2014 Reference Form - Version 3

BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros The Brazilian Securities, Commodities and Futures Exchange

Reference Form

2014

Version 3 – September 30, 2014.

Free translation of the original filed in Portuguese

2014 Reference Form – BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BVMF3)

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TABLE OF CONTENTS

1. PERSONS RESPONSIBLE FOR THE REFERENCE FORM ........................................ 3

2. INDEPENDENT AUDITORS ................................................................................... 3

3. SELECTED FINANCIAL AND OPERATING INFORMATION .................................... 3

4. RISK FACTORS ..................................................................................................... 7

5. MARKET RISKS ................................................................................................... 25

6. COMPANY HISTORY ........................................................................................... 28

7. BUSINESS ........................................................................................................... 30

8. ECONOMIC GROUP ............................................................................................. 45

9. MATERIAL ASSETS ............................................................................................. 47

10. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .......................................................................................... 55

11. PROJECTIONS .................................................................................................... 72

12. SHAREHOLDERS’ MEETING; MANAGEMENT ...................................................... 73

13. MANAGEMENT COMPENSATION ........................................................................ 89

14. HUMAN RESOURCES ........................................................................................ 109

15. CONTROLLING OWNERSHIP ............................................................................ 111

16. RELATED PARTY TRANSACTIONS .................................................................... 112

17. CAPITAL STOCK................................................................................................ 114

18. SECURITIES INFORMATION ............................................................................ 115

19. BUYBACK PROGRAMS; TREASURY STOCK ....................................................... 118

20. SECURITIES TRADING POLICY ........................................................................ 120

21. DISCLOSURE POLICY ....................................................................................... 122

22. EXTRAORDINARY TRANSACTIONS .................................................................. 123


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1. PERSONS RESPONSIBLE FOR THE REFERENCE FORM

1.1. Statements and identification of the persons responsible for this form.

Officer responsible for the information provided in this Form: Edemir Pinto Title: Chief Executive Officer

Officer responsible for the information provided in this Form: Eduardo Refinetti Guardia Title: Investor Relations Officer

The above identified executive officers hereby represent to:

(a) have reviewed this Reference Form;

(b) find the information contained herein meets the requirements of Brazilian Securities Commission (CVM) Ruling No. 480, in particular those that are set forth under articles 14 through 19 thereof; and

(c) find the totality of the information provided herein is truthful, accurate and complete, and fairly presents the financial condition and results of operations of our Company, including as to risks inherent in our business and our issued and outstanding securities.

2. INDEPENDENT AUDITORS

2.1 and 2.2. Information regarding the independent auditors

Years ended December 31, 2011 and 2012

CVM Code: 287-9 / Audit Firm Name: PricewaterhouseCoopers Auditores Independentes / Taxpayer ID (CNPJ) 61.562.112/0001-20

Beginning of the service contract: January 2, 2010 / End of the service contract: December 31, 2012

Lead auditor: Luiz Antonio Fossa (Taxpayer ID (CPF): 052.348.068-71) Office address: Avenida Francisco Matarazzo 1400, 9 th–10th and 13th–-17th floors, Downtown, São Paulo, SP, Brazil Postal Code (CEP) 05001-100 Phone number +55 11 3674-2000 Fax number +55 11 3674-2030 – Email address: [email protected]

Description of agreed services: auditing of annual financial statements; review of quarterly financial reports; other audit-related services.

Total compensation for independent audit services: total compensation in 2012 – auditing services: R$1,562 thousand

Replacement justification: independent audit firm Ernst&Young Auditores Independentes has been hired to provide audit services starting from January 2013. This is in line with the audit firm rotation requirement prescribed under article 31 of CVM Ruling 308/99.

Reasons of the auditors in case of disagreement with the reasons of the issuer to replace the auditors: Not applicable

Year ending December 31, 2013

CVM Code: 471-5 / Audit Firm Name: Ernst & Young Auditores Independentes S.S. / Taxpayer ID (CNPJ) 61.366.936/0001-25

Beginning of the service contract: February 21, 2013 / End of the service contract: -

Lead auditor: Flávio Serpejante Peppe (Taxpayer ID (CPF): 125.090.248-76) Office address: Avenida Presidente Juscelino Kubitschek 1,830, Tower II, 5 th floor, district of Itaim Bibi, São Paulo, SP, Brazil Postal Code (CEP) 04543-900 Phone number +55 11 2573-3213 Fax number +55 11 2573-4901 – Email address: [email protected]

Description of agreed services: auditing of annual financial statements; review of quarterly financial reports; other audit-related services.

Total compensation for independent audit services: Total in 2013 - Accounting Audit: R$1,403 thousand

Replacement justification: Refer to item 2.3 of this form

Reasons of the auditors in case of disagreement with the reasons of the issuer to replace the auditors: Not applicable

2.3. Other material information On March 4, 2013, we released a Notice to the Market announcing the hiring of the independent audit firm of Ernst&Young Auditores Independentes S.S. as our independent auditors, in lieu of PricewaterhouseCoopers Auditores Independentes. Ernst&Young Auditores Independentes started providing services to us from year 2013. This move aimed to fulfill the provision under article 31 of CVM Ruling 308/99, as amended, which requires a rotation of the independent auditors. While we understand that under the abovementioned provision we would be permitted to adopt a 10-year rotation policy, our Company has elected to implement a 5-year rotation policy, as we believe this is in line with the better recommended practices.

3. SELECTED FINANCIAL AND OPERATING INFORMATION

3.1. Consolidated financial statements

2013 2012 2011

(in R$ thousands) (in R$ thousands) (in R$ thousands)

Shareholders’ equity ………………………………………… 19,298,892 19,413,882 19,257,491

Total assets ……………………………………………………. 25,896,659 24,147,114 23,589,922

Net revenues…………………………………………………… 2,131,795 2,064,750 1,904,684

Gross income…………………………………………………… 1,687,535 1,659,791 1,588,210

mailto:[email protected]


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Net income……………………………………………………… 1,080,947 1,074,256 1,048,529

(in number of shares) (in number of shares)

(in number of shares)

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

1,893,582,856 1,931,572,495 1,927,991,988

(in Brazilian reais) (in Brazilian reais)

(in Brazilian reais)

Shareholders’ equity per share …………………………. 10,191734 10,050817

9,988366

Earnings per share …………………………………….…….

Basic earnings per share……………………………….. 0,563638 0,556512 0,537789

Diluted earnings per share…………………………….. 0,562158 0,555066 0,536588 2010

2009

3.2. Non-GAAP financial measures

Our operating income for 2013 amounted to R$1,334,635 thousand, a 2.5% year-over-year rise from R$1,301,670 thousand in the prior year. Likewise, the operating margin (EBITDA divided by net income) decreased to 62.6% from 63.0% one year ago.

2013 2012 Variation

(in R$ thousands) (in R$ thousands) (%)

Net revenues 2,131,795 2,064,750 3.2%

Expenses -797,160 -763,080 4.5%

Operating income 1,334,635 1,301,670 2.5%

Operating Margin 62.6% 63.0% -0.4 bps

Operating income and margin information is developed by us as a measure of our operating performance. Management believes operating income and margin information gives a deeper understanding of our operating performance and allows for better comparability with other companies which operate in the same industry as ours.

3.3. Subsequent events.

Our consolidated financial statements as of and for the year ended December 31, 2013, were approved at a board of directors’ meeting held on February 13, 2014, and subsequently approved by our shareholders at the annual general meeting of March 27, 2012.

At a meeting held on February 13, 2014, our board of directors declared additional dividends out of net income for the year ended December 31, 2013, in the amount of R$145,703 thousand, which action our shareholders approved at the annual meeting held on March 24, 2014.

BM&FBOVESPA concluded the shares buyback program approved by the board of directors’ meeting held on June 25, 2013, through the buyback of 36,950,000 shares (61.58% of the total estimated) in the amount of R$370,418 thousand between January 1st and 29th, 2014, respecting the blackout period in accordance with CVM Instruction 358, which summed with the acquisitions carried out, totaled the buyback of 100% of the maximum acquisition of shares.

3.4. Dividend and cash distributions policy

Topic Years ended December 31, 2013, 2012 and 2011

Rules on earnings’ retention

From net income for the year, as determined after the deductions set forth in article 55 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 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) (1) that we allocate to the bylaws reserve less than the portion required under the bylaws (item (b) above); and/or (2) 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 article 54 of the bylaws, the shareholders’ meeting may decide to retain that portion of net income for the year which is forecast in a capital expenditure budget approved pursuant to Article 196 of Brazilian Corporate Law.

We were not required to make any net income allocations to the legal reserve based on earnings ascertained for the years ended December 31, 2011, 2012 and 2013, because at each of these dates the amount of our legal reserve plus our capital reserves exceeded 30% of our capital stock amount, thereby dispensing with the otherwise required allocation.


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Topic Years ended December 31, 2013, 2012 and 2011

Amount of profit retentions

No earnings have been retained, nor allocations to the bylaws reserve made out of net income for the year ended December 31, 2012.

Earnings retained based on allocations to our bylaws reserves out of net income for the year ended December 31, 2011, amounted to R$135,726 thousand and for the year ended December 31, 2013, amounted to R$216,303.8 thousand. Allocations to bylaws reserves are typically designed to fund our future investments and the safeguard schemes we established in connection with our role as central counterparty clearing house.

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, consistent with Brazilian Corporate Law, this mandatory distribution may be suspended in any particular year in which our board of directors reports to our annual shareholders’ meeting that the distribution would be inadvisable given our financial condition.

In the years ended December 31, 2011, 2012 and 2013, we distributed 87%, 100% and 80% of our yearly GAAP net income, respectively.

Dividend distribution frequency

Dividends are distributed pursuant to a decision of the annual shareholders’ meeting, which typically takes place between March and 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 may deem fit, which in any event may be computed as part of the mandatory dividends we are required to distribute.

In the three most recent years, we adopted the policy of declaring dividends and/or interest on shareholders’ equity following the end of each quarter, and have on occasion declared payouts at even shorter periods.

Restrictions on dividend distributions, mandated by law or special regulation applicable to the issuer, or otherwise required under agreements, arbitration awards or decisions issued by a court of law or administrative court

Under Brazilian Corporate Law we are permitted to suspend the distribution of the mandatory dividend contemplated in item (i) of paragraph 1 of article 55 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 account of a suspension (paragraph 5 of article 55 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.

3.5. Summary of distributions of net income and retained earnings.

2013 2012 2011

(in R$ thousands, unless otherwise indicated)

Adjusted net income (for distribution purposes) 1,081,516 1,074,290 1,047,999

Dividend distributions 865,213 1,074,290 912,273

Distributions, as a percentage of adjusted net income (%) 80.0% 100.0% 87.0%

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

Rate of return on shareholders’ equity – ROE (%) 5.6% 5.5% 5.4%

Retained earnings

216,303 -

135,726

Date of retention approval ASM - March 24, 2014 - ASM - March 27,

2012

Cash Distributions Type of shares

Distribution payment dates

Gross distribution per share

(in R$)

Total gross distribution

(in R$ thousands)

Interest on shareholders’ equity

common stock

March 10, 2011

0.025461

50,000


common stock

July 05, 2011

0.051128

100,000

Dividends

common stock

July 05, 2011

0.034054

66,605


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Cash Distributions Type of shares Distribution

payment dates

Gross distribution per share

(in R$)

Total gross distribution

(in R$ thousands)

Dividends

common stock

October 03, 2011

0.121740

235,336

Dividends

common stock

January 31, 2012

0.121139

233,605

Dividends

common stock

April 30, 2012

0.117420

226,727

Total for 2011

0.470942

912,273

Dividends

common stock

July 31, 2012

0.116161

224,341

Dividends

common stock

October 31, 2012

0.124359

240,065

Dividends

common stock

December 17, 2012

0.067921

131,181


common stock

December 17, 2012

0.046599

90,000

Dividends

common stock

April 30, 2013

0.201237

388,703

Total for 2012

0.556277

1,074,290

Dividends

common stock

June 07, 2013

0.084638

163,580


common stock

June 07, 2013

0.025870

50,000

Dividends

common stock

September 30, 2013

0.146943

280,670

Dividends

common stock

November 27, 2013

0.118341

225,260

Dividends

common stock

June 27, 2014

0.078475

145,703

Total for 2013

0.454267

865,213

For additional information, see the discussion on dividend and other distributions policy in the above subsection 3.4.

3.6. Dividends declared out of retained earnings or other profit reserves.

In the three most recent years we have not declared dividends out of retained earnings or other profit reserves.

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.

Year ended December 31,

Amount (in R$ thousands)

Type of debt ratio Ratio (%)

Index description and reason for use

2013 6,597,767 Debt to Equity

Ratio 34.2%

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

3.8. Debt obligations by type and time to maturity

Year ended December 31, 2013 (data from our consolidated financial statements)

Type of

Debt(*)

Short-term Long-term

Maturing within 1 year

Maturing

within 1-3 years

Maturing

within 3-5 years

Maturing after 5 years

(in R$ thousands) (in R$ thousands)

Current liabilities

2,710,846 0 0 0

Collateral for transactions Unsecured 2,072,989 0 0 0

Earnings and rights on securities under custody Unsecured 49,925 0 0 0

Suppliers Unsecured 45,474 0 0 0

Salaries and payroll charges Unsecured 74,911 0 0 0

Provision for taxes and contributions payable Unsecured 25,979 0 0 0

Income tax and social contribution Unsecured 1,433 0 0 0

Interest payable on bonds issued abroad Unsecured 42,129 0 0 0

Dividends and interest on shareholders’ equity payable Unsecured 1,428 0 0 0

Other liabilities Unsecured 396,578 0 0 0

Noncurrent liabilities

0 0 0 3,886,921

Bond issuance abroad and loans Unsecured 0 0 0 1,426,193

Deferred income tax and social contribution Unsecured 0 0 0 2,295,774

Provision for contingencies and legal obligations Unsecured 0 0 0 88,592

Post-employment healthcare benefits Unsecured 0 0 0 25,940

Other liabilities Unsecured 0 0 0 50,422

Total Indebtedness (current + noncurrent liabilities) Unsecured 2,710,846 0 0 3,886,921 __________________________________________________________________________

(*) We classify the types of debt (based on type of guarantee or absence thereof) as secured by collateral, by floating assets or unsecured.


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The line items “collateral for transactions” and “earnings and rights on securities under custody” recorded under current liabilities are intrinsic to our business model as an exchange. These collaterals and guarantees are not operated in any particular or actually defined term.

Likewise, movements in the line item “deferred income tax and social contribution,” under noncurrent liabilities, are not subject to any predefined timelines.

Collateral for transactions. Collateral pledged to our clearinghouses as margin for transactions are tied to the transactions they secure up to the amounts thereof, and would not be affected in the event of bankruptcy or judicial reorganization by operation of articles 6 and 7 of Law No. 10,214/01, and articles 193 and 194 of Law No. 11,101/05.

Tax liabilities (provision for taxes and contributions payable; income tax and social contribution) and labor liabilities (salaries and payroll charges). These correspond to debt that takes priority over other debt in the manner prescribed under article 83 of the Bankruptcy and Judicial Recovery Law (Law No. 11,101/05).

Other liabilities recorded under both current and noncurrent liabilities line items in our financial statements as of and for the year ended December 31, 2013, consist of unsecured debt obligations.

3.9. Additional reportable information.

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, the actual cost correlates with a rate of 5.64% per annum. As translated into Brazilian reais and including accrued interest of R$42,129 thousand, the balance of our debt under the global notes as of December 31, 2013, was R$1,468,322 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, 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.

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). 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.

We conduct retrospective and prospective tests to assess the hedge effectiveness. On testing backward-looking effectiveness, we adopt the ratio analysis method, also called dollar offset method, as applied on a cumulative and spot-rate basis1. 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, 2013, there was no realizable ineffectiveness.

Moreover, at that year-end date, the fair value of our debt under the notes, as determined based on market data, was R$1,528,652 thousand (Source: Bloomberg).

Supplemental Information for Subsection 3.7

Such as stated in subsection 3.7, our debt ratios and the additional data provided above indicate our company enjoys fairly conservative financial leverage ratios. For additional information on the particular characteristics of our indebtedness, see subsection 10.1(f) below.

4. RISK FACTORS

4.1. Discussion of risk factors

a. Risks relating to the Company

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

1 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.


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The success of our business depends in part on our ability to sustain and increase the volume of transactions carried out and/or registered in our trade and post-trade systems. For this purpose, we offer a wide range of products and trading environments and communications channels to market participants and our end-customers. Our revenues could be adversely affected if we were unable to retain customers (brokerage firms and other market participants) that account for a significant portion of the volume of transactions from which we derive revenues from trading and clearing fees, or if weaknesses were to materialize affecting the sustainability of the business models of these brokerage firms and market participants. Additionally, global economic crises, financial crises or capital-markets crises, as well as sudden adverse changes in macroeconomic conditions could impact our business more harshly than those of other financial institutions and financial services firms because these factors typically have a direct adverse effect on the volume of trading across capital markets, in particular on-exchange markets, and this could override our efforts to expand our core business, leading to lower than expected growth rates. We discuss below some of the adverse ramifications for our primary business segments if any of these risks were to materialize, leading to a decline in the level of activity on markets we operate.

Equities and equity-based derivatives segment (Bovespa segment).

We derive a significant portion of our overall revenues from fees we charge on transactions carried out on markets comprising our Bovespa segment. For this reason, we are highly dependent on the level of market activity, which is a function of the level of stock prices and the prices of equity-based derivatives as well as turnover velocity. In addition, the segment dynamics depend, among other factors, on the number of listed issuers being sustained and increasing.

In 2013, the top ten stocks more actively traded on the stock market accounted for approximately 40% of the trading volume, while trading activity by foreign investors accounted for over 40% of the total value traded. Thus, our revenues and future

results could be materially and adversely affected if one of more issuers of top-traded stocks were to delist from our exchange, or if the number of stocks in the market were to decline significantly or if the volumes traded by foreign investors were to dwindle.

We have no direct control over any of these factors, which depend, among other things, on the relative attractiveness of the securities and equity-based derivatives traded on markets we operate, and, in short, the attractiveness of variable income investments vis-à-vis other investments. These factors, in turn, are influenced primarily by the macroeconomic conditions in Brazil and across the world, in terms of (i) growth levels, liquidity and political stability; (ii) the regulatory environment for investments in securities and equity-based derivatives; and (iii) the levels of market activity, volatility and general stock market performance across global markets.

Financial and commodity derivatives segment (BM&F segment).

Volatility in derivatives prices, credit crunches, reductions in consumer spending and in government spending, global economic slowdowns, exchange rate instability, inflationary pressures, and similar other factors beyond our control have had in the past, and may again have materially adverse direct and indirect effects on the Brazilian economy and, as a result, also on the level of activity on derivatives markets, mainly because these risk factors negatively influence the drive and willingness of financial institutions and investors in general to trade in derivatives to hedge a position, increase leverage or speculate on an asset's price movement.

Substantial decreases in the volume of trading in derivative contracts (particularly interest-rate and FX futures contracts, which account for a significant portion of the overall volume and our revenues for the segment) could materially and adversely affect our revenues and profitability, which would significantly and negatively impact our business, financial condition and results of operations.

In performing our role as central counterparty clearing house we are exposed to substantial risks.

Each of our clearinghouses acts as central counterparty to ensure multilateral clearing and settlement of trades in financial and commodity derivatives, including credit default swaps and forex derivatives (covering the local cash, forwards, options and futures markets), and in spot U.S. dollar contracts (dólar pronto) traded on the local interbank market; and for trades in equities, equity-based derivatives and corporate debt securities (covering the local cash, forwards, options and futures markets and the securities lending market), as well as trades in Brazilian government bonds and debt securities (covering the cash, forwards and repo markets, and securities lending market). As a result, we are directly and indirectly exposed to credit risk from related to clearing members and clearing agents, to brokerage firms and their customers, and other institutions licensed as participants of our clearinghouses.

Default by any of these market participants may expose us to market risks associated with positions held by their customers, because in performing their role as central counterparty clearing house each of our clearinghouses must ensure all trades are cleared and settled.

The amount of our potential exposure to such risks depends on the value of open positions of defaulting market participants, if any, as well as the type of collateral they post as part of the safeguards structure and risk management tools adopted by our clearinghouses.

If a market participant (whether a clearing member or agent, or brokerage firm or their customers) were to face credit or liquidity-related difficulties, or even fail to settle trades or deliver assets or commodities required to be delivered, we would resort to collaterals pledged as margin and the existing safeguards structure implemented as part of our central counterparty risk management policies. However, in the extreme, should these protections and safeguards fail as well, we would have to resort to certain cash availabilities and highly liquid financial investments or make use of certain segregated assets we hold, which ultimately would adversely affect our cash flow and net asset position.


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We may be unable to adequately respond to market demands.

Our ability to create and develop new products and services and to improve or adapt existing ones will be critical for the

consolidation and expansion of our presence in the exchange industry. In addition, bringing continuing innovation to our portfolio of product and service offerings will require investing substantial financial and operating resources in information technology, research and development and human capital. We may be unable to adequately respond to market demands, in particular by deftly and timely rolling out new products and services whose features meet the multiple needs and requirements of the investing public, market participants, the industry regulators, the Brazilian government and so forth.

In addition, the financial return on our investments may fall below expectations if our new offerings of products and services are not as successful as anticipated or fail to earn regulatory approval.

We rely heavily on information technology and our systems for the operation of our business.

Our business relies heavily on a smooth operation of our computer systems and supporting communications systems. System integrity, availability, throughput capacity and scalability, as well as state-of-the-art technology resources are key factors for the performance of our operations and smooth functioning of the markets we operate, critical to give us the ability to attract market participants and investors across the spectrum, all of which requires constantly investing in upgrading and enhancing our information and communications technology systems.

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 the introduction of algorithmic and ultra high-speed trading translated into heightened demand for large capacity, high-performing systems capable of processing the high-frequency order flow. If we are unable to continue to evolve and keep up with the rapid pace of technical evolution, our

operating performance and, therefore, our business and financial condition could be adversely affected.

In addition, electronic 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, power outages and other events beyond our control, including events of force majeure. Our business, financial condition and results of operations could be materially and adversely affected if our information security and business continuity measures were to be partially or entirely compromised, or in the event of a system breach or financial-data theft, or of interruption or malfunction of our systems and communication networks. If any such incident were to materialize, we could incur substantial expenses in order to remediate problems caused by security violations or system failures, and would also be subject to disciplinary action or inquiries by the regulators. We intend to continue to use industry-standard information security policies and measures which strengthen the integrity and reliability of our systems. However, if these measures failed to prevent failures or delays in our computer systems or communication networks, we could face significant drops in processed trading volume, which would materially and adversely affect our business, results of operations and the market price of our shares.

Moreover, our backup systems, redundancy processes, crisis management and disaster recovery and prevention capabilities may be insufficient to avoid such technology failures or problems or to ensure business continuity. If our preventive measures and deterrents were to fail, a degradation of our systems or communication networks could result in customer or market participant complaints to the regulators or in lawsuits against us, or lead to regulatory probes into compliance failures by us.

The complexity and importance of our technology processes correlate with exposures to risk of failures in executing our business operations and, to the extent these processes depend on outsourced providers, risk of performance failures by these providers, including as relating to undue concentration of knowledge, resources, personnel or infrastructure, any of which could lead to failures or inactivity affecting our systems and communication networks, or to system breaches or financial-data thefts, which could materially and adversely affect our business operations.

We may be unable to successfully identify and pursue business opportunities, accomplish our strategy or sustain our competitive advantages.

We intend to continue to explore and pursue acquisitions and other strategic opportunities to strengthen our business and grow our company, including opportunities to help us penetrate new markets, offer new products and services, and further develop or enhance our trading systems and technologies. While in doing so we may pursue opportunities for acquisitions, strategic investments, or strategic partnerships, joint ventures and other alliances, we can give no assurances that our efforts will be successful. Additionally, we may be unable to successfully identify growth opportunities or fully realize the potential benefits from existing or future strategic initiatives or alliances so as to grow our business. And we may have to incur significant expenses to address additional operating requirements related to our growth strategy, which could adversely impact our financial condition and results of operations. Furthermore, some of our partnership agreements could restrict our ability to seek strategic alliances with other important market players, which could prevent us from taking advantage of potentially identified business opportunities.

Moreover, we may be unsuccessful in appropriately responding to our strategic goals and projects due to internal failures related to our decision-making processes, or to operational difficulties executing our plans or outsourcing adequate resources and providers.

Damages to our credibility, reputation and image could adversely affect us.

Our reputation may be compromised in different ways, including as a result of failures in our self-regulatory functions, in our technology resources or in completing transactions in our trading and post-trade systems. Our reputation may also be harmed by events beyond our control, such as capital market scandals and scandals involving other exchanges, which may adversely affect the investing public’s perception of the capital markets as a whole. In addition, fraudulent or other inappropriate behavior by market participants would result in disciplinary actions and regulatory sanctions, and could ultimately harm our reputation, image and credibility.


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We can give no assurances that we would be successful in preventing unauthorized third parties from using or copying or otherwise violating our image and reputation rights, branding rights or intellectual property rights in technologies, services and products developed by us (such as stock indices or standard contracts). Furthermore, our competitors and other companies or individuals may have secured, or may secure in the future, intellectual property rights relating to technologies, products or services similar to those we offer or plan to offer. We can give no assurances that we are aware at any given time of every last intellectual property right secured by other parties, or that we would successfully pursue violations of our intellectual property rights through legal proceedings in order to enforce them, or successfully defend ourselves against third-party allegations of rights violations.

Damages to our reputation, image and credibility could prompt issuers to delist securities from our exchange or organized OTC market or drive prospective issuers to choose other listing venues, and could also discourage actual and prospective investors from trading on the platforms we provide, which would cut trading volumes down, materially and adversely affecting our revenues, our business, financial condition and results of operations. Additionally, a listed issuer’s inability to handle financial problems and stop a deteriorating financial performance could negatively impact our image.

We rely on key management members to successfully conduct our business and run our business operations.

We believe our future success depends to a large extent on the capabilities and efforts as well as continued employment of our executive officers and key management personnel. If one or more of our highly experienced senior managers or high-level executives with deeply technical background were unable or unwilling to continue as part of our management team, and we were unsuccessful in retaining equally qualified professionals, the loss of their services could have a negative impact on our business. In addition, we may be unable to attract and retain qualified talent for positions we consider strategic for our future

growth and success.

We are exposed to multiple financial risks which, if materialized, could adversely affect the market price of our shares.

Our policy on investing cash balances calls for preservation of capital, recommending that we focus on highly -conservative, highly-liquid and lower-risk investment alternatives. This translates into substantial portions of our cash availabilities being allocated to investments in Brazil government bonds, which for the most part pay floating rates that track Brazil’s benchmark rate (Selic rate). In addition, while we do adhere to this policy and hold conservative financial investments, we may allow for some mismatch from our cash flows in order to fund our business operations and capital expenditure plans.

Effective from July 16, 2010, we used the net proceeds from our US$612 million offering of global senior notes due July 2020 to increase to 5.1% our ownership interest in shares of the CME Group, Inc. 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 CME Group shares which is attributable to the notional amount of US$612 million. Given that we are required to assess the book value of the investment for impairment by comparing carrying value and recoverable value, we may have to recognize an impairment loss at any time events or changes in circumstances suggest the carrying value may not be fully recoverable, which thus expose us to risk of ensuing loss of the value of our intangible asset.

Furthermore, one or more credit rating agencies were to cut our ratings or issue a ‘negative’ credit outlook when assessing our capacity to service our debt.

b. Risks relating to the exchange industry

We face significant competition in our business as exchange and OTC market operator.

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 include a number of capital markets operators, predominantly foreign-based exchange operators and operators of alternative trading venues, some of whom may be planning to operate in Brazil at some point in the future. We compete in various aspects within different regulatory frameworks, including with regard to fee rates, quality and speed of trading, liquidity, functionality, ease of use as well as performance of trading systems, range of products and services offerings, and technological innovation.

If we are not successful in promptly adapting to structural changes in our markets, to technological and financial innovation and other competitive factors, we could be unable to maintain or increase trading volumes, and the volume of our clearing and settlement services, which could materially and adversely affect our business, revenues, financial condition and results of operations. In the extreme, we could lose member market participants, investors and listed or potential issuers to the local competition and, where issuers choose to list securities elsewhere, also to foreign-based exchanges or other trading venues.

Noncompliance with applicable legal and regulatory requirements could adversely affect our business.

We operate in a highly regulated and closely monitored industry, which is subject to an extensive, dynamic and complex regulatory framework, and may be subject to increasing regulatory scrutiny. This regulatory framework is designed to preserve the integrity of the capital markets and other financial markets and to protect the interests of the investing public. Our business operations depend on prior authorization from governmental regulatory agencies and on our ability to maintain our operating licenses. Moreover, our ability to comply with applicable laws and regulations is highly dependent on our ability to maintain adequate systems and procedures. Noncompliance with applicable legal and regulatory requirements could materially and adversely affect our business.

Legal and regulatory changes in Brazil and changes in standards implemented at an international level could adversely affect our business and have a negative impact on current and future users of our products and services. For instance, the regulators may implement changes which reduce the attractiveness of a listing on our markets or the use of our services, or encourage issuers whose shares trade on our trading platforms to migrate to alternative market centers offering more flexible trading or


11

corporate governance requirements. The loss of a substantial number of customer issuers or a reduction in the volume of trading on our exchanges and OTC markets could have an adverse effect on our business.

We could face conflict of interest issues related to our multidimensional responsibilities as a self-regulatory organization and a public company listed on our own stock exchange and with widespread ownership structure; and related also to the performance of the members of our board of directors and advisory committees.

The listing of our common shares on our own stock exchange (Bovespa segment) could engender conflict of interest issues related to our operations as a self-regulatory organization (SRO) and our interests as a for-profit company. As a securities market operator, we are responsible for establishing listing, disclosure and reporting standards to be followed by issuers both upon a listing and thereafter.

In addition, many of the members of our board of directors and advisory committees are related parties of financial services and other firms which maintain commercial relations with us. Market perception that these firms influence or otherwise interfere in our decision-making processes regarding products and services offered by us, or that such circumstance engenders information asymmetry problems, could negatively influence investor interest in our shares, which would adversely affect their market price and our business.

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 endeavor to improve our infrastructure, processes and services, including by adopting plans and measures aimed at (i) providing efficient, reliable and cost effective trading, clearing, settlement and other systems to the markets we operate; (ii) strengthening and expanding our market data services for more efficient investment decision-making through highly reliable, more nimble, accurate and cost effective retrieval and transmission of market data to vendors, market participants, investment research analysts, advisory services and investors; (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 investor education programs, which include retail investors, local and foreign institutional investors; and (vi) enhancing ou r internal controls and compliance structures as well as our enterprise risk structure, in addition to strengthen ing and improving our market surveillance structure. These latter structures are responsible for monitoring the risk factors discussed under subsection 4.1 above and any other risk event with potential to negatively impact our business, financial condition and results of operations. Periodic risk monitoring and assessment reports are submitted for evaluation by some of our board advisory committees (Audit Committee and Risk Committee), which make recommendations to our board of directors.

Additionally, given that we act as central counterparty clearing house to ensure trades carried out on our markets are cleared and settled, we adopt risk management and safeguard structures at each of our clearing facilities with the aim of controlling and mitigating the risks inherent in these activities. For further information on risk management and safeguard structures, see the discussion under section 5 of this Form.

Moreover, we have been investing in developing and implementing a new integrated multi -asset, multi-market clearing

and risk management system, which should give us the ability to offer market participants technologically innovative, high-performing and efficient post-trading and risk management systems and services; strengthen our competitive position and better prepare us to face the risk of new competitors potentially entering the local exchange industry.

4.3 Arbitration proceedings; legal and administrative proceedings not protected by absolute privilege.

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 that differ from those contemplated under CVM Resolution 594/09, the tables below include 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) Tax Cases

I.1 – BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA)

I.1.1)

Case No. 2007.61.00.030994-8

Court of origin 4th Lower federal court of the judiciary subsection of São Paulo (SP)

Degree of jurisdiction Appellate degree

Filing date November 12, 2007

Litigating parties Plaintiff: Bolsa de Mercadorias & Futuros– BM&F S.A. (merged with BM&FBOVESPA on May 8, 2008)

Defendant: Brazilian Government

Amounts, assets, rights at risk R$27,015 thousand, as updated through to December 2013.

Purpose and principal related facts

This is a declaratory action seeking a court decree recognizing the absence of taxation relationship permitting the government to charge the Additional Social Security Contribution 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


12

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 aggregate of payments made to independent service providers.

- 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 Remote

Impact in case of a defeat Because the amounts being litigated have been 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$27,015 thousand (the value at risk has been provisioned despite the assessment of remote prospects for a defeat because central issue being litigated is a legal obligation of the Company.

I.1.2)

Administrative Case No. 16327.001536/2010-80

Court of origin 8th Panel of the São Paulo Regional Tax Adjudication Division – Brazilian Federal Revenue Service

Degree of jurisdiction Lower administrative court


Litigating parties Claimant: Brazilian Federal Revenue Service Respondent: BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros

Amounts, assets, rights at risk R$898,934 thousand.


The tax authority drew up a tax delinquency notice seeking to collect corporate income tax (IRPJ) and social contribution on net income (CSLL), on allegation that in 2008 and 2009 BM&FBOVESPA supposedly failed to pay levies for such taxes on the amortization of goodwill from the merger of the shares of Bovespa Holding S.A., approved at the shareholders’ meeting held on May 08, 2008. We received notice of tax assessment on November 29, 2010, and on December 28, 2010, filed opposition challenging the assessment.

- On October 21, 2011, the lower court decision (Regional Tax Adjudication Division) was partially favorable to the Company in that it cutback the tax assessment amount arguing the tax authority calculated the tax basis relative to 2008 using erroneous criteria. We appealed this decision in November 2011, and in December 2013 the Appellate Tax Adjudication Board rejected our appeal whereas upholding the tax assessment in a 3-3 ruling where the president of the bench, representing the Tax Authority, cast the deciding vote against us. Pending publication of the decision, we will be planning our appeal strategy and the appropriate course of action going forward.


Impact in case of a defeat A final judgment of liability would entail obligation to pay the principal deemed delinquent, as accruing interest and the penalty fine.

Provisioned amount No amount has been provisioned.

I.1.3)

Administrative Case No. 16327.720648/2012-03



Filing date October 30, 2012


Amounts, assets, rights at risk R$9.2 mil fine (“Multa Isolada do IRRF”), updated for August 2014.


The tax authority seeks to collect withholding income tax (IRRF) supposedly due in connection with the 2008 merger with Bovespa Holding S.A. (a share merger). The Federal Revenue alleges our company should have retained and remitted withholding income tax due on capital gain the Bovespa Holding shareholders supposedly earned from the merger. We received notice of tax assessment on October 30, 2012, and on November 29, 2012, filed opposition challenging the assessment. The opposition was defeated in January 2014. On august 2014, BM&FBOVESPA decided to take the full upfront payment option available in the REFIS to partially settle the debt of income tax and social contribution regarding this assessment, continuing, nevertheless, to administratively challenge an amount of R$9.2 million of fines (“Multa Isolada”). The discounts in the penalties and interest related to the Tax Assessment will result in the reduction of the amount due from R$123.0 million to R$69.2 million. BM&FBOVESPA awaits the decision to be issued by Administrative Board of Tax Appeals (Conselho Administrativo de Recursos Fiscais – CARF) regarding the fines imposed by the IRS (“Multa Isolada”).

Prospects for a defeat Remote for the R$9,2 mil fine (“Multa Isolada”).

Impact in case of a defeat A final judgment of liability would entail obligation to pay the principal deemed delinquent.


13


I.1.4)

Administrative Case No. 16327.721.146/2012-91



Filing date October 30, 2012.


Amounts, assets, rights at risk R$118,015 thousand (IRPJ and CSLL) plus R$8,739 thousand (noncompliance fine, IRRF).


The tax authority seeks to collect corporate income tax (IRPJ) and social contribution on net income (CSLL), after disallowing certain tax deductions (expenses with fees and commissions charged by participants in the 2007 secondary initial public offering of shares of Bovespa Holding) we took into account in determining the tax basis for each of these taxes. In addition, the Federal Revenue alleges we have failed to retain and remit withholding income tax (IRRF) due on part of the fees and commissions charged by the offering participants. We received notice of tax assessment on October 30, 2012, and on November 29, 2012, filed opposition challenging the assessments. The opposition was defeated in a January 2014 ruling of the São Paulo Regional Tax Adjudication Division.

- The case is now pending judgment of our mandatory appeal by the Appellate Tax Adjudication Board.

Prospects for a defeat Possible, for the assessment of IRPJ and CSLL (R$118,015 thousand); remote for the R$8,739 thousand fine for noncompliance with ancillary tax obligation (IRRF).



I.1.5)

Administrative Cases Nos. 16327.721.267/2012-33 and 16327.721.268/2012-88



Filing date November 7, 2012.


Amounts, assets, rights at risk R$86,844 thousand (social security contributions), plus R$46,252 thousand (noncompliance fine, IRRF).


The tax authority seeks to collect corporate social security contributions supposedly due on stock options originally granted under the BM&F Stock Options Plan of the old independent exchange (exercisable in 2007 and 2008). Our Company supposedly absorbed this tax liability on merging with BM&F in 2007. In addition, the Federal Revenue alleges we have failed to retain and remit withholding income tax (IRRF) levied on the value attributable to these stock options. We received notice of tax assessment on November 7, 2012, and on December 7, 2012, filed opposition challenging the tax assessment. The opposition was defeated in an August 2013 ruling of the São Paulo Regional Tax Adjudication Division.

- The case is now pending judgment of our mandatory appeal by the Appellate Tax Adjudication Board.

Prospects for a defeat Possible, for the assessment of as to social security contributions (R$86,844 thousand); remote for the R$46,252 thousand fine for noncompliance with ancillary tax obligation (IRRF).



I.1.6)

Administrative Case No. 16327.721.519/2012-24



Filing date December 19, 2012.


Amounts, assets, rights at risk R$119,672 thousand.


The tax authority seeks to collect differences in corporate income tax (IRPJ) and social contribution on net income (CSLL) for 2008, which allegedly were due as a result of the non-deductibility of interest on shareholders’ equity we declared and credited to shareholders in 2008. We received notice of tax assessment on December 19, 2012, and on January 18, 2013, filed opposition challenging the tax assessment.

- The case is now pending judgment by the São Paulo Regional Tax Adjudication Division.


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Prospects for a defeat Possible.



(II) Civil law cases

II.1 – BM&FBOVESPA and BVRJ

II.1.1)

Case No. 2007.001167284-8

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



Litigating parties

Plaintiffs: Naji Robert Nahas, Selecta Participações e Serviços S/C Ltda. and Cobrasol Companhia Brasileira de Óleos e Derivados

Defendants: BVRJ and Bovespa Association

Amounts, assets, rights at risk R$10,000,000 thousand (claim for moral and actual damages)


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 1980’s. 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 Superior Court of Justice recently issued a certiorari order, accepting the special appeal for review. A decision by the Superior Court of Justice is now pending.


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.


II.1.2)

Case No. 96.0037050-8

Court of origin 22nd lower federal court of the judiciary subsection of São Paulo (SP)



Litigating parties

Plaintiffs: Rubens Taufic Schahin et Al.

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

Amounts, assets, 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 thousand (as of November 1996), which however is not reflective of the financial value intrinsic in the plaintiffs’ claim.


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 o f 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 Participações, 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.


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.


II.2 – BM&FBOVESPA

II.2.1)


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Case No. 0172946-23.2010.8.26.0100 (lower court case No. 583.00.2010.172946-2)

Court of origin 11th lower civil court of the judicial district of São Paulo (SP)

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, rights at risk

Membership certificates held by plaintiff in BM&F (then a mutualized non-profit exchange, which later went public and merged with BM&FBOVESPA). The value of a membership certificate as of December 2013 has been estimated at R$47,067 thousand plus R$32,589 thousand in payouts by BM&F through to the merger in November 2007 (historical nominal amount) plus payouts paid through to the date when shares of BM&FBOVESPA are delivered to plaintiff, as claimed.


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 default on membership fees due and payable) of Spread’s membership certificates previously held in BM&F, the old futures exchange. The trustee’s 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 (a) compensation for losses allegedly incurred with the cancellation of membership certificates, which according to the trustee’s estimate should be arbitrated at the equivalent of the proceeds from a hypothetical sale of 1,629,461 shares of BM&F S.A. in its 2007 IPO at the offering price per share of R$20.00, as adjusted for inflation and accruing interest in arrears to the payment date; (b) in addition to indemnity for unearned dividends and interest on shareholders’ equity declared by BM&FBOVESPA since the 2007 merger of BM&F, which the trustee alleges to be attributable to the shares of BM&FBOVESPA the estate would hold were it not for the cancelled membership certificates. The trustee also claims payment for fees of counsel arbitrated at 10% of the value on the action. We received service of process on January 18, 2011, and filed the answer shortly thereafter. On August 5, 2011, the lower court decision found for the plaintiff to recognize the bankrupt estate’s 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 plaintiff’s claim for redress of losses from the cancellation of membership certificates in BM&F (arbitrated at R$32,589,220.00, i.e., the proceeds from a hypothetical sale of 1,629,461 shares BM&F S.A. in its 2007 IPO, as adjusted for inflation and accruing interest in arrears of 1% per month to the payment date), and the claim for indemnity for unearned dividends and interest on shareholders’ equity declared by BM&FBOVESPA (arbitrated at R$2,311,592.14, to be paid as adjusted for inflation and accruing 1% interest in arrears), and any other payouts paid or payable to the aggregate number of shares thus attributed to Spread’s 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, which the São Paulo Court of Appeals received with both suspensive and remanding effects. Judgment by the Court of Appeals is still 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 BM&F membership certificates), in addition to compensation for losses supposedly arising from the impossibility to sell BM&F shares in its 2007 IPO (as of November 2007 estimated at R$32,589,220.00), plus indemnity for unearned dividends and interest on shareholders’ equity BM&FBOVESPA declared over time since absorbing BM&F (as of November 2007 estimated at R$2,311,592.14), as adjusted for inflation and accruing interest in arrears of 1% per month.


II.2.2)





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


This action seeks the annulment of a decision of the board of directors of BM&F (then a mutualized exchange), which excluded the plaintiff from membership and cancelled his membership certificates due to default on fees owed the exchange. He also seeks a valuation of his interest in common membership certificates according to the rules provided in the bylaws of the old exchange (including adjustment 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 plaintiff’s appea l, it also recognized the plaintiff’s right to claim credits (if any) against BM&F. Both parties filed motions to clarify. The motion filed by co-defendants BM&FBOVESPA and BM&F Association was partially granted, whereas the plaintiff’s was rejected. The plaintiff then filed both special and extraordinary


16

appeals. A second motion to clarify filed by BM&FBOVESPA and BM&F Association was rejected. However, due to clerical error and other reasons, we filed another motion, which the lower court judge accepted to correct the clerical error. In order to have the motion reviewed by the higher court, we then filed regulatory appeal, whose judgment upheld the appealed decision, declared the

co-defendants and counsel ‘malicious litigants’ for malicious use of process, subject to related penalties. We filed special and extraordinary appeals, which the appealed court accepted, remitting the case record to the higher court for judgment. Our special appeal was accepted with staying effects relative to enforcement of the appealed decision. The plaintiff’s appeals were not accepted. A higher court decision on the appeals is now pending.


Impact in case of a defeat Payment of plaintiff's credits resulting from his exclusion from membership in BM&F (then a mutual entity), which as of December 2013 we estimated at R$2,025 thousand.


II.2.3)





Litigating parties

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

Defendant: BM&FBOVESPA (as successor to BM&F)*, BM&F Association and BM&FBOVESPA’s CEO, Mr. Edemir Pinto. (*) BM&F was originally a mutualized non-profit exchange, which later went public and merged with BM&FBOVESPA.


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


The plaintiffs in this action seek to annul certain board decisions and transactions (including, in particular, a sale of membership certificates carried out within the scope of a buyback program and a spin-off of the assets and liabilities of BM&F and related plan of exchange of certificates for shares) 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 would have been allotted were it not for supposedly having given defective consent to certain demutualization transactions. Process was served on all defendants; the answers and the plaintiffs’ rebuttal filed. A lower court decision on plaintiffs’ motion for summary judgment is now pending.


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.


II.2.4)




Filing date February 25, 2011

Litigating parties

Plaintiff: Solidez Corretora de Títulos e Valores Mobiliários Ltda.

Defendant: BM&FBOVESPA (as successor to BM&F)*, BM&F Association and BM&FBOVESPA’s CEO, Mr. Edemir Pinto. (*) BM&F was originally a mutualized non-profit exchange, which later went public and merged with BM&FBOVESPA.


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


The plaintiff in this action seeks to annul certain board decisions and transactions (including in particular, a sale of membership certificates carried out within the scope of a buyback program and a spin-off of the assets and liabilities of BM&F and related plan of exchange of certificates for shares) implemented in the course of the demutualization process, on grounds of alleged defective consent. The plaintiff intends to regain ownership rights in membership certificates in order to have them replaced 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 offering price per share in the 2007 IPO, and 65% valued at the current market price for BM&FBOVESPA stocks, allowing for certain adjustments). The answer and plaintiff’s rebuttal


17

were filed; the lower court decided the case finding the claim invalid. The plaintiff filed motion to clarify, which was rejected. Plaintiff appealed. The higher court vacated the appealed decision and remanded the case record back to the lower court for a new decision. However, the plaintiff filed motion for recusation due to bias, which has yet to be decided.


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.


II.2.5)

Administrative Misconduct Suits 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 22nd lower civil court of the Federal District judiciary section


Filing date These cases started between April 20 and June 25, 1999

Litigating parties

Plaintiffs: The Federal Public Prosecution Office, Plaintiff in the administrative misconduct suits; 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), Antônio Carlos Mendes e Barbosa and Paulo Roberto Garbato (former officers of BM&F) et Al.


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


These are actions that seek to quash certain transactions in USD-denominated futures contracts agreed between the Central Bank and the two co-defendant 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, which later went public and merged with BM&FBOVESPA) and its officers at the time appear as co-defendants allegedly for 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 an expert examination to be carried out. In addition, given the identity of purposes found in these actions, the expert opinion has been accepted as valid for all of the cases.

On March 15, 2012, the actions were adjudged, and the claims held valid. Most defendants were held jointly and secondarily liable for redressing the Brazilian Treasury, including BM&FBOVESPA (as a successor to BM&F). The value at issue may rise to R$7,005 million. According to one of the decisions, part of this amount (up to R$5,431 million) may be offset against ga ins the Central Bank made by avoiding to use its U.S. dollar reserves. These amounts are 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, some of the defendants were also charged with administrative 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, as well as payment of 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.

After these decisions were publicized, we filed motion for clarification of judgment, which the court rejected. We next filed appeals which are currently pending a decision by the Regional Federal Court (an appellate court).



Compensation for losses incurred by the Treasury, which pursuant to the lower court decisions would rise to R$7,005 million. According to one of the decisions issued thus far, a proportionate part of the award for refund may be offset against gains (up to R$5,431 million) the Central Bank made by avoiding to use 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 has been imposed (which as of January 1999 amounted to R$1,418 million, and will require adjusting for inflation and accrue 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.


