social and environmental responsibility are matters of global concern and we increasingly recognize
the need to develop systems to evaluate and manage the wider impact of our business on the environment and the community,
and are deeply committed to building social and environmental responsibility awareness and encouraging sound responsible
practices vis--vis internal and external stakeholders and the community.
Accordingly, we participate in the Global Compact, a voluntary corporate citizenship initiative sponsored by the United Nations,
which relies on public accountability, transparency and the enlightened self-interest of companies and civil society to initiate and
share substantive action in pursuing principles associated with global sustainability and overcoming social inequalities. In
addition, in response to the Carbon Disclosure Project, a UK-based international organization whose 2010 questionnaire we
have answered, we issued in 2010 our first Energy Use and Greenhouse Gas Emissions Inventory Report (for 2009), prepared in
accordance with the method recommended by the GHG Protocol Brazil Program, established within the scope of the
GHG Protocol Initiative, a joint collaboration of the World Business Council for Sustainable Development, or WBCSD, and the
World Resources Institute, or WRI, coordinated locally by the Center for Sustainability Studies of Getlio Vargas Foundation
(CES-FGV). According to our GHG Inventory Report for 2009, as measured in standards metric tons of equivalent carbon
dioxide, or MT eCO2, for assessment of global warming potential, our greenhouse gas emissions for 2009 reached 1,577 metric
tons CO2-equivalent. We are currently preparing our GHG Inventory Report for 2010.
Amidst other socially and environmentally responsible initiatives and projects, we adopt a waste management program pursuant
to which we provide special recycling bins for collection of recyclable waste from our employees. A recycling company retrieves
this waste for the recycling process and separates the organic waste, which is delivered for composting at the appropriate
facility.
In 2004, based on a partnership with the Brazilian Ministry of Development, Industry and Foreign Trade, we started to
implement the Brazilian carbon market. Within the scope of this market, we developed and implemented the following projects:

Carbon facility. An electronic system, accessed via the Internet, for the registration of emissions reduction projects in

line with the Clean Development Mechanism, or CDM, which is one of the sustainable development mechanisms
defined in the Kyoto Protocol. The goal is to simplify access by potential buyers of Certified Emission Reductions, or
CERs, to carbon credit generating projects approved for implementation under the terms of the Kyoto Protocol.

Carbon credit trading system.

An electronic environment for the trading of CERs (Certified Emission Reductions)

derived from carbon credit generating projects developed within the scope of the Kyoto Protocol. The transactions are
currently carried out via electronic auctions over the Internet. The auctions are scheduled by us at the request of the
selling participants and are physically settled. We do not act as central counterparty to these transactions.

Carbon Market Infrastructure and Institutional Advancement Project: Based on a cooperation we agreed with the

World Bank and FINEP(*), between 2009 and 2010 we put in place a project geared towards advancing the
( )

* FINEP is a science and technology research financing agency established by the Brazilian Ministry of Science and Technology, which agreed a
collaboration with the government of Japan for implementation in Brazil of a professional qualification program within the scope of the Clean Development
Mechanism developed under the Kyoto Protocol, aimed to educate, train and transfer professional skills for development of carbon credit generating
projects. BM&FBOVESPA is the designated coordinator of this program.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

infrastructure and institutional development of the domestic carbon market. As part of our marketing efforts towards
accomplishing these objectives and garner future business for the local carbon market, we organized a qualification
workshop to educate, train and transfer professional skills for development of carbon credit generating projects.
Furthermore, our initiatives towards encouraging and disseminating environmentally responsible practices and sustainable
development of public companies include the following:

BVS&A The Environment and Social Investment Exchange (Bolsa de Valores Sociais e Ambientais).

This is a
pioneering program inspired in the operating model of a stock exchange, which works as a hub for persons and
companies interested in contributing financial resources to domestic NGOs engaged in projects oriented towards
environmental improvements, the advancement of education and community projects;

Corporate Sustainability Index, or ISE (ndice de Sustentabilidade Empresarial). This index measures return on a
portfolio composed of shares of companies that are highly committed to sound practices in social and environmental
responsibility, corporate sustainability and higher corporate governance standards. The ISE is a benchmark for the
Brazilian market and a driver of recommended social and environmental and sustainability practices amongst public
companies;

Carbon Efficient Index, or ICO2 (ndice Carbono Eficiente). In December 2010, during the 16th UN Climate Change

Conference (COP-16) in Cancun, Mexico, BM&FBOVESPA and the Brazilian Social and Economic Development Bank
(Banco Nacional de Desenvolvimento Econmico e Social), or BNDES, announced the launch of the Carbon Efficient
Index, or ICO2, designed to measure the carbon footprint performance of large cap companies. With this index we
aim to encourage public companies to adhere to GHG inventory reporting, to pursue, adopt and share efficient,
innovative, sustainable and environmentally sound practices, redoubling efforts to cut their greenhouse gas emissions,
a fundamental step in terms of climate change management.
The Carbon Efficient Index was structured around the IBrX50, a liquidity-weighted, total return index of the 50 most
actively traded stocks listed on our stock exchange, except that each stock in the new index theoretical portfolio will be
weighed also by the issuers inventory of carbon emissions associated with its activities, or carbon footprint, calculated
as MTeCO2/Gross Revenues. In terms of carbon footprint performance, the lower the ratio of greenhouse gas
emissions to revenues, the greater the carbon efficiency.
As a result, the stocks of more carbon efficient and better performing companies will tend to increase in weight when
compared to the ranking provided by the IBrX-50, whereas the stocks of less efficient companies will tend to decrease
in weight vis--vis their weight in the IBrX-50. As of January 2011, the index theoretical portfolio included 42 large
cap companies.
c.

Dependence on patents, trademarks, licenses, concession grants, franchise arrangements or other

royalty-related contracts, which are material for the course of business.
1)

Patents and trademarks

BM&FBOVESPA and its subsidiaries own a number of registered trademarks, in addition to trademark applications previously
filed with the National Institute of Industrial Property (Instituto Nacional da Proppriedade Industrial), or INPI, the local patent
and trademark office (see the discussion under subsection 9.1(b) of this Form). Our main trademarks and service marks
include BM&FBOVESPA, BM&FBOVESPA A Nova Bolsa, BM&F, BM&F Brasil, GTS - Global Trading System, Bolsa
Brasileira de Mercadorias, BM&F Trading System, Sisbex, Bovespa e Ibovespa, and are duly registered or the subject of
trademark applications previously filed with the INPI, as applicable, classified as trademarks and services marks in the several
classes of services and product we and our subsidiaries provide. Previously, BM&F being a highly recognizable trademark, we
applied to secure highly renowned trademark status for the brand. Recognition of highly renowned status secures special
protection rights for the trademark throughout Brazilian territory and across the spectrum of economic activity. Currently, the
application proceeding is still pending.
In addition, as of December 31, 2010, we had 63 trademarks and service marks registered in other countries in South America,
Europe, Asia and the United States, including the Bovespa Bolsa de Valores de So Paulo, Ibovespa and Bovespa So
Paulo Stock Exchange trademarks. Currently, having completed the integration process which combined BM&F and Bovespa
into BM&FBOVESPA, we are in the process of reviewing our portfolio of brands, marks and logos. Additionally, the process to
update trademark registrations and amend trademark applications existing at the INPI is still ongoing.
Moreover, as of December 31, 2010, we had three patent applications pending at the INPI in Brazil and two in Argentina, all
related to the GTS trading system. However, three patent deposit applications filed in 2009 (International PCT/BR2009/00120,
PCT/BR2009/00154 and PCT/BR2009/00153) have been discontinued and are no longer in our database.
2)

Domain names

As of December 31, 2010, BM&FBOVESPA and its subsidiaries owned 140 domain names registered in Brazil (112 of which on
behalf of BM&FBOVESPA) and 20 domain names registered elsewhere, all of them on behalf of our company. As of that date,
our main registered domain names were bmfbovespa.com.br, bmfbovespa.com, bvmf.com.br, bmf.com.br,
bbmnet.com.br, sisbex.com.br, www.bovespa.com.br, www.abolsadobrasil.com.br and www.bovespaonline.com.br.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

3)

Computer programs and software

Computer programs and software performs a fundamental role in our business operations. Accordingly, we keep strict controls
for the licensing of computer programs and software we use or implement. For additional information on program and software
licensing, see subsection 9.1(b) of this Form.
7.6.

Material revenues derived from activities performed in Brazil and elsewhere

a.

Revenues attributable to customers based in the issuers home country, including as a percentage of
total net revenues

The charts below provide data on the allocation of revenues attributable to the different categories of investors. These data
show that trading activities by retail investors, institutional buyers, corporate investors and financial institutions accounted in
2010 for aggregate 70.4% of the financial value traded on markets comprising the Bovespa segment (versus 65.8% in 2009
and 64.6% in 2008), whereas having accounted for aggregate 77.6% of the volume traded in 2010 on markets comprising the
BM&F segment (versus 79.9% in 2009 and 81.1% in 2008). These are revenues attributable to customers located in Brazil.

Allocation of trades by type of investor- Bovespa segment

7.4%

7.8%

2.2%

2.8%

35.3%

27.1%

26.8%

2008

8,4%
2,3%

34.2%

29,6%

25.7%

33,3%

30.5%

26,4%

Retail Investors

2009
Institutional

Foreign Investors

2010

Corporate Investors

Financial Institutions

Other

Allocation of trades by type of investor - BM&F segment

0.15%

2.90%

47.60%

0.11%

2.53%

1.71%

42.40%

45.46%

3.88%
7.97%

7.63%
22.40%

18.79%

20.02%

22.60%

24.26%

29.61%

2008

2009

2010

Institutional

Foreign Investors

Retail Investors

Financial Institutions

Non financial Institutions

Central Bank

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

b.

Revenues attributable to customers based elsewhere, other than in the issuers home country,
including as a percentage of total net revenues

The tables below set forth data on financial value (Bovespa markets) or volume traded (BM&F markets) by foreign investors
in the periods presented, as distributed by country based on statements provided by these investors.
Bovespa markets
2010
COUNTRY

Financial
value
traded

(in R$
billions)

UNITED STATES
UNITED KINGDOM
URUGUAY
LUXEMBOURG
JAPAN
FRANCE
HOLLAND
IRELAND
CANADA
NORWAY
SOUTH KOREA
CHILE
AUSTRALIA
PORTUGAL
CAYMAN ISLANDS
SAUDI ARABIA
SWITZERLAND
THE EMIRATES (UAE)
SWEDEN
SPAIN
OTHER
TOTAL FOREIGN INVESTORS

397.7
187.7
123.6
59.4
24.5
22.4
21.2
18.4
16.2
9.5
8.3
5.1
5.1
4.5
4.3
3.9
3.7
2.9
2.7
2.6
19.9

2009
% of
Overall
Value
Traded

42.15%
19.89%
13.09%
6.30%
2.60%
2.37%
2.25%
1.95%
1.72%
1.01%
0.88%
0.54%
0.54%
0.48%
0.46%
0.41%
0.39%
0.30%
0.28%
0.28%
2.11%

943.7 100.00%

Financial
value
traded

COUNTRY

(in R$
billions)

UNITED STATES
UNITED KINGDOM
URUGUAY
LUXEMBOURG
FRANCE
HOLLAND
IRELAND
JAPAN
CANADA
SOUTH KOREA
NORWAY
CAYMAN ISLANDS
AUSTRALIA
CHILE
SWITZERLAND
PORTUGAL
THE EMIRATES (UAE)
DENMARK
SAUDI ARABIA
SINGAPORE
OTHER
TOTAL FOREIGN INVESTORS

2008
% of
Overall
Value
Traded

395.2
186.7
107.9
47.8
34.6
24.7
13.4
10.8
8.9
7.7
7.4
6.9
4.8
3.4
3.2
2.8
2.4
2.4
2.0
2.0
13.8

44.47%
21.00%
12.14%
5.38%
3.89%
2.78%
1.50%
1.21%
1.00%
0.87%
0.84%
0.77%
0.55%
0.39%
0.36%
0.32%
0.27%
0.27%
0.23%
0.23%
1.55%

888.6

100.00%

COUNTRY

Financia
l value
traded

(in R$
billions)

UNITED STATES
URUGUAY
UNITED KINGDOM
LUXEMBOURG
HOLLAND
FRANCE
IRELAND
CAYMAN ISLANDS
JAPAN
SOUTH KOREA
ARGENTINA
CANADA
SWITZERLAND
NORWAY
PORTUGAL
THE EMIRATES (UAE)
AUSTRALIA
SPAIN
CHILE
SINGAPORE
OTHER
TOTAL FOREIGN INVESTORS

497.0
152.9
104.3
56.3
25.5
23.7
14.5
14.0
10.3
10.2
9.5
6.4
6.0
5.1
4.8
4.7
3.7
3.5
2.9
2.1
16.2

% of
Overall
Value
Traded

51.06%
15.71%
10.71%
5.78%
2.62%
2.43%
1.49%
1.44%
1.06%
1.05%
0.98%
0.66%
0.61%
0.52%
0.49%
0.49%
0.38%
0.36%
0.29%
0.22%
1.63%

973.4 100.00%

BM&F markets
2010
COUNTRY

UNITED STATES
GREAT BRITAIN (UK)
URUGUAY
LUXEMBOURG
JAPAN
FRANCE
HOLLAND
IRELAND
CANADA
NORWAY
SOUTH KOREA
CHILE
AUSTRALIA
PORTUGAL
CAYMAN ISLANDS
SAUDI ARABIA
SWITZERLAND
THE EMIRATES (UAE)
SWEDEN
TOTAL -

Volume
traded

2009

(number of
contracts)

% of
Overall
Volume
Traded

135,512,067
85,699,214
9,354,013
7,200,400
7,039,708
4,760,962
4,218,438
4,012,745
3,004,102
1,223,811
756,913
628,442
66,262
34,280
33,791
31,040
26,669
12,365
29,115
263,644,337

51.4%
32.5%
3.5%
2.7%
2.7%
1.8%
1.6%
1.5%
1.1%
0.5%
0.3%
0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

Volume
traded

(number of
contracts)

% of
Overall
Volume
Traded

81,163,287
30,972,258
7,419,419
5,990,514
3,397,235
3,392,101
2,986,465
2,707,426
1,588,147
748,120
445,655
163,788
106,070
42,290
30,911
7,950
5,565
2,245
13,878

57.49%
21.9%
5.26%
4.24%
2.41%
2.40%
2.12%
1.92%
1.12%
0.53%
0.32%
0.12%
0.08%
0.03%
0.02%
0.01%
0.00%
0.00%
0.01%

COUNTRY

UNITED STATES
UNITED KINGDOM
PORTUGAL
CANADA
FRANCE
SPAIN
THE NETHERLANDS
URUGUAY
ISRAEL
BERMUDAS
IRELAND
LUXEMBOURG
MEXICO
COLOMBIA
GERMANY
THE EMIRATES (UAE)
CAYMAN ISLANDS
ARGENTINA
OTHER
TOTAL -

2008

141,183,324 100.00%

69

COUNTRY

UNITED STATES
UNITED KINGDOM
PORTUGAL
SPAIN
FRANCE
URUGUAY
THE NETHERLANDS
CANADA
COLOMBIA
BERMUDAS
IRELAND
LUXEMBOURG
CAYMAN ISLANDS
MEXICO
ARGENTINA
ISRAEL
GERMANY
AUSTRALIA
OTHER
TOTAL -

Volume
traded

(number of
contracts)

% of
Overall
Volume
Traded

85,370,297
27,904,770
9,996,410
4,391,576
3,278,664
2,584,006
2,554,661
2,009,846
1,211,075
591,710
229,825
192,072
40,461
18,145
11,219
6,620
7,986
6,215
6,188

60.81%
19.9%
7.12%
3.13%
2.34%
1.84%
1.82%
1.43%
0.86%
0.42%
0.16%
0.14%
0.03%
0.01%
0.01%
0.01%
0.00%
0.00%
0.00%

140,413,746 100.00%

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

FOREIGN INVESTORS

c.

FOREIGN INVESTORS

FOREIGN INVESTORS

Total revenues attributable to customers based elsewhere, other than in the issuers home country,
including as a percentage of total net revenues

The charts above show that foreign investors accounted for 29.6% of the overall volume traded on Bovespa markets in 2010,
versus 34.2% of the volume in 2009, whereas having accounted for 22.4% of the volume traded on BM&F markets in 2010,
versus 20.0% in 2009.
7.7.

Subordination to the laws and regulations of foreign jurisdictions and influence on the business.

We are subject to the regulatory authority of the U.S. Commodity Futures Trading Commission, or CFTC, which is the
independent agency created by the U.S. Congress in 1974 with the mandate to regulate commodity futures and option markets
in the United States. The regulatory framework provided by the CFTC applies to us to the extent we:
Provide local market participants with direct electronic access to U.S. derivatives markets. On
September 26, 2008, the CFTC issued a no-action letter indicating that no civil or criminal action will be taken
against BM&FBOVESPA for engaging in the activity of providing direct access to trading systems in U.S. derivatives
markets, nor against any market participants (meaning local brokerage firms or clearing agents for BM&F segment
markets) or authorized U.S. persons accessing electronic trading systems in U.S. derivatives markets through
BM&FBOVESPA, provided certain CFTC requirements are met. Among other things, these include reporting
requirements concerning volumes and types of contracts traded, new contract offerings, changes to the
organizational structure of the Company and so forth.
Offer and sell in the United States derivatives contracts based on the Bovespa Index. We have been
granted CFTC approval to offer and sell in the United States full-sized and mini-sized futures contracts and options
based on the Ibovespa (or Bovespa Index). Under applicable U.S. law, offerings by a foreign exchange of
derivatives based on a stock index must meet certain contract requirements and criteria for composition and
compilation of the index (as provided under Section 2(a)(1)(C)(ii) of the U.S. Commodity Exchange Act of 1936, as
amended). These criteria include the underlying stock index constituting a broad-based index (as opposed to a
narrow-based security index, as defined).
Dated August 26, 2009, the CFTC permitted us to offer and sell to U.S. persons any of the following futures contracts and
strategies:
Ibovespa Futures;
Mini-sized Ibovespa Futures;
American-Style Call Options on Ibovespa Futures;
American-Style Put Options on Ibovespa Futures;
Forward Points on Ibovespa Futures (FWI);
Ibovespa Rollover (IR1).
On that same occasion, the CFTC also authorized us to provide direct access to our electronic platforms through an order
routing program established with the CME Group (routing through the CMEs Globex system). In addition, we have applied to
offer and sell in the United States derivatives contracts based on the IBrX50 index. This latter application to the CFTC is
currently pending response.
7.8.

Material long-term relationships not discussed elsewhere in this form.

Our material long-term relationships have been discussed elsewhere in this form.
7.9.

Other information deemed to be material.

Market Ombudsman
In 2001, in an initiative to enhance the credibility and transparency of the Brazilian capital markets, we created the office of
the market ombudsman. The role of the market ombudsman is to hear and investigate complaints, pursuing and mediating
fair settlements in the event of conflict between investors and market participants with access to our markets.
These complaints may refer to trading, clearing and settlement or securities custody processes and in most cases are the
result of some clerical error or irregular procedure by a market participant, or ensue from limited knowledge on the part of
the investor.
In 2010 the role of the Ombudsman took on a wider, more proactive character. He will thus act also as liaison officer for our
external audiences, including our shareholders and brokerage firms, regulatory entities and the investing public, and other
stakeholders. In addition, moving forward the Ombudsman will be appointed for two-year terms, and may be reappointed twice
at most. In addition, in 2010 the office of the Ombudsman was awarded ISO 9001 quality certification.
Ombudsman Service

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

A satisfaction survey we conducted amongst a sample audience comprising 24.8% of the stakeholders we serviced in 2010,
resulted in 97.7% satisfaction score.

Social and Environmental Projects

In addition to operations within the realm of our core business, we also engage in activities aimed to providing financial and
market education and training courses, in addition to exercising our corporate citizenship by engaging in socially and
environmentally responsible practices and projects, such as discussed below.

BM&FBOVESPA Educational Institute

The mission of BM&FBOVESPA Educational Institute is to disseminate knowledge about the securities and derivatives markets
amongst the public at large, including specialized knowledge amongst market professionals, pursuant to high standards of
integrity and teaching knowledge. In disseminating specialized knowledge, the Institute is responsible for informational,
training and qualification, and specialization and postgraduate courses provided to persons from the public at large, and to
brokers, traders and other market professionals, including regulatory agencies personnel.
Moreover, the Educational Institute is responsible for conducting the process of certification of professionals for the Operating
Qualification Program, or PQO, for which it offers a professional development program which permits a person acquiring
specialized knowledge and building a career in the intermediation industry.
In addition to regular courses taught at our premises in downtown So Paulo, in 2010 the Institute also organized in-company
training courses targeted for employees of financial and non-financial institutions.
As the primary center in Latin America for dissemination of specialized knowledge on securities and derivatives markets, in 2010
the Institute taught 5,158 students enrolled in personal attendance courses and distance learning courses. In 2009 the Institute
launched a MBA program with focus on Capital Markets and Derivatives, in addition to a program on introduction to capital
markets.
The Institutes library has a catalog of over eight thousand works, in addition to specialized local and international periodicals.

BM&FBOVESPA Institute
As part of our corporate citizenship and social investment initiatives, in 2007 we organized the Institute (Instituto
BM&FBOVESPA de Responsabilidade Social e Ambiental) as a public interest non-governmental organization locally known as
OSCIP (organizao da sociedade civil de interesse pblico) for the purpose of integrating and coordinating the Companys
social and environmental projects. The three principal initiatives the Institute manages are:
Sports and Cultural Space (Espao Esportivo e Cultural) located in Paraispolis, a poor and overpopulated district in the
city of So Paulo, it is a center for the practice of sports and cultural and artistic activities by children and teenagers of
the region. The Space also offers a library with a catalog comprising over four thousand books. In 2010, we had
average 800 youngsters and teenagers enrolled in sports classes, and our book lending center recorded 2,415 book
withdrawals for average 694 enrolled participants;
BVS&A The Environment and Social Investment Exchange (Bolsa de Valores Sociais e Ambientais) this is a pioneering
program inspired in the operating model of a stock exchange, which works as a hub for investors interested in
contributing to environmental improvements and the advancement of education and community projects in search of
sponsors and financing. In 2010 the program amassed R$645 thousand to finance 19 community-oriented and
environmental projects);
Contributions to nonprofit and anchor institutions active in different sectors of the community contributions in excess
of R$1.35 million were made to 69 such institutions in 2010.

BM&FBOVESPA Job Training Association

Created in 1996, this job training association (Associao Profissionalizante BM&FBOVESPA) is committed to promoting social
inclusion. For this it implements social assistance and education actions aimed to modify present conditions to ensure that
young adults are given an opportunity to build on their capabilities and skills for a better future. Programs offered by the
Association include Building Employability Skills (Capacitao para Empregabilidade), Handyman (Faz Tudo) and Beauty Space
(Espao Beleza).
In addition to activities in its base, So Paulo, the association developed a partnership with the Mangueira Samba School
(originated in the Mangueira favela of Rio de Janeiro) to implement the Handyman program in the city of Rio de Janeiro.
Previously, in 2008, it had already implemented the Beauty Space program in Rio de Janeiro as well.
Over 520 young adults benefited from these programs in 2010, both in So Paulo and Rio de Janeiro.

BM&FBOVESPA Athletic Club

The Company actively supports sports since 1988, when the Ouro Olmpico award (Olympic Gold award) was established to
reward Brazilian athletes for outstanding performance in Olympic Games. In 2002, the Athletic Club was organized to permit us

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

to take a more inclusive approach to corporate citizenship and a more active role in the preparation and sponsorship of track
and field athletes. Track and field athletics is very popular and has a highly positive impact on lower income communities. In
addition to working with youngsters from the community with a view to promoting social inclusion, our Athletic Club sponsors a
number of outstanding track and field athletes, 111 of whom were competing in 2010 at an international level under
sponsorship of the Company, which funds the athletes expenses with uniforms, equipment and gear, transportation, training,
pays a stipend and in some cases housing allowance as well. Also in 2010, the Club won the Brazilian Track and Field Trophy
for the ninth consecutive time and held a ceremony at which we laid the cornerstone of a new Training Center which will be
built in the city of So Caetano do Sul, state of So Paulo.

Sustainability Committee and Commission

The sustainability committee has been established within the scope of our sustainability program. The committee is chaired
by the chief executive, Edemir Pinto, three other executive officers, three officers, the market ombudsman and one external
member. The very existence and standing of this committee evidence our deep commitment to sustainability and our
decision to taking a multidisciplinary approach to the matter, in a way that engages all of us, from top to bottom, in the
effort.
The primary responsibility of the committee is to provide strategic guidance in setting our sustainability agenda, to approve
and oversee implementation of the sustainability plan and macro initiatives, and other related actions and campaigns.
Additionally, the committee is supported by a sustainability commission created at the level of middle management with the
responsibility of developing the sustainability agenda and tackling day-to-day activities, reporting to the sustainability
committee.
8. Economic group
8.1.

Description of the economic group in which the issuer is a member.

a.

direct and indirect controlling shareholders

We have no direct or indirect controlling shareholder or controlling group of shareholders sharing similar interests. In
addition, there are no shareholders agreements regulating rights to elect members of our board of directors or the exercise
of voting rights by shareholders.
b.

subsidiaries and affiliates

BM&F Settlement Bank (Banco BM&F de Servios de Liquidao e Custdia S.A.)

The BM&F Settlement Bank was first organized in 2004 as a wholly-owned subsidiary of BM&F, formerly an independent
commodities and futures exchange, with the purpose of providing services that meet the specificities and peculiarities of the
markets in which we operate, offering our clearing facilities and participants with access to these facilities services that
simplify the clearing, settlement and custody of securities and other financial assets, in addition to performing important r isk
mitigation and operating support roles. For additional information on our settlement bank, see section 7 of this Form under
the heading Business.

BM&F (USA) Inc.

BM&F USA Inc. is a wholly-owned subsidiary based in New York, which also operates a representative office in Shanghai,
China. It operates in these regions as our cross-border representative offices, establishing professional relationships with
other exchanges and regulatory agencies, and prospecting customers for BM&FBOVESPA markets.

BM&FBOVESPA (UK) Ltd.

In the second half of 2010, we started a restructuring process involving our subsidiaries abroad. Ultimately, according to
corporate documents dated February 1, 2011, BM&FBOVESPA (UK) Ltd., based in London, which previously was a whollyowned subsidiary of BM&F (USA) Inc. is now directly under our wholly-owned control. It has similar objectives as BM&F (USA) Inc.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

The Brazilian Commodities Exchange is a mutualized not-for-profit entity in which BM&FBOVESPA holds a 50.12% majority
membership interest consisting of 203 membership certificates. It is based in the city and state of So Paulo, and operates
(through branches) regional market centers in the states of Gois, Mato Grosso do Sul, Cear, Minas Gerais, Paran and Rio
Grande do Sul. The corporate purpose of the Brazilian Commodities Exchange is to develop and (through branches) provide
regional market centers, including cash and forward markets for the trading of agricultural commodities and OTC
agribusiness securities, for the development of an organized, wide and active domestic market and reliable price-formation
mechanisms for the Brazilian agribusiness. For additional information, see section 7 of this Form under the heading
Business.

Rio de Janeiro stock exchange, or BVRJ (Bolsa de Valores do Rio de Janeiro)

BVRJ is an inactive stock exchange. BVRJ is an inactive stock exchange. Beginning from 2004 it rents out space in part of the

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

building where its registered office is located.The Rio Exchange Convention Center is leases space for seminars, congresses,
conferences, professional training sessions, private meetings, and similar other events.
c.

Equity holdings in companies belonging to the economic group

Subsidiaries and affiliates

Equity holding(%)

BM&F Settlement Bank

Brazilian Commodities Exchange
Rio de Janeiro Stock Exchange
BM&F (USA) Inc.
BM&FBOVESPA (UK) Ltd.

d.

100.00%
50.12%
86.09%
100.00%
100.00%

Interest held in our shares by companies belonging to the economic group.

There are no such holdings by our subsidiaries or affiliates.

e.

Companies under common control.

We hold no interest in companies under common control with other parties.

8.2.

Organizational chart of the economic group.

BM&FBOVESPA GROUP ORGANIZATIONAL CHART

8.3. Description of the restructuring processes within the economic group, including spin off, consolidation,
merger or share merger transactions, dispositions or acquisitions of ownership control or of material or
substantial assets.
There have been no restructuring transactions materially impacting our economic group, other than the transactions set
forth in subsection 6.5 of this Form.
8.4.

Other material information.

There is no additional material information related to our economic group and this subsection.
9. Relevant assets
9.1. Noncurrent assets which are relevant to the development of Company activities
a.

Fixed assets, including fixed assets which are objects of rental or leasing, reporting their locations

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Type of property

Property address

City

State

Rented/Leased
from third parties

Building
Building
Building
Building
Office space
Office space

Praa Antonio Prado 48

Rua XV de Novembro 275
Rua Florncio de Abreu 195
Rua 3 de Dezembro 38
Rua Marechal Deodoro 344
Rua dos Carijs 126
Rua do Mercado 11
(ground floor / mezzanine)

So Paulo
So Paulo
So Paulo
So Paulo
Curitiba
Belo Horizonte

So Paulo
So Paulo
So Paulo
So Paulo
Paran
Minas Gerais

No
No
No
No
No
No

Rio de Janeiro

Rio de Janeiro

No

Rua dos Andradas 1,234

Porto Alegre

Office space

Rua Lbero Badar 471, 6 floor

Praa XV de Novembro 20
Estrada Vinte e Seis, no number
Rua Boa Vista 208 Jockey Club Building (1st to 5th floors, 11st floor)
Rua Alta Floresta 20
Rua Pernambuco 1,267

So Paulo
Rio de Janeiro
Santana de Parnaba

Rio Grande do
Sul
So Paulo
Rio de Janeiro
So Paulo

So Paulo

So Paulo

Yes

Sorriso
Rondonpolis

Mato Grosso
Mato Grosso

Yes
Yes

Rua Urutagu (Commodity classification, grading)

So Paulo

So Paulo

Yes

Office space
Office space
Office space(*)

Plot of land
Classrooms
Warehouses
Warehouses
Commodity
grading facility
(shed)

th

No
No
No
No

( )

* This building belongs to BVRJ, a mutual association in which we hold 86.09% of the membership certificates.

a.

Patents, trademarks, licenses, concessions, franchises, and technology transfer agreement

1) Registered trademarks and registration applications in Brazil
Trademark

Case Record No.

Status

Class

Deposit date

Registration date

BM&F

812290143

Registered

36.50/60/70

11/7/1985

10/27/1987

IBOVESPA

813834600

Registered

NCL 36

9/22/1987

2/6/1990
2/6/1990

BOVESPA

813878128

Registered

NCL 36

10/29/1987

FUTURO IBOVESPA

813878144

Registered

NCL 36

10/29/1987

2/6/1990

BM&F

815089414

Registered

NCL 36

9/22/1989

3/17/1992

BOLSA DE MERCADORIAS & FUTUROS - BM&F

BOLSA DE MERCADORIAS DE SO PAULO
BOVESPA BOLSA DE VALORES DE SO PAULO
BOVESPA BOLSA DE VALORES DE SO PAULO

816169683

Registered

NCL 36

7/4/1991

7/12/1994

816690154

Registered

36.70

5/19/1992

1/25/1994

820693081

Registered

NCL 36

5/28/1998

4/3/2001

200010476

Registered

NCL 42

5/29/1998

6/19/2001

BOVESPA

820833193

Registered

NCL 36

8/10/1998

2/17/2004

BTC - BANCO DE TTULOS CBLC

821874640

Registered

36.10/70

12/15/1999

8/25/2009

821877259

Registered

36.10/70

12/16/1999

4/18/2006

BRAZILIAN CLEARING AND DEPOSITORY

CORPORATION - CBLC
CBLC

821877348

Registered

36.10/70

12/16/1999

4/18/2006

MULTIBROKER

822059380

Registered

NCL 36

3/14/2000

10/13/2009

SISBEX

822744260

Registered

NCL 36

5/222000

8/22/2006

822472791

Registered

NCL 36

7/27/2000

9/12/2006

822472813

Registered

NCL 38

7/27/2000

9/12/2006

823194264

Applied for

NCL 36

4/23/2001

BM&F GLOBAL TRADING SYSTEM

BM&F BRAZILIAN MERCANTILE & FUTURES
EXCHANGE

823411656

Registered

NCL 36

7/5/2001

2/21/2007

823411680

Registered

NCL 36

7/5/2001

2/21/2007
2/21/2007

CBLC COMPANHIA BRASILEIRA DE LIQUIDAO E

CUSTDIA
CBLC COMPANHIA BRASILEIRA DE LIQUIDAO E
CUSTDIA
BOVESPA FIX MERCADO DE TTULOS DE DVIDA
CORPORATIVA

BM&F BRASIL

823411710

Registered

NCL 36

7/5/2001

GTS - GLOBAL TRADING SYSTEM

823454258

Applied for

NCL 36

7/20/2001

BM&F TRADING SYSTEM

826745741

Registered

NCL 36

10/14/2004

12/9/2008

BM&F TRADING SYSTEM

826745750

Registered

NCL 16

10/14/2004

9/11/2007

BM&F TRADING SYSTEM

826745768

Registered

NCL 42

10/14/2004

9/11/2007

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

BM&F TRADING SYSTEM

826745776

Registered

NCL 41

10/14/2004

BM&F TRADING SYSTEM

826745784

Registered

NCL 36

10/14/2004

9/11/2007

MEGABOLSA MB

827242328

Registered

NCL 36

3/17/2005

11/20/2007

BOVESPA MAIS BRASIL

ISE NDICE DE SUSTENTABILIDADE
EMPRESARIAL
NVEL 1 BOVESPA BRASIL
NOVO MERCADO BOVESPA BRASIL
NVEL 2 BOVESPA BRASIL
BANCO BM&F

827634048

Registered

NCL 36

8/12/2005

12/26/2007

828056102

Registered

NCL 36

1/20/2006

3/18/2008

828232202

Applied for

NCL 36

3/29/2006

7/27/2010

828232296

Applied for

NCL 36

3/29/2006

7/27/2010

828232253

Applied for

NCL 36

3/29/2006

7/27/2010

900170212

Applied for

NCL 36

1/30/2007

BOVESPA

829295089

Applied for

NCL 16

9/4/2007

829344411

Applied for

NCL 36

10/9/2007

829344420

Applied for

NCL 42

10/9/2007

829344438

Applied for

NCL 16

10/9/2007

829549455

Applied for

NCL 36

2/15/2008

829549463

Applied for

NCL 41

2/15/2008

Bm&f Bovespa

829678557

Applied for

NCL 41

5/6/2008

Bm&f Bovespa

829678565

Applied for

NCL 36

5/6/2008

BM&F BOVESPA A NOVA BOLSA

BM&F BOVESPA A NOVA BOLSA

830006273

Applied for

NCL 41

12/8/2008

830006281

Applied for

NCL 36

12/8/2008

IBOVESPA

830006524

Applied for

NCL 41

12/8/2008

IBOVESPA

830006532

Applied for

NCL 36

12/8/2008

SINACOR

830050159

Applied for

NCL 36

2/5/2009

iMERCADO

830322876

Applied for

NCL 36

8/6/2009

BVMF

830323465

Applied for

NCL 41

8/7/2009

BVMF

830323511

Applied for

NCL 36

8/7/2009

BVMF

830323520

Applied for

NCL 42

8/7/2009

DESAFIO BM&FBOVESPA
Educar BM&FBOVESPA
ndice BM&FBOVESPA Financeiro - IFNC
ndice BM&FBOVESPA Financeiro - IFNC

830404660

Applied for

NCL 36

10/23/2009

830467351

Applied for

NCL 41

12/21/2009

830501428

Applied for

NCL 36

1/6/2010

830501410

Applied for

NCL 35

1/6/2010

MERCADO INTERNACIONAL BOVESPA BDR - NO

PATROCINADO
MERCADO INTERNACIONAL BOVESPA BDR - NO
PATROCINADO
MERCADO INTERNACIONAL BOVESPA BDR - NO
PATROCINADO
BVS&A BOLSA DE VALORES SOCIAIS E
AMBIENTAIS BOVESPA
BVS&A BOLSA DE VALORES SOCIAIS E
AMBIENTAIS BOVESPA

i.

9/11/2007

2/1/2011

Term

Under the Brazilian Industrial Property Law (Law No. 9,279/96, as amended), the legally prescribed term of effectiveness of a
trademark registration is 10 years from the grant, successively renewable for additional ten-year periods with no limitation.
ii.

Territory

iii.

Events triggering loss of rights on these assets

Brazil.
Other than legally prescribed events, we are not aware at this time of any circumstance which could lead to loss of rights on
any particular trademark. Also, we do not anticipate facing any event or circumstance which could result in loss of rights on any
particular trademark. No trademark or trademark application has been contested or challenged in any way, whether
administratively or before the courts.
iv.

Potential effects of a loss of rights for the issuer

A loss of rights would result in obligation to discontinue use of the relevant trademark, which despite being a possibility is not
anticipated or likely to occur.
2) Registration of relevant trademarks abroad
Country

Argentina

Trademark

Case record

Status

Class

Deposit date

IBRX

2.039.057

Registered

NLC 36

1/7/2004

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Canada

INDICE BOVESPA
BOVESPA BOLSA DE VALORES DE
SO PAULO
BOVESPA BOLSA DE VALORES DE
SO PAULO
INDICE BOVESPA

Canada

IBOVESPA

Chile
Chile

Argentina
Argentina
Argentina

Chile

1.980.146

Registered

NLC 36

12/1/2003

1.983.386

Registered

NLC 36

4/20/1993

1.983.387

Registered

NLC 41

2/2/2004

TMA502264

Registered

NLC 16/35/36

5/12/1995

TMA502354

Registered

NLC 16/35/36

5/12/1995

INDICE BOVESPA

680.921

Registered

NLC 36

12/15/1992

IBOVESPA
BOVESPA SO PAULO STOCK
EXCHANGE

680.922

Registered

NLC 36

12/15/1992

681.837

Registered

NLC 36

4/21/1993

681.838

Registered

NLC 36

4/21/1993
2/12/2004

BOVESPA BOLSA DE VALORES DE

SO PAULO

Chile
Chile
Singapore
EU Office for Harmonization
in the Internal Market
(Trade Marks and Designs)
Spain

IBRX

703.162

Registered

NLC 36

IBOVESPA

T9502807G

Registered

NLC 36

IBRX

003657641

Registered

NLC 36

2/10/2004

IBOVESPA

1.996.972

Registered

NLC 36

5/23/1995

United States of America

IBRX

3112388

Registered

NLC 36

2/18/2004

United States of America

PIBB PAPIS DE NDICE BRASIL

BOVESPA

3187956

Registered

NLC 36

7/13/2004

United States of America

IBOVESPA

3247943

Registered

NLC 36

7/27/2004

France

IBOVESPA

95557762

Registered

NLC 36/41

2/10/1995

Hong-Kong

INDICE BOVESPA

199803186

Registered

NLC 36

4/25/1995

Hong-Kong

IBOVESPA

199806844

Registered

NLC 36

4/25/1995

Japan

IBOVESPA

4055845

Registered

NLC 36

4/14/1995

Mexico

IBOVESPA

509.242

Registered

NLC 36

3/3/1995

Paraguay

BOVESPA

256303

Registered

NLC 42

11/17/1992

Paraguay

INDICE BOVESPA

259791

Registered

NLC 36

11/16/1992

Paraguay

IBOVESPA

259792

Registered

NLC 36

5/22/2003

260020

Registered

NLC 41

5/7/1993

260021

Registered

NLC 36

4/23/1993

260022

Registered

NLC 36

4/23/1993

BOVESPA BOLSA DE VALORES DE

SO PAULO
BOVESPA BOLSA DE VALORES DE
SO PAULO

Paraguay
Paraguay

Paraguay

BOVESPA SO PAULO STOCK

EXCHANGE
IBRX

270402

Registered

NLC 36

1/9/2004

Portugal

IBOVESPA

307.429

Registered

NLC 35

2/17/1995

Portugal
The United Kingdom of
Great Britain and Northern
Ireland
The United Kingdom of
Great Britain and Northern
Ireland
The United Kingdom of
Great Britain and Northern
Ireland
South Korea

IBOVESPA

307.430

Registered

NLC 36

2/17/1995

IBOVESPA

2021172

Registered

NLC 16/35/36

5/22/1995

PIBB PAPIS DE NDICE BRASIL

BOVESPA

2367095A

Registered

NLC 36

6/30/2004

PIBB PAPIS DE NDICE BRASIL

BOVESPA

2367095B

Registered

NLC 36

6/30/2004

Paraguay

IBOVESPA

34906

Registered

NLC 36

4/6/1995

Switzerland

IBOVESPA

427536

Registered

NLC 16/35/36

3/29/1995

Taiwan

IBOVESPA

83189

Registered

NLC 35

3/9/1995

Taiwan

IBOVESPA

84268

Registered

NLC 36

3/9/1995

Uruguay

IBRX

352.300

Registered

NLC 36

1/13/2004

Uruguay

IBOVESPA

347.426

Registered

NLC 36

11/17/1992

Uruguay

BOVESPA BOLSA DE VALORES DE

SO PAULO

348.234

Registered

NLC 36

4/23/1993

i.

Term of effectiveness

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

The term of effectiveness of trademarks we registered abroad is as provided in the applicable law of each relevant jurisdiction
(usually, 10 years from the grant date, successively renewable for additional ten-year periods with no limitation).
ii.

Territory

Argentina, Canada, the European Union Office for Harmonization in the Internal Market (OHIM), Switzerland, Chile, Spain,
France, United Kingdom, Hong Kong, Japan, South Korea, Mexico, Portugal, Paraguay, Singapore, Taiwan, United States and
Uruguay.
iii.

Events triggering loss of rights on these assets

Other than legally prescribed events, we are not aware at this time of any circumstance which could lead to loss of rights on
any particular trademark. Also, we do not anticipate facing any event or circumstance which could result in loss of rights on any
particular trademark. No trademark or trademark application has been contested or challenged in any way at either the
administrative sphere or before the courts.
iv.

Potential effects of a loss of rights for the issuer

A loss of rights would result in obligation to discontinue use of the relevant trademark, which despite being a possibility is not
anticipated or likely to occur.
3)

Patent applications in Brazil

Application date

Deposit date

Publication date

Title

PI 0801789-1

4/30/2008

Pending
publication

EXCHANGE TRADING SYSTEM

PI 0801983-5

5/29/2008

2/9/2010

PRICING SYSTEM AND COLLECTION PROCESSING

PI 0801982-7

5/29/2008

2/9/2010

STRAIGHT-THROUGH TRADE PROCESSING

AND ASSISTANCE SYSTEM

i.

Status

Patent application
in effect
Patent application
in effect
Patent application
in effect

Term of effectiveness

Under the Brazilian Industrial Property Law (Law No. 9,279/96, as amended), the legally prescribed term of effectiveness of a
patent of invention is 20 years from the deposit date. Our patent applications have yet to be granted.
ii.

Territory

iii.

Events triggering loss of rights on these assets

Brazil.
Other than legally prescribed events, we are not aware at this time of any circumstance which could lead to loss of rights on
any particular invention for whose patent we have filed application. Also, we do not anticipate facing any event or circumstance
which could result in loss of rights on any such invention. No patent application of ours has been contested or challenged in any
way, whether administratively or before the courts.
iv.

Potential effects of a loss of rights for the issuer

A loss of rights would result in obligation to discontinue use of the relevant trademark, which despite being a possibility is not
anticipated or likely to occur given the information provided in the preceding item.
4)

Patent Applications Abroad

Country

Application No.

Deposit date

Status

Argentina

P 09 01 01948

May 29, 2009

Patent application in effect

Argentina

P 09 01 01947

May 29, 2009

Patent application in effect

i.

Term of effectiveness

The term of effectiveness of patents of invention in other countries is as provided in the applicable law of each relevant
jurisdiction (usually, 20 years from the grant date). However, our patent applications have yet to be granted.
ii.

Territory

Argentina.
iii.

Events triggering loss of rights on these assets

Other than legally prescribed events, we are not aware at this time of any circumstance which could lead to loss of rights on
any particular trademark. Also, we do not anticipate facing any event or circumstance which could result in loss of rights on any
particular trademark. No patent application of ours has been contested or challenged in any way at either the administrative
sphere or before the courts.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

iv.

Potential effects of a loss of rights for the issuer

A loss of rights would result in obligation to discontinue use of the relevant trademark, which despite being a possibility is not
anticipated or likely to occur given the information provided in the preceding item.
5)

Technology transfer agreements

Technology Transfer Agreement CME BM&FBOVESPA

Technology recipient: BM&FBOVESPA
Technology provider: the CME Group
Subject-matter of the agreement: development of a multi-asset class electronic trading system for the trading of individual
equities and other equity securities; equity, financial and commodity derivatives; private debt securities and government bonds;
agricultural commodities, spot products and foreign exchange and other products covering all markets operated by
BM&FBOVESPA. In addition, as implemented the new multi-asset class trading platform will permit the Company to process
more efficiently and with no interruption transactions typically carried out on other markets it may organize and operate in the
future.
i.

Term of effectiveness

We estimate the agreement, which was executed in 2010, will be effective for twelve (12) years commencing from the
execution date.
ii.

Territory

iii.

Events triggering loss of rights on these assets

Brazil.
We are currently not aware of any events that could trigger loss of our rights under the technology transfer agreement. In
addition, no third party has challenged or contested nor is expected to challenge or contest our rights under such agreement.
iv.

Potential effects of a loss of rights for the issuer

We do not anticipate any event that could potentially result or threaten to result in loss of our rights under the technology
transfer agreement. Additionally, even if the agreement were to terminate, we could resort to existing alternative technology
solutions.
6)
i.

Other material technology agreements

Term of effectiveness

Each contract has its own renewal time frames and methodologies, which meets market standards or BM&FBOVESPAs specific
operational needs.
ii.

Territory

Mostly in Brazil, with possible effects on other countries due to the nature of the activities performed by BM&FBOVESPA.
iii.

Events triggering loss of rights on these assets

We are currently not aware of any events that may cause the loss of rights arising from the aforementioned contracts
applications. Furthermore, these contracts are not subject to any administrative or judicial dispute by third-parties
iv.