II.2.6)


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Case No. 0612656-34.2000.8.26.0100 (lower court case No. 000.00.612656-1)

Court of origin 3rd lower civil court of the judicial district of São Paulo (SP)


Filing date September 18, 2000

Litigating parties Plaintiff: Capitânea Distribuidora de Títulos e Valores Mobiliários Ltda.

Defendant: BM&FBOVESPA


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, which was the case of the plaintiff.


This is an annulment action brought against BM&F (then a mutualized entity, which later went public and merged with BM&FBOVESPA) seeking to quash a board decision dated December 22, 1999, which authorized the company to charge ‘trading fees’ (emolumentos de pregão) from holders of rights to operate as Commodity Brokers and Clearing Members, including holders that are undergoing extrajudicial liquidation, court-administered reorganization or bankruptcy proceedings (which are not permitted to operate). After the answer, reply and rebuttal, the lower court decision 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, and followed by plaintiff’s special and extraordinary appeals, which were also rejected. Plaintiff then filed interlocutory appeal seeking to reverse the rejection. The interlocutory appeal filed in the record of the special appeal was rejected, whereas the interlocutory appeal filed in the record of the extraordinary appeal is still pending a decision.


Impact in case of a defeat In the event of defeat, beyond the annulment of the fees charged and collected, the decision would establish a negative precedent which would adversely affect the collection of fees from market participants that file for extrajudicial liquidation, court-administered reorganization or bankruptcy.


II.3 – BVRJ

II.3.1)

Case No. 0126206-81.2005.8.19.0001 (lower court case No. 2005.0011280485)

Court of origin 7th lower business court of the judicial district of Rio de Janeiro – State of Rio de Janeiro (RJ)



Litigating parties Plaintiff: Estate of Marco Antônio da Silva Abreu.

Defendant: BVRJ (formerly, the Rio de Janeiro Stock Exchange)


Compensation for moral damages, plus redress for shares (plus cash distributions) plaintiff supposedly sold through brokerage firm named Tamoyo at a time when the shares were allegedly deposited for safekeeping at CLC (the central securities depository associated with BRVJ) but could not be found in the relevant custody account.


The plaintiff in this action seeks redress from BVRJ in connection with an alleged sale of shares intermediated by brokerage firm Tamoyo at a time when the shares were supposedly deposited for safekeeping at CLC (central securities depository associated with BVRJ) but could not be found in the relevant custody account. Furthermore, plaintiff seeks compensation for moral damages ensuing from the loss of shares. The plaintiff claims negligence on the part of BVRJ/CLC allegedly for having failed to provide the auditors with adequate documentation of the relevant operations, so that the auditors’ reported findings supposedly contradicted reality.

BVRJ answered; the plaintiff replied; the expert investigation followed. The lower court decision found the claim partially valid, having ordered BVRJ to deliver to plaintiff 1,463,658 common shares of Banco.do.Brasil plus 13,651 preferred shares of Petrobras, in addition to a R$12.9 million indemnity related to dividends paid to the Banco do Brasil shares plus a R$139 thousand indemnity related to dividends paid to the Petrobras shares. The indemnities are to be paid as adjusted for inflation from December 15, 2010, and accruing interest on arrears at a rate of 1% per month from date lawsuit filing date. The decision further orders BVRJ to pay loss of suit expenses (procedural costs plus fees of plaintiff’s counsel arbitrated at 10% of the total value of the decision). BVRJ appealed. The higher court partially granted the appeal, having vacated the appealed decision and remanded the case record back to the lower court for the expert investigation to be completed and the evidence reassessed thereafter. The complementary expert investigation is now set to take place.


Impact in case of a defeat A defeat would require disbursements in the equivalent of the market price of 1,463,658 common shares of Banco.do.Brasil plus 13,651 preferred shares of Petrobras, plus disbursement of indemnity for cash distributions, as accruing interest in arrears at the legal rate plus adjustment for inflation.


(III) Labor law cases

III.1 – BM&FBOVESPA

Civil Inquiry No. 04300.2012.02.000/2


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Investigating authority 2nd Regional Attorney’s Office Labor-Related Matters (São Paulo State)

Legal authority level First level of legal authority

Filing date September 20, 2012

Parties to the inquiry Probing authority: Labor Prosecution Office.

Subject of inquiry: BM&FBOVESPA

Amounts, assets, rights at risk Not applicable.


The Labor Prosecution Office opened this civil inquiry following an inspection of the Ministry of Labor and Employment which raised concerns over irregularities related to the minimum rest/meal periods employees and interns must be allowed. The applicable legal thresholds for employees are eleven-hour rest periods between working days and one-hour meal periods during a working day; with more stringent periods set with regard to interns. Prompted to clarify why the alleged irregularities were allowed to happen, we stressed these were a few extraordinary events related to very particular circumstances where some professionals and interns spent an exceptional number of hours a t work. We also stressed this is not a regular practice, as we comply with applicable labor laws and strive to provide employees with means and mechanisms to improve wellness and quality of life. The case is now pending completion of an audit by the labor authority.



A finding of culpable irregularity would require we agree a “Conduct Adjustment Instrument” (akin to a cease-and-desist commitment) with the Labor Prosecution Office, whereby we commit to observe the law and abstain from recurring infringements or else face public civil action.


4.4 Arbitration proceedings; legal and administrative proceedings not protected by absolute privilege, where the Company or a subsidiary litigates with against any of a current or former director, officer or controlling shareholder or investor.

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 litigates against any of a current or former director or officer or controlling shareholder or investor in our own securities or those of a subsidiary.

4.5 Material legal proceedings protected by absolute privilege.

Other than as disclosed and discussed above, as of the date of this Reference Form there are no material proceedings protected by absolute privilege to which either the Company or any of its subsidiaries is party.

4.6 Material arbitration, legal and administrative proceedings not protected by absolute privilege, whose outcome (taken collectively) could materially affect the Company or a subsidiary.

(I) Labor Cases

As of December 31, 2013, our Company and subsidiaries were parties to 243 labor claims, which classify into two main groups:

I – Claims by former employees. These refer to 113 labor cases (46.50% of the total) involving claims for salary differences (in large part related to overtime, salary equalization and health hazard allowance, among other things). In this group, 47 claims (contingent liabilities of R$13,984,273.63) have been assessed as a ‘probable defeat,’ whereas 44 claims (contingent liabilities of R$30,279,440.16) have been assessed as a ‘possible defeat.’ A total of 22 cases have been assessed as entailing remote prospects for a defeat.

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’

Company 43 13,488,012.85 44 30.279.440,16

BVRJ 3 213,754.19 - -

Brazilian Commodities Exchange

1 282,506.59 - -

TOTAL 47 13,984,273.63 44 30,279,440.16

II – Third-party claims (other than former employees). These refer to 130 claims (53.47% of the total) filed by former employees of outsourced providers and brokerage firms seeking to have our Company or a subsidiary held jointly and/or secondarily liable for severance and other payments on grounds that Precedent 331 of the Superior Labor Court (TST) is applicable. These claims substantially classify into three groups, as follows:

a. This group comprises 31 claims, where 29 have been brought against a number of brokerage firms and us by former pit traders that used to work on the exchange floor. In addition, the Capital Market Workers’ Union (Sindicato dos Trabalhadores em Mercados de Capitais) appears as plaintiff on behalf of unionized workers in two claims against a number of brokerage firms and us arguing our former trading floor posed an environmental health hazard for traders and other workers, who thus should have been compensated in the form of additional health hazard allowance payments. The decisions thus far issued by the courts upheld our arguments, having overruled the plaintiffs’ allegations, setting aside the notion that we hold secondary liability in the litigated issues, because (i) the plaintiffs’ true employers were the co-defendant brokerage firms for which they worked, and the allegation of indirect employment by us is baseless (including as to cases where health hazard


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allowance payments are claimed); and (ii) the exchange floor has long been shut down, so that objective expert evidence can no longer be obtained and the courts have refused to consider evidence possibly given in older cases . Thus, based on evaluations by counsel, Management classifies the prospects for a defeat in these cases as remote, except for two cases (contingent liability of R$178,302.71) where the employer brokerage firm and us have been found jointly liable for the amounts claimed, thus leading Management to classify the related contingency as a probable defeat.

b. 77 lawsuits have been brought by former employees of outsourced providers of cleaning and security services that claim differences in severance payments received from their former employers. As a result, we are susceptible to being found secondarily liable in 34 claims assessed as a probable defeat (contingent liabilities of R$1,720,767.31); whereas in 27 other claims (contingent liabilities of R$2,495,239.20), the prospects for a defeat have been assessed as possible. The remaining 16 claims have been assess entailing remote prospects for a defeat.



Contingent liabilities under claims assessed as a

‘probable defeat’ (in R$)



Contingent liabilities under claims assessed as a ‘possible

defeat’(in R$)

Company 34 1,720,767.31 27 2,495,239.20

BVRJ 0 - - -

TOTAL 34 1,720,767.31 27 2,495,239.20

c. 22 claims have been brought by former employees of outsourced providers of IT services. The prospects for a

defeat in 14 of these claims (contingent liabilities of R$9,189,409.92) have been assessed as probable, whereas the prospects in 5 other claims (contingent liabilities of R$1,913,560.49) have been assessed as possible. The remaining three cases were assessed as entailing remote prospects for a defeat.



Contingent liabilities under claims assessed as a

‘probable defeat’ (in R$)



Contingent liabilities under claims assessed as a ‘possible

defeat’(in R$)

Company 14 9,189,409.92 5 1,913,560.49

TOTAL 14 9,189,409.92 5 1,913,560.49

d. We provision contingent liabilities (based on value on action ascribed by claimants) where the prospects for defeat in a claim are classified as probable. For this reason, we understand these labor claims entail no material risk to our business.

(II) Tax Cases

There are no arbitration or administrative or court proceedings consisting of repetitive 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

(a) Ordinary Action – Case Record No. 0125497-40.2008.8.26.0100 (former case No. 583.00.2008.125497-9) – 29th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 9095570-75.2009.8.26.0000 - Plaintiff: Carlos Rodrigues Júnior;

(b) Ordinary Action – Case Record No. 583.00.2008.125496-6 – 16th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0125496-55.2008.8.26.0100– Plaintiff: Paulo Roberto Ferreira de Sena;

(c) Ordinary Action – Case Record No. 0125498-25.2008.8.26.0100 (former case No. 583.00.2008.125498-1) – 24th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 9204350-79.2009.8.26.0000 – Plaintiff: Jurandir Pinheiro de Castro;

(d) Ordinary Action – Case Record No. 583.00.2008.125499-4 – 12th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 9138494-71.2009.8.26.0000 - Plaintiff: Walter Silva Junior;

(e) Ordinary Action – Case Record No. 0136416-88.2008.8.26.0100 (former case No. 583.00.2008.136416-9) – 2nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0136416-88.2008.26.0100 – Plaintiff: Egemp Gestão Patrimonial Ltda.;

(f) Ordinary Action – Case Record No. 583.00.2008.129505-7 – 9th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 9000043-91.2008.8.26.0100 – Plaintiff: Reginaldo Goncales da Silva;

(g) Ordinary Action – Case Record No. 0130365-61.2008.8.26.0100 (former case No. 583.00.2008.130365-7) – 8th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage –Civil Appeal no. 0130365-61.2008.8.26.0100 – Plaintiff: Solidez Corretora de Câmbio, Títulos e Valores Mobiliários Ltda;

(h) Ordinary Action – Case Record No. 0125495-70.2008.8.26.0100 (former case No. 583.00.2008.125495-3) – 9th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Appeal no. 0125495-70.2008.8.26.0100 in the Court of Appeals of São Paulo –


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Plaintiffs; original and appellate courts; case numbers

Plaintiff: Roberto Magalhães Duprat;

(i) Ordinary Action – Case Record No. 0129506-45.2008.8.26.0100 (former case No. 583.00.2008.129506-0) – 40th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0129506-45.2008.8.26.0100 – Plaintiff: Jair do Nascimento;

(j) Ordinary Action – Case Record No. 0130362-09.2008.8.26.0100 (former case No.583.00.2008.130362-9) – 9th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Special Appeal No. 1.328.897/SP – Plaintiff: Aureum Corretora;

(k) Ordinary Action – Case Record No. 0101785-84.2009.8.26.0100 (former case No. 583.00.2009.101785-7) – 39th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Appeal no. 0101785-84.2009.8.26.0100 – Plaintiff: Banex Distribuidora de Títulos e Valores Mobiliários;

(l) Ordinary Action – Case Record No. 0243345-48.2008.8.26.0100 (former case No. 583.00.2008.243345-0) – 1st Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0243345-48.2008.8.26.0100 – Plaintiff: Carmine Enrique Filho;

(m) Ordinary Action – Case Record No. 583.00.2009.197829-0 – 12th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal no. 0197829-68.2009.8.26.0100 – Plaintiff: Future Premium;

(n) Ordinary Action – Case Record No. 583.00.2008.212130-9 – 14th Lower Civil Court of the Central Courthouse of São Paulo – Plaintiff: Granóleo Comércio e Indústria de Sementes Oleaginosas e Derivados;

(o) Ordinary Action – Case Record No. 0197372-36.2009.8.26.0100 (former case No. 583.00.2009.197372-7) – 9th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0197372-36.2009.8.26.0100 – Plaintiff: Mario Cesar Nassif da Fonseca;

(p) Ordinary Action – Case Record No. 0243341-11.2008.8.26.0100 (former case No. 583.00.2008.243341-9) – 37th Lower Civil Court of the Central Courthouse, currently at the appellate stage – Civil Appeal No. 0243341-11.2008.8.26.0100 – Plaintiff: Renato Enrique;

(q) Ordinary Action – Case Record No. 0212131-39.2008.8.26.0100 (former case No. 583.00.2008.212131-1) – 10th Lower Civil Court of the Central Courthouse, currently at the appellate stage – Civil Appeal No. 0212131-39.2008.8.26.0100 – Plaintiff: Shan Ban Chun;

(r) Ordinary Action – Case Record No. 0184184-39.2010.8.26.0010 (former case No. 583.00.2010.184184-2) – 15th Lower Civil Court of the Central Courthouse – Plaintiff: Flavio Barreto Moreira;

(s) Ordinary Action – Case Record No. 0184065-78.2010.8.26.0100 (former case No. 583.00.2010.184065-3) – 39th Lower Civil Court of the Central Courthouse, currently at the appellate stage Civil Appeal No. 0184065-78.2010.8.26.0100 – Plaintiff: José Carlos Citti de Paula;

(t) Ordinary Action – Case Record No. 0184083-02.2010.8.26.0100 (former case No. 583.00.2010.184083-5) – 8th Lower Civil Court of the Central Courthouse, currently at the appellate stage – Appeal no. 0184083-02.2010.8.26.0100 – Plaintiff: Ricardo Lombardi de Barros;

(u) Ordinary Action – Case Record No. 0104331-78.2010.8.26.0100 (former case No. 583.00.2010.104331-4) – 1st Lower Civil Court of the Central Courthouse, currently at the appellate stage – Civil Appeal No. 0104331-78.2010.8.26.0100 – Plaintiff: Luiz Carlos Ferreira;

(v) Ordinary Action – Case Record No. 0184070-03.2010.8.26.0100 (former case No. 583.00.2010.184070-3) – 29th Lower Civil Court of the Central Courthouse, currently at the appellate stage – Civil Appeal No. 0184070-03.2010.8.26.0100 – Plaintiff: Alexandre de Freitas Nuzzi;

(w) Ordinary Action – Case Record No. 0184078-77.2010.8.26.0100 (former case No. 583.00.2010.184078-5) – 6th Lower Civil Court of the Central Courthouse – Plaintiff: Rogério Sandes Cardoso;

(x) Ordinary Action – Case Record No. 0183812-90.2010.8.26.0100 (former case No. 583.00.2010.183812-8) – 31st Lower Civil Court of the Central Courthouse, currently at the appellate stage – Civil Appeal No. 0183812-90.2010.8.26.0100 – Plaintiff: Target Consultoria Financeira;

(y) Ordinary Action – Case Record No. 0184197-38.2010.8.26.0100 (former case No. 583.00.2010.184197-7) – 5th Lower Civil Court of the Central Courthouse, currently at the appellate stage – Civil Appeal No. 0184197-38.2010.8.26.0100 – Plaintiff: Vagner Blantes;

(z) Ordinary Action – Case Record No. 0183536-59.2010.8.26.0100 (former case No. 583.00.2010.183536-2) – 31st Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0183536-59.2010.8.26.0100 – Plaintiff: Edson Cerreti;

(aa) Ordinary Action – Case Record No. 0182475-66.2010.8.26.0100 (former case No. 583.00.2010.182475-4) – 36th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0182475-66.2010.8.26.0100 – Plaintiff: Treviso Corretora de Câmbio Ltda;

(ab) Ordinary Action – Case Record No. 0197368-96.2009.8.26.0100 (former case No. 583.00.2009.197368-0) – 34th Lower Civil Court of the Central Courthouse of São Paulo – Plaintiff: Ernesto Matalon;

(ac) Ordinary Action – Case Record No. 0244812-62.2008.8.26.0100 (former case No. 583.00.2008.244812-9) – 37th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0244812-62.2008.8.26.0100 – Plaintiff: Antonio Carlos Rago Cano;

(ad) Ordinary Action – Case Record No. 583.00.2008.151231-9 – 19th Lower Civil Court of the Central Courthouse, 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 São Paulo – Carlos Eduardo Chamma Lutfalla Et Al.;

(ae) Ordinary Action – Case Record No. 583.00.2009.115872-8 – 8th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0115872-45.2009.8.26.0100 (formerly case 990.10.058207-0) in the Court of Appeals of São Paulo – Plaintiff: Cláudio Coppola Di Todaro;


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(af) Ordinary Action – Case Record No. 583.00.2007.256585-8 – 16th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0300971-97.2009.8.26.0000 (formerly case 994.09.300971-3) in the Court of Appeals of São Paulo – Plaintiffs: Rivale Representações, Marisa Lojas, and Décio Goldfarb;

(ag) Ordinary Action – Case Record No. 0019539-14.2010.4.03.6100 – 2nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Plaintiff: Esboriol Participações e Empreendimentos Ltda.;

(ah) Ordinary Action - Case Record No. 583.00.2007.264023-3 – 2nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal no. 0264023-21.2007.8.26.0100, in the Court of Appeals of São Paulo – Plaintiff: Ernesto Rahmani and Ike Rahmani.

Defendant BM&FBOVESPA and BM&F Association, each as a successor to BM&F Mercantile and Futures Exchange (a mutualized non-profit exchange)


Plaintiffs intend to regain ownership rights in common membership certificates previously held in the old futures exchange, BM&F (then a mutualized exchange, which later went public and merged with BM&FBOVESPA), in order to have them replaced with an equivalent number of shares of BM&FBOVESPA. The financial value at risk in these cases would have to be determined in proceedings for calculation of the award and enforcement of judgment.


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 exchange for shares of the demutualized corporation emerging from the spin-off, which they claim failed to take into account earnings 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, a court order nullifying “the members’ decision that approved the valuation of membership certificates,” coupled with an order for defendants to refund losses supposedly incurred for lack of adjustments to the value of their membership certificates. In the answer, the defendants sustained preliminary arguments of lack of interest in the action (a justiciable controversy) and legal impossibility of the claim, while on the merits claiming for the invalidity of the actions (due to lack of legal basis), in addition to offering appropriate arguments concerning the peculiarities of each case.

Except for the suits filed by Flavio Barreto Moreira – item (r); Rogério Sandes Cardoso – item (w); Ernesto Matalon – item (ab); Esboriol – item (ag); and Ernesto and Ike Rahmani – item (ah), lower court decisions have been issued for all other cases. A number of decisions have adjudged the case on its merits, finding for the claim invalidity, whereas some other decisions dismissed the action without prejudice. Every one of these decisions has been appealed.

Higher court decisions are still pending in connection with the appeals filed by Jurandir Pinheiro de Castro – item (c), Egemp Gestão Patrimonial – item (e), Reginaldo Goncales da Silva – item (f), Jair do Nascimento – item (i), Banex DTVM – item (k), Future Premium - item (m), Granóleo Comércio e Indústria de Sementes Oleaginosas e Derivados – item (n) and Alexandre de Freitas Nuzzi – item (v), Vagner Blantes – item (y), Edson Cerreti – item (z), and Antonio Carlos Rago Cano – item (ac).

In all other cases, the appellate court judgments upheld the appealed lower court decisions, which found for the invalidity of the claims. The following plaintiffs have already appealed these judgments:

(1) Paulo Roberto Ferreira de Sena [item (b)] filed special appeal, which has yet to be processed;

(2) Walter Silva Junior [item (d)] filed special appeal, which has yet to be processed;

(3) Solidez CCTVM [item (g)] filed special appeal, which has yet to be processed;

(4) Roberto Magalhães Duprat [item (h)] filed special appeal, which has yet to be processed;

(5) Aureum Corretora [item (j)] filed special appeal, which at the Superior Court of Justice was assigned case record No. 1.328.897;

(6) Mario Cesar Nassif da Fonseca [item (o)] filed special appeal, which has yet to be processed;

(7) Renato Enrique [item (p)] filed special appeal addressed to the Superior Court of Justice. While the appealed court accepted the appeal as eligible and admissible, the case record has yet to be remitted to the higher court;

(8) Shan Ban Chun [item (q)] filed special appeal, which has yet to be processed;

(9) José Carlos Citti de Paula [item (s)] filed special appeal, which has yet to be processed;

(10) Ricardo Lombardi de Barros [item (t)] filed special appeal, which has yet to be processed;

(11), Luiz Carlos Ferreira [item (u)] filed special appeal addressed to the Superior Court of Justice, which the appealed court dismissed as ineligible and inadmissible in a ruling still subject to being appealed;

(12) Target Consultoria Financeira [item (x)] filed both special and extraordinary appeals, which have yet to be processed;

(13) Treviso Corretora de Câmbio Ltda [item (aa)] filed special appeal, which has yet to be processed;

(14) Cláudio Coppola Di Todaro [item (ae)] filed both special and extraordinary appeals, which have yet to be processed; and,

(15) Rivale Representações, Marisa Lojas, and Décio Goldfarb [item (af)] filed interlocutory appeal in the record of the special appeal previously filed (AResp No. 140.444).

In all other cases, the plaintiffs still have time to file motions for clarification of the respective appellate court judgments or otherwise appeal these judgements to the Superior Court of Justice.

Practice originating the contingency

Supposed irregularities related to the 52nd Extraordinary General Meeting of the members of the former independent exchange known as BM&F Mercantile and Futures Exchange, which approved the proposed demutualization and subsequent spin-off of BM&F, then a mutualized entity. The Plaintiffs also object to the valuation of their membership certificates and the plan of exchange for shares of the demutualized company.


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Given the time elapsed since these actions were filed, and the general context in which these cases have evolved, we understand the worst-case scenario would be one where the Company is required to pay compensation for losses. A decision annulling the demutualization decision at this point would be highly unlikely for it would be impractical and virtually impossible to revert to a pre-demutualization state of affairs. However, it is very difficult to make a reasonable estimate of indemnity amounts because of the multiple imponderable factors that would have to be taken into account for this purpose. 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 award, as otherwise it seems impossible to assign value to a plaintiffs’ supposed losses.


(III.2)

Repetitive Cases – II


(a) Ordinary Action – Case Record No. 055287-69.2008.8.26.0100 (former case No.583.00.2008.155287-5) – 32nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 9246473–29.2008.8.26.0000 – Plaintiff: Lawrence Pih;

(b) Ordinary Action – Case Record No. 0155286-84.2008.8.26.0100 (former case No. 583.00.2008.155286-2) – 37th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0155286-84.2008.8.26.0100 – Plaintiff: André Arantes;

(c) Ordinary Action – Case Record No. 0113283-80.2009.8.26.0100 (former case No. 583.00.2009.113283-6) – 13th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0113283-80.2009.8.26.0100 – Plaintiff: Claudio Monteiro da Costa;

(d) Ordinary Action – Case Record No. 0113286-35.2009.8.26.0100 (former case No. 583.00.2009.113286) – 23rd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0113286-35.2009.8.26.0100 – Plaintiff: Fernando Alexandre Esboriol;

(e) Ordinary Action – Case Record No. 0113284-65.2009.8.26.0100 (former case No. 583.00.2009.113284-9) – 2nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0113284-65.2009.8.26.0100 – Plaintiff: Henrique S. Filho;

(f) Ordinary Action – Case Record No. 0113285-50.2009.8.26.0100 (former case No. 583.00.2009.113285-1) – 42nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 9177337-08.2009.8.26.0000 – Plaintiff: Seeiche Abe.

(g) Ordinary Action – Case Record No. 0184100-38.2010.8.26.0100 (former case No. 583.00.2010.184100-2) – 18th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184100-38.2010.8.26.0100 – Plaintiff: Carlos Eduardo Miranda Teixeira;

(h) Ordinary Action – Case Record No. 0184181-84.2010.8.26.0100 (former case No. 583.00.2010.184181-4) – 25th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184181-84.2010.8.26.0100– Plaintiff: Celso Rodrigues;

(i) Ordinary Action – Case Record No. 0184093-46.2010.8.26.0100 (former case No. 583.00.2010.184093-9) – 12th Lower Civil Court of the Central Courthouse of São Paulo – Civil Appeal No. 0184093-46.2010.8.26.0100 – Plaintiff: Correta Corretora;

(j) Ordinary Action – Case Record No. 0184183-54.2010.8.26.0100 (former case No. 583.00.2010.184183-0) – 38th Lower Civil Court of the Central Courthouse of São Paulo – Plaintiff: Edilson Morais Alencar;

(k) Ordinary Action – Case Record No. 0184182-69.2010.8.26.0100 (former case No. 583.00.2010.184182-7) – 10th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage (Civil Appeal pending registration with the Court of Appeals) – Plaintiff: Fabio Causso Feola;

(l) Ordinary Action – Case Record No. 0184076-10.2010.8.26.0100 (former case No. 583.00.2010.184076-0) – 27th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184076-10.2010.8.26.0100 – Plaintiff: Izael Camillo dos Anjos;

(m) Ordinary Action – Case Record No. 0184060-56.2010.8.26.0100 (former case No. 583.00.2010.184060-0) – 27th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal no. 0184060-56.2010.8.26.0100 – Plaintiff: Marcos Bianco Bastos;

(n) Ordinary Action – Case Record No. 0184085-69.2010.8.26.0100 (former case No. 583.00.2010.184085-0) – 36th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184085-69.2010.8.26.0100 – Plaintiff: Roberto Allan de Moraes Barros;

(o) Ordinary Action – Case Record No. 0184092-61.2010.8.26.0100 (former case No. 583.00.2010.184092-6) – 42nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184092-61.2010.8.26.0100 – Plaintiff: Ronaldo Caire;

(p) Ordinary Action – Case Record No. 0132917-28.2010.8.26.0100 (former case No. 583.00.2010.132917-9) – 7th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0132917-28.2010.8.26.0100 – Plaintiff: Sérgio Prado Frigo;

(q) Ordinary Action – Case Record No. 0184067-48.2010.8.26.0100 (former case No. 583.00.2010.184067-9) – 28th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184067-48.2010.8.26.0000 – Plaintiff: Henrique Bispo Pimentel;

(r) Ordinary Action – Case Record No. 0184068-33.2010.8.26.0100 (former case No. 583.00.2010.184068-1) – 36th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184068-33.2010.8.26.0100 – Plaintiff: Paulo Sérgio Albanezi;

(s) Ordinary Action – Case Record No. 0184196-53.2010.8.26.0100 (former case No. 583.00.2010.184196-1) – 11th Lower Civil Court of the Central Courthouse of São Paulo – Plaintiff: Pedro Augusto Spinola;

(t) Ordinary Action – Case Record No. 0184091-76.2010.8.26.0100 (former case No. 583.00.2010.184091-3) – 4th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184091-76.2010.8.26.0100 – Plaintiff: Ulisses Sandes Cardoso;


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(u) Ordinary Action – Case Record No. 0175422-97.2011.8.26.0100 (former case No. 583.00.2011.175422-6) – 39th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0175422-97.2011.8.26.0100 – Plaintiff: BVL Corretora.

(v) – Ordinary Action – Case Record No. 0116425-24.2011.8.26.0100 (former case No. 583.00.2011.116425-1) – 30h Lower Civil Court of the Central Courthouse of São Paulo – Plaintiff: Roberto Cordeiro Simões;

(w) – Ordinary Action – Case Record No. 0126956-72.2011.8.26.0100 (former case No. 583.00.2011.126956-4) – 10th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage (Civil Appeal pending registration with the Court of Appeals) – Plaintiff: Robson Rodrigo de Souza;

(x) – Ordinary Action – Case Record No. 0019453-43.2010.4.03.6100 – 12th Lower Civil Court of the Central Courthouse of São Paulo – Plaintiff: Carlos Eduardo Rodrigues.

Defendant BM&FBOVESPA, as successor to BM&F Mercantile and Futures Exchange (originally, a mutualized entity), and BM&F Association


Plaintiffs intend to regain ownership rights in common membership certificates previously held in the old São Paulo Commodities Exchange (Bolsa de Mercadorias de São Paulo), or BMSP, and, thus, an equivalent interest in membership certificates of the old futures exchange, BM&F (then a mutualized exchange, which later went public and merged with BM&FBOVESPA), in order to have such interest replaced with an equivalent number of shares of BM&FBOVESPA. The financial value at risk in these cases would have to be determined in proceedings for calculation of the award and enforcement of judgment.


These are actions brought against BM&FBOVESPA and the BM&F Association, each as a successor to former BM&F Mercantile and Futures Exchange, whereby the plaintiffs seek a court order declaring the ineffectiveness of a certain “Partial Spin-Off Protocol and Justification” agreed in September 2007 between the mutual association named BM&F and the corporation named BM&F S.A. The Plaintiffs sustain such document cancelled membership certificates in the mutual association named BM&F before the consolidation with BMSP had been completed, which, they argue, was in conflict with the terms of a 1991 Memorandum of Understanding between BMSP and BM&F, thus rendering the spin-off agreement void.

Except for the lawsuits of plaintiffs Roberto Cordeiro Simões – item (w) and Carlos Eduardo Rodrigues – item (x), lower court decisions have been issued in all of these cases, either holding the claim invalid or dismissing the action without prejudice. In each if these cases, the plaintiffs appealed the decision.

The appeals filed by Edilson Morais Alencar – item (j) and Pedro Augusto Spinola – item (s) have yet to be processed and remitted to the higher court. The appeals filed by Lawrence Pih – item (a), André Arantes – item (b), Claudio Monteiro da Costa – item (c), Fernando Alexandre Esboriol – item (d), Seeiche Abe – item (f), Carlos Eduardo Miranda Teixeira – item (g), Marcos Bianco Bastos – item (m), and Roberto Allan de Moraes Barros – item (o) have all been accepted but are still pending trial by the São Paulo Court of Appeals.

Additionally, in all other cases, the appellate court judgments denied the appeals of the plaintiffs, with the following having already appealed these judgments:

(1) Henrique S. Filho [item (e)] filed special appeal, which has yet to be processed;

(2) Celso Rodrigues [item (h)] filed special and extraordinary appeals addressed to the Superior Court of Justice, both of which the appealed court ruled inadmissible causing the plaintiff to file interlocutory appeals. The court has considered these latter appeals and the latest rulings now have to be forwarded for consideration by the Superior Court of Justice;

(3) Correta Corretora [item (i)] filed special appeal, which has yet to be processed

(4) Fabio Causso Feola [item (k)] filed special appeal, which has yet to be processed;

(5) Izael Camillo dos Anjos [item (l)] filed special appeal, which has yet to be processed;

(6) Ronaldo Caire [item (o)] filed both special and extraordinary appeals, which have yet to be processed;

(7) Henrique Bispo Pimentel [item (q)] filed special appeal, which has yet to be processed;

(8) Paulo Sérgio Albanezi [item (r)] filed special appeal, which has yet to be processed;

(9) BVL Corretora [item (u)] filed special appeal, which has yet to be processed;

(10) Robson Rodrigo de Souza [item (w)] filed both special and extraordinary appeals, which have yet to be processed.


Supposed ineffectiveness of the terms of the “Partial Spin-Off Protocol and Justification” agreed in September 2007 between the mutualized entity named BM&F and the corporation named BM&F S.A. The plaintiffs argue their ineffectiveness stems from the document having addressed the cancellation of the membership certificates in BM&F before the consolidation of BM&F with BMSP, which they allege to be inconsistent with the terms of a 1991 Memorandum of Intent agreed by BM&F and BMSP, thereby giving rise to ineffectiveness which should now be recognized.



Shares of BM&FBOVESPA (or the market value thereof) in the equivalent of each plaintiff’s alleged interest in common membership certificates of the mutual association named BM&F.


(III.3)

Repetitive Cases – III


(a) Ordinary Action – Case Record No. 0184098-68.2010.8.26.0100 (former case No. 583.00.2010.184098-2) – 7th Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184098-68.2010.8.26.0100 – Plaintiff: Henrique Bispo Pimentel;

(b) Ordinary Action – Case Record No. 0184069-18.2010.8.26.0100 (former case No.583.00.2010.184069-4) – 1st Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – (Civil Appeal No. 0184069-18.2010.8.26.0100) – Plaintiff: Marcos Bianco Bastos;


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(c) Ordinary Action – Case Record No. 0184096-98.2010.8.26.0100 (former case No.583.00.2010.184096-7) – 2nd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184096-98.2010.8.26.0100 – Plaintiff: Seeiche Abe.

(d) Ordinary Action – Case Record No. 0184097-83.2010.8.26.0100 (former case No.583.00.2010.184097-1) – 3rd Lower Civil Court of the Central Courthouse of São Paulo, currently at the appellate stage – Civil Appeal No. 0184097-83.2010.8.26.0100 – Plaintiff: Sérgio Carnelosso.

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


The hypothetical present value for purlchase of a membership certificate (of the category “special agricultural commodities traders”) in the old futures exchange, BM&F (then a mutualized exchange, which later went public and merged with BM&FBOVESPA), or, in the alternative, 10% of the hypothetical present market value attributable to membership certificates issued to “special traders.” The financial value at risk in these cases would have to be determined in proceedings for calculation of the award and enforcement of judgment.


These are actions against BM&FBOVESPA and Association BM&F which object to, and challenge, the cancellation of BM&F membership certificates of so-called “Special Commodities Traders” (execution brokers /proprietary traders with access to both the futures market and OTC market) at the time of the demutualization process, on the allegation that such cancellation hinged on the plaintiffs’ consent. They seek to annul the cancellation decision or, in the alternative, as a secondary plea, to have BM&FBOVESPA and Association BM&F held liable for paying indemnity in the equivalent of the certificates’ hypothetical present market value. 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 a preliminary argument, insufficiency of action ( lack of legal grounds to substantiate the claim) and, on the merits, invalidity of the claims, as the certificates had no intrinsic economic value, merely granting market access rights which were sustained after the demutualization and the going-public process and, later, maintained by BM&FBOVESPA, as successor and market operator, through market access permits whose issuance grants trading rights.

In all these cases, lower court decisions held the claims invalid, and were appealed. The appeals filed by Marcos Bianco Bastos – item (b) and Seeiche Abe – item (c) are still pending judgment. The appeals filed by Henrique Bispo Pimentel – item (a) and Sérgio Carnelosso – item (d) were denied, and the plaintiffs filed special appeal addressed to the higher court, which have yet to be processed .


Cancellation of BM&F membership certificates (carrying market access rights under the category “special agricultural commodities trader”) in the course of the demutualization implemented in preparation of certain merger transactions and a going-public process. In any event, after the demutualization, it was no longer necessary for a broker or trader to hold a membership certificates in order to have market access rights.



Award for damages requiring payment of indemnity in the hypothetical present value for purchase of “special agricultural commodities trader” membership certificates or, in the alternative, indemnity equivalent to 10% of the hypothetical present market value attributable to membership certificates issued to so-called “special traders”.


4.7 Other material contingent liabilities not previously discussed.

Other than the legal or administrative proceedings discussed under subsection 4.3 above, as of the date of this Reference Form neither we have, nor any of our subsidiaries has additional contingent liabilities.

4.8 Rules applying in the home country jurisdiction and in the foreign jurisdiction where securities of the issuer are held under custody.

BM&FBOVESPA is a corporation duly organized and regularly existing under the laws of Brazil. Our shares 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 the exposure to principal market risks

Sudden changes in macroeconomic conditions in Brazil and the Brazilian government’s significant influence over the domestic economy could adversely affect our business, results of operations and the market price of our shares.

The volume of business in some of our primary business lines, including trading and post-trade services covering equities and multiple derivatives, is directly exposed to risks related to the general performance of the Brazilian economy, which is heavily influenced by the Brazilian government’s policies, regulations and actions which intervene in the general direction of the domestic economy, and in the capital markets and financial services industry. Certain factors and economic indicators, including, among other things, inflation rates, interest rates, exchange rates, credit availability and liquidity in the domestic financial and capital markets, impact the level of capital market activity both directly and indirectly ultimately influencing the volume of business on markets we operate. In addition, uncertainty over whether the Brazilian government will implement changes in policies and regulations, including changes in fiscal and monetary policies, in tax rates or the taxation system, or whether it will adopt a more restrictive interpretation of existing rules that affect these or other factors contributes to economic uncertainty and heightens market volatility, which could adversely affect the volume of business on markets we operate and, in


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the final analysis, our business, cash flow, financial condition and results of operations, as well as the market price of our shares.

For a better understanding, we set forth below a list of developments with potential to affect economic indicators, and of

government actions and measures which, if implemented in the future, could potentially and adversely affect macroeconomic conditions, the capital markets and financial services industry, as well as our business. These are examples only, based on past experience, and we do not purport to provide an exhaustive list of any such factors, developments, actions or measures.

Changes in the level of economic activity and shifts in expectations for economic growth.

Economic slowdowns could adversely affect the performance of listed issuers and the market price of their shares; The negative performance of a significant number of listed stocks could adversely affect the attractiveness of the stock

market, prompting investors to shun the domestic stock market; Expectations of low economic growth could negatively affect the average volume of trading in derivatives contracts based

on interest rates, exchange rates and other derivative instruments.

Changes in the domestic benchmark interest rate and credit-crunch events.

Increases in the domestic benchmark interest rate could dampen the attractiveness of the stock market and elicit more interest in fixed income investments;

The level of credit availability in Brazil could be negatively affected by interest rate rises, driving down investor demand for hedging instruments (forward contracts, futures contracts and other derivative contracts);

A general shortening of financing duration could lead to investment concentration in short-term interest-based derivatives, which could negatively impact our average rate per contract (RPC) for such type of contracts, as we charge lower fee rates for these types of contracts.

Changes in foreign exchange rates.

Changes in foreign exchange rates could adversely affect expected returns on investments from cross-border investors active in the domestic equities and derivatives markets;

Heightened exchange rate volatility could adversely affect the volumes traded in FX contracts and US-dollar denominated interest rate contracts.

The Brazil real to U.S. dollar exchange rate has a direct impact on our average rate per contract (RPC) for groups of derivative contracts based on the exchange rates, on the US-dollar denominated interest rate and on certain commodities, as we our fee rates for these contract groups is denominated in U.S. dollars.

Changes in taxation and tax rates.

New taxes and increases in existing taxes on investments and returns on investments in products traded on markets we operate could adversely and materially affect the attractiveness of, and volume of trading on these markets;

New taxes and increases in existing taxes on investments and returns on investments could prompt investors that customarily deal on markets we operate to lose interest in capital market investing or to cut down on their volume of dealings.

Changes in the taxation system as currently applying to us and the capital markets, particularly as a result of the Brazilian courts or the federal revenue adopting more restrictive interpretations of existing tax rules applicable to financial transactions, stock market trades and trades in derivatives and commodities, could adversely affect trading volumes, thereby affecting our business, financial condition and results of operations.

Adoption of capital controls or creation of restrictions or taxes on capital flows.

Government actions to implement changes in fiscal and foreign exchange policies, adopt foreign exchange controls and restrictions on capital flows, including by introducing or raising taxes on financial or capital market transactions, or otherwise intervening in the capital markets and the financial services industry, could adversely affect the willingness of investors to engage in capital market investing in Brazil and dampen the attractiveness of the domestic stock and derivatives markets.

Changes in the capital markets regulatory framework.

Changes in policies and the legal and regulatory frameworks of the capital markets, particularly as applying to the equities, commodity and derivatives markets we operate could adversely affect our business.

Changes in the laws and regulations that apply to capital market investors and market participants that operate in Brazil could adversely affect our business.

In addition, fluctuations in interest and exchange rates may adversely affect our net interest income, given that our interest revenues substantially derive from investments in fixed rate assets whereas most of our interest expense is denominated in U.S. dollars, as we are required to make U.S. dollar-denominated coupon payments under the global senior notes issued in our July 2010 cross-border bond offering (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 CME Group Inc. which is attributable to the offering notional amount of US$612 million – a hedging instrument in a hedge of net investment in a foreign operation).

Our business and the market price of our shares could be adversely affected by variable factors beyond our control, including the global economic and financial landscape, the discretionary asset allocation strategies of major international investors and the performance of stock and derivatives exchanges across the world.

We have no control over the perceived attractiveness of cross-border exchanges and the securities markets across the world, a variable factor which could influence investor perception of the domestic securities markets and potentially have an adverse impact on the volume of dealings in equities and derivatives processed in our trading and post-trade systems. Moreover, cross-border investors account for a significant portion of the volumes traded in equities and derivatives on domestic markets. If these investors were to change their asset allocation strategies to direct investment resources to other international markets, the average volumes traded on markets we operate could fall, which would adversely affect our business, results of operations


27

and the market price of our shares.

Additionally, global economic slowdowns, inflation and exchange rate instability, credit unavailability and other uncertain or

adverse general economic conditions, globally or in major international capital markets, could adversely affect the Brazilian economy both directly and indirectly and the volume of business on markets we operate.

5.2. Market risk management policy

a. risks against which protection through hedging is sought

Effective from July 16, 2010, we used the net proceeds from our US$612 million offering of global senior notes due July 2020 to increase to 5.1% our ownership interest in shares of the CME Group, Inc. Thus, 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 is attributable to the offering 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, 2013, there was no realizable ineffectiveness.

b. hedging strategies

The purpose of our US$612 million senior notes offering of July 2010 was to fund our purchase of additional shares in the CME Group, thereby increasing our aggregate holdings of their outstanding shares. Thus, starting from the notes’ issue date, we 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 is attributable to the notional amount of US$612 million (a hedging instrument in a hedge of net investment in a foreign operation).

c. hedging tools used for protection

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 related to our July 16, 2010 senior notes offering whose proceeds funded our additional acquisition of CME shares, we have designated that portion of the principal under the senior notes which correlates with changes in exchange rates a hedging instrument in a hedge of net investment in a foreign operation, regarding which we adopted net investment hedge accounting.

d. guidelines adopted in managing these risks

For net investment hedge accounting, we adopt the guidelines 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.

e. if the issuer trades in financial instruments other than to hedge risks, explain why

Not applicable, as we make no use of derivatives or adopt hedging strategies relative to our equity investment in the CME Group. See the discussion above.

f. organizational risk management and control structure

In establishing risk management policies and guidelines our board of directors is advised by the risk committee, a standing advisory committee to the board, established under our bylaws, whose primary responsibilities include monitoring economic and market developments, accessing our exposure to market, liquidity, credit and systemic risks associated with our role as market operator and operator of clearing and settlement facilities.

Additionally, in November 2012, our board created an internal controls, compliance and enterprise risk department whose head, the managing director for internal controls, compliance and enterprise risk, reports to our Chief Executive Officer and accountable for providing information to our audit committee and risk committee.

Additionally, using our risk management structure, we systematically test the hedge effectiveness retrospectively and prospectively relative to the hedging instrument in a hedge of net investment in a foreign operation, in accordance with 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 related to our July 2010 senior notes offering whose proceeds funded said portion of our investment in CME shares, or, more specifically, that portion of the principal under the global notes which correlates with changes in exchange rates. This, we have designated a hedging instrument in a hedge of net investment in a foreign operation, and are required to test the hedge effectiveness.

g. suitability of the operating structure and internal controls for assessment of the effectiveness of the risk management policy

As discussed above, we systematically monitor the hedge effectiveness retrospectively and prospectively relative to the hedging


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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 foreign currency risk.

5.3. Significant changes in exposure to primary market risks or the risk management policy

There have been no changes related to the principal market risk factors associated with the net investment in a foreign operation which, as previously discussed, requires retrospective and prospective hedge effectiveness testing. We have tested the hedge effectiveness, having determined that there was no realizable ineffectiveness.


Except as discussed above in subsections 5.1, 5.2 and 5.3 above, there is no additional reportable information concerning market risks.

6. COMPANY HISTORY

6.1 / 6.2 / 6.4 Incorporation; duration; CVM registration date.

Incorporation; incorporation date. December 14, 2007, is the incorporation date of a corporation formed under the name T.U.T.S.P.E. Empreendimentos e Participações S.A., a vehicle for the inception of BM&FBOVESPA. In its current configuration, BM&FBOVESPA S.A., the Brazilian Securities, Commodities and Futures Exchange, resulted from the integration of the businesses of the Brazilian Mercantile & Futures Exchange–BM&F S.A. and Bovespa Holding S.A. (operator of the São Paulo Stock Exchange), as approved at their respective Extraordinary General Meetings of Shareholders of May 8, 2008.

Corporate type. A corporation (under Brazilian Corporate Law, a companhia), meaning a joint-stock, limited-liability public company.

Country of incorporation. Brazil

Duration. Our Company has been established for an indefinite period of time.

CVM registration date. 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 registration as a public company, the CVM confirmed our registration as market operator pursuant to a May 19, 2009, decision of the full Board of Commissioners.

6.3. Brief History

BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) is the company that emerged from certain merger transactions in the course of the integration process that combined two formerly independent exchanges, i.e., the futures and commodities exchange formerly known as BM&F Mercantile and Futures Exchange (Bolsa de Mercadorias & Futuros - BM&F S.A., herein sometimes referred to as BM&F) and the São Paulo Stock Exchange formerly known as Bovespa Holding S.A. The corporate restructuring process which 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.

Financial and commodity derivatives segment (BM&F Segment)

BM&F’s trajectory of success and unprecedented accomplishments started in January 1986. In the early 1990s, BM&F consolidated as a major Latin American venue for the trading of derivatives and commodities.

In 2000, BM&F first implemented an electronic system for the trading of derivatives. On June 30, 2009, it closed its trading floor to become a fully electronic market.

In addition, in the aftermath of the Brazilian government’s initiative to remodel the Brazilian Payment System, in 2002 BM&F established its own foreign exchange clearing house.

Until 2007 BM&F had been operating as a non-profit mutual association whose membership comprised brokers and broker-dealers holding equity and 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 for-profit corporation (BM&F) that emerged from the corporate restructuring process that followed the demutualization.

In September 2007, General Atlantic LLC and BM&F agreed an acquisition agreement whereby General Atlantic purchased a 10% interest in BM&F shares. One month later, in October, BM&F and the CME Group agreed a partnership involving a cross-investment arrangement and the interconnection of their telecommunications networks for adoption of two-way order routing systems so investors in both countries could trade in each other’s products. In addition, the scope of the partnership with CME has been widened in February 2010, as discussed below under “BM&FBOVESPA History.”

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). And since August 20, 2008, as the integration with Bovespa completed, BMEF3 shares were converted and replaced with BM&FBOVESPA shares at a 1:1 ratio. BM&FBOVESPA shares trade under ticker symbol “BVMF3.”

Equities and equity-based derivatives (Bovespa Segment)

The history of Bovespa dates back to 1890 when Bolsa.Livre was created. Early in the 1960s, Bovespa became a mutualized non-profit stock exchange, whose membership comprised securities brokers and broker-dealers holding both equity and market access rights.

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 distributed via computer. And in the late 1970s Bovespa


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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

the introduction of mutual funds, including equity-oriented funds and pension funds, and two, the transition to an electronic booking system for dematerialized securities under safekeeping, which contributed to more efficient clearing and settlement processes, ultimately boosting market liquidity.

In the early 1990s Bovespa introduced a computer-assisted trading system, or CATS, developed by the Toronto Stock Exchange, which by the mid-1990s was replaced with an advanced system developed by then Paris Bourse. In addition, the Brazilian Clearing and Depository Corporation (CBLC) was organized to operate as both a clearing house for equities and central securities depository, with banking institutions participating as clearing members.

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 across the country. Moreover, in the same year Bovespa launched three special listing segments which adopt additional and more stringent corporate governance requirements than prescribed by law. These special listing segments are known as Novo Mercado and Special Corporate Governance Levels 1 and 2.

Then, in 2002, Bovespa started operating an OTC market for equities (an organized over-the-counter market, per applicable regulations), which grew to concentrate all local trading in OTC equities and equity-based securities, and in September 30, 2005, Bovespa closed its trading floor to become a fully electronic market.

On August 28, 2007, with the regulators’ approval of the demutualization of BOVESPA, the membership equity and market access rights were detached in preparation of a corporate restructuring process, which combined the businesses of Bovespa

and CBLC under a holding company named Bovespa Holding. The initial public offering of Bovespa Holding launched in October 2007 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, and on August 20, 2008, Bovespa Holding merged with and into BM&FBOVESPA, having its shares converted into shares of BM&FBOVESPA at a ratio of 1:1.42485643 common shares plus 0.1 preferred share. These preferred shares were subsequently redeemed at a price of R$17.15340847 per share. BM&FBOVESPA shares trade under ticker symbol “BVMF3.”

BM&FBOVESPA history

BM&FBOVESPA was incorporated in 2007 as a holding company named T.U.T.S.P.E. Empreendimentos e Participações S.A. and in April 2008 the shareholders changed its corporate name to Nova Bolsa S.A., meaning the “New Exchange”.

On May 8, 2008, the integration process that combined the businesses of BM&F and Bovespa Holding was approved. A corporate restructuring process ensued, which included a merger of BM&F assets and liabilities into Nova Bolsa S.A.; a merger of the shares of Bovespa Holding into Nova Bolsa S.A., and adoption of the corporate name BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA S.A. – Securities, Commodities and Futures Exchange).

This integration process gave rise to one of the largest exchanges across the world by market capitalization. BM&FBOVESPA adopts a fully integrated vertical business model which encompasses infrastructure, products and services covering the entire chain of trading and post-trading activities, as well as market data distribution, creation and production of indices, and application software and systems development. As market operator, BM&FBOVESPA offers a fully-integrated, automated venue for the trading of equities and derivatives, bonds and other debt securities and financial instruments; securities listings; a securities lending facility; clearing and settlement facilities and a central securities depository (CSD). In its present configuration, BM&FBOVESPA provides market participants and investors with a wide array of transaction possibilities ranging from buy and sell trades to execution of hedging strategies, arbitrage between markets or financial assets, leveraging techniques, portfolio diversification and so forth, thus significantly contributing to the growth of the Brazilian economy.

In February 2010, we agreed the Term Sheet of a global preferred strategic partnership with the CME Group for the two exchanges (1) 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) to combine efforts for joint development of a multi-asset class electronic trading platform; as well as for us (3) to acquire additional shares in CME and increase to 5% our ownership interest in CME shares, and (4) to designate a representative to sit on the CME Board.

On June 22, 2010, we executed definitive agreements with the CME Group (for a 15-year renewable term), and in July 2010, following the closing of a US$612 million senior notes offering, we used the offering proceeds to purchase additional CME shares, thereby raising from 1.8% to 5% our aggregate ownership interest in shares of the CME Group, which reportedly made us one of the larger CME shareholders. As a result, beginning from July 2010, we now account for this investment under the equity method of accounting (a 5% interest in CME’s shareholders’ equity), and recognize gains and losses from our investment through profit or loss (in the statement of income).

Moreover, in 2011, we invested in our technology infrastructure laying the foundations of our new multi-asset class, multi-market, integrated trading and clearing systems, and we implemented the module for derivatives and spot currency contracts of our new electronic trading system, the PUMA Trading System™, developed in cooperation with the CME Group.

Over 2012 we implemented important stages of our program to improve and refresh our technology infrastructure, including (i) completion of development and testing of the equities module of our new multi-asset class, multi-market trading system, i.e., the PUMA Trading System™; (ii) announcement of a Post-Trade Integration Program (Programa de Integração da Pós-Negociação, or IPN), designed to integrate our four clearing houses into a single, multi-asset, multi-market clearing facility which will rely on CORE®, or CloseOut Risk Evaluation, to provide us with a new, cutting edge risk management framework, the lynchpin of a solid clearing and risk management system architecture for our integrated clearing facility; (iii) start of construction of our new Data Center. Completion of these projects is set to give market participants a high -capacity, high-


30

performing, technology infrastructure which will give us the ability to provide highly efficient, integrated clearing, settlement and risk management services.

In April 2013, we completed the implementation of our new multi-asset class, multi-market trading system, i.e., PUMA Trading System™, a landmark of the development of the domestic stock market. Then, in September, we announced changes to the methodology for calculation of our benchmark stock index, the Bovespa Index, or Ibovespa, the first since 1968, in an effort to correct recent distortions and to better measure and reflect the performance of local shares and the domestic stock market.

For information on our product offerings, see section 7 of this Form.

6.5. Principal merger and acquisition transactions involving the Company, subsidiaries and affiliates

As discussed in items 6.1 and 6.3 above, in its present configuration BM&FBOVESPA (previously named Nova Bolsa S.A., meaning New Exchange) is the result of an integration and corporate restructuring process that combined the businesses of BM&F and Bovespa Holding. Set forth below is a summary of the principal shareholder approved merger transactions related to us and our subsidiaries:

• At extraordinary general meetings held on May 8, 2008, the shareholders of BM&F and Nova Bolsa S.A., approved a merger of the assets and liabilities of BM&F into Nova Bolsa S.A.;

• At that same May 8 extraordinary meeting, the shareholders of Nova Bolsa S.A. also approved the absorption through merger of all shares of Bovespa Holding then issued and outstanding, and changed the company’s name to BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros.

It should be noted that the share merger per se did not terminate Bovespa Holding, which remained a going concern and our wholly-owned subsidiary until November 2008. On August 29, 2008, Bovespa Holding merged with its subsidiary Bolsa de Valores de São Paulo S.A. (the Sao Paulo Stock Exchange) and changed its name to Bolsa de Valores de São Paulo S.A. (or BVSP). Moreover, it owned and controlled Companhia Brasileira de Liquidação e Custódia (or CBLC, the Brazilian Clearing and Depository Corporation). The principal corporate transactions which ultimately combined these companies into BM&FBOVESPA were the following:

• At extraordinary general meetings held on November 28, 2008, the shareholders of each of BVSP and CBLC approved a plan of merger with and into BM&FBOVESPA;

• At an extraordinary general meeting held on November 28, 2008, the shareholders of BM&FBOVESPA approved a plan of merger whereby BM&FBOVESPA absorbed through merger the assets and liabilities of each of BVSP and CBLC. The merger implementation terminated the two merge companies.

Ultimately, as a result of these corporate transactions, the companies Bolsa de Mercadorias & Futuros - BM&F S.A (Brazilian Mercantile & Futures Exchange), Bovespa Holding S.A., Bolsa de Valores de São Paulo S.A. – BVSP (the Sao Paulo Stock Exchange) and Companhia Brasileira de Liquidação e Custódia (or CBLC, the Brazilian Clearing and Depository Corporation) ceased to exist after having merged with and into BM&FBOVESPA.

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. As a result, we increased to 5% our total ownership interest in CME shares. The cross-holdings structure discussed in subsection 6.3 above (under the heading “BM&F Segment history”) has been maintained.

6.6. Petitions for bankruptcy or (judicial or extrajudicial) recovery proceedings

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

6.7. Additional reportable information

There is no additional reportable information concerning any of the matters discussed under this section.

7. BUSINESS

7.1. Overview of the business of the Company and subsidiaries

BM&FBOVESPA S.A., the Securities, Commodities and Futures Exchange ("BM&FBOVESPA”, “Company”, we, us, our)

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, and clearing and settlement of trades in, stocks and other equity securities, corporate fixed-income securities and government bonds, exchange-traded derivatives based on equities, stock indices, interest rates, exchange rates and currencies, commodities 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 software (such as Sinacor, a brokers’ integrated back office management system with capacity to process several middle and back-office activities for brokerage firms and other financial institutions). Moreover, consistent with the requirements of CVM Ruling 461/07, our company, acting through BM&FBovespa Market Surveillance (BM&FBovespa Supervisão de Mercados), or BSM, a non-profit mutual entity and self-regulatory organization in which we hold a material membership interest, performs activities as a self-regulatory entity in charge of overseeing the activities of issuers (including ours) and market participants, and all trading, clearing and settlement transactions performed within the realm of the capital markets we operate. The BSM membership comprises the BM&FBOVESPA Settlement Bank and us.

BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA de Serviços de Liquidação e Custódia S.A.)


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With the purpose of providing services that meet the specificities and peculiarities of the markets we operate, BM&FBOVESPA established the BM&FBOVESPA Settlement Bank in 2004 as a wholly-owned subsidiary which offers market participants access to our clearing facilities and central securities depository, providing services to facilitate clearing and settlement of transactions and custody of securities and other financial assets. In addition, our Settlement Bank provides our clearing houses with access to the Central Bank’s discount window, an added layer of protection against liquidity risk and a safeguard in case we need to seize assets given as collateral. Operating pursuant to the same high standards of efficiency and security adopted by us both as market operator and operator of clearing facilities, the BM&FBOVESPA Settlement Bank offers custody and settlement related services in an exclusive, transparent and skilled environment, including by operating as a settlement bank and custodian of securities, in addition to providing foreign exchange and local representation services for nonresident investors.

BM&F (USA) Inc.

BM&F (USA) Inc. is a wholly-owned subsidiary based in New York which also operates our representative office in Shanghai, China. It operates in these regions as a cross-border representative office, establishing professional relationships with other exchanges and market regulators, as well as prospecting customers for our markets within local regulatory constraints.

BM&FBOVESPA (UK) Ltd.

BM&FBOVESPA (UK) Ltd. is a wholly-owned subsidiary based in London, which operates as our representative office for the European and the Middle Eastern regions, establishing professional relationships with other exchanges and market regulators, as well as prospecting customers for our markets within applicable local regulatory constraints.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

Through its subsidiary The Brazilian Commodities Exchange, BM&FBOVESPA operates in the registration and settlement of transactions of goods, assets and services with physical delivery, as well as the securities representing these products in the primary and secondary markets for spot, forward and options markets.

Rio de Janeiro Stock Exchange, or BVRJ (Bolsa de Valores do Rio de Janeiro)

BVRJ is an inactive stock exchange, which since 2004 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.

BM&FBOVESPA Market Surveillance, or BSM (BM&FBOVESPA Supervisão de Mercados)

Our self-regulatory function is performed through BM&FBOVESPA Market Surveillance, which is a self-regulatory and supervisory organization (SRO). In addition to performing a self-regulatory function, BSM performs market surveillance so as to identify and prevent violations to applicable capital market laws and regulations, unusual dealing, market manipulation, insider trading and other atypical behavior which may threaten the stability, fairness, transparency and credibility of markets we operate.

BM&FBOVESPA Institute (Instituto BM&FBOVESPA)

The BM&FBOVESPA Institute is a not-for-profit entity and civil society organization (CSO) we organized to assist us in realizing our aspirations for sustainable and responsible investments, by integrating and coordinating our social investment projects. Within this context, the initiatives and activities developed by the BM&FBOVESPA Institute focus more particularly on youth training and employability programs, as well as sports as a tool for human development.

7.2. Business segment information

a. Products and services offerings

1) Segment for financial and commodity derivatives – BM&F Segment

The BM&F segment comprises markets for the trading of financial and commodity derivatives (including Brazilian-interest rate contracts, U.S. dollar-denominated interest rate contracts, forex contracts, equity index contracts, commodity and commodity-based contracts offered as full-sized and, in certain cases, mini-sized contracts) and a spot currency market. Moreover, we offer a wide array of post-trade services for trades carried out within our BM&F segment, which include registration, clearing and settlement and risk management services performed using a highly efficient, high-performing system built around a solid and sophisticated risk management framework, which assist us in ensuring we operate fair and orderly markets.

Post-trade services. Within the realm of our BM&F segment we currently operate three clearing facilities, which we call derivatives clearinghouse, Fx clearinghouse and bonds clearinghouse. Transactions are settled through multilateral netting, with each clearing house acting as central counterparty (CCP) which provides stability and efficiency to our markets whereas mitigating market participants’ exposure to credit risks. For this purpose, we rely on risk assessment and management systems, procedures and methodologies, based on which we calculate implied exposures (for some contracts almost in real time, but often in real time, immediately before bids and asks are matched) and determine margin requirements and margin calls.

Derivatives Clearinghouse. It manages risks, clears and settles exchange-traded futures and options contracts, as well as OTC-traded swap contracts (in the latter case, upon the request from the counterparties).

FX Clearinghouse. It accepts registration of trades, providing clearing, settlement and risk management services in connection with spot U.S. dollar transactions (dólar pronto) traded on the Brazilian interbank market.

Bonds Clearinghouse. It accepts registration of trades, providing clearing, settlement and risk management services for transactions in Brazilian government bonds, notes and other government debt securities.

Primary sources of revenues. We derive revenues primarily from fees we charge for providing trading, registration, clearing and settlement and account maintenance services. For our customers these fees represent the cost of trading in our


32

systems. We typically calculate and charge fee rates in Brazilian currency for payment through the settlement processes implemented at our clearing houses, the exceptions being trading fees charged on certain transactions, including trades in agricultural commodity derivatives settled in U.S. dollars in New York City, United States (under the rules of Brazilian National Monetary Council (CMN) Resolution No. 2.687). We classify these fees as follows:

Trading fees. We charge fees for trades executed on our trading platforms, including at position closeouts or transfers. Exchange fees are calculated for each group of contracts with similar characteristics and purposes or relative to products based on the same type of underlying asset.

Clearing fees. We charge fees to provide clearing and settlement of transactions in listed derivatives, including position closeouts upon maturity. These fees cover our costs to provide clearing and settlement and are charged upon a cash-settled or physical delivery clearing.

Registration fees. We charge fees for the registration of transactions at the derivatives, forex and bonds clearinghouses. This fee, which consists of a compound charge relative to the registration and closeout of a position upon maturity, breaks down into a fixed component (a unit worth R$0.1166181, not applicable in the case of exempt contracts) and a variable component, which we calculate pursuant to a progressive discount method based on trading volume bands (such as specified in Circular Letter 006/2009-DP) and according to specific fee schedules per group of contracts;

Maintenance fees. These are fees we charge to monitor custody account positions and issue reports and statements. These fees cover the operating costs of maintaining inactive accounts for positions in derivatives contracts. We calculate maintenance fee based on a customer’s number of contracts outstanding at the close of business on a daily basis.

Fees we charge at our Derivatives Clearinghouse differ based on type of transaction (day trade or non-day trade), type of

contract and time to expiration or maturity. In addition, on setting fee rates for the different contracts and durations we also take into account the implied volatility, existing market conditions and the fees charged in competing markets, among other things. Typically, we charge higher fees for more volatile contracts, as they are riskier than the average. The most actively traded derivatives contracts are Brazilian-interest rate futures (the primary contract being futures based on the local interbank lending rate, or ID), for which we charge fee rates that vary in correlation with contract duration; forex futures, whose payoff depends on the foreign exchange rates of two or more currencies (the primary contract being based on the Brazilian real to US dollar actual exchange rate at a set date in the future); and derivatives based on equity indices, for which we typically charge fees set at fixed rates, which in average vary in correlation with type of transaction and investor category.

Selected operating data for BM&F segment. The tables below set forth selected operating data for the BM&F segment with regard to average daily volume traded (ADV); rates per contract and trading volume distribution by investor category.

BM&F segment – Average Daily Volume – ADV (In number of contracts)

Year ended

December 31,

Real-denominated

interest rate contracts

Forex

contracts

Equity index

derivatives

USD-denominated

interest rate contracts

Commodity

derivatives

Mini-sized

contracts

OTC

derivatives

Overall

ADTV

)

2009 843,480 447,093 80,015 78,298 10,236 52,637 9,273 1,521,032

2010 1,683,623 540,623 89,406 89,714 12,898 75,605 12,866 2,504,736

2011 1,797,215 495,537 123,273 145,222 13,235 114,432 11,726 2,700,639

2012 1,925,725 493,883 143,088 149,843 11,218 165,746 9,173 2,898,676

2013 1,856,691 494,123 113,572 155,867 9,187 208,234 10,086 2,847,761

Y-O-Y VAR. 2010/2009 99.6% 20.9% 11.7% 14.6% 26.0% 43.6% 38.7% 64.7% Y-O-Y VAR. 2011/2010 6.7% -8.3% 37.9% 61.9% 2.6% 51.4% -8.9% 7.8% Y-O-Y VAR. 2012/2011 7.2% -0.3% 16.1% 3.2% -15.2% 44.8% -21.8% 7.3% Y-O-Y VAR. 2013/2012 -3.6% 0.0% -20.6% 4.0% -18.1% 25.6% 10.0% -1.8%

Average rate per contract – RPC (In Brazilian reais)


Real-

denominated interest rate

contracts

Forex

contracts

Equity index

derivatives

USD-

denominated interest rate

contracts

Commodity

derivatives

Mini-sized

contracts

OTC

derivatives

Overall

Average RPC

2009 0.979 2.161 1.619 1.357 2.307 0.176 1.655 1.365

2010 0.889 1.928 1.564 1.142 2.168 0.128 1.610 1.134

2011 0.918 1.894 1.614 0.941 2.029 0.130 1.635 1.106

2012 1.004 2.205 1.524 1.015 2.239 0.116 1.769 1.191

2013 1.046 2.535 1.761 1.231 2.534 0.119 1.409 1.282

Y-O-Y VAR. 2010/2009 -9.1% -10.8% -3.4% -15.8% -6.0% -26.9% -2.7% -16.9% Y-O-Y VAR. 2011/2010 3.3% -1.8% 3.2% -17.6% -6.4% 1.4% 1.6% -2.5% Y-O-Y VAR. 2012/2011 9.3% 16.4% -5.6% 7.9% 10.4% -10.8% 8.2% 7.7% Y-O-Y VAR. 2013/2012 4.2% 15.0% 15.6% 21.3% 13.2% 3.0% -20.4% 7.6%

BM&F segment – Volume distribution by investor category (as a percentage)


Financial institutions

Institutional buyers

Foreign investors

Retail investors

Corporate investors

Central Bank

2009 45.5% 24.3% 20.0% 7.6% 2.5% 0.1% 2010 42.4% 29.6% 22.4% 3.9% 1.7% 0.0% 2011 38.1% 32.5% 23.0% 4.5% 1.8% 0.0% 2012 34.5% 34.0% 25.4% 4.5% 1.6% 0.1%


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2013 32.5% 35.9% 25.4% 4.8% 1.2% 0.2%

2) Segment for equities and equity-based derivatives (Bovespa segment)

The Bovespa segment comprises operations, products and services to support and manage the trading and post-trade cycles for dealings carried out on the equities markets and over-the-counter markets. We offer market participants several tools and mechanisms for the trading of variable income securities (including single stocks, exchange-traded funds (ETFs), Brazilian depositary receipts (BDRs), equity-based derivatives (including stock warrants, locally known as subscription warrants), and index-based derivatives, in addition to corporate debt securities and shares of real estate investment funds (or FIIs, similar to U.S. real estate investment trusts, or REITs) and other CVM-authorized securities (such as units of collective investment schemes), all of which are traded, cleared and settled in our fully-integrated electronic systems, resulting in a fully automated process covering the entire chain of trading.

Post-trade services. We are the only central counterparty (CCP) clearing house for transactions in equities, equity securities, equity and index derivatives and corporate bonds carried out on markets we operate, a provider of risk management services, and operator of safeguard mechanisms we adopt to handle payment default and failed delivery. We act as central counterparty for all clearing agents, absorbing the risks of counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities to ensure the financial settlement and clearing of securitie s. In addition, in certain cases we provide gross settlement services without acting as CCP, so participants may set date and time for settlement. We also provide registration, clearing and settlement services for public offerings of securities authorized for trading on the non-organized OTC market.

The primary revenue components we derive from our operations within the realm of our Bovespa segment are exchange or trading fees and fees for clearing and settlement, which we charge at varying rates depending on the type of transaction and investor category. Our Bovespa segment comprises the stock market, and cash, forward, options and futures markets for equity securities and equity-based derivatives, as well as a fixed-income market for corporate debt securities. 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-business-day 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. 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 trade execution and the settlement date (while other indices or rates may be used, indexation is frequently agreed based on 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 physical delivery of the underlying stocks, whereas exercising an index option implies paying or receiving cash for the difference between strike price and closing price for the underlying index at exercise or expiration. In any event the strike price under a stock option or index option may be indexed to an exchange rate or the IGPM or any other index.

Fixed-Income market. We provide two platforms for the trading of corporate debt securities, namely, BovespaFix, 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.

Selected operating data for Bovespa segment. The tables below set forth selected operating data and information regarding average daily trading value; average daily number of trades, equity market capitalization and distribution of financial value traded by investor category related to our Bovespa segment.

Bovespa segment – Average Daily Trading Volume – ADTV

Years ended December 31,

Cash market

(In R$ millions)

Forward market

(In R$ millions)

Options market

(In R$ millions)

Fixed-income market

(In R$ millions)

Overall ADTV

(In R$ millions)


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2009 4,943.7 96.5 245.0 1.6 5,286.8

2010 6,031.6 147.4 307.9 1.8 6,488.6

2011 6,096.3 118.0 276.3 1.1 6,491.6

2012 6,861.3 103.4 280.1 6.0 7,250.7

2013 7,094.5 91.5 221.3 1.4 7,417.7

Y-O-Y VAR. 2010/2009 22.0% 52.7% 25.7% 12.5% 22.7%

Y-O-Y VAR. 2011/2010 1.1% -19.9% -10.3% -40.4% 0.0%

Y-O-Y VAR. 2012/2011 12.5% -12.4% 1.4% 455.1% 11.7%

Y-O-Y VAR. 2013/2012 3.4% -11.5% -21.0% -76.0% 2.3%

Two product offerings have caught the attention of investors, particularly retail investors keen to turn a profit from cash market dealings, one such product being exchange-traded funds, or ETFs, which are part of a product development program we have been implementing over the last few years. The average daily value traded in ETFs hit R$99.3 million in 2013, a 14.3% year-on-year plunge and accounted for 1.3% of the overall value traded on the stock market (versus 1.7% in 2012). In contrast, in 2012, 2011 and 2010 the average daily value traded in ETFs soared 138.1%, 70.7% and 53.2% year -over-year, respectively.

The other highlight was exchange-traded real estate funds (FIIs). The number of listed FIIs rose to 115 in 2013 versus 93 listings in 2012, 66 in 2011 and 48 in 2010, with average daily value traded surging to R$31.7 million in 2013 versus R$14.6 million, R$3.7 million and R$1.5 million in 2012, 2011 and 2010, respectively.

Bovespa segment – Average daily number of trades (volume)


Cash equities market (in thousands)

Forward market (in thousands)

Options market (in thousands)

Fixed-income market (in thousands)

Overall volume (in thousands)

2009 270.6 1.3 60.4 0.007 332.3

2010 349.8 1.6 79.3 0.012 430.6

2011 476.5 1.1 89.6 0.013 567.2

2012 653.0 1.0 126.4 0.011 780.4

2013 780.0 0.8 108.5 0.010 889.3

Y-O-Y VAR. 2010/2009 29.2% 18.4% 31.3% 77.1% 29.6%

Y-O-Y VAR. 2011/2010 36.2% -26.7% 13.0% 9.9% 31.7%

Y-O-Y VAR. 2012/2011 37.1% -15.5% 41.1% -14.0% 37.6%

Y-O-Y VAR. 2013/2012 19.4% -19.7% -14.1% -11.4% 14.0%

Bovespa segment – Equity market capitalization; Turnover velocity


Year-end Market Capitalization (In R$ billions)

Average market capitalization (In R$ billions)

Turnover velocity (as a percentage)

2009 2,334.7 1,826.9 66.6%

2010 2,569.4 2,334.9 63.8%

2011 2,294.4 2,365.6 64.2%

2012 2,524.3 2,412.9 70.0%

2013 2,414.2 2,413.4 72.9%

YEAR-ON-YEAR VARIATION 2010/2009 10.1% 27.8% -276 bps YEAR-ON-YEAR VARIATION 2011/2010 -10.7% 1.3% 36 bps YEAR-ON-YEAR VARIATION 2012/2011 10.0% 2.0% 578 bps YEAR-ON-YEAR VARIATION 2013/2012 -4.4% 0.0% 295 bps

Bovespa Segment –Distribution of value traded by investor category


Retail Investors Institutional

Investors Foreign Investors

Financial Institutions

Corporate Investors

Other

2009 30,5% 25,7% 34,2% 7,4% 2,2% 0,1% 2010 26,4% 33,3% 29,6% 8,4% 2,3% 0,1% 2011 21,5% 33,4% 34,7% 8,6% 1,7% 0,1% 2012 17,9% 32,1% 40,4% 8,1% 1,5% 0,0% 2013 13,6% 30,5% 49,6% 5,1% 1,3% 0,1%

Other services

Securities lending.

Our equities clearinghouse operates a securities lending facility known as BTC, which permits investors to lend securities traded on our exchange against collateral posted by borrowers that engage in short-selling or arbitrage transactions, thus adding liquidity to these securities. We act as central counterparty to ensure settlement of all lending transactions. In doing so, we adopt strict lending and risk management standards to ensure efficient and stable market operations. The expansion of securities lending transactions has performed a significant role in increasing stock market liquidity in the last few years. As a facilitating agent for securities lending and borrowing, our securities lending facility ensures more efficient clearing and settlement processes, as in the event of failed delivery the BTC will promptly intervene and compulsorily procure so-called ‘automatic loans’ to ensure that particular transaction is properly cleared and settled.


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Borrowers are charged fees on each lending transaction registered in our system. For regular transactions initiated by a borrower and for ‘automatic loans’ we charge fees at a rate calculated over the financial value of the open interest position. 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, 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). The average financial value of open interest positions as the year closed in 2013 hit R$40.8 billion versus R$31.9 billion, R$30.2 billion, R$20.5 billion, and R$12.7 billion in the earlier years of 2012, 2011, 2010 and 2009, respectively.

Securities listings

Listing services consist of services provided to issuers listing securities for trading on our markets. Our revenues from listing fees correlate primarily with annuities we charge from issuers (of shares or BDRs) as a rate of their capital stock amount, as well as with fees we charge from investment funds at a fixed rate.

Our stock market comprises the traditional listing segment for stocks and four special listing segments (Novo Mercado; Corporate Governance Level 2 (Nível 2) and Level 1 (Nível 1) segments; and Bovespa Mais segment), which require issuers to adopt progressively more stringent corporate governance standards not prescribed by law. These requirements typically aim for achieving more transparent corporate management practices, including through heightened disclosure and reporting standards, better balancing the rights of shareholders by ensuring minority holders are extended fair treatment, and promoting widespread share ownership. Moreover, we have established Bovespa Mais as a special listing segment designed for mid-cap issuers whose shares have relatively lower liquidity or who are keen on pursuing gradual access to the stock market (say, by implementing

lower volume equity offerings or offerings designed for a limited number of investors). The corporate governance standards, reporting and disclosure requirements as well as corporate rules applicable in these segments are set forth in the listing rules for each segment and accessible in our website.

Selected operating data. The tables below set forth selected operating data and information regarding listings (per listing segment) and equity offerings in the period from 2009 to 2013. In Bovespa Mais are traded stocks with less liquidit or with a gradual market access strategy.

Number of listings Years ended December 31,

2013 2012 2011 2010 2009

Stock exchange listings (1) 454 452 466 471 434

Traditional segment 255 262 274 295 265 Special listing segments 187 178 182 167 159

Novo Mercado (NM) 134 127 125 112 105 Level 2 (N2) 21 18 19 18 19 Level 1 (N1) 32 33 38 37 35

Sponsored BDRs 12 12 10 9 10

Organized OTC market listings (2) 74 69 71 70 77

Bovespa Mais (MA) 7 3 2 1 1

Funds and other listings (stock exchange and OTC market)

246 241 198 163 131

Total 774 762 735 704 642 (1) Include securities issued by securitization firms, as well as bond issuers and issuers of real estate receivables certificate s (CRIs) whose shares are not

listed to trade on the stock exchange and, thus, are not taken into account in our calculation of equity market capitalization. (2) Effective from February 2014 Bovespa Mais is now a listing segment of the stock market having migrated from the OTC market.

Equity offerings Years ended December 31,

2013 2012 2011 2010 2009

Number of equity offerings

Initial public offerings 10 3 11 11 6

Follow-on; seasoned offerings 7 9 11 11 18

Total 17 12 22 22 24

Combined gross offering proceeds

(In R$ billions)

Initial public offerings 17.3 3.9 7.2 11.2 23.8

Follow-on; seasoned offerings 6.1 9.3 10.8 63.2 22.2

Total 23.4 13.2 18.0 74.4(1) 46.0

(1) Includes the oil reserves assignment the Brazilian government and Petrobras agreed in connection with the seasoned offering conducted in August 2010 by

Brazil’s oil and gas giant Petrobras.

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

We operate the only domestic central securities depository, or CSD, existing in Brazil, through which we provide depository and safe custody services to customers which deal on our equities and fixed-income securities markets. We also provide fungible custody services pursuant to which we hold fiduciary title to securities under custody. We perform daily reconciliation of custody positions and the underlying securities, which are identified by an ISIN code (International Securities Identification Number) under a segregated account structure which identifies the ultimate beneficial owner.

Our customers for custody and back-office services are securities issuers and investors in equities and fixed-income securities. These services include custody accounts identified by investor, account and position statements which we furnish by mail or online through the Internet; treatment of corporate actions, including money transfers and payment receipts, recording of exercise of conversion, exchange and other rights on, in or under securities, and account operations processed in real time. In


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addition, we facilitate interactions and communication among issuers, trustees and customer investors.

The number of active custody accounts at the central securities depository at the close of 2013 totaled 617.6 thousand (with

589.3 thousand accounts registered to retail investors) versus 613.9 thousand (587.2 accounts registered to retail investors) in 2012, 611.2 thousand accounts (583.2 thousand registered to retail investors) in 2011, 640.2 thousand accounts (610.9 thousand registered to retail investors) in 2010, and 575.7 thousand custody accounts (552.4 thousand registered to retail investors) in 2009.

We derive revenues from depositary and custodial services in the form a fixed monthly fee per account, which we charge to intermediary brokerage firms relative to the accounts or open interest positions they service. In addition, since May 2009, we also charge an additional fee rate for open interest positions holding assets in excess of R$300 thousand.

Moreover, our central securities depository provides deposit and safe custody services for retail investors dealing on our Treasury Direct (Tesouro Direto) platform, which we operate for the trading of government bonds through the Internet pursuant to a cooperation arrangement agreed with the Brazilian Treasury. The average financial value of government bonds, notes and other government debt securities under custody at our central securities depository as the year closed in 2013 totaled R$9.8 billion versus R$9.0 billion in 2012, R$6.1 billion in 2011 and R$3.9 billion in 2010, while the average number of investors rise to 95.1 thousand, 84.3 thousand, 64.4 thousand and 42.3 thousand respectively.

Market access permits

Under applicable regulations, trading activities on regulated organized markets, including ours, as well as clearing and settlement an custodial activities are typically performed through investment intermediaries (for the most part, brokerage firms) whom we call market participants. In order to gain access to our markets and make us of our trading infrastructure and post-

trade (clearing & settlement, central depository) infrastructure, market participants are required to hold market access permits. First-time permit applicants are expected to pass certain technical, technological and operating qualification standards (which we verify in special audits), in addition to meeting certain capital and other requirements. Moreover, as any other permit holder, they are expected to continue to meet these standards and requirements as long they hold a permit. The requirements and processes applicant investment intermediaries must fulfill are basically divided into two primary categories: trading and post-trade activities. In addition, applicants are subject to pay certain fees to us, as follows:

Licensing fee: this is a one-off charge collected in connection with the permit application processing;

Access fee: this is a one-off charge collected thirteen months after the admission of a market participant.

Technology infrastructure – Brokerage firms holding (or applying for) permits for access to our markets are required to meet certain requirements related to their technology infrastructure and other IT resources which are set forth in our Technology Infrastructure Access Manual. In addition, we provide technology services which, among other things, include the following:

Trading workstations;

Order entry gateways;

Contingency SLC servers for use at the broker’s trading desk or branch; and

Contracting of order turnaround by minute, based on agreed volume bands, as selected based on expected order flow (volume) and operating strategy of each particular brokerage firm.

The table below set forth data on number of investment intermediation firms (including brokers and broker-dealers) holding permits for access to our markets in the periods indicated. You should note these firms may apply for permits to operate in more than one market or segment, and to engage in trading and/or post-trade activities.

Licensed intermediary investment services firms Years ended December 31,

2013 2012 2011 2010 2009

Equities market (1) 72 88 87 85 81

Financial and commodity derivatives markets (2) 50 74 68 67 62

Forex markets 24 27 38 38 66

Bonds market 54 58 61 61 80 (1) Include markets for stocks and other equity securities, as well as equity-based instruments and derivatives, in addition to corporate debt securities. (2) Include the markets for financial and commodity derivatives.

Market Data and Information Services

We distribute to local and international authorized vendors across the world quote and trade-related information generated in our stock market, options and forwards and futures markets for equity-based securities and derivatives, and in our fixed-income market, and financial and commodity derivatives futures and options markets, as well as information on our stock indices, in addition to news reports on market developments.

We currently authorize market data 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 transmitted directly by us or retransmitted by other intermediating vendors. Brokerage firms may obtain market data through direct market data feeds provided by us or a vendor.

OTC Market (iBalcão)

With the aim of strengthening our business as operators of an organized over-the-counter market, in third quarter of 2013 we launched iBalcão, our new OTC platform for registration of over-the-counter transactions, meaning transactions features are

mutually agreed between the counterparties. Financial assets which can be traded over-the-counter and registered in our new OTC platform include:

Fixed-income securities. These include (1) a number of agribusiness securities, such as agribusiness credit bills (letras


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de crédito do agronegócio), or LCAs; rural product notes (cédulas de produto rural), or CPRs; agribusiness receivables certificates (certificados de recebíveis do agronegócio), or CRAs; agribusiness credit certificates (certificados de direitos creditórios do agronegócio), or CDCAs; agricultural deposit certificates (certificados de depósito agropecuário) and related agribusiness warrants (warrants agropecuários), or CDAs and WAs,2 respectively, and other agribusiness securities; (2) financial instruments and securities originating from the real estate development market, such as real estate credit bills (letras de crédito imobiliário), or LCIs, and real estate credit notes (cédulas de crédito imobiliário) or CCIs, and real estate receivables certificates (certificados de recebíveis imobiliários), or CRIs, whose underlying are CCIs; and (3) bank certificates of deposit, which are marketable money market instruments bearing a maturity date and a specified fixed interest rate, and represent a promise to repay the time deposit amount plus interest at maturity.

Foreign exchange derivatives. These include commodity forwards (gold) and foreign exchange forwards, starting with (for the moment) OTC non-deliverable forward currency contracts (for financial settlement, no central counterparty available), in addition to flexible options and a number of swaps.

Structure notes (certificados de operações estruturadas, or COEs). A hybrid security which combines several financial products (say, a stock or a bond and an embedded derivative component with characteristics that adjust the security's risk/return profile) and whose return performance tracks that of the underlying asset and the derivative embedded within it. Structured notes allow for greater transparency, flexibility and diversity, making them an interesting instrument for investors, issuers and regulators.

b. Revenues derived by operating segments, including as a percentage of total net revenues.

See subsection 10.1(h) below for information on revenues derived by our operating segments, including as a percentage of total net revenues.

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

We do not calculate income or loss per operating segment.

7.3. Information on products and services comprising each operating segment

a. Production process characteristics

Organized markets

Brazilian capital markets regulation classifies “organized markets” as exchange markets and organized over-the-counter (or OTC) markets. Under applicable regulation, an exchange is a displayed marketplace where centralized and multilateral systems allow order entry, competitive matching and execution of buy and sell orders for trades in securities (with assistance from licensed intermediary investment firms, which may also engage in proprietary trading) or, alternatively and subject to certain requirements, a displayed market which provides order entry, crossing and execution systems and a licensed third market maker which acts as counterparty to the trade and is required to post firm bids and offers in the system.

In turn, an organized OTC market provides centralized and multilateral systems for trading (entry, matching and execution of buy and sell orders) in securities or, in the alternative, a platform for registration of previously agreed transactions (with a market maker acting as counterparty to the trade); adopts price formation standards; permits a trader to deal directly, with no

assistance from an intermediary firm; permits delayed display of quote and trade-related information. Other features distinguishing an exchange from an OTC market are trading volume and type of target investing public.

Brazilian capital markets law grants regulatory and oversight powers and authority to the Brazilian Securities Commission, or CVM, the market regulator, which in turn may delegate some of its authority to self-regulatory organizations. CVM Ruling No. 461 dated October 23, 2007, provides the regulatory framework governing regulated securities markets and the formation, organization and operation or extinction of stock exchanges, commodity exchanges, futures exchanges and organized over-the-counter markets. Other regulators for the domestic capital markets and the Brazilian payment system are the Brazilian National Monetary Council (or CMN, acting through the Central Bank) and the Central Bank.

Exchange and organized over-the-counter markets

Exchange markets typically provide centralized and multilateral systems for trading (entry, matching and execution of buy and sell orders) in securities, with assistance from an intermediary firm. Organized OTC markets either operate similarly to an exchange or provide a platform for registration of previously agreed transactions, whether or not with assistance from an intermediary firm.

We operate exchange markets for the trading of financial and commodity derivatives, spot currency contracts, and government bonds, all of which comprise our BM&F segment. Additionally, we operate a stock market and exchange markets for the trading options on singles stocks and other equity-based derivatives, as well as corporate debt securities, all of which comprise our Bovespa segment. Both segments operate pursuant to a fully automated, vertically integrated business model. Our service offerings encompass the entire life cycle of trading, from order entry to matching, to execution, to risk management, and clearing and settlement (where we act as CCP to ensure multilateral settlement). In addition, through our central securities depository, we provide safe custody for financial assets and back-office services to intermediary firms and investors.

A particular trait of exchange markets is that securities and derivatives traded on these markets consist of standardized securities and derivatives contracts, which facilitates trade processing and price discovery. This is because centralized and multilateral trading systems that adopt price formation standards require asset classes of similar characteristics which must be fungible things (i.e., mutually replaceable for things of the same kind and volume). As such, they trade freely regardless of holder.

2 Agricultural deposit certificates (certificados de depósito agropecuário), or CDAs, are instrument which represent a promise to deliver agricultural commodity whereas agribusiness warrants (warrants agropecuários), or WAs, represent a cash payment promise and give their holders pledge rights over the underlying CDAs.


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In contrast, in an organized OTC market price formation standards and trading practices differ from those adopted in an exchange. Additionally, while in the OTC market for equity securities and equity-based derivatives (Bovespa segment) fungibility is still a prerequisite, this is not so in the OTC market for financial and commodity derivatives (BM&F segment). OTC financial and commodity derivatives are typically non-fungible, non-standard, tailor-made contracts, or else standardized (as to size, underlying asset, duration, settlement conditions, etc) registerable contracts for direct trading by two counterparties, with contract prices being derived from the market price or value of the underlying asset.

Post-trade; Clearing facilities

As part of our vertically integrated business model, we provide clearing and settlement services. In the course of the exchange integration process whereby BM&F and Bovespa merged with 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 in the domestic capital markets: (i) equities clearinghouse (for single stocks, equity securities and equity-based derivatives, as well as corporate debt securities), (ii) derivatives clearinghouse (for financial and commodity derivatives), (ii) FX clearinghouse; and (iii) bonds clearinghouse.

Our clearing facilities operate pursuant to Law No. 10,214 dated March 27, 2001, which authorizes mul tilateral clearing and settlement, regulates the role of the central counterparty (as performed by systemically material clearing facilities, such a s ours), and permits the seizure 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 any of our trading segments, data on these trades are automatically fed into the system in our clearing houses and promptly relayed to investment intermediaries 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 clear and settle physical delivery contracts (entailing delivery of the relevant securities or contract underlying and, as the case may be, the transaction registration) and cash-settled contracts (entailing movement of monetary resources). 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 trades in exchange-traded derivatives, FX derivatives, government bonds and stocks, but voluntary for the clearing and settlement of trades in OTC derivatives and corporate debt securities.

Our clearing houses typically act as central counterparty (CCP) for the derivatives markets (including futures, forward, options and swap markets), the spot U.S. dollar market, the government bonds markets (cash, forward, repo and securities lending markets), and for the equities markets (cash, forward options, futures and securities lending markets) and the fixed-income markets (cash and securities lending markets for corporate debt securities). 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 make up 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 as margin, plus special funds intended to cover possible losses due to defaults and, in addition, co-liability undertaken by broker and clearing participants regarding transactions they intermediate or clear.

The models we adopt in calculating margins are stress-test based, meaning we 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.

Technology Evolution

In the last few years we have been making substantial investments in modernizing our technology infrastructure so as to offer the markets we operate high performing and efficient systems, and trade and post-trade services. We discuss our recent

technology developments below.

PUMA Trading System

We believe that having the ability to offer electronic trading at very low latency, high throughput capacity and scalability are critical factors to support market growth which give us key competitive strengths, which requires us to make substantial and continuing investments in our technology infrastructure. For this reason, in 2010 we agreed a partnership and technology cooperation with the CME Group for joint development and implementation of a multi-market, multi-asset class electronic trading system with throughput capacity below one millisecond, which we planned and designed to replace old systems. We named it PUMA© Trading System. The system module for the trading of financial and commodity derivatives contracts and spot currency contracts (BM&F segment) launched in the second half of 2011, whereas the modules for the trading of stocks and other equity securities, equity-based derivatives (Bovespa segment) were implemented quite recently, in the first half of 2013.


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Thus implemented, our new trading technology infrastructure brought the round-trip time, or RTT, down one millisecond, with capacity to support our future growth. RTT is the primary metrics to measure the performance of electronic trading systems.

The table below sets forth data on the evolution of RTT and throughput capacity over the years through to December 31, 2013.


2007 2008 2009 2010 2011 2012 2013

BM&F segment

(PUMA Trading System from 2011)

Round-trip time (in milliseconds) 70 25 20 10-15 ~1 ~1 ~1

Daily throughput capacity (in thousands of trades) 55 200 200 400 400 400 400

Average daily volume (in thousands of trades) 23 29 39 66 66 99 128

Peaks (in thousands of trades) 42 49 76 152 195 195 251

Bovespa segment

(PUMA Trading System from 2013)

Round-trip time (in milliseconds) 450 300 20 10-15 10-15 10-15 ~1

Daily throughput capacity (in thousands of trades) 390 770 1,500 3,000 3,000 3,000 3,000

Average daily volume (in thousands of trades) 153 245 332 431 567 781 837

Peaks (in thousands of trades) 343 414 591 800 1,092 1,500 1,650

Clearinghouse integration (“IPN”):

We are now in the process of implementing a longtime plan to combine our four clearinghouses into a single, fully-integrated, central clearing house in the context of which we created in 2012 our Integrated Post-Trading Facility Program (Programa de Integração da Pós-Negociação or IPN). In the last quarter of 2011, we announced a partnership with Cinnober, a Sweden-based global provider of advanced financial technology, which will include a perpetual license for use of TRADExpress RealTime

Clearing®, their high performing, multi-asset, clearing and real-time risk management system. The RealTime Clearing system (RTC) will be the backbone our future multi-asset, multi-market, integrated clearing facility for its technologically innovative, high performing capabilities, capacity, stability and security features. And in the second quarter of 2011 we announced the development of CORE, or CloseOut Risk Evaluation, our new central counterparty multi-asset, multi-market risk management framework, and lynchpin of a solid risk management system architecture with performance to match the RTC system. Our new integrated clearing house is set offer highly efficient clearing and settlement services for multiple assets across markets, and optimized use of cash and collateral allocation through cross margining. It should also greatly enhance our competitive position. Under the IPN program schedule, the new technology infrastructure for financial and commodity derivatives is set to launch in 2014, and the infrastructure for variable income assets in the following year.

b. Features of the distribution process

Distribution channels

Investment services firms (particularly commodity and securities brokerage firms) are market participants holding permits for direct access to our trading systems, entitled to engage in proprietary trading and in investment intermediation on behalf of their customers.

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. Access permit categories 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 ar e classified into three access categories (i) full; (ii) regional; and (iii) pioneering. 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.

Access permits may grant full or restricted rights for participants to trade and intermediate trading on our markets, depending on the terms of the permit application. Our board of directors reviews and evaluates applications for access permits pursuant to applicable regulations and article 30, item ‘f ‘of our bylaws.

Operational Qualification Program, or PQO (Programa de Qualificação Profissional)

Taking it account that Brokers and brokerage firms typically represent an important distribution channel for our products and for the very nature of their business they work actively in prospecting and expanding our end customer base, we launched in 2005, the PQO with the purpose of certify the quality of the services offered by brokers and brokerage firms. Our quality certification program includes training and professional guidance on good market practices and higher standards of efficiency and performance with the aim of strengthening their position as market participants, while ensuring efficiency and stability

for the markets we operate. Consistent with the program, we adopted several criteria to grant a number of qualification seals classed by category of investment intermediation services provided.

These certification seals include the following: “Agro Broker” (for brokers that focus on intermediation of trades in agricultural commodity derivatives); ”Carrying Broker” (for brokers that operate as clearing agents and as custodians for securities); “Execution Broker” (for brokers that focus on providing professional trading services); “Retail Broker” (for brokers whose customer base comprises mainly retail corporate 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); “Home Broker” (for brokers that focus on a customer base primarily made up of retail investor s to whom they provide direct market access, typically through the Internet, while offering simple, objective guidance requiring very little human interference).

For purposes of obtaining a certification seal, brokerage firms are required to operate pursuant to certain standards and


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practices based on which qualification is recognized. Investment services firms licensed to operate as market participants ar e required to observe and practice certain general standards (minimum qualification requirements), in addition to special standards proper of their elected qualification category.

The heightened standards by which brokerage firms operate in our markets underpin the development of Brazilian capital markets. For this reason, in 2010 we extended our qualification and certification program to Bovespa segment participants as well. Starting from 2012, the qualification and certification programs for market participants are now a responsibility of our subsidiary BM&FBOVESPA Market Surveillance, or BSM, our self-regulatory and market surveillance arm.

c. Market characteristics in relevant operating segments.

i. Market share per segment.