Potential effects of a loss of rights for the issuer

No events that may cause the loss of the rights arising from the aforementioned contracts are currently envisaged. In addition,
there are alternative solutions to those currently used by the company, which could be replaced in case of termination of the
contractual relationship.
6.1)

Overview

Currently, the technology contracts that are relevant for the development of our activities are as follows: (i) software
assignment and transfer contract, signed with Multibroker S.A, through which we were assigned ownership of the web-based
transaction management and processing software called Multibroker Electronic Securities Trading System; (ii) license and
maintenance contracts for use of (a) the software applications for the trading engine of our electronic trading platforms
(Megabolsa and GTS described below) and (b) a trading system, also for the GTS, called GLWin, with GL Trade, in addition to
RiskWatch, which measures the risk of the regular equities settlement cycle; (iii) license contracts for use of the software
applications used to develop our activities, signed with the holders of the rights on the aforementioned software applications;
and (iv) contracts for the update, technical support and maintenance of equipment used to develop our activities, including the
technological platforms of our trading systems, signed with information technology service providers.
We and the CME Group executed in 2010 a technology agreement according to which we will collaborate in the joint
development and implementation of a multi-asset class electronic trading platform with lower than one-millisecond processing
capacity, based on technology derived from the CME Globex trading system and new technology we will develop jointly. This

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

trading platform will provide the infrastructure required for the trading of individual equities, derivatives (futures and options)
on individual equities, derivatives (futures and options) on equity indices, other futures, options on futures and options on spot
products, forward contracts, spot foreign exchange currencies and a number of other products covering all markets we operate,
and shall include components and modules providing functionalities that will gradually replace our existing trading platforms and
systems (per item 6.2 below). In addition, we will develop a new block-trading platform.
We and the CME will be co-owners of this new multi-asset class trading platform and, through mutually granted perpetual,
irrevocable, non-exclusive and worldwide rights and licenses, joint holders of the related intellectual property rights, including
rights on improvements, upgrades and derivative software. In addition, within the scope of this partnership, the CME will
transfer to the Company, and grant rights to use the complete source code and object code of the CME software (the Globex
system software), along with all the knowledge required for joint development, implementation and operation of the new
trading platform, which will enable the Company to use, understand and exploit the CME software, the system, the jointly
developed modules and any independently developed modules, including commercially exploit them in certain regions and
under certain conditions.
In addition to the aforementioned contracts, we have executed contracts with companies (vendors) specialized in the
distribution of market data generated in our markets, including market information on executed trades and market quotes.
6.2)

Electronic Trading Systems

We provide electronic trading systems for the execution of purchase and sale transactions, auctions and special transactions for
derivatives, equities and fixed income in the Exchange and OTC markets.
6.2.1) MegaBolsa
After seven years using a version of the CATS system, which was developed by the Toronto Exchange, in 1997 we began to use
MegaBolsa electronic trading platform, which was developed by the SBF-Paris Bourse, currently called Atos Euronext Market
Solution, which, in 1995, after its open-outcry platform was closed, assumed the processing of all equities transactions carried
out in our markets. In addition, our trading, clearing and settlement systems and depository services are fully integrated.
Our equities trading system processes bids and asks electronically, with reliability, agility and transparency, allowing investors,
Intermediary Institutions and online data agencies to visualize all offers in real time via Internet or via private networks
connected to our system.
In addition, the MegaBolsa system allows transactions to be monitored in order to track and identify any problems in the case
of a deviation in response time, permitting not only the collection of data for control analysis purposes, but also the
development of tools that speed up the transmission of orders to the market and make possible the automatic registration of
stock purchases and sales via automated offers (program trading).
Via automated connections or gateways, the Exchange allows orders to be received through the order routing system, which is
geared to the following types of investors:
a) Retail Investors individual investors, non-financial companies and investment clubs;
b) Institutional Investors mutual funds, pension funds, insurance companies and others; and
c) Portfolio managers customer portfolios managed by duly authorized and registered managers.
The available order routing functionalities are limited when compared to those available in the MegaBolsa terminals.
6.2.2) GTS and Sisbex
Introduced in 2000, the Global Trading System, or GTS, is our electronic trading platform for the (exchange-traded) derivatives
market, the bonds market, the spot foreign currency market and the carbon market. GL Trade developed the GTS system and
provided also the trading screen software, GL WinFix, also known as GTS Fix, which we provide for dealings on these specific
markets. All derivatives contracts authorized by BM&FBOVESPA can be traded on GTS, except for the OTC contracts.
We also have an electronic trading system, called the Sisbex, which was especially adapted for the execution of transactions
with federal government bonds, particularly definitive purchase and sale transactions, repo transactions and stock lending
transactions.
6.2.3) Bovespa Fix and Soma Fix
The electronic fixed income trading system is the SIOPEL, which was developed by Mercado Abierto Electronico S.A. (MAE), the
main debt securities market in Argentina. In 2001, after acquiring the trading platform, BVSP entered into a partnership with
MAE and Bolsa Electronica de Valores del Uruguay S.A. (BEVSA) to further develop and enhance the software.
Since the software was originally developed for the debt securities market, it includes features trading characteristics of that
market, such as trading in rate, price quotation requests and spread orders.
Besides providing the fixed income market with a safe, modern and reliable environment, one of the SIOPEL systems major
advantages is the flexibility that it provides to market managers and traders.
In addition to being used by BM&FBOVESPA (for its government bond market), the SIOPEL system is also used by the Colombia

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Exchange and the Colombia Republic Bank.

6.3)

Sinacor

In addition, we also develop and offer the Integrated Brokerage House Management System (SINACOR), which provides
services with safety, efficiency and efficacy and can process various middle and back office activities for brokerage houses and
other Intermediary Institutions.
b.

Companies in which the issuer holds ownership interest

Name
Registered office
Business

Ownership interest

BM&F Settlement Bank

(Banco BM&F de Liquidao e Custdia S.A.)

Brazilian Commodities Exchange

(Bolsa Brasileira de Mercadorias)

So Paulo, Brazil

Brasilia, Brazil

Facilitates the clearing and settlement of the

transactions carried out on BM&FBOVESPA
markets; provides operating support; acts as
important risk mitigation vehicle

Facilitates the trading of agricultural

commodities, provides services for the public
sector by operating the electronic auctions
system and for the agribusiness sector
operating a market for agricultural
commodities.

100.0%

50.1%

Subsidiary

Subsidiary

Not registered as a public company

(privately-held)

Not registered as a public company

(privately-held)

R$ 44,935

R$ 8,011

Not applicable

Not applicable

Appreciation or depreciation in carrying value

in the last three years
(In R$ thousands)

None, other than our share of the profit of

equity-method investment amounting to R$4,980

None, other than our share of the profit of

equity-method investment amounting to
R$2

Appreciation or depreciation in market value

in the last three years
(as per stock quote as at year-end)
(In R$ thousands)

Not applicable

Not applicable

Offering participants with access to our

clearinghouses access to convenience services
involving settlement and custody activities.

Facilitating the development and operation of

trading systems for a wider range of
commodities; facilitating the creation of a major
domestic market for agricultural commodities.

Rio de Janeiro Stock Exchange (BVRJ)

BM&F (USA) Inc.

Subsidiary or affiliate
CVM Registration
Investment carrying value
(In R$ thousands)
Investment market value
(as per stock quote as at year-end)
(In R$ thousands)

Total dividends received in the last three

years
(In R$ thousands)
Reasons for the acquisition and maintenance
of this ownership interest

Name

(Bolsa de Valores do Rio de Janeiro BVRJ)

Registered office
Business

Ownership interest
Subsidiary or affiliate
CVM Registration
Investment carrying value
(In R$ thousands)

Rio de Janeiro, Brazil

New York, USA

BVRJ is not currently active. Since 2004 it now

rents space in its main office building (the former
exchange premises, now converted into a
convention center). The Rio Exchange Convention
Center leases space for seminars, congresses,
conferences, professional training sessions,
private meetings, and similar other events. The
space allows for different set-up configurations
and types of social or institutional events.

Acts as our cross-border representative office,

establishing professional relationships with
other exchanges and market regulators; tackles
distribution of market data and other
information abroad; prospects for strategic
alliances and opportunities with other
exchanges, as well as potential customers for
our markets; provides support to securities and
commodities brokerage firms that service
foreign customers with local business.

86.1%

100.0%

Subsidiary

Subsidiary

Not registered as a public company

(privately-held)

Not registered as a public company

(privately-held)

51,427

348

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Not applicable

Not applicable

Appreciation or depreciation in carrying value

in the last three years
(In R$ thousands)

None, other than our share of the profit of

equity-method investment amounting to R$132

None, other than our share of the profit of

equity-method investment amounting to
R$3,683

Appreciation or depreciation in market value

in the last three years
(as per stock quote as at year-end)
(In R$ thousands)

Not applicable

Not applicable

In the interest of the evolution of the Brazilian

stock market, in 2000 we agreed with other
regional exchanges a program aimed to
concentrate the trading of Brazilian equities in the
So Paulo Stock Exchange. In 2002, the Brazilian
Commodities & Futures Exchange (BM&F) took
over BVRJ and in the process acquired the rights
to manage and operate the Sisbex system for the
trading of government bond.

Establishing professional relationships

with other exchanges and market regulators;
prospecting for strategic alliances and
opportunities with other international
exchanges; prospecting foreign customers
for our local markets.

CME Group

BM&FBOVESPA (UK) Ltd. (*)

Chicago, USA

London, UK

The CME Group serves the risk management

needs of customers around the world. It owns
and operates large derivatives and futures
exchanges in Chicago and New York City,
as well as online trading platforms. As an
international marketplace, it attracts buyers and
sellers to its electronic trading systems,
(CME Globex) and open-outcry system. It also
owns the Dow Jones stock and financial indexes.
And it provides the widest range of benchmark
futures and options products available on any
exchange, covering all major asset classes.
The contracts CME exchanges trade include
futures and options based on interest rates,
equity indexes, foreign exchange, energy,
agricultural commodities, rare and precious
metals, weather and real estate.

Acts as our cross-border representative office,

establishing professional relationships with
other exchanges and market regulators; tackles
distribution of market data and other
information abroad; prospects for strategic
alliances and opportunities with other
exchanges, as well as potential customers for
our markets; provides support to securities and
commodities brokerage firms that service
foreign customers with local business.

5.0%

100.0%

Affiliate

Subsidiary

Registered with the SEC

(Securities and Exchange Commission)

Not registered as a public company

(privately-held)

Investment carrying value

(In R$ thousands)

2,248,325

Investment market value

(as per stock quote as at year-end)
(In R$ thousands)

1,838,568

Appreciation or depreciation in carrying value

in the last three years
(In R$ thousands)

None registered, other than our share of the

profit of equity-method investment amounting to
R$ 38,238 (see subsection 9.2)

Appreciation or depreciation in market value

in the last three years
(as per stock quote as at year-end)
(In R$ thousands)

2010 69,617
2009 - 117,266
2008 - (697,893)

2010 - 18,169
2009 - 12,592
2008 - 20,650

Global preferred strategic partnership whereby

Establishing professional relationships

Investment market value

(as per stock quote as at year-end)
(In R$ thousands)

Total dividends received in the last three

years
(In R$ thousands)
Reasons for the acquisition and maintenance
of this ownership interest

Name
Registered office
Business

Ownership interest
Subsidiary or affiliate
CVM Registration

Total dividends received in the last three

years
(In R$ thousands)
Reasons for the acquisition and maintenance

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

of this ownership interest

the two exchanges collaborate in identifying

strategic joint investment and commercial
partnership opportunities in securities and
derivatives markets, in addition to joint
development of a new multi-asset class
trading platform.

with other exchanges and market regulators;

prospecting for strategic alliances and
opportunities with other international
exchanges; prospecting foreign customers
for our local markets.

( )

* We have restructured our subsidiaries abroad, such that according to corporate documents and agreements dated February 1, 2011,
BM&FBOVESPA (UK) Ltd., based in London, which previously was a wholly-owned subsidiary of BM&F (USA) Inc. is now directly controlled by
BM&FBOVESPA.

9.2. Other information that the Company deems relevant

Starting from July 2010, when we acquired additional 3.2% of the outstanding shares of CME, our aggregate ownership interest
in the CME Group climbed to 5.0% (from 1.78% previously), which made us the largest shareholder of the CME Group. As a
result, we now account for our investment in CME under the equity method of accounting, and recognize our share of the profit
or loss of this equity-method investment through profit or loss (in the statement of income).
10. Managements discussion and analysis of financial condition and results of operations
10.1

The following discussion and comparative analysis have been based on our consolidated financial
statements for the periods presented.
a.

financial condition and net equity position

Year ended December 31, 2010 compared with year ended December 31, 2009.
The Brazilian economy consolidated in 2010 the recovery started late in 2009 in the wake of the global economic downturn
driven by the 2008 international financial crisis. This economic environment has positively impacted on the average daily
volume traded on BM&F segment markets, which soared 64.7% year-on-year, and the average daily value traded on Bovespa
segment markets, which surged 22.7% from one year ago.
This strong operating performance resulted in 25.7% rise in our gross revenues, a 29.9% jump in net income 1 and 34.9%
increase in EBITDA2, which shot EBITDA Margin3 to 69.6% from 64.9% in the prior year.
In the Bovespa segment, two primary factors influenced our financial performance:
a prolonged market overhang sparked by uncertainties around the then-upcoming Petrobras offering slowed trading
volumes significantly, but trading volumes sprang back promptly after the offering closed.
a rebound in the market prices for stocks followed to boost trading volumes further, and while at year-end the
Ibovespa, or Bovespa Index, the primary index of the Brazilian stock market, had climbed just 1.0% year-on-year, the
average Ibovespa had risen 27.8% over the 2009 average.
Volume growth in the BM&F segment in turn was driven primarily by strong trading in Brazilian-interest rate futures contracts,
the most actively traded group of contracts, whose average daily volume traded rose nearly 100% mainly as a result of
increased credit availability and volatility pushed by differing perceptions and expectations about the Central Banks decisions on
the direction and size of the Selic rate, which is the Brazilian base interest rate.
Further denoting the economic recovery is the rebound seen in the equity offering market, where IPOs, follow-on and seasoned
offerings made for the best year on record, placing the Brazilian equity offering market as the third largest worldwide by gross
proceeds from offerings, in no small part due to the largest ever equity offering conducted by Brazils oil and gas giant
Petrobras.
Moreover, having previously completed our initial efforts to consolidate the integration of BM&F and Bovespa, the two formerly
independent exchanges, we shifted our focus towards (i) enhancing our technology infrastructure through adoption of an
investment program designed to support our future growth (ii) pursuing opportunities in international markets, in particular by
strengthening our strategic partnership with the CME Group (iii) spurring growth in the equity offering market by increasing the
number of listings, (iv) developing new products, and, in particular (v) investing in financial education and forming an
1

Net income attributable to BM&FBOVESPA shareholders.

EBITDA is Earnings before interest, taxes, depreciation and amortization.
3
EBITDA divided by net revenue.
2

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

investment-minded middle class so as to widen capital markets penetration, which in the long run should revert to us in the
form of a broader investing public.

Year ended December 31, 2009 compared with year ended December 31, 2008.
Year 2009 dawned in anxiety amid the uncertainties of a distressed economic environment, bleak projections for the global
economic future, which redoubled at every turn of events, with every news headline or market development. This was the
economic landscape that emerged from the worst global financial crisis since the 1930s, started in 2008.
As a result, the scenario that emerged early in 2009 after the financial crisis peaked was one of a severe credit crunch pointing
to general deleveraging amidst a lively debate over the need for more stringent and efficient regulation for the financial and
capital markets, strong contraction in the prices of commodities and financial assets, and governments across the board moving
towards quantitative easing.
This combination of factors directly impacted performance in our markets. In the equities market (Bovespa segment), volumes
tumbled due mainly to the falling prices of stocks prompted by bearish sentiments and risk aversion, whereas in the derivatives
market (BM&F segment), hedging activities sank due mainly to the credit crunch, which coupled with general risk aversion and
strong deleveraging significantly depressed volumes. This low-volume scenario prevailed for most of the first half of 2009.
As a result of these factors the average daily volume traded on derivatives markets (BM&F segment) gave back 3.3% yearover-year, while the average daily value traded on equities markets (Bovespa segment) tumbled 4.3% year-over-year when
compared to 2008 averages, pushing a 6.2% decline in our gross revenues. However, given that we successfully implemented
certain cost savings plan (as discussed below), net income for the year shot up 36.5% year-over-year, EBITDA climbed 6.7%
and EBITDA Margin jumped to 64.9% from 57.0% one year earlier.
Despite the doom-and-gloom facing world economies however, and differently from developments in previous crises, Brazil
reacted positively and was one of the few countries to emerge relatively unscathed from the crisis. While the level of economic
activity did decrease, the country was less affected by the downturn than most other countries and the flow of foreign
investments increased in strides in the second half of the year, pushing strong appreciation in the Brazilian real to U.S. dollar
exchange rate.
An improved landscape in the latter half of the year and brighter prospects for the domestic economy positively impacted on
the equities markets. The Bovespa Index soared in the highest rise on record, to rank the biggest gainer among securities
markets across the world. The equity offering market rebounded to boom as the worlds most active after China, having closing
2009 as our second best year on record in total proceeds, which made Brazil the 4 th best performing country in terms of
proceeds from IPOs, and 7th by overall offering proceeds, in addition to having hosted the countrys largest IPO ever, conducted
by Banco Santander Brasil. These movements were topped by a surging stock market, which in the fourth quarter reached the
highest ever average daily trading value.
Meanwhile, in the BM&F segment, the market moves towards deleveraging continued to affect volumes traded negatively
including in the second half of 2009.
b.

Capital structure and likelihood of redemption of shares, including:

The Companys capital structure showed the following compositions: (i) On December 31, 2010 - 85.8% equity and 14.2%
liabilities, (ii) On December 31, 2009 92.8% equity and 7.2% liabilities, (iii) On December 31, 2008 - 94.4% equity and 5.6%
liabilities.
(In thousands of Reais)
Current and non-currrent liabilities

2010
3,214,927

%
14.2%

2009
1,494,946

%
7.2%

2008

1,138,365

5.6%

Shareholders equity

19,419,048

85.8% 19,342,893

92.8% 19,291,724

94.4%

Total liabilities and shareholders equity

22,633,975

100.0% 20,837,839

100.0% 20,430,089

100.0%

Out of the overall liabilities, there is a portion of onerous liability related mainly to the debt issued abroad on July 16, 2010 (see
section 10.1.f of this Reference Form):

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

2010

(In thousands of Reais)

Total onerous liability

1,043,213

Interes payable on debt issued abroad and loans

Debt issued abroad and loans

2009

5.1%

33,154

11,790

2008

4,087

0.1%

9,295

0.0%

4,087

1,010,059

2,495

Shareholders equity

19,419,048

94.9% 19,342,893

99.9%

19,291,724

100.0%

Total onerous liability and shareholders equity

20,462,261

100.0% 19,354,683

100.0%

19,295,811

100.0%

According to data presented above, the Company presents conservative levels of leverage, considering overall liabilities (current
liabilities and non-current liabilities) or just the onerous liabilities (debt and interest on debt).
i.
ii.

events of redemption
redemption price calculation method

Other than as legally provided, we are not contemplating any share redemption, nor any event that would trigger redemption
rights.
c.

Capacity to service the debt.

Net interest income for the year to December 2010 hit R$298,024 thousand and was up 17.4% year-on-year. Interest revenues
climbed to R$354,806 thousand from R$289,686 thousand one year ago, influenced by an increase in interest rates earned on
financial investments the higher average cash invested. However, net interest income was negatively affected by an increase in
interest expenses, which were up to R$56,782 thousand from R$35,824 thousand in the prior year due to the bond offering we
completed in July 2010.
Comparatively, our net interest income for the year to December 2009 reached R$253,862 thousand, as the result of interest
revenues totaling R$289,686 thousand (down 20.6% year-on-year from 2008, mainly due to decline in the average interest rate
earned on financial investments) and R$35,824 thousand in interest expenses (which were 39.2% down from one year earlier).
EBITDA for 2010 amounted to R$1,315,046 thousand, a 34.9% rise over EBITDA for 2009, which amounted to R$975,108
thousand, in a 6.7% rise from R$913,493 thousand in 2008. The 2010 EBITDA Margin climbed 69.6% year-on-year, as
compared with 64.9% and 57.0% in 2009 and 2008, respectively.
Net income for the year to December 2010, amounted to R$1,144,561 thousand, climbing 29.9% year-on-year and is
attributable mainly to our improved performance and a profit on equity method investment related to our ownership interest in
the CME Group. In turn, net income for the year to December 2009 amounted to R$881,050 thousand, up 36.5% year-on-year
primarily due to reduction in expenses. This reduction included a 27.4% dive in expenses with data processing and 37.8%
plunge in expenses with marketing and promotion, in each case pushed by our cost savings plan designed to capture synergies
from the process of integrating BM&F and Bovespa, the two formerly independent exchanges. Additionally, in 2008 we incurred
R$19.6 million in expenses with the integration process, which have not recurred in 2009.
Our net debt closing balance at December 31, 2010, was a negative number (R$2,392,132 thousand, negative) which compares
with equally negative numbers in 2009 and 2008 (respectively R$3,919,993 thousand and R$2,988,600 thousand, negative), in
each case denoting our low degree of financial leverage and very strong capacity to pay interest and repay principal.
In addition, cash and cash equivalents plus short- and long-term financial investments at December 31, 2010, totaled
R$3,435,345 thousand and accounted for 15.2% of total assets, whereas having amounted to R$3,236,211 thousand to
account for 15.3% of total assets in the prior year.
Given the nature of our available cash flows, which include our own financial resources as well as cash pledged as collateral by
customers, our policy calls for lower-risk investing of cash balances, which we typically accomplish by seeking very
conservative, highly liquid and safe investments, often by taking positions in Brazilian government bonds and debt-securities
whose yield and coupon rates typically track the base rate (interbank deposit rates or the Selic rate), whether or not including a
spread.
We therefore believe our Company is fully capable of servicing its debt both in the short- and long-term.
d.

Sources of working capital and capital expenditure financing.

We finance working capital and capital expenditure requirements primarily from our operating cash flow, which is sufficient to

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support all of the former and most of the latter.

In certain cases we have also accessed the capital markets (by issuing global notes) and entered into lease agreements as an
alternative to finance certain noncurrent assets. For additional information on the nature and characteristics of debt obligations,
see the discussion under subsection 10.1(f) below.
e.

Sources of working capital and capital expenditure financing that the company intends to use
to cover liquidity deficiencies.

As previously noted, operating cash flow generated by us constitutes the primary source for funding our own working capital
and capital expenditure requirements.
In addition, we may in certain cases consider alternative sources of funding, which include taking bank loans or accessing
government financing programs or the domestic or international capital markets.
In any event, while there are no reasons to believe we could experience liquidity deficiencies, should there be any need for us
to source additional funding in order to cover such deficiencies, we would benefit from investment grade ratings4 (foreign and
local currency) recently assigned to us by Moody's Investors Service and Standard & Poors in order to obtain financing through
any of the aforementioned sources.
f.

Indebtedness level and characteristics of existing debt obligations

On July 16, 2010 BM&FBOVESPA completed an offering of global senior unsecured notes priced at 99.635% of the aggregate
principal nominal amount of US$612,000 thousand, which after deducting underwriting discounts netted proceeds of
US$609,280 thousand (at the time equivalent to R$1,075,323 thousand). The notes, which mature on July 16, 2020, were
issued with interest coupon of 5.50% per annum payable every six months, in January and July. However, as computed to
include the transaction expenses, in particular underwriting discounts, commissions paid to the arranging and structuring banks
and other offering expenses, listing fees, legal fees, rating fees paid to Standard & Poors and Moodys, and ongoing
administration and custody expenses, the actual cost will represent a rate of 5.64% per annum. As translated into Brazilian
reais and including accrued interest of R$30,179 thousand, the balance of our debt under the global notes as of December 31,
2010, was R$1,041,238 thousand. We used the offering proceeds to purchase additional interest in the shares of the CME
Group effective July 16, 2010.
Starting from the notes issue date, we have designated as hedging instrument that portion of the principal under the notes
which correlates with changes in exchange rates in order to hedge the foreign currency risk affecting that portion of our
investment in the CME Group Inc which correlates with the notional amount of US$612 million (a hedging instrument in a
hedge of net investment in a foreign operation, per Note 7 to our financial statements as of and for December 31, 2010).
Accordingly, we have adopted net investment hedge accounting pursuant to accounting standard CPC-38 (Financial
Instruments: Recognition and Measurement), for which purpose the hedging relationship has been formally designated and
documented, including as to (i) risk management objective and strategy for undertaking the hedge, (ii) category of hedge, (iii)
nature of the risk being hedged, (iv) identification of the hedged item, (v) identification of the hedging instrument, (vi)
evidence of the actual statistical relationship between hedging instrument and hedged item (retrospective effectiveness test)
and (vii) a prospective effectiveness test.
Under CPC 38 (IAS 39) we are required to assess the hedge effectiveness periodically by conducting retrospective and
prospective tests. On testing backward-looking effectiveness, we adopt the ratio analysis method, also called dollar offset
method, as applied on a cumulative and spot-rate basis. In other words, this method compares changes in fair values of the
hedging instrument and hedged item attributable to the hedged risk, as measured on a cumulative basis over a given period
(from the hedge inception to the reporting date) using the foreign currency spot exchange rate as of each relevant date in
order to determine the ratio of cumulative gain or loss on the notes principal amount to cumulative gain or loss on the net
investment in a foreign operation over the relevant period. And on testing forward-looking effectiveness, we adopt stress
scenarios which we apply to the hedged variable in performing foreign currency sensitivity analysis to determine degree of
sensitivity to changes in exchange rates.
We have tested the hedge effectiveness retrospectively and prospectively, having determined that at December 31, 2010,
there was no realizable ineffectiveness. Moreover, at that date, the fair value of our debt under the notes, as determined
based on market data, was R$1,037,774 (Source: Bloomberg).
4

Standard & Poors Counterparty credit rating of BBB+ / Notes issue rating of A2; and
Moodys Issuer ratings of A1 on the global scale and Aaa.br on the Brazilian national scale / Notes rating of Baa2.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In addition to the funding transaction discussed above, BM&FBOVESPA has entered into borrowing transactions in the form of
computer equipment finance leases. As of December 31, 2010, the balance of such leases totaled R$2,975 thousand (versus
R$11,790 thousand at December 31, 2009; and R$ 4,087 thousand at January 01, 2009). These finance leases are set to
mature in April 2011.
The table below sets forth our principal total indebtedness indicators.
Indebtedness ratios
Total-Debt-to- EBITDA ratio
EBITDA-to-Interest Coverage ratio
( )

Net Debt * (in R$ thousands)

Year ended December 31,

2010

2009

2008

0.80

40

(2,392,132)

(3,919,993)

(2,988,600)

( )

* Net Debt = Remunerated Debt (Cash and cash equivalents + Financial investments)

g.

Restrictions on use of the proceeds of financing previously undertaken.

The indenture governing our issuance of senior unsecured notes includes certain limitations and requirements customary in
similar transactions found on the international debt markets, which we believe will not restrict our normal operating and
financial activities. Provisions containing such limitations and requirements include mainly the following:

Limitation on liens a provision limiting our and our subsidiaries ability to secure debt by creating liens (other than
certain permitted liens, as defined);

Limitation on sale and lease-back transactions;

General liens basket a provision permitting us to undertake additional debt provided the sum of (a) the aggregate

principal amount of all debt obligations secured by liens other than certain permitted liens (as defined), and (ii) debt
attributable to all our and our subsidiarys sale and lease-back transactions (with certain exceptions), should not
exceed 20% of our consolidated net tangible assets (as defined);

Limitation on mergers, consolidations or business combinations a provision restricting our ability to merge,
consolidate or otherwise combine with any other person unless the resulting or surviving company assumes
obligation to repay the principal and pay interest on the notes, and meets certain other requirements designed to
ensure compliance with the terms and conditions of the indenture.

However, these limitations and requirements include a number of exceptions which are set forth in the indenture. For a
comprehensive discussion of such limitations and requirements, and related exceptions, see the section Description of the
Notes Covenants of the Offering Memorandum for the Notes, and article IV of the notes Indenture under the heading
Covenants.
h.

Significant changes to line items of the financial reports.

Our consolidated financial statements as of and for December 31, 2010, and the comparative financial statements as of and for
December 31, 2009, have been prepared and are presented in accordance with the accounting standards generally accepted in
Brazil, observing the accounting guidelines provided by Brazilian Corporate Law (Law No.6,404/76, as amended and including
the provisions introduced by Law No. 11,638/07 and Law No. 11,941/09), as supplemented by new accounting standards,
implementation guidance and interpretations issued by the Brazilian Accounting Standards Board (Comit de Pronunciamentos
Contbeis), or CPC, approved for promulgation pursuant to resolutions of the Brazilian Federal Council of Accounting (Conselho
Federal de Contabilidade), or CFC, and the rules promulgated by the Brazilian Securities Commission ( Comisso de Valores
Mobilirios), or Brazilian Securities Commission.
These accounting standards, implementation guidance and interpretations, whose primary objective is the convergence
between the accounting practices previously adopted in Brazil and the International Financial Reporting Standards, or IFRS,
adopted by the International Accounting Standards Board, or IASB, were issued over the course of 2009 and are effective for
compulsory adoption from January 1, 2010, and include, for comparability purposes, a requirement for presentation of financial
statements revised and adjusted for retrospective application of international financial accounting standards.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Earlier, up to and including the six-month period ended June 30, 2010, we prepared and presented financial information
according to previously prevailing Brazilian accounting standards, which included the accounting guidelines mandated by
Brazilian Corporate Law, as amended to include the accounting guidelines introduced by Law No. 11,638/07 and Law No.
11,941/09, and supplemented by CPC accounting standards, implementation guidance and interpretations (CPC 01 through CPC
14) approved and promulgated by the CFC and the CVM before December 31, 2008.
Now, pursuant to CVM Resolution 609/09, which promulgated accounting standard CPC 37 (First-time Adoption of International
Financial Reporting Standards ) and CVM Resolution 610/09, which promulgated accounting standard CPC 43 (First-time
Adoption of Brazilian Accounting Standards CPC 15 to 40), in preparing and presenting our consolidated financial statements as
of and for December 31, 2010, and the comparative financial statements as of and for December 31, 2009, we have adopted
the international financial reporting standards (IFRS) and changed accounting practices accordingly, on a retrospective basis,
starting from January 1, 2009 (the date for transition to IFRSs).
Additionally, for clearer presentation of our consolidated financial information, in 2010 we reclassified certain line items within
the revenues group, with no impact on net income, shareholders equity or cash flows. However, these changes are not
incorporated into our financial information for the years ended December 31, 2009 and 2008, thus allowing for limited
comparability only. For additional information on accounting reclassification, see Note 2 to our financial statements as of and for
September 30, 2010.
STATEMENTS OF INCOME

Year ended December 31, 2010 compared with year ended December 31, 2009
Gross operating revenues

Gross operating revenues of R$2,102.554 thousand in 2010 were up 25.7% from R$1,672.894 thousand in 2009 primarily due
to the recovery in volumes traded on both stock and derivatives markets, which climbed 22.7% and 64.7%, respectively.

Trading and/or settlement system BM&F segment

Revenues from trading and settlement fees derived in the BM&F segment totaling R$722.065 thousand accounted for 34.3% of
total gross revenues, having soared 35.2% year-on-year from R$534,189 thousand in the prior year due primarily to the
following factors:

Derivatives

Revenues from fees charged on trades in derivatives went up 36.7% to R$701,545 thousand from R$513,185 thousand in the
prior year, due primarily to a 64.7% year-on-year upsurge in volumes traded, which however was not captured in full due to a
16.9% drop in average rate per contract (RPC.

Forex

Revenues from fees charged on spot currency trades went down 2.0% year-on-year, to R$20,427 thousand from R$20,849
thousand earlier, due mainly to the appreciation of the Brazilian real against the U.S. dollar.

Government bonds and securities

Revenues from fees charged on transactions in government bonds and debt securities dropped 40.0% year-on-year, to R$93
thousand from R$155 thousand previously. Despite a mere 1.6% drop in volumes traded, the mix of transactions resulted in
lower revenues in particular on account of repo transactions, for which we charge lower fees when compared to other types of
transactions, explaining the fall in revenues for this line item.

Trading and/or settlement system Bovespa segment

Revenues from trading and settlement fees derived in the Bovespa segment climbed 25.3% year-on-year and amounted to
R$1,049,300 thousand, accounting for 49.9% of total gross revenues, versus R$837,326 thousand in the prior year, due mainly
to the following factors:

Trading Fees trading systems

This revenue line item went up 21.8% year-on-year, to R$737,074 thousand from R$605,244 thousand earlier, reflecting a
22.7% surge in total value traded in the year. However this growth in revenues from trading fees was somewhat curbed by a
drop in margin attributable to the mix of investors more actively trading in the period, which included increased trading
activities (and value traded) by domestic institutional investors, which are charged lower average fee rates.

Transaction fees clearing and settlements systems

Revenues from fees charged by our equities clearing house on clearing and settlement transactions related to trades carried out

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

in the Bovespa segment went up 22.6% year-on-year, to R$254,904 thousand from R$207,914 thousand previously, which is
explained by the same factors discussed above.

Other trading or settlement fees

Revenues from other trading or settlement fees derived in the segment soared 137.2% year-on-year, to R$57,322 thousand
from R$24,168 thousand in the earlier year primarily due to the increase in number of equity offerings and the massive
Petrobras offering, from which we derived settlement revenues of R$47,394 thousand, as compared with R$14,228 thousand
one year ago.

Other operating revenues

Other operating revenues climbed 9.9% to R$333,189 thousand from R$331,189 thousand in the prior year. This increase is
attributable to the following factors:

Securities lending services

Revenues from securities lending services amounting to R$49,443 thousand went up 49.9% from R$32,989 thousand in the
prior year due mainly to a 61.5% upsurge in the average financial value of open interest positions, which rose to R$20.5 billion
from R$12.7 billion one year earlier.

Listing fees

Revenues from listing fees amounting to R$44,392 thousand went up 12.2% year-on-year from R$39,549 thousand earlier due
mainly to the revenues from offering registration application fees, which soared 83.6% year-on-year, the revenues from listing
annuities, which went up 7.5% from the prior year; and a reduction in discounts previously granted on listing annuities.

Depository, custody, back office services

This line item climbed 22.3% year-on-year, to R$88,263 thousand from R$72,167 thousand earlier. Revenues derived from the
operations of our central securities depository rose 18.4%, to R$69,169 thousand from R$58,404 thousand in the prior year
primarily on account of a 10.3% rise in average number of custody accounts (610.8 thousand in 2010 versus 553.7 thousand
one year ago) and 25.8% lift in average financial value of assets under custody (R$472.6 billion versus R$375.6 billion in the
prior year), not including custody of ADRs and custody services provided to foreign investors.

Participant access fees

We charge access fees from market participants acquiring trading and other rights for access to our markets. Revenues from
access fees charged from market participants climbed 4.7% year-on-year, to R$48,234 thousand from R$46,051 thousand
previously, mainly as a result of the increase in volumes traded in the segment.

Market data sales vendors

Revenues from market data sales rose 4.6% year-on-year to R$67,629 thousand from R$64,650 thousand due mainly to a
4.0% growth in number of customer terminals.

Commodity grading fees

Revenues from grading fees fell 9.4% year-on-year, to R$3,898 thousand from R$4,304 thousand one year ago due mainly to
the lower volume of coffee samples tested at our laboratories.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

Revenues from transaction fees charged on the trading of agricultural commodities on the exchange operated through the
Brazilian Commodities Exchange declined 20.7% year-on-year, to R$5,669 thousand from R$7,146 thousand earlier, as a result
of the lower number of subsidized coffee and cotton contracts auctioned by government-controlled Brazilian Supplies Company
(Companhia Nacional de Abastecimento), or CONAB, as part of the Brazilian governments agricultural policy for certain
commodities.

Settlement Bank

The revenues from fees charged by BM&FBOVESPA Settlement Bank fell 3.0% year-on-year, to R$8,043 thousand from
R$8,290 thousand one year ago. However, no item under this revenue line presented meaningful change from the prior year.

Other

Other revenues dropped 40.5% year-on-year, to R$15,618 thousand from R$26,233 thousand previously, mainly because we
no longer report dividends received from the CME Group under this line item, since starting from July 2010 our investment in
shares of the CME Group is accounted for under the equity method of accounting. In addition, in 2009 we reported revenues
from a Campos do Jordo congress organized by us, which are not annually recurring as these congresses take place every two
years.

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Deductions from revenue

Deductions from revenue totaled R$212,797 thousand from R$170,350 thousand one year ago, a 24.9% climb consistent with
the increase in gross operating revenues for the year.

Net operating revenue

As a result of the changes in revenue line items discussed above, net operating income amounted to R$1,889,757 thousand, up
25.8% from R$1,502,544 thousand in the prior year.

Operating expenses

Operating expenses totaled R$633.504 thousand, climbing 11.2% year-on-year from R$569,832 thousand earlier. The principal
changes in expense line items were the following:

Personnel and related expenses

Expenses with personnel and related expenses of R$290,107 thousand increased slight 0.1% year-on-year, and were virtually
unchanged from R$289,806 thousand one year ago. This movement is explained by the following factors: an August 2010
salary increase required under the existing collective bargaining agreement, which represented a 6% increase in payroll; and a
12.3% year-on-year climb in headcount, in line with our growth strategy, such that most new hirings occurred in technology
area and the business development department. Expenses with the stock options plan in turn dropped 48.1% year-on-year, to
R$30.9 million from R$59.6 million one year ago. In addition, in 2009, personnel expenses were impacted by first-quarter
severance payments in the aggregate of R$18.0 million due to terminations on account of the functional restructuring process.

Data processing

Data processing expenses totaling R$101,690 million were substantially flat (0.9% drop) from R$102,596 thousand in the prior
year. The slight drop is due to the increase in time billed by outsourced providers in connection with certain capital expenditure
projects (which costs are allocated to the relevant projects), counterbalanced by rent payments, starting from July 2010, for the
premises at which our new backup data center is located.

Depreciation and amortization

The expenses with depreciation and amortization went up 29.3% year-on-year, to R$54,818 thousand from R$42,396 thousand
one year ago, primarily as a result of a 51.7% increase in property and equipment over the year.

Outsourced services

Expenses with outsourced services went up 5.7% year-on-year, to R$48,102 thousand from R$45,495 thousand previously,
primarily as a result of legal fees paid in connection with international partnership agreements we entered into over the year.

Communications

Expenses with communications rose 10.2% year-on-year to R$25.819 thousand from R$23,428 thousand in the prior year, due
mainly to increase in number of trades on Bovespa markets, as the Exchange sends investors, by mail, execution confirmation
notices for their transactions and custody account statements.

Marketing and promotion

Marketing and promotion expenses reached R$42,376 thousand soaring 116.7% year-on-year from R$19,555 thousand one
year ago, primarily as a result of redoubled financial education initiatives and marketing campaigns, in particular those that are
designed to attract prospective retail investors.

Taxes

Expenses with taxes paid by us soared 450.3% year-on-year to R$12,784 thousand from R$2,323 thousand one year ago,
primarily as a result of taxation related to our share of dividends paid by the CME Group.

Profit (loss) on equity method investments

Starting from the third quarter of 2010, when we increased to 5.0% our ownership interest in shares of the CME Group, we
now account for this investment under the equity method of accounting and recognize gains and losses through profit or loss
(in the statement of income). For the year ended December 31, 2010, we recognized a profit on the investment amounting to
R$38,238 thousand.

Interest income, net

Net interest income of R$298,024 thousand climbed 17.4% year-on-year, from R$253,862 mil one year ago. Interest revenues
for the year increased to R$354,806 thousand from R$289,686 thousand in the prior year, influenced by the rising interest rates
earned on financial investments and higher average cash invested. In turn, net interest income was influenced by an increase in

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interest expenses for the year, which shot to R$56,782 thousand from R$35,824 thousand in the prior year due to the bond
offering we completed in July 2010.

Income before taxation on profit

Income before taxation on profit climbed 34.2% year-on-year, to R$1,592,515 thousand from R$1,186,574 thousand one year
ago, and correlates primarily with the degree of operating leverage, evidenced by proportionally higher revenues as compared
to the increase in expenses.

Income tax and social contribution

Income tax and social contribution for the year totaled R$448,029 thousand, up 47.1% from R$304,505 thousand in the prior
year, as follows:
The line item for current income tax and social contribution registered an expense of R$5,408 thousand at December 31,
2010, as compared to revenue of R$32,085 thousand in the prior year.
The line item for deferred income tax and social contribution registered an expense R$442,621 thousand at December
31, 2010, as compared to expense of R$336,590 thousand at December 31, 2009, rising 31.5%. This line item
substantially correlates with deferred tax liabilities related to temporary differences from amortization of goodwill for
tax purposes, with no impact on cash flow and amounting to R$445.155 thousand at December 31, 2010 versus
R$333,917 thousand in the prior year.

Net income for the year

Net income for the year increased 29.8% year-on-year to R$1,144,486 thousand at December 31, 2010, from R$882,069
thousand in the earlier year.

Net income attributable to BM&FBOVESPA shareholders

Net income attributable to BM&FBOVESPA shareholders went up 29.9% year-on-year, to R$1,144,561 thousand from
R$881,050 thousand one year ago, primarily due to the 25.7% increase in gross revenues, 17.4% rise in net income interest
and a R$38,238 thousand profit on equity method investment, which we now recognize in the income statement.

Net income attributable to non-controlling interests

Non-controlling interests relate to interest attributable to other members in our subsidiaries Brazilian Commodities Exchange
(Bolsa Brasileira de Mercadorias) and Rio de Janeiro Stock Exchange (Bolsa de Valores do Rio de Janeiro), whose financial
statements are combined in our consolidated financial statements despite not being wholly-owned subsidiaries. The share
attributable to non-controlling interests totaled loss of R$75.0 thousand at December 31, 2010, versus profit of R$1,019
thousand in the prior year.
MAIN LINE ITEMS OF THE BALANCE SHEET STATEMENT

Year ended December 31, 2010 compared with year ended December 31, 2009
Current assets

Current assets at December 31, 2010, fell 26.6% year-on-year to R$2,547,589 thousand (11.3% of total assets) from
R$3,468,852 thousand one year ago (16.6% of total assets).

Cash and cash equivalents; financial investments

Cash and cash equivalents comprise cash on hand and demand deposits, in addition to short- and long-term liquid investments
with prime banks and in financial investment funds, government bonds and other financial assets. As of December 31, 2010,
cash and cash equivalents and financial investments amounted to an aggregate of R$3,435,345 thousand, which accounted for
15.2% of our total assets at that date, and represented decline of 12.6% from R$3,391,783 thousand one year ago, when they
accounted for 18.9% of total assets.
The primary factor justifying this fall in total cash and cash equivalents and financial investments was the account
reclassification of our now larger investment in shares of the CME Group, currently accounted for as equity method investment
under the investments line item (investment in associate) at R$695,572 thousand as of December 31, 2010.

Accounts receivable, net

Accounts receivable largely comprise trading and transactions and other fees receivable from customers, and market data
transmission fees receivable from vendors. Accounts receivable rose 27.8% year-on-year to R$51,399 thousand from R$40,205
thousand in the prior year, mainly as a result of 46.7% rise in trading fees receivable in line with the increase in volumes

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traded, and a 69.4% climb in depositary and custody service fees receivable.

Deferred income tax and social contribution

Deferred income tax and social contribution dropped by 80.7% year-on-year to R$54,687 thousand from R$283,824 thousand
previously. Deferred tax assets of R$237,283 thousand were originally recorded in December 2008 for recognition of
impairment loss on the carrying value of our investment in shares of the CME Group, than classified as available-for-sale.
Following our acquisition of additional ownership interest in the CME Group in July 2010, the aggregate of this investment was
reclassified as investment in associate under noncurrent assets, with which both the impairment loss and related deferred tax
asset were fully reversed against retained earnings.

Noncurrent assets

Noncurrent assets climbed 15.6% year-on-year to R$20,086,386 thousand (88.7% of total assets) from R$17,368,987 thousand
one year ago (83.4% of total assets). Set forth below is a brief discussion of the main changes to line items under noncurrent
assets not previously discussed.

Judicial deposits

Judicial deposits totaled R$92,378 thousand at December 31, 2010, rising 8.8% year-on-year from R$84,895 thousand in the
prior year due to additional collateral pledged to the courts in connection with ongoing litigation cases.

Investments

Investments substantially consist of investment in associate and relate to ownership interest we hold in shares of the CME
Group recorded at R$2,248,325 thousand. In July 2010, after we increased our overall equity interest in CME shares to 5%
(from 1.8% previously) the investment, which we previously recorded as available-for-sale financial investment, was reclassified
as investment in associate and accounted for under the equity method of accounting.

Property and equipment

Property and equipment climbed 51.7% year-on-year to R$367,134 thousand, representing 1.6% of total assets at December
31, 2010, from R$241,939 thousand earlier, when it accounted for 1.6% of total assets. This rise is due mainly to capital
expenditures involving technology improvements and acquisition of new computer equipment and IT facilities.

Intangible assets

Intangible assets went up slightly by 0.5% year-on-year to R$16,215,903 thousand R$16,215,903 thousand previously.
Intangible assets consist of (i) goodwill, which kept a steady line at R$16,064,309 thousand by year-end in each year, and
accounted for 71.0% and 77.1% of total assets as of December 31, 2010 and 2009, respectively; and (ii) software and projects,
which went up 136.8% to R$151,594 thousand in 2010 from R$64,023 thousand one year ago due mainly to acquisition,
implementation and development of new software and systems.

Current liabilities

Current liabilities rose 24.0% to R$1,416,204 thousand at December 31, 2010 (6.3% of total liabilities) from R$1,142,074
thousand one year earlier (5.5% of total liabilities). Set forth below is a brief description of the main changes to line items
under current liabilities.

Collaterals for transactions

Collaterals for transactions which at end of year amounted to R$954,605 thousand (4.2% of total liabilities) jumped 17.8%
when compared to R$810,317 thousand one year ago (3.9% do total liabilities). This change is due to increase in cash collateral
pledged as margin by participants and correlates with the 2010 surge in number of transactions within the scope of our clearing
houses and central securities depository.

Noncurrent liabilities

Noncurrent liabilities in the amount to R$1,798,723 thousand at December 31, 2010 (7.9% of total liabilities) soared 409.7%
when compared to R$352,872 thousand in the prior year (1.7% of total liabilities). This change is due primarily to debt we
undertook with our bond offering and to our having recognized deferred income tax and social contribution amounting to
R$257,216 thousand at year-end, as resulting from temporary differences between the tax base of goodwill and its balance
sheet carrying value.

Loans and financing

Loans and financing amounted to R$1,010,059 thousand at December 31, 2010, as compared to R$2,495 thousand one year
ago, primarily on account of debt we undertook from issuing global senior notes abroad under a bond offering completed on
July 16, 2010, as funding for our acquisition of additional ownership interest in the shares of the CME Group, which investment
currently represents 5.0% of the CME shares (up from 1.8% previously). For additional information on this acquisition, see

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subsection 10.1(f) of this form.

Shareholders equity

Shareholders equity rose by 0.4% year-on-year to R$19,419.048 thousand (85.8% of total liabilities) from R$19,342,893
thousand in the prior year (92.8% of total liabilities). This slight increase resulted from incremental allocation to our statutory
reserve (under the revenue reserve line item) for the funding of safeguard mechanisms and guarantee funds we keep in
connection with clearing and settlement activities, as required under our bylaws, which was counterbalanced by an increase in
the treasury shares line item attributable to implementation of our share buyback program.
STATEMENTS OF INCOME

Year ended December 31, 2009 compared with year ended December 31, 2008
Gross operating revenues

Gross operating revenues in the amount of R$1,672,894 thousand for the year to December 31, 2009, declined 6.2% from
R$1,783,358 thousand one year ago, primarily as a result of a 4.3% fall in volumes traded on the equities markets and a 3.3%
drop in volumes for the derivatives markets, in either case due to factors correlated with the global financial crisis which peaked
in 2008 but continued to adversely affect the capital markets primarily in the first half of 2009.

Trading and/or settlement system BM&F segment

Revenues from transaction fees we charge on trading and clearing activities on the derivatives markets (BM&F segment)
tumbled 12.9% to R$552,492 thousand at year-end from R$634,230 thousand in the prior year. This decrease correlates mainly
with the following items:

Derivatives

Revenues from fees charged on derivatives trading and clearing transactions (derivatives clearing house) fell 14.2% year-onyear, to R$516,052 thousand for the year from R$601,275 thousand previously, as a result of the 3.3% decline in volume
traded in derivatives contracts and 10.3% slump in average revenue per contract (RPC).

Forex

Revenues from fees charged on forex trading and clearing transactions (foreign exchange clearing house) tossed 2.1% year-onyear, to R$20,849 thousand for the year from R$21,302 thousand in the earlier year, due mainly to appreciation of the Brazilian
real against the U.S. dollar.