Because we operate the only domestic exchange and OTC markets for listed equities and derivatives, as of December 31, 2013, 2012, 2011 and 2010 our share of these markets was 100%.

According to data compiled by the Futures Industry Association and released in the FIA Magazine, in the year 2013 we were operating the fifth largest derivatives markets across the world by number of contracts traded, which was up from sixth largest such market in the years 2010, 2011 and 2012. This measure takes into account financial and commodity contracts traded on futures and options markets comprising our BM&F segment and equity-based derivatives and options on single stocks and stock indices traded on derivatives markets comprising our Bovespa segment. In the case of registered trades in OTC derivatives, our market share is approximately 20%.

In addition, in 2013 we held a 64.2% market share of the overall financial value traded in stocks of Brazilian issuers across the world (versus 63.0%, 58.3% and 55.4% in the earlier years of 2012, 2011 and 2010, respectively), while the remainder correlates with on-exchange transactions in U.S. markets, such as the New York Stock Exchange, or NYSE, in the form of depositary receipts. Moreover, while between 2004 and 2013 our stock market registered 151 initial public offerings, the NYSE registered five offerings of shares of Brazilian issuers. In addition, we registered 110 follow-on and seasoned offerings.

Moreover, according to data (in US dollars) compiled by the World Federation of Exchanges (WFE), in 2013 our stock market (Bovespa segment) ranked 15th worldwide in terms of gross process raised in equity offerings, 13th in terms of average daily trading value and 17th in terms of equity market capitalization. And according also to WFE data, as measured in terms of volume traded, equity market capitalization and volume of equity offerings, we are the by far leading Latin American exchange.

ii. Competitive market conditions

Brazilian Exchange 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 São Paulo Stock Exchange, under the name of Free Exchange (Bolsa Livre), which in 1895 changed to São Paulo Government Funds Exchange (Bolsa de Fundos Públicos de São 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, as an exchange for the trading of financial, commodity and equity-based 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, 2013, 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 competitors in terms of markets for OTC derivatives, government bonds and corporate debt securities, as well as registration of OTC financial instruments, in addition to having competitors for certain services our subsidiary BM&FBOVESPA Settlement Bank provides.

iii. 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.

iv. 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).

Our main suppliers and service providers include the following:


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IT (software and hardware): HP; EMC Computer; Hitachi Data System; IBM; Compusoftware; AtosEURONEXT (NYSE); Software AG; Oracle; Cinnober; Calypso; Red Hat Brasil Ltda; Smarts Market; CME;

Services: 7COMm; IBM; Multirede; Hitachi Data Systems, UOL Diveo, CPM Braxis; Microsoft; T&M; Tempest Serviços

Specialist providers: 7COMm; GPTI; 3CON Consultoria; Stefanini;

Telecom providers: Algar-CTBC; Embratel Primesys; RTM; TIM – Intelig; Telefônica Brasil S.A.; Telmex;

Web hosting providers: UOL Diveo; Tivit.

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; background on relationships with licensing authorities.

Industry Regulation

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 the Brazilian National Monetary Council (Conselho Monetário Nacional), or CMN; and (ii) Law No. 6,385/76, 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.

Regulators

The Brazilian National Monetary Council, the Central Bank and the Brazilian Securities Commission (Comissão de Valores Mobiliários), 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.

Brazilian National Monetary Council (CMN)

The CMN members are 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.

Brazilian Securities Commission (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; (iii) oversee the activities of publicly held companies, and the stock, commodities and futures markets, as well as the members of the securities distribution system; (iv) release information or set guidelines for clarification or guidance to market participants; (v) 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 provision of fungible and non-fungible custodial services for securities and bonds.

Under article 18 of the Brazilian Securities Market Law (Law No. 6,385/76, as amended), the operation and management of organized securities markets by us are subject to consent and oversight by the CVM.

In addition, the CVM issued Ruling 461/07, which regulates the formation, organization, operation and extinction of exchange markets (whether for stocks, commodities or derivatives) and organized over-the-counter markets, or OTC markets. This


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means our organization and operations are subject to direct oversight from the CVM, who has authority to validate regulatory rules we may issue in connection with the operation of markets we operate, 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 completion of the integration process which combined the businesses 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 Ruling 461/07, the CVM 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 operator and operator of clearing houses that, in such capacity, act as a self-regulatory and market surveillance organization, responsible for monitoring and overseeing market participants and the transactions carried out on our markets. Our self-regulatory and market surveillance arm is BM&FBOVESPA Market Surveillance (BSM), a not-for-profit mutual association and a financially autonomous functional entity, with its own budget, infrastructure and specialized employees, created to perform self-regulatory and market surveillance functions, ensuring market integrity, efficiency and stability, enhanced investor protection and sound market practices. BSM maintains close relationships with the regulators, in particula r the Central Bank and the CVM. It is also responsible for keeping the CVM abreast of market developments and provid ing the market regulator with periodic reports of its market surveillance operations.

Moreover, the CVM regulates our business as operator of a central securities depository and provider of custodial services for securities, as well as securities bookkeeping and registrar services (per CVM Rulings 541/13, 542/13 and 543/13, respectively). Our license as central securities depository operator was issued on November 28, 2008.

Under Law No. 10,214/01, activities involving clearing and settlement services, which we provide through our four clearing facilities (the derivatives, FX and bonds clearinghouses for BM&F segment and the Bovespa segment clearinghouse for equities and corporate debt securities) 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 Communiqué 9,419 dated April 18, 2002, the Central Bank granted BM&F licenses to operate a derivatives clearinghouse and an FX clearinghouse, while having granted Bovespa (through CBLC, then a subsidiary which later merged with Bovespa) a license to operate the equities clearinghouse; Communiqué 13,750 dated September 29, 2005, authorized the derivatives clearinghouse to expand the scope of its business operations; and Communiqué 12,789 dated December 21, 2004, granted BM&F a license to operate the bonds 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 entails no 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, we are committed to building social and environmental responsibility awareness and encouraging sound responsible practices vis-à-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), contemplating all of the Scope 1, 2 and 3 emissions provided under the GHG Protocol Corporate Standard. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. Moreover, since 2010 our reports are now externally assured.

We were also the first emerging-market exchange to sign up to the Principles of Responsible Investment (PRI), a United Nations-backed initiative and a set of aspirational and voluntary guidelines for investment entities wishing to address environmental, social, and corporate governance (ESG) issues. The Principles provide a voluntary framework by which investors can incorporate ESG issues into their decision-making and ownership practices and so better align their objectives with those of society at large. As a signatory member, we also disseminate the Principles encouraging other investors to adhere. And we are a member of the advisory committee of the Carbon Disclosure Project.

Moreover, such as announced at the 2012 Rio+20 Conference, acting within the scope of the Sustainable Stock Exchanges Initiative, or SSE, we have committed to advance long-term, sustainable investing in our markets by promoting improved environmental, social and corporate governance disclosures, performance and reporting by issuers and market participants. The SSE is an initiative supported by the U.N. Global Compact, the United Nations-supported Principles for


43

Responsible Investment (PRI), the United Nations Environment Program Finance Initiative (UNEP-FI), and the United Nations Conference on Trade and Development (UNCTAD).

c. Dependence on patents, trademarks, licenses, concession grants, franchise arrangements or other royalty-related contracts, which are material for the course of business.

Given the nature of our business, intellectual property assets can be critical to our operations, in particular IT-related assets which in some cases may have been licensed from third parties. The information below provides an overview of these assets, which are discussed in further detail under subsections 9.1(b) and 9.2 of this Reference Form.

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 Propriedade Industrial), or INPI, the local patent and trademark office (see the information 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”, “Novo Mercado BM&FBOVESPA,” “PUMA Trading System BM&FBOVESPA,” and “BM&FBOVESPA The New Exchange,” which are either currently registered or are the subject of trademark applications previously filed with the INPI, classifying as trademarks or services marks in the several categories of services and products we and our subsidiaries offer. 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, 2013, we had 68 trademarks and service marks registered in other countries in South America, Europe, Asia, South Africa and the United States, including trademarks as “BM&FBOVESPA,” “Bovespa – Bolsa de Valores de São Paulo,” “Ibovespa” and “Bovespa – São Paulo Stock Exchange.” We periodically review our portfolio of brands, marks and logos, taking steps to adjust it our strategy as may be appropriate.

As of December 31, 2013, we had five patent applications pending at the INPI in Brazil, and one patent application pending in the United States. These applications are related to our GTS trading system, the Brazil Easy Investment project and our CORE project (or CloseOut Risk Evaluation), our new central counterparty, multi-asset, multi-market risk management system framework. Pursuant to a strategic decision taken by our chief technology and IT security officer, the patent applications previously filed in Argentina in connection with the GTS trading system have been withdrawn and discontinued.

2) Domain names

As of December 31, 2013, BM&FBOVESPA and its subsidiaries owned 147 domain names registered on behalf of the Company in Brazil and 16 domain names registered elsewhere, other than in Brazil, all on behalf of our Company. As of the same 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”.

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 from local and foreign customers

a. Revenues attributable to customers based in the issuer’s home country, including as a percentage of total net revenues

We estimate domestic investors accounted for about 70.0% of the overall volume traded on our markets in the year ended December 31, 2013.

b. Revenues attributable to foreign customers on a per-country basis, including as a percentage of total net revenues

Investors based in the United Kingdom, United States and Uruguay accounted for 13.6%, 12.0% and 4.2%, respectively, of the overall value traded in 2013 on markets comprising the Bovespa segment, which means these investors accounted for estimated 5.7%, 5.1% and 1.8%, respectively, of our total net revenue for 2013. In turn, our BM&F segment, investors based in the United States and the United Kingdom accounted for 22.1% and 3.1%, respectively, of the overall volume traded in 2013, which means these investors accounted for approximately 9.3% and 1.3%, respectively, of our total net revenue for 2013.

c. Total revenues attributable to customers based elsewhere other than in Brazil, including as a percentage of total net revenues

We estimate foreign investors accounted for about 30.0% of the overall volume traded on our markets in the year ended December 31, 2013.

7.7. How the laws and regulations of foreign jurisdictions influence the business

We are subject to the regulatory authority of the U.S. Commodity Futures Trading Commission, or CFTC, which is the independent agency of the United States Government that regulates futures and options markets. 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, provided certain CFTC requirements were met, no civil or criminal action would be taken against BM&FBOVESPA for providing direct access to trading systems in U.S. derivatives markets, or any

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against market participants (meaning local brokerage firms or clearing agents for BM&F segment markets) and authorized U.S. persons for accessing electronic trading systems in U.S. derivatives markets through BM&FBOVESPA. The relevant CFTC requirements include, among other things, reporting requirements concerning volumes and types of contracts traded, new contract offerings, changes to our organizational structure 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 Bovespa Index. Under applicable U.S. law, a foreign exchange offering derivatives based on a stock index must meet certain contract-related requirements and index composition and compilation criteria. One such criterion requires the underlying stock index to be a broad-based index (as opposed to a narrow-based security index, as defined).

On August 26, 2009, the CFTC authorized us to offer and sell to U.S. persons the following futures contracts and strategies:

Bovespa Index Futures (or 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 Futures Rollover (IR1).

On the 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 CME’s Globex system). In addition, we have applied to offer and sell in the United States derivatives contracts based on the IBrX50 index. A response to this latter application to the CFTC is

currently pending.

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

In 2013, for the fifth year in a row we published our annual sustainability report, which provides information about our socially and environmentally responsible performance, in accordance with the guidelines of the Global Reporting Initiative (GRI) on sustainability reporting. We were the second exchange worldwide and the first in the Americas to adopt the GRI Guidelines on sustainability reporting. A sustainability report is a comprehensive annual report that gives financial and non-financial information about economic, environmental, social investing and governance performance, and enables a company to report sustainability information in a way that is similar to financial reporting, including by providing comparable data, with agreed disclosures and metrics. It is also encouragement for investors and analysts to incorporate environmental, social and corporate governance (ESG) issues into their investment decision-making and ownership practices, thus better aligning their objectives with those of society at large. Our 2013 Annual Report was prepared pursuant to a GRI Application Level C declaration, which the Global Reporting Initiative has checked issuing the relevant GRI Application Level Check Statement.

You may access our Annual Reports in our website at www.bmfbovespa.com.br, or in our investor relations gateway, www.bmfbovespa.com.br/ri.

Our commitment to sustainability is underpinned by the realization that our Company has the key mission of “inducing, promoting and practicing socially and environmentally responsible principles and investments designed to promote sustainable development.” Amidst other actions geared towards realizing these aspirations and ensuring these values are built into our approach to business, we launched our “Novo Valor” (New Value) program in May 2010, which aims to promote sustainable development of Exchange and capital market involving all audiences, like investors, companies and brokerage firms. Our Novo Valor initiatives and programs include:

Corporate Sustainability Index, or ISE (Índice de Sustentabilidade Empresarial). Created in 2005, this index measures return on a theoretical portfolio of stocks of issuers highly committed to sound practices in social and environmental responsibility, corporate sustainability and higher corporate governance standards. The ISE is a benchmark for the domestic capital markets and a driver of socially and environmentally responsible investing (see additional information at www.isebvmf.com.br);

Carbon-Efficient Index, or ICO2 (Índice Carbono Eficiente). Launched in December 2010, the Carbon Efficient Index, or ICO2, is a liquidity-weighted total return index where stocks are weighted also by their carbon footprint performance

(calculated as MTeCO2/Gross Revenues).

In Good Company Program. This program provides a discussion forum for deeper understanding of the impact of sustainability and social investing initiatives on management and day-to-day operations. A highlight of the program, in April 2011, we launched a publication designed as a ‘first-steps guide’ to socially and environmentally responsible investments entitled “Novo Valor – Corporate Sustainability: How to begin; who to involve; what to prioritize” (Novo Valor – Sustentabilidade nas Empresas, Como Começar, Quem Envolver e o que Priorizar) .

Greenhouse Gas Emissions Inventory Report. We issued in 2010 our first GHG Emissions Inventory Report (for 2009), which was followed in 2011 by a Scope 3 report for our 2010 GHG emissions inventory, which has been externally assured. Our GHG emissions inventory reports are filed with the GHG Emissions Registry established by the Brazil GHG Protocol Program, where our reports can be accessed.

Report of Explain Initiative. In December 2011 we issued a recommendation for listed public companies to adhere to sustainability reporting in line with the reporting guidelines of the Global Reporting Initiative, or GRI. The initiative was implemented on a “report-or-explain” basis and allows for progressive adherence to sustainability reporting. For this purpose, issuers are expected to indicate under subsection 7.8 of their annual Reference Forms whether or not

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they engage in sustainability reporting (by releasing a sustainability report per se or an integrated report) and, if so, where the report be can accessed, or otherwise explain why not.

SSE Initiative. At the 2012 Rio+20 Conference, we, BM&FBOVESPA, along with Nasdaq OMX, the Johannesburg Stock Exchange, the Istanbul Stock Exchange and the Egyptian Exchange, acting within the scope of the Sustainable Stock Exchanges Initiative, or SSE announced a commitment to advance long-term, sustainable investing in our domestic markets by promoting enhanced environmental, social and corporate governance disclosures, performance and reporting by issuers and market participants. The announcement followed a report by the Sustainable Stock Exchanges Initiative, or SSE, named “2012 Sustainable Stock Exchanges: A Report on Progress,” supported by the U.N. Global Compact, the United Nations-supported Principles for Responsible Investment (PRI), the United Nations Environment Program Finance Initiative (UNEP-FI), and the United Nations Conference on Trade and Development (UNCTAD).

BM&FBOVESPA Institute

As part of our corporate citizenship and social investment initiatives, in 2007 we organized the Institute (Instituto BM&FBOVESPA) as a civil society organization (CSO), which under Brazilian law takes the form of a public interest non-governmental organization locally known as OSCIP (organização da sociedade civil de interesse público), for the purpose of integrating and coordinating our social investment projects. The initiatives the Institute operates are:

Sports and Cultural Space (Espaço Esportivo e Cultural). Located in Paraisópolis, a lower income district in the city of São Paulo, the Space is a center for the practice of sports and cultural and artistic development of children and teenagers of that community. The Space offers year-round classes to about 700 youngsters and teenagers;

BVSA – The Environmental and Social Investment Exchange (Bolsa de Valores Socioambientais). 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 socially and environmentally responsible projects (including education and community advancement projects) in search of sponsors and financing. In 2013 the program amassed R$614 thousand to finance 17 projects;

In Action. Created in October 2010, this is a voluntary community mobilization program whose volunteer members are some of our employees, interns and their family members. At present, 428 registered members use a social media network we call “In-Action Gateway” (Portal em Ação) as the basis for their volunteer community work.

Job Training Association. Created in 1996, this job training association (Associação Profissionalizante BM&FBOVESPA) is committed to promoting social inclusion by carrying out education actions aimed to modify present conditions and ensure young adults (aged 15 to 22) are given an opportunity to build on their capabilities and skills for a better future. Programs offered by the Association include Building Employability Skills (Capacitação para Empregabilidade), Handyman (Faz Tudo) and Beauty Space (Espaço Beleza). In 2013 we celebrated the 17th anniversary of our association with a track record of 75% employability rate.

Athletics Club. The Athletics Club (Clube de Atletismo BM&FBOVESPA) was organized in 2002 as part of our efforts to take a more inclusive approach to corporate citizenship and a more active role in the preparation and sponsorship of track and field athletes. In 2011, we organized and are sponsoring a junior track & field team composed of young people from underprivileged backgrounds aged 6 to 18. In 2012, at its 10th anniversary, the Club unveiled its new Sports Training Center located nearby São Paulo in the city of São Caetano do Sul. Product of a cooperation arrangement with the São Caetano City Hall. It is an indoor sports complex, with both indoor and outdoor track and field facilities, which offers fitness, strength and conditioning areas, medical and rehabilitation facilities, and other athlete services.


There is no additional reportable information requiring discussion at this time.

8. ECONOMIC GROUP

8.1. Description of the economic group

a. direct and indirect controlling shareholders

We have no direct or indirect controlling shareholder or controlling group of shareholders sharing similar interests. In addition, no shareholders,’ voting or other agreements have been filed in our registered office to regulate rights to elect o ur directors or the exercise of voting rights by shareholders.

b. subsidiaries and affiliates

BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA de Serviços de Liquidação e Custódia S.A.)

The BM&FBOVESPA Settlement Bank is a wholly-owned subsidiary organized to facilitate clearing and settlement for trades carried out on markets we operate, including by providing custodial services for securities and other financial assets, foreign exchange and local representation services for nonresident investors, in addition to performing important risk mitigation and other 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 our representative office in Shanghai, China. It operates in these regions as a cross-border representative office, establishing professional relationships with other exchanges and market regulators, as well as prospecting customers for our markets within local regulatory constraints.


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BM&FBOVESPA (UK) Ltd.

BM&FBOVESPA (UK) Ltd. is a wholly-owned subsidiary based in London, which operates as our representative office for the European and the Middle Eastern regions, establishing professional relationships with other exchanges and market regulators, as well as prospecting customers for our markets within local regulatory constraints.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

The Brazilian Commodities Exchange is a mutualized not-for-profit entity in which BM&FBOVESPA holds a 53.28% majority membership interest consisting of 203 membership certificates. The corporate purpose of the Brazilian Commodities Exchange is to develop and offer regional venues (including spot and forward and options markets) for the free and open and competitive trading of agricultural commodities (as actuals or otherwise) and OTC agribusiness securities. For additional information, see section 7 of this Form.

Rio de Janeiro Stock Exchange, or BVRJ (Bolsa de Valores do Rio de Janeiro)

BVRJ is an inactive stock exchange. Since 2004 it has been renting out space in part of the building where its headquarters are located. The Rio Exchange Convention Center leases space for seminars, congresses, conferences, professional training sessions, private meetings, and similar other events. For information on the real property owned by BVRJ, see the information under subsection 7.9 of this Form.

BM&FBOVESPA Market Surveillance, or BSM (BM&FBOVESPA Supervisão de Mercados)

Our self-regulatory function is performed through BM&FBOVESPA Market Surveillance, which is a self -regulatory and

supervisory organization (SRO) formed as a not-for-profit mutual association. BSM is unconsolidated in our financial statements. For additional information on BSM, see section 7 of this Form.

BM&FBOVESPA Institute (Instituto BM&FBOVESPA)

The BM&FBOVESPA Institute is a not-for-profit entity and civil society organization (CSO) we organized to assist us in realizing our aspirations for sustainable and responsible investments, by integrating and coordinating our social investment projects. The BM&FBOVESPA Institute is unconsolidated in our financial statements. For additional information on the Institute, see section 7 of this Form.

c. Equity holdings in companies belonging to the economic group

Subsidiaries and affiliates Equity holding(%)

BM&FBOVESPA Settlement Bank 100.00%

Brazilian Commodities Exchange 53.28%

Rio de Janeiro Stock Exchange 86.95%

BM&F (USA) Inc. 100.00%

BM&FBOVESPA (UK) Ltd. 100.00%

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

None of our subsidiaries and affiliates holds shares issued by us.

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.

100.0% 99.99%

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

BM&FBOVESPA

Market Surveillance

(“BSM”)

0.01%

100.0% 53.28% 86.95% 100.0%

99.99%

Brazilian

Commodities

Exchange

BM&FBOVESPA

Settlement

Bank

BM&F (USA) Inc. BM&FBOVESPA

(UK) Ltd.

Rio de Janeiro

Stock Exchange

(“BVRJ”)

BM&FBOVESPA

Institute


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The BM&FBOVESPA Institute (Instituto BM&FBOVESPA) was organized in 2007 as a civil society organization (CSO) which, under Brazilian law, takes the form of a public interest non-governmental organization locally known as OSCIP (organização da sociedade civil de interesse público), for the purpose of integrating and coordinating our social investment projects. BM&FBOVESPA Market Surveillance (BM&FBOVESPA Supervisão de Mercados), or BSM, is a not-for-profit mutual association established as a self-regulatory and market surveillance organization which, consistent with CVM Ruling 461/07, is responsible for regulatory and oversight activities within the realm of markets we operate. Both these companies are unconsolidated in our financial statements, which is why they are not included in the table provided in subsection 8(1)(c) above.

8.3. Restructuring processes; merger and acquisition transactions

Other than as discussed in subsection 6.5 of this Form, there have been no corporate restructuring transactions, whether materially impacting our economic group or otherwise.


There is no additional material information related to our economic group and this subsection.

9. MATERIAL ASSETS

9.1. Material noncurrent assets; other assets.

Not applicable, as noncurrent assets are not material for our business.

a. Fixed assets

Type of property Property address City State Owned/Rented/Leased

Headquarters building Praça Antonio Prado 48 São Paulo São Paulo Owned property

High rise Rua XV de Novembro 275 São Paulo São Paulo Owned property

High rise Rua Florêncio de Abreu 195 São Paulo São Paulo Owned property

Building under construction Estrada Vinte e Seis 85 Santana de Parnaíba São Paulo Owned property

High rise Av. Ceci 1,850 – district of Tamboré Barueri São Paulo Rented property

High rise Rua Bento Branco de Andrade Filho 621–

– district of Santo Amaro São Paulo São Paulo Rented property

Office space Rua Líbero Badaró 471, 4th floor São Paulo São Paulo Rented property

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

1) Material registered trademarks and trademark applications in Brazil

Asset description Subsection 9.2 of this Form sets forth a list of all our material registered trademarks and trademark applications in Brazil.

Territory covered Brazil.

Effective life 10 years from the registration date (renewable for like periods) - per Industrial Property Law (Law No. 9,279/96, as amended).

Events potentially triggering loss of trademark rights

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 or application. Moreover, we do not anticipate facing any event or circumstance which could result in loss of rights on any particular trademark or trademark application. No trademark or trademark application has been contested or challenged in any way, whether administratively or before the courts.

Effects of loss of rights

A loss of rights under any registered trademark or trademark application could entail inability to prevent other parties from using the trademarks and, possibly, discontinuance of use, neither of which is anticipated by us to the information provided herein.

2) Material trademarks registered elsewhere other than in Brazil

Asset description Subsection 9.2 of this Form sets forth a list of our material registered trademarks abroad.

Territory covered

Territories of Argentina, Chile, Paraguay, Uruguay, Mexico, Canada, the United States of America, territory covered by the European Union’s Office of Harmonization for the Internal Market (OHIM), Spain, Portugal, France, the United Kingdom, Switzerland, Hong Kong, Japan, South Korea, Singapore and Taiwan, as applicable, and as stated in the list provided in subsection 9.2 below.

Effective life Pursuant to applicable legislation in the jurisdictions where trademarks have been registered or trademark applications filed, the effectively life typically spans 10 years after the registration date (renewable for like periods).


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 or application. Moreover, we do not anticipate facing any event or circumstance which could result in loss of rights on any particular trademark or trademark application. No trademark or trademark application has been contested or challenged in any way, whether administratively or before the courts.


A loss of rights under any registered trademark or trademark application could entail inability to prevent other parties from using the trademarks and, possibly, discontinuance of use, neither of which is anticipated by us by virtue of the information provided herein.

3) Patent applications in Brazil

Asset description Subsection 9.2 of this Form sets forth a list of our patents and patent applications in Brazil.


Effective life Pursuant to the Industrial Property Law ( Law No. 9,279/96, as amended), 20 years from the patent deposit date. However, you should note that as of the date of this Form, no patents had been issued to us.


48


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 patent application. Moreover, we do not anticipate facing any event or circumstance which could result in loss of rights on any particular patent application. No patent application has been contested or challenged in any way, whether administratively or before the courts.


A loss of rights under any patent or patent application could entail inability to prevent other parties from using the patents and, possibly, discontinuance of use, neither of which is anticipated by us by virtue of the information provided herein.

4) Cross border patent applications and patent applications under the Patent Cooperation Treaty (or PCT applications)

Asset description Subsection 9.2 of this Form sets forth a list of our patents and patent applications abroad.

Territory covered United States of America.

Effective life Pursuant to applicable legislation in the jurisdictions in which patent applications have been filed, 20 years from the patent deposit date. However, you should note that as of the date of this Form, no patents had been issued to us elsewhere other than 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 patent application. Moreover, we do not anticipate facing any event or circumstance which could result in loss of rights on any particular patent application. No patent application has been contested or challenged in any way, whether administratively or before the courts.


A loss of rights under any patent or patent application could entail inability to prevent other parties from using the subject-matter of the patent application and, possibly, discontinuance of use, neither of which is anticipated by us by virtue of the information provided herein.

5) Technology transfer agreements

Asset description Subsection 9.2 of this Form sets forth a list of existing technology agreements.


Effective life As stated under subsection 9.2 under the heading “Technology Agreements.”


To the best of our knowledge, there have been no events or circumstances prior to the date of this Form which would threaten or otherwise imply loss of our rights under any existing technology agreement, which rights have not been challenged by any third party under judicial proceedings or otherwise.


Given the information above, we do not anticipate losing any such contractual rights. However, we could resort to using alternative technology solutions if the relevant technology agreement were to terminate.

For additional information about trademarks, patents, applications and technology agreements, see the tables under subsection 9.2 of this Form, under the heading “Additional Reportable Information – Supplemental Information to Subsection 9.1(b)”.

c. Companies in which the issuer holds ownership interest

Corporate name BM&FBOVESPA Settlement Bank – Subsidiary (Banco BM&FBOVESPA de Serviços de Liquidação e Custódia S.A.)

Brazilian taxpayer ID (CNPJ) 00.997.185/0001-50

Based in (city – state - country) São Paulo, SP, Brazil

Business Facilitates clearance and settlement of transactions carried out on BM&FBOVESPA markets; acts as an important risk mitigation vehicle

Ownership interest 100.0%

CVM Registration (number) Not registered as a public company (closely-held)

Investment decision basis (decisions to acquire and to hold the investment)

Facilitating the clearing and settlement process and the custody of financial assets for customer market participants with access to our clearing houses.

Investment carrying value R$59,028 thousand (at December 31, 2013)

Investment market value at year-end (based on year-end stock quote)

Not applicable

Appreciation or depreciation in the last three years (based on carrying value)

None, except for a positive equity-method adjustment to carrying value, in the amount of R$6,670 thousand.

Market value appreciation or depreciation in the last three years (based on year-end stock quotes)

Not applicable

Total dividends received in the last three years R$2,750 thousand

Corporate name Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias) – Subsidiary


Based in (city – state - country) São Paulo, SP, Brazil

Business Facilitates trading of agricultural commodities, provides services to the public sector by operating the electronic auctions system and to the agribusiness sector by operating a market for agricultural commodities.




Developing and offering regional venues for the trading (including cash and forward market 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


49


Investment market value at year-end (based on year-end stock quote )

Not applicable


None, except for a negative equity-method adjustment to carrying value, in the amount of R$387.0 thousand.


Not applicable

Total dividends received in the last three years R$0.00

Corporate name BVRJ - Rio de Janeiro Stock Exchange (Bolsa de Valores do Rio de Janeiro) – Subsidiary


Based in (city – state - country) Rio de Janeiro, RJ, Brazil

Business

BVRJ is an inactive stock exchange. Since 2004 it rents out space in part of the building where its registered office is located. The Rio Exchange Convention Center leases space for seminars, congresses, conferences, professional training sessions, private meetings, and similar other events. See the information under subsection 7.9 of this Form.




In 2000, with the purpose of consolidating all Brazilian equity trading on a single exchange, the São Paulo Stock Exchange (Bovespa) led an integration program with the other eight Brazilian stock exchanges, whereby it became the only exchange operator for equities in Brazil. In 2002, BM&F acquired most of the membership certificates in the Rio de Janeiro Stock Exchange, which gave it control over the rights to operate Sisbex, the government bonds trading system previously operated by the Rio de Janeiro Stock Exchange (BVRJ).



Not applicable


None, except for a negative equity-method adjustment to carrying value, in the amount of R$ 2,693 thousand.


Not applicable


Corporate name BM&F (USA) Inc. – Subsidiary

Brazilian taxpayer ID (CNPJ) Not applicable

Based in (city – state - country) New York, NY, U.S.A.

Business

Acts as our cross-border representative office, establishing professional relationships with other exchanges and market regulators and, giving due regard to local regulatory constraints, prospecting customers for our markets. It also tackles distribution of market data and other market information abroad; prospects for strategic alliances and opportunities with other exchanges.




Establishing professional relationships with other exchanges and market regulators, prospecting customers for our markets.



Not applicable


None, except for a positive equity-method adjustment to carrying value in the amount of R$131 thousand.


Not applicable


Corporate name BM&FBOVESPA (UK) Ltd. – Subsidiary


Based in (city – state - country) London, England

Business

Acts as our cross-border representative office, establishing professional relationships with other exchanges and market regulators and, giving due regard to local regulatory constraints, prospecting customers for our markets. It also tackles distribution of market data and other market information abroad; prospects for strategic alliances and opportunities with other exchanges.




Establishing professional relationships with other exchanges and market regulators, prospecting customers for our markets.


50



Not applicable


None, except for a positive equity-method adjustment to carrying value in the amount of R$45 thousand.


Not applicable


Corporate name CME Group, Inc. – Affiliate


Based in (city – state - country) Chicago, IL, U.S.A.

Business

The CME Group serves the risk management needs of customers around the world. As an international marketplace, it attracts buyers and sellers to its multi -asset electronic trading systems (CME Globex) and open-outcry system. CME listings include futures and options based on interest rates, equity indices, foreign exchange, energy, agricultural commodities, rare and precious metals, weather and real estate.

Ownership interest 5%

CVM Registration (number) A public company registered with the U.S. Securities and Exchange Commission (SEC)


Global preferred strategic partnership whereby the two exchanges collaborate in identifying strategic joint investment and commercial partnership opportunities in securities and derivatives markets, in addition to jointly developing and implementing a new multi-asset class electronic trading platform.

Investment carrying value R$3,312,606 thousand (at December 31, 2013)

Investment market value at year-end (based on year-end stock quote at year-end)

R$3,119,716 thousand


None


December 31, 2013 – R$1,361,772 thousand December 31, 2012 – R$205,922 thousand December 31, 2011 – (R$268.329 thousand)

Total dividends received in the last three years

December 31, 2013 – R$169,958 thousand December 31, 2012 – R$124,470 thousand December 31, 2011 – R$ 32,907 thousand


CME Group, Inc. 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% (from 1.8% 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).

BM&F (USA) Inc. and BM&FBOVESPA (UK) Ltd. Pursuant to corporate documents dated February 1, 2011, BM&FBOVESPA (UK) Ltd., which was earlier a wholly-owned subsidiary of BM&F (USA) Inc., is now directly under our control as a wholly-owned subsidiary.

Supplemental Information to Subsection 9.1(b)

1) Material registered trademarks and trademark 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

BOVESPA 813878128 Registered NCL 36 10/29/1987 2/6/1990

FUTURO IBOVESPA 813878144 Registered NCL 36 10/29/1987 2/6/1990

BOLSA DE MERCADORIAS & FUTUROS - BM&F 816169683 Registered NCL 36 7/4/1991 7/12/1994

BOVESPA BOLSA DE VALORES DE SÃO PAULO 820693081 Registered NCL 36 5/28/1998 4/3/2001

BOVESPA BOLSA DE VALORES DE SÃO PAULO 200010476 Registered NCL 42 5/29/1998 6/19/2001


BTC - BANCO DE TÍTULOS CBLC 821874640 Registered 36.10/70 12/15/1999 8/25/2009

BRAZILIAN CLEARING AND DEPOSITORY CORPORATION - CBLC

821877259 Registered 36.10/70 12/16/1999 4/18/2006

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 5/22/2000 8/22/2006

CBLC COMPANHIA BRASILEIRA DE LIQUIDAÇÃO E CUSTÓDIA

822472791 Registered NCL 36 7/27/2000 9/12/2006

CBLC COMPANHIA BRASILEIRA DE LIQUIDAÇÃO E CUSTÓDIA

822472813 Registered NCL 38 7/27/2000 9/12/2006

BOVESPA FIX MERCADO DE TÍTULOS DE DÍVIDA CORPORATIVA

823194264 Registered NCL 36 4/23/2001 11/3/2010


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BM&F GLOBAL TRADING SYSTEM 823411656 Registered NCL 36 7/5/2001 2/21/2007

BM&F BRAZILIAN MERCANTILE & FUTURES EXCHANGE

823411680 Registered NCL 36 7/5/2001 2/21/2007

BM&F BRASIL 823411710 Registered NCL 36 7/5/2001 2/21/2007

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





MEGABOLSA MB 827242328 Registered NCL 36 3/17/2005 11/20/2007

BOVESPA MAIS BRASIL 827634048 Registered NCL 36 8/12/2005 12/26/2007

ISE ÍNDICE DE SUSTENTABILIDADE EMPRESARIAL 828056102 Registered NCL 36 1/20/2006 3/18/2008

NÍVEL 1 BOVESPA BRASIL 828232202 Registered NCL 36 3/29/2006 7/27/2010

NÍVEL 2 BOVESPA BRASIL 828232296 Registered NCL 36 3/29/2006 7/27/2010

NOVO MERCADO BOVESPA BRASIL 828232253 Registered NCL 36 3/29/2006 7/27/2010

BANCO BM&F 900170212 Registered NCL 36 1/30/2007 5/17/2011


MERCADO INTERNACIONAL BOVESPA BDR - NÃO PATROCINADO

829344411 Registered NCL 36 10/9/2007 9/6/2011


829344420 Registered NCL 42 10/9/2007 9/6/2011


829344438 Registered NCL 16 10/9/2007 9/6/2011

BM&F BOVESPA 829678557 Registered NCL 41 5/6/2008 8/2/2011

BM&F BOVESPA 829678565 Registered NCL 36 5/6/2008 8/2/2011

BM&F BOVESPA A NOVA BOLSA 830006273 Applied for NCL 41 12/8/2008

BM&F BOVESPA A NOVA BOLSA 830006281 Applied for NCL 36 12/8/2008

IBOVESPA 830006524 Applied for NCL 41 12/8/2008

IBOVESPA 830006532 Registered NCL 36 12/8/2008 2/1/2011

SINACOR 830050159 Registered NCL 36 2/5/2009 8/9/2011

iMERCADO 830322876 Registered NCL 36 8/6/2009 5/15/2012

BVMF 830323465 Registered NCL 41 8/7/2009 5/15/2012



DESAFIO BM&FBOVESPA 830404660 Registered NCL 36 10/23/2009 8/21/2012

Educar BM&FBOVESPA 830467351 Applied for NCL 41 12/21/2009

Índice BM&FBOVESPA Financeiro - IFNC 830501428 Registered NCL 36 1/6/2010 11/27/2012

Índice BM&FBOVESPA Financeiro - IFNC 830501410 Registered NCL 35 1/6/2010 11/27/2012

TJ3 BM&FBOVESPA A Nova Bolsa 830863630 Applied for NCL 36 1/28/2011






Novo Mercado BM&FBOVESPA 830876383 Applied for NCL 16 2/28/2011





PUMA Trading System BM&FBOVESPA 831093226 Applied for NCL 09 8/17/2011



BM&FBOVESPA The New Exchange 831093250 Applied for NCL 36 8/17/2011



BRICSMART 840042922 Applied for NCL 42 3/2/2012





CORE CloseOut Risk Evaluation (ESTRUTURA DE

AVALIAÇÃO DE RISCO PARA CONTRAPARTES CENTRAIS) – RISK

MANAGEMENT STRUCTURE FOR CENTRAL COUNTERPARTIES 840296568 Applied for NCL 42 10/11/2012

CORE CloseOut Risk Evaluation (ESTRUTURA DE

AVALIAÇÃO DE RISCO PARA CONTRAPARTES CENTRAIS) – RISK

MANAGEMENT STRUCTURE FOR CENTRAL COUNTERPARTIES 840296584 Applied for NCL 16 10/11/2012

BVSA – BOLSA DE VALORES SOCIOAMBIENTAIS 840509715 Applied for NCL 16 5/9/2013


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iBalcão 840477139 Applied for NCL 09 4/9/2013




SINCAD SISTEMA INTEGRADO DE CADASTRO BM&FBOVESPA 840718349 Applied for NCL 09 11/26/2013




2) Material trademarks registered abroad

Country Trademark Case record Status Class Deposit date

South Africa BM&FBOVESPA 2012/07304 Applied for NLC 16 3/22/2012

South Africa BM&FBOVESPA 2012/07306 Applied for NLC 36 3/22/2012

South Africa IBOVESPA 2012/07309 Applied for NLC 16 3/22/2012

South Africa IBOVESPA 2012/07311 Applied for NLC 36 3/22/2012

Argentina IBRX 2.039.057 Registered NLC 36 1/7/2004

Argentina INDICE BOVESPA 1.980.146 Registered NLC 36 12/1/2003

Argentina BOVESPA BOLSA DE VALORES DE

SÃO PAULO 1.983.386 Registered NLC 36 4/20/1993

Argentina BOVESPA BOLSA DE VALORES DE

SÃO PAULO 1.983.387 Registered NLC 41 2/2/2004

Chile IBOVESPA 680.922 Registered NLC 36 12/15/1992

Chile BOVESPA SÃO PAULO STOCK

EXCHANGE 681.837 Registered NLC 36 4/21/1993

Chile BOVESPA BOLSA DE VALORES DE

SÃO PAULO 681.838 Registered NLC 36 4/21/1993

Chile IBRX 703.162 Registered NLC 36 2/12/2004

China BM&FBOVESPA 10725319 Registered NLC 36 4/5/2012

China BM&FBOVESPA 10725321 Registered NLC 16 4/5/2012

China IBOVESPA 10725323 Registered NLC 36 4/5/2012

China IBOVESPA 10725325 Registered NLC 16 4/5/2012

European Union IBRX 003657641 Registered NLC 36 2/10/2004

South Korea IBOVESPA 34906 Registered NLC 36 4/6/1995

Spain 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 BRICSMART 85562222 Applied for NLC 16 /35 /36 /41 /42 3/6/2012

United States of America IBOVESPA 3247943 Registered NLC 36 7/27/2004

France IBOVESPA 95557762 Registered NLC 36/41 2/10/1995

Hong-Kong IBOVESPA 199806844 Registered NLC 36 4/25/1995

India IBOVESPA 2301880 Applied for NLC 16 /35 /36 /41 /42 3/19/2012

India BM&FBOVESPA 2301881 Applied for NLC 16 /35 /36 /41 /42 3/19/2012

Japan IBOVESPA 4055845 Registered NLC 36 4/14/1995

Mexico IBOVESPA 509.242 Registered NLC 36 3/3/1995

Paraguay IBRX 270402 Registered NLC 36 1/9/2004

Portugal IBOVESPA 307.429 Registered NLC 35 2/17/1995

Portugal IBOVESPA 307.430 Registered NLC 36 2/17/1995

The United Kingdom of Great Britain and Northern Ireland

IBOVESPA 2021172 Registered NLC 16 /35 /36 5/22/1995


PIBB PAPÉIS DE ÍNDICE BRASIL BOVESPA

2367095A Registered NLC 36 6/30/2004


PIBB PAPÉIS DE ÍNDICE BRASIL BOVESPA

2367095B Registered NLC 36 6/30/2004

Russia BM&FBOVESPA 486884 Registered NLC 16 /35 /36 4/4/2012

Russia IBOVESPA 486885 Registered NLC 16 /35 /36 4/4/2012

Singapore IBOVESPA T9502807G Registered NLC 36

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


53

Uruguay IBRX 352.300 Registered NLC 36 1/13/2004

3) Patent applications in Brazil

Application number Deposit date Publication date Title Status

PI 0801789-1 4/30/2008 2/1/2011 Sistema de operacionalização de transação bursátil (Exchange Trading System)

Patent application in effect

PI 0801983-5 5/29/2008 2/9/2010 Processo e sistema de realização de precificação (Pricing System and Collection Processing)


PI 0801982-7 5/29/2008 2/9/2010 Processo de realização de uma operação bursátil de direto e sistema de assistência (Straight-Through Trade Processing and Assistance System)


BR 11 2012 008205 1 A2

9/30/2010 (international application)

4/9/2012 (local application)

12/5/2012

Método implantado por computador para facilitar a negociação de valores mobiliários, sistema para facilitar a negociação de valores mobiliários, meio de armazenamento legível por computador implantado por hardware e meio de armazenamento

(Computer-implemented method for facilitating securities trading; system for facilitating securities trading; machine-readable storage medium)


BR 11 2013 028263 0

5/2/2012 (international application)

11/1/2013(local application)

Publication still pending

Processos para a avaliação de risco para o encerramento de uma carteira

(Portfolio Liquidation Risk Assessment Processes)


4) Patent applications abroad

Country Application No. Deposit date Status

United States US-13/462,091(Final application)

US-61/481,473 (provisional application) Final application on May 2, 2012.

Provisional application on May 2, 2011 Patent application in effect

5) Technology transfer agreements

5.1.) Technology Agreement CME – BM&FBOVESPA

Technology recipient: Our Company, BM&FBOVESPA Technology provider: the CME Group, Inc. (CME) Subject-matter: Technology transfer agreement for development of a multi-asset class electronic trading system for

the trading of individual equities and other equity securities; equity, financial and commodity derivatives; corporate 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.

Term of effectiveness: We estimate the agreement, which was executed in 2010, will be effective for fifteen (15) years from the execution date.

5.2.) Technology Agreements Cinnober – BM&FBOVESPA

Technology recipient: Our Company, BM&FBOVESPA Technology provider: Cinnober Financial Technology AB (Cinnober) Subject-matter: Software customization, maintenance and support agreements which contemplate knowledge

transfer by means of technology supply and provision of technical and scientific assistance in connection with (1) development and customization of a new automated, integrated post-trade platform; (2) installation, implementation and testing of the automated platform; (3) provision of support and maintenance services for the installation, implementation, personnel training and operation stages.

Term of effectiveness: Software system customization agreement - Executed in 2011, this agreement will be effective for the entire project lifecycle;

Term of effectiveness: Software system support and maintenance agreement - The agreement was executed in 2011 to take effect from April 3, 2013. While agreed for an indefinite period, we anticipate the agreement will be effective for at least 10 years.

6) Material technology agreements

Term of effectiveness: Each of our material technology agreements typically has its own renewal method and timeline, as designed to meet market standards or our specific operating requirements.

Territory covered: Mostly Brazilian territory, with possible effects on other countries due to the nature of our business.

6.1) Overview


54

The technology contracts that are relevant for the development of our activities are as follows: (i) license and maintenance contracts for use of the software application called GLWin in the trading engine of the derivatives module of our PUMA Trading System (agreed with GL Trade, now Sungard), and for use of a customized RiskWatch software application originally developed by Algorithmics Inc. for risk assessment related to the regular settlement cycle of trades in equity and equity-based securities; (ii) licenses for use of software applications we utilize in our business operations, which we agreed with the rights’ owners; and (iii) contracts agreed with technology platform providers for update, technical support and maintenance of equipment used in our business operations, including the technology platforms of our trading systems.

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 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 2011 we entered into a software customization agreement and a software system support and maintenance agreement with Cinnober Financial Technology AB, a Sweden-based global provider of advanced financial technology, which will include a perpetual license for use of TRADExpress RealTime Clearing®, their cutting edge, nimble, high performing, multi-market clearing and real-time risk management system. The RealTime Clearing system (RTC) will be the backbone our future multi-asset class, multi-market, integrated clearing facility. The agreements contemplate software customization, maintenance and support agreements which contemplate knowledge transfer by means of technology supply and provision of technical and scientific assistance in connection with (1) development and customization of a new automated, integrated post-trade platform; (2) installation, implementation and testing of the automated platform; (3) provision of support and maintenance services for the installation, implementation, personnel training and operation stages.

Also in 2011 we entered into a technology licensing and master services agreement with Calypso Technology, Inc., a global application software provider of an integrated suite of trading and risk applications to financial and capital market institutions. The Calypso system will give us a new operating model for registration and treatment of OTC transactions, risk calculation and collateral management.

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) PUMA Trading System

Our new multi-asset trading system, a joint creation of the CME Group and BM&FBOVESPA, the PUMA Trading System™ is one of the most advanced and efficient trading systems available anywhere across the world and the basis of all our trading platforms. Development started in 2010 and the module for derivatives and spot currency contracts was implemented in 2011. In the first half of 2013 we implemented the module for equities, bonds other debt securities (Bovespa segment).

We also have an electronic trading system called Sisbex, which we have adapted especially for the execution of transactions in government bonds, including buy and sell trades, repurchase agreements and securities lending transactions. The Sisbex system operates with the SIOPEL software application discussed below.

6.2.2) Bovespa Fix and Soma Fix

The electronic trading system for government bonds and other federal debt securities operates with the software application known as SIOPEL, developed by Mercado Abierto Electronico S.A. (MAE), which operates the primary debt securities market in

Argentina. In 2001, after purchasing their trading platform, we agreed a partnership with MAE and Bolsa Electronica de Valores del Uruguay S.A. (BEVSA) to develop and enhance the software application further.

As the software was originally developed for the debt securities market, it features characteristics of that market, such as trading in rates, quote requests and spread orders.

In addition to providing the fixed income market with a safe, modern and reliable trading environment, one of the SIOPEL system’s major advantages is the flexibility that it provides to market managers and traders.

We use the SIOPEL application and the Sisbex system in our BM&F segment as a trading platform for government bonds.