Government bonds and securities

The revenues from fees charged on trades in government bonds and debt securities, and on clearing transactions (debt
securities clearing house) sank 53.0% year-on-year, to R$155 thousand at end of year from R$330 thousand the year before,
as a result of the 76.9% plunge in volume traded.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

Revenues from trades in agricultural commodities on the exchange operated through the Brazilian Commodities Exchange fell
9.1% year-on-year, to R$7,146 thousand for the year from R$7,865 thousand in the year before, due to the fall in volume
traded in agricultural notes.

Settlement bank

Revenues from the operations of BM&FBOVESPAs settlement bank increased by 139.7% year-on-year, to R$8,290 thousand at
end of year from R$3,458 thousand previously, as a result of the rise in volume of services sold.

Trading and/or settlement system Bovespa segment

Revenues from trading and transaction fees we charge on trading and clearing activities in the equities markets (Bovespa
segment) fell 2.2% year-on-year, to R$1,032,201 thousand for the year from R$1,055,028 thousand one year earlier. This drop
correlates mainly with the following items:

Trading Fees trading systems

Revenues from fees charged on trading in equities tossed 2.2% year-on-year, at R$617,000 thousand at year-end from
R$635,091 thousand one year ago, reflecting the 4.3% decline in volumes traded on the equities markets.

Transaction fees clearing and settlements systems

Revenues from fees charged on clearing and settlement transactions tumbled 10.5% year-on-year, to R$232,166 thousand at
the close of year from R$259,355 thousand in the year before, also the 4.3% decline in volumes traded on the equities markets

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and due to a change in our pricing policy.

Securities lending services

Revenues from securities lending services operated by our depository facility (known as BTC) fell 32.0% year-on-year, to
R$48,528 thousand for the year from R$32,989 thousand in the prior year, due to a slump in the volume of securities lending.

Listing fees

Revenues from listing fees we charge on securities listings climbed 32.8% year-on-year to R$39,549 thousand from R$29,776
thousand in the previous year, mainly due to implementation of a new price schedule for listings of securities which we adopted
in January 2009, gradually terminating discounts we had been granting in the last few years to promote listings in our special
corporate governance trading segments.

Depository, custody and back office services

Revenues from fees charges for depository, custody and back-office services increased by 12.3% year-on-year, to R$62,523
thousand at year-end from R$70,231 thousand in the earlier year, primarily as a result of a 3.1% increase in the number of
custody accounts, and to implementation of our new pricing policy as of May 2009, which adopted a custody fee by volume
deposited with the depository facility.

Participant access fees

We charge access fees from market participants acquiring trading and other rights for access to our markets. The revenues
from access fees soared 103.8% year-on-year to R$40,266 thousand from R$19,755 thousand one year ago due primarily to
the new policy for access to our markets which we adopted in January 2009.

Other operating revenues

Other operating revenues decreased 6.3% year-over-year to R$88,201 thousand from R$94,100 thousand in the previous year.
This drop correlates mainly with the following items:

Market data sales - vendors

Revenues from distribution and sale of market data comprising quotations and other market information were up 33.1% yearon-year to R$57,691 thousand from R$43,359 thousand the year before, as a result of our new pricing policy for these services
implemented as of April 2009.

Commodity grading fees

Revenues from fees we charge for grading commodities have climbed 21.8% year-over-year, to R$4,304 thousand at end of
year from R$3,535 thousand in the prior year, due mainly to increase in the volume to cotton bags graded at our testing
facilities.

Other

Other revenues dropped 44.5% year-on-year, to R$26,206 thousand at end of year from R$47,206 thousand in the earlier year,
due primarily to lower than average dividends paid to us by the CME Group, and to the reversal of provisions recorded in
previous years.

Deductions from revenue

Deductions from revenue decreased by 6.1% to R$170,350 thousand at end of year from R$181,347 thousand previously,
which is consistent with the fall in gross operating revenues.

Net operating revenue

As a result of the year-over-year changes in revenues discussed above, net operating revenue fell 6.2% to R$1,502,544
thousand for the year versus R$1,602,011 thousand one year ago.

Operating expenses

Operating expenses tossed 21.3% year-on-year to R$569,832 thousand from R$723,658 thousand one year ago, due primarily
to the synergy identification plan we established in connection with the integration of BM&F S.A. and Bovespa Holding S.A., and
implemented with the aim of capturing synergy savings by eliminating duplicate work and through action related to the items
discussed below.

Personnel and related expenses

Expenses with personnel and related charges increased by 17.2% year-on-year to R$289,806 thousand from R$247,349
thousand in the previous year, due primarily to increase in expenses for the year with stock options granted to key
management personnel 2009, which reached R$59,634 thousand versus R$26,359 thousand in the year before.

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Data processing

Data processing expenses dropped 27.4% year-on-year to R$102,596 thousand from R$141,282 thousand in the prior year, due
primarily to synergy savings captured from the integration process (Bovespa and BM&F).

Depreciation and amortization

Expenses with depreciation and amortization increased by 20.6% year-on-year to R$42,396 thousand from R$35,140 thousand
one year earlier, due primarily to acquisitions in the asset group of computer equipment and IT facilities.

Outsourced services

Expenses with outsourced services remained virtually unchanged with slight rise of 3.3%, to R$45,495 thousand for the year
versus R$44,043 thousand the year before. The synergy savings we had captured in connection with this line item were more
than cancelled out by expenses with outsourced services related to specific and strategic projects, in particular in the quarter to
December 2009 when ongoing projects included, among other things, some of the magnitude of the partnerships with the CME
Group and Nasdaq OMX, and the operating qualification program (PQO) for brokerage firms.

General maintenance

Expenses with general maintenance dropped by 18.7% year-on-year to R$11,007 thousand from R$13,536 thousand in the
earlier year, due to synergy savings captured from the integration process (Bovespa and BM&F).

Communications

Expenses with communications were up 25.1% year-on-year to R$23,428 thousand from R$18,721 thousand in the prior year,
due mainly to increase in volume traded on Bovespa segment, as the exchange sends notices of trade execution by mail
addressed to the investors, for confirmation of the transactions.

Rents

Expenses with rents incurred in the year to December 31, 2009, dropped 30.3% to R$3,032 thousand from R$4,351 thousand
one year ago, due to synergy savings captured from the integration process (Bovespa and BM&F).

Supplies

Expenses with supplies fell 30.8% year-on-year to R$2,510 thousand from R$3,629 thousand one year ago, due to synergy
savings captured from the integration process (Bovespa and BM&F).

Marketing and promotion

Expenses with promotion and marketing declined 37.8% year-on-year to R$19,555 thousand from R$31,446 thousand the year
before, due to synergy savings captured from the integration process (Bovespa and BM&F).

Taxes

Expenses with taxes paid by us increased by 40.4% year-on-year to R$2,323 thousand from R$1,655 thousand one year ago,
primarily due to taxes charged on remittances abroad for payment of outsourced services related to certain specific and
strategic projects of ours.

Directors compensation

Expenses with remuneration paid to directors in the year to December 31, 2009, dropped 43.0% year-on-year to R$5,252
thousand from R$9,219 thousand in the earlier year. This decline is due to the existence of two exchanges and two different
boards prior to the May 2008 integration process that combined Bovespa and BM&F into BM&FBOVESPA, and due also to the
fact that the members of both boards continued to provide services to our Company for a few more months during the
transition period towards our consolidation.

Integration expenses

Expenses with the integration process amounted to R$129,576 thousand in the year ended December 31, 2008, and did not
recur in the year to December 31, 2009.

Sundry

Sundry expenses dropped 48.7% year-on-year to R$22,432 thousand form R$43,711 thousand one year earlier, due to synergy
savings captured from the integration process (Bovespa and BM&F).

Goodwill amortization

The expenses with amortization of goodwill which in the year to December 31, 2008, amounted to R$324,421 thousand
collapsed to R$0 (naught) in the year to December 31, 2009, due to the change in the accounting standard determining the

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accounting treatment of goodwill, as under certain CPC pronouncements issued in 2008, starting from January 1, 2009, goodwill
is no longer subject to amortization recognized in the income statement.

Interest income, net

Net interest income for the year ended December 31, 2009, dropped 17.0% to R$305,972 thousand from R$ 253,862 thousand
in the prior year, due mainly to the decline of the base interest rates (interbank deposit rate and Selic rate) that remunerate our
financial investments.

Income before taxes

Income before taxes increased by 38.0% to R$1,186,574 thousand for the year from R$859,904 thousand a year ago, and
correlates mainly with the 21.3% decrease in operating expenses and the change in the accounting standard that determines
the accounting treatment of goodwill, as previously discussed.

Income tax and social contribution

Income tax and social contribution for the year increased 43.1% and represented an expense of R$304,505 thousand at end of
year, as compared to R$212,741 thousand one year earlier as follows:
The line item for current income tax and social contribution, which at December 31, 2008, registered an expense of
R$331,879 thousand, at December 31, 2009, registered revenue of R$32,085 thousand.
The line item for deferred income tax and social contribution, which at December 31, 2008, registered a revenue of
R$119,138 thousand, at December 31, 2009, registered an expense of R$336,590 thousand.
After Bovespa Holding S.A. merged with BM&F S.A. in November 2008, the goodwill came to be deductible for purposes of
income tax and social contribution on net income. As a result, starting from December 2008 we took advantage of the tax
benefit, such that the portion of goodwill which had been amortized but not taken as a deduction gave rise to income tax and
social contribution credits recorded as tax assets in the amount of R$76,702 thousand. In addition to recording tax assets from
amortized goodwill, we recorded tax assets for tax losses in the amount of R$35,036 thousand.
Deferred income tax and social contribution liabilities as of December 31, 2009, derived from recognition of the temporary
difference between the tax base of goodwill and its balance sheet carrying value, considering that while goodwill continued to
be amortized for tax purposes, starting from January 1, 2009, goodwill is no longer amortized for accounting purposes, thus
resulting in a goodwill tax base that is lower than its carrying value. As of December 31, 2009, the total deferred tax liabilities
related to amortization of goodwill for tax purposes was R$333,917 thousand.
In the second quarter of 2009, we recognized income tax and social contribution credits in the amount of R$35,503 thousand,
as related to tax losses and negative tax base of social contribution of the former Bovespa Holding, which had not been used at
the time of the merger of Bovespa Holding due to the supposed deductibility limitation set at 30% of adjusted net income. We
revisited this procedure in the second quarter of 2009, based on opinions from our internal and external legal advisers, and the
understanding that this limitation is not applicable in the event of a merger of the investee given that in this case there is no
continuity and the investee ceases to exist, such that the purported limitation on deductibility is removed and the tax losses
may be used in full. As a result, the Company has recorded the tax credits previously mentioned.

Minority interests

Minority interests refer to those portions of our subsidiaries Brazilian Commodities Exchange ( Bolsa Brasileira de Mercadorias)
and Rio de Janeiro Stock Exchange (Bolsa de Valores do Rio de Janeiro) consolidated in our financial statements, which are not
owned by us. Minority interests amounted to R$1,019 thousand in the year to December 31, 2009, versus R$1,567 thousand
the year before, a 35.0% decrease.

Net income for the year

Net income for the year of R$881,050 thousand surged 36.5% year-over-year from R$645,596 thousand one year ago. This rise
is due primarily to the 21.3% reduction in operating expenses and expenses from the change in the accounting standard
determining the accounting treatment of goodwill, which were only partially counterbalanced by the 43.1% increase in the
income tax and social contribution line item, resulting from recognition of deferred tax liabilities.
MAIN LINE ITEMS OF THE BALANCE SHEET STATEMENT

Year ended December 31, 2009 compared with year ended December 31, 2008
Current assets

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Current assets as of December 31, 2009, increased 41.4% year-on-year to R$2,778,968 thousand (13.1% of total assets) from
R$1,965,461 thousand one year earlier (9.6% of total assets). The main changes to current assets were the following:

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with short- and long-term, liquid investments
through prime banks, financial investment funds, government bonds and so forth. As of December 31, 2009, cash and cash
equivalents and financial investments amounted to an aggregate of R$3,236,211 thousand, which accounted for 15.3% of our
total assets at that date, and represented increase of 34.0% over R$2,414,241 thousand one year ago, when they accounted
for 11.8% of our total assets. This increase in cash and cash equivalents and financial investments was pushed by the higher
volume of cash collaterals deposited by market participants as margin for transactions, which in turn was driven by the soaring
volume of trades on the equities markets in the quarter to December 2009, versus the same quarter one year earlier. The
collaterals are included in current assets and in current liabilities.

Accounts receivable, net

Accounts receivable largely comprise trading and transactions and other fees receivable from customers, and market data
transmission fees receivable from vendors. Accounts receivable dropped by 61.8% year-over-year, to R$40,205 thousand from
R$105,169 thousand in the prior year. This fall is attributable to change in the due date for payment of most trading and
transaction fees charged in the equities markets, which starting from October 1, 2009, we collect as of the third business day
after the trade date, whereas previously these fees would be paid up to two months after the trade date.

Deferred income tax and social contribution

Deferred income tax and social contribution recorded under both current and noncurrent assets were reduced by 61.9% yearon-year, from R$122,070 thousand in the prior year to R$46,541 thousand as of December 31, 2009. This decrease resulted
from a change in the accounting standard related to the accounting treatment of goodwill amortization, according to which we
now recognize a deferred tax liability on tax amortizations of goodwill. The balance of deferred tax assets recorded one year
ago (in the amount of R$76,702 thousand) was reclassified as a liability in 2009, thus representing the net amount of tax credit
attributable to goodwill.

Noncurrent assets

Noncurrent assets were substantially unchanged, with slight drop of 0.2% to R$18,422,215 thousand as of December 31, 2009
(86.9% of total assets) from R$18,464,628 thousand one year ago (90.4% of total assets). Other than previously explained, the
main changes to noncurrent assets were the following:

Judicial deposits

Judicial deposits totaled R$84,895 thousand at end of year, a 9.6% declined as compared to R$93,885 thousand in the prior
year. This drop correlates mainly with deposits withdrawn from court in 2009.

Other investments

Other investments which at end of year amounted to R$1,319,439 thousand, representing 6.2% of total assets, kept a steady
line from the year before when it totaled R$1,318,282 thousand representing 6.5% of total assets. This line item correlates
primarily with our ownership interest in the CME Group recorded at R$1,276,199 thousand. In 2010 this investment will be
reclassified pursuant to the standard provided by technical pronouncement CPC 38, as discussed in item 10.4.b below.

Property and equipment

Property and equipment climbed 8.5% to R$268,895 thousand at end of year, representing 1.3% of total assets, from
R$247,850 thousand one year earlier when it represented 1.2% of total assets, mainly as a result of increase in computer
equipment and IT facilities.

Intangible assets

Intangible assets went up slightly by 0.2% year-on-year to R$16,117,930 thousand from R$16,089,633 thousand previously.
Intangible assets comprise (i) goodwill, which kept a steady line at R$16,064,309 thousand at end of year in either year, and
represented 75.8% and 78.6% of total assets as of December 31, 2009 and 2008, respectively; and (ii) software and projects,
which went up 111.7% to R$53,621 thousand at end of year from R$25,324 thousand one year ago, due mainly to acquisition,
implementation and development of new software and systems.

Current liabilities

Current liabilities rose 8.0% to R$1,162,075 thousand as of December 31, 2009 (5.5% of total liabilities) from R$1,075,744
thousand one year earlier (5.3% of total liabilities). The main changes to current liabilities were the following:

Collaterals for transactions

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Collateral for transactions which at end of year amounted to R$810,317 thousand (3.8% of total liabilities) jumped 38.3% when
compared to R$585,963 thousand one year ago (2.9% do total liabilities). This change correlates with an increase in margin
received from market participants and deposited in the form of cash, as a result mainly of volume growth in the quarter to
September 2009 as compared to the same period in the prior year.

Earnings and rights on securities in custody

The 11.4% decline in earnings and rights on securities in custody, which at end of year amounted to R$31,897 thousand as
compared to R$36,020 thousand one year ago, is due primarily to the fall in earnings from judicial deposits.

Financing

The 127.4% climb in financing, which at end of year amounted to R$9,295 thousand as compared to R$ 4,087 thousand in the
year before, is due mainly to financial lease arrangements for IT-related equipment.

Other liabilities

The line item other liabilities climbed 15.7% to R$194,895 thousand at end of year (0.9% of total liabilities) from R$168,404
thousand in the previous year (0.8% of total liabilities), which correlates primarily with deposits and repurchase agreements
related to the operations of Banco BM&F, the settlement bank.

Noncurrent liabilities

Noncurrent liabilities in the amount to R$313,002 thousand at December 31, 2009, (1.5% of total liabilities) surged 569.8%
when compared to R$46,729 thousand at the end of the prior year (0.2% of total liabilities). This change is due primarily to our
having recognized deferred income tax and social contribution at end of year in the amount of R$261,060 thousand, as derived
from the temporary difference between the tax base of goodwill and its carrying value in the balance sheet, considering that
while goodwill continues to be amortized for tax purposes, starting from January 1, 2009, goodwill is no longer amortized for
accounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value.

Shareholders equity

Shareholders equity rose 2.2% to R$19,709,749 thousand at December 31, 2009, when it represented 93.0% of total liabilities,
from R$19,291,724 thousand one year earlier, when it represented 94.4% of total liabilities, and as resulting from the formation
of a reserve for investments and funding of safeguard mechanisms and guarantee funds we keep in connection with clearing
and settlement activities, as required under our bylaws (under the statutory reserve line item) and pursuant to the proposal on
allocation of net income for the year.
10.2.

Managements discussion and analysis of

a.

The results of operations and, in particular:

i. Material revenue components

Year ended December 31, 2010 compared to year ended December 31, 2009
Our consolidated gross operating revenues of R$2,102,554 thousand for the year ended December 31, 2010, up 25.7% from
R$1,672.894 thousand one year ago primarily due to the recovery in volumes traded on both stock and derivatives markets
(Bovespa and BM&F segments, respectively).
Revenues from trading and settlement fees derived in the Bovespa segment climbed 25.3% year-on-year and
amounted to R$1,049.300 thousand, which accounted for 49.9% of total gross revenues, reflecting a 22.7% yearover-year rise in total value traded, in addition to increase in number of equity offerings, from which we derived
settlement revenues of R$47,394,660 thousand, as compared to R$14,227,787 thousand one year ago. However,
margins dropped as a result of a change in the mix types of investors more actively trading in the period, including a
boom in trading activities by domestic institutional investors, from whom we charge lower average fee rates.
Revenues from trading and settlement fees derived in the BM&F segment soared 35.2% year-on-year and amounted
to R$722.065 thousand, accounting for 34.3% of total gross revenues, due primarily to a 64.7% year-on-year upsurge
in volumes traded, which tough was not captured in full due to a 16.9% drop in average rate per contract (RPC).
Revenues unrelated to trading and settlement activities rose 9.9% year-on-year to R$331.189 thousand (15.8% of
total gross revenues) from R$301.379 thousand (18.0% of the total) one year earlier.

Year ended December 31, 2009 compared to year ended December 31, 2008

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Our consolidated gross operating revenues for the year ended December 31, 2009, totaled R$1,672,894 thousand, down 6.2%
from R$1,783,358 thousand one year ago, primarily reflecting the following:
revenues from transaction fees we charge on trading and clearing activities on the equities markets (Bovespa
segment) accounted for 50.8% of gross operating revenues, or R$849,166 thousand, in a 5.1% year-on-year decline
as a result of the 4.3% drop in volumes traded when compared to the prior year. Despite having tumbled in the first
half of 2009, volumes bounced significantly in the second half, and revenues from fees on trading and clearing
transactions surged 34.5% over the period to June 2009, to peak in the quarter to December 2009, which registered
record high volumes; and
revenues from transaction fees we charge on trading and clearing activities in BM&F segment accounted for 32.1% of
gross operating revenues, or R$537,056 thousand, plunging 13.8% year-over-year. This decline correlates with a
10.3% fall in average revenue per contract (RPC), while overall volume traded tossed 3.3% from one year earlier.
As a result, revenues derived from transaction fees we charge on trading and clearing activities in the equities and derivatives
markets accounted for 82.9% of our total revenues in the year to December 2009, versus 85.1% of total revenues for 2008.
Taxes charged on these revenues amounted to R$170,350 thousand, or approximately 10.2% of our gross operating revenues.
ii. Factors materially influencing the results of operations

Year ended December 31, 2010 compared to year ended December 31, 2009
The Brazilian economy consolidated in 2010 the recovery started earlier in the aftermath of the global economic downturn
driven by the international financial crisis of 2008. While other countries still wrestled with the longer-term effects of the
downturn and European policy makers tackled market mistrust trying to prevent a sovereign-debt collapse driven by the
additional economic difficulties faced by certain eurozone countries, the Brazilian economy was visibly coming around.
Evidencing the recovery, the Brazilian economy grew, credit availability and domestic consumption increased, and the Brazilian
real registered strong appreciation against the U.S. dollar.
This economic environment has positively impacted on our financial and operating performance. Volumes traded in 2010 hit
unprecedented record highs in both the stock market (Bovespa segment) and the derivatives markets (BM&F segment).
In the Bovespa segment, where for months market overhang sparked by uncertainties around the then-upcoming Petrobras
offering had slowed trading significantly, but deal flows sprang back promptly after the offering closed. In addition, a
subsequent rebound in the market prices for stocks positively influenced volumes traded on the equities markets.
In the BM&F segment, heightened credit availability and volatility driven by differing perceptions and expectations about the
Central Banks decisions on the direction and size of the Selic rate, which is the Brazilian base interest rate, coupled with a
boost in foreign trade, pushed the volumes traded decisively.
However, while not having affected the fundamentals of the Brazilian economy, the international economic landscape did
impact on our markets, particularly the stock market, as the eurozone crisis sparked by the sovereign debt crisis among EU
nations deepened, leading to uncertainties about the future of the Euro, to negative market sentiment and high volatility. In
addition, the October 2010 changes in IOF taxation (tax on financial transactions), which the Brazilian government adopted in
an exercise designed to curb the appreciation of the Brazilian real against the U.S. dollar, affected trading volumes negatively
by containing market sentiment on account of uncertainties about additional future measures towards the same end.

Year ended December 31, 2009 compared to year ended December 31, 2008
Year 2009 dawned in anxiety, amid the uncertainties that emerged from the worst global financial crisis since the 1930s,
started in 2008.
In the years before the crisis, in the folly of the housing derivatives feeding frenzy, lending behavior changed, credit policies
became ever more liberal, securitization ubiquitous, players operated in highly-leveraged mode, regulation was lax or lacking
and there was too little transparency in over-the-counter transactions. As a result, the scenario that emerged early in 2009 after
the crisis peaked was one of a severe credit crunch pointing to general deleveraging, amidst a lively debate over a need for
more stringent and efficient regulation for the financial and capital markets, strong contraction in the prices of commodities and
financial assets, and governments across the board moving towards quantitative easing.

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This combination of factors directly and negatively affected performance in markets BM&FBOVESPA operates. In the equities
market (Bovespa segment), volumes tumbled due mainly to the falling prices of stocks prompted by bearish sentiments and risk
aversion, while in the derivatives market (BM&F segment) hedging activities sank due mainly to the credit crunch, which
coupled with general risk aversion and deleveraging significantly depressed volumes.
Another factor influencing performance in our markets was the creation of two new types of taxes on financial transactions
(IOF). With the stated objective of arresting the appreciation of the Brazilian real, the Brazilian government adopted a 2.0% tax
on money inflows for portfolio investments (stocks, fixed-income securities and derivatives) in domestic capital markets and a
1.5% IOF tax on issuances of American Depositary Receipts (ADRs). These two government measures negatively influenced the
flow of foreign capital to our markets and adversely affected trading activities, particularly in the Bovespa segment, due to the
increased cost of trading in local markets and the uncertainties about additional measures the Brazilian government could take
in the future.
Regarding the expenses, in 2009 we were spared certain nonrecurring expenses with the integration of the former two
exchanges, BM&F S.A. and Bovespa Holding S.A., which were all concentrated in 2008, when they topped R$129,576 thousand.
In addition, also in 2008 we recognized through profit and loss the expense related to proportionate amortization of goodwill
from the merger of shares of Bovespa Holding S.A., in the amount of R$324,421 thousand, with net impact of R$235,075
thousand.
In turn, in 2009, we recorded deferred tax liabilities of R$333,917 thousand related to temporary differences from tax
amortization of goodwill in the year, with no impact on cash flow. Taking the above amounts into account, the actual tax rate
for 2009 was 25.7%.
b.

Changes in revenues attributable to fluctuations in market prices, exchange rates, inflation

rates, changes in volumes and offerings of new products or services

Year ended December 31, 2010 compared to year ended December 31, 2009
Changes in revenues attributable to changes in our pricing policies or to fluctuations in exchange rates include:

Listing fees: revenues up 12.2% year-on-year due mainly to the revenues from offering registration application fees, which
soared 83.6% year-on-year, the revenues from listing annuities, which climbed 7.5% from the prior year, and a reduction
in discounts previously granted on listing annuities.

Market data sales - vendors: revenues up 4.6% year-on-year due mainly to a 4.0% growth in number of customer

Market participant access fees: revenues climbed 4.7% year-on-year mainly as a result of the increase in volumes traded,

High Frequency Traders: under our new policy for high frequency traders operating in either the Bovespa or BM&F

terminals. In addition, revenues from sales of market data were influenced by implementation in August 2010 of a new
pricing policy designed to attract retail trading through our Home Broker system, and by the 11.7% appreciation of the
Brazilian real against the U.S. dollar over the year, which negatively affected our revenues from fees charged to foreign
customers, which account for approximately one-third of our revenues under this line item.
however partially counterbalanced by the effects of our new pricing policy for the technology package used by market
participants.

segments, which took effect in November 2010, high frequency traders holding HFT registration accounts are granted
progressive discounts based on intraday trading volume bands.

Year ended December 31, 2009 compared to year ended December 31, 2008
Changes in revenues attributable to changes in our pricing policies or to fluctuations in exchange rates include:

Listing fees: a 32.8% year-on-year climb in listing fees, due to a change in prices and the end of certain discounts
previously granted to companies listing securities to trade on our special corporate governance trading segments;

Central securities depository: revenues from depositary and custody and back office services went up 12.3% from one year

ago, following a change in our pricing policy which established an additional fee charged from Brazilian-resident investors
holding custody accounts in excess of R$300,000 thousand, which is based on the market price of securities and other
assets held in custody;

Market participant access fees: revenues from access fees surged 103.8%, as a result of the policy for access to markets
within both segments;

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Market data sales - vendors: sales of market data rose 33.1% year-on-year due to implementation of our revised pricing
policy in April 2009;

Securities lending: revenues from securities lending dropped 32.0% primarily due to the plunge in transaction volume in
the first half of 2009, after which however volumes in this market bounced back to show significant improvement; and

Average revenue per contract (RPC) traded on BM&F segment: RPC fell 10.3% from a year ago primarily due to (i) the
August 2008 decision to terminate certain discounts on transaction fees after November 2008. The discount period had
pushed volumes driving revenue per contract upwards in the period; (ii) appreciation of the Brazilian real against the U.S.
dollar, which negatively influenced revenues from FX contracts, from USD interest rate contracts, and from commodities
contracts; and (iii) the granting of discounts for access to our systems via certain DMA (Direct Market Access) models, and
for high frequency traders.
c.

Impact on financial condition and results of operations attributable to inflation rate; changes in
market prices for the principal raw materials and other supplies; changes in exchange and
interest rates.

Not applicable.
10.3.

Managements discussion and analysis of actual or expected material effects of the factors set forth
below on the financial statements or results of operations.
a.

Creation or disposition of operating segment.

No new operating segment has been created or sold in the years ended December 2010 and 2009. Accordingly, no such event
has had or is expected to have effects on our financial statements and results of operations.
b.

Company organization; acquisition or disposition of ownership interest.

In July 2010 we acquired an additional 3.2% interest in the shares of the CME Group, thereby raising our aggregate ownership
interest to 5% of the shares (from 1.78% previously) and making BM&FBOVESPA CMEs largest shareholder 5. Following this
additional acquisition, the investment has been accounted for under the equity method of accounting, and the effects of thereof
were recognized and accounted for in the year ended December 31, 2010.
c.

Unique or extraordinary events or transactions.

There have been no unique or extraordinary events or transactions related to us or our activities in the years to December 2010
and 2009, which has had or is expected to have materially influence our financial statements or results of operations.
10.4.

Discussion and analysis of

a.

Significant changes in accounting practices

Our consolidated financial statements as of and for December 31, 2010, are the initial consolidated financial statements
prepared under Brazils CPC and IFRS. These consolidated financial statements were prepared and are presented in accordance
with accounting standards CPC 37 (IFRS 1 First-time Adoption of International Financial Reporting Standards) and CPC 43
(First-time Adoption of Brazilian Accounting Standards CPC 15 to 41), in addition to IFRS 1 (First-time Adoption of International
Financial Reporting Standards).
The transition date for adoption of international financial reporting standards is January 21, 2009. Accordingly, Management
prepared the opening balance sheet in accordance with Brazils CPC and IFRS applied retrospectively to January 1, 2009.
b.

Significant effects of changes in accounting practices

Set forth below is a reconciliation of shareholders equity and net income for the year from previous GAAP to IFRSs.
BM&FBOVESPA and Consolidated
(in thousands of Brazilian reais)

Source: Thomson Reuters

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At December 31,
2009

At January 1,
2009

Equity disclosed in accordance with previous Brazilian GAAP ....

19,709,749

19,291,724

Impairment loss on investment in CME Group shares (a) .

(460,610)

(460,610)

77,396

20,000

200,001

(20,000)

(20,000)

19,326,535

19.011.115

Non-controlling interests (d) ..

16,358

15,339

Equity disclosed in accordance with IFRS

19,342,893

19.026.454

Equity reconciliation

Adjustment for mark-to-market measurement of shares in CME Group

classified as available for sale (b) .
Dividend recognized in excess of the mandatory dividend
at the balance sheet date (c) ..
Contribution to establishing BSM previously treated as investment..

Consolidated
(in thousands of Brazilian reais)
Net Income reconciliation

At December 31, 2009

Net income disclosed in accordance with previous Brazilian GAAP

Non-controlling interests (d)

881,050
1,019

Net income disclosed in accordance with IFRS

882,069

________________________________

(a) Under previous GAAP, which were effective through December 31, 2009, the investment in CME was recorded at historical cost un der
noncurrent assets, in accordance with CPC 14 (IAS 39 and 32- parts) Financial Instruments: Recognition, Measurement and Disclosures ,
such that the investment was subject impairment testing using the discounted cash flow method to determine value in use, acco rding to as
required under CPC 01 (IAS 36) - Impairment of Assets in connection with investments valued at cost.
After CPC 38 (IAS 39) took effect in 2010, the investment was reclassified under the financial instruments group, designate d as availablefor-sale financial asset, and adjusted to fair value. Thus, for purposes of fair value measurements the adopted standard was that of quoted
market price in an active market (stock exchange).
Thus, after the investment was designated an available-for-sale financial asset, impairment tests would compare the market value of the
shares at the valuation base date with the investment acquisition cost (CPC 38/IAS 39), using significant or sustained decline in market
price as indication of impairment loss.
As a result, given the significant decline in the market price for CME shares over the last quarter of 2008, BM&FBOVESPA adjusted the
investment in CME Group to its recoverable value recognizing impairment loss of R$697,893 thousand and deferred tax asset amo unting to
R$237,283 thousand, with net-of-tax impact of R$460,610 in equity for 2008.
After the acquisition of additional ownership interest in the CME Group in July 2010, the aggregate investment was re -designated as
investment in associate under CPC 18 (IAS 28) Investment in Associates and accounted for under the equity method of account, whereas
the net-of-tax impairment loss of R$460,610 thousand previously registered was reversed against equity, establishing the new cost basis for
the investment.
(b) Mark-to-market measurements over 2009 for comparison with the new cost basis established for the investment in CME Group shares
resulted in a positive effect, net of taxes, amounting to R$77,396 thousand.
Then, starting from July 2010, as a result of the increase in the aggregate ownership interest in CME shares (to 5% from 1.8%
previously), we began to account for this investment under the equity method of accounting.
(c) According to the CPC Interpretation 08, or ICPC 08 - Accounting for Dividend Payment Proposal , that portion of net income which is in
excess of the annual mandatory dividend (as computed to include interest on shareholders equity) should be kept in equity, under a special
account, pending final decision by the shareholders. Under CPC 25 (IAS 37) - Provisions, Contingent Liabilities and Contingent Assets , a
provision should be recognized only where there is liability proper, i.e., a present obligation resulting from past events.
(d) CPC 26 (IAS 1) Presentation of Financial Statements . Non-controlling interests (the new name for minority interests) are now
presented within equity.

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(e)

The following CPCs (IFRSs) accounting standards have been implemented with no impact on equity or net income:
i. Segment Information (CPC 22/IFRS 8 Operating Segments ) The consolidated financial statements of BM&F BOVESPA have
been prepared and are presented by operating segment (Note 24);
ii. Earnings per share, or EPS (CPC 41/IAS 33 Earnings per Share) - Earnings per share are now presented as straightforward pershare profit or loss for the period attributable to shareholders and as divided by the weighted average number of shares outstanding (the
denominator) during the period, not including treasury stock. In addition, we present diluted EPS as calculated by adjusting the earnings
and number of shares for the effects of dilutive options and other potentially dilutive securities (as calculated after giving effect to
outstanding securities convertible, exchangeable or exercisable for newly-issued shares).
Optional exemptions to full retrospective application of CPCs/IFRSs. Consistent with CPC 37 (IFRS 1) First-time Adoption of
International Financial Reporting Standards) , In preparing our initial and comparative financial information under current Brazilian and
(f)

international financial reporting standards (CPCs/IFRSs), we applied mandatory except ions to, and certain optional exemptions from the
general principle of retrospective application. Set forth below are the main exemptions under CPC 37/IFRS 1 which are not applicable to us.
i
Business combinations We elected to adopt the exemption permitting BM&FBOVESPA to forgo application restating business
combination transactions (mergers) occurred prior to the transition date and opening balance sheet date of January 1, 2009;
ii Deemed cost of fixed assets - We elected to adopt the exemption permitting BM&FBOVESPA to forgo the deemed-cost exemption,
and preferring rather to adopt the carrying value for which our fixed assets had been registered under previous GAAP;
iii Leases We elected to revisit existing contracts and, consistent with IFRIC 4 issued by the International Financial Reporting
Interpretations Committee, reconsider whether in light of facts and circumstances as of the transition date any arrangement c ontained a
lease not previously recognized as such, having found that all had been properly ide ntified and recognized under previous GAAP, which in
this regard were in line with the international financial reporting standards (CPCs/IFRSs);
iv Share-based payments Share-based payments had been accounted for under previous GAAP, which in this regard were in line
with the international financial reporting standards (CPCs/IFRSs); and
v Assets and liabilities of subsidiaries First-time adoption of IFRS has been implemented concurrently and consistently by us and
all our subsidiaries.
(g) Exceptions to retrospective application of CPCs/IFRSs. The estimates we used in preparing our opening and comparative financial
statements as of January 1, 2009, and December 31, 2009, are consistent with estimates used as of the same dates under previo us GAAP.
Other mandatory exceptions to retrospective application were not applicable as there were no significant differences in accounting practices
under previous GAAP and current CPCs/IFRSs.

c.

Qualifications and emphasis of matter paragraphs included in the independent auditors report

Our consolidated financial statements have been prepared in accordance with current Brazilian GAAP, which adopts the
accounting standards issued by the CPC for convergence with IFRS. However, these accounting standards differ from IFRS
applicable to separate financial statements in that under CPC standards our investments in subsidiaries and affiliates are
accounted for, and valuated under the equity method of accounting, whereas under IFRS they would be accounted for at cost
or fair value.
10.5. Critical accounting policies and analysis, in particular, of accounting estimates requiring Management
to exercise judgment and make subjective assumptions about future events and uncertainties which
can materially influence the financial condition and results of operations. Critical accounting
estimates may relate to provisions, contingencies, recognition of revenues, tax credits, long-term
assets, the useful life of noncurrent assets, pension schemes, adjustments for foreign currency
translations, environmental recovery costs, impairment and recoverability testing standards for fair
value measurement of assets and financial instruments, among other things.
a.

Financial instruments.
(i) Recognition and measurement
The Company classifies financial assets under the following categories: designated at fair value through profit or loss, loans
and receivables, held to maturity and available-for-sale. The classification depends on the purpose for which a financial
asset is acquired. Management determines a financial asset classification at the time of initial recognition.

Financial assets designated at fair value through profit or loss

Financial assets designated at fair value through profit or loss are financial assets held for active and frequent trading or
assets we designate as measurable at fair value through profit or loss upon initial recognition. Derivatives are also classified
as held-for-trading and, as such, are recorded under this category. Assets of this category which are held for trading are
classified under current assets. A gain or loss on a financial asset classified at fair value through profit or loss resulting from
changes in fair value is recognized in profit or loss, in the statement of income under the interest income line item, in the
period in which these changes occur.

Loans and receivables

These comprise loans granted and receivables that are non-derivative financial assets with fixed or determinable payments,

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not quoted in an active market. Loans and receivables are recorded under current assets, except for those maturing more
than 12 months after the balance sheet date (which are classified under noncurrent assets). Our loans and receivables
comprise trade accounts receivable and other accounts receivable. Loans and receivables are measured at amortized cost on
an effective interest rate basis.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives designated on initial recognition as available for sale, or any other
instruments that are not classified in any other category. They are recorded under noncurrent assets, unless management
intends to sell the investment within 12 months after the balance sheet date. Available-for-sale financial assets are measure
at fair value. Interest on available-for-sale securities, as computed using the effective interest method, is recognized in the
statement of income as interest revenue. The cumulative gain or loss from changes in fair value is recognized in equity, in a
fair value adjustment account, and recognized (realized) through profit or loss when the asset is sold or becomes impaired.

Fair value measurements

Fair value measurements of securities quoted in an active market are based on current market prices. If a market for a
financial instrument is not active or a security is unquoted, fair value is measured through valuation techniques, such as, for
example, option pricing models.
At the balance sheet date, Management makes an objective assessment to determine whether a given financial asset or
group of financial assets is impaired.
(ii)

Derivative instruments and hedge activities

Derivatives are recorded at fair value on initial recognition, as of the date of the derivatives instrument, and subsequently
measured at fair value, with changes in fair value recognized through profit or loss except where a derivative is designated
as a cash flow hedge.
(iii) Hedge of a net investment in a foreign operation
A gain or loss on a hedging instrument attributable to the effective portion of the hedge is recognized in comprehensive
income. A gain or loss attributable to any ineffective portion of the hedge is promptly recognized through profit or loss
included in other gains (losses), net". Cumulative gains or losses recognized in equity are recognized through profit or loss
in the statement of income at the time all or some of the foreign operation (the hedged item) is sold or otherwise disposed
of.
b. Intangible assets.

Goodwill

Goodwill or negative goodwill on the acquisition of an investment is calculated as the difference between the consideration
paid or payable for a business at the acquisition date and the net fair value of the assets and liabilities of the entity
acquired. Goodwill paid for control of an entity (subsidiary) is recognized under intangible assets. In turn, negative
goodwill paid for a subsidiary is a gain recognized immediately through profit or loss for the period (as determined by the
acquisition date). Goodwill is assessed for impairment on an annual basis. Goodwill is stated at cost less impairment losses.
Recognized Impairment losses on goodwill are not reversed.

Goodwill is allocated to cash generating units (CGU) for impairment testing purposes. Specifically, allocations are made to
such cash generating units as are expected to benefit from the business combination originating goodwill, which are
identified based on operating segment.

Software and projects

Software licenses we acquire are capitalized at cost incurred and amortized over the estimated useful life.
The costs for software development or maintenance are expensed as incurred. Expenditures related directly to unique,
identifiable software we control, and which are likely to generate economic benefits greater than the costs for over a oneyear period, are recognized as intangible assets. Direct expenditures include remuneration of the software development
team.
Expenditures for development of software recognized as assets are amortized using the straight-line method over the useful
life.
c. Affiliates - Step Acquisitions
The cost of an affiliate acquired in stages is measured by the total amount paid under each transaction.

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Cumulative gain or loss previously recognized in comprehensive income, while classified as an available-for-sale asset, is
subsequently reversed against the investment account and restated as part of the acquisition cost.
Goodwill is calculated at each acquisition step as the difference between acquisition cost and the fair value of net assets in
proportion to interest acquired.
The investment total book value is assessed for impairment by comparing carrying value and recoverable value (determined
as the higher of selling value less costs to sell or value in use) when the requirements of the CPC 38/IAS 39 suggest an
impairment loss on the investment may have occurred.
d. Contingent assets and liabilities and legal obligations

The recognition, measurement, and disclosure of contingent assets and liabilities and legal obligations observe the criteria
defined in CPC 25/IAS 37.

Contingent assets - These are not recognized unless management has full control over their realization, or there are

secured guarantees, or a final, unappealable court decision is in place, permitting assumption that a gain will materialize.
Contingent assets, whose realization is deemed to be probable, as applicable, are just disclosed in the financial
statements.

Contingent liabilities - These are recognized based on a number of factors including: the opinion of counsel; the

nature of the lawsuit; similarity to previous lawsuits (precedents); complexity of the proceedings; and court precedents.
Contingent liabilities are recognized where a loss is assessed as probable, since this would imply probable outflow of
resources for settlement of the obligation, as long as the sums involved are measurable with sufficient reliability.
Contingent liabilities assessed as a possible loss are not recognized but are disclosed in notes to financial statements,
whereas those that are assessed as a remote loss are neither recognized nor disclosed.

Legal obligations - Legal obligations result from tax lawsuits in which the Company is discussing the legality, validity

or constitutionality of certain taxes and charges. These are fully recognized in the financial statements regardless of any
assessment as to the prospects for a win or defeat.

Other Provisions - Provisions are recognized where BM&FBOVESPA has a present obligation, whether legal or

constructive, resulting from past events, and it is probable an outflow of resources will be required to settle the
obligation, provided a reliable estimate of amount can be made.
e. Impairment of assets
Assets with indefinite useful life, such as goodwill, are not amortized but are assessed for impairment on an annual basis.
Assets that are subject to amortization are assessed for impairment at any time events or changes in circumstances suggest
the carrying value may not be fully recoverable. Where carrying value exceeds recoverable value the impairment loss is
recognized of fair value less costs to sell or value in use. Recoverable value is defined as the higher of fair value less costs to
sell or value in use. For impairment assessment purposes, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units, or CGUs). An impairment loss for a non-financial asset (Except for
goodwill) is subsequently reversed if at the date of a report there has been a change in the estimates used to determine
recoverable value.
f. Foreign currency translation
Items included in separate financial information of each company included in our consolidated financial statements are
measured using the currency of the primary economic environment in which we operate ("functional currency"). Our
financial statements are presented in Brazilian reais, which is the functional currency of BM&FBOVESPA.
Transactions in foreign currency are translated into our Brazilian reais (our functional currency) using the exchange rates as
of the transaction dates or, as the case may be, the relevant measurement dates. A foreign exchange gain or loss arising
from the settlement of these transactions or from the translation, at end-of-period exchange rates, of monetary assets and
liabilities in foreign currency, are recognized through profit or loss, unless deferred in comprehensive income as part of a
hedge of a net investment in a foreign operation.
In the case of changes in foreign currency affecting the value of a net investment in a foreign operation whose functional
currency differs from ours, the effects of changes correlated solely with foreign exchange rates are recognized in

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comprehensive income, under the "Equity Adjustment Account," and recognized through profit or loss only when the
investment is sold or written off. In applying the equity method of accounting, unrealized gains on transactions with
subsidiaries and associates are eliminated.
The exchange gains and losses on non-monetary financial assets related to the investment in shares of the CME Group,
which was classified as available-for-sale until July 2010, were included in comprehensive income. After July 2010, when
switched to accounting for our investment in the CME Group under the equity method of accounting, the effects of changes
in foreign currency were recognized in comprehensive income.
g. Deferred income tax and social contribution
Deferred taxes are calculated on income tax and social contribution losses and the temporary differences between the tax
calculation bases of assets and liabilities and the respective book values in the financial statements.
Deferred tax assets are recognized to the extent that it is probable sufficient future taxable profit will be available to be
offset against temporary differences and/or tax losses, considering projections of future income performed on the basis of
internal assumptions and future economic scenarios which present uncertainties and may ultimately differ from actual
events.
Deferred tax liabilities are recognized in relation to all taxable temporary differences, that is, differences that should result in
taxable amounts in determining taxable profit (tax loss) of future periods when the carrying value of an asset or liability is
recovered or settled.
Deferred income tax and social contribution are not recorded if resulting from initial recognition of an asset or liability in a
transaction other than a business combination, which at the time of the transaction does not affect net income or taxable
income (tax loss). Deferred income tax and social contribution are determined using tax rates (and tax laws) promulgated,
or substantially promulgated at the balance sheet date, which are applied when the related deferred tax asset is realized or
the deferred tax liability is settled.
h. Critical accounting estimates and assumptions
i) Equity method of accounting
BM&FBOVESPA applies the equity method of accounting for its investments when it has the ability to exercise significant
influence over the operations and financial policies of the investee. Managements judgment regarding the degree of
influence we exercise over an investee include key factors as proportionate interest in the shares, representation at board
level, whether or not we have a say on defining business guidelines, corporate and financial policies, and on material
intercompany transactions.
ii)
Impairment
Pursuant to We assess assets for impairment on an annual basis, including in particular goodwill and fixed assets, which are
tested pursuant to the accounting practices set forth under subsection 10.5(b).
iii) Recognition of financial instruments
BM&FBOVESPA classifies financial assets under the following categories of (i) measured at fair value through profit or loss
and (ii) available for sale. The classification depends on the purpose for which these financial assets were acquired.
Management determines the designation of financial assets upon initial recognition. For additional information on the
treatment and management of these assets, see subsection 10.5.(a).
iv) Stock options plan
BM&FBOVESPA offers its employees and executives the benefit of a stock options plan. The fair value of these options is
recognized as expense in the period in which the right is acquired. Management revisits its estimate of the number of
options that are likely to meet vesting requirements and subsequently recognizes the effects of changes in initial estimates,
if any, in the statement of income, with an offset to the capital reserve account in equity, as shown in note 3(o) to our
financial statements.
10.6.

Internal controls adopted to ensure reliable financial reporting

a.

Degree of effectiveness of the internal controls; deficiencies and corrective actions.

Our internal controls serve the primary function of providing control over financial reporting, in particular where accounting,
financial and statistical data depend on elements such as variance analyses, balance validations, reconciliation with operating
systems and support documentation. Internal controls are routinely performed and are designed to provide reasonable

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assurance that the values and balances recorded in the accounts and financial statements reflect with reasonable reliability the
balances of equity and profit and loss accounts.
The improvements to internal controls we developed and implemented over 2010 or are in the course of implementing are part
of an internal audit action plan designed to ensure we keep effective and reliable financial reporting controls and processes
across Company departments, including our subsidiaries. These include the following:
a coordinated ERP workflow model for all purchases, hirings and payments (in line with our payment policy);
developing a plan and implementing in our financial department certain recommendations of our internal audit team
and the independent auditors;
improvements to monitoring indicators related to certain accounting and financial processes;
integration and automation of information flowing from information originators and the financial department;
review of the user access profile structure for the financial department.
These initiatives, coupled with those that are ongoing, should heighten the effectiveness of our internal controls system, in line
with the high standards we expect to maintain, while driving gains in efficiency and security.
b.

Remarks on internal controls deficiencies and recommendations included in the independent

auditors report.

Our independent auditors have conducted a survey and assessment of our accounting and internal controls systems in
connection with their audit of our financial statements, with the aim of determining the nature, timing and extent of audit
procedures and substantive testing, but not for the purpose of expressing any opinion on the effectiveness of our internal
controls.
Accordingly, we have received recommendations on possible improvement to our internal controls system. These
recommendations were given due consideration and incorporated into an action plan for additional improvements to our
internal controls, the implementation of which is under supervision of our internal auditors.
10.7.