6.3) Sinacor

In addition, we also developed and offer brokerage firms an integrated middle and back office management system known as SINACOR (Sistema Integrado de Administração de Corretoras), which provides services with safety, efficiency and efficacy and


55

can process various middle and back office activities for brokerage houses and other Intermediary Institutions.

10. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

10.1 Management’s discussion and analysis.

a. financial condition and net equity position

Year ended December 31, 2013 compared with year ended December 31, 2012.

The year 2013 was marked by important developments pertaining to the markets we operate as well as developments related to our products and offerings. The stock market has seen a boost in trading activity which led to record high average value traded, to R$7.42 billion in 2013 from R$7.25 billion in 2012, in the wake of an upsurge in turnover velocity, despite the unmoving equity market capitalization . In contrast, while the volumes traded in financial and commodity derivatives were somewhat subdued, to 2.85 million in 2013 from 2.90 million in 2012, a slightly decrease of 1.8% in the average daily traded value, and the average rate per contract (“RPC”) went up 7.6%, to R$1.282 in 2013 from R$1.191 in 2012, raising revenues, primarily because a substantial portion of the volumes correlate with contracts for which we charge U.S. dollar-denominated fees, so that ultimately these revenues were positively influenced by the depreciation of the Brazilian real against the U.S. dollar.

In a striking note of market performance, while in the first half of 2013 value traded in cash equities as well as volume traded in financial derivatives hit record highs, in the second half of the year trading value and volumes plummeted, unveiling a shift in market mood triggered by sinking risk appetite and deteriorating market expectations, as portfolios investment outflows soared.

Ultimately, our diversified revenue base and innovative products and services offerings (including securities lending and Treasury Direct services, products as exchange-traded real estate funds (FIIs) and agribusiness credit bills (LCAs) added to the positive effects of our market making program for options on single stocks, and equity offerings worth R$23 billion in gross proceeds (the largest equity-financing volume in three years), all contributed to spring a 3.5% year-on-year climb in total revenues.

Reflecting this performance, our consolidated total revenues climbed 3.5% year-over-year, to R$2,370,229 thousand in 2013 from R$2,289,023 thousand one year ago, as the outcome of a 5.9% rise in revenues from trading and clearing fees earned in our BM&F segment coupled with a 1.0% drop in revenues from trading and clearing fees earned in our Bovespa segment; and an important contribution from revenues unrelated to trading volumes, which surged 10.4% year-over-year.

Once again, our unwavering efforts to controlling costs and expenses drove us to successfully contain the build-up in adjusted expenses below the average inflation rate to R$575,764 thousand in 2013 from R$563,487 thousand in 2012, an increase of 2.2%. In addition, we continue to pledge steadfast commitment to return capital to shareholders by combining cash distributions and share buybacks effectively and without affecting our solid financial position.

Thus, our consolidated operating income climbed 2.5% year-on-year to R$1,334,635 thousand from R$1,301,670 thousand previously, while the consolidated GAAP net income (attributable to BM&FBOVESPA shareholders) increased 0.7% to R$1,081,516 thousand from R$1,074,290 thousand one year ago.

Last, but not least, BM&FBOVESPA is well-positioned to capture future growth opportunities the Brazilian market will certainly continue to offer, though it must be said the economic outlook as 2013 came to a close became more challenging in light of the present macroeconomic conditions. Nonetheless, we believe our investments in product development and technology infrastructure are key factors for the future growth and diversification of our revenue base, for the improvement of our services, and will be critical in consolidating the efficiency and strength of the Brazilian capital markets. It is our firm belief the development and implementation of our business strategy will continue to bear fruit in the years ahead.


BM&FBOVESPA delivered solid operating performance in 2012, which in our BM&F segment (financial and commodity derivatives) translated into growth and record high volumes, whereas growth in our Bovespa segment (equities, equity -based derivatives and index-based derivatives) was driven primarily by increase in turnover velocity, spurred mainly by the increase in average daily value traded by foreign investors. The primary reasons for this are twofold: one, the fact that mo st of the high frequency trading volume originates cross border; two, a shift in monetary policy which in December 2011 led the Government to remove the 2% tax on financial transactions (IOF tax) levied on hot money inflows for investments in variable-income securities.

In turn, the record growth in the BM&F segment was pushed mainly by increase in average daily volume traded in Brazilian-interest rate contracts, the most actively traded contract group. In addition, the average rate per contract (RPC) climbed both as a result of the increase in volumes traded in longer-maturity Brazilian-interest rate contracts and because the RPC for FX contracts was positively influenced by the depreciation of the Brazilian real against the U.S. dollar, since our rates for these contracts are denominated in U.S. dollars. A combination of factors explains the increase in trading volume and greater concentration on longer term interest rate contracts, prime among which are the structural change brought about by drastic cuts in the real interest rate, coupled with increased credit availability and the greater portion of fixed inter est-bearing government debt relative to total public debt.

Reflecting this operating performance, our consolidated total revenues climbed 8.2% year-over-year, to R$2,289,023 thousand from R$2,115,983 thousand one year ago, driven by (i) a 7.2% rise in revenues from trading and clearing fees derived in the Bovespa segment; (ii) a 13.9% climb in revenues from trading and clearing fees earned in the BM&F segment;


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and (iii) a 0.5% drop in other operating revenues unrelated to trading volume.

The consolidated total expenses fell 6.6% year-over-year, to R$763,080 thousand from R$816,664 thousand in the prior

year. As adjusted to eliminate non-recurring expenses and expenses with no impact on cash flow, the adjusted expenses decreased 3.6% to close the year quite near the lower endpoint of the revised budget interval. In August 2012, true to our commitment to controlling costs and expenses, we revised the adjusted opex guidance to an interval between R$560,000 – R$580,000 thousand from R$580,000 – R$590,000 thousand previously.

Contrasting to operating performance, which the slash in real interest rates strengthened by spurring trading volumes in the BM&F segment, our interest revenues dwindled as a result of a plunge in interest earned on our cash availabilities and financial investments (the large part of which earn fixed-interest rates), coupled with a jump in interest expenses attributable to the appreciation of the U.S. dollar against the Brazilian real, as most our interest expenses are denominated in U.S. dollars. As a result, net interest income shrank 25.6% year-over-year to R$208,851 thousand from R$280,729 thousand one year earlier.

Thus, the consolidated operating income climbed 19.6% from one year ago, while the consolidated net income attributable to shareholders rose 2.5%. Our performance in 2012 bolstered our strong financial position further.

b. Capital structure; likelihood of share redemption.

The table below sets forth year-end data on the composition of consolidated capital structure in the last three years:

(i) at December 31, 2013 - 74.5% equity and 25.5% liabilities, (ii) at December 31, 2012 - 80.4% equity and 19.6% liabilities, (iii) at December 31, 2011 - 81.6% equity and 18.4% liabilities.

Year ended December 31, Year ended December 31, Year ended December 31,

2013 2012 2011

(in R$ thousands, except for percentages)

Current and noncurrent liabilities 6,597,767 25.5% 4,733,232 19.6% 4,332,431 18.4%

Shareholders’ equity 19,298,892 74,5% 19,413,882 80.4% 19,257,491 81.6%

Total liabilities and shareholders’ equity 25,896,659 100.0% 24,147,114 100.0% 23,589,922 100.0%

Under total liabilities, part of our onerous liabilities relates mainly to debt issued abroad in connection with global senior notes issued in a cross-border bond offering completed on July 16, 2010 (see subsection 10.1(f)).

Year ended December 31, Year ended December 31, Year ended December 31,

2013 2012 2011

(in R$ thousands, except for percentages)

Total onerous liabilities 1,468,322 7.1% 1,279,121 6.2% 1,172,225 5.7%

Interest payable on debt issued abroad and loans 42,129 36,882 33,566

Debt issued abroad and loans 1,426,193 1,242,239 1,138,659

Shareholders’ equity 19,298,892 92.9% 19,413,882 93.8% 19,257,491 94.3%

Total onerous liabilities and shareholders’ equity 20,767,214 100.0% 20,693,003 100.0% 20,429,716 100.0%

According to the information presented above, our Company has a conservative degree of leverage, taking into account both our total liabilities (current and noncurrent liabilities) and our onerous liabilities (debt and interest on debt).

i. events of redemption ii. redemption price calculation method

Other than as legally prescribed, we are not contemplating any share redemption and do not anticipate any event occurring that would trigger redemption rights.

c. Capacity to service the debt.

Our Company has strong cash generation capacity, as evidenced by consolidated operating income of R$1,334,635 thousand in 2013, R$1,301,670 thousand in 2012 and R$1,088,020 thousand in 2011, and consolidated operating margins of 62.6%, 63.0% and 57.1%, respectively, as well as yearly net income attributable to shareholders amounting to R$1,081,516 thousand, R$1,074,290 thousand and R$1,047,999 thousand for the same three years, respectively.

Additionally, our consolidated cash and cash equivalents coupled with short- and long-term financial investments reached R$4,870,760 thousand in 2013 (18.8% of total assets), R$3,850,639 thousand in 2012 (15.9% of total assets) and R$3,782,411 thousand in 2011 (16.0% of total assets). Moreover, we should note that cash and cash equivalents, as well as financial

investments include cash collateral pledged by market participants in the course of their dealings, which, as registered under current liabilities in our balance sheet, totaled R$2,072,989 thousand at year-end in 2013 versus R$1,134,235 thousand and R$1,501,022 in 2012 and 2011, respectively.

Accordingly, our net indebtedness ratio (see subsection 10.1(f) below) at December 31, 2013, was a negative number (R$1,279,524 thousand, negative) which compares with equally negative figures for 2012 and 2011 (R$1,393,308 thousand and R$1,070,126 thousand, negative, respectively), in each case denoting our low degree of financial leverage and very strong capacity to service our debt. 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, safe investments, often by taking positions in Brazilian government bonds, notes and other debt securities whose yield and coupon rates typically track the base rate (interbank lending 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-


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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 support all of the former and most of the latter. In a particular case we have also accessed the capital markets (by issuing global senior notes in a 2010 bond offering) as an alternative to finance noncurrent assets. For additional information on the nature and characteristics of our 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 is the primary source for funding our own working capital and capital expenditure requirements. Moreover, should the need arise, we may 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 deficiencies, we would benefit from investment grade ratings (foreign and local currency) assigned to us by prime credit rating agencies in order to obtain financing through any of the above sources.

f. Indebtedness level and characteristics of existing debt obligations

(i) material loans and financing transactions

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 mature on July 16, 2020, and pay 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 & Poor’s and Moody’s, and ongoing administration and custody expenses, the actual cost will represent a rate of 5.64% per annum. Effective from July 16, 2010, we used the net offering proceeds to purchase additional interest in the shares of the CME Group, thereby increasing our ownership interest to 5.1% of the shares of common stock (from 1.8% earlier).

As translated into Brazilian reais, the balance of our debt under the global notes as of December 31, 2013, was R$1,468,322 thousand (including accrued interest of R$42,129 thousand), as compared to R$1,279,121 thousand (accrued interest of R$36,882 thousand) at December 31, 2012 and R$1,172,225 thousand (accrued interest of R$33,566 thousand) at December 31, 2011. Moreover, at December 31, 2013, the fair value of our debt under the notes, as determined based on market data, was R$1,528,651 thousand (Source: Bloomberg).

Starting from the notes’ issue date (July 16, 2010), 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 the year ended December 31, 2013). Accordingly, we have adopted net investment hedge accounting pursuant to accounting standard CPC-38 (IAS 39 -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 for 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 at 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 so as to determine degree of sensitivity to changes in exchange rates. We have tested the hedge effectiveness retrospectively and prospectively, having determined that there was no realizable ineffectiveness at December 31, 2013.

The table below sets forth data related to our debt service(*) coverage ratio.

Debt coverage indicator Years ended December 31,

2013 2012 2011

(in R$ thousands)

Gross debt service 1,468,322 1,279,121 1,172,225

Cash and cash equivalents, plus short- and long-term

financial investments 2,747,846 2,672,429 2,242,351

Net debt service (1,279,524) (1,393,308) (1,070,126)

(*)In determining our debt service coverage ratio and in order to better evidence the actual ratio of cash available for debt servicing, we calculate total cash and cash equivalents plus short- and long-term financial investments (current and noncurrent assets) after eliminating amounts


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recognized under the line item ‘collateral for transactions’, as well as payouts and rights on securities under custody at our central securities depository under the ‘current liabilities’ line item.

(ii) other long-term transactions with financial institutions

In the normal course of our business we transact on an arm’s length basis with some of the primary financial institutions operating in Brazil. These are transactions agreed pursuant to customary market practices. Other than as set forth herein, we have no long-term transactions agreed with financial institutions and our noncurrent liabilities record no other long-term liabilities.

(iii) debt subordination

In terms of subordination, the liabilities we recognize in the line items under current and noncurrent liabilities in our balance sheet statement rank as follows:

Collateral for transactions – pursuant to articles 6 and 7 of Law No. 10,214/01 (clearing and settlement within the scope of the Brazilian Payment System) and articles 193 and 194 of Law No. 11,101/05 (Bankruptcy and Reorganization Law), the financial assets pledged to our clearing houses as collateral for transactions rank senior to and have priority over any other guarantee up to the amount of the transactions these collaterals secure, and are not affected in any way in the event of bankruptcy or judicial reorganization proceedings.

Tax and payroll liabilities – pursuant to article 83 of Law No. 11,101/05 (Bankruptcy and Reorganization Law),

government credits for tax liabilities and government or employee credits for social security and payroll liabilities (recognized in the line items ‘personnel and related charges’ and ‘income tax and contributions payable/recoverable’) constitute preferred debt and, thus, have priority over other types of debt.

Other payment obligations – other obligations recognized under current and noncurrent liabilities in our balance sheet statement as of December 31, 2013, constitute unsecured debt.

(iv) restrictions on indebtedness level and new financing, on dividend declaration, on assets sales, on new issues and transfer of control

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 subsidiary’s 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.

g. Restrictions on use of the proceeds of financing previously undertaken.

Not applicable. Other than the funding transaction discussed under 10.1(f) above, we have taken no loans or financing.

h. Significant changes to line items of the financial reports.

Our consolidated financial statements as of and for December 31, 2013, and the comparative financial statements as of and for December 31, 2012 and 2011, have been prepared and are presented in accordance with the accounting standards generally accepted in Brazil.

Moreover, started from 2011, the results of the financial intermediation operations (custody services and local representation for nonresident investors) of our subsidiary BM&FBOVESPA Settlement Bank were reclassified to the ‘other revenues’ line item, with no impact on net income and shareholders’ equity. Before 2011 we recognized these results under the ‘net interest income (expense)’ line item.

Selected financial information. The tables below set forth selected financial information from our financial statements at December 31, 2013, 2012 and 2011. For better comparability and understanding of our performance, the tables below set forth data related only to the main line items of the statement of income and balance sheet statement, and changes to these line items, as selected by management upon applying the materiality criteria set forth below.

Selected financial information from the consolidated statements of income. Information selected from results presents only the revenue line items that accounted for over 3.0% of net revenue for the year ended December 31, 2013; expense line items that accounted for over 5.0% (by expense module) of net revenue for the same year, in addition to income line items, and line items related to deductions from revenue and taxes.

Selected financial information from the consolidated balance sheet statements. Information selected from the balance sheet presents only the main line items which accounted for over 4.0% of total assets as of December 31, 2013.


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Other selected financial information. Other financial information selected by management includes data under lines items related to one-off, extraordinary or non-recurring and other events, which are likely to provide a clearer understanding of our statement of income.

Selected Financial Information (from the Consolidated Statements of Income)


2013 AV% 2012 AV% 2011 AV% Variation Variation

2013/2012 2012/2011

(In R$ thousands) (%) (In R$ thousands) (%) (In R$ thousands) (%) (%) (%)

Total revenues 2,370,229 111.2 2,289,023 110.9 2,115,983 111.1 3.5 8.2

Revenues from trading and/or clearing services - BM&F segment 916,530 43.0 865,874 41.9 760,245 39.9 5.9 13.9 Derivatives 897,098 42.1 848,858 41.1 744,018 39.1 5.7 14.1

Revenues from trading and/or clearing services- Bovespa segment 1,023,978 48.0 1,034,007 50.1 964,702 50.6 -1.0 7.2 Trading fees – trading systems 192,985 9.1 243,181 11.8 540,391 28.4 -20.6 -55.0

Clearing fees – clearing and settlement systems 804,570 37.7 769,221 37.3 396,023 20.8 4.6 94.2

Other revenues 429,721 20.2 389,142 18.8 391,036 20.5 10.4 -0.5

Securities lending 102,186 4.8 77, 063 3.7 74,030 3.9 32.6 4.1 Depository, custodian, back-office services 116,305 5.5 102,763 5.0 91,353 4.8 13.2 12.5 Market data (vendors) 69,236 3.2 67,668 3.3 65,049 3.4 2.3 4.0

Deductions from revenues (238,434) -11.2 (224,273) -10.9 (211,299) -11.1 6.3 6.1

Net revenue 2,131,795 100.0 2,064,750 100.0 1,904,684 100.0 3.2 8.4

Expenses (797,160) -37.4 (763,080) -37.0 (816,664) -42.9 4.5 -6.6

Personnel and related charges (356,120) -16.7 (353,880) -17.1 (351,608) -18.5 0.6 0.6 Data processing (111,797) -5.2 (102,805) -5.0 (104,422) -5.5 8.7 -1.5

Depreciation and amortization (119,661) -5.6 (93,742) -4.5 (75,208) -3.9 27.6 24.6 Marketing and promotion (15,043) -0.7 (19,280) -0.9 (38,609) -2.0 -22.0 -50.1

Operating income 1,334,635 62.6 1,301,670 63.0% 1,088,020 57.1 2.5 19.6

Equity in results of investees 171,365 8.0 149,270 7.2 219,461 11.5 14.8 -32.0

Interest income, net 181,535 8.5 208,851 10.1 280,729 14.7 -13.1 -25.6

Interest income 300,023 14.1 297,217 14.4 357,720 18.8 0.9 -16.9 Interest expenses (118,488) -5.6 (88,366) -4.3 (76,991) -4.0 34.1 14.8

Income (loss) before taxation on profit 1,687,535 79.2 1,659,791 80.4 1,588,210 83.4 1.7 4.5

Income and social contribution taxes (606,588) -28.5 (585,535) -28.4 (539,681) -28.3 3.6 8.5

Current (60,097) -2.8 (67,314) -3.3 (49,422) -2.6 -10.7 36.2 Deferred (546,491) -25.6 (518,221) -25.1 (490,259) -25.7 5.5 5.7

Net income (loss) for the year 1,080,947 50.7 1,074,256 52.0 1,048,529 55.1 0.6 2.5 Net income attributable to BM&FBOVESPA shareholders 1,081,516 50.7 1,074,290 52.0 1,047,999 55.0 0.7 2.5

Selected Financial Information (from the Consolidated Balance Sheet Statements)


2013 AV% 2012 AV% 2011 AV% Variation Variation

2013/2012 2012/2011

(In R$ thousands) (%) (In R$ thousands) (%) (In R$ thousands) (%) (%) (%)

ASSETS

Current assets 4,319,483 16.7 3,536,282 14.6 2,401,134 10.2 22.1 47.3

Cash and cash equivalents 1,196,589 4.6 43,642 0.2 64,648 0.3 2,641.8 -32.5

Financial investments 2,853,393 11.0 3,233,361 13.4 2,128,705 9.0 -11.8 51.9

Noncurrent assets 21,577,176 83.3 20, 610,832 85.4 21,188,788 89.8 4.7 -2.7

Long-term receivables 1,135,424 4.4 808,868 3.3 1,767,411 7.5 40.4 -54.2

Financial investments 820,778 3.2 573,636 2.4 1,589,058 6.7 43.1 -63.9

Investments 3,346,277 12.9 2,928,820 12.1 2,710,086 11.5 14.3 8.1

Investment in associate 3,312,606 12.8 2,893,632 12.0 2,673,386 11.3 14.5 8.2

Intangible assets 16,672,325 64.4 16,512,151 68.4 16,354,127 69.3 1.0 1.0

Goodwill 16,064,309 62.0 16,064,309 66.5 16,064,309 68.1 0.0 0.0

Total assets 25,896,659 100.0 24,147,114 100.0 23,589,922 100.0 7.2 2.4

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities 2,710,846 10.5 1,660,609 6.9 1,929,946 8.2 63.2 -14.0

Collaterals for transactions 2,072,989 8.0 1,134,235 4.7 1,501,022 6.4 82.8 -24.4

Noncurrent liabilities 3,886,921 15.0 3,072,623 12.7 2,402,485 10.2 26.5 27.9


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Debt issued abroad and loans 1,426,193 5.5 1,242,239 5.1 1,138,659 4.8 14.8 9.1 Deferred income tax and social contribution 2,295,774 8.9 1,739,644 7.2 1,204,582 5.1 32.0 44.4

Shareholders’ equity 19,298,892 74.5 19,413, 882 80.4 19,257,491 81.6 -0.6 0.8

Capital and reserves attributable to shareholders

Capital stock 2,540,239 9.8 2,540,239 10.5 2,540,239 10.8 0.0 0.0 Capital Reserves 16,056,681 62.0 16,037,369 66.4 16,033,895 68.0 0.1 0.0

Total liabilities and shareholders’ equity 25,896,659 100.0 24,147,114 100.0 23,589,922 100.0 7.2 2.4

COMPARATIVE ANALYSIS OF CONSOLIDATED STATEMENTS OF INCOME


Total revenues Total revenues for the year ended December 31, 2013, amounted to R$2,370,229 thousand, rising 3.5% year-over-year due primarily to increase in revenues from operations in the segment for financial and commodity derivatives as well as other revenues unrelated to trading and clearing activities, which, however, were counterbalanced by the year-on decrease in revenues earned in the Bovespa segment.

Revenues from trading and clearing fees – BM&F segment This line item increased 5.9% year-over-year totaling R$916,530 thousand (38.7% of total revenues), where R$897,098 thousand relates to fees earned on trades in financial and commodity derivatives. This climb is due mainly to a 7.6% year-on climb in average RPC, which, however, was not fully captured due to a 1.8% tumble in volumes traded within the segment.

Revenues from trading and clearing fees – Bovespa segment This line item gave back 1.0% year-on-year totaling R$1,023,978 thousand, and accounted for 43.2% of total revenues. This fall is explained by a 4.5% margin drop (to 5.423 basis points from 5.676 basis points one year ago) attributable primarily to changes in pricing policies (including rate cuts for trades in cash equities by foreign and retail investors) coupled with a spike in trading activity by investors that enjoy discounts by volume range and a plunge in value traded in single stocks (relative to overall trading value). Nonetheless, the impact of this margin drop was somewhat evened out by a 2.3% upsurge in average trading value.

Trading Fees – trading systems. This revenue line item declined 20.6% year-on-year, to R$192,985 thousand from R$243,181 thousand one year ago, due primarily to the changes in pricing policies implemented in April 2013 for a price structure rebalancing (trading and clearing fee rates) which included a cut in trading fees for different investor groups.

Clearing fees – clearing and settlements systems. This revenue line went up 4.6% year-over-year, to R$804,570 thousand from R$769,221 thousand one year earlier, due in part to a price structure rebalancing across the segment (trade and post-trade fees rates mainly) which resulted in changes in pricing policies implemented in April 2013, including changes in fees charged from local institutional investors and intraday traders.

Other revenues Other revenues hit R$429.721 thousand, a 10.4% rise from the year-ago, and accounted for 18.1% of total revenues, primarily as a result of changes in revenue line items unrelated to trading and clearing operations, as follows:

Securities lending services. Revenues of R$102,186 thousand (4.3% of total revenues) soared 32.6% year-over-year due mainly to a 27.5% year-on rise in financial value of open interest positions at year-end, whose average reached R$40.8 billion.

Depository, custody, back office services. Revenues of R$116,305 thousand (4.9% of total revenues) went up 13.2% year-on-year explained mainly by a 4.6% climb in average number of custody accounts (assets under custody at our central securities depository) as well as the higher revenues we derived from operating the Treasury Direct platform and from registration services for transactions in agribusiness credit bills (locally known as LCAs, Letras de Crédito do Agronegócio).

Market data (vendors). At R$69,236 thousand (2.9% of total revenues) this revenue line item picked up 2.3% year-over-year. This slight climb is attributable mainly to appreciation of the U.S. dollar versus the Brazilian real, as we derive about half of this revenue line from fees denominated in U.S. dollars which we charge from foreign customers.

Deductions from revenue Deductions from revenue totaled R$238,434 thousand, a 6.3% year-on rise (proportionately higher than the climb in revenues) attributable mainly to the lower offsettable amount of credits from PIS and Cofins taxes related to revenue inputs. However, we should note that some of the PIS-Cofins related tax credits generated in 2013 will be offsettable against 2014 revenues.

Net revenue As a result of the changes in revenue line items discussed above, the net revenue climbed 3.2% year-over-year, to R$2,131,795

thousand from R$2,064,750 thousand one year ago.

Expenses Expenses totaling R$797,160 thousand rose 4.5% year-over-year. Set forth below is a discussion of the principal changes in operating expense line items.

Personnel and related charges. This expense line totaled R$356,120 thousand, up slight 0.6% year-on-year. However, the comparability of these expenses has been somewhat hampered by a R$27,533 thousand provision recognized in 2012 in connection with our employees’ healthcare plan. As adjusted to eliminate the provision, this line item would have recorded a 9.1% year-on surge in expenses with personnel and related payroll charges, reflecting mainly the annual wage increase prescribed under our collective bargaining agreement and a fall in capitalized personnel expenses related to ongoing projects (capitalized personnel expenses for 2013 came R$9.5 million lower than the amount capitalized one year ago).


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Data processing. The expenses in this line item totaled R$111.797 thousand, up 8.7% year-on-year due mainly to a rise in expenses with software and hardware services and maintenance related to trading platforms rolled out over the year, including the equities module of our PUMA Trading System in April 2013.

Depreciation and amortization. The expenses in this line item totaled R$119.661 thousand, up 27.6% year-on-year primarily due to the start of operations of our new information technology platforms, in particular, the ensuing additional depreciation of (i) the equities module of our PUMA Trading System; and (ii) the ERP solution implemented in 2013.

Marketing and promotion. This expense line hit R$15,043 thousand plummeting 22.0% year-on-year due primarily to the reprioritization of our marketing campaigns for the year and cuts in advertising expenses.

Sundry. This expense line hit R$55,715 thousand, down 13.7% year-on-year due primarily to R$15 million in proceeds from fines having been transferred to BM&FBOVESPA Market Surveillance (BSM) at end-2012 to fund its operations.

Operating income At R$1,334,635 thousand, the operating income (revenues, net of expenses) was up 2.5% from R$1,301,670 thousand in the prior year.

Gain (loss) on equity-method investment (equity in the results of subsidiaries and investees) We account for our investment in shares of the CME Group under the equity method of accounting and recognize gains and losses through profit or loss in the statement of income. Our net share of gain from the equity-method investment in CME Group shares went up 14.8% from one year ago, totaling R$171,365 thousand, where R$64,847 thousand were provisioned as recoverable tax paid abroad. This rise in equity-method gain reflects not only the improved results of operations ascertained by the CME Group, but also the effects of the local currency depreciation vis-à-vis the U.S. dollar.

Interest income, net Net interest income for the year hit R$181.535 thousand, down 13.1% year-on-year due primarily to a 34.1% jump in interest expenses, which hit R$118.488 thousand in 2013, due mainly to the local currency depreciation against the U.S. dollar, since most our interest expenses correlate with debt under global senior notes issued in a July 2010 cross-border offering. In turn, our interest income was up mere 0.9%, virtually keeping a steady line from the prior year to R$300,023 thousand.

Income before taxation on profit Income before taxation on profit rose by 1.7% year-over-year, to R$1,687,535 thousand from R$1,659,791 thousand one year ago.

Income tax and social contribution Income before taxes totaled R$606,588 thousand and include R$60,097 thousand in current income tax and social contribution (related mainly to the offset portion of R$64,847 thousand in income tax paid overseas and recognized under equity in results of investee, with the balance of R$4,750 thousand consisting of temporary tax credits for future offsetting). Additionally, at R$546,491 thousand, the line item ‘deferred income tax and social contribution’ breaks down as follows: (i) recognition of deferred tax liabilities of R$555,648 thousand related to temporary differences attributable mainly to amortization of goodwill for tax purposes, with no impact on cash flow; and (ii) recognition of deferred tax assets amounting to R$9,157 thousand related mainly to temporary differences and reversal of deferred tax liabilities.

Net income for the year Net income for the year rose 0.6% year-over-year to R$1,080,947 thousand from R$1,074,256 thousand at December 31, 2012.

Net income attributable to BM&FBOVESPA shareholders Net income attributable to BM&FBOVESPA shareholders climbed 0.7% year-over-year to R$1,081,516 thousand from R$1,074,290 thousand the year before, primarily due to the higher revenues earned in our BM&F segment and revenues from services unrelated to trading and clearing operations (volume-unrelated revenues) and gain on the equity-method investment, which were partially canceled out by higher than anticipated expenses and the retreat in net interest income.


Total revenues Total revenues for the year ended December 31, 2012, amounted to R$2,289,023 thousand, rising 8.2% year-over-year due primarily to revenue increases in both the Bovespa and BM&F segments.

Revenues from trading and clearing fees – BM&F segment At R$865.874 thousand (where R$848,858 thousand relates to fees earned on trades in financial and commodity derivatives), this line item increased 13.9% year-over-year reflecting a 7.3% climb in overall trading volume for the segment and 7.7% jump in average rate per contract, as previously discussed herein.

Revenues from trading and clearing fees – Bovespa segment At R$1,034,007 thousand, this line item jumped 7.2% year-over-year due mainly to an 11.7% rise in trading volume for the segment, which, however, was partially counterbalanced by a 2.2% margin drop (to 5.676 bps from 5.793 bps one year earlier) attributable to the higher volumes of high frequency and intraday trading, since we charge lower fees these types of transactions. In addition, on a year-over-year basis, the 2012 revenues were toned down by fewer trading sessions than last year (246 trading sessions in 2012 versus 249 in 2011).

Trading Fees – trading systems. This revenue line item declined 55.0% year-on-year, to R$243,181 thousand from R$540,391 thousand one year ago, driven by our pricing policy implemented in September 2011, which rebalanced the price structure in line with our cost structure, ultimately cutting down the average fee rate for trading, whereas pushing up the average fees for clearing and settlement transactions, such that the cost of trading for investors would not be impacted.

Clearing fees – clearing and settlements systems. The revenue from fees our equities clearing house charges on clearing and settlement transactions (Bovespa segment) went up 94.2% year-over-year, to R$769,221 thousand from R$396,023 thousand


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in 2011, due mainly to the price structure rebalancing previously discussed.

Other revenues Other revenues of R$389,142 thousand went down slight 0.5% from the year-ago primarily as a result of changes in revenue line items unrelated to trading and clearing operations, as follows:

Securities lending services. This revenue line hit R$77,063 thousand (3.4% of total revenues), a 4.1% year-over-year upsurge due mainly to a 5.9% year-on rise in financial value of the balance of open interest positions at year-end, which amounted to R$32.0 billion.

Depository, custody, back office services. The line for revenues derived from the operations of our central securities depository hit R$102.763 thousand (4.5% of total revenues) rising 12.5% year-over-year mainly due to a 2.6% climb in average financial value of assets under custody, not including custody of ADRs and custody services provided to foreign investors. In addition, the revenue from fees related to custody of Brazil’s government bonds traded in our Treasury Direct (Tesouro Direto) platform soared 30.1% year-on-year.

Market data (vendors). At R$67.668 thousand (3.0% of total revenues) this revenue line item picked up 4.0% year-over-year. While the number of customers for our market data shrank somewhat, this climb is attributable mainly to appreciation of the U.S. dollar versus the Brazilian real, as we derive 40.0% of this revenue line from fees denominated in U.S. dollars which we charge from foreign customers.

Deductions from revenue Deductions from revenue totaled R$224,273 thousand, a 6.1% upsurge in line with the increase in total revenues.

Net revenue As a result of the changes in revenue line items discussed above, the net revenue shot up 8.4% year-over-year, to R$2,064,750 thousand from R$1,904,684 thousand one year ago.

Expenses Expenses totaling R$763,080 thousand declined 6.6% year-over-year. However, the comparability of this line item has been hampered because of certain non-recurring expenses recorded in 2011 and 2012.

Personnel and related charges. This expense line totaled R$353.880 thousand, up slight 0.6% year-over-year, and correlate primarily with: (i) the provision for expenses with healthcare plans, which totaled R$27,553 thousand and was recognized in accordance with accounting standard CPC 33/IAS 19 (Employee Benefits). The provision correlates with the expense accrual related to vested rights of employees that contributed to a (post-retirement) healthcare plan in the period between 2002 and 20093. Pursuant to Law No. 9,656/98 and additional requirements set forth under Brazilian Healthcare Agency (ANS) Normative Resolution No. 279 dated November 2011, an employee that contributes to the corporate healthcare plan with any sum of money is entitled to continue on as beneficiary after the employment termination or retirement, as long as such employee bears the burden of paying for the plan costs. The potential liabilities thus reserved relate to the difference, over time, between the average cost of the corporate healthcare plan and the estimated average cost for inactive beneficiaries had they not stayed on as plan beneficiaries (indirect benefit); and (ii) expenses with the stock options plan, which at R$32,306 thousand (versus R$53,630 thousand in 2011) fell by 39.8% year-over-year; and (iii) a R$18.290 thousand year-on increase in capitalized expenses with personnel engaged in certain ongoing technology projects. The effects of inflation on the line item for personnel and related charges have been balanced out by these factors (see the discussion under subsection 10.2(c) below).

Data processing. This line item totaled R$102,805 thousand, a 1.5% drop from the prior year.

Depreciation and amortization. The expenses in this line item totaled R$93.742 thousand, up 24.6% year-over-year and in line with the increase in investments implemented in previous years.

Marketing and promotion. This expense line hit R$19.280 thousand, plummeting 50.1% year-over-year due primarily to the reprioritization of our marketing campaigns for the year and cuts in advertising expenses.

Operating income At R$1,301,670 thousand, the operating income (revenues, net of expenses) was up 19.6% from R$1,088,020 thousand in the prior year.

Gain (loss) on equity-method investment (equity in the results of subsidiaries and investees) We account for our investment in shares of the CME Group under the equity method of accounting and recognize gains and losses through profit or loss in the statement of income. Our gain from this investment totaled R$149,270 thousand, 32.0% down from one year ago, in line with the yearly results of the CME Group. It is worth noting this line item includes recognition of R$60,196 thousand worth of tax benefit in the form of income tax to offset against income tax paid abroad.

Interest income, net Net interest income of R$208,851 thousand plunged 25.6% year-over-year mainly due to a 16.9% year-on decrease in interest revenues, which totaled R$297,217 thousand. Additionally, the interest revenues were negatively impacted by an increase in interest expenses, which at R$88,366 thousand climbed 14.8% year-over-year. This increase in interest expenses is explained by the appreciation of the U.S. dollar against the Brazilian real, since we are required to make U.S. dollar-denominated coupon payments under the global senior notes issued in our July 2010 cross-border offering.

Income before taxation on profit Income before taxation on profit rose by 4.5% year-over-year, to R$1,659,791 thousand from R$1,588,210 thousand one year ago.

Income tax and social contribution

5 Starting from May 2009, the employee healthcare plan is no longer a defined contribution plan, such that only part of our active employees will be entitled to all or some of benefit.


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Income tax and social contribution for the year totaled R$585,535 thousand. This line item comprises current income tax and social contribution amounting to R$67,314 thousand, including R$60,196 thousand which we offset against income tax paid abroad (such as discussed previously under “gain (loss) on equity-method investment”). Additionally, at R$518,221 thousand, the line item ‘deferred income tax and social contribution’ comprises (i) recognition of R$539,075 thousand in deferred tax liabilities related to temporary differences attributable mainly to amortization of goodwill for tax purposes, with no impact on cash flow for the year; and (ii) recognition of R$20,854 thousand in deferred tax assets related mainly to temporary differences and reversal of deferred tax liabilities.

Net income for the year Net income for the year rose 2.5% year-over-year to R$1,074,256 thousand at December 31, 2012, from R$1,048,529 thousand one year ago.

Net income attributable to BM&FBOVESPA shareholders Net income attributable to BM&FBOVESPA shareholders likewise climbed 2.5% year-over-year to R$1,074,290 thousand from R$1,047,999 thousand the year before, primarily due to an increase in revenues earned on a higher trading volume base coupled with a reduction in expenses, which were partially counterbalanced by lower gain on the equity-method investment and a decline in net interest income.

MAIN LINE ITEMS OF THE CONSOLIDATED BALANCE SHEET STATEMENTS


TOTAL ASSETS Total assets of R$25.896.659 thousand climbed 7.2% from R$24.147.114 thousand one year ago.

Current assets Current assets surged 22.1% year-over-year, to R$4,319,483 thousand (16.7% of total assets) from R$3,536,282 thousand the year before due mainly to an increase in investments maturing in the near term (less than 12 months) and the upcoming maturity of a number of government bonds in our investment portfolio.

Cash and cash equivalents; short-and long-term financial investments. These encompass line items registered under both current assets (‘cash and cash equivalents’ comprising cash on hand and demand deposits, in addition to short-term financial investments) and noncurrent assets (long-term financial investments). Short- and long-term financial investments are liquid investments with prime banks, and investments in financial investment funds, government bonds and other highly liquid financial assets. At December 31, 2013, cash and cash equivalents plus short- and long-term financial investments totaled R$4,870,760 thousand, a 26.5% year-on-year rise from R$3,850,639 thousand one year ago due primarily to an upsurge in cash collateral (R$1,154,902 thousand) market participants pledged to our clearing houses in the course of their dealings. Cash collateral received by us is recorded under current liabilities.

Noncurrent assets Noncurrent assets of R$21,577,176 thousand (83.3% of total assets) climbed 4.7% year-on-year from R$20,610,832 thousand one year ago. Set forth below is a brief discussion of main changes to line items under noncurrent assets not previously

discussed.

Investments. This line item rose 14.3% year-on-year to R$3,346,277 thousand from R$2,928,820 thousand previously. The ‘investments’ line consists primarily of investment in associate which we account for under the equity method of accounting, and relates to our ownership interest in shares of the CME Group, which at December 31, 2013, were recorded at R$3,312,606 thousand. The year-on-year rise in investment value is attributable mainly to depreciation of the Brazilian real against the U.S. dollar and our recognition of gain on equity-method investment.

Intangible assets. This line rose by 1.0% year-on-year, to R$16,672,325 thousand from R$16,512,151 thousand previously. Intangible assets consist of (i) goodwill, which at R$16,064,309 thousand remained unchanged (and accounted for 62.0% and 66.5% of total assets at December 31, 2013 and 2012, respectively); and (ii) software and projects, which jumped 35.8% year-on-year to R$608,016 thousand from R$447,842 thousand one year ago, due mainly to acquisition, development and implementation of new software applications and systems.

Current liabilities Current liabilities climbed 63.2% year-on-year to R$2,710,846 thousand from R$1,660,609 thousand the year before. This change is attributable mainly to 82.8% surge in the ‘collateral for transactions’ line item, as the year-end balance of cash collateral pledged by market participants went up to R$2,072,989 thousand from R$1,134,235 thousand one year ago.

Noncurrent liabilities Noncurrent liabilities of R$3,886,921 thousand were up 26.5% from R$3,072,632 thousand in the prior year. Set forth below is a brief description of the main changes to line items under noncurrent liabilities.

Debt issued abroad and loans. Loans and financing amounting to R$1,426,193 thousand rose 14.8% from R$1,242,239 thousand one year earlier primarily on account of depreciation of the Brazilian real (our functional currency) against the U.S. dollar (the transaction currency for our global senior notes issued abroad in a July 2010 cross-border bond offering).

Deferred income tax and social contribution. Deferred income tax and social contribution liabilities of R$2,295,774 thousand versus R$1,739,644 thousand one year ago, climbed 32.0% year-on-year surge resulting from recognition of the temporary differences between the tax base of goodwill and its balance sheet carrying value (while goodwill continues to be amortized for tax purposes, from January 1, 2009, it is no longer amortized for accounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value).

Shareholders’ equity


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Shareholders’ equity of R$19,298,892 thousand was virtually unchanged with a scanty 0.6% year-on-year drop from R$19,413,882 thousand one year ago.


TOTAL ASSETS At R$24.147.114 thousand, total assets climbed 2.4% from R$ 23,589,922 thousand one year ago.

Current assets Current assets surged 47.3% year-on-year, to R$3,536,282 thousand (14.6% of total assets) from R$2,401,134 thousand one year ago, due mainly to increase in short term financial investments (less than 12 months) and the upcoming maturity of a number of government bonds in our investment portfolio.

Cash and cash equivalents; short-and long-term financial investments. These comprise line items registered under current assets (‘cash and cash equivalents’ comprising cash on hand and demand deposits, in addition to short-term financial investments) as well as under noncurrent assets (long-term financial investments). Short- and long-term financial investments are liquid investments with prime banks, and in financial investment funds, government bonds and other highly liquid financial assets. At December 31, 2012, cash and cash equivalents plus short- and long-term financial investments totaled R$3,850,639 thousand, a 1.8% year-on-year rise from R$3,782,411 thousand one year ago.

Noncurrent assets Noncurrent assets of R$20,610,832 thousand (85.4% of total assets) fell 2.7% year-on-year from R$21,188,788 thousand one year ago. Set forth below is a brief discussion of main changes to line items under noncurrent assets not previously discussed.

Investments. This line item increased 8.1% year-on-year to R$2,928,820 thousand from R$2,710,086 thousand previously. The ‘investments’ line consists primarily of investment in associate which we account for under the equity method of accounting, and relates to our ownership interest in shares of the CME Group, which at December 31, 2012, was recorded at R$2,893,632 thousand. The year-on-year rise first noted above is attributable mainly to devaluation of the Brazilian real against the U.S. dollar and our recognition of the gain on equity-method investment.

Intangible assets. This line rose by 1.0% year-over-year, to R$16,512,151 thousand from R$16,354,127 thousand previously. Intangible assets consist of (i) goodwill, which at R$16,064,309 thousand kept a flat line in each year, and accounted for 66.5% and 68.1% of total assets at December 31, 2012 and 2011, respectively; and (ii) software and projects, which soared 54.5% year-over-year to R$447,842 thousand from R$289,818 thousand one year ago due mainly to acquisition, implementation and development of new software applications and systems.

Current liabilities Current liabilities decreased 14.0% year-over-year to R$1,660,609 thousand from R$1,929,946 thousand the year before. This change is attributable mainly to a 24.4% decrease in the ‘collateral for transactions’ line item, as the year-end balance of cash collateral pledged as margin by market participants declined to R$1,134,235 thousand from R$1,501,022 thousand one year ago.

Noncurrent liabilities Noncurrent liabilities of R$3,072,632 thousand went up 27.9% from R$2,402,485 thousand in the prior year. Set forth below is a brief description of the main changes to line items under noncurrent liabilities.

Debt issued abroad and loans. Loans and financing amounting to R$1,242,239 thousand rose 9.1% from R$1,138,659 thousand one year earlier primarily on account of the devaluation of the Brazilian real (our functional currency) against the U.S. dollar, which is the transaction currency for our global senior notes issued abroad (in a July 2010 cross-border bond offering).

Deferred income tax and social contribution. Deferred income tax and social contribution liabilities amounted to R$1,739,644 thousand versus R$1,204,582 thousand one year ago, a 44.4% year-on-year surge resulting from recognition of the temporary difference between the tax base of goodwill and its balance sheet carrying value (while goodwill continues to be amortized for tax purposes, from January 1, 2009, it 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 of R$19,413,882 thousand was virtually unchanged with a scanty 0.8% year-on-year drop from R$19,257,491 thousand one year ago.

10.2. Management’s discussion and analysis of results of operations

a. Material revenue components

Year ended December 31, 2013 compared to year ended December 31, 2012

Our consolidated total revenues climbed by 3.5% year-on-year to R$ R$2,370,229 thousand from R$2,289,023 thousand one year ago.

Revenues from trading and clearing fees earned within our Bovespa segment. These declined 1.0% from the prior year and amounted to R$1,023,978 thousand, primarily due to a 4.5% margin drop (to 5.423 basis points from 5.676 basis points one year ago) which was counterbalanced by a 2.3% rise in average value traded.

Revenues from trading and clearing fees earned within our BM&F segment. These jumped 5.9% year-on-year, to R$916,530 thousand (38.7% of total revenues), due primarily to a 5.7% year-on-year upsurge in average volume traded and a 7.6% rise in average rate per contract (RPC).


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Revenues unrelated to trading and clearing operations. These surged 10.4% year-on-year to R$429,721 thousand (18.1% of total revenues).

Year ended December 31, 2012 compared to year ended December 31, 2011.

Our consolidated total revenues climbed 8.2% year-on-year R$2,289,023 thousand from R$2,115,983 thousand one year ago.

Revenues from trading and clearing fees charged within our Bovespa segment climbed 7.2% year-on-year to R$1,034,007 thousand, reflecting a combination of 11.7% rise in average trading volume, which however was partially counterbalanced by fewer trading sessions than the year before (246 in 2012 versus 249 in 2011), and a 2.2% fall in average basis point margin (to 5.676 bps from 5.793 bps in the earlier year). This margin drop is in line with the higher volumes attributable to high frequency and intraday trading, from which we derive fees at lower-than-average margins.

Revenues from trading and clearing fees charged within our BM&F segment jumped 13.9% year-on-year, to R$865,874 thousand, due primarily to a 7.3% year-on-year upsurge in volumes traded and a 7.7% climb in average rate per contract (RPC).

Revenues unrelated to trading or clearing activities totaling R$389,142 thousand in 2012 kept a virtually unchanged line from R$391,036 thousand one year ago.

b. Factors that materially influence the results of operations


The average daily value traded on equities markets hit an all-time record high of R$7.42 billion (versus R$7.25 billion one year ago). However, the average margin (trade and post-trade services) fell to 5.423 basis points in 2013 from 5.676 basis points one year earlier, which is attributable primarily to changes in pricing policies and heightened trading activity by investors that enjoy discounts by volume range.

In contrast, the average daily volume traded on financial and commodity derivatives markets dropped 1.8% year -on-year, to average 2.85 million contracts traded versus 2.90 million contracts previously, whereas the average rate per contract (RPC) went up 7.6% year-on-year to R$1.282 from R$1.191 in the earlier year, in large part due to the local currency depreciation against the U.S. dollar, since the fee rates we charge for a significant number of contract groups are denominated in U.S. dollars.


The volume of business in both our Bovespa and BM&F segments ballooned over the course of 2012 to hit new record highs. In the Bovespa segment, increased turnover velocity driven by a boost in volume traded by foreign investors spurred an 11.7% spike in overall trading volumes. The primary reasons for the foreign investing buildup are twofold: one, the fact that most of the high frequency trading volume originates cross border; two, a shift in monetary policy which in December 2011 led the Government to remove the 2% IOF tax levied on hot money inflows for investments in variable-income securities.

In turn, a 7.3% volume jump in the BM&F segment was pushed mainly by the surge in average volumes traded in Brazilian-interest rate contracts. In addition, the average rate per contract (RPC) climbed 7.7% year -over-year both as a

result of the swelling volumes traded in longer-maturity Brazilian-interest rate contracts and because the RPC for forex contracts was positively influenced by the depreciation of the Brazilian real against the U.S. dollar (since our ra tes for these contracts are denominated in U.S. dollars). A combination of factors explains the increase in trading volume and greater concentration on longer-term interest rate contracts, prime among which are the structural change brought about by drastic cuts in real interest rate, coupled with increased credit availability and the greater portion of fix interest -bearing government debt relative to total public debt.