Discussion of any offering previously completed.

See subsection 10.1(f) of this form.

10.8.

Description of off-balance sheet arrangements.

a.

Off-balance sheet items.

Collaterals for transactions Customer transactions carried out in markets we operate are secured by collateral these customers
are required to pledge as margin or otherwise. Collaterals consist mainly of cash, government bonds, corporate debt securities,
bank letters of guarantee and stocks, among other things. These collaterals are segregated and treated off-balance sheet,
except for cash collateral deposited as margin. For additional information, see the discussion under item 10.9 below.
b.

Other off-balance sheet arrangements

Our Settlement Bank (Banco BM&F) manages BM&F FoF (FIC BM&F), a fund of funds called Fundo BM&F Margem Garantia
Referenciado DI Fundo de Investimento em Cotas de Fundos de Investimento, with net assets of R$173,365 thousand at
December 31, 2010 (versus R$97,376 thousand in the prior year).
In performing activities as custodian, the Banco BM&F is responsible for the custody of:
Securities held on behalf of nonresident investors, which at December 31, 2010, totaled R$118,610 thousand (versus
R$77,229 thousand one year earlier);
(ii) agricultural securities registered with the custody registration system operated by our Company, which at
December 31, 2010 amounted to R$51,216 thousand (versus R$260,606 thousand one year ago).
10.9.

Discussion of off-balance sheet arrangements reported under subsection 10.8

Central counterparty risk

Credit risk BM&FBOVESPA performs the role of central counterparty to ensure multilateral clearing and settlement of
transactions. We operate four central counterparty clearing facilities, which we absorbed during the exchange integration

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process that combined BM&F and Bovespa (the former two independent exchanges), which the Central Bank considers to
perform systemically material roles. We call them (i) equities clearing house (commonly known as CBLC), (ii) derivatives
clearing house, (ii) FX clearing house; and (iii) government bonds clearing house.
Our clearing facilities operate pursuant to Law No. 10,214 dated March 27, 2001, which authorizes multilateral clearings and
settlements, regulates the role of central counterparty performed by systemically material clearing facilities, and permits the use
of collaterals posted by defaulting participants to settle their obligations within the scope of our clearing and central
counterparty activities, including in the event of insolvency, intervention, bankruptcy and extrajudicial liquidation.
Through these clearing facilities, BM&FBOVESPA acts as central counterparty to ensure multilateral clearing and settlement
(CCP) for transactions carried out on derivatives market (including futures, forward, options and swap markets), the spot FX
market, the bonds markets (cash, forward and repo markets, in addition to securities lending market) and, in addition, trades
carried out on equities markets (including cash, forward options, futures and securities lending markets), including the
corporate debt market (cash and securities lending markets). This means that in acting as central counterparty, to ensure
transactions carried out or registered in our trading and registration systems BM&FBOVESPA is responsible for ensuring full
completion to a substantial portion of all trading activity in the domestic capital markets.
The central counterparty clearing facilities are responsible for providing efficiency and stability to the market by ensuring trades
are properly cleared and settled. A CCP interposes itself between counterparties to financial transactions, becoming the buyer to
the sellers and the seller to the buyers. Acting in the capacity of central counterparty, we absorb the risks of the counterparties
in-between a trade transaction and its clearing and settlement, carrying out multilateral activities for financial settlement and
clearing of securities and financial assets, and in the event of default resort to certain established safeguard mechanisms, or in
extreme situations may have to resort to our own net assets. In modeling and managing CCP risks, we focus on calculation,
controls and mitigation of credit risk related to clearing participants.
Our clearing facilities are not directly exposed to market risks, as they do not hold net long positions or net short positions in
either contracts or assets traded in our markets. However, an increase in price volatility could affect the magnitude of amounts
to be settled by market participants, which in turn could increase the default rate amongst these participants. In addition, as
the clearing facilities ensure clearing and settlement of transactions carried out by participants including in the event of failed
settlement or default, this could result in losses if settlement amounts were to exceed those of existing margin. Thus, while we
are not directly exposed to market risks, they may impact and heighten the credit risks to which we are exposed.
For proper risk mitigation, each clearing facility has its own risk management system and safeguard structure. Each of these
structures comprises the universe of mechanisms and remedies a clearing house may resort to in order to cover losses from
failed settlement by a participant. The key components of these safeguard structures include collateral deposited by market
participants, often in the form of margin, plus special funds intended to cover possible losses due to default and, in addition, coliability undertaken by brokers and clearing agents regarding transactions they intermediate or clear. These risk management
systems and safeguard structures are described in detail in applicable rulebooks and the operating manuals adopted by our
clearing houses, which were tested and homologated by the Central Bank, pursuant to Resolution 2,882 of 2001 issued by the
Brazilian National Monetary Council and Central Bank Circular 3,057 of 2001.
Set forth below are the principal elements comprising the safeguard structure of our derivatives clearing house in the year to
December 2010.
Collaterals pledged by participants of derivatives markets;
Co-liability undertaken by brokers and clearing agents regarding transactions they intermediate or clear, and collateral
pledged by these market participants;
Special Clearing Participant Fund (Fundo de Desempenho Operacional), whose net assets at December 31, 2010,
totaled R$1,162,122 thousand (versus R$1,126,126 thousand in the prior year and R$1,145,908 thousand at the
transition date of January 1, 2009). This special clearing fund is a pool of funds made up of contributions from clearing
agents that also hold access permits granting settlement and trading access permits, and was formed to ensure
settlement of transactions in the event of default by one or more clearing agents;
Agricultural Market Trading Fund (Fundo de Operaes do Mercado Agropecurio), whose net assets at December 31,
2010 and 2009 totaled R$50,000 thousand. This fund was set up as a mutual fund to ensure the settlement of
transactions where the underlying are agricultural commodities;
Special Clearing Member Fund (Fundo Especial dos Membros de Compensao), whose net assets at December 31,
2010 and 2009 totaled R$40,000 thousand. This fund was set up as a mutual fund to ensure the settlement of
transactions cleared and settled by the derivatives clearing house regardless of category;
Clearing Fund (Fundo de Liquidao de Operaes), whose net assets at December 31, 2010, totaled R$408,509
thousand (versus R$378,113 thousand in the prior year and R$387,235 thousand at the transition date of January 1,

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2009). This is a pool of financial assets contributed as collateral by clearing participants, which was set up to ensure
transactions are settled even after the previously mentioned funds are depleted;
Segregated assets, which we hold pursuant to article 5 of Law No. 10,214 dated March 27, 2001, which governs the
operation of a clearing house, as supplemented by Central Bank Circular 3,507 dated August 31, 2011. At December
31, 2010, we held segregated net assets totaling R$34,807 thousand (versus R$31,678 thousand one year ago and
R$28,808 thousand at the transition date of January 1, 2009).
Set forth below are the principal elements comprising the safeguard structure of our FX clearing house in the year to December
2010.
Collaterals pledged by participants of forex markets;
Participation Fund (Fundo de Participao), whose net assets at December 31, 2010, totaled R$162,235 thousand
(versus R$154,056 thousand in the prior year and R$140,584 thousand at the transition date of January 1, 2009). This
fund was set up as a pool of financial assets in the form of cash and financial instruments contributed by FX clearing
participants to ensure the settlement transactions registered at our FX clearing house;
FX Operating Funds (Fundo Operacional da Clearing de Cmbio), whose net assets at December 31, 2010 and 2009
totaled R$50,000 thousand. This fund was set up to cover financial losses arising from errors or administrative or
operating failures by market participants;
Segregated assets, which we hold pursuant to article 5 of Law No. 10,214 dated March 27, 2001, which governs the
operation of a clearing house, as supplemented by Central Bank Circular 3,507 dated August 31, 2011. At December
31, 2010, we held segregated net assets totaling R$34,848 thousand (versus R$31,714 thousand one year ago and
R$28,808 thousand at the transition date of January 1, 2009).
Set forth below are the principal elements comprising the safeguard structure of our government bonds clearing house in the
year to December 2010.
Collaterals pledged by participants of government bonds markets;
Bonds Market Operating Fund (Fundo Operacional da Clearing de Ativos), whose net assets at December 31, 2010 and
2009 totaled R$40,000 thousand. This fund was set up to cover financial losses arising from errors or administrative or
operating failures by market participants;
Segregated assets, which we hold pursuant to article 5 of Law No. 10,214 dated March 27, 2001, which governs the
operation of a clearing house, as supplemented by Central Bank Circular 3,507 dated August 31, 2011. At December
31, 2010, we held segregated net assets totaling R$24,536 thousand (versus R$22,373 thousand one year ago and
R$20,277 thousand at the transition date of January 1, 2009).
Set forth below are the principal elements comprising the safeguard structure of our equities clearing house in the year to
December 2010.
Collaterals pledged by participants of the equities markets, including corporate debt securities markets;
Co-liability undertaken by brokers and clearing agents regarding transactions they intermediate or clear, and collateral
pledged by these market participants;
Settlement Fund (Fundo de Liquidao), whose net assets at December 31, 2010, totaled R$485,409 thousand (versus
R$322,268 thousand in the prior year and R$350,210 thousand at the transition date of January 1, 2009). comprises
contributions from clearing agents to ensure settlement of transactions in the event of default by one or more clearing
agents;
Segregated assets, which we hold pursuant to article 5 of Law No. 10,214 dated March 27, 2001, which governs the
operation of a clearing house, as supplemented by Central Bank Circular 3,507 dated August 31, 2011. At December
31, 2010, we held segregated net assets totaling R$37,210 thousand (versus R$33,877 thousand one year ago and
R$30,374 thousand at the transition date of January 1, 2009).
The risk management policy we adopt at our clearing houses is established by our Market Risk Committee, which is composed
of BM&FBOVESPA officers, including the chief clearing, depository & risk officer, the chief operations and IT officer, the chief
product development officer, the risk management officer and the settlement officer. The responsibilities of this committee
include (i) evaluating macroeconomic conditions and government policies, and the effects on our markets; (ii) assessing and
determining risk management models, margin calculation methods and stress testing models adopted at our clearing houses,
including models and methods to control exposure to intraday trading risks; (iii) setting parameters for these models, in
particular stress scenarios for primitive risk factors, (iv) defining eligible collaterals and determining valuation methods, use
limits and haircuts, and (v) conducting other related surveys and analyses. Collaterals pledged by market participants make up
the principal element of the safeguard structures of our clearing houses as they account for the larger portion of these
structures.

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Margin requirements for most derivatives contracts and transactions in securities and other financial assets are determined at a
level sufficient to cover exposure to market risk, i.e., price fluctuations, typically over a two-day time horizon, which is the
expected time of settlement in case a participant defaults, although this time horizon may vary depending on type or nature of
a contract or transaction.
Margin calculation models are typically based on stress analysis for assessment of market risk based not only on recent
historical volatility, but taking into account unanticipated events that could result in unexpected breakdown of historical
correlations, i.e., unexpected departure from historical price and market behavior.
The principal parameters we use in our margin calculation models are stress scenarios (as defined by the market risk committee
for (implied and primitive) risk factors affecting the prices of derivatives and securities traded on our markets. The primary risk
factors affecting these prices include, among other things, the Brazilian real to U.S. dollar exchange rate, Brazilian forward fixed
rate yield curve, the U.S. dollar-denominated Brazilian forward yield curve, the Bovespa Index and the cash prices for stocks.
In defining stress scenarios, the market risk committee combines both quantitative and qualitative analyses. Quantitative
analysis is performed based on statistical models for risk assessment, such as, for example, Extreme Value Theory (EVT),
estimation of implied volatilities, and Garch family models, in addition to historical simulations. Qualitative analysis in turn
considers elements related to domestic and international macroeconomic conditions and government policies, and predictable
effects on our markets.
Market risk - Investment of cash funds
Given the importance of that our net equity as a worst-case remedy within the safeguard structure for our clearing and
settlement activities, our investment policy calls for lower-risk investing of cash balances, which we typically accomplish by
seeking very conservative, highly liquid safe investments. This is evidenced by the significant volume of positions we take in
Brazilian government bonds and debt-securities whose yield and coupon rates typically follow the base rate (interbank deposit
rates or the Selic rate), whether or not including a spread. We generally buy them directly by entering into repo transactions
whose underlying consists of government bonds and debt securities, and by investing in exclusive open-ended investment
funds.
Transactions carried out on our markets are secured by collateral pledged as margin in the form of cash, government bonds
and corporate debt securities, bank letters of guarantee and stocks, among other things. At December 31, 2010, we held
collaterals totaling R$143,087,657 thousand (versus R$101,640,805 thousand on year ago and R$125,676,805 thousand at the
transition date of January 1, 2009), as follows:
At December 31,
2010

At December 31,
2009

At January 1,
2009

(in thousands of Brazilian reais)

Derivatives clearing house

Brazilian government bonds
Bank letters of credit
Stocks
Bank certificates of deposit (CDBs)
Gold
Cash (1)
Other

76,979,261
3,538,492
4,934,328
1,150,998
105,958
652,290
173,340

53,754,858
1,479,341
3,351,593
1,307,762
60,865
555,106
95,938

89,760,722
3,690,835
2,678,991
2,161,736
319,831
327,644
108,008

Subtotal

87,534,667

60,605,463

99,047,767

FX Clearing house
Brazilian government bonds
Cash (1)

3,855,147
66,520

3,766,090
-

3,550,223
174,060

Subtotal

3,921,667

3,766,090

3,724,283

928,786

832,125

1,423,484

22,749,941
25,809,847

15,665,732
17,208,344

10,185,946
9,101,835

Government bonds clearing house

Federal government bonds
Equities clearing house (2)
Brazilian government bonds
Stocks

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Sovereign bonds; ADRs (3)

Bank certificates of deposit (CDBs)
Bank letters of credit
Cash (1)
Other
Subtotal
Total collaterals

736,905
580,066
448,054
235,806
141,918

1,944,896
997,944
296,442
247,230
76,539

1,219,499
467,649
239,625
101,927
164,790

50,702,537

36,437,127

21,481,271

143,087,657

101,640,805

125,676,805

_____________________________

(1) The balance of cash deposits is recorded in current liabilities under the collaterals for transactions line item. We manage these
resources and their availability; any investing is contingent on, and changes in correlation to, the aggregate level of required clearing
margin at the time.
(2) Clearing house for stocks and corporate debt securities, known in the market as CBLC.
(3) US Treasuries and German federal securities, in addition to ADRs (American Depositary Receipt).

a.

Other information
Clearing Fund (Fundo de liquidao de operaes) - Derivatives Clearing House

The clearing fund comprises dedicated contributions required from clearing agents specifically to ensure the clearing and
settlement of transactions registered at the clearinghouse in the event of default by one or more clearing participants.
Contributions to the participation fund may be made in the form of cash, gold and bank letters of guarantee or, subject to prior
approval by us, government bonds, corporate debt securities or other financial instruments satisfactory to us, in our discretion.
Clearing participants are jointly and severally liable for replenishing the fund, subject to a limit by member.
The table below sets forth data on balances of contributions deposited in the fund at the transition date and each balance sheet
date.
Composition

At December 31,
2010

At December 31,
2009

At January 1,
2009

(in thousands of Brazilian reais)

Brazilian government bonds

354,256

314,304

324,980

Letters of credit

35,012

33,000

30,000

Bank certificates of deposit (CDBs)

14,700

20,200

18,560

4,541

6,634

7,763

Gold

2,925

1,928

Cash (1)

1,050

4,005

408,509

378,113

387,236

(313,000)

(319,500)

(333,500)

95,509

58,613

53,736

Stocks

Total contributions
Aggregate minimum contribution required
from participants
Surplus contributions
_________________________________

(1) The balance of cash deposits is recorded in current liabilities under the collaterals for transactions line item. We manage these
resources and their availability; any investing is contingent on, and changes in correlation to, the level of required clearing margin at the
time.

The minimum contribution required from clearing participants has been set at R$2,000 thousand, R$3,000 thousand or R$4,000
thousand, depending on the type of clearing access permits they hold. Moreover, clearing participants that provide services to
other brokers (holders of trading access permits) do so under formal contractual arrangements we register, and are required to
pay additional R$500 thousand per customer trading participant. At December 31, 2010, the aggregate of collaterals deposited
with the fund amounted to R$408,509 thousand (versus R$378,113 thousand on year ago and R$387,236 thousand at the
transition date of January 1, 2009).

b.

Special Clearing Participant Fund (Fundo de desempenho operacional) Derivatives Clearing House

The special clearing participant fund was set up to ensure the settlement of transactions in the event of default by one or more
clearing participants that also hold access permits granting then settlement and trading rights. Participants are required to make
minimum contributions and, as fund members, are liable for replenishing the fund. Contributions may be in the form of cash,

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gold and bank letters of guarantee or, subject to prior approval by us, government bonds, private debt securities or other
financial instruments satisfactory to us, in our discretion.
The table below sets forth data on balances of collaterals deposited with us at the transition date and balance sheet dates.
Composition

At December 31,
2010

At December 31,
2009

At January 1,
2009

(in thousands of Brazilian reais)

Brazilian government bonds

921,678

859,804

863,451

Bank letters of credit

172,210

156,200

160,730

Bank certificates of deposit (CDBs)

52,801

81,310

98,683

Stocks

15,358

20,098

17,647

FIC BM&F

1,781

4,177

Other

582

Cash (1)

75

6,351

1,220

Total contributions

1,162,122

1,126,126

1,145,908

Aggregate minimum contribution required

from participants

(989,200)

(1,009,500)

(1,026,700)

172,922

116,626

119,208

Surplus contributions
____________________________

(1) The balance of cash deposits is recorded in current liabilities under the collaterals for transactions line item . We manage these
resources and their availability; any investing is contingent on, and changes in correlation to, the level of required clearing margin at the
time.

The minimum contribution clearing participants are required to make to this fund has been set at
R$5,500 thousand, R$6,500 thousand or R$7,500 thousand, depending on the type of clearing access permits they hold. The
minimum contribution required from commodity brokers holding full trading access permits has been set at R$6,000 thousand.
Brokerage firms holding restricted trading access permits (rights to trade in interest rates, exchange rates and Bovespa Index)
pay minimum contribution of R$4,000 thousand. Holders of access rights permitting a broker to trade in other categories of
contracts which are cleared and settled by our derivatives clearing house are required to pay minimum contribution of R$3.000
thousand. Scalpers may apply for scalper access permits and are required to pay minimum contribution of R$1,600 thousand in
the case of full access permits or, R$1,000 thousand in the case of restricted scalper access permits (granting rights to trade in
interest rates, exchange rates and Bovespa Index).

c.

Participation fund (Fundo de participao) Foreign Exchange Clearinghouse

The participation fund was set up to cover financial losses resulting from risks related to banking operations carried out in our
FX clearing house. Banks holding permits to operate in our FX clearing house are required to contribute to the fund.
Contributions may be in the form of cash deposits, currencies or financial instruments.
The table below sets forth data on balances of collaterals deposited with us at the transition date and balance sheet dates.
Composition

At December 31,
2010

At December 31,
2009

At January 1,
2009

(in thousands of Brazilian reais)

Brazilian government bonds

d.

162,235

154,056

140,584

Settlement Fund (Fundo de liquidao) Equities Clearing House

Every clearing participant is required to contribute to this dedicated settlement fund, which is intended solely to cover possible
losses due to default.
The table below sets forth data on balances of collaterals deposited with us at the transition date and balance sheet dates.
At December 31,

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At December 31,

At January 1,

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Composition

2010

2009

2009

(in thousands of Brazilian reais)

Brazilian government bonds

485,409

322,261

190,629

Shares in exclusive funds, bonds,

repo transactions

159,580

Cash (1)

485,409

322,268

350,209

Total contributions
_____________________________

(1) The balance of cash deposits is recorded in current liabilities under the collaterals for transactions line item . We manage these
resources and their availability; any investing is contingent on, and changes in correlation to, the level of required clearing margin at the
time.

10.10. Key components of the business plan.

a.

Investments
i)

Quantitative and qualitative description of ongoing and planned investments.

We have been investing heavily on our technology infrastructure and in strengthening our international partnerships in order to
establish a solid foundation on which to accomplish our strategic growth plan and build our future. Moreover, we have
redoubled our focus on pursuing new growth opportunities in Brazil and elsewhere, and on realizing our clear objective of
investing in financial education and forming an investment-minded middle class so as to widen capital markets penetration, on
spurring growth in the equity offering market by increasing the number of listings, and on developing new products.
Technology developments
BM&FBOVESPA aims to offer prime information technology resources and services to customer market participants and
investors. To this end, we invested in 2010 an aggregate of R$219.261 thousand in a number of projects. The discussion below
highlights the main projects on whose implementation we have been working.

New trading platform.

In the first half of 2010, consistent with our partnership agreement with the CME Group, we have started the joint development
of a multi-asset class trading platform for the trading of equities, derivatives, fixed income securities and other exchange-traded
or OTC-traded assets, which is set for phased implementation over the course of the coming year, as it will ultimately replace
our four trading systems, which operate trading platforms for the equities, derivatives, corporate securities and bonds markets.
This new trading platform will give us a state-of-the-art technology structure and technology independence, will provide
customers and participants with streamlined, efficient access to deal-making across markets, and place BM&FBOVESPA high
amongst the fastest, most reliable, efficient and technologically advanced exchange-based marketplaces in our industry.
In developing and implementing our new, fully integrated electronic trading platform, we face challenges of multiple
dimensions, including as related to application of new technologies, the transmission of knowledge inside our company,
implementation, testing and deployment to market participants, and not least importantly, sticking to the implementation
schedule. This schedule calls for a three-staged implementation process, where the first, the derivatives module, is set to
implement in June 2011, followed by the equities module between the last quarter of 2011 and the first quarter of 2012, and at
a later date the fixed-income module. The step comprising analysis and specification of system functionalities for this last stage
is set to start in April 2011.

New Data Center.

As a result of the 2008 exchange integration process that combined BM&F and Bovespa we absorbed four data centers,
meaning the primary and backup centers of each exchange. We are now in the process of reorganizing and streamlining our
technology infrastructure, for which purpose we have planned two new data centers that will be more efficient, provide
heightened security features and offer greater capacity than the existing ones they are set to replace, and should thus better
support our strategic growth plan. Construction of our new primary data center has begun and is scheduled to end in the
second half of 2012, whereas since June 2010 our new backup data center is located at a leased hosting facility.

Partnership with Trading Technologies.

As announced in April 2010, we agreed a partnership with Trading Technologies International (TT), an independent software
vendor and developer of high-performance trading software, including the X-TRADER platform and front-end screen, their
flagship order entry product. TT will have a server connected to our data center under a co-location arrangement and the ability
to connect their customers to our trading systems.

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Brazil Easy Investing.

Brazil Easy Investing is a data feed and order routing software system developed in partnership with Chi-X Global, a company
specializing in electronic trading systems, which software system is designed to convert stock quotes into different foreign
currencies in real time, and give foreign investors the ability to transmit orders to the Brazilian exchange in their local
currencies.

Improvements to technology infrastructure, services, management.

In addition, we hired an international consulting firm to assess our electronic trading technology infrastructure, processes and
support services. We were presented with a report on their findings, which includes certain improvement recommendations to
both the infrastructure and the technology support services provided to market participants. These recommendations were
integrated into a number of action plans for staged-implementation. Consistent with the experts recommendations, the five
action plans we considered to be our top priorities and were selected for prompt implementation (now ongoing and set to
complete early in 2012) tackle the following: (i) model of a customer and electronic trading support center, (ii) IT performance
management, (iii) IT monitoring strategy, (iv) knowledge transfer with regard to the new electronic trading platform, and (v)
crisis management.
ii)

sources of financing for these investments.

The primary source of funds we use to finance our strategic investment plans is operating cash flow. We may also consider
alternative sources of financing, such as bank loans or some government or development bank financing program, or financing
through accessing the either the local or the international capital markets.
iii)

planned and ongoing material divestments.

Not applicable.
b.

Disclosed acquisitions of plants, equipment, patents and other assets, which are expected to
materially influence production capacity.

New trading platform. In the first half of 2010, consistent with our partnership agreement with the CME Group, we have started

the joint development of a multi-asset class trading platform for the trading of equities, derivatives, fixed income securities and
other exchange-traded or OTC-traded assets, which is set for phased implementation over the course of the coming year, as it
will ultimately replace the four existing trading systems.

Purchase of land for the new data center. We have recently purchased 20,000 square meters of land in Santana do Parnaba,

state of So Paulo, Brazil, where we intend to build our new data center. Construction is set to start in 2011 and should be
completed by the second half of 2012.
c.

new offerings of products and services, including:

i)

previously disclosed and ongoing product research.

ii)

total expenses incurred in research for development of new products or services.

Not applicable.

Not applicable.
iii)

previously disclosed and ongoing development projects.

BM&F Segment:

Mini-sized cash-settled soybean futures contracts whose final cash settlement prices would be based on similar
derivatives traded on the Chicago Mercantile Exchange (CME);
Contractual arrangements have been made for development of middle and back office services targeting Futures
Commission Merchants (FCM); and
ISVs (Independent Software Vendors): Trading Technologies (TT) will provide X-TRADER platform and front-end
screens for the BM&F segment.
Bovespa Segment:

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Block Trade Facility;

Market markers for options on stocks;
Foreign ETFs: Bovespa segment listings of foreign market indexes;
Brazil Easy Investing data feed and order routing system designed to convert stock quotes into different foreign
currencies in real time;
E-mini S&P 500 futures contracts.
Both segments:

New multi-asset class trading platform;

New data centers: lease of the premises for our new backup center and purchase of land for construction of the
primary data center;
ISVs (Independent software vendors): FlexTrade will provide trading screens for both segments (but mostly the
Bovespa segment);
EntryPoint: unified order entry interface for both segments;
Integration of clearing facilities: we intend to integrate our four clearing houses into a single clearing facility, which will
permit cross-margining, improve risk management processes and the management of cash participants deposit as
margin.
iv)

total expenses incurred in developing new products or services.

Over the year to December 2010 we disbursed R$219,261 thousand in IT projects, such as the development of a new multiasset class trading platform, a joint cooperation with the CME Group within the scope of the global preferred strategic
partnership we have mutually agreed in February 2010, the expansion of our throughput capacity in both segments and the
purchased 20,000 square meters of land, where we intend to build our new data center.
10.11. Discussion of additional factors materially influencing operating performance and not previously
identified or discussed in this section.

11.

Expansion of throughput capacity. In the third quarter we completed the expansion of throughput capacity for the
BM&F segment (which climbed to 400 thousand daily trades from 200 thousand previously), and in the fourth quarter
we completed the implementation in the Bovespa segment, where throughput went up to 3.0 million daily trades from
1.5 million earlier.

New DMA models for the Bovespa segment. In August 2010 the CVM authorized, and in September 2010 we launched
three additional Direct Market Access connection models, i.e., DMA via Provider, via Direct Connection and via CoLocation Arrangements (we call them DMA models 2, 3 and 4), which for their efficiency should attract more
sophisticated investors to the Brazilian equities markets, including high frequency traders.
Projections

11.1. Projections should identify:

a.

the projections subject

We projected and budgeted for 2009 capital expenditures on the order of R$116,000 thousand and operating expenses
(adjusted to eliminate depreciation expenses and expenses with stock option plan, severance payments and allowance for
doubtful accounts) totaling R$450,000 thousand.
Our 2010 budget projected capital expenditures on the order of R$302,100 thousand and R$550,000 thousand in operating
expenses (adjusted to eliminate depreciation expenses, provisions, expenses with stock option plan and taxes on dividends the
CME Group paid to us). On June 22, 2010, our projections for investments were revised down to R$272,000 thousand, whereas
operating expenses, as adjusted for depreciation, stock option plan and taxes on dividends received from the CME Group, were
revised down to R$520,000 thousand. On November 9, 2010, we reviewed the guidance for adjusted operating expenses to an
interval between R$540,000 thousand and R$545,000 thousand and investments to an interval between R$250,000 thousand
and R$272,000 thousand.
Additionally, our 2011 budget contemplates investments at an interval between R$235,000 thousand and R$255,000 thousand
and operating expenses (adjusted to eliminate depreciation expenses, provisions, expenses with stock option plan and taxes on
dividends paid by the CME Group) on the order of R$625,000 thousand, allowing for a R$10 million upward or downward
variance. On November 8, 2011, our projections for investments were revised down to an interval between R$180,000
thousand and R$210,000 thousand, where as operating expenses, as adjusted for depreciation, stock option plan and taxes on

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dividends received from the CME Group, were revised down to an interval between R$580,000 thousand and R$590,000
thousand.
Our 2012 budget for operational expenses (adjusted to eliminate depreciation expenses, provisions, expenses with stock option
plan and taxes on dividends paid by the CME Group) is on the interval between R$580,000 thousand and R$590,000 thousand
and investments at an interval between R$230,000 thousand and R$260,000 thousand.
b.

the projections time frame and valid time

The 2009 budget was prepared for a 12-month time frame, having ended December 31, 2009, while the 2010 budget, which
covered a 12-month time frame, ended December 31, 2010. The 2011 budget covers a 12-month time frame and ends
December 31, 2011. The 2012 budget was prepared for a 12-month time frame, and ends December 31, 2012.
c.

the underlying assumptions, including indication of those that may be influenced by Management and
those beyond Managements control

Our projections for 2010 took into account estimated capital expenditures and expenses we expected to make or incur in the
following areas and projects:

Technology and post-trading: investments will be allocated to expanding business capacity; to the joint development
(with the CME Group) of a new multi-asset class electronic trading platform (therefore, for derivatives, equities, fixed
income and other exchange-traded or OTC assets); to restructuring our data centers (primary and contingency
centers); to improving IT systems , to integrating our clearing facilities;

Expansion of the customer base and revenues:

Institutional strengthening: creation of the research and business projects department; bolstering the sustainability

investments will be allocated to strengthening the market

popularization and the financial education program targeting prospective retail investors; to boosting our issuer
prospecting activities (BovespaMais, Novo Mercado and BDRs); to implementing a new pricing policy for the Bovespa
segment; to attracting high frequency traders; to developing new products; to expanding to international markets; and
area; improvements to internal controls and project management.

Our estimates for capital expenditures and expenses may be influenced by Management.
Under our 2011 budget, forecast operating expenses we expected to incur with, and capital expenditures we plan to make in
the following:
Operating expenses

Based on our plans for the future, in 2010 we revised the number of personnel required for the following business
areas: IT, business and product development, post-trade services;
Resources required for development and implementation of our new multi-asset class trading platform, post-trade
systems, new structure of our data centers, maintenance and development of our technology infrastructure;
Redoubling our marketing and promotion activities targeting mainly financial education initiatives designed to better
prepare prospective retail investors.

Capital expenditures

IT Investments:
New multi-asset class trading system;
Building of new data center;
Integration of all our clearing facilities;
Improvements in IT infrastructure;
Other capital expenditures.

For 2012, our forecast opex and capex includes:

Operating expenses
Maintenance of our headcount
Continuous effort to reduce other expenses
Capital expenditures

IT investments:
Puma Trading System for equities;
Building of new data center;
Integration of our four clearing facilities;
New OTC platform;
Improvements in IT infrastructure;
Other capital expenditures.

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Our estimates for capital expenditures and expenses may be influenced by Management.
d.

the value of the existing indicators for the subject of the projection

There was no proper budget or other forecast for 2008 because this was the year of the merger and integration of the
businesses of BM&F and Bovespa Holding into our Company.
Our 2009 budget contemplated capital expenditures on the order of R$116,000 thousand and operating expenses (adjusted to
eliminate depreciation expenses and expenses with stock option plan, severance payments allowance for doubtful accounts)
totaling R$450,000 thousand. Actual capital expenditures amounted to R$95,585 thousand and actual adjusted operating
expenses totaled R$446,677 thousand.
Our 2010 budget forecast capital expenditures at an interval between R$250,000 thousand and R$272,000 thousand, whereas
having estimated operating expenses (as adjusted to eliminate depreciation expenses, expenses with stock option plan and
taxes on dividends the CME Group paid to us) at an interval between R$540,000 thousand and R$545,000 thousand. Actual
capital expenditures amounted to R$268,362 thousand and actual adjusted operating expenses totaled R$543,881 thousand, in
either case thus within the budget.
Additionally, our 2011 budget contemplates investments at an interval between R$180,000 thousand and R$210,000 thousand
and operating expenses (adjusted to eliminate depreciation expenses and expenses with stock option plan and taxes on
dividends paid by the CME Group) at an interval between R$580,000 thousand and R$590,000 thousand.
On 2012, our budget contemplates investments at an interval between R$230,000 thousand and R$260,000 thousand and
operational expenditures (adjusted to eliminate depreciation expenses and expenses with stock option plan and taxes on
dividends paid by the CME Group) between R$580,000 thousand and R$590,000 thousand.
11.2. Projections related to the evolution of its indicators in the past three financial years:
a.

indicate any data for which updated projections are included herein, and which repeat previous
projections

The same kind of capital expenditure and operating expense budgets we released in 2009 were prepared for 2010, pursuant to
updated estimates and forecasts.
The same kind of capital expenditure and operating expense budgets we released in 2010 were prepared for 2011, pursuant to
updated estimates and forecasts.
The same kind of capital expenditure and operating expense budgets we released in 2011 were prepared for 2012, pursuant to
updated estimates and forecasts.
b.

Comparison of the projected data with the actual performance of the indicators

There was no proper budget or other forecast for 2008 because this was the year of the merger and integration of the
businesses of BM&F and Bovespa Holding into our Company.
Our 2009 budget contemplated capital expenditures on the order of R$116,000 thousand and R$450,000 thousand in operating
expenses (adjusted to eliminate depreciation expenses and expenses with stock option plan, severance payments allowance for
doubtful accounts), whereas actual capex totaled R$95,585 thousand and opex amounted to R$446,677 thousand. One of the
principal reasons why our actual capital expenditures fell below the forecast was we postponed for 2010 the implementation of
our new data center, originally forecast at R$26,500 thousand. This, coupled with appreciation of the Brazilian real to U.S. dollar
exchange rate ultimately resulted in actual capital expenditures falling short of the budget.
Our 2010 capital expenditure budget was set at an interval between R$250,000 thousand and R$272,000 thousand, whereas
the adjusted operating expense budget were set at an interval between R$540,000 thousand and R$545,000 thousand. Actual
capital expenditures amounted to R$268,362 thousand and actual adjusted operating expenses totaled R$543,881 thousand, in
either case thus within the budget.
c.

with regard to projections for ongoing periods, indicate whether the projections stand as of the date
of this form

Additionally, our announced Capex and Opex budgets for 2011 contemplates capital expenditures at an interval between
R$235,000 thousand and R$255,000 thousand and operating expenses (adjusted to eliminate depreciation expenses and
expenses with stock option plan and taxes on dividends received from the CME Group) on the order of R$625,000 thousand,
allowing for a R$10 million upward or downward variance. As of the date of this reference form, our 2011 budget forecasts still
stand.
12.

Shareholders meeting and management

12.1. Administrative structure

a.

responsibilities of each administrative body and committee;

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Responsibilities of the board of directors. Our board of directors is responsible for (a) setting the general business
guidelines for us and our subsidiaries, approving or amending the annual budg ets, and periodically establishing targets and
business strategies, whereas overseeing the budget execution and our performance; (b) electing and removing the officers,
whereas approving the internal management regulation pursuant to the Bylaws; (c) moni toring the activities of the Officers,
inspecting books and records at any time, as well as requesting information on contracts and agreements, whether executed
or set for execution, and any other managerial acts; (d) deciding on whether to convene shareh olders' meetings; (e)
submitting to the shareholders' meeting, along with its opinion, the managements report and discussion and analysis, in
addition to the financial statements as of and for the year ended; (f) submitting to the annual shareholders' m eeting the
proposal for allocation of net income for the year; (g) giving prior consent for contracts of any type, and for transactions or
waivers of rights entailing obligations in excess of the reference amount and not contemplated in the annual budge t,
except liquidity facility transactions (per article 38, indent e of the bylaws). Under our Bylaws, reference amount is defined
as one percent of the book value of our shareholders equity; (h) granting prior approval for investments in excess of th e
reference amount, if not contemplated in the annual budget; (i) granting prior approval for any loan, financing, issuance or
cancellation of simple, non-convertible and unsecured debentures, and for the rendering of collateral or fiduciary guarantees
on behalf of subsidiaries, if in excess of the reference amount and not contemplated in the annual budget; (j) authorizing
management to acquire, dispose of, or give collateral or establish any liens on permanent assets, for amounts implying
liability in excess of the reference amount and not contemplated in the annual budget; (k) granting prior approval for
execution of partners or shareholders agreements by us or our subsidiaries; (l) approving voting instructions for
representatives representing us in shareholders' meetings of companies in which we hold equity interest, or give prior
consent for amendments to their bylaws, in the event our interest in any such company exceeds the reference amount; (m)
appointing the executive officers of subsidiaries, which shall defer to the recommendations of the chief executive officer,
unless otherwise decided upon affirmative vote of a qualified majority representing 75% of our directors; (n) deciding on
purchases of our own shares by us, whether to be kept as treasury stock or for later cancellation or reissuance; (o)
deciding on acquisitions of ownership interest in other companies, and on our membership in charitable associations or
organizations, in case any such interest is in excess of the reference amount, and except for interest acquired as part of our
financial investments policy; (p) authorizing the rendering of any guarantee on behalf of third parties, whether or not in
transactions related to our operating activities, in particular where we may be act ing as central counterparty to settlement
transactions related to our or a subsidiarys clearing and settlement activities; (q) providing shareholders with the triple list
of specialized firms with ability to evaluate our shares and prepare the valuation report, in the event a tender offer is to be
conducted in the course of a going-private process (with cancellation of our registration as a public company) or for our
delisting from the Novo Mercado ; (r) approving the hiring of a bookkeeping agent; (s) giving regard to applicable
legislation, deciding on distributions of interest on shareholders equity; (t) hiring and replacing the independent auditor s,
based on a proposal of the audit committee; and (u) appointing the members of our standing advisory committees, and
those of other committees and temporary work groups the board may establish.
Additionally, the responsibilities of the board of directors comprise: (a) approving regulations for access to our markets, and
rules related to the granting, suspension and cancellation of access permits, as well as other regulatory, operational, and
clearing and settlement rules to regulate market operations and define transactions in securities, bonds and contracts listed
to trade on our markets and in registration, clearing and settlement systems operated by us or a subsidiary; (b) approving
rules related to listing, suspension and delisting of securities and contracts, and relevant issuers or writers, as applicabl e; (c)
approving operational regulations and the rules on our clearing facilities and systems for registration, clearing and
settlement of transactions carried out on markets operated by us or a subsidiary ; (d) approving the code of ethics for
participants in markets operated by us, which should provide the rules of conduct for proper market practices and to ensure
market operations are conducted pursuant to highly ethical standards, in addition to regulating the operations and
composition of the Ethics Committee and to elect the members of said committee; (e) establishing the penalties that shall
apply in the event of violations to regulatory rules approved by the board of directors ; (f) deciding on the granting of access
permits to prospective market participants, which decisions may be appealed within a thirty-day period for reconsideration
by the shareholders meeting, which shall then issue a final decision on the matter, whereas giving regard to applicable
regulations; (g) deciding on whether to suspend or cancel access permits, in addition to reviewi ng permits in the event of a
transfer of control of a market participant and upon replacement of the upper management members of participants holding
access permits; (h) ordering limited or full-scale trading halt in the event of serious emergency in markets operated by us or
a subsidiary adversely affecting regular market operations, promptly giving notice of the decision and justification to the
Brazilian Securities Commission ( Comisso de Valores Mobilirios ), or CVM; (i) approving our and our subsidiaries annual
reports on our operational risk control systems and business continuity plan; and (j) deciding on the formation, resource
allocation and management of guarantee funds and other safeguard mechanisms in connection with transactions carried out
in our markets and systems, including by regulating instances and processes for their use .
Responsibilities of the board of executive officers. The board of executive officers represents us and is responsible
for managing our business, having powers to (a) abide by and enforce the provisions of these Bylaws and the decisions of
the board of directors and the shareholders meetings; (b) within its sphere of authority, perform all acts necessary to
ensure the regular course of business and fulfill our corporate purpose, and (c) coordinate the activities of our subsidiaries.

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The responsibilities of the board of executive officers include (a) deciding on opening, closing or moving branches,
representative offices, warehouses, depository facilities or any other establishments in Brazil or abroad; (b) submitting to our
board the annual management report, the financial statements and the auditors report, along with the proposal on
allocation of net income for the year; (c) preparing yearly and multi-year budget proposals, and proposals on strategic plans,
expansion plans and investment programs; (d) granting prior consent for the acquisition or disposition of chattel or real
property by us or a subsidiary, and for the rendering of collateral or liens of any nature on our assets, the taking of loans or
financing and the granting of in rem or fiduciary guarantees, in any event for amounts below the reference amount, and
(e) authorize the Company to enter into or renew liquidity facility transactions, whether or not collateralized, and/or asset
monetization schemes with the aim of ensuring timely fulfillment of obligations undertaken in the capacity of central
counterparty clearing, regardless of the amount involved in the transaction; and (f) prompted by the chief executive officer,
deciding on any matters not allocated to be exclusive sphere of competence of the board of directors or the shareholders
meeting.
Additional responsibilities of the board of executive officers include (i) declaring default by participants in our clearing
facilities and organized OTC markets, and ordering appropriate action, whereas giving regard to applicable regulations; (ii)
setting the operating, credit and risk limits attributable to participants in registration or clearing facilities; (i ii) defining
processes for common adoption by registration and clearing facilities, and for their integration with our trading systems, ri sk
management and margin systems; and (iv) order the closing out of open positions held by permit -holding market
participants in any of our markets.
Responsibilities of the board advisory committees

Audit Committee. The primary responsibilities of the audit committee include making recommendations concerning

the independent auditors, as well as assessing the effectiveness of our internal controls system and internal and
independent auditing processes, in addition to assessing the quality and integrity of our financial information and
supervising the financial reporting activities and performing other functions established in our bylaws and under
applicable. This committee is composed of five members, as follows: Renato Diniz Junqueira (director), Paulo
Roberto Simes da Cunha (external independent member), Srgio Darcy da Silva Alves (external independent
member), Luis Nelson Guedes de Carvalho (external independent member, currently under temporary leave of
absence), Alexsandro Broedel Lopes (external independent member and Mr. Carvalhos interim replacement for the
leave of absence period), and Tereza Cristina Grossi Togni (external independent member and ad-hoc Committee
Coordinator substituting for Mr. Carvalho during his leave of absence).

Compensation Committee. The primary responsibilities of the audit committee include evaluating and adjusting our

compensation guidelines, standards and policy, including as to benefits for directors, committee and management
members. This committee is composed of three members, as follows: Candido Botelho Bracher (director), Claudio
Luiz da Silva Haddad (independent director) and Ren Marc Kern (independent director).

Nomination and Governance Committee. The primary responsibilities of the nomination and governance committee

include tackling corporate governance, protecting our and our subsidiaries credibility and ensuring we practice high
business standards. This committee is composed of three members, as follows: Arminio Fraga Neto (independent director
and chairman of the board), Pedro Pullen Parente (independent director) and Luis Stuhlberger (director).

Risk Committee. The primary responsibilities of the risk committee include monitoring and assessing risks, including

market, liquidity and systemic risks affecting markets we operate from a strategic and structural standpoint. This
committee is composed of four members, as follows: Arminio Fraga Neto (independent director and chairman of the
board), Julio de Siqueira Carvalho de Arajo (director), Luis Stuhlberger (director) and Jos Roberto Mendona de
Barros (independent director).
Responsibilities of the executive advisory committee

Market Risk Committee: The primary responsibilities of the market risk committee include (i) evaluating

macroeconomic conditions and prospective impact on market risks; (ii) setting standards and guidelines for the
determination of margin requirements; (iii) setting standards and guidelines for the valuation of assets accepted as
collateral; (iv) setting guidelines determining the form and levels of collaterals required under transactions carried
out or registered in any of our trading, registration, clearing and settlement systems, including transactions carried
out through our subsidiaries and collateral under open positions; (v) proposing policies for management of
collaterals; (vi) analyzing systemic leveraging; (vii) proposing standards, limits and gu idelines for control of credit
risk by market participants; (viii) analyzing and proposing measures for improvement of risk management systems;
and (ix) conducting other analytic processes, as deemed befitting matters within the sphere of competence of the
chief executive officer. This committee is composed of eight members, as follows: Ccero Augusto Vieira Neto (chief
operating, clearing and depository officer), Viviane El Banate Basso (settlement officer), Marcos Costa Santos
Carreira (derivatives officer), Andr Eduardo Demarco (operations officer), Bernard Appy (strategy and planning
officer), Marcos Jos Rodrigues Torres (corporate risk officer), Sergio Goldenstein (fixed income and FX officer) and
Luis Antnio B. G. Vicente (risk management officer).

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In addition, under item (g) of article 35 of our Bylaws, the Chief Executive Officer may decide to establish other executive
advisory or operational committees and work groups., and standardization and regulations committees, commodity
classification and mediation committees and other special committees, whose role, responsibilities, composition and
operation will be defined at the time they are created.
b.

the date the fiscal council was established (if not permanently active), and the dates on which the co mmittees
were established;

Our fiscal council is has not been active since our incorporation. We take the view that the absence of an active fiscal coun cil
is adequately supplemented by our audit committee because it has been conceived and established to i nclude, among other
things, responsibilities (listed under article 47 of our Bylaws) that overlap those legally ascribed to a fiscal council unde r
Brazilian Corporate Law.
As with our compensation committee and nomination and governance committee (both pr eviously comprising one body
named compensation and nomination committee), our audit committee was established at the extraordinary shareholders
meeting held on May 8, 2008.
Our risk committee was established by the board of directors at a meeting held o n May 12, 2009.
The executive market risk committee was created on May 8, 2008.
c.

the mechanisms for evaluation of performance by each administrative body or committee;

We have no mechanisms for evaluation of the performance of either the board of executive officers or the market risk
committee, as collective bodies per se.
In addition, the board of directors has adopted a yearly evaluation process whose dimensions are twofold: what and how.
The what dimension means evaluating data compiled and grouped into three categories we call (a) strategic focus, (b)
knowledge and information on the business, and (c) independence, whereas the how dimension means evaluating data
compiled and grouped into categories we call (a) decision-making process, (b) role at meetings and (c) motivation and
interest alignment.
The objective of the process is to facilitate structured discussions on continuing performance improvements for
systematically enhanced efficiency of the role of the board. The first stage encourages mu lling over individual performance
through a questionnaire that proposes intensity-rated responses (on a 1 to 5 scale) that fall within one of the above
dimension categories. Results are compiled and discussed at a meeting of the board, which then establish es the related
improvement action plan.
d.

the individual powers and responsibilities of the executive officers;

Chief executive officer . The chief executive officer is assigned powers and responsibilities to (a) convene and chair the

meetings of the board of executive officers; (b) propose to our board the internal regulation and the composition of the
board of executive officers; (c) direct and coordinate the activities of the other officers; (d) coordinate general planning
activities for us and our subsidiaries; (e) approve our organizational structure, hiring executives and directing the upper and
middle management members, and expert professionals, assistants and consultants, as he may deem necessary or
appropriate, defining positions, functions and compensation, assigning powers and responsibilities, whereas giving regard to
guidelines set in budget forecasts approved by our board; (f) establish the executive market risk committee and the
regulation governing the committees operations, composition, role and responsibilities, setting the compensation of
committee members, as applicable, whereas giving regard to guidelines set by compensation committee; (g) establish other
executive or advisory or operational committees and work groups, and standardization and regulations committees,
commodity classification and mediation committees, and other special committees, in addition to defining their role,
responsibilities, composition and operating regulation; (h) set prices, fees, commissions and other dues payabl e by
participants holding permits for access to our markets and by other parties, as compensation for our offerings of products
and services provided in connection with our core business activities, including our regulatory and surveillance activities,
auditing and grading activities, whereas ensuring wide dissemination of price schedules amongst customers and participants;
(i) submit to our board proposals on regulatory, operational, clearance and settlement rules to regulate market activities an d
transactions in equities and derivatives listed to trade on our markets and the operation of our electronic trading,
registration, clearing and settlement systems and environments; (j) define securities, bonds and contracts that may be listed
to trade on our markets or registered, cleared and settled on our systems, in addition to powers to order halts on trading in
any securities, bonds or contracts, or delisting them altogether; (k) monitor and inspect in real -time trades and other
transactions carried out on our trading, registration, clearing and settlement systems; (l) acting within the scope of our
market surveillance activities, take measures and adopt procedures to prevent unfair or illegal or irregular market practices ;
(m) in the event of serious emergency in markets operated by us or a subsidiary, which adversely affects regular market
operations, to order limited or full-scale trading halt, promptly giving notice of this decision and justification to the board and
the Brazilian Securities Commission; (n) to take the cautionary measure of suspending the access permit of participants in
certain instances contemplated in the access regulation and other rules enacted by our board of directors, or in the event of
suspected violation of the code of ethics, whereas promptly communicating the suspension to the CVM and the Central Bank;

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

(o) prevent the completion of transactions entered in our trading, registration, clearing and settlement systems where there
are indications of violation of the legislation and regulations which we are responsible for surveilling and enforcing; (p)
cancel transactions entered or registered in our trading, registration, clearing and settlement systems, as long as any such
transaction is pending settlement, and to halt clearing and settlement of transactions, in any instance where there are
indications of violation of the legislation and regulations which we are responsible for surveilling and enforcing; (q)
determine special procedures for transactions entered and or registered in our t rading, registration, clearing and settlement
systems, in addition to establishing clearing and settlement requirements in connection therewith; (r) promptly communicate
the CVM of the occurrence of events, including transient events, that affect the marke ts operated by us; and
(s) forward to the CVM, as required from us and within the assigned deadline, information and reports related to
transactions entered or registered in our trading, registration, clearing and settlement systems.