Other factors which decisively influenced our 2012 results, as compared to 2011, include:

a 25.6% decline in interest revenues (to R$208,851 thousand versus R$280,729 thousand one year ago) due primarily to a tumble in the interest rates earned on our financial investments, most of them fixed-rate investments;

R$27,533 thousand reserved as provision for healthcare plan expenses;

R$15,000 thousand contributed to BSM to fund the operations of our market surveillance arm over the course of 2013.

c. Changes in revenues attributable to fluctuations in market prices, exchange rates, inflation rates, changes in volumes and offerings of new products or services


Changes in revenues attributable to changes in our pricing policies or to fluctuations in exchange rates include:

Revenues from trading and post-trade transactions within Bovespa segment. As discussed elsewhere herein, in April 2013 we implemented a price structure rebalancing across the segment (trade and post-trade fees rates mainly) which resulted in changes in pricing policies that included rate cuts for trades in cash equities by foreign and retail investors, in addition to discounts by volume range granted to local institutional investors and intraday traders dealing on the stock and options markets. To a certain extent, these price changes hampered the comparability of the revenue lines related to trading and clearing fees between 2013 and 2012.

Revenues from trading and post-trade transactions within BM&F segment. The fluctuation in exchange rates between the years 2013 and 2012 positively influenced the average RPC for forex contracts (+ 15.0%) and U.S. dollar-denominated interest rate contracts (+ 21.3%), as the fees we charge for each of these contract groups are denominated in U.S.


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dollars. Between 2011 and 2012 the average exchange rate for U.S. dollars appreciated 10.5% against the Brazilian real. 4

Market data (vendors). This revenue line was positively influenced by the appreciation of the U.S. dollar against the

Brazilian real, as about half of our revenues from sales to financial data vendors originate from foreign customers from whom we charge fees denominated in U.S. dollars for payment abroad.


Changes in revenues attributable to changes in our pricing policies or to fluctuations in exchange rates include:

Revenues from trading and post-trade transactions within the Bovespa segment. In August 2011, as discussed elsewhere herein, we announced a comprehensive revision of our pricing policy for the segment to eliminate cross subsidies embedded in fee rates across our trading and post-trade business lines. While this policy revision affected the comparability of the 2012 and 2011 revenue lines as regards fees derived from trading activities and post-trade activities, the comparability of total revenues for these two years has not been hampered.

Revenues from trading and post-trade transactions within the BM&F segment. The variation in exchange rates between the years 2011 and 2012 positively influenced the average RPC for forex contracts (+ 16.4%) and U.S. dollar-denominated interest rate contracts (+ 7.9%), as the fees we charge for both are denominated in U.S. dollars. Between 2011 and 2012 the average exchange rate for U.S. dollars appreciated 17.6% against the Brazilian real.

5

Market data (vendors). This revenue line was positively influenced by the appreciation of the U.S. dollar against the Brazilian real, as about 40% of the revenues from market data sales to financial data vendors originate from foreign customers from whom we charge fees denominated in U.S. dollars for payment abroad.

d. Impact on financial condition and results of operations attributable to changes in inflation rates; in market prices for the principal raw materials and other supplies; in exchange and interest rates.

The level of interest rates (real or otherwise) influences our financial results (net interest income) as it determines the basis on which we earn a return on our financial investments. At December 31, 2013 our financial investments amounted to R$3,674,171 thousand versus R$3,806,997 thousand and R$3,717,763 thousand December 31, 2012 and 2011, respectively. Thus, a change in average interest rates paid on our financial investments influences our interest revenue, which at December 31, 2013, amounted to R$300,023 thousand versus R$297,217 thousand and R$357,720 thousand at December 31, 2012 and 2011, respectively.

In the case of changes in foreign exchange rate, the effects of depreciation of the local currency relative to U.S. dollars are threefold: (i) our interest expenses increase, as nearly all our onerous liabilities (interest-bearing obligations) consist of the U.S.-dollar denominated debt under global senior notes issued by us in a cross-border bond offering completed on July 16, 2010 (see subsection 10.1(b) above); (ii) our revenues from fees earned on certain contract groups increase as well, since the average fee rates we charge on trades in forex futures, in U.S. dollar-denominated interest rate futures and in certain commodity futures contracts are denominated in U.S. dollars (see subsection 10.2(b) above) and (iii) our revenues from market date sales to financial data vendors increase as a significant portion of this revenue is denominated in U.S. dollars, such that at December 31, 2013, we registered a 2.3% year-on climb in this revenue line (R$69,236 thousand) due mainly to the depreciation of the local currency against the U.S. dollar.

Additionally, the inflation rate influences our expenses, in particular expenses with personnel and related c harges (see subsection 10.1(h) above.). Under our annual collective bargaining agreement, which is renewed every month of August, the payroll and related charges increase (by wage bracket) relatively in line with the inflation rate for the prior period, a s measured by the Extended National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), known as IPCA, which is compiled and released by the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or IBGE.

10.3. Management’s discussion and analysis of actual or expected material effects on the financial statements or results of operations from the factors set forth below.

a. Creation or disposition of operating segment.

No operating segment was created or sold in the year ended December 31, 2013. Accordingly, no such event has had or is expected to have any effects on our financial statements, financial condition or results of operations.

b. Company organization; acquisition or disposition of ownership interest.

No event entailing the organization of a company has occurred in the prior year, nor any acquisition or disposition of ownership interest carried out in the year ended December 31, 2013.

c. One-off and extraordinary events or transactions.

In the year ended December 31, 2013, there were no events or transactions characterized as one-off or extraordinary events or transactions related to us or our business which materially influenced, or are expected to materially influence our financial statements and results of operations.

10.4. Discussion and analysis of

a. Significant changes in accounting practices

4 Year-over-year exchange rate fluctuation is calculated as the average fluctuation of the PTAX exchange rate as at end-December 2011 through end-November 2013, as these rates provide the basis on which to calculate average RPC for the months of January 2012 through December 2013, respectively. The PTAX rate is

compiled and released at the close of business on a daily basis by the Central Bank. 5 Year-over-year exchange rate variation is calculated as the average fluctuation of the PTAX exchange rate as at the end of December 2010 through end-November 2012, as these rates provide the basis on which to calculate average RPC for the months of January 2011 through December 2012, respectively. The PTAX rate is

compiled and released at the close of business on a daily basis by the Central Bank.


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There were no significant changes in our accounting practices in the years ended December 31, 2013, 2012 and 2011.

Our consolidated financial statements as of and for the year ended December 31, 2010, were the initial consolidated

financial statements prepared and presented under Brazil’s CPC and IFRS. The consolidated financial statements were prepared and 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).

b. Significant effects of changes in accounting practices

There were no significant changes in our accounting practices in the years ended December 31, 2013, 2012 and 2011.

c. Qualifications and emphasis of matter paragraphs included in the independent auditors’ report

The independent auditors’ report on our financial statements as of and for the years ended December 31, 2013, 2012 and 2011, include, in each case, an emphasis of matter paragraph to the effect that “the unconsolidated financial statements were prepared in accordance with the accounting practices adopted in Brazil. In the case of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros, these practices differ from IFRS applicable to separate financial statements only in relation to the measurement of investments in subsidiaries and associate entities accounted for under the equity method, since IFRS would require them to be carried at cost or fair value. Our opinion is not qualified with respect to this matter.”

10.5. Critical accounting policies

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 to foreign currency translations, environmental recovery costs, impairment testing of assets and financial instruments.

Impairment of assets

Assets subject to amortization are tested for impairment at any time events or changes in circumstances suggest the carrying value may not be fully recoverable. An impairment loss is recognized when the carrying value of the asset is found to exceed its recoverable value. Recoverable value for this purpose is the higher of the asset’s fair value less costs of disposal (net selling price) and value in use.

Indefinite-lived assets, as is the case of goodwill, are not subject to amortization and are tested for impairment on an annual basis, with reassessments being made at shorter intervals where there are indications of potential impairment.

The goodwill of R$16,064,309 thousand has been attributed to expected future profitability, supported by an economic and financial valuation report of the underlying investment. According to the guidelines provided by accounting standard CPC 01 (IAS 36 – Impairment of Assets), goodwill is tested for impairment on an annual basis, and indications of potential impairment are reassessed at shorter intervals. Goodwill is stated at cost less impairment losses. Additionally, recognized impairment losses on goodwill are not subsequently reversed.

The assumptions we adopted in estimating the future cash flows expected to be derived from the cash-generating unit consisting of our Bovespa segment have been based on our analysis of the segment’s performance over the last few years, and on our analysis and expectations for growth of the exchange industry, in addition to our own expectations and strategies.

For assistance in the measurement of the asset’s value in use (recoverable value) we hire external independent valuation specialists. The valuation report provided by the specialist valuation firm found no impairment charges were required to be recognized, so that no adjustments were made to the carrying value of goodwill as of December 31, 2013.

Based on our expectations for growth of the Bovespa segment, our estimates of future cash flows take into account certain projections of future revenues and expenses for the segment over a time horizon extending from December 2013 to December 2023, with perpetuity derived by extrapolating the 2023 cash flow projection at a growth rate of 7.63% per annum, which is equivalent to the expected rate of growth for the nominal GDP in the longer term.

We understand the ten-year projection horizon to be consistent with perception that the variable income segment of the domestic capital markets is set to undergo an extended period of growth until it reaches longer term maturity.

In determining the present value of projected cash flows, we applied average pre-tax discount rate of 16.56% per annum for the period from December 2013 to December 2017. Thereafter, the discount rate kept stable, at 15.24% per annum, capturing the expected fluctuation in inflation rates over the period.

The two main variables that influence our calculation of value in use are discount rates and perpetuity growth rates. We ran sensitivity analysis on our projections to determine how changes in these variables impact our calculation of value in use. The equivalent pre-tax discount rate for the entire period being 15.45% per annum, an increase of 1.10 percentage point (110bps) in such rate (from 15.45% to 16.55% per annum) would reduce our calculation of value in use by approximately 12%. And a 0.50 percentage point (50bps) decrease in perpetuity growth rate (from 7.63% to 7.13% per annum) would reduce our calculation of value in use by approximately 5%. For purposes of our sensitivity analysis, the variations of the two parameters that influence our calculation of value in use were determined, for the former variable, on the basis of a backward-looking standard deviation of discount rates using data for the last 5 years, and for the latter variable, on the basis of a backward-looking standard deviation of the averages for 10-year series of data on Brazil’s real GDP growth rate variations. In the outcome, value in use shows lower sensitivity to variations in projected net revenues; thus, a decrease in average annual revenue growth rate on the order of 15% over the 2014 to 2023 horizon would reduce our calculation of value in use by approximately 15%. In our


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individual analysis of the above three sensitivity scenarios, no outcome shows the investment value would fall below its carrying value as of December 31, 2013.

Provisions for tax, civil and labor contingencies

Our company and subsidiaries are defendants in a number of legal and administrative proceedings related to disputes of a labor, tax or civil law nature which involve matters arising in the ordinary course of business.

The outcome of these legal and administrative proceedings are assessed in terms of prospects for a defeat (probable, possible or remote), based on an evaluation by counsel and our judgment based on a number of factors, including the opinion of counsel, the nature of the case, existing similar or issue-connected lawsuits, case law trends and court precedents.

The contingent liabilities related to lawsuits assessed as a probable defeat have been provisioned. The disputes related mainly to the following:

Most labor cases refer to claims by our former employees or employees of outsourced providers based on alleged noncompliance with labor laws;

Civil law cases generally refer to tort claims against our company and subsidiaries;

Tax cases mostly relate to PIS and Cofins taxes levied on (i) our revenues and (ii) interest on shareholders’ equity.

The contingencies related to lawsuits assessed as a possible defeat are not provisioned. The amounts at risk in these cases totaled R$693,603 thousand as of December 31, 2013, where R$34,688 thousand relate to labor cases, R$81,911 thousand relate to civil law cases and R$577,004 thousand related to tax cases, as detailed under ex Note 14 to our financial statements as of and for the year ended December 31, 2013.

Investments in associate (Equity method of accounting)

We apply the equity method in accounting for equity investments concerning which we have the ability to exercise significant influence over the operations and financial policies of the investee. Our judgment of the degree of influence we exercise over an investee considers key factors, such as proportionate interest in the shares, representation at board level, whether or not we have a say in defining business guidelines, corporate and financial policies and material intercompany transactions.

Starting from July 2010, when we acquired a 3.2% additional interest in the CME Group (for R$1,075,119 thousand), thereby increasing to 5% (from 1.8% previously) our aggregate interest in CME shares, we now account for our investment under the equity method, as in our view this ownership interest and the qualitative and strategic aspects of our partnership with the CME Group give us significant influence over the investee. As of December 31, 2013, the carrying value of our investment in the CME Group amounted to R$3,312,606 thousand, whereas based on the current market price for the shares, the fair value of the investment as at that date totaled R$3,119,716 thousand. Given that the market value of our investment was now lower than its carrying value, we have tested the investment for impairment test as of the base date November 30, 2013. The testing findings have not indicated there is need to recognize impairment losses on our investment in the CME Group.

The impairments tests were performed pursuant to the discounted cash flow method. Taking into account the expectations for growth of the exchange industry where the CME Group operates, our cash-flow projections take into account activity-related revenues and expenses expressed in nominal U.S. dollars.

The operating cash flows projections cover a time horizon extending from December 2013 to December 2018. Perpetuity was derived by extrapolating 2018 free cash flow projection at a growth rate of 4.66% per annum, which is equivalent to the expected rate of growth for the U.S. nominal GDP in the longer term. The pre-tax discount rate used to determine the present value of the projected cash flows was 11.43% per annum.

The two main variables that influence our calculation of value in use are discount rates and perpetuity growth rates. To determine how changes in these variables impact our calculation of value in use, we ran sensitivity analysis on our projections which showed a 1.0 percentage point (100 bps) increase in equivalent pre-tax discount rate (from 11.43% to 12.43% per annum) would reduce our calculation of value in use by approximately 13%, whereas a one-quarter of a percentage point (25 bps) decrease in perpetuity growth rate (from 4.66% to 4.41% per annum) would reduce our calculation of value in use by approximately 5%. For purposes of our sensitivity analysis, the variations of the two parameters that influence our calculation of value in use were determined, for the former variable, on the basis of a backward-looking standard deviation of the discount rates using data for the last 4 years (which best reflect the existing capital structure of CME group), and for the latter variable, on the basis of a backward-looking standard deviation of the averages for 30-year series of data on the United States’ real GDP growth rate variations. In the outcome, value in use shows lower sensitivity to variations in projected net revenues; thus, a decrease in average annual revenue growth rate on the order of 10% over the 2014 to 2018 horizon would reduce our calculation of value in use by approximately 4%. In our individual analysis of the above three sensitivity scenarios, no outcome shows the investment value would fall below its carrying value as of December 31, 2013.

10.6. Financial reporting internal controls

a. Degree of effectiveness of the internal controls; deficiencies and corrective actions.

The improvements and automation of internal control processes under responsibility of the financial department were consolidated over the course of 2012, giving Management more efficient and reliable tools to better control expenses and prioritize projects.

The initiatives we implemented over the year include highlights as a development of a new ERP system (enterprise resource planning) using a SAP AG’s integrated solution. Implemented in January 2013, the new system allows for automated control of


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the opex and capex budget and sustained improvement of management mechanisms for the operating expenses and capital expenditures, the internal payment policies; and procurement activities and activity based costing methods.

Additionally, by end-2012 we restructured certain departments at management level to create the Internal Controls, Compliance and Corporate Risk Department. Over the course of 2013, the new team reviewed processes across Company departments, having introducing multiple improvements, including improvements to enhance financial information reporting.

b. Remarks on internal controls deficiencies and recommendations included in the independent auditors’ report.

The internal control assessments performed by our independent auditors have found no significant deficiencies or prompted any meaningful recommendations regarding our internal controls over financial reporting. This is our understanding as well, since we consider our internal controls over financial reporting present no significant deficiencies. We should stress our Company invests continually in improving systems and processes, while taking a strict approach to monitoring, in addition to striving to promptly address any recommendations from our independent auditors, so as to assuage risks and ensure the integrity of any information released to the market, in particular any and all financial information .

10.7. Use of offering proceeds.

See subsection 10.1(f) of this form.

10.8. Material 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 subsection 10.9 below.

(i) operating lease transactions (as lessor or lessee)

There are no material off-balance sheet items. In particular, we have no material operating lease transactions undisclosed in our consolidated financial statements.

(ii) obligations retained, risk supported under written off pools of receivables (and related liabilities)

No pools of receivables have been written off over which we have retained obligations or incurred risk.

(iii) commitments to purchase or sell products or services in the future

There are no material off-balance sheet items. In particular, we have no material purchase or sale commitments undisclosed in our consolidated financial statements.

(iv) unfinished construction contracts

We have no construction contracts undisclosed in our financial statements.

(v) take-out financing commitments

We have no take-out commitments agreed with any parties.

b. Other off-balance sheet arrangements

Our Settlement Bank (BM&FBOVESPA Settlement Bank) manages the BM&FBOVESPA FoF, 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$66,008 thousand as of December 31, 2013 (versus R$179,440 thousand and R$212,968 thousand as of December 31, 2012 and 2011, respectively.

In addition, in the course of their business the Settlement Bank provides financial services and frequently operates as custodian for financial assets and provider of local representation services for nonresident investors. At December 31, 2013 and the comparative years of 2012 and 2011, the Settlement Bank was operating as custodian for (i) securities on behalf of nonresident investors in total amount of R$261,952 thousand (versus R$154,911 thousand and R$117,815 thousand, respectively), and for (ii) agricultural securities (registered in the proper custody system we operate) in total amount of R$15,079 thousand (versus R$15,079 thousand and R$16,216 thousand, respectively).

10.9. Discussion of off-balance sheet items

(i) how off-balance sheet items change or may change revenues, expenses, interest expenses, results of operations and other balance sheet line items.

(ii) nature and purpose of the off-balance sheet arrangements

(iii) nature and amount of obligations and rights arising from off-balance sheet arrangements

Central counterparty risk

BM&FBOVESPA operates four central counterparty clearing houses, which the Central Bank considers to perform systemically material roles. We call them (i) derivatives clearing house (for transactions carried out on futures, forward, options and swap markets); (ii) FX clearing house (for spot FX market transactions); (iii) bonds clearing house (transactions in, or based in government bonds, notes and treasury bills carried out on cash and forwards markets, in addition to repo transactions and lending and borrowing transactions); and (iv) equities clearing house (it provides clearance and settlement for transactions carried out on cash, forwards, options and futures markets for equities, equity securities and equity -based derivatives, as well as corporate debt securities, and handles securities lending and borrowing transactions).


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Through these clearing facilities, BM&FBOVESPA acts as central counterparty to ensure multilateral clearing and settlement (CCP) for transactions carried out on these markets. This means that in acting as central counterparty we ensure full completion to transactions carried out or registered in our trading and registration systems and, therefore, to a substantial portion of all trading activity taking place in the domestic capital markets.

Our 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 risk of the counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities for financ ial settlement and clearing of securities and financial assets. In modeling and managing CCP risks, we focus on calculation, control and mitigation of credit risk related to clearing participants.

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 in case of default, including collateral pledged by market participants as margin or otherwise, special funds designed to cover losses, and co-liability undertaken by brokers and clearing agents regarding transactions they intermediate or clear. To a large extent, each of these safeguard structures adopts a ‘defaulter pays’ model, meaning a loss-sharing arrangement whereby each participant is required to collateralize, to a high degree of reliability, any exposures it creates for other participants, such that losses possibly resulting from a party’s default are borne by the defaulting party. Thus, margin requirements, margin calls and other collateral we may require market participants to post are key elements of the structure by which we manage risks associated with our role as central counterparty clearing house.

Transactions carried out on our markets are typically secured by collateral pledged as margin in the form of cash, government bonds and treasury bills, corporate debt securities, bank letters of guarantee and stocks, among other things. At December 31, 2013, the aggregate financial value of cash and other collateral pledged to our clearing houses totaled R$214,389,365 thousand (versus R$176,481,916 thousand and R$178,556,455 thousand at December 31, 2012 and 2011, respectively), with all cash collateral registered in the ‘collateral for transactions’ line item under current liabilities in our balance sheet, whereas the remainder, i.e., non-cash collateral amounting to R$212,316,376 thousand as of December 31, 2013 (versus R$175,347,681 thousand and R$177,055,433 thousand at year-end in 2012 and 2011, respectively) was registered in off-balance sheet non-cash collateral accounts.

For additional information on collateral pledged to our clearing houses and our safeguard structures, see Note 17 to our Financial Statements as of and for the year ended December 31, 2013.

10.10. Business plan.

a. Investments.

(i) Quantitative and qualitative description of ongoing and planned investments.

Since early 2010 we have been investing heavily in setting up a streamlined, efficient, modern technology infrastructure, with IT resources to match, with the aim of establishing a solid foundation on which to capture growth opportunities to better execute our strategy and build our future. These capital expenditures should further boost our strategic position and sharpen our competitive edge.

Our 2010-2014 strategic growth plan calls for R$1.5 billion worth of investments, of which R$289,224 thousand executed in 2013, plus R$258,363 thousand, R$204,041 thousand and R$268,362 thousand executed 2012, 2011 and 2010, respectively. The larger part of this plan consists of investments in technology.

Moreover, we have redoubled our focus on identifying and pursuing new growth opportunities in Brazil and elsewhere, including through international partnerships; on widening the issuer base by promoting equity financing as one of the cheaper and more flexible sources of finance, on developing new products and markets to meet or anticipate demand as trading strategies become more elaborate and the capital markets grow. Additionally; we plan to strengthen our relationship with customers, our socially responsible investing initiatives and the regulatory framework for issuers, as well as to bolster market surveillance.

Furthermore, we firmly believe in BM&FBOVESPA’s potential for growth and a have clear understanding of the important role our Exchange performs as a driver of strength and development for the Brazilian capital markets. We strongly believe our investments in technology, in market development and a wider range of products and services are key factors to improve the quality of the services we offer, and to strengthen and enhance the transparency of the Brazilian capital markets.

Technology Developments

BM&FBOVESPA aims to offer prime information technology resources and excellence in information technology services to

customer market participants and investors. To this end, our investments in multiple IT projects in over 2013, 2012, 2011 and 2010 totaled R$278,607 thousand R$231,722 thousand, R$183,444 thousand and R$219.261 thousand, respectively. The discussion below highlights the main projects we have completed or on whose implementation we have been working.

The PUMA Trading System™, our new multi-asset class trading platform.

In the first half of 2010, consistent with our partnership agreement with the CME Group, we 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 co-owned by our Company and the CME Group. The PUMA Trading System has replaced our previous trading systems. This new trading platform gives us a state-of-the-art technology structure and technology independence. It provides customers and participants with streamlined, efficient access to deal -making across markets, and places BM&FBOVESPA high amongst the fastest, more reliable, efficient and technologically advanced exchange-based marketplaces in our industry.


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In the second half of 2011 we completed the implementation of the first stage of the PUMA project, comprising the derivatives and spot forex module, which is now fully operational. And the equities module implemented in the first half of 2013.

Integrated Central Clearing Facility (IPN).

Since completing the integration of the two formerly independent local exchanges into BM&FBOVESPA, one of our more important projects has been to combine the four clearing houses (equities and corporate debt securities; derivatives, forex, bonds) we operate into a single, fully-integrated, central clearing facility. Our new central clearing facility has been planned to give us highly efficient, multi-asset, multi-market, integrated risk management capabilities, allow for cross-margining, and improve risk management processes and the management of cash and other collaterals pledged by market participants, so we have the ability to offer highly solid and efficient clearing and settlement services to market participants and investors.

The project made headway in the last quarter of 2011, when we announced a partnership with Cinnober, a Sweden-based global provider of advanced financial technology, which will include a perpetual license for use of TRADExpress RealTime Clearing®, their high performance, multi-asset, clearing and real-time risk management system. The RealTime Clearing system (RTC system) will be the backbone our future multi-asset, multi-market, integrated clearing facility for its technologically innovative, high performing capabilities, high capacity, stability and security features.

Then, late in 2012, we announced the launch of our Post-Trade Integration Program (Programa de Integração da Pós-Negociação - IPN) in connection with the upcoming creation of our multi-market central clearing facility, which will be based on CORE, or CloseOut Risk Evaluation, our pioneering, purpose-developed central counterparty multi-asset, multi-market, risk management framework, and the lynchpin of a solid risk management system architecture, with performance to match the RTC system. In addition, our derivatives clearing house is set to migrate to the new infrastructure in the first half of 2014, whereas

the equities clearing operations are expected to complete the migration at a later stage. We are required to obtain regulatory approval to implement the IPN-CORE project.

New data center

We have been making substantial investments in our technology infrastructure, as part of our efforts towards reorganizing and streamlining our data centers to benefit from a truly modern, efficient, safe and high-performing technology platform, which is better prepared to support our future growth. We centered our strategy on two primary data centers, one designed for our trading systems and applications, the other planned to house our post-trade systems and applications. One such data center has been operational since June 2010 after having relocated, along with some of our IT team, to a leased high-capacity hosting facility. The other data center will be a brand new, especially planned and designed facility, custom-made to meet our specific needs and demands. The construction of our new data center began late in 2012 and is set to complete in the first half of 2014, when we plan to start the equipment relocation and migration phase.

New OTC trading platform for derivatives and fixed-income securities (IBalcão)

In the third quarter of 2013 we launched our new platform for registration of transactions in OTC derivatives. It is a streamlined, state-of-art OTC platform which gives us a new operating model for treatment of OTC transactions, risk calculation and collateral management, while offering flexibility and nimbleness fit to meet regulatory requirements and market demands.

The first family of contracts listed for trading on this OTC platform comprises non-deliverable forward currency contracts (for financial settlement, no central counterparty available). In addition, we are set to list new products and offer new services over the course of the year, including the registration services for securities as bank deposit certificates ( certificados de depósito bancário, or CDBs), real estate credit bills (letras de crédito imobiliário, or LCIs), and structured notes (locally known as certificados de operações estruturadas, or COEs).

(ii) sources of financing for these investments.

The primary source of funds we currently use to finance our strategic investment plans is operating cash flow. We may also consider alternative sources of financing, such as bank loans or a government or development bank financing program, or we may elect to source funds by accessing the domestic or international capital markets. In 2010, with the aim of sourcing funds with which to pay for an additional interest in CME shares, we carried out a cross-border offering of global senior notes. We have since been funding our project with our operating cash flow.

(iii) planned and ongoing material divestments.

Not applicable, as there have been no, and there are no material divestments being considered or ongoing.

b. Disclosed acquisitions of plants, equipment, patents and other assets, which are expected to materially influence production capacity.

Integrated central clearing facility. In the last quarter of 2011 we announced an agreement with Cinnober to advance our central clearing facility project, which included a perpetual license for use of their TRADExpress Real Time Clearing system. The module for clearing and settlement of financial and commodity derivatives is set to implement in 2014. Such implementation depends on the approval of regulators.

PUMA Trading System. In the first half of 2010, consistent with our partnership agreement with the CME Group, we started the joint development and implementation of our co-owned multi-market, multi-asset class trading system and platform which has now replaced our previous trading systems.

New data center. In 2010 we purchased a 20,000 square meter plot of land in Santana do Parnaíba, state of São Paulo, Brazil, where since November 2012 our new data center has been under construction. The construction of this new facility is set to complete in the first half of 2014.

Expansion and modernization of OTC trading platform. In second half of 2011 we announced the development of our new platform for registration and treatment of transactions in OTC derivatives, corporate debt securities and financial instruments. The OTC platform was completed in the second half of 2013.


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c. new offerings of products and services, including:

(i) previously disclosed and ongoing product research.

Not applicable, as our ongoing research studies relate to projects discussed under subsection 10.10(c)(iii) below.

(ii) total expenses incurred in research for development of new products or services.

Not applicable, as our expenses with research studies are discussed under subsection 10.10(c)(iv) below in connection with our ongoing projects.

(iii) previously disclosed and ongoing development projects.

Projects we announced previously include our new integrated central clearing facility (within the scope of our Post-Trade Integration Program (IPN); the PUMA Trading System; construction of our new data center in Santana do Parnaíba (State of São Paulo); new OTC trading platform (registration and treatment of OTC derivatives, corporate debt securities and financial instruments); market making program for options on single stocks and stock indices; a review of the methodology of the Bovespa Index (Ibovespa), fixed income ETFs and improvements on securities lending facility.

(iv) total expenses incurred in developing new products or services.

Total capital expenditures over the course of 2013 totaled R$289,224 thousand, with investments largely focused on our technology projects, such as the PUMA Trading System, our new multi-asset electronic trading system and platform, the derivatives module of the multi-market clearing system for our new central clearing facility (which is being implemented within the scope of our IPN program), the new OTC trading platform and development of the family of non-deliverable forward currency contracts for the OTC platform (which we called ”iBalcão”) and the construction of our new data center.

Total capital expenditures over the course of 2012 amounted to R$258,363 thousand, where R$231,722 thousand have been invested in our technology projects, including the new PUMA Trading System, the first phase of the our central clearing facility project and development of CORE (CloseOut Risk Evaluation), and the projects for development and implementation of new platforms for registration and treatment of OTC derivatives and fixed-income securities, in addition to construction of our new data center.

Total capital expenditures over the course of 2011 amounted to R$204,041 thousand, where R$183,444 thousand are investments in technology projects such as implementation of the derivatives and forex module of our new PUMA Trading System, and the integration of our clearing facilities into a single central clearing facility.

Total capital expenditures over the course of 2010 amounted to R$268,362 thousand, where R$219,261 thousand are investments in IT projects, such as development of a new multi-asset class trading platform, a joint cooperation with the CME Group within the scope of the global preferred strategic partnership we agreed in February 2010, and the expansion of throughput capacity in both segments, in addition to purchase of a plot of land for us to build our new data center.

10.11. Other factors which materially influence operating performance

Other than as discussed elsewhere herein, there are no reportable factors which could materially influence our operating performance.

11. PROJECTIONS

11.1. Released estimates and assumptions

a. the subject matter

On September 24, 2014, we revised our 2014 opex budget (operating expenses adjusted to eliminate depreciation and provision expenses, and expenses with the stock options plan and with taxes on dividends the CME Group paid to us), released earlier, on December 17, 2013, to R$585 million and R$595 million from R$595 million and R$615 million previously. Additionally, the Company reaffirms its investment (“CAPEX”) budget: (i) interval of R$230 million to R$260 million for 2014; and (ii) interval between R$190 million and R$220 million for 2015.

b. the time frame and valid time

The 2014 budget was prepared for a 12-month time frame ending December 31, 2014.

The 2015 budget was prepared for a 12-month time frame ending December 31, 2015.

c. the underlying assumptions, including indication of those that may be influenced by Management and those that are beyond Management’s control

Opex budget. Our 2014 opex budget provides a forecast of expenses adjusted to eliminate depreciation and provision expenses, and expenses with the stock options plan and taxes on dividends paid by the CME Group. It does not anticipate increases in headcount throughout 2014. We will be working towards deepening our internal controls and costs management in order to offset the effects of salary increases due to promotion, changes in wages and the annual salary adjustments contemplated under our collective bargaining agreement with the unions. Thus, the 2014 opex budget contemplates primarily adjustments related to inflation in the period.

Capex budget. Our 2014-2015 capex budget features 2014 current and 2015 forecast estimates for capital expenditures related to investments we expect to make in developing our IT infrastructure and platforms, as follows:

Integration of all our clearing houses into a single, multi-market central clearing facility; Building of new data center;


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New OTC trading and registration platform; Improvements in IT infrastructure; Deepening initiatives (securities lending, market makers, pre-trade risk controls).

The budget forecasts for capital expenditures and adjusted operating expenses may be influenced by Management.

d. budget indicators

Our 2013 budgets projected capital expenditures at an interval between R$260,000 thousand and R$290,000 thousand, and adjusted operating expenses at an interval between R$560,000 thousand and R$580,000 thousand.



11.2. Monitoring and revisions of budget projections

a. identify updated and repeat projections included herein

The same types of estimates for adjusted operating expenses and capital expenditures included in our capex and opex budgets for 2011, 2012 and 2013 are now repeated (after adjustments for inflation) in the capex and opex budgets for 2014 and 2015.

b. comparison of estimates versus actual data for prior periods; reasons leading to budget deviations, if any.

Our 2013 capex budget contemplated capital expenditures within a range between R$260,000 thousand and R$290,000 thousand, while the opex budget contemplated adjusted operating expenses within a range between R$560,000 thousand and R$580,000 thousand. Ultimately, our actual capital expenditures amounted to R$289,224 thousand while the actual adjusted operating expenses totaled R$575,764 thousand, in either case within the budget range.

Our 2012 capex budget contemplated capital expenditures within a range between R$230,000 thousand and R$260,000 thousand, whereas the opex budget contemplated adjusted operating expenses within a range between R$560,000 thousand and R$580,000 thousand. Ultimately, our actual capital expenditures amounted to R$258,363 thousand while the actual adjusted operating expenses totaled R$563,487 thousand, in either case within the budget range.

Our 2011 capex budget contemplated capital expenditures within a range between R$180,000 thousand and R$210,000 thousand, whereas the opex budget contemplated adjusted operating expenses within a range between R$580,000 thousand and R$590,000 thousand. Ultimately, our actual capital expenditures amounted to R$204,041 thousand while the actual adjusted operating expenses totaled R$584,521 thousand, in either case within the budget range.

c. report and explain, as the case may be, sustained and revised projections for the current period as of the date of this form

On September 24, 2014, we revised our 2014 opex budget (operating expenses adjusted to eliminate depreciation and provision expenses, and expenses with the stock options plan and with taxes on dividends the CME Group paid to us), to R$585 million and R$595 million.

12. SHAREHOLDERS’ MEETING; MANAGEMENT

12.1. Administrative structure

a. responsibilities of each administrative body and committee;

Responsibilities of the board of directors. In addition to responsibilities prescribed under Brazilian Corporate Law and our bylaws, the board of directors is responsible for (a) setting the general business guidelines for us and our subsidiaries; (b) except for liquidity facility transactions (per article 38, indent ‘e’ of the bylaws), giving prior consent for contracts of any type and transactions or waivers of rights entailing obligations not contemplated in the annual budget which are in excess of a certain ‘reference amount’. Under our bylaws, ‘reference amount’ is defined as one percent of the book value of our shareholders’ equity; (c) appointing the executive officers of subsidiaries (for which purpose the directors are to defer to the recommendations of the chief executive officer, unless any such recommendation is outvoted in a poll by a qualified majority of directors representing 75% of the board membership); (d) providing shareholders with a list of three nominee specialized firms with ability to evaluate our shares and prepare a valuation report, in the event a tender offer is to be implemented in the course of a going-private process (and our deregistration as a public company) or for our shares to be delisted from the Novo Mercado; (e) within 15 days after the announcement of any type of tender offer initiated for shares issued by us, expressing and disclosing to the market a reasoned opinion advising shareholders on the timing and convenience of the bid, its impact on our business interests and other factors related to the tender offer; (f) approving rules for access to our markets, including rules on granting, suspension and withdrawal of access permits, in addition to operating, clearing and settlement rules and rulebooks, rules to define and regulate transactions in securities, bonds and derivative contracts admitted for on-exchange trading or for trading on organized OTC markets operated by us or a subsidiary, and transactions carried out in the clearing and settlement systems operated by us or a subsidiary; (g) approving rules related to listing, suspension and delisting of securities and derivative contracts, and registration of issuers and writers; and (h) ordering limited or market-wide trading halts in serious emergency events which otherwise would disrupt or adversely affect the orderly operation of markets operated by us or a subsidiary, provided prompt notice of any such decision is to be given to the Brazilian Securities Commission (Comissão de Valores Mobiliários).

Responsibilities of the board of executive officers. The board of executive officers represents our Company and is


74

responsible for managing our business in line with the guidelines set by our directors. In addition to responsibilities prescribed under Brazilian Corporate Law and our bylaws, the board of executive officers is responsible for (a) abiding by, and enforcing our bylaws and the decisions of our board of directors and shareholders’ meetings; (b) within its sphere of authority, performing any and all acts necessary to ensure the regular course of business and fulfill our corporate purpose; and, (c) coordinating the activities of our subsidiaries.

Moreover, the board of executive officers has powers to (a) declare a clearing participant in default of its obligations vis-à-vis our clearing facilities, ordering appropriate action to be taken; (b) assign operating, credit and risk limits to participants that operate directly or indirectly in our clearing facilities; (c) define processes for common adoption at each of our clearing facilities, and for the integration of trading systems, clearing and settlement systems, risk management and margin systems (straight-through processing); and (d) order the closing out of open positions held by permit-holding market participants.

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. For the composition of this committee, see the information under section 12.7 of this Form.

Compensation Committee. The primary responsibilities of the compensation committee include evaluating and adjusting our compensation guidelines, standards and policy, including as to benefits for directors, committee and management members. For the composition of this committee, see the information under section 12.7 of this Form.

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. For the composition of this committee, see the information under section 12.7 of this Form.

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. For the composition of this committee, see the information under section 12.7 of this Form.

Investment Intermediation Industry Advisory Committee. The primary responsibility of this committee is to consider issues and problems that affect the investment intermediation industry (particularly brokerage firms with access to our markets) and make recommendations to our board regarding actions oriented towards strengthening the industry. For the composition of this committee, see the information under section 12.7 of this Form.

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 guidelines 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. For the composition of this committee, see the information under section 12.7 of this Form.

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. date the fiscal council was established (if not a permanent body), and the dates on which committees were established;

Our fiscal council has not been active since our incorporation. We take the view that the functions of a fiscal council are adequately fulfilled by our audit committee because it was conceived and established with responsibilities (stated under article 47 of our bylaws, pursuant to CVM Ruling 308/99, as amended) which overlap with those that are legally assigned to a fiscal council under Brazilian Corporate Law.

Our audit committee as well as the compensation committee and the nominations and governance committee (the latter two

previously comprising a single body named compensation and nominations committee) were established at the extraordinary shareholders’ meeting held on May 8, 2008, while the risk committee was established at a board meeting held on May 12, 2009.

The market risk committee was created on May 8, 2008, as an advisory committee to the CEO. Additionally, at a meeting held on March 5, 2013, the board of directors established the investment intermediation industry advisory committee.

c. 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 classified 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


75

compiled and classified 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 mulling 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 establishes the related improvement action plan.

d. individual powers and responsibilities of the executive officers;

Chief Executive Officer. The responsibilities of the chief executive officer are set forth under article 35 of our bylaws, and include, among other things, (a) directing and coordinating the functions of the other officers; (b) coordinating and directing general planning activities for our company and subsidiaries; (c) setting prices, fee rates, commissions and other dues charged from participants holding permits for access to our markets and from customers for services we provide as market operators and in the course of performing our self-regulatory and market surveillance functions, as well as in performing broker audits and commodity grading activities; (d) monitoring in real time and inspecting trades and other transactions carried out on our trading, registration, clearing and settlement systems; (e) acting within the realm of our market surveillance function, taking measures and adopting procedures to prevent unfair or illegal or irregular market practices; (f) ordering limited or market-wide trading halts in serious emergency events which otherwise would disrupt or adversely affect the orderly operation of markets operated by us or a subsidiary, promptly giving reasoned notice of any such decision to our board of directors and the Brazilian Securities Commission; (g) in certain instances contemplated in

the participant access rules and other rules issued by our board of directors, and in the event of suspected violation of the code of ethics, taking the precautionary measure of suspending (for no more than ninety days) the access rights of noncompliant or recalcitrant participants, whereas promptly communicating the suspension to the CVM and the Central Bank; and (h) promptly notifying the CVM of events, including transient events, that affect the markets we operate.

Chief Financial and Corporate Affairs Officer. The chief financial officer accumulates responsibilities as officer for corporate affairs. As such, this officer’s responsibilities include (a) planning and preparing yearly and multi-year budget forecasts, work plans and capital expenditure plans; (b) controlling the execution of yearly and multi-year budgets; (c) managing and investing financial resources, and supervising the performance of these activities by our subsidiaries; (d) directing and managing our accounting, financial planning and taxation departments; (e) managing the provision of administrative services required by our business, in particular with regard to contract management, asset management, asset security, supplies and logistics, engineering and maintenance; (f) supervising the legal team in connection with legal advice and course of action regarding litigation, tax and taxation and regulatory matters; and (g) supervising the activities of the issuer regulation department regarding the processing and analysis of listing applications, in addition to issuer compliance with listing regulations and disclosure and reporting requirements. We should note the nominations and governance committee (a standing advisory committee to our board) has powers to monitor the activities of our issuer regulation department with the aim of mitigating the potential for conflicts related to our capacity as a self-listed company.

Chief Operations Officer. The chief operations officer accumulates responsibilities as chief officer for trade and post-trade

operations. As such, this officer’s authority and responsibilities include (a) directing, managing trade operations and monitoring the connectivity to our electronic trading platforms (b) directing and managing all clearing activities for the equities, derivatives, fixed-income, commodities and foreign exchange markets, supervising activities at public offerings, including clearing and settlement related thereto; (c) directing and managing services at our central securities depository and custody activities provided for equities, fixed-income securities, gold and agricultural securities registered or deposited with our central securities depository and our other custody systems; (d) directing and managing our activities as central counterparty clearing house; and (e) managing the processing applications for permits for access to our markets and the markets operated by our subsidiary Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias).

Chief Product and Investor Relations Officer. The chief product and investor relations officer is responsible for (a) coordinating the research and development of new products and trading structures; researching market needs in cooperation with market participants, regulatory entities and private capital market institutions; (b) promoting market efficiency and market education in cooperation with market participants, regulatory entities and private capital market institutions and developing solutions to tackle technical hurdles; (c) establishing guidelines for business development activities in local an d international markets, (d) identifying and designing strategies for new business opportunities and establishing b usiness relationships with market participants seeking to expand distribution channels; and (e) interfacing with customers for our products and services; (f) managing reporting and disclosure activities, and acting as primary interface between our Company and the shareholders, the CVM, the market, other exchanges and markets on which Company securities trade, and

ensuring we keep current registration information as required by applicable CVM regulation, in addition to directing and managing compliance with other regulatory requirements.

Chief Technology and Information Security Officer. The chief technology and information security officer directs and manages our information technology and information security activities, and is responsible for our technology infrastructure, as well as for (a) managing and 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.

e. 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 pursuant to a process whose dimensions are twofold: “what” and “how.” The “what” dimension evaluates project realization,


76

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 the members of the board of executive officers, and define evaluation scores which give us feedback for determination of both the short-term variable compensation (profit sharing bonuses) and long-term variable compensation (stock options under our stock option plan). The evaluations and scores are subsequently submitted to the board of directors, 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 performance of committee members, as each of their overall performance is evaluated as discussed above.

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. 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 shareholders convening in properly called general meetings include (a) approving stock or subscription option plans benefitting our and our subsidiaries’ management members and employees, consultants and certain other

service providers; (b) deciding on action to delist our shares from the Novo Mercado segment of the Brazilian stock exchange, or to deregister BM&FBOVESPA as a public company upon a going private process; (c) from a list of candidate appointees, designating a specialized firm to determine the fair value of our shares and prepare a valuation report in the event of a going private process or our delisting from the Novo Mercado; (d) suspending the rights of shareholders in breach of the law or our bylaws (article 120 of Brazilian Corporate Law n° 6.404/76 and article 18 of our bylaws); (e) deciding on our holding ownership interest in other companies and/or associations, consortia or joint ventures where any such interest involves an amount in excess of three times the ‘reference amount’ defined in the bylaws, for which purpose the legally prescribed quorum to resolve must be observed, unless the Brazilian Securities Commission (Comissão de Valores Mobiliários), or CVM, consents to a lower quorum being adopted, 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 Praça Antonio Prado, 48, Downtown, São Paulo, State of São Paulo

Electronic addresses: www.bmfbovespa.com.br/ri; and www.cvm.gov.br

d. identification and management of conflicts of interest;

At this time we adopt no particular mechanism or policy to detect and identify instances where the interests of a shareholder may entail conflict with our interest on 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 having some of our senior management members act as proxies for shareholders who wish to appoint them giving voting instructions on how they are to vote their 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 certa in requirements, including corporate documents that prove authority for the granting of proxies (or powers of attorney). However, we do not require 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 available 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 other general meetings. Thus, shareholders are permitted to register for remote voting or voting by proxy on every topic in the order of business, whereupon they are issued digital certification 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).

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.

http://www.bmfbovespa.com.br/ri

http://www.cvm.gov.br/


77

We adopt no special mechanisms for shareholders to add proposals to the order of business.

12.3. Dates and newspapers for published notices, documents and other releases required under Brazilian Corporate Law.

Year ended December 31, 2013 Year ended December 31, 2012 Year ended December 31, 2011

Event Publication

date(s) Newspaper(s)

Publication date(s)

Newspaper(s) Publication

date(s) Newspaper(s)

Notice of release of financial statements

Not published N/A Not published N/A Not published N/A

Call notices for annual shareholders’ meetings

February 21, 2014 February 24, 2014 February 25, 2014

Valor Econômico March 15, 2013 March 18, 2013 March 19, 2013

Valor Econômico February 23, 2012 February 24, 2012 February 27, 2012

Valor Econômico


Official Gazette of the State of

São Paulo

March 15, 2013 March 16, 2013 March 19, 2013


São Paulo



São Paulo

Date of the meeting March 24, 2013, 12 noon April 15, 2013, 11 am March 27, 2012, 10 am

Minutes of the annual shareholders’ meeting that judged the financial statements

March 25, 2014 Valor Econômico April 16 2013 Valor Econômico March 29, 2012 Valor Econômico

March 25, 2014


São Paulo April 16, 2013


São Paulo March 29, 2012


São Paulo

Financial statements

February 14, 2014 Valor Econômico February 20, 2013 Valor Econômico February 15, 2012 Valor Econômico

February 15, 2014 Official Gazette of the State of

São Paulo February 20, 2013


São Paulo February 15, 2012


São Paulo

12.4. 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. A majority of our directors must be independent directors. Our directors must not accumulate duties as our officers or 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 directors 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, our board of directors meets regularly every other month, pursuant to an annual calendar our Chairman releases every January. In addition, if urgent business so require, extraordinary board meetings may be called pursuant to a three-day call notice given by the chairman or, in his absence, the vice chairman or otherwise by 2/3 of the board membership.

The table below sets forth the dates of board of directors held in the last three full years.

2013 2012 2011


March 5, 2013 March 27, 2012 April 19, 2011

April 4, 2013 May 10, 2012 May 5, 2011

April 15, 2013 June 26, 2012 May 12, 2011

May 9, 2013 August 7, 2012 June 16, 2011

June 13, 2013 September 13, 2012 August 9, 2011

June 25, 2013 October 3, 2012 September 1, 2011

July 25, 2013 November 6, 2012 September 20, 2011

August 8, 2013 December 11, 2012 November 8, 2011

September 11, 2013 - December 13, 2011

September 17, 2013 - -


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September 30, 2013 - -

October 1, 2013 - -

October 3, 2013 - -

November 7, 2013 - -

November 14, 2013 - -

December 17, 2013 - - - - -

b. provisions in shareholders agreements (if any) restricting or otherwise tying the voting rights 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 h ave 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 shareholders 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 d irector, 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.