Chief financial officer; Investor relations officer . The chief financial officer accumulates responsibilities as investor

relations officer and officer for corporate affairs. As such, this officer has powers and responsibilities to (a) plan and prepare
yearly and multi-year budget forecasts, work plans and capital expenditure plans; (b) control the execution of our yearly and
multi-year budgets; (c) manage and invest our financial resources, and to supervise performance of these activities by our
subsidiaries; (d) direct our accounting, financial planning and taxation departments; (e) perform reporting and disclosure
activities, and interface with shareholders, the CVM, the market, other exchanges or markets on which securities issued by
us are listed to trade, and to keep current registration information as required by applicable CVM regulation, in addition to
fulfilling other requirements of said regulation; (f) provide administrative services as may be required by our business, in
particular with regard to contract management, asset management, asset security, supplies and logistics, engineering and
maintenance; and (g) supervise the legal team in connection with legal advice on corporate, litigation and tax matters, as
well as regarding our regulatory activities.

Chief operating, clearing and depository officer . The chief operating, clearing and depository officer is responsible for

(a) administer and monitor the operations and external connectivity in the electronic trading platforms (b) administering all
clearing activities for the equities, derivatives, fixed-income, commodities and foreign exchange markets, pursuant to
transactions carried out in our trading systems, and supervising public offerings and the settlement of transactions carried
out within the scope of these offerings; (c) directing and administering the services of the central securities depository and
the custody activities provided for equities, fixed-income securities, gold and agricultural securities which are registered or
deposited
with
our
central
securities
depository
and
our
other
custody
systems;
(d) directing our activities as central counterparty to ensure multilateral settlement of transactions at our clearing faciliti es;
and (e) managing the processing of applications for permits for access to our markets and the Brazilian commodities
exchange operated by the Brazilian Commodities Exchange ( Bolsa Brasileira de Mercadorias ), our subsidiary.

Chief information technology and security officer. The chief information technology and security officer directs our
information technology and information security activities, and is responsible for (a) monitoring the connections to our
electronic trading platforms; and (b) developing and managing operating systems control tools and market surveillance
mechanisms, in addition to technology solutions related to the processing of transactions within the scope of the capital
markets.

Chief products and customers officer. The chief products and customers officer is responsible for (a) coordinating

research and development of new products, trading structures, researching market requirements, operating in cooperation
with market participants, regulatory entities and private capital market institutions; (b) by acting in cooperation with mar ket
participants, regulatory entities and private capital market institutions, promote market efficiency, market education and
develop solutions to tackle technical hurdles and (c) establish guidelines for the activities of business development in local
and international markets, (d) identify and design strategies for new business opportunities and establish business
relationship with participants seeking to expand distribution channels; and (e) develop a direct relationship with the clients
of the Company's products and services.
e.

the mechanisms for evaluation of performance by directors, committee members and officers.

Evaluations of the officers are conducted at the beginning of the year, at which time we set performance targets for the next
year in line with our strategic plan. In determining whether performance targets are met, the evaluations are conducted
based on a process whose dimensions are twofold: what and how. The what dimension evaluates project realization,
adherence to budget and key operating indicators, whereas the how dimension evaluates competencies. In addition,
upper management team leaders perform half-yearly evaluations of each upper management member, including members of
the board of executive officers, and define evaluation scores which provide feedback for determination of both the shortterm variable compensation (profit sharing bonuses) and the long-term variable compensation (stock options under our stock
option plan). The evaluations and scores are subsequently submitted to the board of direct ors, along with the proposed
compensation.
Given that the executive market risk committee is composed only by upper management members (meaning executive
officers elected under the Bylaws and other officers), we conduct no evaluation of the individual per formance of committee
members, as each of their overall performance is evaluated as discussed above.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

In addition, while we have no mechanisms for individual evaluation of directors, their performance as a collective body is
evaluated pursuant to the process discussed above, in item c of this subsection.
12.2.

Description of the rules, policies and practices regarding shareholders meetings:

a.

call notice periods;

Shareholders meetings are called at least fifteen days prior to the date scheduled for the meeting on first call, and eight
days prior to the date of the meeting on second call.
b.

powers and responsibilities;

In addition to powers allocated to a shareholders meeting under Brazilian Corporate Law and our Bylaws, the powers and
responsibilities of our shareholders convened in properly called meetings include (a) reviewing the management report and
judging the financial statements; (b) deciding on the proposal for allocation of net income for the year and on dividend and
other distributions of net income; (c) electing and removing the directors and the fiscal council members, if the fiscal council
is established; (d) setting the aggregate compensation of the directors and executive officers, and that of fiscal council
members, if this is active; (e) approving stock or subscription option plans benefitting our and our subsidiaries management
and employees and other service providers; (f) giving regard to existing legal limits and in accordance with our human
resources policy, approving profit sharing plans for the benefit of management and our employees; (g) approving our
delisting from the Novo Mercado segment of the Brazilian stock exchange, or the cancellation of our registration as a public
company upon a going private process; (h) from a list of candidate appointees, designating a specialized firm to determine
the fair value of our shares and prepare the valuation report in the event of a going -private process or our delisting from the
Novo Mercado; (i) suspending the rights of shareholders in breach of the law or our Bylaws (Article 120 of Brazilian
Corporate Law and Article 18 of our Bylaws); (j) deciding on our holding ownership interest in other companies and/or
associations, consortiums or joint ventures, where any such interest involves an am ount in excess of three times the
reference amount; (k) deciding on any material disposition of our assets or trademarks; (l) deciding on merger transactions
whereby our company or our shares are proposed to be absorbed into another company, and on conso lidation or spin-off
transactions, and on a transformation of our corporate type and on our dissolution, for which purpose the legally prescribed
quorum to resolve will be fulfilled, unless the Brazilian Securities Commission ( Comisso de Valores Mobilirios), or CVM,
shall have consented to a lower quorum to resolve, such as permitted under paragraph 2 of article 136 of Brazilian Corporate Law.
c.

locations (street address and website or e-mail address) at which the documents related to a shareholders
meeting are made available for analysis by shareholders;

Street address: our registered office, at Praa Antonio Prado, 48, Downtown, So Paulo, State of So Paulo
Electronic addresses: www.bmfbovespa.com.br/ri; and www.cvm.gov.br
d.

identification and management of conflicts of interest;

Under applicable Brazilian legislation, if the interests of any shareholder conflict with our interests in any particular mat ter on
which a shareholders meeting is to vote, the conflicted shareholder will be prevented from voting his shares.
The same is provided in article 19 of our Bylaws, which prohibits conflicted shareholders from voting in the event of a
conflict of interest. In addition, under article 115 of Brazilian Corporate Law, a vote cast by a conflicted shareholder would
constitute abuse of shareholder rights.
At this time we adopt no mechanism to detect and identify events where the interests of a shareholder conflicts with our
interest in any matter submitted to a shareholders meeting.
e.

proxy requests by management (for purposes of delegating voting rights);

Pursuant to current practices, we consent to have certain management members act as proxies for shareholders that wish to
do so and provide sufficient voting instructions on how these proxies are to vote the shares at the relevant shareholders meeting.
f.

formal requirements for acceptance of proxies and powers of attorney granted by shareholders, including
indication as to whether proxies sent via computer are acceptable;

We accept electronic proxies (powers of attorney) granted by shareholders that meet certain requirements, including original
or certified copies of the corporate documents that prove authority of the signatory to grant a proxy (or power of attorney).
However we do not require these proxies (or powers of attorney) to be notarized or consularized.
In order to facilitate attendance and encourage shareholder participation, we have adopted the practice of making availab le
the Online General Meetings platform provided by Assembleias Online for electronic voting or voting by proxy. We first
put this solution into practice for the combined annual and extraordinary shareholders meetings held on April 20, 2010, and
then again for the annual and extraordinary meetings held 2011, when shareholders were permitted to register for remote
voting, or voting by proxy, and were issued digital certifications by either a private certificate provider or by ICP -Brasil, the
certification authority for the Brazilian public key infrastructure established pursuant to Provisional Measure No. 2200-2 dated
August 24, 2001.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

g.

forums or gateways for receipt via computer of shareholder statements on matters included in the agenda of
shareholders meetings;

We keep no forums or gateways for receipt of shareholders statements via computer, regarding matters included in the
agenda for any shareholders meetings.
h.

online video and/or audio transmission of shareholders meetings;

We provide no online video or audio transmission of our shareholders meetings.

i.

mechanisms for inclusion of shareholder proposals in meeting agendas.

We adopt no special mechanisms for shareholders to add proposals to the order of business. While thus far no such request
has been made by any shareholder, if any such request is actually received we will review the matter on a case -by-case
basis, at which time we may agree to do add a proposal to the order of business.
12.3. Dates and newspapers where notices to shareholders have been published to announce (a) release of
financial statements; (b) call notices related to annual shareholders meetings; (c) minutes of annual
shareholders meetings held to judge the financial statements; (d) the financial statements .
2010
Event

Publication
date(s)

Notice of release of
financial statements

Call notices for

annual shareholders
meetings

Date of the meeting

Minutes of the
annual shareholders
meeting that judged
the financial
statements
Financial statements

12.4.

2009

Newspaper(s)

Publication
date(s)

2008
Newspaper(s)

Publication
date(s)

Newspaper(s)

Not published

N/A

Not published

N/A

March 19, 2009

March 20, 2009

Not published

N/A

Not published

N/A

March 19, 2009

March 20, 2009

Official Gazette
of the State of
So Paulo

March 18, 2011

March 21, 2011
March 22, 2011

Valor Econmico

March 19, 2010

March 20, 2010
March 23, 2010

Valor Econmico

March 31, 2009

April 1, 2009
April 2, 2009

Valor Econmico

March 18, 2011

March 19, 2011
March 22, 2011

Official Gazette of
the State of So
Paulo

March 20, 2010

March 23, 2010
March 24, 2010

Official Gazette
of the State of
So Paulo

March 31, 2009

April 1, 2009
April 2, 2009

Official Gazette
of the State of
So Paulo

April 18, 2011, 3 pm

April 20, 2010, 11 am

Valor Econmico

April 28, 2009, 11:30 am

April 20, 2011

Valor Econmico

April 22, 2010

Valor Econmico

May 14, 2009

Valor Econmico

April 20, 2011

Official Gazette of
the State of So
Paulo

April 23, 2010

Official Gazette
of the State of
So Paulo

May 14, 2009

Official Gazette
of the State of
So Paulo

February 18, 2011

Valor Econmico

February 24, 2010

Valor Econmico

March 18, 2009

Valor Econmico

February 24, 2010

Official Gazette
of the State of
So Paulo

March 19, 2009

Official Gazette
of the State of
So Paulo

Official Gazette of
February 18, 2011 the State of So
Paulo

Description of the rules, policies and practices regarding the board of directors

Our board has the mission of ensuring that business is conducted for protection and appreciation of our assets, whereas
maximizing long-term return for shareholders and caring for the health of good order of the markets we operate. Our board of
directors is a collective decision-making body, responsible for setting our general business guidelines and deciding on strategic
issues.
As set forth in our Bylaws, our board is composed of a minimum of seven and a maximum of eleven members, all of whom are
elected for two-year terms, reelection being permitted, and may be removed by the shareholders meeting at any time. Our
directors may not accumulate responsibilities as our executive officers, nor as officers of our subsidiaries.
The chairman and vice chairman of the board are appointed by the absolute majority (50% plus one of all acting directors)
of directors attending the first board meeting after their election and investiture.
The presence of an absolute majority of our directors (50% plus one of all acting directors) constitutes a quorum to convene
any board meeting on first call. On second call, any number of attending dir ectors constitutes a quorum to convene.
Except as provided in our Bylaws, the decisions of the board require a majority of affirmative votes of attending directors,
provided the chairman of our board has the casting vote.
a.

frequency of board meetings;

Under article 26 of our Bylaws, the board of directors meets regularly every two months, pursuant to the annual calendar

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

our chairman releases in January every year. In addition, if urgent business so require extraordinary board meetings may be
called based on a three-day prior notice given by the chairman or in his absence, the vice chairman, or also by 2/3 of the
board members.
The table below sets forth the dates of board of directors held in the last three full years.

b.

2010

2009

2008

February 23, 2010

March 25, 2010
May 11, 2010
June 22, 2010
August 12, 2010
September 14, 2010
September 28, 2010
November 9, 2010
December 14, 2010
December 16, 2010
-

January 20, 2009

February 17, 2009
March 17, 2009
March 27, 2009
April 14, 2009
April 28, 2009
May 12, 2009
May 18, 2009
June 25, 2009
August 11, 2009
September 24, 2009
October 23, 2009
November 10, 2009
December 17, 2009

May 8, 2008
May 20, 2008
June 18, 2008
July 3, 2008
August 12, 2008
August 14, 2008
August 19, 2008
September 16, 2008
September 24, 2008
October 21, 2008
November 11, 2008
December 16, 2008
December 19, 2008
-

provisions of shareholders agreements, if any, establishing restrictions on, or in any way tying the votes of
directors at board meetings;

There are no shareholders agreements filed at our registered office.

c.

rules for identification and management of conflicts of interest.

Under article 22, paragraph 4, of our Bylaws, no person may be elected to our board if he or she is a director of a competito r
of ours or of a subsidiary, or has a conflict of interest with us or any of our subsidiaries. A person is deemed to have a
conflict of interest if, cumulatively, (i) the shareholder seeking to elect such person also has appointed a director of any
competitor; and (ii) the person has subordination relations with the shareholder seeking to elect such person.
Additionally, to determine whether or not a conflict of interest exists in the above circumstance, our Bylaws make an
extrapolation from the votes cast to elect any particular director, by providing that a director is deemed to have been elected
by (i) the shareholder or group of shareholders individually electing said director; or (ii) the shareholder or group of
shareholders whose votes, in a cumulative voting system, per se, were sufficient to elect the director, or whose votes would
have been sufficient had the cumulative voting system been adopted, taking into account the number of shareholders
attending the meeting; or (iii) the shareholder or group of shareho lders whose votes, per se, would have been sufficient to
achieve the minimum percentage (10%) set under paragraph 4 of article 141 of Brazilian Corporate Law for exercise of the
right to elect a director by a separate vote.
Under Brazilian Corporate Law and paragraph 5 of article 26 of our Bylaws, a conflicted director must not have access to
information, take part in board deliberations, or vote on the matter regarding which he or she has a conflicting interest.
Moreover, under paragraphs 8 and 9 of article 22 of our Bylaws our board members must not include two directors having
ties with a single participant with access to our markets or with a single entity, conglomerate or economic group. Our
Bylaws define ties as any of the following:
(a)

a continuing relationship based on an employment contract or service provision agreement or an office as director,
executive officer, committee member, governing committee or fiscal council member;

(b)

directly or indirectly holding ownership interest in shares representing at least 10% of the capital stock or voting stock
of the relevant participant, entity conglomerate or economic group; or

(c)

being a spouse, common law spouse or relative to the second degree of another director.

Paragraph 10 of article 22 of our Bylaws further provides that if a supervening event occurs, or a previously unknown event
comes to light, such that a particular director no longer meets the appointment requirements, said director must promptly be
replaced.
Under the sole paragraph of article 21 of our Bylaws, directors and officers are required to adhere to our policy on material
disclosures and securities trading, by singing the instrument of adherence to the policy manual.
While for the most part our board is composed by independent directors, the interests of all our directors are in line with our
interests.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Under our Bylaws, independent director is defined as a director (a) that meets all of the independence standards set in the
Novo Mercado listing regulation and in CVM Instruction 461/07; and (b) whose interest in our shares, whether directly or
indirectly held, represents less than five percent of our shares of common stock and if the director has ties with a
shareholder, the latter must not hold an interest representing five percent or more of our shares of common stock.
In addition, under section 4 of our policy on conflicts of interest and related party transactions and under subsection 15.7 of
the board regulation, our directors are required to disclose promptly any existing conflict of interest and are also required to
abstain from taking part in deliberations and any decision-making process related to the pertinent matter.
Moreover, also under section 4 of our policy on conflicts of interest and related party transactions the chairm an may request
a conflicted director to attend a board meeting to provide additional information on the conflict of interest, the relevant
matter, the parties involved, and so forth, provided the conflicted director must not vote or take part in the decisi on-making
process regarding the pertinent matter.
Additionally, if any director that would potentially ascertain a personal gain from any given decision were to silence about a
conflict of interest, any cognizant peer may reveal the conflict of interest. The conflicted director would be in breach of our
policy (for the conflict per se and his disclosure failure), and the matter would be submitted to the nomination and corporate
governance committee for evaluation and a recommendation to the board of directors as to possible corrective actions.
In any event, the conflict of interest disclosure and the conflicted directors abstentions from voting must be properly
recorded in the minutes of the relevant board meetings.
On taking office, our directors are required to sign a statement acknowledging being aware of, and committing to abide by
the requirements of our policy on conflicts of interest and related party transactions.
12.5. Description of the Bylaws provision on arbitration commitment for settlement of disputes among
shareholders, or between shareholders and the registrant.
Our Bylaws (article 76) require our shareholders, directors, officers and, if in office, also our fiscal council members, to settle
by arbitration any disputes which is related to the application, legality, effectiveness, interpretation, violation and effects of
violation of the provisions of the agreement for participation in the Novo Mercado or the rules of the Novo Mercado, the
arbitration regulation of the market arbitration chamber, the provisions of the Brazilian Corporate Law, the rules issued by the
Brazilian Monetary Council (Conselho Monetrio Nacional), or CMN, the Central Bank or the CVM, and other rules generally
applying to the Brazilian capital markets. The arbitration proceedings should be carried out before the market arbitration
chamber, under its rules.
12.6.

Information on the directors, executive officers and fiscal council members

12.6.1

Board of Directors
Arminio Fraga
Neto

Candido
Botelho
Bracher

Charles P.
Carey

Claudio Luiz da
Silva Haddad

53

52

58

Economist

Business
Administrator

Manager

64
Industrial and
mechanical
engineer

469.065.257-00

039.690.188-38

Position

Chairman
(Independent
Director)

Director

Appointment date

April 18, 2011

Age
Profession
Taxpayer ID (CPF)

Investiture date

Term of office

Other positions

Jos Roberto
Mendona de
Barros

Julio de Siqueira
Carvalho de
Arajo

66

56

Economist

Banker

109.286.697-34

005.761.408-30

425.327.017-49

Director

Independent
director

Independent
director

Director

April 18, 2011

May 10, 2012

April 18, 2011

April 18, 2011

April 18, 2011

April 18, 2011

April 18, 2011

May 10, 2012

Through to the
date of the
annual
shareholders
meeting that
convenes to
judge the 2013
financial
statements
Nominations and
Governance
Committee

Through to the
date of the
annual
shareholders
meeting that
convenes to
judge the 2013
financial
statements
Compensation
Committee
member

Through to the
date of the next
annual
shareholders
meeting

124

April 18, 2011

April 18, 2011

April 18, 2011

Through to the
date of the
annual
shareholders
meeting that
convenes to
judge the 2013
financial
statements
Compensation
Committee
member

Through to the
date of the
annual
shareholders
meeting that
convenes to
judge the 2013
financial
statements

Through to the
date of the
annual
shareholders
meeting that
convenes to
judge the 2013
financial
statements

Risk Committee
member

Risk Committee
member

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

member; Risk
Committee
member
Appointed by
controlling
shareholder

No

No

No

Luis Stuhlberger

Marcelo Fernandez
Trindade

Pedro Pullen
Parente

Renato Diniz
Junqueira

56

46

58

Engineer

Lawyer

Executive

58
Business
Administrator

881.983.918-00

776.785.247-49

059.326.371-53

Director

Independent director

Appointment date

April 18, 2011

April 18, 2011

Investiture date

April 18, 2011

April 18, 2011

Term of office

Through to the date

of the annual
shareholders
meeting that
convenes to judge
the 2013 financial
statements

Through to the date

of the annual
shareholders meeting
that convenes to
judge the 2013
financial statements

Other positions

Nominations and
Governance
Committee
member; Risk
Committee member

Audit Committee
member

No

No

Age
Profession
Taxpayer ID (CPF)
Position

Appointed by
controlling shareholder

12.6.2

No

No

No

Ren Marc Kern

47
Businessman

679.361.308-10

356.047.0115

Vice-Chairman
(Independent
director)
April 18, 2011

Director

Independent
director

April 18, 2011

April 18, 2011

April 18, 2011

Through to the
date of the
annual
shareholders
meeting that
convenes to judge
the 2013 financial
statements

April 18, 2011

Through to the
date of the
annual
shareholders
meeting that
convenes to judge
the 2013 financial
statements

April 18, 2011

Nominations
and Governance
Committee
member

Through to the date

of the annual
shareholders
meeting that
convenes to judge
the 2013 financial
statements

Audit Committee
member

Compensation
Committee member

No

No

No

Board of Executive Officers

Edemir Pinto
57

Ccero Augusto
Vieira Neto
38

Eduardo Refinetti
Guardia
45

Lus Otvio
Saliba Furtado
45

Marcelo
Maziero
44

Economist

Economist

Economist

System Analyst

Engineer

Taxpayer ID (CPF)

614.304.988-20

128.501.208-98

088.666.638-40

087.083.368-57

Position

Chief Executive
Officer

Chief Operating,
Clearing and
Depository Officer

Chief Financial
Officer (IRO)

Appointment date

May 5, 2011

May 5, 2011

May 5, 2011

926.046.687-34
Chief Information
Technology
and Security
Officer
Sep 1, 2011

Investiture date

May 5, 2011

May 5, 2011

May 5, 2011

Sep 1, 2011

Sep 1, 2011

Term of office

2 years

2 years

2 years

2 years

Other positions

2 years
Member of the
Market Risk
Committee
No

No

Age
Profession

Appointed by
controlling shareholder

12.6.3

No

Chief Products
and Customers
Officer
Sep 1, 2011

No

No

Fiscal Council

The fiscal council has not been established. We take the view that the absence of an active fiscal council is adequately
supplemented by our audit committee because it has been conceived and established to include, among other things,
responsibilities (listed under article 47 of our Bylaws) that overlap those legally ascribed to a fiscal council under Brazilian
Corporate Law. Our audit committee is composed of five independent members (one independent director and four external
members) appointed by our board for two-year terms, based on recommendations of our nomination and corporate
governance committee. In addition, to ensure this committee operates in an exempt and objective fashion, and for the
benefit of our company and shareholders, audit committee members are required to be well versed or experienced in either

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auditing and accounting and taxation or compliance and internal controls, as well as meet the independence standards set
forth in article 46 of our Bylaws.
12.7. Standing board advisory committees
Audit Committee
Luis Nelson
Guedes de
Carvalho

Alexkandro
Broedel Lopes

Renato Diniz
Junqueira

Paulo Roberto
Simes

Srgio Darcy
da Silva Alves

65

37

61

Accountant

Accountant

027.891.838-72
Committee
Coordinator
June 16, 2011

031.212.717-09
External
member
May 10, 2012

58
Business
Administrator
679.361.308-10

May 10, 2012

567.047.048-68
External
member
June 16, 2011

66
Financial
Consultant
050.933.687-68
External
member
June 16, 2011

163.170.686-15
External
member
June 16, 2011

June 16, 2011

May 10, 2012

In office during
Mr. Carvalhos
leave of
absence

May 10, 2012

June 16, 2011

June 16, 2011

June 16, 2011

2 years

2 years

2 years

2 years

Age
Profession
Taxpayer ID (CPF)
Position
Appointment date
Investiture date
Term of office

2 years

Member

Accountant

Currently, the
Committee
Interim
Member of the
Coordinator is
Other positions
replacement for
Director
Regulation
under
Mr. Carvalho
Committee(*)
temporary leave
of absence
( )
* The Regulation Committee is an advisory committee established to support Management on regulatory issues.

Tereza
Cristina Grossi
Togni
62
Accountant

Ad-hoc
Committee
Coordinator,
substituting for
Mr. Carvalho

Nominations and Governance Committee

Arminio Fraga Neto
Age
Profession
Taxpayer ID (CPF)

Pedro Pullen Parente

Luis Stuhlberger

53

58

56

Economist

Executive

Engineer

469.065.257-00

059.326.371-53

881.983.918-00

Committee Coordinator

Committee member

Committee member

Appointment date

June 16, 2011

August 09, 2011

June 16, 2011

Investiture date

June 16, 2011

August 09, 2011

June 16, 20119

2 years
Independent director
(Chairman of the Board)

2 years

2 years

Independent director

Director

No

No

Position

Term of office
Other positions
Appointment by controlling
shareholder

No

Compensation Committee
Candido Botelho Bracher
Age
Profession
Taxpayer ID (CPF)
Position

52

Claudio Luiz da
Silva Haddad

Ren Marc Kern

Businessman

039.690.188-38

64
Industrial and mechanical
engineer
109.286.697-34

Business Administrator

47

3560470115

Committee member

Committee Coordinator

Committee member

Appointment date

June 16, 2011

June 16, 2011

June 16, 2011

Investiture date

June 16, 2011

June 16, 2011

June 16, 2011

Term of office

2 years

2 years

2 years

Other positions

Director

Independent director

Independent director

No

No

No

Appointed by controlling shareholder

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Risk Committee
Arminio Fraga Neto
Age
Profession
Taxpayer ID (CPF)

Julio de Siqueira
Carvalho de Arajo

Luis Stuhlberger

Jos Roberto
Mendona de Barros

53

56

56

66

Economist

Banker

Engineer

Economist

469.065.257-00

425.327.017-49

881.983.918-00

005.761.408-30

Committee member

Committee Coordinator

Committee member

Committee member

Appointment date

June 16, 2011

June 16, 2011

June 16, 2011

August 9, 2011

Investiture date

June 16, 2011

June 16, 2011

June 16, 2011

August 9, 2011

2 years
Independent director
(Chairman of the
Board)

2 years

2 years

2 years

Director

Director

Independent director

No

No

No

Position

Term of office
Other positions
Appointed by controlling
shareholder

No

Executive advisory committees

Market Risk Committee
Andr Eduardo
Demarco
Age
Profession
Taxpayer ID (CPF)
Position

Bernard Appy

Ccero Augusto
Vieira Neto

Luis Antnio
B. G. Vicente

49

38

42

38
Business
Administrator
157.259.728-64

Economist

Economist

Mathematician

022.743.238-01

128.501.208-98

975.138.577-68

Committee member

Committee member

Committee member

Committee member

Appointment date

May 13, 2009

February 01, 2011

May 8, 2008

May 8, 2008

Investiture date

May 13, 2009

February 01, 2011

May 8, 2008

May 8, 2008

Term of office

Indefinite term

Indefinite term

Indefinite term

Other positions

Operations officer

Strategy and
planning officer

Indefinite term
Chief operating,
clearing and
depository officer

No

No

No

No

Marcos Costa
Santos Carreira

Marcos Jos
Rodrigues Torres

Sergio
Goldenstein

Viviane El Banate
Basso

Appointment by
controlling shareholder

Age
Profession
Taxpayer ID (CPF)

Risk management
officer

39

46

42

34

Engineer

Economist

Economist

Economist

072.442.928-05

168.206.222.-87

013.868.647-57

267.030.438-92

Committee member

Committee member

Committee member

Committee member

Appointment date

February 10, 2010

February 01, 2011

February 01, 2011

July 05, 2011

Investiture date

February 10, 2010

February 01, 2011

February 01, 2011

July 05, 2011

Term of office

Indefinite term
Derivatives officer

Indefinite term
Fixed income and FX
officer

Indefinite term

Other positions

Indefinite term
Corporate Risk
officer
No

No

Position

Appointment by
controlling shareholder

No

Settlement officer
No

12.8. Brief biographical description of the directors, executive officers, fiscal council members and audit
committee
a. Curriculum
b. Judgments of guilt issued in administrative or court proceedings (including of a regulatory or criminal nature)
against the directors, officers and fiscal council members

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Board of directors
Arminio Fraga Neto

Chairman of the board

Mr. Fraga Neto holds a bachelors and a masters degree in economics from the Catholic University of Rio de Janeiro (1981)
and a PhD degree in Economics from Princeton University (1985). He is the founding partner of Gvea Investimentos
(2003), an independent investment management company which focuses on structured investments and private equity. He
is a former governor of the Brazilian Central Bank (March 1999 through December 2002). Previously, he was a managing
director of the Soros Fund, based in New York, director for International Affairs and member of the Central Bank board of
governors, a vice president at the Salomon Brothers, in New York, and Chief Economist and Oper ations Manager of Banco
Garantia. In addition, is a former professor for the masters program of the Catholic University of Rio de Janeiro, of the
school of Economics of Fundao Getlio Vargas, the School of International and Public Affairs of Columbia U niversity (U.S.)
and a visiting assistant professor in the Finance Department at Wharton School of the University of Pennsylvania.
Other positions in public companies. Mr. Fraga Neto is a former director of Unibanco Unio de Bancos Brasileiros S.A.,
whose registration as a public company was cancelled following the merger with Banco Ita in April 2009. He was also a
member of the advisory committees of the Bunge group in Brazil (Bunge Alimentos S.A. and Bunge Fertilizantes S.A).
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Candido Botelho Bracher

Director

Mr. Bracher holds a graduate degree in business administration from Fundao Getlio Vargas. Since 2005, he has been the
chief executive officer of Banco Ita BBA. Previously, he was a vice president of Banco Ita BBA (2003 -2005), an executive
officer of Banco BBA Creditanstalt (1988-2003), of Banco Itamarati (1987-1988), executive officer and vice chief executive of
Banco de Desenvolvimento do Estado de So Paulo (1985-1987), executive officer of Bahia Corretora and a manager of
Banco da Bahia Investimentos (1983-1985), a trader in commodities futures at the Paris offices of the Commodities
Corporation (1982), a forex trader at the Swiss Bank Corporation, based in Zrich, Switzerland (1982), and assistant
manager for exports at Braswey Indstria e Comrcio S.A. (1980).
Other positions in public companies. Mr. Bracher has been vice chief executive of Ita Unibanco Holding S.A. since May 2005
and a member of the board of directors since December 2008. In addition, Mr. Bracher is a former member of the board of
directors of Unibanco Unio de Bancos Brasileiros S.A., whose registration as a public company was cancelled following the
merger with Banco Ita in April 2009.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Charles P. Carey

Director

Mr. Carey is a member of the Board of Directors of the CME Group. Earlier, he served as Vice Chairman in the CME Board of
Directors between July 2007 and May 2010. In addition, Mr. Carey served as Chairman of Chicago Board of Trade (CBOT) from
2003 to 2007. Previously, he served on the CBOT board of directors for 11 years in various roles, including Vice Chairman, First
Vice Chairman, and Full Member Director. As chairman of the CBOT, Mr. Carey oversaw its demutualization and stockmarket
listing. Additionally, Mr. Carey is President of the Chicagoland Sports Hall of Fame.
Other positions in public companies. Mr. Carey has not been on the board of directors or senior management of any local
public company.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Claudio Luiz da Silva Haddad

Independent director

Mr. Haddad holds a graduate degree in mechanical and industrial engineering from the Engineering Military Institute of Rio
de Janeiro (1969), a masters and doctorate degree in economics from the University of Chicago (1974) and is a graduate of
the Harvard Business School Owner/President Management Program (1987). He was formerly a full -time professor at the
post-graduate School of Business Administration of Fundao Getlio Vargas (1974-1979); chief economist at Banco de
Investimentos Garantia S.A. (1979); Central Bank director for sovereign debt and open market (1980-1982); partner and
officer for corporate financing and, later, for investment banking at Banco de Investimentos Garantia S.A. (1983 -1992); chief
executive officer of Banco de Investimentos Garantia S.A (1992- 1998). He is the president of Instituto Veris, which owns
and maintains the IBMEC So Paulo, and chairman of the board of directors and principal shareholder of Veris Educacional
S.A, a higher education organization which also controls the IBMEC schools. Additionally, he is the president and founding
member of Instituto Futuro Brasil, member of the board of directors of the Abril Group, member of the Visiting Committee of
the Harvard Business School, and a member of the boards of the Davi d Rockfeller Center for Latin American Studies at
Harvard University, of Hospital Israelita Albert Einstein, of Ideal lnvest S. and Instituto Unibanco. He is also a member of the
International Advisory Committee of the Capital Group and director of the Brazil-Israel Chamber of Commerce.

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Other positions in public companies. Mr. Haddad was a director of Petrobras (2002-2006).

No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Jos Roberto Mendona de Barros

Independent director

Mr. Barros holds a graduate degree and a PhD in economics from the University of So Paulo and a post -doctorate degree
from the Economic Growth Center at Yale University. He is an independent consultant, founder and managing partner of
Mendona de Barros Associados S/S Ltda. (1978), a member of the advisory committee of the Estado de So Paulo
publishing group, of the Brazilian Federation of Banks (Febraban) and of Link Partners. He is also a member of the advisory
committee for our Novo Mercado listing segment. He is a former Secretary for Economic Policy of the Ministry of Finance
and executive secretary of the Presidents Office of Foreign Trade. In addition, he was also a visiting professor at the
agricultural economics and rural sociology department at Ohio State University and assistant PhD professor of the economics
and business school at the University of So Paulo.
Other positions in public companies. Mr. Barros is a former member of the board of directors of CESP - Companhia
Energtica de So Paulo, Eletropaulo, CPFL and Comgas (1983-1985), member of the strategic committee of Vale (20022006), of Fertilizantes Fosfatados S.A. Fosfertil (2004-2006), of GP Investments (2006- 2009), of Frigorfico Minerva (20072008). He was also a member of the board of directors of Bovespa Holding S.A., which then operated the So Paulo stock
exchange, whose registration as a public company was cancelled in 2008 after the merger with BM&F, from which
BM&FBOVESPA emerged. Additionally, he is currently a director of Tecnisa S.A, member of the advisory committee of
Companhia Brasileira de Distribuio (Po de Acar group) and director of Banco Santander (Brasil) S.A.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Julio de Siqueira Carvalho de Arajo

Director

In March 1978, Mr. Arajo joined Banco BCN S.A., and became executive officer in October 1989. In 1997, the bank was
acquired by Banco Bradesco. Since 2000, he has been the deputy chief executive officer of Banco Bradesco and in this
capacity he also participates in the boards and committees of several companies within the Bradesco conglomerate. He is
member of the steering committee and managing officer of the Bradesco Foundation, alternate member of the board of
directors of the Interbank Payment Chamber and a sitting member of the deliberative council of the Brazilian Association of
Real Estate Credit and Savings (Abecip). He was formerly a sitting member of the board of directors of the Brazilian Clearing
and Depository Corporation (CBLC). Mr. Arajo was elected to our board in 2008.
Other positions in public companies. Mr. Arajo is the deputy chief executive officer of Banco Bradesco and in this capacity
participates in boards and committees of several other companies within the Bradesco conglomerate, including executive
officer and director of Bradesco Leasing S.A. Arrendamento Mercantil.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Luis Stuhlberger

Director

Mr. Stuhlberger holds a graduate degree in engineering from Escola Politcnica of the University of So Paulo and a
postgraduate degree in business administration from Fundao Getlio Vargas. Having begun his career as a futures and
commodities trader in 1981, he is currently a minority shareholder of Credit Suisse Hedging -Griffo Investimentos S.A.,
controlling shareholder of Credit Suisse Hedging-Griffo Corretora de Valores S.A, of Credit Suisse Hedging-Griffo Asset
Management S.A and of Credit Suisse Hedging-Griffo Servios Internacionais S.A. He is the executive officer in charge of
portfolio management for these three companies, including the Green Investment Fund (Hedging-Griffo Verde) portfolio.
Other positions in public companies. He holds no other position in public companies.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Marcelo Fernandez Trindade

Independent director

Mr. Trindade holds a law degree from the Catholic University of Rio de Janeiro (PUC-Rio). He has been a member of the law
firm of Trindade Sociedade de Advogados since 1986. In addition, since 1993 he has been a tenured Civil Law professor in
the Law Department of PUC-Rio. He is currently a business law professor for the postgraduate program of the law school of
Fundao Getlio Vargas, in Rio de Janeiro. Previously, he was a partner at the law firms of Cardoso, Rocha, Trindade e Lara
Resende Advogados (19941998) and Tozzini Freire Teixeira e Silva Advogados (1999 2000 and 2002 2004). Between
2000 and 2002, he was a director of the Brazilian Securities Commission (CVM) and the CVM Chairman between 2004 and
2007. He was elected our independent director in May 2008.
Other positions in public companies. Mr. Trindade has been a director of Redecard S.A. since 2011. Previously, he was a
director of BM&F, then an independent commodities and futures exchange, whose registration as a public company was
cancelled in 2008 following the merger with the So Paulo stock exchange (Bovespa), from which BM&FBOVESPA emerged.
He was also a member of Globex Utilidades S.A. (2008-2009).

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No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Pedro Pullen Parente

Independent director

Early in his civil service career, Mr. Parente worked for Banco do Brasil (1971-1973); he then transferred to the Central Bank
(in either case open-competitive examination required), which he left in 2010 when he retired, after having held multiple
higher-ranking positions in the Brazilian Central Bank's Financial Administration Department, in civil service and government;
he served as Secretary of State and Consultant for the 1988 Brazilian Constitutional Assembly; he was Secretary of Planning
from 1991 to 1992, Consultant of the International Monetary Fund, based in Washington D.C., from 1993 to 1994, Executive
Secretary of the Finance Ministry from 1995 to 1999. Between April and July 1999, he was Minister of Planning, Budget and
Management and in March 2001 acting Minister of Mines and Power. He served as Chief Minister for the Civil House and
Executive of the Brazilian Ministry of Finance from 1994 to 2002. In 1999, he was a Minister of the Brazilian government,
and his last assignment while in office was to coordinate the team overseeing President Ferna ndo Henrique Cardoso's
transition. Between 2001 and 2002 he was chairman of the Energy Crisis Management Committee; Chief Operating Officer
of Brazilian media company Grupo RBS from 2003 to 2009. Mr. Parente has been the Chief Executive Officer and President
of Bunge Brazil at Bunge Ltd. since January 2010. He is also a member of the boards of AMCHAM Brasil, RBS, FNQ and
Conex.
Other positions in public companies. Mr. Parente was a director of Banco do Brasil, Petrobras, TAM, Bovespa (prior to the
merger), CPFL, Alpargatas and Duratex.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Renato Diniz Junqueira

Director

Mr. Junqueira holds a graduate degree in business administration from Fundao Getlio Vargas. He was formerly an
executive officer at Banco do Comercio e Industria de So Paulo (19731987), vice chairman of board of the Brazilian
Commodities Exchange (20022007). He is currently chairman of the Brazilian Confederation of Exchanges and of the Rio
de Janeiro stock exchange (BVRJ), a member of the board of directors of Usina Mand S/A , executive officer of Banco
Intercap S/A (since 1987) and Brazilian Association of Securities, Forex and Commodities Brokers and Dealers ( Associao
Nacional das Corretoras e Distribuidoras de Ttulos e Valores Mobilirios, Cmbio e Mercadorias ), or ANCORD. He is also a
cattle raiser and a farmer and grower of sugarcane, soy and corn.
Other positions in public companies. Mr. Junqueira was a director of BM&F (19972007) and vice chairman of its board of
directors (20012007), prior to the merger with Bovespa from which BM&FBOVESPA emerged as the Brazilian securities,
commodities and futures exchange.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Ren Marc Kern

Independent director

Mr. Kern holds a B.S. degree from the University of California, Berkeley, and an M.B.A. a nd an M.A. degree from the
University of Pennsylvania. He was formerly a consultant at Bain & Co, having worked previously at General Atlantic and
Morgan Stanley. He is currently managing director of General Atlantic, a global growth equity firm where he is also the
global lead executive. Mr. Kern is also a director of Getco Holding Company, LLC, an electronic liquidity provider and tradi ng
firm, RiskMetrics Group, Inc., a leading provider of risk management and corporate governance solutions to the fina ncial
community, and Intec Telecoms Systems Plc, a provider of business and operations support systems. He has been our
independent director since May 2008.
Other positions in public companies. Mr. Kern was formerly a director of BM&F, then an independent commodities and futures
exchange, whose registration as a public company was cancelled in 2008 following the merger with the So Paulo stock
exchange (Bovespa), from which BM&FBOVESPA emerged.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Board of executive officers
Edemir Pinto

Chief executive officer

Mr. Pinto is an economist and joined BM&F in January 1986. In July 1987 he was elected Derivatives Clearing Officer,
responsible for risk management, clearing and settlement, participant registration, margin requirements, custody and
controllership. He was chief executive officer of BM&F between April 1999 and May 2008, in which capacity he was
responsible for managing the company, supervising and coordinating the work of the officers, establishing the business plans
and strategic guidelines. Following the merger with Bovespa in the integration process from which BM&FBOVESPA emerged
as the Brazilian securities, commodities and futures exchange, he was elected our chief executive officer.
Other positions in public companies. Prior to our merger with Bovespa Holding, Mr. Pinto was the CEO of BM&F, the Brazilian
Mercantile and Futures Exchange (Bolsa de Mercadorias e Futuros BM&F S.A).

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Under appeal No. 7530 and with grounds on article 11 of Law No. 6,385/76, the Appeals Board of the Brazilian Financial
System (CRSFN) reversed the earlier acquittal issued in CVM sanction proceedings No. 37/2000 to enter a jud gment of
warning against Mr. Edemir Pinto for oversight failure related to transactions in Ibovespa futures.
Ccero Augusto Vieira Neto

Chief operating, clearing and depository officer

Mr. Vieira Neto holds a graduate degree in economics from the school of economics of the University of So Paulo. He joined
BM&F in 2001, was executive officer for the BM&F clearinghouses. At our company, prior to the merger with Bovespa, he
was head of derivatives clearing and risk management. Since 2008 he has been our chief operations officer, responsible for
operations, IT/Trading, IT/Post-trading, IT/Infrastructure & Architecture and IT/External Services.
Other positions in public companies. Prior to our merger with Bovespa Holding, Mr. Vieira Neto was an executive officer of
BM&F, the Brazilian Mercantile and Futures Exchange (Bolsa de Mercadorias e Futuros BM&F S.A).
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Eduardo Refinetti Guardia

Chief financial officer; Investor relations officer

Mr. Guardia holds a bachelors degree in economics from the economics and business administration school of the Catholic
University of So Paulo (PUC-So Paulo), a masters degree from the Institute of Economics of the University of Campinas
(Unicamp) and a doctorate degree from the Economic Research Institute of the school of economics of the University of So
Paulo (USP). Between 1990 and 1997 he was a professor at PUC-So Paulo. He was also Secretary of the Brazilian Treasury
(May to December 2002), Secretary of Finance for the State of So Paulo (January 2003 to January 2006), CFO and IRO of
GP Investments (February 2006 to May 2007) and partner of Pragma Gesto de Patrimnio Ltda, an asset management firm,
between June 2007 and May 2010. In addition, he is a former chairman of the board of Banco Nossa Caixa and COSESP
(Insurance Company of So Paulo) and director of a number of Brazilian companies, including Droga Raia (2008-2010), ETC
Participaes S.A (2008-2010), Ideal Invest (2007-2009), CESP/EMAE (2003-2004), Sabesp (2003), CTEEP (2003-2004), Cosipa
(2000-2002). He was also a director (2003-2005) and chairman of the board (2005-2006) of the state savings and loans bank
(Banco Nossa Caixa), and fiscal council member of Banco do Brasil (1999-2000) and of SABESP (1996-1998).
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Lus Otvio Saliba Furtado

Chief Information Technology and Security Officer

Mr. Furtado is a systems analyst graduated from Catholic University in 1989 with Advanced Management Program at Harvard
Business School in 2008. He was IT manager at IBM, responsible for Latin America. From 2000 to 2002, he joined the Grupo
Po de Acar, where his last position was Director of Electronic Commerce. He served as Vice President of Technology and
Services of Sul America Seguros. In April 2011, he joined the staff of the BOVESPA as Director of Information Technology. In
September 2011, became Director of Information Technology and Security of the Company.
Other positions in public companies: Mr. Furtado was Executive Vice President of Sul America SA, from 2002 to 2011.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Marcelo Maziero

Chief Products and Customers Officer

Mr. Maziero holds a graduate degree in engineering from the University of So Paulo and a masters degree in business
administration from the Massachusetts Institute of Technology. He worked for 10 years with the Ita Group, where he rose to
the position of Managing Director responsible for product development, in particular derivatives products for customers of
ItauUnibanco. He was a member of the Board of Directors of CETIP and Vice President of the Board of Directors of Febrabans
Center of Derivatives Exposures (Central de Exposio a Derivativos), or CED.
Other positions in public companies. Mr. Maziero was previously a member of the Board of Directors of CETIP.
No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.
Fiscal council
The fiscal council is not active at this time.
Audit Committee
Luis Nelson Guedes de Carvalho
Mr. Carvalho holds graduate degrees in Economics from the Economics, Business Management and Accounting School of the
So Paulo University (FEA-USP) and in Accounting Sciences from Faculdades So Judas Tadeu (So Paulo, Brazil), in addition to
masters and doctorate degrees in Accounting and Controllership from FEA-USP. He is a Professor at FEA-USP; a director of the
Accounting, Actuarial and Financial Research Institute Foundation (Fundao Instituto de Pesquisas Contbeis, Atuariais e
Financeiras), or FIPECAFI. Mr. Carvalho is also a member of the Brazilian Accounting Standards Board (Comit de

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Pronunciamentos Contbeis), or CPC, where he also serves as Coordinator for International Relations; as CPC Representative at

the Emerging Economies Group (EEG) of the International Accounting Standards Board (IASB) in London. Mr. Carvalho is a
member of the International Integrated Reporting Committee (IIRC). He has been an arbitrator with the ICC International Court
of Arbitration, based in Paris, France, and a member of the list of expert arbitrators of the Arbitration Chamber of ANBIMA, the
Brazilian Financial and Capital Markets Association, based in Rio de Janeiro, Brazil. Mr. Carvalho is also a consultant specializing
in mergers and acquisitions, corporate restructuring and organizational change; a corporate and law-firm adviser; and a scholar
and specialist reviewer on topics and disputes related to financial and capital market affairs, financial auditing, corporate
accounting and mergers and acquisitions; a contributing editor of the FIPECAFI Contabilidade e Finanas magazine; General
Coordinator of Exame magazines special publication Melhores e Maiores, a comprehensive report that analyzes the 500 biggest
and fastest-growing companies based in Brazil; Chairman of the Capacity-Building Working Group in the area of International
Financial Reporting of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting
(ISAR), an UNCTAD initiative; and Assistant Coordinator of the Strategic Committee of the XBRL-CFC Brazil project. In addition,
Mr. Carvalho is a member of the Board of Directors of Banco FIBRA and Coordinator of their Internal Controls Committee; a
member of the Board of Directors of Fundao Amaznia Sustentvel FAS, a nongovernmental organization for the
conservation and sustainable development of the state of Amazonas (Amazon region); a member of the Sustainability
Committee of BM&FBOVESPA; a member of the Audit Committee of BMF&BOVESPA (from May 2012 under leave of absence).
Previously, he was a member of the Board of Directors of XBRL International Inc. (20092011); between 2008 and 2010, a
member of the Financial Crisis Advisory Group (FCAG), an initiative of the Financial Accounting Standards Board (FASB) and the
International Accounting Standards Board (IASB); Chairman of the IASB Standards Advisory Council (SAC) from July 2005 to
December 2008); member of the Consultative and Advisory Group (CAG) of the International Assurance and Auditing Standards
Board of the International Federation of Accountants (IFAC) from 2005 to 2010.
Other positions in public companies. Mr. Carvalho is a former member of the boards of directors of Banco Nossa Caixa S.A.
and Vicunha Txtil S.A.; former Coordinator of the Audit Committee of Banco Nossa Caixa S.A. and of the Finance and Risk
Committee of Vicunha Txtil S.A.
No judgment of guilty (final or otherwise) has been entered against any of our committee members in any disciplinary or court
proceedings.
Alexsandro Broedel Lopes
Mr. Lopes is currently a member of the Advisory Council and the Education Advisory Group of the IFRS Foundation. Earlier,
between 2010 and 2011, he was a director of the Brazilian Securities Commission ( Comisso de Valores Mobilirios), or CVM,
after having been an independent specialist consultant, a scholar and specialist reviewer on Accounting, Taxation and Finance
topics for over ten years. Mr. Lopes holds a PhD degree in Accounting and Finance from the Manchester Business School, UK
(formerly School of Management at UMIST). He also holds doctorate and college-professor degrees from the School of
Economics, Business Management and Accounting of the So Paulo University (FEA-USP), Brazil, where he graduated. He is a
Full Professor of Accounting and Finance at FEA-USP and Invited Professor at the Law School of the So Paulo University
(FDUSP). He was earlier a Professor and Researcher at the London School of Economics and Political Science (LSE), UK; at the
Manchester Business School (MBS), UK; at the Arizona State University (ASU), U.S.A.; and at the Business Administration School
of the Getlio Vargas Foundation (EAESP-FGV), Brazil. He is also the author of several books and articles on accounting,
finance and taxation topics.
Other positions in public companies. Mr. Lopes currently holds no positions in other public companies.
No judgment of guilty (final or otherwise) has been entered against any of our committee members in any disciplinary or court
proceedings.
Paulo Roberto Simes da Cunha
Mr. Cunha holds a graduate degree in Accounting and Business Administration from and post-graduate degrees in Accounting
and Auditing. Earlier, he had a 23-year career at the Central Bank of Brazil, where he worked mainly in banking supervision. He
was also a partner of KPMG Auditores Independentes and lead executive for the Risk Advisory Services and Regulatory practice
areas. He was a member of the Audit Committees of the Bradesco and Santander conglomerates. Currently, he is the Chairman
of the Fiscal Council of Mahle Metal Leve S.A and member of the Audit Committee of BM&FBOVESPA.
Other positions in public companies. Mr. Cunha is the Chairman of the Fiscal Council of Mahle Metal Leve S.A.
No judgment of guilty (final or otherwise) has been entered against any of our committee members in any disciplinary or court
proceedings.
Renato Diniz Junqueira
Mr. Junqueira is an Audit Committee member and our director. For biographical information on Mr. Junqueira, see subsection
12.8 above.
Srgio Darcy da Silva Alves
Mr. Alves graduated in Economics from the Rio de Janeiro Federal University. He has been as a member of the Audit Committee
of Santander S.A since October 2006; Coordinator of the Regulation Committee and member of the Audit Committee of

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BM&FBOVESPA since January 2007; Chief Executive Officer of ATP Tecnologia S.A since April 2011; Chairman of the Board of
Directors of Planet Finance; a consultant and adviser for the Brazilian Association of Credit, Financing and Investment
Companies; a consultant and adviser for a number of financial market institutions; a Central Bank representative serving in the
boards, and in committees and working groups of a number of entities based in Brazil; a Central Bank representative seating in
the Sub-Group IV Committee (financial systems affairs) of the Mercosur Common Market Group.
Other positions in public companies. Mr. Alves has been a member of the Audit Committee of Santander S.A since October 2006.
No judgment of guilty (final or otherwise) has been entered against any of our committee members in any disciplinary or court
proceedings.
Tereza Cristina Grossi Togni
Ms. Grossi holds degrees in Business Management and Accounting Sciences from the Minas Gerais Catholic University (1977).
She attended specialization programs in Banking Supervision in Basel, Switzerland, and the United States. She made her career
at the Central Bank of Brazil, where she rose to member of the Board of Governors and Banking Supervisory Officer (from April
2000 to March 2003), after having held positions as Expert Consultant, Adjunct Head of Department and Head of the Banking
Supervision Department between February 1997 and March 2000, and as Inspector and Banking Supervision Coordinator
between August 1984 and February 1997. As a Central Bank representative, Ms. Grossi was a member of the Core Principles
Liaison Group (CPLG) of the Basel Committee on Banking Supervision and member of its Working Group on Capital from April
2000 to March 2003. She was also a member of Board of Directors of Banco Ita Holding Financeira S.A. from February 2004
to November 2008, where she also served as Financial Specialist member of its Audit Committee between July 2004 and May
2010; member of the Disclosures and Trading Committee between May 2005 and May 2010; member of the Accounting Policies
Committee between May 2008 and May 2010. Also within the Ita Group, since 2010 Ms. Grossi has served as Coordinator of
the Audit and Risk Management Committee of Itautec S.A, and member of its Disclosures Committee since May 2011. In
addition, she has been Chairman of the Fiscal Council of Itasa - Investimentos Ita S.A since April 2011.
Other positions in public companies. Ms. Grossi has served as Coordinator of the Audit and Risk Management Committee of
Itautec S.A since 2010, and member of its Disclosures Committee since May 2011. In addition, she has been Chairman of the
Fiscal Council of Itasa - Investimentos Ita S.A since April 2011.
No judgment of guilty (final or otherwise) has been entered against any of our committee members in any disciplinary or court
proceedings.
12.9. Marital relationships or domestic partnerships or family relationships (up to the second degree)
between:
a. the directors of the registrant
There are no marital relationships or domestic partnerships or family relationships (up to the se cond degree) between any
directors of the registrant.
b. (i) the directors of the registrant, and (ii) the directors of its direct or indirect subsidiaries
There are no marital relationships or domestic partnerships or family relationships (up to the second d egree) between any
directors of the registrant and the directors of its direct or indirect subsidiaries.
c. (i) the directors of the registrant and its direct or indirect subsidiaries, and (ii) the direct or indirect controlling
shareholders
Not applicable, as we have no controlling shareholders.
d. (i) the directors of the registrant, and (ii) the directors of its direct or indirect controlling shareholders
Not applicable, as we have no controlling shareholders.
12.10. Work or employment or service provision relationships, or other subordination relationships in the
past three full years, tying any of registrants directors and officers to:
a. any direct or indirect subsidiary of the registrant
Between February 1998 and June 2008, executive officer Amarlis Prado Sardenberg was operations officer of the Brazilian
Clearing and Depository Corporation (CBLC), a wholly-owned subsidiary which merged with BM&FBOVESPA in November
2008, and currently comprises our equities clearinghouse, securities lending facility and cen tral securities depository.
b. any direct or indirect controlling shareholder
Not applicable, as we have no controlling shareholders.
c. any material supplier, customer, debtor or creditor of either the registrant, or a subsidiary, or controlling
shareholder or companies under common control
Director Charles P. Carey is a director of the CME Group Inc., which holds a 4.95% ownership interest in our shares and has
an order routing agreement with us. In addition, we hold an interest in 5% of the outstanding shares issued by the CME

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Group.
Additionally, we and the CME Group have entered into the following agreements: (i) an order routing agreement, whereby
CME customers may have their orders for local trades routed to our trading systems through the CME Globex platform,
whereas our customers route their orders for trades in CME products through our GTS (BM&FBOVESPA) platform;
(ii) a technology agreement whereby we will cooperate in the development and implementation of a multi-asset class electronic
trading platform with throughput capacity below one millisecond, which in time will replace our existing trading platforms; and
(iii) a global preferred strategic partnership whereby, among other things, we will cooperate in identifying and pursuing
opportunities for co-investment in, and joint commercial partnerships with, other international securities or derivatives
exchanges on a shared and equal basis.
12.11. Description of directors and officers liability insurance policies
We provide directors and officers liability insurance aimed to cover damages or defense costs in the event they suffer such
losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for our
organization.
The basic principle underlying D&O insurance is that we and our shareholders are best served by knowledgeable directors and
officers who take strategic risks based upon the information reasonably available to them at the time the decision is made,
without the threat of personal liability. We purchase D&O insurance policies to cover our and our subsidiaries executive
officers and other upper management members for potential losses related to functional activities performed both in Brazil
and cross-border.
The current D&O insurance policies are effective through September 29, 2011, but coverage for future claims regarding
events through September 29, 2011, may in our discretion extend for an additional period covering up to 72 months. This
policy contemplates no automatic renewal process. The premium we paid for a one-year coverage (ending September 29,
2011) totaling R$56,001 thousand amounted to R$295 thousand.
12.12. Other material information

Adherence to the ABRASCA Code of Self-Regulation and Good Practices of Public Companies
BM&FBOVESPA adhered the ABRASCA Code of Self-Regulation and Good Practices of Public Companies ("ABRASCA Code") on
December 12, 2011, and declares that applies the principles and rules established in the ABRASCA Code, except the rule that
the advisory committees of the Board of Directors must be chaired by board members. In BM&FBOVESPAs case, this rule
applies to advisory committees, except in relation to the Audit Committee which is chaired by an external member. However,
because it is an external member, independent, and with the technical expertise that the position requires, the Company
believes that the choice of such member to act as coordinator of the Audit Committee aligns the functions of the Committee
and the criteria for independence and empowerment that a committee of this nature requires.

Positions our directors hold in other companies or entities.

Arminio Fraga Neto
Chairman of our board of directors (Independent director)

Board or senior management positions held in other companies or entities. Founding partner of Gvea Investimentos.
Candido Botelho Bracher
Non Executive Director

Board or senior management positions held in other companies or entities. Mr. Bracher has been vice chief executive of Ita

Unibanco Holding S.A. since May 2005 and a member of the board of directors since December 2008. In addition, Mr.
Bracher is a former member of the board of directors of Unibanco Unio de Bancos Brasileiros S.A., whose registration as a
public company was cancelled following the merger with Banco Ita in April 2009.
Charles P. Carey
Non Executive Director

Board or senior management positions held in other companies or entities. Mr. Carey is a member of the Board of Directors of
the CME Group. Additionally, Mr. Carey is President of the Chicagoland Sports Hall of Fame.
Claudio Luiz da Silva Haddad
Independent Director

Board or senior management positions held in other companies or entities. Mr. Haddad is the president of Instituto Veris,

which owns and maintains the IBMEC So Paulo, and chairman of the board of directors and principal shareholder of Veris
Educacional S.A, a higher education organization which also controls the IBMEC schools. Additionally, he is the president
and founding member of Instituto Futuro Brasil, member of the board of directors of the Abril Group, member of the Visiting
Committee of the Harvard Business School, and a member of the boards of the David Rockfeller Center for Latin American

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Studies at Harvard University, of Hospital Israelita Albert Einstein, of Ideal lnvest S. and Instituto Unibanco. He is also a
member of the International Advisory Committee of the Capital Group and director of the Brazil-Israel Chamber of Commerce.
Jos Roberto Mendona de Barros
Independent Director

Board or senior management positions held in other companies or entities. Mr. Barros has been managing partner of
Mendona de Barros Associados S/S Ltda. since 1978, a member of the advisory committee of the Estado de So Paulo
publishing group, of the Brazilian Federation of Banks (Febraban) and of Link Partners. He is also a member of the advisory
committee for our Novo Mercado listing segment. He is currently a director of Tecnisa S.A, member of the advisory committee
of Companhia Brasileira de Distribuio (Po de Acar group) and director of Banco Santander (Brasil) S.A.
Julio de Siqueira Carvalho de Arajo
Non Executive Director

Board or senior management positions held in other companies or entities. Mr. Arajo is an executive officer of Aicar

Holdings Ltda.; Alvorada Administradora de Cartes Ltda.; Alvorada Cartes, Crdito, Financiamento e Investimento S.A.; Alvorada
Companhia Securitizadora de Crditos Financeiros; Alvorada Servios e Negcios Ltda.; Andorra Holdings S.A.; Aquarius Holdings
Ltda.; Banco Alvorada S.A.; Banco Boavista Interatlntico S.A.; Bankpar Arrendamento Mercantil S.A.; BCN Consultoria,
Administrao de Bens, Servios e Publicidade Ltda.; BF Promotora de Vendas Ltda.; BCM Asset Management Distribuidora de
Ttulos e Valores Mobilirios Ltda.; Bradescard Elo Participaes S.A.; Bradesco Leasing S.A. Arrendamento Mercantil; Bradesplan
Participaes Ltda.; Brasilia Cayman Investments II Limited; Brasilia Cayman Investment III Limited; Caboquenas
Empreendimentos e Participaes Ltda.; Caet Holdings Ltda.; Celta Holdings S.A.; Columbus Holdings S.A.; Companhia
Securitizadora de Crditos Financeiros Rubi; Damaniv Holdings Ltda.; Elba Holdings Ltda.; Elo Holding Financeira S.A.; Embaba
Holdings Ltda.; Everest Holdings Ltda.; Everest Leasing S.A. Arrendamento Mercantil; Ferrara Participaes S.A.; Itacar Holdings
Ltda.; Itajuba Holdings Ltda.; Itana Holdings Ltda.; Japira Holdings S.A.; Lyon Holdings Ltda.; Lyra Holdings Ltda.; Manacs
Holdings Ltda.; Marselha Holdings Ltda.; Miramar Holdings S.A.; Mississipi Empreendimentos e Participaes Ltda.; NCF
Participaes S.A.; Nigara Participaes e Empreendimentos Ltda.; Nova Cidade de Deus Participaes S.A.; Nova Marlia
Administrao de Bens Mveis e Imveis Ltda.; Nova Paiol Participaes Ltda.; Paineira Empreendimentos e Participaes Ltda.;
Promosec Companhia Securitizadora de Crditos Financeiros; Quixaba Empreendimentos e Participaes Ltda.; Quixaba
Investimentos S.A.; Rubi Holdings Ltda.; Serel Participaes em Imveis S.A.; Settle Consultoria, Assessoria e Sistemas Ltda.;
STVD Holdings S.A.; Tapajs Holdings Ltda.; Tibre Distribuidora de Ttulos e Valores Mobilirios Ltda.; Tibre Holdings Ltda.;
Titanium Holdings S.A.; Top Clube Bradesco, Segurana, Educao e Assistncia Social; Unio Participaes Ltda.; Veneza
Empreendimentos e Participaes S.A. He is a Vice President of Banco Bankpar S.A., of Banco Bradesco BBI S.A.; Banco Bradesco
Cartes S.A.; Banco Bradesco Financiamentos S.A.; Banco Bradesco S.A.; Banco Ibi S.A. Banco Mltiplo; Baneb Corretora de
Seguros S.A.; Bankpar Brasil Ltda.; Bankpar Consultoria e Servios Ltda.; BEC Distribuidora de Ttulos e Valores Mobilirios Ltda.;
BEM Distribuidora de Ttulos e Valores Mobilirios Ltda.; BP Promotora de Vendas Ltda.; Bpar Corretagem de Seguros Ltda.;
Bradesco Administradora de Consrcios Ltda.; Bradescor Corretora de Seguros Ltda.; Bram Bradesco Asset Management S.A.
Distribuidora de Ttulos e Valores Mobilirios; Finasa Promotora de Vendas Ltda.; Ganant Corretora de Seguros Ltda.; Ibi Corretora
de Seguros Ltda.; Ibi Promotora de Vendas Ltda.; Imagra Imobiliria e Agrcola Ltda.; Instituto Assistencial Alvorada; PTS Viagens
e Turismo Ltda.; Tempo Servios Ltda. He is also a member of the boards of directors of BBD Participaes S.A.; Cidade de
Deus Companhia Comercial de Participaes; Fundao Instituto de Molstias do Aparelho Digestivo e da Nutrio; and Fundo
Garantidor de Crditos FGC. He is a managing director Fundao Bradesco and Fundao Instituto de Molstias do Aparelho
Digestivo e da Nutrio. Mr. Arajo acts as chairman of the deliberative council of Boavista Prev Fundo de Penso
Multipatrocinado, a multi-sponsored pension fund, and member of the deliberative council of Caixa Beneficente dos Funcionrios
do Bradesco, a Bradesco pension fund. He is alternate member of the board of directors of the Interbank Payments Chamber
(Cmara Interbancria de Pagamentos), or CIP; acting executive officer of the Financial System National Confederation
(Confederao Nacional do Sistema Financeiro), or CONSIF; alternate member of the Council for the Agribusiness, or CONSAGRO;
and member of the Governing Board of the Bradesco Foundation. In addition, at Banco Bradesco S.A, he is a member of the
Integrated Risk Management and Capital Allocation Committee, of the Ethical Conduct Committee, of the Disclosures Executive
Committee, of the Operational Risk Management Committee, of the Basel II Implementation Executive Committee, of the
Investments Executive Committee, of the Products and Services Executive Committee, of the Capital Markets Executive
Committee, of the Acquisitions and New Business Integration Executive Committee, of the Human Resources and People
Management Committee, of the Quality Executive Committee (as coordinator), of the Strategic Planning Executive Committee,
and of the Sustainability Executive Committee, of the CRM (Customer Relationship Management) Executive Committee.
Luis Stuhlberger
Non Executive Director

Board or senior management positions held in other companies or entities. Mr. Stuhlberger is chief asset management officer

of Credit Suisse Hedging-Griffo Asset Management and Credit Suisse Hedging-Griffo Servios Internacionais S.A; executive
officer at Credit Suisse Hedging-Griffo Investimentos S.A.; president of the Hedging-Griffo Institute; director of the
Association of Capital Market Investors (Associao de Investidores no Mercado de Capitais), or AMEC; member of the ethics
committee of the Brazilian Financial and Capital Markets Association ( Associao Brasileira das Entidades dos Mercados

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Financeiro e de Capitais), or ANBIMA.

Marcelo Fernandez Trindade
Independent Director

Board or senior management positions held in other companies or entities. Mr. Trindade has been a member of the law firm
of Trindade Sociedade de Advogados since 1986, and is a director of Redecard S.A.
Pedro Pullen Parente
Independent Director

Board or senior management positions held in other companies or entities. Mr. Parente has been the Chief Executive Officer

and President of Bunge Brazil at Bunge Ltd. since January 2010. He is also a member of the boar ds of AMCHAM Brasil, RBS,
FNQ and Conex.
Renato Diniz Junqueira
Non Executive Director

Board or senior management positions held in other companies or entities. Mr. Junqueira is currently chairman of the Brazilian
Confederation of Exchanges and of the Rio de Janeiro stock exchange (BVRJ), a member of the board of directors of Banco
Intercap S/A (since 1987) and of the Brazilian Association of Securities, Forex and Commodities Brokers and Dealers
(Associao Nacional das Corretoras e Distribuidoras de Ttulos e Valores Mobilirios, Cmbio e Mercadorias), or ANCORD.
Ren Marc Kern
Independent Director

Board or senior management positions held in other companies or entities. Mr. Kern is currently the managing director of

General Atlantic, a member of their Executive Committee, Investments Committee and Portfolio Committee, in addition to
chairman of the Capital Committee of General Atlantic. He is also a director of Getco Holding Company, LLC, and of the
Amedes Group.
13.

Management Compensation

13.1
Description of compensation policy and practices of the board of directors, board of executive officers,
members of management, the fiscal council members, the advisory committee members and the audit, risk,
financial and compensation committee members as regards the following aspects.

a.

Purposes of compensation policy and practices.

As the Company is the result of the integration process that combined BM&F and BOVESPA into BM&FBOVESPA in May 2008
and as there were significant changes in the organization structure and new policies and practices were defined during the year,
we have decided, for better understanding of the information disclosed herein and as permitted by CVM Instruction No. 480 of
December 7, 2009, to provide information exclusively on the 2009 and 2010 fiscal years, as well as the forecast for the year
ended December 31, 2011, wherever applicable.
Our compensation policy seeks to encourage alignment with the corporate purpose of the Company, and drives our officers and
employees productivity and efficiency, besides maintaining competitiveness in the market in which we operate.

b.

Compensation breakdown.

(i) Description and purpose of the compensation components

Board of Directors: For the directors, the compensation is in the form of a fixed monthly remuneration and, for the chairman
of the board, the remuneration includes an additional semi-annual fixed payment equivalent to double the compensation
received in the six-month period. The fixed component is intended to adequately compensate directors for their participation in
meetings, while the additional remuneration of the Chairman of the Board is paid in return for a larger number of tasks required
on his part.
In the event an executive and management member (though not a member of the board of executive officers) or any other
employee is appointed to a position on the board of directors, this professional will not be entitled to any additional
compensation. In addition, under article 22, paragraph 1, of our By-laws, no director may be elected to the board of executive
officers.
Board of executive officers and members of management: The compensation policy for executive officers and other
management members breaks down as follows:
- A monthly base salary consisting of thirteen monthly payments per year, aimed at direct compensation for services
rendered, in line with market practices;
- Benefit package including health and dental care plan, life insurance, meal voucher, private pension fund, use of
Company car, medical check-up, parking and use of Company cell phone. These benefits are aimed at offering an attractive
package which is minimally consistent with market standards for performance of similar tasks;

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- Semiannual (short-term) variable remuneration established and paid under our profit sharing program according to
Law No. 10101, dated December 19, 2000. Our profit sharing program defines potential multiples of monthly base salary
attributable pursuant to profit-based overall performance targets, job level responsibilities and evaluation of individual
performance, aimed at aligning officers with the Companys short and medium-term results; and
- Long-term share-based remuneration structured so as to grant stock purchase options pursuant to the Companys
stock option plan (option plan) with regard to profit-based overall performance targets, job level responsibilities and
evaluation of individual performance. It is aimed at the alignment of the officers interests with those of the Company in the
long term, as well as the retention of the Companys key management personnel.
Committees: The members of the board advisory committees are entitled to a fixed monthly remuneration. Directors that take
part in these committees are entitled to an additional fixed monthly remuneration, limited however to participation in three
committees. At this time we have an audit committee, a nomination and corporate governance committee, a compensation
committee and a risk committee, all advising the board of directors. To advise the board of executive officers, we have the
following committees: agribusiness committee, market committee, market risk committee, athletic club committee and
regulation committee. Only the members of the regulation committee receive a fixed monthly compensation. Officers (whether
an executive officer or other management member) or other employees that are appointed to serve on any management
advisory committee are not entitled to additional remuneration. The aforementioned fixed monthly remuneration is paid for the
purpose of compensating officers for their participation in meetings.
Fiscal Council: The Companys fiscal council is not active. The compensation policy for fiscal council members, if and when
active, will be established in accordance with applicable law. The Company believes the absence of an active fiscal council is
leveled and adequately covered by the audit committee, since under article 47 of our Bylaws the scope of the committee
responsibilities goes far beyond that which is assigned to a fiscal council under Brazilian Corporate Law. The audit committee is
composed of five independent members, four of them being outside members, and one an independent director. Audit
committee members serve for two-year terms. The members of the audit committee are nominated by the nomination and
corporate governance committee, and appointed by the board of directors. Outside members must have auditing,
compliance/controls, accounting, taxation and similar other specialized knowledge and/or experience, in addition to being
required to meet the independence standards established in article 46 of the Bylaws, so as to ensure they will perform their
duties with exemption, for the benefit and in the interests of the Company and the shareholders.

(ii) Proportion of each component of the total compensation

The average proportion of each compensation component in the year 2010 according to our current compensation policy is set
forth in the table below.
2010

Monthly
remunerati
on

Participatio
n in
committees

Benefit
s

Short-term
variable
remuneration
(profitsharing)

Long-term
variable
remuneration
(Stock Option)

Total

Board of directors

88.62%

11.38%

0%

0%

0%

100%

Board of executive
officers and other
members of
management

38.73%

0%

6.26%

55.00%

(*)

100%

100%

0%

0%

0%

0%

100%

Committees

* At a meeting held on February 23, 2010, the Board of Directors approved that the grants under the option plan of the year ended December
31, 2010 shall always occur at the beginning of the subsequent year. Thus the option grant held within the scope of the option plan for the year
ended December 31, 2010 occurred in January 2011 and, therefore, this will have an impact on the year ending December 31, 2011.

These percentages may vary each year, especially in due to the remuneration breakdown being heavily based on variable
elements. However, it is expected that by the year 2011, the above ratios will be substantially different from those recorded in
2010.
In 2010, with regard to long-term compensation (stock option), as per the Board of Directors approval, the granting of options
for the year ended December 31, 2010 occurred only in January 2011 and this will have an impact on the year ending
December 31, 2011.

(iii) Method of calculation and adjustment of each compensation component

The compensation paid to directors and officers is revised every year and submitted for approval at the annual shareholders
meeting. The compensation paid to members of the audit committee, nomination and corporate governance committee, risk
committee and compensation committee is revised every year and submitted to the board of directors for approval. The fixed
monthly compensation paid to management is adjusted yearly at rates defined in a collective agreement entered into with the

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trade union. In addition, under our salary policy, an increase may possibly be given for individual merit. The rules and
definitions of the policies for short-term variable compensation (profit-sharing) and long-term variable compensation (stock
option) are proposed by the compensation committee and approved by the board of directors according to the guidelines set in
the option plan, which was approved by the extraordinary shareholders meeting held on May 8, 2008.
Typically, we conduct periodic salary surveys to ensure the Company is in line with good market practices and to sustain our
retention strategy of paying fixed and long-term compensation that is both commensurate and competitive.
These surveys comprise a sample of companies in the financial market and services sector, of similar size to the Company.
From the results of the surveys, job matching is performed with respect to the corresponding positions and functions existing in
the Company, for adjustments to the general amounts paid to different positions and levels in a comparative manner. The
adjusted results are submitted for approval of the Compensation Committee and subsequent ratification by the Board of
Directors, as described above.
Moreover, in keeping with our retention policy we constantly survey market practices on benefits and make adjustments as
necessary to remain competitive.

(iv) Reasons that justify compensation composition

Our compensation strategy seeks to balance the short-, medium- and long-term compensation components to ensure alignment
with the Companys corporate purpose, whereas permitting us to offer a compensation package that is fair and competitive in
our market, can influence attraction and retention, and motivates and compensates our professionals according to the
responsibilities of their jobs. Our compensation strategy thus seeks to position the fixed remuneration of our executives at
market average, while rewarding them with the differential of short- and long-term variable compensations in line with the
overall performance of the Company and the individual.
In the specific case of 2010, as per the Board of Directors approval at a meeting held on February 23, 2010, a change was
made to the grant date. Therefore, the granting of options for the year ended December 31, 2010 occurred only in January
2011 and this will have an impact on the year ending December 31, 2011.

c.

Key performance indicators considered in defining each compensation component.

Performance target indicators we adopt in allocating short- and long-term variable compensation, meaning profit-sharing and
stock option programs, consist of individual targets and goals we analyze in individual performance evaluations, which are
based on factors that are specific to function and job level, and the overall performance target indicators. Such indicators are
accounted for both in determining the overall value of profit-sharing to be distributed and in defining the eligibility and amount
of grants of stock options to be held.
In 2009, the overall performance indicator adopted by the Company was EBITDA margin. As of 2010, the overall performance
target indicator established by the Board became the quarterly adjusted net income. The total amount of the short-term
variable compensation to be paid to officers and employees at the end of each year will, therefore, be calculated based on the
Companys adjusted quarterly net income actually ascertained and will represent 3.5% of this amount.
In 2010, the amount ascertained by the Company was within the expected range, which was 70% to 130% of the target set for
the corresponding fiscal year. Thus, the total amount of short-term variable remuneration which was paid to the Companys
officers and employees during the year ended December 31, 2010 was calculated based on adjusted quarterly net income and
represented 3.5% of this amount.
As of 2011 inclusive, the total amount of short-term variable remuneration to be paid to the Companys officers and employees
will be calculated based on adjusted quarterly net income effectively ascertained, considering the expenses limit forecast in the
years budget, and will represent 3.5 % of this amount, if it falls within the 90% to 150% range. If adjusted quarterly net
income actually ascertained falls under 90% of the target, the short-term variable remuneration will be reduced to 2.0% of
adjusted quarterly net income. However, if the adjusted quarterly net income is more than 150% of the target established by
the board, the aggregate short-term variable remuneration will equal the sum of: (i) the amount that corresponds to 3.5%
computed over 150% of the target, and (ii) the amount that corresponds to 2.0% computed over that portion of adjusted net
income which exceeds 150% of the target. If the expenses budgeted for the year exceed the limit, a reduction in the
percentage of the aforementioned adjusted net income will be applied at exactly the same rate of increase of realized expense
versus budgeted expense. A portion of this aggregate amount will be attributable to Company executive officers, as allocated
pursuant to certain base salary multiples that will differ based on individual performance.
In the case of long-term remuneration (stock option), in addition to the aforementioned criteria with respect to defining the
option grants, it should be underscored that any benefit granted to the executive shall be obtained only to the extent that the
Company shares are appreciated, allowing the Beneficiary to, after the deadline for exercising the options and/or restriction to
transfer of shares, sell shares at a price higher than what was paid by the executive upon being granted the options. Therefore,
the earning potential of the stock option beneficiary depends on the appreciation of the Company shares on the market.
As for the fixed remuneration and benefits, no performance indicators are taken into account. These compensation
components depend on the level of responsibility of the job, and in the specific case of additional fixed remuneration,

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

qualification for the job is also taken into consideration.

d.

Discussion on how the compensation is structured to reflect the evolution of performance indicators.

According to our short- and long-term variable compensation policy, the pool of profit-sharing and stock options is affected by
the scope of the overall performance target we adopt (adjusted net income); in other words, the size of the pool is determined
according to year-end results of operations (in 2010, adjusted net income) and the extent to which the performance targets for
the year were or were not achieved.
In addition, our policy provides for different compensation levels based on individual performance by any of the officers,
(meaning both the executive officers elected pursuant to the Bylaws and the executive performing functions as officers) and the
employees, taking into account job level and responsibilities.

e.
Discussion on how the compensation policy or practices are aligned with the interests of the Company
on short, medium and long term.
We aim to keep a competitive compensation policy vis--vis the marketplace in order to attract and retain talent, and keep a
capable team of skilled and dedicated people with ability to help the Company attain its short-, medium- and long-term goals
and strategic objectives. Given that our integrated business model is inextricably linked to the Companys objectives of
promoting, developing and expanding the domestic capital markets, which per se imply longer and sustainable cycles, it is
crucial for us to have the ability to retain talent, such that our compensation policy must include mechanisms to encourage our
people to stay with the us for the long haul.
Pursuant to this compensation strategy, we aim to balance the fixed compensation represented by the base salary, short-term
compensation (profit sharing) and medium- and long-term compensation (through the option plan). Therefore, our employees
are thus encouraged to attain and exceed the half-yearly and yearly targets which are linked to our profit-sharing program. We
also structure our compensation policy so our executives will be motivated to pursue medium- and long-term goals aimed to
benefit the business, add value to the Company and drive share appreciation, the incentive for this being associated to the
options granted within the scope of the option plan.

f.
Existence of compensation supported by a subsidiary, affiliate or direct or indirect controlling
shareholder.
There is no compensation supported by a subsidiary, affiliate or direct or indirect controlling shareholder of the Company.

g.
Existence of any remuneration or benefit tied to occurrence of any particular corporate event, such as
disposition of registrants control.
There is no compensation or benefit tied to occurrence of any corporate event involving the Company, such as disposition of
control, forming strategic partnerships or otherwise.
With regard to the option plan, it is forecast that in the event of dissolution of the Company, or of a transformation of the
corporate type, or any merger, consolidation or spin-off transaction, or corporate restructuring transaction, from which the
Company does not emerge as the surviving company, or if it does survive, in case of a delisting or going private process, any
outstanding stock options may be transferred to the surviving company or vest at a predefined earlier date, in the discretion of
our board, provided the option will then be exercisable within a limited period of time, following which, the option plan will end
and options not exercised will forfeit lapse with no right to indemnity.
13.2
Information on compensation recognized in the income statement for the year to December 31, 2009
and December 31, 2010 and compensation forecast for the current year, as attributable to directors, officers and
fiscal council members.
The tables and notes below set forth the annual compensation allocated to directors, executive officers and audit committee
members (it should be noted that the Company does not have an established fiscal council, but its duties are performed by the
audit committee provided in its bylaws and functioning on a permanent basis), as (i) recognized in the income statement for the
year to December 31, 2010 and December 31, 2009, taking into account the yearly average number of members by body, on a
monthly basis, as shown in the table below 6; and (ii) the forecast for the current year.
Year ended December 31, 2010
Month

Board of directors

Board of executive officers

January

11

February

11

March

11

April

11

Sum of number of members of each body in each of the months of 2010, divided by 12 (months). This calculation is made pursuant to
CVM/SEP Official Letter/Circular No. 05/2010.

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

May

11

June

11

July

11

August

11

September

11

October

11

November

11

December

11

Total

132

72

Average

11

6.00

(*) At the end of December 2010, the board member Fabio de Oliveira Barbosa resigned and received the full salary for the month of
December.

It should be underscored that with regard to long-term compensation (stock option grants according to the option plan) as per
the board of directors approval, the granting of options for the year ended December 31, 2010 occurred only in January 2011
and this will an impact on the year ending December 31, 2011. (see note in item 13.1 b (ii)).
Year ended December 31, 2010
Board of Directors

Board of Executive
Officers

Fiscal
Council(*)

Total

11

n/a

17

3.835.734,86

5.288.126,90

n/a

9.123.861,76

3.399.044,36

4.611.216,86

n/a

8.010.261,22

Direct and indirect benefits

n/a

676.910,04

n/a

676.910,04

Compensation for service in

committees

436.690,50

n/a

n/a

436.690,50

n/a

n/a

n/a

n/a

n/a

9.592.419,87

n/a

9.592.419,87

Number of members
Yearly fixed remuneration (in R$)
Salary or remuneration

Other
Variable compensation (in R$)
Bonuses

n/a

n/a

n/a

n/a

Profit Sharing

n/a

8.416.729,19

n/a

8.416.729,19

Compensation for participation in

meetings

n/a

n/a

n/a

n/a

Commissions

n/a

n/a

n/a

n/a

Other (1)

n/a

1.175.690,68

n/a

1.175.690,68

Post-employment benefits

n/a

n/a

n/a

n/a

Benefits upon leaving job

n/a

n/a

n/a

n/a

Share-based compensation

n/a

0,00

n/a

0,00

3.835.734,86

14.880.546,77

n/a

18.716.281,63

Compensation amount
______________________________________

(1) Additional rescissory amounts and sign-on bonuses

( )

* As discussed in paragraph 13.1 of the Reference Form, while the fiscal council is not active, its responsibilities are adequately
covered by the audit committee whose scope of responsibilities under article 47 of the Bylaws goes beyond those Brazilian Cor porate
Law prescribes for the fiscal council. The audit committee consists of five independent members, four of them being outside members,
and one an independent member, all of whom serve for two-year terms. The compensation paid to the outside committee members in
2009 amounted to R$ 733,668.40 and in 2010 amounted to R$814,941.08 (these amounts are not included in the above table).

Year ended December 31, 2009

Month

Board of directors

Board of executive officers

January

11

February

11

March

11

April

10

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

May

11

June

11

July

11

August

11

September

11

October

11

November

11

December

11

Total

131

72

Average

10,92

6.00

The table below provides information about the remuneration of the board of directors, board of executive officers and audit
committee held in the year ended December 31, 2009. In this case, the stock-based compensation refers to the grant held on
the March 1st, 2009 for a total of 2,490,000 options, or 0.12% of total shares issued at the time at the fair price of R$ 2.93 (as
per item 13.6).
It should be emphasized that the fair price, as provided for in the accounting rules, should consider the forecast conditions of
the market at the time of the grant, as mentioned in items 13.6 and 13.9, excluding the specific table for the 2010 Program.
Year ended December 31, 2009

Number of members
Yearly fixed remuneration (in R$)
Salary or remuneration
Direct and indirect benefits
Compensation for service in committees
Other
Variable compensation (in R$)

Board of directors

Board of executive
officers

Fiscal
council(*)

Total

10,92

6,00

n/a

17

3.702.348,37

4.855.869,38

n/a

8.558.217,75

3.362.935,80

4.249.518,66

n/a

7.612.454,46

n/a

606.350,72

n/a

606.350,72

339.412,57

n/a

n/a

339.412,57

n/a

n/a

n/a

n/a

5.674.487,40

n/a

5.674.487,40

Bonuses

n/a

n/a

n/a

n/a

n/a

5.674.487,40

Profit Sharing

n/a

5.674.487,40

Compensation for participation in meetings

n/a

n/a

Commissions

n/a

n/a

n/a

Other

n/a

n/a

n/a

Post-employment benefits

n/a

n/a

n/a

Benefits upon leaving job

n/a

n/a

n/a

Share-based compensation

n/a

7.295.700,00

n/a

7.295.700.00

3.702.348,37

17.826.056,78

n/a

21.528.405,15

Compensation amount

The table and note below provide information on the remuneration of the board of directors, board of executive officers and
audit committee forecast for the year ending December 31, 2011, which is subject to approval at the Annual General Meeting to
be held April 18, 2011. Given that the short-term variable remuneration of the board of executive officers (profit-sharing) is tied
to the Company's overall target set for the year, the forecasts in the table below assume a likely outcome scenario and may
change depending on the variation of adjusted net income and the expenses of the Company (defining basis for the profitsharing pool). For example, as per the rule described in item 13.1 "c " of the reference form, where the amounts at year end
reach a level that is 10% above the forecast adjusted net income, considering the expenses limit forecast in the years budget,
the amount of short-term variable remuneration (profit-sharing) will be added of R$953,484.67, which is equivalent to a 10%
increase in the total estimated amount, as provided for in the rule described in item 13.1 "c ".
In addition, as decided by our board of directors in connection with the long-term variable compensation, stock option grants
under the 2010 program will only be awarded in January 2011 with an impact on the year ending December 31, 2011 (see note
in item 13.1 b (ii)). The amount of options granted under the option plan in effect under the 2011 program for the board of

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

executive officers, as approved by the board of directors, comprised a total of 3,420,000 shares, or 0.17% of the outstanding
shares issued by the Company. The option strike price was defined based on the rules of the option plan at the closing price of
the shares trade in the last 20 exchange sessions of 2010.
It should be noted that the calculation of the fair price under the 2011 stock option grant ("2010 Program") considers the
market variables at the time of the grant and are reflected in a final fair price amount (R$ 4.50), which is substantially higher
when compared to the 2009 fair price. The pricing model has not changed and the variation results mainly from changes in
market conditions that occurred during this period, as mentioned in items 13.6 and 13.9.
Current Year Forecast for 2011
Board of directors
Number of members

Board of executive
officers

Fiscal
council(*)

Total

11

n/a

17

4.282.122,50

5.528.760,20

n/a

9.810.882,70

3.738.948,84

4.787.305,79

n/a

8.526.254,63

n/a

741.454,41

n/a

741.454,41

543.173,66

n/a

n/a

543.173,66

n/a

n/a

n/a

n/a

9.534.846,72

n/a

9.534.846,72

Bonuses

n/a

n/a

n/a

Yearly fixed remuneration (in R$)

Salary or remuneration
Direct and indirect benefits
Compensation for service in committees
Other
Variable compensation (in R$)
Profit Sharing

n/a

9.534.846,72

n/a

9.534.846,72

Compensation for participation in meetings

n/a

n/a

n/a

Commissions

n/a

n/a

n/a

Other

n/a

n/a

n/a

Post-employment benefits

n/a

n/a

n/a

Benefits upon leaving job

n/a

n/a

n/a

Share-based compensation

n/a

15.390.000,00

n/a

15.390.000,00

4.282.122,50

30.453.606,92

n/a

34.735.729,42

Compensation amount
______________________________________
( )

* As discussed in section 13.1 of the reference form, while the fiscal council is not active, its responsibilities are adequately covered by
the audit committee whose scope of responsibilities under article 47 of the Bylaws goes beyond those Brazilian Corporate Law
prescribes for the fiscal council. The audit committee consists of five independent members, four of them being outside members, and
one an independent member, all of whom serve for two-year terms. The estimated compensation for the year ending December 31,
2011 related to outside committee members amounts to R$992,924.53.

13.3
Information on variable compensation for the year to December 31, 2010, and variable compensation
forecast for the current year.
Our variable compensation policy for the executive officers is based on the concept of multiples of monthly base salaries varying
based on job seniority. At each job level, individual performance accounts for the differences.
The tables below set forth information on variable compensation for the executive officers, as (i) recognized in the income
statement for the year ended December 31, 2010 and the year ending December 31, 2011, taking into account the number of
members in each body actually granted the variable compensation; and (ii) the forecast for the current year.
Year ended December 31, 2010

Number of members

Board of
directors

Board of
executive officers

Fiscal
council

Total

n/a

n/a

Bonuses (in R$)

n/a

Minimum forecast in compensation plan

n/a

n/a

n/a

n/a

Minimum forecast in compensation plan

n/a

n/a

n/a

n/a

Amount forecast in compensation plan

if the targets are attained

n/a

n/a

n/a

n/a

Actually recognized in income statement

n/a

n/a

n/a

n/a

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Year ended December 31, 2010

Board of
directors

Board of
executive officers

Fiscal
council

Total

Profit Sharing (in R$)

Minimum forecast in compensation plan

n/a

8.308.036,10

n/a

8.308.036,10

Minimum forecast in compensation plan

n/a

10.154.266,35

n/a

10.154.266,35

Amount forecast in compensation plan

if the targets are attained

n/a

9.231.151,23

n/a

9.231.151,23

Amount actually recognized in income statement

n/a

8.416.729,19

n/a

8.416.729,19

Year ended December 31, 2009

Number of members

Board of
directors

Board of
executive officers

Fiscal
council

Total

n/a

n/a

Bonuses (in R$)

n/a

Minimum forecast in compensation plan

n/a

n/a

n/a

n/a

Minimum forecast in compensation plan

n/a

n/a

n/a

n/a

Amount forecast in compensation plan

if the targets are attained

n/a

n/a

n/a

n/a

Actually recognized in income statement

n/a

n/a

n/a

n/a

Minimum forecast in compensation plan

n/a

4,353,266.96

n/a

4,353,266.96

Minimum forecast in compensation plan

n/a

6,097,751.36

n/a

6,097,751.36

Amount forecast in compensation plan

if the targets are attained

n/a

5,890.,667.01

n/a

5,890,667.01

Amount actually recognized in income statement

n/a

5,674,487.40

n/a

5,674,487.40

Profit Sharing (in R$)

The table below sets forth information about the variable compensation forecast for year 2011. Since the short-term variable
compensation for executive officers (profit-sharing) depends on whether and how the overall performance targets for the year
are achieved, the forecasts set forth in the table below assume a scenario based on estimate of probable results, which thus
may change based on actual results determining adjusted net income for of the year and the budgeted expense (basis of
determination of the profit-sharing pool). According to the rule described in section 13.1 c, the total amount of the short-term
variable compensation to be paid to officers and employees in 2011 will be 3.5% of adjusted net income of the Company
actually ascertained, considering the expenses limit forecast for the years budget, if this income lies within the range of 90% to
150% of the target.
If the adjusted net income is less than 90% of the target, the amount allocated to total short-term variable remuneration will be
reduced to 2% of adjusted net income.
If the adjusted quarterly net income is more than 150% of the target established by the board, the aggregate short-term
variable remuneration will equal the sum of: (i) the amount that corresponds to 3.5% computed over 150% of the target, and
(ii) the amount that corresponds to 2.0% computed over that portion of adjusted net income which exceeds 150% of the
target. A portion of this aggregate amount will be attributable to Company executive officers, as allocated pursuant to certain
base salary multiples that will differ based on individual performance. If the expenses budgeted for the year exceed the limit, a
reduction in the percentage of the aforementioned adjusted net income will be applied at exactly the same rate of increase of
realized expense versus budgeted expense.
On forecasting the minimum and maximum amounts, it should be noted that the distribution of profit sharing, according to the
aforementioned rules, is directly affected by adjusted net income, considering the expenses limit forecast for the years budget,
so that: (i) if there is no net income, the amount paid as profit sharing is zero, (ii) there is no maximum amount set as a ceiling,
while the distribution rules described above should be observed. For purposes of estimating the minimum and maximum
amounts specified in the table below, we considered adjusted net income to be 10% below and 10% above, respectively, of the
target set internally for the purpose of the profit sharing program.

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Current Year Forecast for 2011

Board of
Directors

Board of Executive
Officers

Fiscal
Council

Total

n/a

n/a

Minimum forecast in compensation plan

n/a

n/a

n/a

n/a

Minimum forecast in compensation plan

n/a

n/a

n/a

n/a

Amount forecast in compensation plan

if the targets are attained

n/a

n/a

n/a

n/a

Actually recognized in income statement

n/a

n/a

n/a

n/a

Number of members
Bonuses (in R$)

Profit Sharing (in R$)

Minimum forecast in compensation plan

n/a

8.668.042,47

n/a

8.668.042,47

Minimum forecast in compensation plan

n/a

10.488.331,39

n/a

10.488.331,39

Amount forecast in compensation plan

if the targets are attained

n/a

9.534.846,72

n/a

9.534.846,72

n/a

n/a

n/a

n/a

Amount actually recognized in income statement

13.4
Information on share-based compensation plan for directors and executive officers as effective in the
most recent full year and as forecast for the current year.

a.

General terms and conditions.