While for the most part our board is composed by independent directors, the interests of all our directors are in line with our interests.

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 Ruling 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 subsection 5(IV) 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 subsection 5(IV) of our policy on conflicts of interest and related party transactions the chairman 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 decision-making process regarding the pertinent matter.

Additionally, if a director who may potentially ascertain a personal gain from any given decision fails to disclose having a conflicted interest, any informed peer may unveil such circumstance. The conflicted director would be found in breach of our policy (for both the conflict proper and the disclosure failure), and the matter would be submitted for consideration of the nominations and corporate governance committee so a recommendation can be made to the board of directors as to possible corrective actions.

In any event, any disclosed conflict of interest and the conflicted director’s abstentions from voting are required to be properly recorded in the minutes of the relevant board meetings.

Additionally, on taking office, our directors are required to sign a statement acknowledging awareness of our policy and committing to abide by the policy requirements regarding conflicts of interest and related party transactions.


79

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 Novo Mercado listing agreement or the Novo Mercado listing rules and sanctions regulation, the arbitration regulation of the Market Arbitration Chamber, the provisions of the Brazilian Corporate Law, the rules issued by the Brazilian Monetary Council (Conselho Monetário Nacional), or CMN, the Central Bank or the CVM, and other rules generally applying to the Brazilian capital markets. The arbitration proceedings are to be conducted by the Market Arbitration Chamber under its rules.

12.6 and 12.8. Composition of the board of directors, board of executive officers and fiscal council; professional experience of directors, executive officers and fiscal council members

Board of Directors

Alfredo Antônio

Lima de Menezes André Santos

Esteves Charles P. Carey Claudio Luiz da Silva Haddad

Daniel Luiz Gleizer

José de Menezes Berenguer Neto

Age 51 44 58 66 54 47

Professional degree

Banker System Analyst Manager Industrial and mechanical engineer

Economist Bachelor of Laws

Taxpayer ID (CPF)

037.958.008-03 857.454.487-68 - 109.286.697-34 628.724.277-91 079.269.848-76

Position Director Director Director Independent

director Director Director

Election date April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 June 3, 2014 April 15, 2013

Investiture date April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 June 3, 2014 April 15, 2013

Term of office

Through to the date of the annual

meeting convening to judge the 2014

financial statements










Through to the date of the next general

shareholders’ meeting




Other positions Risk Committee

member - -

Nominations and Governance

Committee member; Compensation

Committee member

-

Investment Intermediation

Industry coordinator; Nominations and

Governance Committee member;

Compensation Committee member

Appointed by controlling shareholder

No No No No No No

José Roberto

Mendonça de Barros Luiz Fernando

Figueiredo Luiz Nelson Guedes

de Carvalho Marcelo Fernandez

Trindade Pedro Pullen

Parente

Age 70 50 68 48 61

Professional degree Economist Business Administrator Accountant Lawyer Business Executive

Taxpayer ID (CPF) 005.761.408-30 013.124.158-35 027.891.838-72 776.785.247-49 059.326.371-53

Position Independent director Independent director Independent Director Vice Chairman

(Independent director) Chairman;

(Independent director)

Election date April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013

Investiture date April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013

Term of office

Through to the date of the annual meeting

convening to judge the 2014 financial statements


convening to judge the 2014 financial

statements



statements



statements



statements

Other positions Risk Committee

member

Risk Committee coordinator; Advisory

Committee for the Securities Intermediation

Industry member

Audit Committee coordinator

-

Governance and, Compensation

Committee coordinator; Compensation

Committee coordinator; Risk Committee member


No No No No No

The following is a brief biographical description of the directors.

Pedro Pullen Parente (Chairman; Independent director) Early in his civil service career, Mr. Parente worked for Banco do Brasil (1971-1973); he then transferred to the Central Bank


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(in either case open-competitive examination required), after having held multiple higher-ranking positions in the Brazilian Central Bank's Financial Administration Department, in civil service and government . He was a Consultant for the 1988 Brazilian Constitutional Assembly; Secretary of Planning (1991-1992), Consultant of the International Monetary Fund, based in Washington D.C. (1993-1994), Executive Secretary of the Finance Ministry (1995-1999), Minister of Planning, Budget and Management (April-July 1999) and in March 2001 acting Minister of Mines and Power. He also 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 Fernando Henrique Cardoso's transition. Between 2001 and 2002 he served as chairman of the Energy Crisis Management Committee; Chief Operating Officer of Grupo RBS, a Brazilian media conglomerate (2003-2009). Mr. Parente served as Chief Executive Officer and President of Bunge Brazil at Bunge Ltd. until April 2014. He is also a member of the boards of SBR-Global and ABC Group, where he serves as President.

Other positions in public companies. He is a former member of the boards of the following companies: 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 Mr. Parente in any disciplinary or court proceedings.

Marcelo Fernandez Trindade (Vice Chairman; 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. Previously, he was a partner at the law firms of Cardoso, Rocha, Trindade e Lara Resende Advogados (1994–1998) 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 São Paulo Stock Exchange (Bovespa), from which BM&FBOVESPA emerged. He was also a director of Globex Utilidades S.A. (2008-2009).

No judgment of guilty (final or otherwise) has been entered against Mr. Trindade in any disciplinary or court proceedings.

Alfredo Antônio Lima de Menezes (Director) Mr. Menezes holds a graduate degree in business administration from Faculdades Integradas Tibiriçá-(FATI), Brazil. Early in his career (1985) he joined Banco BCN as a junior trader and made his way up to executive officer. Mr. Menezes is a former department head of Banco Bradesco S.A, (from 2001) and served as its assistant executive officer between December 2010 and January 2012, when he was elected to serve as executive managing. Mr. Menezes is a member of the governing board of the Bradesco Foundation. He is currently a member of the board of directors of the Institute of Digestive Disease and Nutrition Foundation (Fundação Instituto de Moléstias do Aparelho Digestivo e da Nutrição – FIMADEN); Chairman of the Fixed-Income, Currencies and Derivatives Advisory Committee of BM&FBOVESPA, and a member of the Advisory Committee for Securities, Currencies and Bonds Clearing Houses of BM&FBOVESPA. Previously, Mr. Menezes was a Vice Chairman of the Operating and Ethics Committee and a director of the Brazilian Financial Markets Association (Associação Nacional das Instituições do Mercado Financeiro – ANDIMA); a director of CentralClearing de Compensação e Liquidação S.A., and a member of the Deliberative Committee of the Brazilian Association of Real Estate Loans and Savings Companies (Associação Brasileira das Entidades de Crédito Imobiliário e Poupança – ABECIP).

Other positions in public companies. Mr. Menezes is a former director of CETIP S.A. – Balcão Organizado de Ativos e Derivativos (former name of CETIP S.A. – Mercados Organizados). He currently serves as Executive Managing Officer of Banco Bradesco S.A.

No judgment of guilty (final or otherwise) has been entered against Mr. Menezes in any disciplinary or court proceedings.

André Santos Esteves (Director) Mr. Esteves holds a graduate degree (BS) in Computer Sciences from the Federal University of Rio de Janeiro. Mr. Esteves is the chief executive officer of Brazilian investment bank Banco BTG Pactual S.A. Previously of funding Banco BTG, he was the chairman and chief executive officer of UBS Pactual from 2006 to 2008. He served as global head of fixed income of UBS Investment Bank since August 2007 until 2008 and Global Head of FICC (Fixed Income, Currencies and Commodities) since October 2007. He held both positions until his departure from UBS in 2008. He work for 17 years at Banco Pactual until its sale to UBS in 2006. He joined the bank in 1989 and became a partner in 1993 and its managing partner (executive committee member) in 2002. He served as a member of the Board of BM&F - Bolsa de Mercadorias e Futuros (the Brazilian Mercantile and Futures Exchange) from 2002 to 2006. In the last five years, he served as executive officer of Pactual Asset Management S.A DTVM, of the brokerage firm Pactual Corretora de Títulos e Valores Mobiliários S.A., and of Sistema Leasing S.A Arrendamento Mercantil. He served chief executive and chairman of the board of Banco BTG Pactual S.A, and global head of fixed income and global head of FICC (Fixed Income, Currencies and Commodities) of UBS AG; and director of the Brazilian Federation of Banks - FEBRABAN.

Except as set forth below, no judgment of guilty (final or otherwise) has been entered against Mr. Esteves in any disciplinary or court proceedings:

1) Administrative Case Pt. 0601357636 – The Central Bank instituted proceedings to investigate allegations of losses from intraday trades in BRL/USD (Brazilian real to U.S. dollar rate) futures contracts; in U.S. dollar-denominated local yield curve futures (locally also known as ‘ID versus USD spread futures contract,’ or futuro de cupom cambial), which trade either as a standard futures contract or forward rate agreements, and intraday trades in 1-day Brazilian-interest rate futures contracts (a bet on the overnight interbank lending rate). These trades allegedly occurred in the period from October 2002 to February 2004 supposedly to benefit a non -resident investor. On April 19, 2013, the Central Bank charged a R$100,000.00 fine which was fully paid. The case has now been shelved.

2) CONSOB Proceedings No. 18165 – The Italian Securities Commission (Commissione Nazionale per le Societá e La Borsa – CONSOB)


81

instituted this civil inquiry as part of a probe into alleged secondary insider trading (equivalent to ‘tippee’, under U.S. securities law) by Mr. André Esteves in November 2007, involving shares of Cremonini S.p.A., who was then negotiating a partnership with JBS S.A. M r. Esteves was fined €350,000 Euros, banned from serving as director of companies under the CONSOB regulatory authority and had assets frozen (the alleged profit) by the Italian regulator authority. This was an administrative decision with no criminal charges attached. While having full conviction that the allegations have no foundation, Mr. Esteves waived his right to appeal, with no admission of guilt, in order to avoid extending the case.

Charles Peter 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, having performed a leading role in the 2007 merger of the CBOT and the CME. 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 spearheaded the transformation of CBOT, a member-run institution for more than 155 years, into a for-profit, NYSE-listed public company in 2005. 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 other public company registered in Brazil.

No judgment of guilty (final or otherwise) has been entered against Mr. Carey 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 master’s 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 the Getúlio Vargas Foundation, or FGV (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 Insper - Instituto de Ensino e Pesquisa, the principal shareholder of IBMEC São Paulo, and chairman of the board of directors and principal shareholder of the IBMEC Group, a higher education conglomerate. Additionally, he is a member of the boards of directors of the David Rockefeller Center for Latin American Studies of the Harvard University, of Hospital Israelita Albert Einstein, Ideal lnvest S.A. and Instituto Unibanco.

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 Mr. Haddad in any disciplinary or court proceedings.

Daniel Luiz Gleizer (Director) Mr. Gleizer holds a graduate degree in Economics from the Rio de Janeiro Federal University, a master’s degree in Economics from the University of Illinois at Urbana-Champaign and a PhD in Economics from the University of California, Berkeley. Mr. Gleizer currently serves as Vice President and Executive Member of the Board of Directors of Banco Itau BBA. He joined Unibanco in April 2004, where he served as executive managing officer in charge of Risk Management and Macroeconomic Research and, later, Head of Treasury (2006). Earlier in his career he was Deputy Governor of the Central Bank’s Department

of International Affairs (1999-2002) and a voting member of the Central Bank’s Monetary Policy Committee (Comitê de Política Monetária); Chief Economist at Banco de Investimentos Garantia S.A. (investment bank; 1996-1998); and an Economist with the International Monetary Fund (1991-1995).

Other positions in public companies. Mr. Gleizer is not on the board of directors of public companies other than us. No judgment of guilty (final or otherwise) has been entered against Mr. Gleizer in any disciplinary or court proceedings.

José de Menezes Berenguer Neto (Director) Mr. Berenguer Neto holds a Bachelor of Laws (LLB) degree from the Pontifical Catholic University of São Paulo (1989). He has been appointed to serve as Chief Executive Officer of JP Morgan Brazil from April 1, 2013, and is the Chief Executive Officer of Gávea Crédito Estruturado (project finance). Previously, from 2007 and 2012, he worked for Banco Santander S.A., where he served as lead executive of the Santander segments for retail customers, private banking, asset management, global markets and products. He also served as a member of their executive committee and, until September, 2012, as a member of the board of directors of Banco Santander Brasil. Between 2002 and 2007, he served as Executive Vice President of the Corporate Segment of Banco ABN-Real, where he was responsible for Global Markets, Private Banking, Products, Finance and the Asset-Liability Committee (ALCO). From 1999 to 2002, Mr. Berenguer Neto was an executive, and also member of the board of directors, at Banco BBA, being responsible for Balance sheet Management, Gapping, Proprietary Trading e Capital Markets. He was also a member of the Board of Directors. He also was co-founding partner at the Utor Investment Group. From 1997 to 1998 act as Co- Head of Emerging Markets and High Yield Fixed Income of Banco ING –

New York, as member of executive committee of Corporate and Private Baking, and also act as member of the Regional Management Committee of the Americas. From 1994 to 1997 serves as Director of ING Barings Brasil in Head of Fixed Income, Equities Trading, Sales and Research. Also, Mr. Berenguer Neto was member of the Board of Directors of Gávea Investimentos S.A, of FEBRABAN, ANBIMA, Fudandação Brasileira de Proteção da Juventude e Infância, and of Emerging Markets Traders Association. Further, he was Vice-President of Federação Bancária Brasileira – Treasury, from 2000 to 2002.

No judgment of guilty (final or otherwise) has been entered against Mr. Berenguer Neto in any disciplinary or court proceedings.

José Roberto Mendonça de Barros (Independent director) Mr. Barros holds a graduate degree and a PhD in economics from the University of São Paulo and a post -doctorate degree from the Economic Growth Center at Yale University. He is an independent consultant and has been the founding managing partner of Mendonça de Barros Associados S/S Ltda. since 1978. He is also a member of the Advisory Board of the Brazilian Federation of Banks (Febraban) and of Corttex Gestão de Recursos. He is also a member of the advisory committee for our


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Novo Mercado listing segment. He is a former Secretary for Economic Policy of the Ministry of Finance and executive secretary of the President’s Office of Foreign Trade. In addition, he was a Visiting Professor at the Agricultural Economics and Rural Sociology Department of the Ohio State University and Assistant PhD Professor at the Economics and Business School of the University of São Paulo. Other positions in public companies. Mr. Barros is a former director of Tecnisa (June 2006-March 2014) and Banco Santander (Brasil) S.A (January 2009-August 2013); former member of the advisory committee of the O Estado de São Paulo publishing group (June 2008-January 2012); former member of the Advisory Committee of Pão de Açucar Group (June 2005-July 2011); former director of GP Investments (2006- 2009); of Frigorífico Minerva (2007-2008); of Fertilizantes Fosfatados S.A. – Fosfertil (2004-2006); former member of the strategic committee of Vale (2002-2006); and former member of the board of directors of the public utilities CESP - Companhia Energética de São Paulo, Eletropaulo, CPFL and Comgas (1983-1985). He was also a member of the board of directors of Bovespa Holding S.A., which deregistered as a public company in 2008 following the merger with BM&F, from which BM&FBOVESPA emerged.

No judgment of guilty (final or otherwise) has been entered against Mr. Barros in any disciplinary or court proceedings.

Luiz Fernando Figueiredo (Independent director) Mr. Figueiredo holds a graduate degree in business administration, with specialization courses in Finance from Fundação Armando Álvares Penteado (FAAP). He was formerly a Professor of the MBA program of the same institution. Mr. Figueiredo is a co-founder and the head managing partner of Mauá Sekular Investimentos and serves as director of the Brazilian Financial and Capital Markets Association (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – ANBIMA) and its executive officer. Previously, he served as Chairman of Association of Capital Market Investors (Associação de Investidores no Mercado de Capitais – AMEC); member of the Advisory Committee of Pão de Açucar Group; and member of the board of Indústrias Romi. He was founder partner of Gávea Investimentos, and a partner and executive officer of Banco BBA. Between 1999 and 2003, he served as Monetary Policy Director of the Central Bank of Brazil. He also served in several management roles at Banco Nacional, JP Morgan and other local brokerage firms, in a number of areas, including trading, currencies, commodities and equities.

No judgment of guilty (final or otherwise) has been entered against Mr. Figueiredo in any disciplinary or court proceedings.

Luiz Nelson Guedes de Carvalho (Independent director) Mr. Carvalho holds graduate degrees in Economics from the School of Economics, Business and Accounting of the University of São Paulo (FEA-USP) and in Accounting Sciences from Faculdades São Judas Tadeu (São Paulo, Brazil), in addition to master’s and doctorate (strictu sensu) 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 (Fundação Instituto de Pesquisas Contábeis, Atuariais e Financeiras), or FIPECAFI. Mr. Carvalho is also a member of the Brazilian Accounting Standards Board (Comitê de Pronunciamentos Contábeis), or CPC, where he also serves as Vice Coordinator for International Relations. He serves as the CPC Vice Representative at the Emerging Economies Group (EEG) of the International Accounting Standards Board (IASB) in London. Mr. Carvalho is a member of the Advisory Council of the Prince's Accounting for Sustainability Project (A4S, a CFO and accounting bodies-led non-profit organization established by HRH The Prince of Wales, UK) and a member of the Governance Committee of the International Integrated Reporting Committee (IIRC). He is also an independent member of the Banking Self-Regulatory Board of the Brazilian Federation of Banks (Febraban). He is an arbitrator with the ICC International Court of Arbitration, based in Paris, France, and with the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (CCBC). In addition, Mr. Carvalho is 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 Finanças magazine; General Coordinator of Exame magazine’s 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 for International Financial Reporting of the Intergovernmental Working Group of Experts on International Standards o f Accounting and Reporting (ISAR), an UNCTAD/UN initiative; and Assistant Coordinator of the Strategic Committee of the XBRL-CFC Brazil project. In addition, Mr. Carvalho serves as Chairman of the Audit Committee of the Pão de Açucar Group; serves in the Board of Directors of Fundação Amazônia Sustentável – FAS, (Sustainable Amazon Foundation), a non-governmental organization; is a member of the Sustainability Committee of BM&FBOVESPA; Vice President “at large” of International Association for Accounting Education and Research, or IAAER; and member of the Brazilian Academic Society of Accounting Science (Academia Brasileira de Ciências Contábeis), or ABRACICON. Previously, he was a member of the Board of Directors of XBRL International Inc. (2009–2011); member (2008-2010) of the Financial Crisis Advisory Group (FCAG), an initiative of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB); independent member and chairman of the IASB Standards Advisory Council (July 2005-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; World Bank independent consultant on Brazil Financial System and Financial Reporting Reform (2003); deputy director of the Inter-American Accounting Association (IAAA); chairman and standing member of the Brazil Delegation to the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) hosted by UNCTAD/UN.

Other positions in public companies. Mr. Carvalho is a former director of Caixa Econômica Federal (banking & savings banking), of Banco Nossa Caixa S.A. (banking & savings banking), of Banco BBVA Brasil S.A. (banking), of Vicunha Têxtil S.A. (textiles), of Banco de Crédito Real de Minas Gerais – CREDIREAL (banking), of the ORSA Group (pulp and paper), of Companhia Müller de Bebidas (liquor and spirits) and Banco Fibra (banking). He was also chairman of Audit Committee of Banco Nossa Caixa S.A., of the Internal Controls Committee of Banco Fibra and of the Finance and Risk Management Committee of Vicunha Têxtil S.A.


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No judgment of guilty (final or otherwise) has been entered against Mr. Carvalho in any disciplinary or court proceedings.

Board of Executive Officers

Edemir Pinto

Cícero Augusto Vieira Neto

Daniel Sonder

Eduardo Refinetti Guardia

Luís Otávio Saliba Furtado

Age 61 42 38 48 47

Professional degree Economist Economist Economist Economist System Analyst

Taxpayer ID (CPF) 614.304.988-20 128.501.208-98 283.092.178-03 088.666.638-40 926.046.687-34

Position Chief Executive

Officer Chief Operations Officer

(Trading, Clearing & CSD)

Chief Financial and Corporate Affairs

Officer

Chief Product and Investor Relations

Officer

Chief Technology and Information Security

Officer

Appointment date May 9, 2013 May 9, 2013 May 9, 2013 May 9, 2013 May 9, 2013

Investiture date May 9, 2013 May 9, 2013 July 1, 2013 May 9, 2013 May 9, 2013

Term of office 2 years 2 years 2 years 2 years 2 years

Other positions - Market Risk Committee

member -

Market Risk Committee member

-


No No No No No

The following is a brief biographical description of the members of the 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). On deciding appeal No. 7530, the Appeals Board of the Brazilian Financial System (CRSFN), with grounds on article 11 of Law No. 6,385/76, reversed the earlier acquittal issued in CVM sanction proceedings No. 37/2000 to enter a judgment of warning against Mr. Edemir Pinto for oversight failure related to certain transactions in Ibovespa futures.

Cícero Augusto Vieira Neto Chief Operations Officer Mr. Vieira Neto holds a graduate degree in economics from the school of economics of the University of São Paulo. He joined Brazilian Mercantile and Futures Exchange (BM&F) in 2001, where he served as executive officer for the BM&F clearing

houses. At our company, prior to the merger with Bovespa Holding, he was head of derivatives clearing and risk management (2006-2008). Since July 2008 he was our chief operations and technology officer, responsible for trade and post-trade operations, the IT infrastructure and architecture, and IT external services. Since September 2011, became chief operations officer of BM&FBOVESPA, responsible trade and post-trade operations, including clearing houses and depository 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.

Daniel Sonder Chief Financial and Corporate Affairs Officer Mr. Sonder holds a degree in Economics and International Relations from TUFTs University and a master´s degree in International Relations from the Fletcher School of Law and Diplomacy. He served until recently as a managing director and head of Structured Credit Funds in the Asset Management Division of Credit Suisse, which he joined in 2006. Previously, he was a member of the cabinet of the São Paulo State Secretary of Finance (2003-2006); assistant to the Director of Structured Products at the Brazilian National Bank for Economic and Social Development (Banco Nacional de Desenvolvimento Econômico e Social), or BNDES (2002-2003), and held several positions at J.P. Morgan Chase from 1999 to 2001. Other positions in public companies. Mr. Sonder has not held board or management positions in other public companies. 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 Product and Investor Relations Officer Mr. Guardia holds a bachelor’s degree in Economics from the Economics and Business Administration School of the Catholic University of São Paulo (PUC-São Paulo), a master’s 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 São Paulo (USP). In June 2010 he was appointed chief financial and investor relations officer of BM&FBOVESPA. Previously, he served as Secretary of the Brazilian Treasury (May-December 2002), Secretary of Finance of the State of São Paulo (January 2003-January 2006), Deputy Secretary of Economic Policy of the Ministry of Finance, partner of Pragma Gestão de Patrimônio Ltda, an asset management firm (June 2007-May 2010) and a Professor at PUC-São Paulo (1990-1997). In May 2013, he was appointed our Chief Product and Investor Relations Officer. Other positions in public companies. Mr. Guardia is a former CFO and IRO of GP Investments and former chairman of the


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boards of directors of Banco Nossa Caixa and Cosesp (Insurance Company of São Paulo). He was previously a member of the boards of directors of Droga Raia (retail drugstore chain), of ETC Participações S.A. (private equity), of Ideal Invest (financial solutions in education), of the public utilities CESP/EMAE, Sabesp and CTEEP, of Cosipa (steel mill) and of Banco Nossa Caixa S.A. (banking, savings and loans). He was also a fiscal council member at Banco do Brasil (baking), Sabesp (water utility) and the Brazilian National Bank for Economic and Social Development (Banco Nacional de Desenvolvimento Econômico e Social, or BNDES). No judgment of guilty (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings.

Luís Otávio Saliba Furtado Chief Technology and Information 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. Previously, he worked for the Pão de Açúcar Group (2000-2002), where his last position was Chief E- Commerce Officer, and Vice President of Technology and Services at Sul America Seguros (insurance). In April 2011, he joined the staff of the BOVESPA as Chief IT Officer. In September 2011, he was appointed our Chief Technology and Information Security Officer. Other positions in public companies: Mr. Furtado served as Executive Vice President of Sul America S.A. 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.

Fiscal Council

Our fiscal council is not active at this time. See subsection 12.12 below, under the heading “Additional Reportable Information – Supplemental Information to Subsections 12.6 and 12.8 – Fiscal Council.”

12.7. Composition of standing committees established under the bylaws, and of the audit, risk, finance and compensation committees.

Audit Committee

Luis Nelson Guedes de Carvalho

Paulo Roberto Simões da Cunha

Pedro Oliva Marcilio de Sousa

Sérgio Darcy da Silva Alves

Tereza Cristina Grossi Togni

Age 68 64 40 69 64

Professional degree Accountant Accountant Lawyer Financial Consultant Accountant

Taxpayer ID (CPF) 027.891.838-72 567.047.048-68 726.224.745-04 050.933.687-68 163.170.686-15

Position Committee coordinator External member

External member

External member

External member

Appointment date June 13, 2013 June 13, 2013 June 13, 2013 June 13, 2013 June 13, 2013

Investiture date June 13, 2013 June 13, 2013 June 13, 2013 June 13, 2013 June 13, 2013

Term of office June, 2015 June, 2015 June, 2015 June, 2015 June, 2015

Other positions Independent director - - Regulatory

Committee(*) member -

(*) The Regulatory Committee is an advisory committee to the CEO established to support Management on regulatory issues.

The following is a brief biographical description of the members of the audit committee.

Tereza Cristina Grossi Togni (external independent member) 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 (April 2000-March 2003), where she rose to member of the Board of Governors and Banking Supervisory Officer after having held positions as Expert Consultant, Adjunct Head of Department and Head of the Banking Supervision Department (February 1997- March 2000), and Chief Inspector and Banking Supervision Coordinator (August 1984-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 Itaú Unibanco Holding Financeira S.A. from February 2004 to November 2008, where she also served as Financial Specialist member of its Audit Committee (July 2004 -May 2010); member of the Disclosures and Trading Committee (May 2005-May 2010); member of the Accounting Policies Committee (May 2008-May 2010); member of the Audit Committee of Porto Seguro S.A., insurance arm of the Itau conglomerate (December 2009-October 2011). Also within the Itaú Group, Ms. Grossi has been coordinator of the Audit and Risk Management Committee of Itautec S.A since September 2010; member of the Disclosures Committee of Itautec S.A

since May 2011; and chairman of the Fiscal Council of Itaúsa - Investimentos Itaú S.A since April 2011. In addition, she has been chairman of the Audit and Risk Management Committee of Duratex S.A. since April 2013, and specialist committee member (auditing and risk management) since June 2012.

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 Itaúsa - Investimentos Itaú S.A since April 2011, Chairman of the Audit and Risk Management Committee of Duratex S.A. since April 2013, and Specialist Committee Member (auditing and risk management) since June 2012. No judgment of guilty (final or otherwise) has been entered against Ms. Grossi in any disciplinary or court proceedings.

Luis Nelson Guedes de Carvalho (independent director and committee coordinator) Mr. Carvalho is our independent director. For biographical information, see subsection 12.8 above.


85

Paulo Roberto Simões da Cunha (external independent member) 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 Risk practice areas. Currently, he serves as Chairman of the Fiscal Council of Mahle Metal Leve S.A and Specialist Member of the Audit Committee of the Bradesco conglomerate.

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 Mr. Cunha in any disciplinary or court proceedings.

Pedro Oliva Marcilio de Sousa (external independent member) Mr. Sousa holds a graduate degree in Law from the Federal Univeristy of Bahia. In 1997, Mr. Sousa joined the law firm of Machado, Meyer, Sendacz e Opice Advogados where he was a partner from 2001 to 2005, when he left to serve a two-year term (2005-2007) as a Commissioner with the Brazilian Securities Commission (Comissão de Valores Mobiliários). He was also vice-president of the investment bank division of Goldman Sachs Banco de Investimento S.A. and served as managing director of Banco Standard de Investimento S.A., in charge of corporate acquisitions between 2009 and 2010. Since 2010 Mr. Sousa has been a managing director of BR Advisory Partners Participações S.A and audit committee member of Companhia Brasileira de Distribuição. Other positions in public companies. Mr. Sousa is an audit committee member at Companhia Brasileira de Distribuição. No judgment of guilty (final or otherwise) has been entered against Mr. Sousa in any disciplinary or court proceedings.

Sérgio Darcy da Silva Alves (external independent member) Mr. Alves graduated in Economics from the Rio de Janeiro Federal University. He has been as a member of the Audit Committee of Banco Itaú Unibanco since April 2014; Coordinator of the Regulatory Committee of BM&FBOVESPA since January 2007; 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; Former Director of Central Bank, responsible for the Standards Area and Financial System Organization, from September 1997 to April 2006.

Other positions in public companies. Mr. Alves has been a member of the Audit Committee of Banco Itaú Unibanco S.A.

No judgment of guilty (final or otherwise) has been entered against Mr. Alves in any disciplinary or court proceedings.

Risk Committee

Luiz Fernando Figueiredo

Alfredo Antônio Lima de Menezes

José Roberto Mendonça de Barros

Pedro Pullen Parente

Age 50 51 70 61

Professional degree Business Administrator Banker Economist Executive

Taxpayer ID (CPF) 013.124.158-35 037.958.008-03 005.761.408-30 059.326.371-53

Position Committee Coordinator Committee member Committee member Committee member

Appointment date April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013

Investiture date April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013

Term of office 2 years 2 years 2 years 2 years

Other positions

Independent director; Investment Intermediation

Industry Committee member

Director Independent director

Independent director; Chairman of the Board; member of the Compensation Committee and

of the Nominations and Governance Committee

Compensation Committee


Claudio Luiz da Silva Haddad


Age 61 66 47

Professional degree Executive Mechanical and industrial engineer Bachelor of law

Taxpayer ID (CPF) 059.326.371-53 109.286.697-34 079.269.848-76

Position Committee Coordinator Committee member Committee member

Appointment date April 15, 2013 April 15, 2013 April 15, 2013

Investiture date April 15, 2013 April 15, 2013 April 15, 2013

Term of office 2 years 2 years 2 years

Other positions Independent director (Chairman);

Risk Committee member; Nominations and Governance Committee member

Independent director; Nominations and Governance Committee member

Independent director; Investment Intermediation Industry Committee

member; Nominations and Governance Committee member

Nominations and Governance Committee


Claudio Luiz da Silva Haddad


Age 61 66 47

Professional degree Executive Mechanical and industrial engineer Bachelor of law


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Taxpayer ID (CPF) 059.326.371-53 109.286.697-34 079.269.848-76

Position Committee Coordinator Committee member Committee member

Appointment date April 15, 2013 April 15, 2013 April 15, 2013

Investiture date April 15, 2013 April 15, 2013 April 15, 2013

Term of office 2 years 2 years 2 years

Other positions Independent director (Chairman);

Risk Committee member; Compensation Committee member

Independent director; Compensation Committee member

Independent director; Investment Intermediation Industry Committee member; Compensation Committee

member

Investment Intermediation Industry Advisory Committee


Luiz Fernando Figueiredo

Carlos Arnaldo Borges de Souza

Joaquim da Silva Ferreira

Julio de Siqueira Carvalho de Araújo Caio Weil Villares

Age 47 50 51 73 59 42 Professional degree

Bachelor of law Business

Administrator Administrator Executive Banker Engineer

Taxpayer ID (CPF)

079.269.848-76 013.124.158-35 006.031.278-51 478.956.918-72 425.327.017-49 258.999.908-99

Position Committee Coordinator

Committee member

External member

External member

External member

External member

Appointment date

April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 September 17, 2013

Investiture date

April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 April 15, 2013 September 17, 2013

Term of office 2 years 2 years 2 years 2 years 2 years 2 years

Other positions

Independent director; Nominations and

Governance Committee member;

Compensation Committee member

Independent director;

Risk Committee member

- - - -

Executive advisory committees

Market Risk Committee

André Eduardo Demarco

Cícero Augusto Vieira Neto Eduardo Refinetti Guardia Marcelo Wilk

Age 39 42 48 37

Professional degree Business Administrator Economist Economist Economist

Taxpayer ID (CPF) 157.259.718-64 128.501.208-98 088.666.638-40 215.977.998-90

Position Committee member Committee member Committee member Committee member

Appointment date May 13, 2009 May 8, 2008 June 3, 2013 December 10, 2013

Investiture date May 13, 2009 May 8, 2008 June 3, 2013 December 10, 2013

Term of office Indefinite term Indefinite term Indefinite term Indefinite term

Other positions Engineering Officer

for Product and Services Chief Operations Officer

(Trading, Clearing & CSD) Chief Product and Investor

Relations Officer CSD & Registration Officer

André Monteiro d'Almeida Monteiro

Viviane El Banate Basso

Mário Palhares

Eduardo Lopes Farias

Age 42 37 40 37

Profession Engineer Economist Business Administrator Systems analyst

Taxpayer ID (CPF) 631.491.505-82 267.030.438-92 025.278.567-30 027.002.197-32

Position Committee member Committee member Committee member Committee member

Appointment date October 14, 2013 July 5, 2011 February 18, 2014 February 18, 2014

Investiture date October 14, 2013 July 5, 2011 February 18, 2014 February 18, 2014

Term of office Indefinite term Indefinite term Indefinite term Indefinite term

Other positions Risk Management Officer Settlement Officer Trading Officer Internal Controls, Compliance

and Enterprise Risk Officer

12.9. Marital relationships or domestic partnerships or family relationships (to the second degree) between:

a. the directors of the registrant

There are no marital relationships or domestic partnerships or family relationships (to the second degree) between any of our directors.

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 (to the second degree) between any of our directors and the directors of our direct or indirect subsidiaries.

c. (i) the directors of the registrant and direct or indirect subsidiaries, and (ii) the direct or indirect controlling shareholders

Not applicable, as we have no controlling shareholders.


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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 (subordinate relationships) tying directors, officers, subsidiaries, controlling shareholders, other.

a. direct or indirect subsidiaries

There are no subordinate relationships (work, employment or service provision relationships) between any of our directors or officers and us or any of our wholly-owned or other subsidiaries and affiliates.

b. direct or indirect controlling shareholders

Not applicable, as we have no controlling shareholders. c. material suppliers, debtors, creditors and significant customers of the registrant, its subsidiaries,

controlling shareholders, companies under common control.

For information on subordinate or contractual relationships, see subsection 12.12 below, under the heading “Additional Reportable Information – Positions our directors hold in other companies and entities.”

12.11. Directors and officers liability insurance policies or indemnification agreements

We provide directors and officers (D&O) 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 policy is effective through February 28, 2015, but coverage for future claims regarding events preceding such date may in our discretion extend for an additional period covering up to 72 months.

However, the policy renewal is not automatic, requiring notice of renewal being given. The premium we paid for a one-year R$349,689.75 coverage (ending February 28, 2015) totaled R$125,000 thousand.


Adherence to the ABRASCA Code of Self-Regulation and Good Practices of Public Companies

On December 12, 2011, BM&FBOVESPA adhered to the ABRASCA Code of Self-Regulation and Good Practices of Public Companies ("ABRASCA Code"). In so doing, BM&FBOVESPA declared to abide by the principles and standards established in the ABRASCA Code, except with regard to the standard which calls for a Disclosures Committee to be established. Nonetheless, we should note our investor relations officer (as supported by other Company departments) is responsible for analyzing information related to us and ensuring we comply with existing legal and regulatory disclosure and reporting requirements.

Positions our directors hold in other companies and entities

Pedro Pullen Parente, non-executive director Board or senior management positions held in other companies or entities. Mr. Parente serves as chairman of the board of the ABC Group and as director of SBR-Global.

Marcelo Fernandez Trindade, non-executive director

Board or senior management positions held in other companies or entities. Mr. Trindade is a partner at the law firm of Trindade Sociedade de Advogados and serves as director of Wilkers Participações S.A.

Alfredo Antônio Lima de Menezes, non-executive director Board or senior management positions held in other companies or entities. Mr. Menezes serves as Executive Managing Officer of Banco Bradesco S.A., as member of the Board of Directors of the Institute of Digestive Disease and Nutrition Foundation (Fundação Instituto de Moléstias do Aparelho Digestivo e da Nutrição – FIMADEN); member of the Governing Board of the Bradesco Foundation.

André Santos Esteves, non-executive director Board or senior management positions held in other companies or entities. Chairman and Chief Executive Officer of BTG

Pactual S.A., Chief Executive Officer of BTG Pactual Holding S.A., Director and executive officer of BTG Pactual Participations Ltd., Vice Chairman of Banco Pan S.A. Also a member of the Board of Directors of BR Properties S.A., Universo Online S.A. and the Brazilian Finance and Real State S.A. and Member of the Board of the Fundação Estudar.

Charles Peter 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. He also serves in the management of Henning-Carey Proprietary Trading, LLC and as General Partner of Henning & Carey Trading Company. Additionally, Mr. Carey serves as President of the Chicagoland Sports Hall of Fame.

Claudio Luiz da Silva Haddad, non-executive director Board or senior management positions held in other companies or entities. Mr. Haddad is the president of Instituto Insper, which owns and maintains the IBMEC São Paulo, and chairman of the board of directors of the IBMEC Group, a higher education conglomerate. He is a member of the board of directors of the David Rockefeller Center for Latin American Studies of


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the Harvard University, and a director of Hospital Israelita Albert Einstein, of Ideal lnvest S.A and of Instituto Unibanco.

Daniel Luiz Gleizer, non-executive director

Board or senior management positions held in other companies or entities. Mr. Gleizer serves as Vice President and Executive Member of the Board of Directors of Banco Itau BBA.

José de Menezes Berenguer Neto, non-executive director Board or senior management positions held in other companies or entities. Mr. Berenguer Neto serves as Chief Executive Officer of JP Morgan Brazil, is a member of the boards of Santos Futebol Clube (a football or soccer club), of Central de Exposição de Derivativos (a derivatives institute), a non-profit firm dedicated to enhance transparency of domestic derivatives, and of New Ventures Brasil and the Akatu Institute.

José Roberto Mendonça de Barros, non-executive director Board or senior management positions held in other companies or entities. Mr. Barros has been managing partner of Mendonça de Barros Associados S/S Ltda. since 1978, and serves as advisory committee member at the Brazilian Federation of Banks (Febraban) and at Corttex Gestão de Recursos.

Luiz Fernando Figueiredo, non-executive director Board or senior management positions held in other companies or entities. Mr. Figueiredo serves as Head Managing Partner of Mauá Sekular Investimentos and serves as Director of the Brazilian Financial and Capital Markets Association (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – ANBIMA).

Luiz Nelson Guedes de Carvalho, non-executive director Board or senior management positions held in other companies or entities. Mr. Carvalho serves as director of the Accounting,

Actuarial and Financial Research Institute Foundation (Fundação Instituto de Pesquisas Contábeis, Atuariais e Financeiras), or FIPECAFI. He is a member of the Brazilian Accounting Standards Board (Comitê de Pronunciamentos Contábeis), or CPC, where he also serves as Vice Coordinator for International Relations; serves as the CPC Vice Representative at the Emerging Economies Group (EEG) of the International Accounting Standards Board (IASB) in London; is a member of the Advisory Council of the Prince's Accounting for Sustainability Project (A4S, a CFO and accounting bodies-led non-profit organization established by HRH The Prince of Wales, UK) and a member of the Governance Committee of the International Integrated Reporting Committee (IIRC); serves as Chairman of the Capacity-Building Working Group for International Financial Reporting of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR), an UNCTAD/UN initiative; Assistant Coordinator of the Strategic Committee of the XBRL-CFC Brazil project; Vice Chairman of the International Executive Committee of the International Association for Accounting Education & Research – IAAER; Chairman of the Audit Committee of the Pão de Açucar Group (Casino); director of the NGO Fundação Amazônia Sustentável (Sustainable Amazon

Foundation); independent member of the Self-Regulatory Board of the Brazilian Federation of Banks (FEBRABAN); managing partner of NISA Soluções Empresariais Ltda. and Nisa Consultoria Empresarial Ltda.

Supplemental Information to Subsection 12.2 – Practices related to shareholders’ meetings.

The table below sets forth data on turnout information for shareholders' meetings held in the last three years.

Type of general meeting Meeting date Convened on

first or second call Shareholder Turnout

(% of shares issued and outstanding)

Annual shareholders’ meeting Extraordinary shareholders’ meeting Extraordinary shareholders’ meeting

April 28, 2009 April 28, 2009 May 8, 2009

First call First call

Second call

54.6% 54.6% 36.7%

Annual shareholders’ meeting Extraordinary shareholders’ meeting

April 20, 2010 April 20, 2010


36.8% 36.8%


April 18, 2011 April 18, 2011 April 28, 2011


Second call

50.0% 51.7% 41.2%


March 27, 2012 March 27, 2012 April 10, 2012


Second call

44.1% 44.2% 45.0%

Combined annual and extraordinary shareholders’ meeting

April 15, 2013 First call 40.4%

Annual shareholders’ meeting Extraordinary shareholders’ meeting Extraordinary shareholders’ meeting Extraordinary shareholders’ meeting

March 24, 2014 April 7, 2014 May 13, 2014 May 26, 2014

First call First call First call

Second call

34.2% 36.3% 39.0% 39.6%

Supplemental Information to Subsections 12.6 and 12.8 – Fiscal Council.

We take the view that the absence of an active fiscal council is adequately fulfilled by our audit committee because it has been conceived and established with responsibilities (listed under article 47 of our Bylaws) that overlap with those legally assigned 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 nominations 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, external audit committee members are required to be well versed in either auditing and accounting and taxation or compliance and internal controls. They must also meet the independence standards set forth in article 46 of our Bylaws.


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Supplemental Information to Subsection 12.10(c) – Subordinate and Contractual Relationships with Our Affiliates.

Our director Charles P. Carey is also a director of the CME Group Inc., which holds ownership interest in approximately 5% of

BM&FBOVESPA shares. Moreover, at December 31, 2013, we owned a 5.1% ownership interest in the shares of the CME Group. You should note that while the CME Group is an affiliate of ours, it is also a foreign company which is not a local taxpayer and, thus, has no taxpayer ID (CNPJ) in Brazil.

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 PUMA (BM&FBOVESPA) platform; (ii) a technology agreement whereby we will cooperate in the development and implementation of a multi-asset class electronic trading platform; 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.

13. MANAGEMENT COMPENSATION

13.1 Compensation policy and practices regarding the board of directors, the board of executive officers and other senior management members, the members of the standing advisory committees to the Board and other advisory committees, including the Audit Committee, Risk Committee, Finance Committee and Compensation Committee. The discussion below refers to compensation objectives and composition.

a. Objectives of the compensation policy or practices

The aim of the compensation policy is to foster alignment between corporate objectives and managements’ as well as the staff’s productivity and efficiency, whereas maintaining the Company’s competitiveness in the exchange industry.

b. Compensation composition

(i) compensation components and their objectives

Board of directors. The members of the Board of Directors are paid fixed monthly compensation. The board chair is paid an additional semiannual fixed amount equivalent to twice the compensation for a six-month period and may use of a company car. The purpose of a fixed compensation is to adequately compensate the directors for their governance role and for participating in board meetings and the company affairs, while the additional fee paid to the board chair compensates him or her for the additional responsibilities pertaining to the function. Moreover, the shareholders in attendance of the combined annual and extraordinary shareholders meeting of April 15, 2013, approved a proposal amending our stock options plan for adoption of a specific mechanism by which stock options can be awarded to our directors by way of long-term incentive.

Board of executive officers and other senior management members. Total compensation for executive officers and other senior management members comprises the following components:

Base yearly compensation comprising thirteen monthly payments which remunerate executives directly for the services provided, in line with market practices;

Benefits including health and dental care plans, life insurance, meal tickets, retirement pension, company car, parking, medical check-ups, and company cell phone, all of which aims to provide an attractive package minimally compatible with industry standards for senior executives;

Variable semiannual payments distributed under the company’s profit-sharing program (PLR), in accordance with Law 10,101 dated December 19, 2000. The company’s profit-sharing program (PLR) is based on a salary ratio formula tied to company earnings as well as individual job level and performance, aligning senior executives with the company’s short- and mid-term results of operations;

As approved at an extraordinary general meeting of May 8, 2008, and amended at extraordinary meetings held on April 18, 2011 and April 15, 2013, long-term incentive structured as a stock option plan tied to company earnings, as well as individual job level and performance, so as to align the interests of senior executives with those of our company (and shareholders) on a long-term horizon and foster retention of key personnel.

Committees. The members of any board advisory committee earn fixed monthly compensation. Directors holding a seat on any these committees are paid an additional fixed monthly compensation. No director may serve on more than three committees. The standing board advisory committees currently established are the Audit Committee, the Nominations and Corporate Governance Committee, the Compensation Committee and the Risk Committee. In addition, from March 2013 we established the Investment Intermediation Industry Committee, whose members are not entitled to compensation. The

executive advisory committees, which report to the chief executive officer, include the Agribusiness Committee, the Market Committee, the Market Risk Committee, the Athletic Club Committee and the Regulatory Committee, but we pay fixed monthly compensation just to members of the latter. Moreover, no officer, whether or not a member of the executive management board, and no staff member that serves on any of the executive advisory committees are entitled to additional compensation for participating in committee meetings.

Fiscal council. Our fiscal council is a non permanent body, which is not active at this time. If and when it is established, the

compensation policy for fiscal council members (assuming the council is active in any given year) will be established according applicable legislation. We take the view that the functions of a fiscal council are adequately fulfilled by the Audit Committee, which has been established with responsibilities (prescribed under article 47 of the bylaws) that overlap with those of legally assigned to a fiscal council under Brazilian Corporate Law. Our Audit Committee is a standing advisory committee which reports directly to the Board of Directors. It is composed of five independent members elected for two-year terms, four of whom are


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external members plus one independent director. The audit committee members are required to meet the qualification requirements set forth under CVM Ruling 308/99, as amended.

(ii) Each component as a percentage of total compensation

The table below sets forth the average percentage of each compensation component under the 2013 compensation policy.

2013 Salary, fees Participation in

committees Benefits

Short-term variable compensation (profit

sharing plan)

Long-term variable compensation (stock

option plan) Total

Board of Directors 91.02% 8.98% 0.0% 0.0% 0.0% 100%

Executive Officers and Senior Management

23.18% 0.0% 3.40% 23.17% 50.25% 100%

Committees 100% 0.0% 0.0% 0.0% 0.0% 100%

Percentages may vary from one year to year, especially in the case of variable compensation components.

(iii) methodology for calculating and reviewing each compensation component

The compensation of the members of the board of directors and the board of executive officers is reviewed every year by the Compensation Committee (per article 49, paragraph 1, item (a), of the bylaws), which makes recommendations for the board concerning the compensation proposal to be put forward to the annual shareholders’ meeting in line with the requirements of Brazilian Corporate Law. Similarly, the compensation committee reviews the compensation we pay board advisory committee members on a yearly basis and makes recommendations to the board of directors. With regard to the executive officers, their fixed monthly compensation or salary is adjusted pursuant to a collective bargaining agreement we negotiate yearly with the labor union that represents our employees. In addition, merit raises may also be granted in line with the compensation policy. Moreover, the compensation committee is responsible for proposing standards and guidelines for the board of directors to decide on the policies concerning short-term variable compensation (profit-sharing plan) and long-term variable compensation (stock options programs established under the approved stock options plan) and making recommendations to our board of directors, which has the final say on the matter.