The Company has a stock option plan (option plan) approved at the Extraordinary General Assembly Meeting held on May 8,
2008, by which the directors and managers of the Company and its subsidiaries and, in special cases, employees appointed by
the Chief Executive Officer (beneficiaries).
The option plan gives ample powers for the board of directors to approve the stock option grants and manage them by means
of stock option programs (programs), which should define, among other specific conditions: (i) the respective beneficiaries; (ii)
the total number of shares to be granted; (iii) the division of option grants into lots, if applicable; (iv) the option strike price; (v)
the vesting period and the period for exercise of the option; (vi) the restrictions on transfers of shares deriving from exercise of
an option; and (vii) any penalties. The powers given to the board can be bestowed upon the compensation committee.
Currently, the board of directors relies on the advice of the compensation committee to establish the grant conditions under the
statutory authority of the compensation committee.
The option plan provides further that each stock option program may establish at the discretion of the board of directors (who
relies on the advice of the compensation committee for the formulation of corresponding proposals) and after hearing the chief
executive officer, an elected percentage to the base number of stock options granted to each beneficiary based on the reach of
overall and/or individual performance targets, limited however by the total number of options allocated for grant to that
particular program.
On adopting a particular program, the board will approve the terms and conditions of the stock options granted to each
beneficiary under a stock option purchase agreement (stock option agreement or simply agreement) to be celebrated between
the Company and each beneficiary. The stock option agreement must stipulate at least the following conditions:
a) the number of shares that a beneficiary will be entitled to purchase or subscribe for upon exercising the option, at the strike
price per share, pursuant to the corresponding program;
b) the percentage increase in the base number of options allocated to the beneficiary and the criteria for determining it, as well
as the period of management evaluation to determine it
c) the initial vesting period during which the option may not be exercised and the option expiration date and last date for total
or partial exercise of the option;
d) transfer restrictions regarding the shares delivered upon exercise of the option and penalties for not respecting these
restrictions; and
e) any other terms and conditions not conflicting with the option plan or the relevant program.
The shares resulting from exercise of an option will enjoy rights established in the option plan, in the relevant program and in
the stock option agreement, in addition to being assured rights to dividends and other distributions after acquired under an
option, whether through subscription or a purchase of shares.
The programs and stock option agreements are also subject to the following general conditions:
a) no share may be delivered to a beneficiary upon exercise of the option unless all legal and regulatory requirements have

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

been fully satisfied;

b) no provision of the option plan, of any program or the stock option agreement may be construed as assurance that the
relevant beneficiary will continue to provide services to the Company as an officer or employee or service provider, or construed
in any way that would hinder our right to remove an officer or terminate an employee or service provider as we may deem fit.;
c) the stock options granted under the option plan, and the option exercise by a beneficiary, are not in any way related to, nor
bound to the beneficiarys fixed remuneration or profit-sharing payment;
d) the beneficiary will not have shareholder rights or privileges other than those that are provided under the option plan
pursuant to the options in the stock option agreement; and
e) the beneficiary will only enjoy full shareholder rights and privileges after having actually subscribed for, or purchased the
shares for which the option was exercised.
Currently, there are three stock option grant programs, which were approved by the board, respectively, "2008 BVMF option
program", "2009 BVMF option program and "2010 BVMF option program. The conditions of the approved programs are
substantially similar and are described in greater detail in subparagraphs below.
In addition to the option plan, upon the integration of BM&F S.A., the Company incorporate the BM&F S.A. stock option plan
(BM&F option plan), approved at the BM&F S.A. shareholders meeting held on September 20, 2007. This involved the
assumption of 19,226,388 stock options by the Company representing an equal number of Company shares. Of this total,
5,461,546 options remain outstanding at December 31, 2010. These shares do not fall within the limits provided for in the
current option plan.
It should be noted that in the case of BOVESPA Holding SA there was no assumption of any part of the option plan, since all
shares were vested and exercised at the time of the integration.
Finally, as per the board of directors approval on February 23, 2010, the stock option grant for the year ended December 31,
2010 occurred only in January 2011 and it will have an impact on the year ending December 31, 2011 (see note in item 13.1 b
(ii)).

b.

Key plan objectives.

The purpose of the Companys stock option plan, which was established according to article 168, paragraph 3, of Brazilian
Corporate Law (Law No. 6404/76), is to give the officers, employees and service providers of the Company and of the
companies in which it is the direct or indirect controlling shareholder the opportunity to become a shareholder of the Company.
The aim is to align the interests of these officers, employees and service providers with those of the Company and the
shareholders, including by having them share in the risks inherent in investments in the capital markets, whereas permitting the
Company and its affiliates to attract and retain talent at any level, including officers, employees and service providers.

c.

Information on how the plan contributes to these objectives.

The objective of promoting a greater alignment of interests is achieved by offering the opportunity to officers and employees to
become shareholders. Therefore, the grants are formatted in such a way that the beneficiaries may only enjoy a possible gain
in the medium and long term as the Company shares appreciate in the market. The aim is for compensated officers and
employees to commit themselves to the Companys long-term goals and to the generation of value in the medium and long
term.
Furthermore, the need for beneficiaries to remain bound to the Company so that they can exercise their options in the future is
aimed at retaining talent among the Company's key personnel. In short, the possibility of future gains subject to the
beneficiary's loyalty to the Company should contribute to maintaining the participants position in the Company in the long term.

d. Information on how the plan fits into the compensation policy.

The option plan contributes substantially to the total compensation of management members, and in this respect fits into the
compensation policy goals to closely tie in individual performance with the Company goals, since it is an additional incentive for
the officers to take medium and long-term actions that aggregate value to the Company. This incentive is ultimately reflected
on the possibility of gains resulting from the appreciation of the Company shares in the market. Additionally, stock option grants
provide the possibility of gains only through long-term commitment and act as a strong instrument for attraction and retention
of talent.

e.
Information on how the plan aligns the interests of management members with those of the Company
on medium and long term.
The option plan provides for different levels of compensation based on performance, which is the incentive for redoubling
efforts to attain the overall performance targets of the Company and taking medium and long-term actions to aggregate value
to the Company, and positively influence the market price of the shares. The officers are strongly encouraged to pursue
sustainable results for the Company to the extent that, as shareholders, they have a vested interest in pushing efficient
management practices for enhanced results, and in attracting and retaining highly qualified professionals, driving growth and
adding value to the business. The mechanisms that allow the alignment of beneficiaries interests over time include, for
example, the vesting periods during which the options cannot be exercised and the timeframe for exercising the options. The

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division into option lots, with exercise over time, serves as encouragement for retention of talent during these periods, allowing
them to become shareholders of the Company with progressively greater involvement and to earn a profit which will be
increased the longer they remain in the Company. On the other hand, the restriction on transfer of shares allows this alignment
of interests to be modulated for a longer period, so any gain can only be realized during the course of such period.

f.

Maximum number of shares allocated to the plan

According to the option plan approved at the extraordinary shareholders meeting of May 8, 2008, the options granted may not
exceed the maximum number of shares up to 2.5% (two point five percent) of the Companys capital stock as of the grant date.
Based on the number of shares issued by the Company as of December 31, 2010, the total number of shares included in the
option plan may reach 51,100,357 shares. There are 10,849,191 outstanding options granted by the Company, so the Company
could still grant, as of the year ending December 31, 2011 and based on the total amount referred to above, a balance of
options totaling 40,251,166 shares, subject to the 2.5% limit of capital stock for each grant.
In addition to the limit above, the option plan provides that, in succession to BM&F SA due to its incorporation by the Company
on May 8, 2008, the option plan of that company (BM&F plan) was assumed by the Company. Therefore, the beneficiaries of
the BM&F will be entitled to exercise the options for purchase of shares issued by the Company. This led to the assumption by
the Company of 19,226,388 options, representing an equal number of shares of the Company. Of this total, 5,461,546 options
remain outstanding at December 31, 2010. These shares do not fall within the 2.5% limit under the Companys option plan.

g. Maximum number of option grants.

The Company's option plan approved by the Extraordinary General Assembly Meeting held on May 8, 2008, provides that the
options granted shall not comprise more than the maximum limit of shares up to 2.5% (two point five percent) of the
Companys capital stock as of the grant date. Based on the number of shares issued by the Company on December 31, 2010,
the total options covered by the option plan can be no more than 51,100,357 share options. There are 10,849,191 outstanding
options to be granted by the Company, so the company can still grant as of the year ending December 31, 2011 and based on
the total value referred to above, a balance of options 40,251,166 shares, subject to the 2.5% limit of capital stock for each
grant.

h.

Conditions for acquisition of shares.

The rules for the existing option plan provides that the board of directors or the compensation committee, as appropriate, shall
establish periodically stock option programs (Programs), which should define: (i) the respective beneficiaries; (ii) the total
number of shares to be granted; (iii) the division of option grants into lots, if applicable; (iv) the option strike price; (v) the
vesting period and the period for exercise of the option; (vi) the restrictions on transfers of shares deriving from exercise of an
option; and (vii) any penalties. Each Program will establish, at the discretion of the board or committee, as appropriate and
after hearing the opinion of Chief Executive Officer, a percentage increase in the base number of options granted to each
beneficiary based on the overall and/or individual targets and respecting the limits provided for in the plan. For further
information on the conditions for acquisition of shares under the option plan and its programs, see especially the subitems (a)
(i) and (j) of this Item 13.4.

i.

Criteria for pricing the option (strike price).

The option plan establishes as an overall rule that the option strike price is the average of the closing price of the Company
shares at the last 20 trading sessions before the date of the option grant. In approving any particular program, the board of
directors may authorize up to 20% discount on the option strike price incurred on the basic amount as described above,
provided that the circumstance of a given program authorizing a discount will not require the same or other discounts being
authorized under subsequent stock option programs.

j.

Criteria determining the exercise period.

The rules of the option plan provide that options may be exercised fully or partially during the timeframe specified and the
periods set for each program and in the respective stock option grant agreements at the discretion of the board or
compensation committee, as appropriate. In any case, upon defining such deadlines, both these bodies should consider
meeting the objectives of the option plan so that those deadlines envisage the medium to long term future, focusing on the
alignment of interests and talent retention.
With regard to the existing programs, the beneficiaries may exercise their options at a rate of one quarter per year. The 2010
program provided the following staggered exercise periods: (i) from January 3, 2011, (ii) from January 3, 2012, (iii)
from January 3, 2013, and (iv) from January 3, 2014. For the 2008 programs, the staggered exercise periods were as
follows: (i) from June 30, 2009, (ii) from June 30, 2010, (iii) from June 30, 2011, and (iv) from 30 June 2012. For
the 2009 program, the staggered exercise periods were as follows: (i) from December 30, 2009; (ii) from December 30,
2010; (iii) from December 30, 2011; and (iv) from December 30, 2012.
The existing program provisions stipulate that the options may be exercised fully or partially after the end of the vesting period
but in any event within at most seven years from the date on which any portion of the option first vested. In case of partial
exercise, the remainder of that particular option will be exercisable, pursuant to the terms and conditions of the relevant

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program, in any subsequent exercise period through to the expiration of the programs, at which time any unexercised options
will be automatically forfeited with no right to indemnity.

k.

Form of settlement.

Assuming that other conditions and requirements are met, a beneficiary that wishes to exercise vested stock options under any
particular program must give the Company written notice of exercise specifying the number of shares he/she aims to acquire.
Validity and effectiveness of this notice are contingent on the options being exercised within the appropriate periods other
applicable requirements of exercise is only valid and effective if delivered within the periods established on account of the need
to program the availability of shares for acquisition under the programs. Upon receiving the written notice, the Company is
responsible for informing the strike price to the beneficiary, while and the Company managers must take all steps necessary to
formalize the acquisition of shares and exercise of options. The strike price will be paid by beneficiaries in the manner stipulated
by the board or compensation committee, as appropriate.
After the option is exercised, the Company, the beneficiary and any other parties concerned with the transaction will sign the
relevant documents required for consummation of the transaction and delivery of the shares. The transaction documents will
include provisions regarding transfer restrictions and ensure the formalities provided in the law and the Bylaws are fulfilled.
Shares thus acquired will enjoy the same rights as the other shares issued by the Company.
The company may temporarily suspend the exercise rights at any time applicable law or regulations restrict or prevent the
beneficiary from trading in Company shares. Payment of the option strike price is to be made in one lump sum by the
beneficiary, provided no share will be delivered to the beneficiary unless all the legal, regulatory and other requirements have
been fully met.

l.

Transfer restrictions.

The option plan assigns to the board of directors or compensation committee, as is the case, the decision to establish a transfer
restriction period during which a beneficiary may not sell, transfer or otherwise dispose of shares acquired under the option
plan, or any additional shares he may have acquired as stock dividends, or as a result of a share split, share issuance or by any
means other than a disbursement of additional funds, or any securities convertible into, or exercisable or exchangeable for
shares issued by the Company, provided any such additional shares and other securities correlate with, and are attributable to
ownership of shares acquired by exercise of a stock option granted under the option plan. Such transfer restriction period may
not exceed two years from the option grant date.
Nevertheless, a beneficiary may at any time sell any number of shares, as necessary to pay for all or some of the strike price (in
the latter case, provided staggered payment arrangements are permitted under the relevant stock option program).
Where staggered payment arrangements are permitted under a stock option program, shares acquired under the relevant
program will be subject to transfer restrictions for as long as the strike price has not been paid in full, such that any sale during
this period will require prior consent from the board of directors, including as the case may be consent granted upon
recommendation of the compensation committee. If consent is granted, the proceeds from the sale will be used primarily to pay
off any outstanding balance of the strike price.
Additionally, a beneficiary will not be permitted to establish any lien on his shares as long as payment is pending for any portion
of the strike price, and for as long as the shares are subject to transfer restrictions. In any event, beneficiaries will undertake
not to encumber the shares in any way that would hamper enforcement of the provisions of the option plan.
It should be noted that for the existing programs, no transfer restriction period has been set.

m.

Criteria and events triggering suspension, alteration or termination of the stock option plan.

The Option Plan may be terminated at any time by the board of directors, without prejudice the prevalence of restrictions on
the negotiability of the shares, and without modifying rights and obligations of any agreement existing on the purchase option
in effect.
Additionally, in the event of dissolution of the Company, or a transformation of the corporate type, or any merger, consolidation
or spin-off transaction, or corporate restructuring transaction, from which the Company does not emerge as the surviving
company, or if it does survive, in case of a delisting or going private process, any outstanding stock options may be transferred
to the surviving company or vest at a predefined earlier date, at the discretion of the board, provided that the option will then
be exercisable within a limited period of time, following which the stock option program will end and options not exercised will
forfeit with no right to indemnity.
The beneficiaries will be given reasonable prior notice of any of the above events so that they can exercise their options at their
discretion and within the period established by the board of directors or proposed by the compensation committee, as the case
may be.

n.
Information on how a director or officer leaving the Company impacts his rights under the share-based
compensation plan.
In the event of removal from office for a violation of the office responsibilities or any fiduciary or other duties intrinsic to the

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position, or for dismissal with cause or for termination of service agreement with cause, as defined under Brazilian civil and
labor law, any unexercised options will forfeit with no right to indemnity regardless of whether or not their respective options
vested.
If the legal relationship between the Company and a beneficiary, whether an employee or service provider, terminates without
cause either through removal or resignation from a management office, or due to dismissal or termination of the service, or also
due to voluntary resignation, then: (i) vested options will be exercisable within 90 days after the event , provided this period
must not exceed the original exercise period set forth by the respective program; and (ii) vesting options will forfeit without
right to indemnity.
In the event of death or permanent disability of a beneficiary, whether an officer or employee or service provider, vesting
options will vest, and his option rights under any existing options will be exercisable by the heirs and successors, or in case of
disability, by the beneficiary, within one year after the death or permanent disability. Options not exercised within this one-year
period will forfeit with no right to indemnity. In any such event the options will be exercisable either fully or partially for
payment in one lump sum, provided that in the case of death of a beneficiary the option rights will be apportioned amongst the
heirs and successors according to the relevant will or probate. Shares acquired in any such event will be free of any transfer
restrictions and clear for sale at any time.
The above applies similarly in the event of retirement, if the beneficiary agrees to a non-compete clause, meaning he must not
work, as an employee or otherwise, for companies or institutions operate in any way in the same market as the Company for a
120-day period.
No provision of the option plan, the program or the agreements under the option plan may be construed as assurance that the
relevant beneficiary will continue to provide services to the Company as an officer or employee or service provider, or construed
in any way that would hinder our right to remove an officer or terminate an employee or service provider.
13.5
Number of shares and convertible securities issued by the Company or its direct or indirect controlling
shareholders, or subsidiaries or companies under common control, which at the end of year were held directly or
indirectly, in Brazil or abroad, by directors, executive officers and fiscal council members, as grouped by body.
2010
Company Shares
Board of directors
Board of executive officers
Fiscal council
Total

Company Shares

(%)

656.302

0,03%

2.776.997

0,14%

n/a

n/a

3.433.299

0,17%

13.6
Share-based payments to directors and executive officers recognized in the income statement for the
year ended December 31, 2009 and December 31, 2010, and share-based payments forecast for the current
year.
The tables below set forth information about the share-based remuneration of the board of executive officers (i) recognized in
the year ended December 31, 2010 and December 31, 2009, considering the number of members of each body actually
receiving share-based remuneration; and (ii) forecast for the current year.
Year ended December 31, 2010
Board of
directors

Board of
executive officers

Total

n/a

- Date of grant

n/a

n/a

n/a

- Number of options grants

n/a

n/a

n/a

- Vesting dates

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Number of beneficiaries
Regarding each option grant:

Last exercise date

Transfer restrictions period

Strike price: price-weighted average for
the following option groups:
- Outstanding at start of year

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Year ended December 31, 2010

Board of
directors

Board of
executive officers

Total

- Lost during the year

n/a

n/a

n/a

- Exercised during the year

n/a

n/a

n/a

- Expired during the year

n/a

n/a

n/a

Fair value as of the option grant date

n/a

n/a

n/a

Possible dilution for other shareholders after

giving effect to exercise of all options granted

n/a

n/a

n/a

It should be noted that with regard to long-term compensation (stock option grants according to the option plan) as per the
board of directors approval, option grants for the year ended December 31, 2010 occurred only in January 2011 and it will
have an impact on the year ending December 31, 2011 (see note in item 13.1 b (ii)).
Year ended December 31, 2009
Board of
directors

Board of
executive officers

Total

n/a

- Date of grant

n/a

3/1/2009

- Number of options grants

n/a

2,490,000

- Vesting dates

n/a

622,500 - 12/30/09

Number of beneficiaries
Regarding each option grant:

622,500 - 12/30/10
622,500 - 12/30/11
622,500 - 12/30/12
-

Last exercise date

n/a

12/30/2016

n/a

n/a

n/a

R$ 6.60

R$ 6.60

- Outstanding at start of year

n/a

R$ 6.60

R$ 6.60

- Lost during the year

n/a

R$ 6.60

R$ 6.60

- Exercised during the year

n/a

R$ 6.60

R$ 6.60

- Expired during the year

Transfer restrictions period

Strike price: price-weighted average for
the following option groups:

n/a

R$ 6.60

R$ 6.60

Fair value as of the option grant date

n/a

R$ 2.93

R$ 2.93

Possible dilution for other shareholders after

giving effect to exercise of all options granted

n/a

0.12%

0.12%

Due to the BM&F incorporation, the Company assumed 19,226,388 stock options from which 7,859,384 options were granted to
the officers of the former corporation, entitling them to the acquisition of a similar number of Company shares at a set strike
price of R$1.00 per share. As of December 31, 2010, there were 1,464,846 outstanding stock options granted to officers under
the BM&F option plan, which have yet to vest thus remaining outstanding.
Pursuant to the option plan, as of December 19, 2008, the Company granted a number of options which on vesting will be
exercisable at a strike price of R$5.174 per share, which was the average closing price in the 20 trading sessions preceding the
grant date. This lot comprised a total of 1,540,000 staggered options granted to Company officers, which vest evenly over a
period of four vesting dates (the 2008 program).
Since then lots 1 and 2 were vested and some officers who held stock options for the 2008 program have earned the right to
exercise their options. On December 31, 2010, there were 280,000 stock options granted to officers in 2008 under the 2008
program which hat had not yet been vested.
Under the option plan, on March 1, 2009, 2,490,000 stock options were granted to officers with a set strike price of R$6.60 per

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share. Thereafter, there were no new grants or changes in vesting conditions under this plan. On December 31, 2010, there
were 955,000 stock options from officers which had not yet vested.
On January 3, 2011 the amount of options granted to executive officers under the 2010 Program, as approved by the board of
directors, comprised 3,420,000 million shares representing 0.17% of total shares issued by the Company, and their strike price
was defined based on the share price at the last 20 trading sessions of 2010, in accordance with the option plan.
It should be noted that with regard to long-term compensation (stock option grants according to the option plan) as per the
board of directors approval, option grants for the year ended December 31, 2010 occurred only in January 2011 and it will
have an impact on the year ending December 31, 2011 (see note in item 13.1 b (ii)).
Current Year Forecast for 2011
Board of directors

Board of executive officers

Total

n/a

- Date of grant

n/a

01/03/2011

- Number of options grants

n/a

3,420,000

- Vesting dates

n/a

855,000 01/03/11

Number of beneficiaries
Regarding each option grant:

855,000 01/03/12
855,000 01/03/13
855,000 01/03/14
- Last exercise date

n/a

01/03/2018

Transfer restrictions period

n/a

n/a

n/a

R$ 12.91

R$ 12.91

- Outstanding at start of year

n/a

R$ 12.91

R$ 12.91

- Lost during the year

n/a

R$ 12.91

R$ 12.91

- Exercised during the year

n/a

R$ 12.91

R$ 12.91

- Expired during the year

Strike price: price-weighted average for

the following option groups:

n/a

R$ 12.91

R$ 12.91

Fair value as of the option grant date

n/a

R$ 4.50

R$ 4.50

Potential dilution for other shareholders after giving

effect to exercise of options grants

n/a

0.17%

0.17%

13.7
year.

Outstanding stock options held by directors and executive officers at the end of the most recent full

The tables below set forth information regarding the outstanding options of the executive officers recognized in the year ended
December 31, 2010 considering the number of members of each body actually receiving variable remuneration.
It should be noted that with regard to long-term compensation (stock option grants according to the option plan) as per the
board of directors approval, option grants for the year ended December 31, 2010 occurred only in January 2011 and it will
have an impact on the year ending December 31, 2011 (see note in item 13.1 b (ii)).
Year ended December 31, 2010 2010 Program
Board
of directors

Board
of executive officers

Total

n/a

Number of vesting options

n/a

n/a

n/a

Vesting dates

n/a

n/a

n/a

Last exercise date

n/a

n/a

n/a

Transfer restrictions period

n/a

n/a

n/a

Strike price in the year: weighted average

n/a

n/a

n/a

Number of beneficiaries
Vesting options:

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Year ended December 31, 2010 2010 Program

Board
of directors

Board
of executive officers

Total

n/a

n/a

Fair value as of end of year

Vested options:
Number of vested options

n/a

n/a

n/a

Last exercise date

n/a

n/a

n/a

Transfer restrictions period

n/a

n/a

n/a

Strike price in the year: weighted average

n/a

n/a

n/a

Option fair value as of end of year

n/a

n/a

n/a

Fair value for all options as of end of year

n/a

n/a

n/a

Board
of directors

Board
of executive officers

Total

n/a

Number of vesting options

n/a

955,000

955,000

Vesting dates

n/a

477.500 12/30/2011

Last exercise date

n/a

Transfer restrictions period

n/a

n/a

n/a

Strike price in the year: weighted average

n/a

6.60

6.60

2.93

2.93
617,500

Year ended December 31, 2010 2009 Program

Number of beneficiaries
Vesting options:

477.500 12/30/2012
12/30/2016

Fair value as of end of year

Vested options:
Number of vested options

n/a

617,500

Last exercise date

n/a

12/30/2016

Transfer restrictions period

n/a

n/a

n/a

Strike price in the year: weighted average

n/a

6.60

6.60

Option fair value as of end of year

n/a

2.93

2.93

Fair value for all options as of end of year

n/a

2.93

2.93

Due to the BM&F incorporation, the Company assumed 19,226,388 stock options from which 7,859,384 options were granted to
the officers of the former corporation, entitling them to the acquisition of a similar number of Company shares at a set strike
price of R$1.00 per share. On of December 31, 2010, there were 1,464,846 non-exercisable stock options and no exercisable
options were available.
Under the option plan, on December 19, 2008, the Company granted a lot of options at a strike price of R$5.174 per share,
corresponding to the weighted average of the closing price at which the shares traded in the last 20 trading sessions preceding
the grant date granted on vesting. A total of 1,540,000 staggered stock options had been granted to officers equally distributed
in four vesting dates over a period of four years (2008 program). On December 31, 2010 there were 280,000 non-exercisable
stock options and 70,000 exercisable options.
13.8
Options exercised and shares delivered to directors and executive officers as share-based compensation
in the year to December 31, 2009 and December 31, 2010.
The table below sets forth information regarding options exercised and shares delivered to executive officers as part of the
Companys share-based compensation policy for the year to December 31, 2010 and December 31, 2009 considering the
number of members from each body who actually exercised their options and received shares.
Year ended December 31, 2010 2010 Program
Board
of directors

151

Board
of executive officers

Total

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Year ended December 31, 2010 2010 Program

Board
of directors

Board
of executive officers

Total

n/a

Number of shares from option exercise

n/a

Strike price in the year: weighted average

n/a

Difference between strike price and the market price of the

shares

n/a

Number of beneficiaries
Exercised options:

Shares delivered:

n/a

Number of shares from option exercise

n/a

Strike price: weighted average

n/a

Difference between strike price and the market price of the

shares

n/a

Board
of directors

Board
of executive officers

Total

n/a

Number of shares from option exercise

n/a

Strike price in the year: weighted average

n/a

Difference between strike price and the market price of the

shares

n/a

Year ended December 31, 2009 2009 Program

Number of beneficiaries
Exercised options:

Shares delivered:

n/a

Number of shares from option exercise

n/a

Strike price: weighted average

n/a

Difference between strike price and the market price of the

shares

n/a

As set forth in paragraph 13.6 above, due to the incorporation of BM F SA, the Company assumed 19,226,388 stock options of
which 7,859,384 were granted to the officers from the former corporation, entitling them to acquire an equal number of shares
from the Company at the strike price of R$1.00 per share. On December 31, 2010, there were 1,464,846 outstanding stock
options from the officers under the BM&F option plan, which had not yet been vested.
Under the option plan, on December 19, 2008, the Company granted a lot of options at a strike price of R$5.174 per share,
corresponding to the weighted average of the closing price at which the shares traded in the last 20 trading sessions preceding
the grant date granted on vesting. A total of 1,540,000 staggered stock options had been granted to officers equally distributed
in four vesting dates over a period of four years (2008 program). On December 31, 2010 there were 280,000 stock options
granted in 2008 to the officers under the option plan which had not yet been vested.
Under the option plan, on March 1st, 2009, the Company granted 2,490,000 stock options to officers at a set strike price of
R$6.60 per share. After that, no new grants or changes to the vesting conditions occurred under the option plan. On December
31, 2010, there were 955,000 stock options granted to the officers which had not yet been vested.
13.9
Summary information required for a clear understanding of the data provided under paragraphs 13.6 to
13.8, such as an explanation of the method for pricing the shares and options.

a.

pricing model;

Because of the factors described in items (b) and (c) of this paragraph 13.9, in determining the options fair value we used
Hulls binomial pricing model. This model presents advantages equivalent to such as the Black-Scholes model, used in
valuations of European options, and is therefore relatively easy to build allowing exercise at any point in time until expiration
and payment of dividend associated with the respective option.

b. data and assumptions used taken into account in the pricing model, including price-weighted average, strike
price, expected volatility, option lifespan, expected dividends and risk-free interest rate;

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The main assumptions used in pricing the options were:

the options were valued according to market conditions as at the grant dates under each grant program;
the risk-free interest rate was estimated by using interest-based futures contracts assuming a count convention
spanning the duration of the option;
the prices for the shares were adjusted to account for dividend payments;
the expected volatility used for pricing was defined pursuant to item (d) of this paragraph 13.9; and
the assumed expiration date of the options was the last exercise date under the option.
Other classic assumptions for option pricing models were used, such as removing the possibility of arbitrage and constant
volatility over time.
The key assumptions are thus the following:
Data and Assumptions

2010 Program

Date of grant

01/03/2011

Share price (R$)

13.40

Strike price (R$)

12.91

Expected volatility (year)

25.00%

Option lifespan (last vesting)

7 years

Expected dividends

80%

Risk-free interest rate (per year of 252 business days)

11.78%

c. method used and assumptions adopted to incorporate expected effects of early exercise;
In determining the fair value of the options we took into account the following aspects:
the stock option model we adopt allows for early exercise after a certain future date (the vesting date) between the
grant date and the last exercise date;
the underlying shares pay dividends between the grant date and the last exercise date.
Therefore, through to the vesting date, the options mimic European-style options (early exercise not permitted) whereas after
vested the options may be exercised earlier than anticipated under certain circumstances, mimicking American-style options.
Similar options are known as Bermuda or Mid-Atlantic options, and by construal their price must lie between the price of a
European option and the price of an American option of like characteristics. For the payment of dividends, two effects on the
option price should be taken into consideration: (i) a typical drop in the market price for the shares after they start trading exdividend; and (ii) the influence these payments have on an early-exercise decision.

d. form of determining expected volatility;

The shares underlying the options under the programs were not outstanding for options listed on the date of the fair price
calculation, and therefore it was not possible to define their implied volatilities through market prices. As a result, the Company
estimated an average options volatility between the volatility calculated by means of broadly accepted model (EWMA) and the
implied volatility by an independent data provider.

e. any other option feature included in measuring the option fair value fair value.
All major characteristics of the options are described and covered in the preceding paragraphs.
13.10

Private pension plans granted to directors and executive officers.

Board of
directors
Number of members

n/a

Name of plan

Board of executive
officers

Total

Mercaprev

Number of officers eligible for retirement

n/a

Conditions for early retirement

n/a

n/a

Updated amount of contributions accrued in private

pension plan up to end of previous year, net of direct
contributions by the officers

n/a

3,893,443.51

3,893,443.51

n/a

438,110.56

438,110.56

Total accrued contributions over previous year, net of

direct contributions by the officers

153

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Board of
directors

Board of executive
officers

n/a

Yes, only the employees

portion

Is early redemption possible and on what conditions

13.11

Total
-

Average remuneration paid to directors, executive officers and fiscal council members.

In 2010, the stock options for the year 2010 as per the board of directors approval (see item 13.1 b (ii)) occurred on January 3,
2011, and it will have an impact on the year ending December 31, 2011.
In the case of the board of directors, two members left the Company, one in April and one in June, and a new member was
hired in June at a lower salary. We therefore considered the four members of the board with effective exercise of their functions
over a twelve month period. To inform the highest remuneration, we considered all salaries paid in the year ended December
31, 2010, whereas the board member with the highest remuneration performed his functions over a full year.
One member of the board of directors received no remuneration in the year 2010. The average amount of remuneration
received by an individual board member during 2010 was R$383,573.49.
Year ended December 31, 2010
Board of
directors
Number of members

Board of
executive officers

Fiscal
Council

11.00

6.00

n/a

Amount of highest individual remuneration (in R$)

1,403,705.84

4,208,247.98

n/a

Amount of lowest individual remuneration (in R$)

204,000.00

1,769,140.17

n/a

Average individual remuneration (in R$)

348,703.17

2,480,091.13

n/a

* As discussed in paragraph 13.1 of the Reference Form, while the fiscal council is not active, its responsibilities are
adequately covered by the audit committee whose scope of responsibilities under article 47 of the Bylaws goes beyond
those the Brazilian Corporate Law prescribes for the fiscal council.
The Companys audit committee consists of five independent members, four of them being outside members, and one an
independent member, all of whom serve for two-year terms. For the composition of the amounts listed in the table below,
we considered compensation paid to four outside committee members in 2010. The highest remuneration paid in 2010
amounted to R$241,352.46 and the lowest was R$190,194.02. The average remuneration paid in 2010 was
R$203,735.27.
Due to changes in board composition as of April 2009, the information on lowest remuneration takes into account just the five
members actually in office throughout the 12-month period, whereas the information on highest remuneration takes into
account the aggregate amount recognized in the income statement. This notwithstanding the board member earning the
highest remuneration was in office for just the period from May to December 2009.
In the case of the board of executive officers, it should be noted two members left the Company in February and one in May,
whereas a new officer joined our Company in July. The information on lowest remuneration takes into account the five
members actually in office throughout the 12-month period, whereas information on the highest remuneration takes into
account the aggregate amount recognized in the income statement for the year to December 31, 2009. The executive officer
that earns the highest remuneration was in office for the full year.
Two members of the board of directors received no remuneration in 2009. The average remuneration of the nine members who
did receive remuneration in 2009 was R$415,061.48.
It should be noted that that the composition of 2009 remuneration includes the amount related to long-term compensation
(stock option grants) calculated based on the fair value of options as described in paragraphs 13.4, 13.6, 13.7, 13.8 and 13.9.
Year ended December 31, 2009
Board of
directors

154

Board of
executive officers

Fiscal
Council

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Number of members

10.92

6.00

n/a

Amount of highest individual remuneration (in R$)

936,091.88

5,453,734.08

n/a

Amount of lowest individual remuneration (in R$)

204,000.00

2,326,769.28

n/a

Average individual remuneration (in R$)

339,042.89

2,971,009.46

n/a

13.12 Discussion on contractual arrangements, insurance policies and other documents used in structuring
compensation schemes or indemnity mechanisms covering removal from office or retirement of directors and
officers; including information on related financial effects impacting the Company.
We do not adopt any specific policy for the compensation and/or indemnification of officers in the event of termination or
retirement, except for benefits granted under the relevant private pension plans in effect in the event of retirement, as
described in paragraph 13.10. It should be noted that the D&O insurance, which covers civil liability of directors and officers,
held by the Company is not extensive and is not related to the termination or retirement, whereas its purpose is to ensure
financial protection and peace of mind for all and management members, who can thus focus on day-to-day management
decisions without too much concern, which is a competitive advantage in retaining qualified talent.
13.13 Information on percentage of total compensation paid to each of the board of directors, board of
executive officers and fiscal council, which is attributable to members qualifying as parties related to the direct
or indirect controlling shareholders, as defined under applicable accounting principles.
The Company has no controlling shareholder, and therefore there is no compensation recognized in the income statement
regarding directors or officers deemed to be parties related to direct or indirect controlling shareholders.
13.14 Information (segregated by body) on amounts recognized in the income statement as remuneration paid
to members of each of the board of directors, board of executive officers and fiscal council for any reason other
than their responsibilities as members of these bodies, such as, for example, fees and commissions for
consulting or advisory services.
There is no amount recognized in the income statement as remuneration paid to directors or officers for reasons other than
their responsibilities as members of the board of directors or the board of executive officers.
13.15 Information (segregated by body) on amounts recognized in the income statements of subsidiaries,
companies under common control and direct or indirect controlling shareholders, as remuneration paid to
members of each of the board of directors, board of executive officers and fiscal council, including information
specifying on what account these amounts were paid.
The Company has no controlling shareholder, and therefore there are no companies under common control. There are no
amounts recognized in the income statements of subsidiaries, as remuneration paid to directors or officers of the Company.
13.16

Other information deemed relevant by the registrant.

There is no further information regarding the officers compensation which has not been set forth in the items of paragraph 13.
14.

Human resources

14.1. Description of the human resources structure

a.

number of employees (grouped by type of activities performed and by geographic location)

The number of personnel we employ has grown in 2010 largely as a result of enhanced market demand. Most our new hirings
occurred in the technology and operational business areas, driven by the number and importance of our ongoing projects.
Year ended December 31, 2010
Geographic location

So Paulo

Rio de Janeiro
Porto Alegre
Mato Grosso

Activity
Senior executives
Executives
Managers
Other heads of department
Specialists
Operations personnel
Interns
Specialists
Interns
Specialists
Specialists
TOTAL

Number of employees
6
30
85
144
988
126
77
2
1
1
2
1,462

155

Total by geographic location

1,456

3
1
2

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Year ended December 31, 2009

Geographic location

So Paulo

Rio de Janeiro
Porto Alegre
Cear
Paran

Activity
Senior executives
Executives
Managers
Other heads of department
Specialists
Operating personnel
Interns
Specialists
Operating personnel
Interns
Specialists
Operating personnel
Managers
Operating personnel
Operating personnel
TOTAL

Number of employees
6
26
70
108
712
139
56
1
4
1
1
3
1
3
5
1,136

Total by geographic location

1,117

6
4
4
5

Year ended December 31, 2008

Geographic location

So Paulo

Rio de Janeiro
Porto Alegre
Cear
Paran

b.

( )

Activity
Senior executives
Executives
Managers
Other heads of department
Specialists
Operating personnel
Interns
Other heads of department
Specialists
Operating personnel
Specialists
Operating personnel
Managers
Specialists
Operating personnel
Managers
Specialists
Operating personnel
TOTAL

Number of employees
8
29
74
118
728
184
75
2
3
6
1
2
1
1
4
1
1
5
1,243

Total by geographic location

1,216

11
3
6

number of outsourced personnel (grouping them by type of activities performed and by geographic
location)

Geographic location
So Paulo

Year ended December 31, 2010

Activity
Outsourced personnel (*)
Specialists
175

Total by geographic location

175

Geographic location
So Paulo

Year ended December 31, 2009

Activity
Outsourced personnel (*)
Specialists
227

Total by geographic location

227

Geographic location
So Paulo

Year ended December 31, 2008

Activity
Outsourced personnel (*)
Specialists
319

Total by geographic location

319

* IT outsourced personnel

The number of outsourced personnel in 2010, including outsourced IT personnel, decreased 14.7% from May 2008 (after the
BM&F and Bovespa Holding merger), when the number of outsourced IT personnel (not including interns) was 1,828.
c.

employee turnover rate;

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Pushed by our strategic plan and new projects, we opened 431 new job positions in 2010, most in the technology and
operational areas, whereas having cut 58 positions in other departments. The turnover rate at the end of 2010 was 10.39%.
Employee turnover in 2009 was 17.42%. We should stress this turnover rate was impacted by the actual cut of 93 jobs over
the months of March and April 2009, which resulted from our having captured synergy opportunities arising from the process
that integrated the activities of the former two independent exchanges, BM&F and BOVESPA.
Given that the integration process started in May 2008, and extended over a certain number of months we cannot provide any
accurate turnover rate for that year.
d.

registrants exposure to labor liabilities and contingent liabilities.

For information on our exposure to labor liabilities and contingent liabilities, see subsection 4.3 of this Form.
14.2.

Discussion on any material changes relative to the data provided under item 14.1 of this Form.

As of the date of this form, there have been no material changes related to the data and information provided under subsection
14.1 above.
14.3.

Description of the employee compensation policy

a.

salary and variable compensation policy;

Our aim is to have a competitive compensation policy vis--vis the marketplace, one that will give us the ability to attract and
retain talent, and keep a capable team of skilled and dedicated people, capable to help us attain our short-, medium- and longterm goals and strategic objectives. Given that our integrated business model is inextricably tied to our objectives of
promoting, developing and expanding the domestic capital markets, which per se imply longer and sustainable cycles, it is
crucial for us to have the ability to retain talent, such that our compensation policy must include mechanisms to encourage our
people to stay with us for the long haul.
Under our policy our employees are granted annual salary adjustments based on the adjustment rate established under the
relevant collective bargaining agreement, as of a certain base date. Moreover, we may grant additional salary adjustments
based on merit, or due to promotion or as recognition for outstanding performance, which in any of these cases are voluntary
salary adjustments with correlate mainly with the results of periodic evaluations of individual performance.
In addition, the variable remuneration portion of the compensation package is established and paid every six months pursuant
to our Profit Sharing Program and according to the rules set under Law No. 10,101 dated December 19, 2000. This profit
sharing program defines potential multiples based on monthly salary, which are ultimately determined as a function of certain
global performance indicators set for the Company, coupled with factors as job seniority and evaluations of individual
performance.
b.

policy on employee benefits

Our benefit package includes dental and health care plans, executive health check-up plan, life insurance, meal vouchers and
in-house meals, private pension plan, child care and transportation vouchers. Additionally, we adopt a quality of life program
which periodically implements actions oriented towards enhancing our employees wellness and quality of life, promoting
healthy lifestyles and cultural activities and offering them good entertainment.
c.

characteristics of any share-based compensation plan for non-management employees

While our stock option plan targets mainly our upper management employees, it also includes middle-management employees
amongst the eligible employees. Stock options are granted from time to time as a function of certain global performance
indicators set for the Company, coupled with factors as job rank and evaluations of individual performance.
The characteristics of the share-based compensation plan to which our middle management employees are eligible are the
same as those of the stock option plan for upper management members, and are discussed under subsection 13.4 of this Form.
14.4.

Discussion on relations with workers unions

The workers union that represents most of our employees is the Union of Employees of Independent Commercial Agents and
Consulting, Expertise, Information, Research and Accounting Firms of the State of So Paulo ( Sindicato dos Empregados de

Agentes Autnomos do Comrcio e em Empresas de Assessoramento, Percias, Informaes e Pesquisas e de Empresas de

Servios Contbeis no Estado de So Paulo).

Our relationship with the union is characterized by analytical reviews and discussions of mutual proposals, with the aim of
reaching consensus on how to best improve work conditions for our employees. These discussions typically involve the
negotiations for the annual renewal of the collective bargaining agreement, and address issues as salary adjustments, benefits,
work hours, lunch and rest breaks, and so forth. We have had productive relations with the unions thus far.
In addition, in 2009 we entered into a collective bargaining agreement with the union which specifically sets rules on how our
employees can bank time while they are working to cover periods when they are not. An hour bank was agreed along with the

157

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

terms and conditions of our profit sharing program.

15. Controlling ownership
15.1.

Controlling shareholder or group of shareholders

No shareholder or group of shareholder sharing similar interests holds a direct or indirect controlling interest in our issued and
outstanding shares. In addition, no shareholders agreement has been filed at our registered office which seeks to control the
election of directors and/or regulate the exercise of voting rights by any shareholders.
15.2.
Groups of shareholders sharing similar interests which in the aggregate hold ownership interest
representing five percent or more of the shares of stock (other than those listed under 15.1 above).
Shareholders
or voting
agreements

Ties with
controlling
shareholder

Foreign

No

No

5/17/2011

Foreign

No

No

12/13/2011

Brazilian

No

No

81.87

No

No

2.54

100.00

Common shares

% of shares
outstanding

Funds managed by BlackRock, Inc.

104,767,426

5.29

9/7/2010

Funds managed by OppenheimerFunds, Inc.

103,004,451

5.20

CMEG BRASIL I PARTICIPACOES LTDA.

101,078,580

5.10

Other

1,620,930,218

Treasury shares

50,219,325

Total

1,980,000,000

Shareholder

15.3.

Last
changed

Brazilian or
foreign
shareholder

Ownership structure as at the date of the most recent shareholders meeting.

Ownership structure as at the annual and extraordinary shareholders meetings held on April 18, 2011

By type of shareholders

Number of shares

Number of individual shareholders

76,908

Number of corporate shareholders

2,068

Number of institutional investors

1,823

(95.85%)

Free float

15.4.

1,959,262,007

Ownership structure chart

No shareholder or group of shareholder sharing similar interests holds a direct or indirect controlling interest in our shares.
Ownership in our shares is widely dispersed. In addition, no shareholders or voting agreement has been filed at our registered
office which seeks to control the election of directors and/or regulate the exercise of voting rights by any shareholders.
15.5.

Shareholders agreements

No shareholders or voting agreements of any kind have been registered with our Company.
15.6.
Material changes in ownership interest held by participants in the controlling group and by the
registrants directors and officers
No shareholder or group of shareholders sharing similar interests holds a direct or indirect controlling interest in our shares. In
addition, no shareholders or voting agreement has been filed at our registered office whether or not for the purpose of
controlling the election of directors and/or regulating the exercise of voting rights by any shareholders.
As of December 31, 2010, our directors and officers held combined ownership interest in 0.168% of our outstanding shares, or
an aggregate of 3,433,299 common shares. As of December 31, 2009, their combined ownership interest was 0.108% of the
outstanding shares of stock (or 2,212,684 shares), which was down from a total of 0.383% of the shares (or 7,834,824 shares)
as of December 31, 2008.
15.7.

Other material information

There is no additional material information to be provided at this time under this section.
16. Related party transactions
16.1.
Rules, policies and practices the registrant adopts in connection with related party transactions, such
as defined in applicable accounting standards.
Our policy on related party transactions and other circumstances involving or potentially involving conflicts of interest (Policy on
Related Parties) was approved by our board of directors on March 17, 2009. This policy sets rules aimed to ensure that

158

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

decisions are taken on the basis only of the best interests of BM&FBOVESPA and subsidiaries, in particular decisions that involve
related parties or other situations potentially involving conflicts of interest. Our policy applies to all our directors, officers and
employees, and those of our subsidiaries.
Based on Accounting Standard No. 5, or CPC-5, issued by the Brazilian Accounting Standards Board (Comit de
Pronunciamentos Contbeis), or CPC, and endorsed by the CVM pursuant to CVM Resolution 560/08, our Policy on Conflicts of
Interest and Related Party Transactions defines a related party as a person having relations with our company in any of the
following ways:
(a) Where said person directly or indirectly, through one or more intermediaries, (i) is a controlling shareholder or a
subsidiary or company under common control (including a controlling shareholder or subsidiary), (ii) holds an interest
in us permitting it to exercise significant influence over our company; or (iii) exercises joint control over our company;
(b) Where said person is an affiliate of ours;
(c) Where said person is a joint company (joint venture) in which we are an investor;
(d) Where said person is a director or key management member of the Company, key management member being
defined as a person vested with authority to, and responsibility for planning, directing and overseeing the Companys
activities either directly or indirectly (including any director or executive officer of said person). Under our policy, key
management member is further defined to include any member of our board of directors, our board of executive
officers, our audit officer, our human resources officer, corporate risk officer and the chief operational officer, in
addition to the chief operational officer of the BM&F settlement bank;
(e) Where said person is a close family member of any of the persons listed in items (a) and (d) above, close family
member being defined as family members that would be expected to influence, or be influenced by such close family
member in his or her business dealings with us, and may include (i) said persons spouse, or common law spouse, and
children; (ii) the children of the spouse or common law spouse; and (iii) said persons dependants or the dependants
of said persons spouse.
(f) Where said person is a subsidiary or company under common control, or is a company significantly under the influence
of, or is a company in which the power to significantly affect or influence the decision-making process lies directly or
indirectly with any of the persons listed in items (d) or (e); or
(g) Where such person is a pension fund operating for the benefit of company employees or of any entity that is a related
party of ours.
Under our policy on related parties, on identifying a matter or proposal involving or potentially involving a related party
transaction or other instance of conflict of interest, directors and officers are required promptly to make the conflict of interest
known to us. In addition, they are required to abstain from taking part in discussions concerning any such matter or proposal,
and from voting on any such matter or proposal.
In the event a director or executive officer could potentially ascertain a personal gain from any particular decision were to
silence about a conflict of interest, any peer having knowledge of the fact may disclose the conflict of interest. In this event, a
directors or officers silence will be deemed a breach of our policy and the matter will be submitted to our nomination and
corporate governance committee for evaluation and a recommendation to the board of directors as to possible corrective
actions.
Our policy and the rules it conveys are in line with the requirements of Brazilian Corporate Law, particularly inasmuch as it
prescribes that directors and officers have a duty of loyalty towards the company.
Except for the requirements set forth in our policy on conflicts of interest and related party transactions, we do not adopt other
rules, regulation or procedures in connection with related party transactions.
16.2.
Related Party

Related party transactions

Partys
relation
to Co.

BVRJ
Rio de Janeiro
Exchange

Subsidiary

BBM Brazilian
Commodities
Exchange

Subsidiary

BM&F
Settlement

Whollyowned

Amount
(In R$)

TXN date

Subject matter

Monthly

Exchange fees on
ownership mbrshp.

(475)

Monthly

Costs refund exp.

w/ IT services

115

Monthly

Exchange fees on
ownership mbrshp.

Not
applicable

Bank acct.
deposits

2010

(1,319)
-

2009

Outstanding balance
(in R$ thousands)
2008

Transaction

(475)

(475)

Acct.
Payable

295

2,184

Acct.
Receivable

(669)

(150)

Acct.
Payables

159

Cash
equivalents

Related
Party
Crtb.

Security &
Insurances

2010

2009

2008

(2,315)

(1,839)

(1,361)

N/A

N/A

88

N/A

N/A

(337)

(157)

(70)

N/A

N/A

17

2,760

N/A

N/A

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Bank

subsidiary

Monthly

Use of our facilities

& IT infrastructure

Not
applicable

BSM Market

Subsidiary

BM&F
Association

Subsidiary

We
sponsor the
association

3,325

Acct.
Payable

527

543

457

N/A

N/A

(831)

N/A

N/A

Fgn. exchange
ctr. to close

Foreign
exchange

153

3,549

N/A

N/A

Monthly

Cost recovery ctr. for

refund of costs re
use of our manpower
& infrastructure

2,570

2,419

1,483

Acct
Receivable

452

1,257

N/A

N/A

Monthly

Pass-through of
broker contributions
(based on trading
volume)

Funds to
transfer

(2,907)

N/A

N/A

Not
applicable

Refund of Co.
donations

Acct.
Receivable

1,501

N/A

N/A

Acct.
Payable

(9)

N/A

N/A

Investor

Bovespa
Institute for
Social &
Environmental
Responsibility

5,898

Not
applicable

Surveillance

Compensation
Mechanism

Acct.
Receivable

5,402

Not
applicable
Not
applicable

Donations related to
demutualization

(9,250)

Donations

N/A

N/A

Not
applicable

General cost
recovery

441

Cost
recovery

441

N/A

N/A

Not
applicable

Cash transfers to Co.

Acct.
Receivable

6,947

6,901

4,295

N/A

N/A

Acct.
Payable

(9)

N/A

N/A

Not
applicable

Abbreviations at http://www.itc.nrcs.usda.gov/scdm/docs/OD-Abbreviations.pdf

As discussed under subsection 16.1(d) above, our policy formally acknowledges key management personnel as our related
parties. Given that the compensation we pay to our key management personnel has already been discussed at length under
section 13 of this Form, the above table does not include information on compensation, providing data only on our transactions
with other related parties, as identified based on the criteria set forth in subsection 16.1 above.
16.3.
For each related party transaction or set of transactions discussed under 16.2 above, which has been
agreed in the last year, the information should cover:
a) identification of actions taken to tackle conflicts of interest
Our transactions with other parties, in particular transactions with related parties, are typically subject to approval either by our
board of directors or board of executive officers, as pertaining to each of their spheres of authority and provided in our bylaws.
Where any director or officer may have a conflict of interest regarding any proposed transaction, this director or officer must
abstain from discussing the matter, and from attending and voting in any meeting held to deliberate about the subject.
For additional information on conflicts of interest affecting any member of our board of directors, please see subsection 12.4(c)
of this Form.
We adopt no additional formal mechanisms to identify conflicts of interests.
b) evidence that the related party transactions have been entered on an arms length basis (mutually beneficial
or adequately compensated transactions)
Below there is more information about transactions with related parties carried out last year, according to the table in item
16.2:

BVRJ Rio de Janeiro Exchange. Payments made by BM&FBOVESPA is given pursuant to the BVRJs bylaws, which states that it
is the duty of the member (such as BM&FBOVESPA case) punctually pays the contributions due. At a meeting held on
December 13, 2004, the Board of BVRJ established the minimum monthly contribution amount due for each property title at R$
400.00. Additionally, in a meeting held on January 28, 2011, the Board of BVRJ determined the extinction of the stipulated
minimum monthly contribution to BM&FBOVESPA, because of financial self-sufficiency of BVRJ.

BBM Brazilian Commodities Exchange. Payments made to BBM by BM&FBOVESPA is given pursuant the bylaws of that entity,

which states that it is the duty of the member (such as BM&FBOVESPA case) pay punctually the contributions due as a result of
the property title. The Ordinary General Assembly established at a meeting held on December 18, 2003, the value of the
minimum monthly contribution of R$ 500.00 per property title. For members considered inactive, the Board of Directors of BBM
has determined the payment of double the minimum monthly contribution. The BM&FBOVESPA has received from BBM, as
reimbursement of costs, the amount expent in expert technical assistance, systems development and maintenance of
equipment (data processing).

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

BM&F Settlement Bank. The amounts owed by the BM&F Settlement Bank to BM&FBOVESPA are relative to the resources used

by the bank for execution of their activities, in accordance with the contract between the parties. The payment of such amounts
are done based on a descriptive document prepared by BM&FBOVESPA and approved by the BM&F Settlement Bank in
accordance with the conditions of contract.

BSM Market Surveillance. BM&FBOVESPA transfers the costs related to the hiring of its resources and infrastructure by BSM to
perform its activities. Such costs are calculated monthly in accordance with methodology defined in the contract signed between
the parties and also include activities related to the Invertor Compensation Mechanism Fund, since such mechanism is operated
by BSM.
17. Capital stock
17.1.

Capital stock

Our capital stock is represented by shares of common stock only.

Type of
shares

Number of
shares

Common
shares

1,980,000,000

Issued and
outstanding

Capital stock

(in R$ thousands)

(in R$ thousands)

2,540,239,563.88

2,540,239,563.88

Authorized share
capital

(in R$ thousands)

2,540,239,563.88

Payment
term

Last changed

Not
applicable

December 13,
2011.

Authorized share capital

Amount

Number

Authorization date

(in R$ thousands)

Our board is authorized to increase the

capital stock by up to two billion and five
hundred million (2,500,000,000) shares of
common stock

Within the authorized limit, our board has powers to

decide on any issuance of shares and on the issue price
per share.

May 8, 2008

As of the date of this Form no convertible securities have been issued by us.
17.2.
Date of
decision

August 19,
2008

Share issuances and increase in capital stock

Issuance
approved
by

Board of
directors

Issue date

August 19,
2008

Total
issuance

Total
issue

Issue
price

(in Brazilian
reais)

(number of
shares)

(in R$)

3,216,300.00

3,216,300

1.00

Form of
payment

Criterion
determining the
total issuance

Private
issuance or
public
offering

As a
ratio of
capital
stock

(%)

Issue price
paid in cash
on or before
December
31, 2008.

Shares issued within

the authorized limit
set in our Bylaws.
Under article 8 of the
Bylaws, our board
has powers to decide
on the issuance
(within the
authorized limit), the
issue price, and the
form and conditions
of payment.

Private
issuance
shares
subscribed
by holders of
vested stock
options
under our
stock option
plan.

0.16%

Under article 8 of the Bylaws, our board of directors is authorized to share issuances up to the limit of two billion and fiv e
hundred million shares of common stock without need to amend our Bylaws. In so deciding, the board must resolve on the
total issuance, the issue price per share and the form and conditions for shareholders to pay in the new shares.
At a meeting held on August 19, 2008, our board approved the issuance of 3,216,300 additional comm on shares for
fulfillment of vested stock options under the stock option plan which we absorbed upon the merger with BM&F (the former
independent commodities and futures exchange), which was approved at a shareholders meeting held on September 20,
2007. This stock option plan was later incorporated into our own stock option plan, which was approved at the extraordinary
shareholders meeting of May 8, 2008.
As of August 19, 2008, the additional shares were fully subscribed by the relevant holders of veste d stock options and paid
up in Brazilian currency on or before December 31, 2008. This share issuance was well within the authorized limit of our
share capital. As a result, as of August 19, 2008, our capital stock which previously amounted to R$2,537,023, 263.88
increased to R$2,540,239,563.88 represented by 2,044,014,295 shares of common stock.
At a shareholders meeting held on May 8, 2009, the shareholders approved the new wording of article 5 of the Bylaws,

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

which reflects the current capital stock, as approved at the board meeting of August 19, 2008.
17.3.

Share splits, reverse splits and bonus shares

As of the date of this Form, there have been no share splits or reverse splits and no bonus shares have been distributed.
17.4.

Reductions in capital stock

As of the date of this Form, there has been no reduction of our capital stock.
17.5.

Other relevant information

At a Board meeting held on Dezembro 13, 2011, it was approved the cancellation of 64,014,295 treasury shares held by the
Company after repurchases carried out within the scope of the Share Buyback Program. As a result, our capital stock
amounted to R$ 2.540.239.563,88 is now represented by 1,980,000,000 shares of common stock. For additional information
on our share buyback program, see section 19, under the heading Share buyback programs and treasury stock.
18. Securities information
18.1.

Rights and prerogatives of each type and class of shares:

a.

Rights to dividends

Under Brazilian Corporate Law and our Bylaws, our shareholders are entitled to any dividend or other distributions, based on
their proportionate holdings in shares of stock issued by us.
Under article 54 of our bylaws, we are required to pay to shareholders every year mandatory dividends at a rate of 25% of
adjusted net income for the year. Our calculation of net income for the year, and the amount available for distribution, includes
adjustments made pursuant to Brazilian Corporate Law for allocations to the legal reserve and certain other reserves, such as a
contingency reserve, as well as for reversal of previous allocations where appropriate.

b.

Voting rights

Each of our common shares grants its holder right to one vote at decisions of annual and extraordinary shareholders meetings.
Under the Novo Mercado listing regulation, all our shares of capital stock are required to be voting shares, such that we are not
permitted to issue non-voting shares or shares with restricted voting rights or participation certificates. However, there are
certain voting limitations, which are set forth in subsection 18.2 of this form.

c.

Convertibility into other types or classes of shares

Our shares of stock are not convertible into other types or classes of shares. In addition, under our bylaws we are permitted to
issue debentures convertible into common shares and subscription warrants. However as of the date of this reference form we
had not issued any of these securities.

d.

Reimbursement rights

Withdrawal rights
Under certain circumstances, shareholders that dissent from a decision taken at a shareholders meeting are entitled to exercise
withdrawal rights, in which case we must reimburse them for the value of their shares, as determined pursuant to Brazilian
Corporate Law.
In our case, pursuant to applicable regulations, shareholders will not be entitled to exercise withdrawal rights upon a decision to
(a) approve a consolidation transaction or (b) approve a merger transaction where we are not the surviving entity or (c)
approve our participation in a corporate group acquire ownership interest in to the extent our shares (1) are liquid shares,
meaning they are included in the stock exchange general stock index or a stock index compiled by any other exchange, as
defined by the Brazilian Securities Commission, and (2) consist of widely held stock (defined as the controlling shareholders
individually or as a group holding less than 50% of the issued and outstanding shares of capital stock).

Redemption
Under Brazilian Corporate Law, our shares may be redeemed upon a decision taken at a shareholders meeting approved by
holders of shares representing at least 50% of our capital stock.

Liquidation
Pursuant to Brazilian Corporate Law, in the event of our liquidation in a winding up process, our shareholders are entitled to
reimbursement of capital in proportion to their holdings in our shares, provided all our other liabilities must have been
previously settled.

e.

Tag along rights (tender offers triggered by acquisition of control)

Under the Novo Mercado listing regulation, a disposition of our control agreed pursuant to one or a series of successive
transactions requires a precedent or dissolving condition being established, whereby the prospective buyer undertakes to
conduct a tender offer to purchase all outstanding shares. Under Brazilian Corporate Law and the Novo Mercado listing

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

regulation, the bid price and the payment conditions must be the same as offered for the controlling shares, and the offer
should take place within the legally prescribed deadline.
In addition, a tender offer is required also in the following instances:
Where a transaction is entered for assignment of a sale of subscription or other rights exercisable for shares, or of
securities convertible or exchangeable for shares of our capital stock, which upon being exercised or converted or
exchanged for shares issued by us would imply a disposition of control;
Where one or more transactions for a sale of beneficial ownership in as many shares issued by us as would imply a
disposition of control (indirect transfer of control); and
Where a shareholder acquires as many additional shares in one or more private transactions as are sufficient to
acquire control. In this event, the bid price and payment conditions in the tender offer must be the same as paid under
the private purchase transactions and, in addition, shareholders that may have traded shares to the acquirer of control
in the preceding six-month period will be entitled to compensation established as the difference between the price per
share paid for control and selling price on the stock exchange, as adjusted for inflation in the period.
Under Brazilian Corporate Law and the Novo Mercado listing regulation, in a tender offer triggered by a disposition of control all
shareholders may adhere to sell the shares at 100% the selling price paid for the controlling shares. Additionally, because of
our fairly dispersed share ownership structure, our bylaws require a tender offer to be carried out by any shareholder or group
of shareholders seeking to acquire a 30% interest in our shares, or other rights in our shares as beneficial owners (including by
means of usufruct or a trust) in any way granting voting rights over 30% or more of the outstanding shares. For additional
information see subsection 18.2(c) below.

f.

Transfer restrictions (lock up)

There are no transfer restrictions related to our shares.

g.

Conditions to amend rights assigned to the shares

Under Brazilian Corporate Law, neither the bylaws nor the decisions of a shareholders meeting of any corporation may restrict
the rights of shareholders regarding any of the following:
Rights to a proportionate participation in profit distributions;
Right to a proportionate participation in the distribution of assets outstanding in a winding up process (after all corporate
liabilities are settled);
Preemptive rights to subscribe for shares, convertible debenture or subscription warrants, except in certain circumstances
permitted by Brazilian Corporate Law.;
Right to review and judge the company financials and the management of business operations in the manner prescribed
under Brazilian Corporate Law; and
Right to withdraw under certain legally prescribed circumstances.

h.

Other material features

There are no other material features.

i.

Foreign issuers

Not applicable.
18.2.
Description of bylaws provisions limiting the voting rights of holders of material ownership interest,
and bylaws provisions requiring holders of material interest to conduct tender offers.

- Voting cap
While under article 7 of our Bylaws each share entitles the holder to one vote in decisions of shareholders meetings, the same
provisions sets forth a voting cap to the effect that no shareholder or group of shareholders sharing similar interests is entitled
to vote shares representing individual or aggregate interest in excess of 7% of our issued and outstanding shares.
As a result, if a shareholders or voting agreement regulating the exercise of voting rights were to be filed at our registered
office, the contracting shareholders would be deemed to constitute a group of shareholders sharing similar interests, and would
be subject to the voting cap discussed above.
In addition, as a result of such voting cap, under paragraph 3 of article 7 of our Bylaws, no shareholders or voting agreement
(whether or not filed at our registered office for effectiveness towards our company and other shareholders) will be permitted
to predefine and establish a consistent majority by forming voting blocs representing aggregate voting interest in excess of 7%
of our issued and outstanding shares, such as discussed above.
The chairman of a shareholders meeting is responsible for enforcing the voting caps established under our Bylaws, and must
inform shareholders of the number of eligible individual votes the shareholders and groups of shareholders will be permitted to

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

cast at any particular meeting. For enforcement of these rules, votes cast in excess of the voting cap will not be computed for
purposes of determining whether a quorum to resolve has been met.

- Tender offer requirements

Below is a discussion of certain tender offer requirements included in our Bylaws. Where a tender offer is conducted at any time
to purchase our outstanding shares, and our board of directors finds the offer meets the interests of the community of
shareholders and of the economic segments in which our subsidiaries operate, and votes to recommend the offer be accepted,
then our board (and only our board) may also vote to call a shareholders meeting to decide on whether our Bylaws should be
amended to eliminate any voting limitations, however under the condition that the bidder should acquire at least two-thirds of
the outstanding shares (thus, not including treasury stock) for the amendments to the Bylaws to take effect.
(a) Disposition of control

Under our Bylaws and the Novo Mercado listing regulation, a disposition of control agreed pursuant to one or a series of
successive transactions requires a precedent or dissolving condition being established, whereby the prospective buyer
undertakes to conduct a tender offer to purchase all outstanding shares. Under Brazilian Corporate Law and the Novo Mercado
listing regulation, the bid price and the payment conditions must be the same as initially offered for control, to ensure
equalitarian treatment is extended to all shareholders.
In addition, a tender offer is required also (1) where a transaction is entered for assignment of a sale of subscription or other
rights exercisable for shares, or of securities convertible or exchangeable for shares of our capital stock, which upon being
exercised or converted or exchanged for shares issued by us would imply a disposition of control, and (2) in the event of a
disposition of control over our controlling shareholder (if any).
Moreover, under our Bylaws and the Novo Mercado listing regulation, where a shareholder acquires as many additional shares
in one or more private transactions as are sufficient to acquire control, this acquiring shareholder must then conduct a tender
offer to purchase all outstanding shares. In this event, the bidder will also be required to reimburse any holders selling shares in
stock market transactions (regardless of buying counterparties) carried out in the same trading sessions at which the acquirer
of control was trading to buy shares in the market over the six-month period preceding the date of acquisition of Control, which
reimbursement shall compensate these sellers for the difference between the selling market price per share and the tender
offer bid price, as adjusted for inflation through to the reimbursement date. BM&FBOVESPA, as central counterparty clearing to
these transactions shall be responsible, pursuant to applicable regulations, for allocating the aggregate of the reimbursement
amount amongst the relevant stock market sellers in proportion to the daily net settlement balances of such transactions, as
registered in its records.
Additionally, both our Bylaws and the listing regulation prohibit the actual transfer of shares between sellers and buyer of
control, requiring us not to recognize any share transfer unless and until the acquirer of control (whether one or a group of
persons sharing similar interests) executes the instrument of adherence to the Novo Mercado listing regulation.
Another requirement calls for the acquirer to take action within six months after the acquisition to restore the free float to
minimum 25% of the outstanding shares, as the case may be.
Moreover, in a tender offer conducted as part of a going private process, the bidder or bidders (including us, if we conduct the
tender offer) to set the bid price at a minimum equivalent to the fair value per share, as determined by a specialist firm in the
form prescribed in 63 of our Bylaws.
A tender offer requirement applies also where the shareholders take action at a shareholders meeting approving (1) a delisting
from the Novo Mercado for our shares to trade on another market or listing segment, or (2) implementing a corporate
restructuring process from which we do not emerge as the surviving company and the actually surviving entity fails to list the
shares to trade on the Novo Mercado within one hundred and twenty (120) days after the date of the meeting approving such
action. In any such event the tender offer will be required to be carried out at a minimum bid price equivalent to the economic
value (fair value) per share, as determined by a specialist firm according to the provisions of paragraphs 1 through 3 of article
63 of our Bylaws, whereas giving regard to other applicable legal and regulatory rules.
(b) Acquisition of control where control is widespread

Where share ownership is widely dispersed, if shareholders convening in a Shareholders Meeting approve action consisting of
(1) a going private process (entailing cancellation of our registration as a public company), we will be required to take action
regarding a tender offer for all outstanding shares, except that the preference order requires we first purchase the shares of
accepting holders that voted against going private and only then those of accepting holders in favor of the action; or (2) a
delisting from the Novo Mercado listing segment for the shares to trade on another market or listing segment, or if the
shareholders take action to implement a corporate restructuring process where the unlisted surviving company fails to list the
shares to trade on the Novo Mercado within one hundred and twenty (120) days after the date of the meeting approving such
action, then such action shall be contingent on a tender offer being conducted for all outstanding shares, under similar terms
and bid price conditions as discussed in the preceding paragraph (a). In addition, at the same meeting, the shareholders will

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

be required to name one or more attendee shareholders in attendance to fulfill the requirement and carry out the tender offer.
The shareholder(s) thus named will be required to commit expressly to the tender offer. Moreover, where the shareholders
meeting approves a corporate restructuring process but fails to appoint the shareholder(s) responsible for conducting a tender
offer if the unlisted surviving company fails to arrange for timely listing on the Novo Mercado segment, and such failure does
take place, then the obligation to conduct a tender offer shall lie with all the shareholders that voted for the corporate
restructuring process.
(c) Protection of free float

Where share ownership is widely dispersed and we incur a breach of the Novo Mercado listing regulation due to a action taken
by shareholders at a shareholders meeting, our management will be required to call a shareholders meeting to remedy the
breach or, in the alternative, to vote on delisting our Company from the Novo Mercado. If the shareholders vote for our
delisting, they will also be asked to name the party or parties that will be responsible for conducting the required tender offer.
Moreover, where share ownership is widely dispersed, if we incur a breach of the Novo Mercado listing regulation due to action
taken by our management, i.e., an act or fact of Management, our directors and officers will be required to call a
shareholders meeting to for the shareholders to resolve on action required to be taken to remedy the breach or otherwise
decide for a delisting from the Novo Mercado, and in the latter case also name the party or parties that will commit to
conducting the required tender offer.
If any two or more of these events were to occur more or less concomitantly at any time ownership in our shares continues to
be fairly dispersed, the regulation allows for a single tender offer to be conducted as long as the objectives of the relevant
tender offer requirements can be achieved, the single-offer alternative does not harm the interests of shareholders and the CVM
consents to this course of action, if and when required.
In any event, the potential bidders in any such tender offer (whether required under our bylaws, the law, the CVM regulations
or the Novo Mercado listing regulation) may agree that just one of them or a third party acting for them or, as the case may be,
ourselves will carry out the offer, provided each party required to conduct a tender offer will be held liable for ensuring the bid
is implemented and complies with applicable law and regulations.
(d) Protection of free float

Any shareholder or group of shareholders sharing similar interests (acquirer) that aims to purchase additional shares issued
by us or acquire rights in the shares (including as beneficial owners, through usufruct or a trust) granting them a 15% voting
interest in the outstanding shares of common stock, must first seek consent from the CVM, while giving regard to applicable
legislation, regulatory rules, the stock exchange regulations and our bylaws.
Any shareholder or group of shareholders sharing similar interests (acquirer) that (1) accumulates direct or indirect ownership
interest in 30% or more of our issued and outstanding shares, or in any way (2) purchases (i.e., acquire at cost) rights in the
shares (including as beneficial owners, through usufruct or a trust) granting a 30% voting interest in the outstanding shares of
common stock, must first seek consent from the CVM, and within a 30-day period after obtaining consent, is required to initiate
or apply to register a tender offer to purchase all other issued and outstanding shares, whereas giving regard to applicable law
and regulatory rules in the jurisdictions where our shares are listed to trade at the time, and to the stock exchange regulations
and our bylaws.
The bid price per share in a tender offer triggered by accumulation of material interest (such as discussed in the preceding
paragraph) must at least equal the highest market price per share the acquiring shareholder or group of shareholders paid for
shares in the market within the six-month period preceding the date on which the 30% threshold was hit, as adjusted to
account for corporate actions, such as distributions of dividends or interest on shareholders equity, stock splits, reverse splits
and bonus shares, but not for actions related to corporate restructuring processes (article 70 of our bylaws).
This tender offer requirement will not apply where a person acquires aggregate ownership interest in excess of 30% of the
issued and outstanding shares by virtue of any of the following events: (i) a subscription of shares implemented in a single
issuance authorized in a shareholders meeting, where the issue price is determined on the basis of a fair value valuation
conducted by a specialist firm pursuant to article 63 of our bylaws; or, (ii) acquisition in a tender offer.
However, if the acquirer fails to meet the requirements and obligations set forth in our bylaws, including as to applicable
deadlines concerning (1) the start or registration of a tender offer, or (2) submitting applications to the CVM or meeting their
demands, our board of directors will call a shareholders meeting to decide on suspending the rights of such acquirer, at which
the shareholder or group of shareholders in question will be impeded from voting and must abstain (per article 120 of Brazilian
Corporate Law).
18.3.

Exceptions to, or events of suspension of economic and policy (voting) rights under the Bylaws.

Our Bylaws contemplate certain restrictions affecting economic and policy rights, as follows:

Events excluding or restricting preemptive rights

Under article 11 of our Bylaws (article 172 of Brazilian Corporate Law), if we decide to conduct an offering for sale of new

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2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

shares or convertible debentures or warrants, or an exchange offer, we may for purposes of the offer and upon a decision of
our board exclude the preemptive rights of shareholders, or limit the period for exercise of these rights. Similar exceptions
may also occur under special tax legislation related to certain incentivized equity interests .

Members of the board of directors

Under article 22, paragraph 4, of our Bylaws, any person that holds a position in a competitor of ours, or the competitor
subsidiaries, or that has a conflict of interest with us or any of our subsidiaries is ineligible to our board, unless the
shareholders convening in a meeting decide otherwise (per article 147, paragraph 3, of Brazilian Corporate Law).
Under Brazilian Corporate Law and paragraph 5 of article 26 of our Bylaws, a conflicted director will be barred from access t o
information, and from taking part in board deliberations and decisions on any matter regarding which he or she has a
conflicting interest with us or any of our subsidiaries, and must abstain from interfering in any way on any matter in which
he or she has a conflicting interest.

Voting restrictions
Our Bylaws contemplate the voting cap discussed above under subsection 18.2. Additionally, article 19 of our Bylaws requires
shareholders and shareholder proxies to abstain from voting on any matter in which their interest conflicts with ours. Under
article 115 of Brazilian Corporate Law, a shareholder acting upon a conflict of interest whether to approve or disapprove any
particular motion is deemed to incur abuse of voting rights.
Moreover, under article 18 of our Bylaws, shareholders convening in a general meeting may suspend the rights, including voting
rights, of any shareholder or group of shareholders that acts in violation of statutory or regulatory provisions or our Bylaws.
18.4.

Information on trading value and stock quotes (highs and lows) in the three most recent full years.
Market price per common share
Lowest price

Highest price

Average price

Average daily
trading value

Financial value traded

(in R$)

(in R$)

(in R$)

(in R$)

(in R$)

Third quarter (*)

6.77

13.38

10.05

138,159.59

5,940,862,448.00

Fourth quarter

3.90

9.27

5.84

132,264.18

8,200,379,312.00

2008

2009
First quarter

5.70

7.90

6.62

111,485.35

6,800,606,391.00

Second quarter

6.91

12.78

10.16

194,471.38

11,862,753,941.00

Third quarter

10.45

13.55

11.94

156,717.79

10,029,938,722.00

Fourth quarter

11.05

14.11

12.34

181,050.08

10,863,004,671.00

11.05

13.94

12.11

163,108.70

9,786,521,890.00

Second quarter

9.81

12.76

11.74

177,097.20

10,980,026,639.00

Third quarter

10.95

15.00

12.98

159,399.99

10,201,599,549.00

Fourth quarter

12.50

15.70

13.67

167,850.43

10,238,876,045.00

2010
First quarter

( )

* data start from August 20, 2008, when our shares began to trade on the stock exchange under ticker symbol BVMF3

18.5.

Other securities issued

We have issued no securities other than shares, as discussed elsewhere in this Form.
18.6.

Brazilian markets where securities of the issuer have been listed to trade

BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros.

18.7.

Cross-border markets where securities of the issuer have been listed to trade

No securities issued by us have been listed to trade on cross-border markets.

18.8.
Securities offerings previously implemented by the issuer or other parties, including controlling
shareholders, subsidiaries and affiliates, for sale of securities of the issuer.
There have been no securities offerings previously implemented for sale of shares issued by us.
18.9.

Previous takeover bids and tender offers for shares of another company.

There have been no previous takeover bids or other tender offers for shares of another company.
18.10.

Other relevant information

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We have issued global senior notes in a cross-border offering, whose principal features are set forth in the table below. The
global notes have no legal nature of securities.
Identification of the Notes

Senior unsecured notes

Issue date

July 16, 2010

Maturity date

July 16, 2020

Number of notes

Notes in minimum denominations of US$100,000 and integral multiples of US$1,000

Principal (US$)

US$612 million

Transfer restrictions

No

Convertibility

No

Redemption

Yes, an optional redemption with make-whole amount.

Events of redemption;
redemption price calculation method

The Notes are redeemable, at our option, in whole or in part, at any time and from time
to time, upon giving not less than 30 nor more than 60 days notice to the holders, at a
Redemption Price equal to the greater of (i) 100% of the principal amount of the notes
to be redeemed, and (ii) the sum of the present values of the remaining scheduled
payments on such notes discounted to the redemption date (excluding interest accrued
to the redemption date), on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months), at a rate equal to the sum of the applicable U.S. treasury rate
plus 40 basis points.

Key features of the notes

The notes are unsecured, denominated in U.S. dollars and have been issued by us
abroad. Interest calculated at the rate of 5.500% per annum will be payable semi annually on each January 16 and July 16 (the first Interest Payment Date was January
16, 2011) until full repayment has been made.

Trustee, Registrar, Transfer Agent and Paying Agent (the Trustee):

Deutsche Bank Trust Company Americas

19. Buyback programs and treasury stock

19.1. Implemented share buyback programs

a. dates of any decision to implement a buyback program

The board approved our first share buyback program (2008 Program) on September 24, 2008. While as legally permitted the
program contemplated repurchasing up to 71,266,281 shares over a 365-day period starting from the approval date, it was
terminated on May 12, 2009.
Then, with the objective of creating shareholder value through efficient management of our capital structure, a second share
buyback program (2010 Program) was approved at a board meeting held on August 12, 2010. The program contemplated
repurchasing up to 31 million shares over a period ending December 31, 2010. However, on December 16, 2010, the board
increased to 60 million the number of common shares in the buyback program, which was extended through June 30, 2011.
A new buyback program (2011 Program) was approved at a board meeting held on June 16, 2011, with the objective of
creating shareholder value through efficient management of our capital structure. The program contemplates repurchasing up
to 30 million shares, spanning from July 1st to December 31, 2011.
The board approved the extention of the 2011 Program on December 13, 2011. The maximum amount was increased to 60
million shares, spanning from December 31, 2011 to June 30, 2012.

b. detail the following regarding each program:

i.

number of shares approved for repurchase, by type and class of shares

The three share buyback programs discussed above contemplated repurchasing up to 71,266,281; 60,000,000 and 60,000,000
shares of common stock, respectively.
ii.

repurchase as a percentage of the total issued and outstanding shares, by type and class of shares

As a percentage, repurchases under these three buyback programs represented approximately 3.5%, 3.03% and 3.12% of the
free float at the time, respectively.
iii.

repurchase period

We began repurchasing shares within the scope of the 2008 Program on September 29, 2008 and extended these repurchases
through February 6, 2009. At a meeting held on May 12, 2009, after we had repurchased 45,686,000 shares of common stock,
our board terminated the 2008 Program.

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In 2010 Program, we repurchased the totality of 60 million shares foreseen in the program, for aggregate R$768.3 million or
average repurchase price of R$12.81 per share.
The 2011 Program period will be from July 1st throughJune 30,2012.
iv.

reserves and earnings available to be allocated to the program

Allocations to Share Buyback Program

Capital reserves
Profit reserves
Total allocations

v.

Year ended
December 31, 2010

Year ended
December 31, 2009

Year ended
December 31, 2008

(in R$ thousands)

(in R$ thousands)

(in R$ thousands)

16,662,480

16,492,260

16,606,853

847,658

403,191

302,928

17,510,138

16,895,451

16,909,781

other key program features

The share buyback program approved on September 24, 2008, authorized the repurchase of shares for subsequent cancellation
with the aim of maximizing value generation for shareholders through efficient management of our capital structure. As of
December 16, 2008, our board the earlier decision was amended to authorize us either to cancel the shares at a later date or to
keep them as treasury stock for subsequent reissue within the scope of our stock option plan.
The shares of common stock we repurchase under our 2010 and 2011 Programs will be kept as treasury stock and may either
be cancelled or reissued by us for fulfillment of options exercised within the scope of our stock options plan.
Other than discussed herein, there are no other key features related to our buyback program.
vi. number of shares ultimately repurchased, by type and class of shares
By February 6, 2009, we had repurchased a total of 45,686,000 shares within the scope of the 2008 Program. Additionally,
within the scope of the 2010 Program, by June 30, 2011, we had repurchased 60,000,000 shares of common stock.
vii.

weighted average repurchase price, by type and class of shares

Repurchases within the scope of the 2008 Program were implemented at average R$5.85 per share, whereas repurchases
under the 2010 Program totaled average R$12.81 per share. The table below sets forth data on share buyback and average
repurchase price under our first two programs.

Periods
September 2008

2008 Program
Average price per share
Number of shares
(in R$)

Total amount
(in R$)

757,800

7.92

6,001,650.00

5,183,400

7.52

38,983,565.10

November 2008

9,456,300

4.76

45,004,740.00

December 2008

18,793,975

5.44

102,207,863.11

Total for 2008

34,191,200

5.62

192,197,818.21

9,288,300

6.46

60,031,758.37

2,206,500
45,686,000

6.79
5.85

14,992,125.06
267,221,701.64

October 2008

January 2009
February 2009
Sum total

2010 Program

August 2010
September 2010
October 2010
November 2010
Total for 1st phase
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011

5,650,000
8,280,000
12,447,900
2,872,100
29,250,000
2,700,000
16,570,000
1,800,000
250,000
2,500,000
4,150,000

Average price per share

(in R$)
12.83
13.89
14.02
13.22
13.67
12.80
12.33
11.41
11.24
11.69
11.24

June 2011
Total for extended phase

2,780,000
30,750,000

10.89
11.98

Periods

Number of shares

168

Total amount
(in R$)
72,466,569.00
115,044,628.00
174,497,469.00
37,966,234.00
399,974,900.00
34,556,255.00
204,307,384.00
20,536,843.00
2,809,176.00
29,224,397.00
46,631,717.00
30,266,460.00
368,332,232.00

2011 Reference Form BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF)

Sum total for 2 nd Program

60,000,000

12.81

768,307,132.00

2011 Program

Periods

Number of shares

July 2011
August 2011
September 2011
Ouctober 2011
November 2011
December 2011*
Sum Total

Average price per share

(in R$)

6,500,000
19,000,000
1,771,900
240,500
1,252,500
787,600
29,552,500

Total amount
(in R$)

9.90
8.92
9.31
8.72
9.52
10.00
9.21

64,378,535
169,531,039
16,496,138
2,097,641
11,923,993
7,875,425
272,302,771

*On December 21 , 2011.

viii. actually repurchased shares as a percentage of the total shares approved for repurchase
Share repurchases within the scope of each of our first and second buyback programs were implemented giving regard to the
restrictions set forth under CVM Instruction 358.
The total number of shares repurchased within the scope of the 2008 Program represented 64.1% of the total number originally
authorized, whereas those that we repurchased under the 2010 Program represented 100.0% of the total authorized
repurchases.
19.2.

Treasury stock information

Number of
treasury
stock at
start of year

Weighted
Aggregate
average
value at
repurchase
start of year
price per
share

Year

Type of
shares
of stock

2008

common

2009

common

33,024,204

2010

common

39,247,983

(R$ thousands)

19.3.

(in R$)

Aggregate
repurchases
in the year

Number of
treasury
shares
reissued

(R$ thousands)

5.628

34,191,204

185,880

6.527

230,102

13.600

Total
amount
reissued

Number
of
cancelled
shares

Total
treasury
stock at
year-end

(R$ thousands)

192,198

1,167,000

6,318

11,494,800

75,024

5,271,021

30,802

31,950,000

434,531

7,104,881

50,730

Total value
at
year-end

(R$ thousands)

33,024,204

185,880

39,247,983

230,102

63,093,102

613,903

Treasury stock at year-end

Total value
of
treasury stock

(in R$)

19.4.

Total
repurchases
in the year

Number of
treasury stock

Weighted average
repurchase price per
share

Repurchase
date

As a percentage of issued
and outstanding shares
of common stock

(in R$)

6,001,650.00

757,800

7.92

September 2008

0.04%

38,983,565.10

5,183,400

7.52

September 2008

0.26%

45,004,740.00

9,456,300

4.76

November 2008

0.47%

102,207,863.11

18,793,700

5.44

December 2008

0.93%

60,031,758.37

9,288,300

6.46

January 2009

0.46%

14,992,125.06

2,206,500

6.79

February 2009

0.11%

72,466,569.00

5,650,000

12.83

August 2010

0.29%

115,044,628.00

8,280,000

13.89

September 2010

0.42%

174,497,469.00

12,447,900

14.02

October 2010

0.63%

37,966,234.00

2,872,100

13.22

November 2010

0.15%

34,556,255.00

2,700,000

12.80

December 2010

0.14%

Other material information

There is no additional material information to be provided at this time under this secti on.
20. Securities trading policy

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20.1. Policy setting guidelines and standards for direct or indirect controlling shareholders, directors, officers,
fiscal council members and members of technical or advisory standing committees established under the
Bylaws concerning trading in securities of the issuer
The securities trading guidelines and standards that apply to our directors, officers, fiscal council members (if the council is
active) and members of technical or advisory standing committees established under the Bylaws (and would also apply to
controlling shareholders if any were to emerge) are stated in our Material Disclosures and Securities Trading Policy Manual,
which we call simply Policy Manual. In addition, the securities trading rules that apply to all of our directors, officers,
employees, interns and service providers, as well as our subsidiaries, are stated in our Code of Conduct.
a) Date of adoption
Our Policy Manual was approved at a meeting of our board of directors held on March 8, 2008.
Our Code of Conduct, as effective and amended, was approved at a meeting of our board of directors held on March 17, 2009.
Amendments to this Code have been introduced after approved at a board meeting held on February 23, 2010.
b) Persons bound by the policy
As stated in the Policy Manual, our securities trading policy applies to, and is binding on directors, officers, consultants and
other insiders. It would also be binding on controlling shareholders, if any were to emerge in the future.
In addition, as reflected in our Code of Conduct, persons bound to comply with our securities trading policy encompass all our
directors, officers and other insiders, including insider employees, consultants and service providers, as well as those of our
subsidiaries, all of whom we call Collaborators. Moreover, the Code applies also to persons connected with any Collaborator,
defined as close family members to the first degree (parents, children, siblings), spouses or common law spouses, dependents
so declared in a collaborators income tax returns, and any legal entity in which a Collaborator holds powers to decisively
influence the decision-making process.
The definition of connected persons includes also investment funds in which a Collaborator holds powers to influence
investment decisions, even if they are made by a fund manager or administrator. Accordingly, the securities trading policy
standards does not apply to investment funds where the actual management of funds and assets is deferred to professional
managers, such that a Collaborator would hold no power to influence investment decisions. A Collaborator may thus freely
invest in these funds.
c) Key policy features

Policy Manual
The policy sets guidelines and standards that subject persons to close or blackout periods during which trading is restricted.
These trading restrictions are triggered, among other things:
before the public disclosure of any material act or fact with respect to us, our business, our subsidiaries and
affiliates, and their businesses;
whenever there is in the course any process to implement a merger transaction (including a merger per se,
share merger, full or partial spin-off or consolidation transaction, or transformation of corporate type, and any
type of corporate restructuring process;
applicable only to our directors and officers (and direct or indirect controlling shareholders, if any were to
emerge), whenever there is in course a procedure for purchase or sale of our shares by us or our subsidiaries or
affiliates, or an option or mandate has been granted for the same purpose.
Persons that are no longer members of our management, having left the Company before a disclosure of material
developments, are banned from trading in our securities, including derivatives based on our securities, provided the restriction
extends to the earlier of (i) expiration of a six-month period after the date on which such persons quit their positions or (ii) the
date of disclosure to the public of such material information as was known to them while in office, unless resuming trading in
our securities would adversely influence the developments being disclosed, to our detriment of that of our shareholders.

Code of Conduct
Under our policy, and with certain exceptions, collaborators and connected persons are banned from trading in any way,
directly or through other persons, on either the derivatives or the equities markets we operate (i.e., on markets comprising our
BM&F segment or Bovespa segment).

Exceptions to the trading restrictions

Policy Manual
The trading restrictions discussed above will not apply to subject persons making long-term investments (for at least 12
months) in our securities, as long as any such investment fulfills at least one of the following characteristics:
a subscription or purchase of shares resulting from options exercised within the scope of our stock options plan, as
approved and amended from time to time by action taken at a shareholders meeting;
a purchase of shares issued by us using the proceeds of variable compensation paid by way of profit sharing; or

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investments made pursuant an individual investment program.

An acceptable individual investment program is one establishing a plan for investments and divestments to be made according
to some kind of schedule and programmed use and source of funds, where investments are long-term and extend for at least
12 months. In addition, the program is required to contain provisions preventing insider trading and must be structured
so investment or divestment decisions cannot be taken after the investing subject person has become privy to any
particular privileged information, meaning an investor under any such individual investment program must not influence
any investment or divestment decisions.

Code of Conduct
Collaborators and connected persons are permitted trading activities consisting of the following (1) investments in shares or
units of index funds (ETFs) listed on Bovespa segment markets, in which they hold no powers to influence the fund
administration or asset management, provided buying and selling fund shares or units must span a 90-day period;
(2) investments in shares of open-end, non-exclusive, diversified portfolio funds, in which they hold no powers to influence the
fund administration or portfolio management; and (3) investments in securities listed to trade on Bovespa markets, pursuant to
an individual investment program previously approved by us.
Individual investment program An acceptable individual investment program for this purpose is one establishing a plan for
investments and divestments to be made according to some kind of schedule.
Investment clubs Collaborators and connected persons are not permitted join or invest in investment clubs.
d) provisions governing blackout or close periods, and description of processes adopted to ensure compliance.
Our Collaborators are categorically banned from trading in any way, shape or form, in stocks or other securities issued by us
during the fortnight preceding the quarterly earnings release (known locally as ITR, or quarterly financial information) and the
release of our full-year financial statements (or DFP). They may also be banned from trading in other instances, which our
investor relations officer may define in his discretion.
Our investor relations officer is responsible for circulating internal communication notices for the purpose of indicating the initial
and final terms of any such blackout period.

Policy Manual
Our directors, officers, fiscal council members (if the council is active) and members of technical or advisory standing
committees established under the bylaws are required to notify us of their holdings in our shares and those of connected
persons, and of any changes to these holdings (1) on the first business day after they take office, and (2) no later than after
five days of any buying or selling transaction.

Code of Conduct
Our audit office continually monitors trading activities by our Collaborators. If there are indications of a breach, formal
clarification is sought; the case is investigated, analyzed and referred to the code of conduct committee for a decision.
If the committee finds that a breach of conduct has in fact occurred, the collaborator in question will be subject to disciplinary
action, which may result in termination for cause and other legally prescribed penalties, in addition to other appropriate action.
20.2.

Other material information

Under article 10 of our bylaws, every shareholder or group of shareholders sharing similar interests is required to give notice to
us disclosing any purchases of shares which added to previously held shares result in aggregate ownership interest in excess of
5% of our issued and outstanding shares of common stock, following which any additional purchase of share lots representing
an interest in 2.5% (or multiples thereof) of our shares must also be disclosed. Any such disclosure must include information on
the identities of buyer(s) and seller(s), the purpose of the acquisition, the number of shares and percentage interest acquired
and other information required under article 12 of CVM Instruction 358/02.
Given that ownership in BM&FBOVESPA shares is widespread and control is dispersed at this time, the provisions included in our
Policy Manual specifically with regard to trading activities by controlling shareholders would only serve the purpose if any were
to emerge in the future.
21. Disclosure policy
21.1.
Guidelines, regulations and internal processes adopted by the registrant to ensure information
requiring disclosure is collected, processed and reported in a timely and accurate fashion.
Except as discussed herein based on guidelines, rules and processes stated in our disclosure policy, there are no additional
guidelines, regulations or internal processes concerning disclosure of information by us.
21.2.

Policy on disclosure of material developments adopted by the registrant.

All our directors and officers, as well as our insiders as employees, consultants and providers with access to privileged

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information, and the controlling shareholders (if any were to emerge in the future) are required to comply with the guidelines
and standard established by our material disclosures policy.
Any information on material developments related to us necessarily flows to our investor relations officer, who is responsible for
ensuring proper disclosure in accordance with our policy and article 3 of CVM Instruction 358/02.
The responsibilities of the investor relations officer include ensuring material developments taking place in the course of
business or in any way related to us and our subsidiaries are timely and accurately disclosed, using plain language which is
easily understood by the market. In addition, our investor relations officer is responsible for ensuring material disclosures are
promptly, widely and concomitantly disseminated in any markets in which our shares are listed to trade
Under our disclosure policy, in the event of atypical volatility in the quotations or market price of our shares, or in volumes
traded in our shares, our investor relations officer is responsible for investigating the matter, including by inquiring persons
bound to comply with our policy, in order to determine whether there are indications of insider trading.
Our policy requires that we disclose information on material developments as soon as practicable, preferably prior to the start of
business or after the close of business on the stock exchange, provided that if our shares trade on more than one market in
different time zones, the start and end of business in the Brazilian market prefer.
The guidelines on manner and timing for the investor relations officer to disclose information on material developments are the
following:
i.

Material facts occurring in the course of business or in connection with our business operations are to be disclosed
promptly after occurring;

ii.

Material disclosures are to be made concomitantly to relevant markets in Brazil and elsewhere through any number of
information channels, including press releases and professional association bulletin boards, and to investors, analysts
and selected audiences;

iii.

The investor relations officer is required to assess the suitability of requesting that trading on our shares be halted in
any market they may trade for disclosure and dissemination of a particular material fact, if it is imperative for a
particular disclosure to occur during business hours;

iv.

The investor relations officer is charged with ensuring prompt and widespread dissemination of information on material
developments to all relevant markets and stock exchanges where our shares may trade at the time; and

v.

The investor relations officer is charged with providing on request of the relevant regulatory entities additional
clarification related to any particular disclosure of material development.

Material disclosures are made to the CVM and the relevant stock exchanges as soon as practicable and concomitantly in all
relevant markets pursuant to a written document providing details on the material development being disclosed and, where
possible or available, the amounts involved and other pertinent clarification.
The dissemination of material disclosures is made through press releases published in the wide-circulation newspapers we
customarily use to publish corporate acts and notices to the market.
Pursuant to our disclosure policy, insiders are required to keep the information strictly confidential until such time as it is
properly disclosed to the market.
In addition, any person with access to privileged information (an insider) is required to refrain from acting on such knowledge in
any way, directly or indirectly for his own or a third partys benefit, which includes any type of insider trading. These persons
are also required to ensure persons working under him or her and persons of trust also refrain from acting on any information
to which they have access due to their position, and are held jointly liable for any insider trading or unauthorized disclosure by
the latter.
Under our disclosure policy and pursuant to the main provision of article 6 of CVM Instruction 358/02, our board may decide to
halt prompt disclosure in exceptional instances where disclosing privileged information on a particular material development
could jeopardize our legitimate interests.
Moreover, in any such exceptional event, the CVM, acting on its own initiative, or on request of our board or management or a
shareholder, may analyze the matter further and confirm or disallow the decision to halt the material disclosure on grounds that
it could jeopardize our legitimate interests.
Moreover, any person bound by our policy on material disclosures and securities trading is required to sign an instrument of
adherence to the policy.
21.3.
Directors and/or officers responsible for implementing, enforcing, assessing and monitoring
compliance with the disclosure policy.
Under our disclosure policy, the investor relations officer is responsible for implementing, enforcing, assessing and monitoring
compliance with the policy.
21.4.

Other material information

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Under article 10 of our bylaws, every shareholder or group of shareholders sharing similar interests are required to give notice
to us disclosing any purchases of shares which added to previously held shares result in aggregate ownership interest in excess
of 5% of our issued and outstanding shares of common stock, following which any additional purchase of share lots
representing an interest in 2.5% (or multiples thereof) of our shares must also be disclosed. Any such disclosure must include
information on the identities of buyer(s) and seller(s), the purpose of the acquisition, the number of shares and percentage
interest acquired and other information required under article 12 of CVM Instruction 358/02.
22. Extraordinary transactions
22.1.

Acquisition or disposition of material assets transacted outside the normal course of business.

In July 2010, following completion of a US$612 million bond offering whereby we sold global senior notes abroad, we used the
offering proceeds to purchase an additional 3.2% interest in CME shares, which added to our 1.78% existing interest to total
aggregate 5% ownership interest in the CME Group, which made us the largest CME shareholder and matched our reciprocal
holdings. As long as we maintain our reciprocal holdings arrangement, each of BM&FBOVESPA and the CME Group will
designate a representative to seat on the board of the other, thereby contributing to strengthen our mutual global preferred
strategic partnership.
As result of our acquisition of additional shares in the CME, beginning from July 2010, we now account for this investment
under the equity method of accounting and recognize gains and losses from this investment in associate through profit or loss
(in the statement of income). Our financial statements as of and for the year ended December 31, 2010, did include our equitymethod investment in CME shares and our share of the CME profits have been properly recognized in our statement of income.
22.2.

Significant changes in the way business is conducted.

There have been no significant changes in the way we do business.

22.3.

Material contracts and agreements not directly related to the business activities.

There have been no material contracts or agreement not directly related to our business activities.
22.4.

Other material information

There is no additional material information to be provided at this time under this section.

173