Our company periodically conducts salary surveys in order to maintain the competitiveness of its fixed and (short, mid- and long-term) variable compensation strategy and ensure alignment with the industry best practices. These surveys sample companies of similar size as ours which operate in the financial services industry. The survey findings are adjusted by job matching to enable a comparison of functions and job level within the company with those of peers across the industry. The adjusted findings are then reviewed by the compensation committee and recommendations forwarded to the board of directors.

Benefits are adjusted as deemed necessary to maintain competitiveness on the basis of regular reviews and surveys of market practices.

(iv) rationale for the compensation composition

The primary purpose of our compensation strategy is to make certain we offer short-, mid- and long-term compensation components that ensure alignment with the corporate objectives, maintain competitiveness in the marketplace, attract and retain executives, and remunerate our executives according to the responsibilities of their job descriptions and in line with their individual performance. To this end the compensation strategy seeks to position the executives’ pay at the median salary for the industry, with additional short-, mid- and long-term variable compensation tied to the company’s collective performance and their individual performance.

c. Key performance indicators taken into account to determine each compensation component

With regard to short- to mid-term variable compensation, i.e. profit sharing payments, and mid- to long-term variable compensation, i.e. stock options, the key performance indicators we take into account to determine compensation are (i) individual performance assessments based on factors proper to each job description and position level, and (ii) the company’s collective key performance indicator (KPI). These indicators are taken into account for a determination as to total profit sharing payment as well as stock option eligibility and grants.

In 2011, pursuant to the compensation committee’s recommendations after assessing actual versus target Adjusted Net Income and operating expense of the Company, our board of directors approved short- to mid-term variable compensation in the equivalent of 3.2% of adjusted net income for the year. We made this profit sharing payment to the executive officers and other executives over the course of 2011, and recognized it fully in the statement of income.

Starting from 2012, we establish the total amount of short- to mid-term variable compensation for executives as a ratio (3.5%) of adjusted net income, provided we meet the opex budget. Thus, if the actual operating expenses go over budget, a reduction factor applies so that every percentage point by which actual opex exceeds the budget target brings the pool down by 5%. Moreover, the portion of the total yearly profit sharing payment which is attributable to the executive officers is apportioned so each individual allocation (calculated as a multiple of base pay, i.e., a salary ratio formula) is then adjusted to take individual performance into account (the reward).

As the 2012 and 2013 opex budgets were met, the total short- to mid-term variable compensation was calculated at 3.5% of the adjusted net income for each of these two years.

With regard to long-term incentives (stock options plan), in addition to the criteria determining option grants, as first discussed in this item, a grantee will only truly benefit from a stock option if the market price of our shares rises over time, such that after the transfer restrictions are lifted or expire, the grantee can sell the stocks for more than the exercise pr ice


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they paid. Thus, the potential gain for stock option grantees lies in the appreciation of the market price of our shares.

On the other hand, no performance indicators are taken into account for purposes of determining fixed compensation or

benefits. In fact, these executive compensation components are tied to the level of responsibility involved in each person’s job. Additionally, in establishing fixed compensation, we take into account each person’s qualifications to perform the job.

d. How the compensation is structured to reflect evolution of key performance indicators (KPIs)

In accordance with our policy for short-, mid- and long-term variable compensation, the profit-sharing pool and stock options grants are affected by the extent to which the company achieves performance targets set in terms of adjusted net income and operating expenses. In other words, the size of the pool and the options grants are determined on the basis of actual performance by the company compared to the collective performance targets for the period.

Furthermore, our policy provides for differing compensation levels designed to reward executive officers, other officers, executives and employees for individual performance based on key performance indicators for the respective jobs, functions and responsibilities.

e. Aligning the compensation policy or practices with the company’s short-, mid- and long-term interests

We offer compensation that is market competitive in order to retain and attract talent that helps us achieve our short-, mid- and long-term objectives. Given that longer cycles of sustained growth are naturally ingrained in our business model, which aims to strengthen, develop and expand the markets we operate, retaining skilled professionals is critical for our growth, such that our compensation strategy must include ways and means encouraging them to stay with us for a long time.

Our compensation strategy seeks to balance fixed compensation (in the form of a base salary) with the short - to mid-term compensation (in the form of profit sharing payments) and mid- to long-term compensation (in the form of stock option grants). With this we aim to give employees incentives for them to achieve, even eclipse, the half -year and annual targets tied to our profit sharing program, and inducement for effective implementation of mid- and long-term actions that add value to our company, and should therefore help to drive up the market price of our shares and better reward recipients of stock option grants.

f. Disclosure of compensation supported by subsidiaries, affiliates or controlling shareholders, if any

None of our subsidiaries or affiliates supports compensation we pay to directors, officers and employees. Additionally, given our widespread ownership structure, we have no controlling shareholders.

g. Disclosure of compensation or benefit tied to specific corporate actions, as a sale of controlling interest.

We do not tie the compensation we pay to directors, officers and employees to consummation of any particular corporate action involving our company, including mergers, acquisitions, sale of controlling interest, or strategic partnership arrangements.

In addition, our stock option plan provides that in the event of our dissolution or liquidation, or a transformation of corporate type, or of a merger, consolidation, spinoff or other corporate restructuring transaction from which we do not emerge as the surviving company, or even if we do, would entail a delisting of our shares or a going private process, then,

in the discretion of our board of directors, either the surviving company would succeed us as option grantor or any outstanding stock options would vest earlier than anticipated so the option grantees can exercise them for a given period, after which the stock option plan will end and any unexercised options forfeit with no right to indemnity or consideration for the grantee.

13.2 Compensation of directors, officers and fiscal council members (for the years ended December 31, 2013, 2012 and 2011 and projections and estimates for 2014).

Year ended December 31, 2013

Board of Directors Executive Board Fiscal Council (*) Total

No. of members 11 4.92 n/a 15.92

Annual fixed compensation (in R$) R$4,972,415.92 R$5,361,853.94 n/a R$10,334,269.86

Salary, fees R$4,525,878.76 R$4,577,821.68 n/a R$9,103,700.44

Direct & indirect benefits n/a R$784,032.26 n/a R$784,032.26

Participation in committees R$446,537.16 n/a n/a R$446,537.16

Other n/a n/a n/a n/a

Variable compensation (in R$) n/a R$10,332,121.26 n/a R$10,332,121.26

Bonuses n/a n/a n/a n/a

Profit sharing n/a R$9,095,873.67 n/a R$9,095,873.67

Participation in meetings n/a n/a n/a n/a

Commissions n/a n/a n/a n/a

Other (1)

n/a R$1,236,247.59 n/a R$1,236,247.59

Post-retirement benefits n/a n/a n/a n/a

Stepping-down benefits n/a n/a n/a n/a

Share-based payments n/a R$25,303,271.30 n/a R$25,303,271.30

Amount of compensation R$4,972,415.92 R$40,997,246.50 n/a R$45,969,662.42


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No. of members 11 5 n/a 16











Other (1)

n/a n/a n/a n/a







No. of members 10.75 5.67 n/a 16.42











Other (1)

n/a R$600,000.00 n/a R$600,000.00

Post-employment benefits n/a n/a n/a n/a



Amount of compensation R$4,019,685.04 R$29,863,965.96 n/a R$33,883,651.00 (1) Severance dues and additional sign-on bonuses.

Note: The number of members of each organ was calculated in accordance with the Circular Letter/CVM/SEP/ No 01/2014.

13.3 Variable compensation directors, officers and fiscal council members (for the years ended December 31, 2013, 2012 and 2011 and projections and estimates for 2014).

The variable compensation policy for executive officers is based on salary ratios, which may vary based on seniority of job position and, where job positions are leveled, based on individual performance assessments.

The tables below present information on the variable compensation paid to executive officers. (i) as recognized in the income statements for the years ended December 31, 2013, 2012 and 2011, based on number of members by management body to whom variable compensation was paid in the relevant years, and (ii) as projected for the current year.


Board of Directors Executive Board Fiscal Council Total

No. of members n/a 5 n/a 5 Bonus (in R$) n/a

Minimum projected in Comp. Plan n/a n/a n/a n/a Maximum projected in Comp. Plan n/a n/a n/a n/a Projected in Comp. Plan if targets met n/a n/a n/a n/a Actually recognized in the income statement n/a n/a n/a n/a

Profit sharing (in R$) Minimum projected in Comp. Plan n/a R$9,569,329.99 n/a R$9,569,329.99 Maximum projected in Comp. Plan n/a R$11,578,889.28 n/a R$11,578,889.28


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Projected in Comp. Plan if targets met n/a R$10,526,262.98 n/a R$10,526,262.98 Actually recognized in the income statement n/a R$9,095,873.67 n/a R$9,095,873.67



No. of members n/a 5 n/a 5 Bonus (in R$) n/a


Profit sharing (in R$) Minimum projected in Comp. Plan n/a R$9,072,748.56 n/a R$9,072,748.56

Maximum projected in Comp. Plan n/a R$10,978,025.75 n/a R$10,978,025.75

Projected in Comp. Plan if targets met n/a R$9,980,023.41 n/a R$9,980,023.41

Actually recognized in the income statement n/a R$8,827,692.36 n/a R$8,827,692.36



No. of members n/a 5.67 n/a 5.67 Bonus (in R$) n/a


Profit sharing (in R$)’ Minimum projected in Comp. Plan n/a R$ 8,668,042.47 n/a R$ 8,668,042.47

Maximum projected in Comp. Plan n/a R$ 10,488,331.39 n/a R$ 10,488,331.39

Projected in Comp. Plan if targets were achieved n/a R$ 9,534,846.72 n/a R$ 9,534,846.72

Actually recognized in the income statement n/a R$ 8,702,085.66 n/a R$ 8,702,085.66

Current year projections. The table below sets forth information on projected variable compensation for 2014. Given that the short- to mid-term variable compensation (profit sharing payments) for executive officers is tied to yearly performance targets being realized, the projections below assumed a probable results scenario and may change to the extent our actual adjusted

net income and operating expenses (both determining the profit sharing pool) depart from the budget (including the opex budget).

Pursuant to the method described under 13.1(c) above, the total 2014 allocation to short- to mid-term compensation for executive officers and other employees (i.e., the profit sharing pool) is to be calculated at a rate of about 3.5% of our adjusted net income for the year, provided we meet the opex budget.

Part of this total would then be allocated to the executive officers, with each individual allocation being calculated as a multiple of base pay (salary ratio formula) adjusted to reward individual performance. However, if actual operating expenses are in excess of the budget, a 5% reduction factor would apply so that every percentage point by which actual opex exceeds the budget target would bring the pool down by 5%.

With regard to projections for minimum and maximum allocations, you should bear in mind that, consistent with the allocation method previously discussed, the true size of the profit sharing pool is directly affected by our actual adjusted net income and the extent to which we adhere to the opex budget, so that ultimately (i) if we are not profitable, there may be no profit sharing allocation altogether; and (ii) if we are profitable, there will be no caps limiting the allocation, as long as the calculation guidelines previously discussed are observed. The minimum and maximum allocation amounts set forth in the following table were projected assuming adjusted net income 10% above or below the collective performance target, respectively.

Current financial year – 2014 Budget


No. of members n/a 5 n/a 5 Bonus (in R$)


Profit sharing (in R$) Minimum projected in Comp. Plan n/a R$10,137,582.05 n/a R$10,137,582.05 Maximum projected in Comp. Plan n/a R$12,390,378.06 n/a R$12,390,378.06 Projected in Comp. Plan if targets met n/a R$11,263,980.06 n/a R$11,263,980.06


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Current financial year – 2014 Budget


Actually recognized in the income statement n/a n/a n/a n/a

13.4 Share-based compensation plan for directors and executive officers (prior and current years).

a. General terms and conditions

We have a stock options plan approved at an extraordinary shareholders’ meeting held on May 8, 2008, and amended at extraordinary meetings held on April 18, 2011 and April 15, 2013 (as discussed under subsection 13.1(b).(i) above). Under the Plan, the directors, executive officers and other executives, including the executive officers and executives of our subsidiaries and, in certain special cases, employees and service providers designated by our chief executive officer (“beneficiaries”), are eligible for awards of option grants conveying rights to buy common shares issued by our company.

Under the existing stock option plan, our board of directors (or compensation committee, as applicable) establish from time to time stock option programs which define (i) the eligible beneficiaries; (ii) the total number of shares for which the options are exercisable; (iii) where an option breaks down into lots, the number of shares underlying each option lot; (iv) the exercise price; (v) the vesting schedule; (vi) any transfer restrictions applicable to the shares for which an option is exercised; and (vii) provisions on penalties, if any.

The stock option plan also calls for our board of directors to decide on additional options granting special rights to eligible key executives. Under the plan, as a pre-requisite for an additional option grant and, eventually, the exercise thereof, a beneficiary is required to (1) buy shares issued by us (Own Shares) by disbursing own funds, and keep them for a holding period at least equal to the vesting period under the additional option grant, failing which the additional option will be lost; and (2) adhere to certain transfer restrictions (“lock-up”) applicable to Own shares and effective for the holding period.

Our board of directors may delegate authority for our compensation committee to make certain decisions and recommendations concerning the stock options plan. Currently, in line with certain bylaws provisions allocating responsibilities to the Compensation Committee, the committee members assist and advise our directors in defining terms and conditions related to option grants.

In addition, consistent with our stock options plan, and acting in its discretion, our board (as advised by the compensation committee) may establish stock option programs and (upon hearing the recommendations of our chief executive officer) define the terms and ratios under which additional options (contemplated under each particular program) may be awarded to eligible key employees to reward outstanding performance, as assessed based on collective and individual performance targets.

Where launching an option program, our board is responsible for establishing terms and conditions applicable to stock option grant agreements beneficiaries will be required to execute with us within the scope of that particular program. These agreements typically include provisions at least covering the following:

a) The number of shares for which an option is exercisable by a beneficiary grantee, and the exercise price per share, as calculated pursuant to the method adopted in the relevant program;

b) The ratio by which the base number of option grants may be increased and the criteria as well as performance period

determining the increment;

c) The vesting period, the vesting schedule (whether or not a staggered schedule) and the exercise date or staggered exercise dates, and the option expiration date;

d) Transfer restrictions applicable to shares for which an option is exercised, including as related to ‘Own Shares’ held by beneficiaries of additional stock option grants, and penalties for failures to adhere to such restrictions;

e) Other terms and conditions of contract, as long as not conflicting with the stock option plan and relevant program.

Shares for which an option is exercised enjoy rights established under the stock option plan, and the relevant program and stock option grant agreement, and are assured rights to payouts after delivered to a beneficiary.

Consistent with the stock option plan and related stock option programs and grant agreements, the following additional terms and conditions apply:

a) The delivery of shares for which an option is exercised shall in any event be contingent on all applicable legal and regulatory requirements having been met in every respect;

b) The provisions of the stock option plan and related programs and grant agreements are not to be construed as assurance of continuing services or employment relationship between a beneficiary and our company, and no such provision affects in any way our right to remove any beneficiary from office or position or to terminate the relevant service or employment contract at any time;

c) neither a stock option grant, nor the shares for which an option is exercised have any bearing whatsoever either on the fixed compensation we pay to beneficiaries or on profit sharing payments we may or may not make to a beneficiary;

d) beneficiaries enjoy none of the rights or privileges of shareholders in the company except those to which the Option Plan refers with regard to the options covered by the relevant Agreement;

e) A beneficiary shall only be entitled to the rights and prerogatives inherent in the capacity of shareholder after the shares for which an option is exercised are registered and delivered to such beneficiary.

Furthermore, the existing stock options plan establishes a mechanism specifically applicable to stock option grants to members of our board of directors, as follows: (i) the directors are eligible to stock option awards starting from the date there are elected or such other date as the shareholders may determine at the time; (ii) at the annual meetings the shareholders are to decide on the number of stock option grants for that particular year up to an aggregate of 330,000 stock


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options (the “Collective Lot”) and the collective lot for the year will be apportioned equally amongst the directors (linear apportioning); (iii) the collective lot is to be awarded to the directors on the same occasion as the regular stock options are awarded to other beneficiaries; (iv) the stock options thus awarded to beneficiary directors are to vest within two (2) years after the their terms end; (v) the stock options will be exercisable over a five (5) years period after the vesting date; (vi) where a director is removed from office due to breach of responsibilities or fiduciary duty (per applicable civil and corporate law), or for any of the reasons which otherwise would justify ‘termination for cause’ under the labor laws, any outstanding stock options (vested and unvested) forfeit with no right to indemnity or consideration; and (vii) if a director resigns his or her office, any outstanding stock options (vested and unvested) will be exercisable, except for options granted over the course of the year in which the resignation takes place.

We have now completed ten rounds of stock option distributions implemented under our stock options plan, including one round in 2013 allocating stock options to our directors, whereas the other nine consist of grants implemented by our board under the BVMF 2008 Stock Option Program, the BVMF 2009 Stock Option Program, the BVMF 2010 Stock Option Program, the BVMF 2011 Stock Option Program plus the BVMF 2011 Additional Options Program, the BVMF 2012 Stock Option Program plus the BVMF 2012 Additional Options Program, in addition to the BVMF 2013 Stock Option Program plus the BVMF 2013 Additional Options Program. The terms and conditions of these programs are discussed elsewhere herein.

Furthermore, with regard to our stock options plan, and the programs implemented thereunder, we should stress that, pursuant to a decision of our board of directors dated February 23, 2010, long-term compensation in the form of stock options attributable to executives in any particular year materializes in the form of stock option grants at the start of the next year. Thus, for example, while stock options to reward 2010 performance were granted in January 2011, with effects on our results

for 2011; stock options to reward 2011 performance were granted in January 2012, with effects on our results for 2012, and stock options to reward 2012 performance were granted in January 2013, with effects on our results for 2013; and stock options to reward 2013 performance have been granted in January 2014, with effects on our results for 2014.

b. Key objectives of the stock options plan

Our stock option plan was established pursuant to article 168, paragraph 3, of Brazilian Corporate Law, as an incentive aimed primarily to give eligible officers, employees and providers of ours and our subsidiaries an opportunity to become our shareholders. By exposing optionees to market risks associated with fluctuations in the market price of our shares, this incentive is expected to align the interests of executives, employees and providers with the interests of our interests and the interests of shareholders, in addition to serving as a talent retention tool.

c. How the plan helps achieve these objectives

The objective of fostering closer alignment with our interests and the interests of shareholders is achieved by means of offering selected executives, employees and providers an opportunity to become our shareholders, and thus share in the inherent investment profit opportunity on a mid- to long-term time horizon, committing themselves to our long-term objectives, and working harder to create value for the market price of our shares to rise on a consistent basis.

Moreover, by structuring stock options as a longer term investment with prospects for future gains, which materialize only if the option beneficiaries stay with us for a longer time span, we expect to retain a key talent pool and keep these executives, employees and providers motivated to pursue our success over the long run.

In the particular case of our Additional Options Program, beneficiaries also undertake to buy and hold company shares (“Own Shares”) as a condition for both a grant and, eventually, the option exercise. This leads to deeper alignment of their interests with ours, because as shareholders they are partners invested in, and highly committed to our longer term results. Additionally, given that this Program has been designed for a key group within the organization, and requires a deeper level of commitment to our future through longer vesting periods, it should operate as a stronger tool for retention of professionals we consider to be critical for short-, mid- and long-term value creation.

d. How the plan fits into the company’s compensation policy

Our stock option plan is a key component of our policy on long-term incentives attributable to executive officers and other executives, employees and service providers. Accordingly, it is part of our compensation policy goal of tying individual performance to our corporate objectives, serving as an additional incentive to implement mid- and long-term actions that add value to the company. This incentive consists of an opportunity for future gains from the appreciation of the market price of our shares. Furthermore, as the prospects for future gains are tied to commitment towards our company over the long run, the stock options grants operate as a means for us to attract and retain talent.

e. Aligning the interests of executive officers with those of the company in the short-, mid- and long-term

Our stock option plan ties in performance to differing levels of compensation, so compensation becomes an incentive towards the achievement of certain targets and a driver towards the pursuit of mid- to long-term actions that add value to the company, affect growth and spurs appreciation of the market price of our shares. Thus, our executives are encouraged to pursue sustainable results that add value to the company over time. The stock option plan aligns the interests of eligible beneficiaries with the company’s interests insofar as it enables them to become shareholders, spurring efficient management of company affairs, while also attracting and retaining highly qualified professionals, fueling growth and spurring value creation for the company. Mechanisms to nurture interest alignment over time include, for example, the options’ vesting period and vesting schedule, as they determine the pace at which options are exercised. Where the options break down into lots, staggered vesting fosters talent retention, enabling beneficiary optionees to increase their holdings in our shares gradually whereas continuing to invest in our future growth and profitability as they continue to work for us.

Moreover, in order to deepen the alignment of interests between eligible executives and our company, we have put in place a new program, the Additional Options Program, which gives key employees the right to exchange options for shares at preset


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exercise prices and, as a prerequisite for the grant, and, eventually, the option exercise, requires beneficiaries to buy shares issued by us (Own Shares) by disbursing own funds, and keep them for a holding period at least equal to the vesting period under the additional option grant. This leads to deeper alignment of their interests with ours, because as shareholders they are partners invested in, and highly committed to our longer term results. Additionally, given that this Program has been designed for a key group within the organization, and requires a deeper level of commitment to our future through longer vesting periods, it operates as a stronger tool for retention of professionals we consider to be critical for short-, mid- and long-term value creation.

f. Maximum number of shares in a program

Under the stock options plan, option grants encompass a limited number of shares set as the equivalent of 2.5% of the shares of common stock issued and outstanding as of the date of each grant. Based on the number of shares issued and outstanding as of December 31, 2013, the total number of shares underlying previously awarded option grants encompasses 49.5 million shares.

g. Maximum number of option grants

Under the plan, option grants are exercisable for a limited number of shares set as an aggregate equivalent to 2.5% of the shares of common stock issued and outstanding as of the date of each grant. Based on the number of shares issued and outstanding as of December 31, 2013, the total number of shares underlying previously awarded option grants encompasses 49.5 million shares.

h. Conditions for stock purchase

As discussed in subsection 13.4(a) above, under the existing stock option plan, our board of directors, as advised by our

compensation committee, establish from time to time stock option programs which, among other things, are required to define (i) the eligible beneficiaries; (ii) the total number of shares for which the options are exercisable; (iii) where an option breaks down into lots, the number of shares underlying each option lot; (iv) the exercise price; (v) the vesting schedule; (vi) any transfer restrictions applicable to the shares for which an option is exercised; and (vii) provisions on penalties, if any.

The stock option plan also calls for our board of directors to decide on additional options granting special rights to key executives (per subsection 13.4(a) above). Under the plan, as a pre-requisite for an additional option grant and, eventually, the exercise thereof, a beneficiary is required to (1) buy shares issued by us (Own Shares); and (2) adhere to certain transfer restrictions (lock-up) for a certain holding period. In addition, consistent with our stock options plan, our board (in its discretion, as advised by the compensation committee) may establish stock option programs and (upon hearing the recommendations of our chief executive officer) define the terms and ratios under which additional options (contemplated under each particular program) may be awarded to eligible key employees to reward outstanding performance, as assessed based on collective and individual performance targets. For more information on the terms and conditions under which stock options are exercisable for shares, and the relevant stock option programs, see subsections 13.4(a) above, and 13.4(i) and (j) below.

As previously discussed, the shareholders in attendance of the combined annual and extraordinary meeting held on April 15, 2013, amended the existing stock options plan for adoption of a mechanism that applies specifically to stock option awarded to our directors, thus establishing the basis for a transparent granting process. Under the amendment: (i) the directors are eligible for stock option grants starting from the date they are elected or such other date as the shareholders may determine at the

time; (ii) at the annual meetings the shareholders are to decide on the number of stock option grants for that particular year, up to an aggregate of 330,000 stock options (the “Collective Lot”) and the collective lot for the year will be apportioned equally amongst the directors (linear apportioning); (iii) the collective lot is to be awarded to the directors on the same occasion as the regular stock options are awarded to other beneficiaries; (iv) the stock options thus awarded to beneficiary directors are to vest within two (2) years after the end of their terms end; (v) the stock options will be exercisable over a five (5) years period after the vesting date; (vi) if a director is removed from office due to breach of responsibilities or fiduciary duty (per applicable civil and corporate law), or for any of the reasons which otherwise would justify ‘termination for cause’ under the labor laws, any outstanding stock options (vested and unvested) forfeit with no right to indemnity or consideration; and (vii) if a director resigns his or her office, any outstanding stock options previously granted will still be exercisable (upon vesting, if not vested), with the exception of options granted over the course of the year in which the resignation takes place.

i. Criteria determining exercise price

Under the stock option plan, the general pricing rule requires the exercise price is to be set as the average market price for our shares in the 20 trading sessions prior to the grant date. However, on establishing a program and setting the exercise price, the board of directors may approve up to a 20% discount on this average. But a discount is not mandatory and, where authorized, the actual discount rate is entirely in the discretion of our board. No discounts have been authorized under stock option programs previously established, except that in determining the exercise price for options awarded under our stock option programs for 2012 and 2013, a 20% discount was computed on the average closing price for the shares over the twenty

previous trading sessions.

In the particular case of the Additional Options Program, the discount on the average market price that determined the exercise price may be granted at a higher rate than 20%, in the discretion of our board of directors, as advised by the compensation committee, provided the following conditions apply in any event: (i) a pre-requisite purchase of shares issued by us, for which the beneficiary is required to disburse own funds, observing the number of shares (set as a percentage) and other terms and conditions defined in the program (“Own Shares”); and (ii) a beneficiary’s requisite adherence to a holding period at least equal to the vesting period under the relevant additional option grant, during which transfer restrictions apply as provided in the program (lock-up). In the case of each of the BVMF 2011 Additional Options Program, BVMF 2012 Additional Options Program and the BVMF 2013 Additional Options Program, on setting the exercise price, our board authorized a 50% discount rate on the base price (average market price extrapolated from the closing price in the 20 previous trading sessions).

Pursuant to plan, as amended to contemplated grants for directors, , the exercise price is to be determined pursuant to the


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stock option plan rules, meaning the average market price for BM&FBOVESPA shares in the 20 trading sessions prior to the grant date. The grant dates are to be the same as our regular stock option programs may determine.

j. Criteria determining vesting periods

Under our stock option plan, the vesting schedule under each program may be such that the options vest at once or on a staggered schedule, in the discretion of our board of directors (as advised by our compensation committee). In any event, on setting the vesting schedule these bodies must take into account the objectives of our stock option plan so as to ensure the schedule aligns with the company’s mid- and long-term interests and our talent retention strategy.

Pursuant to the vesting schedules adopted under our existing stock option programs (except the additional options program), each option grant breaks down into lots exercisable for ¼ of the underlying shares according to the following staggered scheduled:

BVMF 2013 Stock Option Program:

(i) January 2, 2015 (¼);

(ii) January 2, 2016 (¼);

(iii) January 2, 2017 (¼);

(iv) January 2, 2018 (¼).


(i) January 2, 2014 (¼);

(ii) January 2, 2015 (¼);

(iii) January 2, 2016 (¼);

(iv) January 2, 2017 (¼).


(i) January 2, 2013 (¼);

(ii) January 2, 2014 (¼);

(iii) January 2, 2015 (¼);

(iv) January 2, 2016 (¼).


(i) January 3, 2011 (¼);

(ii) January 3, 2012 (¼);

(iii) January 3, 2013 (¼);

(iv) January 3, 2014 (¼).


(i) December 30, 2009 (¼);

(ii) December 30, 2010 (¼);

(iii) December 30, 2011 (¼);

(iv) December 30, 2012 (¼).


(i) June 30, 2009 (¼);

(ii) June 30, 2010 (¼);

(iii) June 30, 2011 (¼);

(iv) June 30, 2012 (¼).

Under the terms and conditions established for these programs, the exercise period under each option grant spans a time period that commences promptly after the vesting date for each lot and expires as of a date seven years after the vesting date for the very first lot.

Moreover, as our additional options programs are aimed at giving us a stronger talent retention tool, vesting periods span a while longer, the options are likewise staggered (each lot being exercisable for 50% of the underlying shares), and the exercise periods for each lot may be extended, provided the options expire as of a date seven years after the grant date.

The vesting schedule under the BVMF 2013 Additional Options Program is:

(i) January 2, 2017 (½);

(ii) January 2, 2019 (½).


(i) January 2, 2016 (½);

(ii) January 2, 2018 (½).


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(i) January 2, 2015 (½);

(ii) January 2, 2017 (½).

Additionally, under the additional options program, as a pre-requisite for an option grant and, eventually, the exercise thereof, a beneficiary is required to (1) buy shares issued by us (Own Shares); and (2) adhere to certain transfer restrictions (lock-up) for a prescribed holding period.

Furthermore, pursuant to the terms based on which a mechanism was established for stock options to be granted to board members, the stock options are awarded as a collective lot (up to an aggregate of 330,000 stock options) allocated on a linear apportioning basis, with the options vesting within two (2) years from the end of their tenure, with an exercise period comprising five (5) years after the vesting date.

Additionally, after the vesting date, and provided applicable grant requirements are met, the option (or lot thereof) will be exercisable (for a predefined number of shares) at any time over the exercise period, failing which the option forfeits with no right to indemnity or consideration.

k. Settlement

Beneficiaries that wish to exercise vested options are required to give us written notice of exercise by filling out an Exercise Notice Form. This notice must state the number of shares for which the option is exercised. Exercise notices are valid only if given within the relevant exercise period, pursuant to deadlines we establish to allow for time to plan, make shares available and arrange for share delivery. Upon receiving an exercise notice we are required to respond by returning notice of the exercise price and making arrangements for the transaction consummation. Beneficiaries are required to pay the exercise price in the manner and conditions defined by our board of directors or compensation committee, as applicable.

The arrangements include the execution of transaction completion documents, which must give due regard to applicable legal and regulatory rules our bylaws, and include undertakings related to trading and transfer restrictions applicable to the shares under the law and applicable regulations. Except for applicable transfer restrictions, the shares thus acquired by beneficiaries enjoy the same rights as any other common shares issued by us.

Moreover, we may order temporary suspensions of beneficiaries’ rights to exercise options, where necessary under the law or regulations to prevent or halt trading in our shares by a beneficiary. Beneficiaries are typically required to make lump-sum payments of the exercise price. Additionally, the delivery of shares for which an option is exercised will in any event be contingent on all applicable legal and regulatory requirements having been met in every respect.

l. Share transfer restrictions

The stock option plan also calls for our board of directors (or the compensation committee, as applicable) to establish a lock-up period during which beneficiaries may not sell, transfer or otherwise dispose of shares acquired under our stock option plan, as well as any bonus shares attributable to such shares, or shares resulting from stock splits thereof, or shares acquired through exercise of subscription rights or any manner other than through disbursement of the beneficiary’s own funds, and any securities convertible into, or exercisable or exchangeable for shares, which are in any way attributable to shares exercised for stock options granted within the scope of our stock option. Additionally, no such lock-up period may extend for over two years after the original option grant date.

Nevertheless, a beneficiary may at any time sell any number of shares in his or her holding, as may be necessary for the proceeds of such sale to be used for payment of all or some of the exercise price, including for a down payment if the program establishes a time payment plan.

Where time payment is permitted under any given stock option program, and except upon prior consent of our board or under an approved proposal of the compensation committee of directors, a transfer restriction will apply preventing any sale of shares for which an option is exercised until such time as the exercise price is fully paid. Additionally, where an exception applies, the proceeds of such sale must be used primarily for payment of any outstanding balance of the exercise price.

In the particular case of our additional options program, a lock-up period may apply (as established in the discretion of our board of directors or the compensation committee, as applicable), such that beneficiaries will only be permitted to sell, transfer or otherwise dispose of their Own Shares, as well as any bonus shares attributable to such shares, or shares resulting from stock splits thereof, or shares acquired through exercise of subscription rights or any manner other than through disbursement of the beneficiary’s own funds, and any securities convertible into, or exercisable or exchangeable for shares, which are in any way attributable to their Own Shares, after the expiration of the lock-up period. Where established, the lock-up period must coincide with, and be proportional to the additional options’ vesting periods, such that Own Shares can be sold as the options exercised for additional shares.

Moreover, unless our board of directors (or the compensation committee, as applicable) decides otherwise, a sale or other disposition of Own Shares by a beneficiary prior to the date the relevant additional option or lot thereof vests, any outstanding unvested or unexercised options forfeit, with no right to indemnity or consideration.

In addition, beneficiaries are required to undertake to refrain from establishing liens or otherwise encumbering Own Shares under lock-up restriction, as well as any shares resulting from the exercise of additional options, for as long as the exercise price or any portion thereof remains unpaid, as any such lien or encumbrance could prevent us from seizing these shares in case the beneficiary should default on paying the exercise price.

m. Events (and criteria) triggering a suspension, modification or termination of the plan

The stock options plan may be discontinued at any time on decision of our board, in which case any existing lock-up or trading restrictions would continue in place, with no changes to rights and obligations underlying existing option grants.


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In addition, our stock options plan provides that in the event of our dissolution or liquidation, or transformation of corporate type, or a business combination transaction such as a merger, consolidation or spinoff or similar other transaction from which we do not emerge as the surviving company, or if we do, we emerge as a delisted issuer, and in the event of our going private, then, in the discretion of our board of directors, either the surviving company would succeed us as option grantor or any outstanding stock options would vest earlier than anticipated so the optionees can exercise them for a given period, after which the stock options plan would end and any unexercised options forfeit with no right to indemnity or consideration for the option holder. This being the case, the option holders would be given sufficient notice of the event for them to decide on whether they wish to exercise their options and, if so, they would then be required to observe a deadline assigned by our board of directors (as advised by the compensation committee).

n. Effects of termination on rights attributable to departing executive officers under the share-based compensation plan

Where an option holder officer is removed from office for breach of duty, and where an option holder employee or service provider is terminated for cause (as defined under Brazilian labor and civil law, respectively) any unvested or unexercised options forfeit, with no right to indemnity or consideration for the holder.

Unless otherwise determined by our board, acting on recommendation of the compensation committee, or by our chief executive officer, acting on board-delegated authority, where an option holder resigns his/her office or is replaced (if an officer), or resigns his/her job or is terminated without cause (if an employee) or terminates his/her service contract or is terminated with or without cause (if a provider), then (i) any vested options will be exercisable within ninety days after the event, having regard for the exercise deadline established in the relevant stock option program and agreement; whereas (ii)

any unvested options will forfeit with no right to indemnity or consideration.

In addition, if an option holder were to die or become permanently disabled, unvested options would vest forthwith and the options would be exercisable by either the holder or the heirs or successors, as the case may be, for a period of one after the event, following which any unexercised options would forfeit, with no right to indemnity or consideration for the holder, or his/her heirs or successors. In any such event, the options would be exercisable for all or some of the underlying shares, and the exercise price be payable in one lump-sum. The option holder being deceased, the option rights would be apportioned amongst heirs and successors according to the decedent’s last will and testament or the laws of intestate succession. The shares for which an option is exercised by either a disable holder or the heirs and successors of a holder shall be free and clear of liens and encumbrances, and of lock-up or trading restrictions, and may be sold at any time after delivered.

Retiring option holders are treated similarly, except however a retiring holder would be required to commit to a 120-day non-compete covenant preventing him/her from providing services (whether or not as employee) to direct or indirect competitors in the Brazilian capital markets or other markets where we may operate at the time.

Moreover, the provisions of the stock option plan and related programs and grant agreements are not to be construed as assurance of continuing services or employment relationship between an option holder and our company, as no such provision affects in any way our rights to remove any beneficiary from office or position, or to terminate the relevant service or employment contract at any time.

Under the plan of stock options grants for directors, if a director is removed from office due to (i) breach of responsibilities or fiduciary duty (per applicable civil and corporate law), or for any of the reasons which otherwise would justify ‘termination for cause’ under the labor laws, any outstanding stock options (vested and unvested) forfeit with no right to indemnity or consideration; and (ii) if a director resigns his or her office, any outstanding stock options (vested and unvested) will be exercisable, except for options granted over the course of the year in which the resignation takes place.

13.5 Number of shares (or units representing shares) and other convertible securities (issued by the Company or its direct or indirect controlling shareholders, or subsidiaries or companies under common control, which at year-end were held directly or indirectly, in Brazil or abroad, by directors, executive officers and fiscal council members, as grouped by body of holders.

2013

Holders grouped by body Shares of common stock (%)

Board of Directors 126,697 0.006%

Executive Board 2,982,749 0.151%

Fiscal Council n/a n/a

Total 3,109,446 0.157%

13.6 Share-based compensation (of directors and executive officers) recognized in the income statement for the years ended December 31, 2013, 2012 and 2011, and share-based payments forecast for the current year.

The tables below set forth information on stock-based compensation paid to executive officers, (i) as recognized in the income statements for the years ended December 31, 2013, December 31, 2012 and December 31, 2011, based on the number of members (by body of holders) to whom compensation was actually allocated in the years concerned, and (ii) as projected for the current year. We should note that long-term incentive in the form of stock options attributable to executives in any particular year materializes in the form of stock option grants at the start of the next year. Thus, stock options to reward 2013 performance were granted in January 2014, with effects on our results for 2014, while options to reward 2012 performance were granted in January 2013, with effects on our results for 2013, and options to reward 2011 performance were granted in January 2012,


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with effects on our results for 2012.


Body of holders: Executive management board

Number of members: 51

Stock Option Program: 2011 Stock

Options Prgm. 2011 Stock

Options Prgm. 2011 Additional Options Prgm.

2012 Stock Options Prgm.

2012 Additional Options Prgm.

I. Grant date: Jan. 3, 2011 Jan. 2, 2012 Jan. 2, 2012 Jan. 2, 2013 Jan. 2, 2013

II. Number of options granted: 3,420,000 3,250,000 1,337,170 3,300,000 1.001.185

III. Vesting date per lot Number of vesting options per lot

- January 2014 285,000 406,250

825,000

- January 2015

270,833 222,862

- January 2016

203,125

166,864

- January 2017

133,717

IV. Expiration date Jan. 3, 2018 Jan. 2, 2020 Jan. 2, 2019 Jan. 2, 2021 Jan. 2, 2020

V. Lock-up period n/a n/a n/a

n/a

VI. Weighted average exercise price per option group set forth below (in R$):

- options outstanding at start of year 12.91 10.07 5.04 10.78 6.74

- options lost during over the year 12.91 10.07 5.04 10.78 6.74

- options exercised over the year 12.91 10.07 5.04 10.78 6.74

- options expired over the year 12.91 10.07 5.04 10.78 6.74

VII. Fair price as of grant date 4.50 2.79 4.19 5.55 6.98

VIII. Potential dilution for existing shareholders if all options are exercised in full

0.17% 0.16% 0.07% 0.17% 0.07%

(1) The number of members takes into account the number of persons actually receiving share-based compensation (rather than average membership by year), as recognized through profit and loss in the income statement for the relevant year.


Body of holders Executive management board

Number of members 51

Stock Option Program 2009 Stock Options

Program 2010 Stock Options

Program 2011 Stock Options

Program 2011 Additional

Options Program

I. Grant date Mar. 3, 2009 Jan. 3, 2011 Jan. 2, 2012 Jan. 2, 2012

II. Number of options granted 2,490,000 3,420,000 3,250,000 1,337,170


- December 2012 207,500

- January 2013

427,500 812,500

- January 2014

285,000 406,250

- January 2015

270,833 222,862

- January 2016

203,125

- January 2017

133,717

IV. Expiration date Dec. 30, 2016 Jan. 3, 2018 Jan. 2, 2020 Jan. 2, 2019

V. Lock-up period n/a n/a n/a n/a


- options outstanding at start of year 6.6 12.91 10.07 5.04

- options lost during over the year 6.6 12.91 10.07 5.04

- options exercised over the year 6.6 12.91 10.07 5.04

- options expired over the year 6.6 12.91 10.07 5.04

VII. Fair price as of grant date 2.93 4.50 2.79 4.19


0.12% 0.17% 0.16% 0.07%



101


Body of holders Executive management board

Number of members 51

Stock Option Program 2009 Stock Options Program 2010 Stock Options Program

I. Grant date Mar. 3, 2009 Jan. 3, 2011

II. Number of options granted 2,490,000 3,420,000


- December 2012 311,250

- January 2013 207,500

- January 2014

855,000

- January 2015

855,000

- January 2016

427,500

- January 2017

285,000

IV. Expiration date Dec. 30, 2016 Jan. 3, 2018

V. Lock-up period n/a n/a


- options outstanding at start of year 6.6 12.91

- options lost during over the year 6.6 12.91

- options exercised over the year 6.6 12.91

- options expired over the year 6.6 12.91

VII. Fair price as of grant date 2.93 4.50


0.12% 0.17%


Current year - 2014 forecast

Body of holders Executive management board Board of Directors

Number of members 5 11

Stock Option Program 2011 Stock

Options Prgm. 2011 Add’l





Options Prgm.

2013 Board’s Stock Options

Prgm.

I. Grant date Jan. 2, 2012 Jan. 2, 2012 Jan. 2, 2013 Jan. 2, 2013 Jan. 2, 2014 Jan. 2, 2014 Jan. 2, 2014

II. Number of options granted 3,250,000 1,337,170 3,300,000 1,001,185 3,500,000 1,875,320 330.000


- January 2015 270,833 222,862 825,000

875,000

- January 2016 203,125

825,000 166,864 875,000

- January 2017

133,717 825,000

875,000 312,553

- April 2017

99,000

IV. Expiration date Jan. 2, 2020 Jan. 2, 2019 Jan. 2, 2021 Jan. 2, 2020 Jan. 2, 2022 Jan. 2, 2021 Apr. 30, 2022

V. Lock-up period n/a n/a n/a n/a n/a n/a n/a


- outstanding at start of year 10.07 5.04 10.78 6.74 8.73 5.46 10.92

- lost during over the year 10.07 5.04 10.78 6.74 8.73 5.46 10.92

- exercised over the year 10.07 5.04 10.78 6.74 8.73 5.46 10.92

- expired over the year 10.07 5.04 10.78 6.74 8.73 5.46 10.92

VII. Fair price as of grant date 2.79 4.19 5.55 6.98 3.43 4.33 2.98

VIII.

Potential dilution for existing shareholders if all options are exercised in full

0.16% 0.07% 0.17% 0.07% 0.18% 0.09% 0.016%

13.7 Outstanding stock options held by directors and executive officers at the year-end


102

The tables below set forth information on stock options outstanding at December 31, 2013, stated on the basis of the number of members per governance or management body to whom variable compensation in the form of stock options was actually paid.

Again, we should note that, pursuant to a decision of our board of directors, long-term incentives attributable to executives in any particular year materialize in the form of stock option grants at the start of the next year. Thus, stock options to reward 2013 performance were granted in January 2014, with effects on our results for 2014.


Body of holders Board of executive officers

Number of members 4

Stock Option Program 2010 Stock





Options Prgm.

Unvested options

Number of unvested options 592,500 2,100,000 1,228,140 3,000,000 1,001,185

Vesting date per lot Number of vesting options per lot

January 2014 592,500 700,000

750,000

January 2015

700,000 614,072 750,000

January 2016

700,000

750,000 500,593

January 2017

614,068 750,000

January 2018

500,592

Expiration date 03/01/2018 02/01/2020 02/01/2019 02/01/2021 02/01/2020

Lock-up period n/a n/a n/a n/a n/a

Weighted average exercise price (in R$): 12.91 10.07 5.04 10.78 6.74

Fair price at year-end 4.50 2.79 4.19 5.55 6.98

Vested options

Number of vested options 1,777,500 125,000 - - -

Expiration date 03/01/2018 02/01/2020 n/a 02/01/2021 n/a

Lock-up period n/a n/a n/a n/a n/a

Weighted average exercise price (in R$): 12.91 10.07 n/a n/a n/a

Fair price as of December 31,2013 4.50 2.79 n/a n/a n/a Aggregate fair price at year-end (all options)

4.50 2.79 4.19 5.55 6.98

13.8 Exercised options and shares delivered to directors and executive officers as share-based compensation.

The tables below set forth information on options exercised by, and shares delivered to executive officers by way of long-term incentive in the years ended December 31, 2013, 2012 and 2011 taking into account the number of governance and management body members that actually exercised options and received shares.


Board of Directors Board of executive officers Total

Number of members n/a 5 5 Options exercised

Number of shares n/a 1,607,500 1,607,500 Weighted average exercise price n/a R$8.85 R$8.85 Total difference between exercise price and market price of shares for which options were exercised

n/a R$2,668,875.00 R$2,668,875.00

Shares delivered n/a 0 0 Number of shares n/a 0 0 Weighted average exercise price n/a 0 0

Aggregate of difference between exercise price and market price of shares for which options were exercised

n/a 0 0



Number of members n/a 5 5

Options exercised

Number of shares n/a 170,000 170,000

Weighted average exercise price n/a R$6.01 R$6.01

Total difference between exercise price and market price of shares for which options were exercised

n/a R$1,011,584.50 R$1,011,584.50


103



Shares delivered n/a 0 0

Number of shares n/a 0 0

Weighted average exercise price n/a 0 0


n/a 0 0



Number of members n/a 5.67 5.67

Options exercised

Number of shares n/a 497,500 497,500

Weighted average exercise price n/a R$6.40 R$6.40

Total difference between exercise price and market price of shares for which options were exercised

n/a R$2,934,395.00 R$2,934,395.00

Shares delivered n/a 0 0

Number of shares n/a 0 0

Weighted average exercise price n/a 0 0


n/a 0 0

13.9 Summary information required to better understand data disclosed under subsections 13.6 to 13.8 above.

a. pricing model

The stock options granted under our plan resemble European-style options in that early exercise is not allowed until the vesting date, but may also be said to resemble American-style options in that thereafter, meaning after the options vest, they may be exercised earlier than their expiration date. Options that bear these features are commonly known as Bermudan or Mid-Atlantic options. Thus, they should by construction be priced within the price range provided by the prices of both European and American options. As for dividend payments, two effects on the option pricing should be taken into account: (i) a fall in share price at ex-dividend dates; and (ii) the influence of dividend payments on an early-exercise decision.

The main assumptions we use in pricing these options are as follows:

a) Option pricing takes into account the market parameters as of each grant date under the relevant Program;

b) The estimate of risk-free interest rates is based on rates provided by interest-rate futures contracts whose maturity correlate with each option duration;

c) The farthest, last exercise date (expiration) determines the option life.

Other classic assumptions associated with option pricing models also taken into consideration include the absence of arbitrage opportunities and constant volatility over time.

Taking the above factors into account, in determining the fair price of these stock options, we use the binomial-tree model developed by Hull. This pricing model produces results equivalent to those of the Black-Scholes model for simple European options with the advantage of capturing the effects of early exercise and dividend payments associated with the options concerned.

b. data and assumptions used by the pricing model, including weighted average share price, exercise price, expected volatility, option life, expected dividends and risk-free interest rate

The main assumptions we use in pricing the stock options are the following:

The option pricing takes into account the market parameters as of each grant date under the relevant Program;

The estimate of risk-free interest rates is based on rates provided by interest-rate futures contracts whose maturity correlate with each option duration;

Share prices are adjusted to account for the effects of dividend payments;

Expected volatility is determined as explained in (d) below;

The last exercise date (expiration) determines the option life.

Other classic assumptions associated with option pricing models also taken into account were the absence of arbitrage opportunities and constant volatility over time. The table below summarizes the main data and assumptions:

Data & Assumptions 2013 Stock Option Program

Grant date Jan. 2, 2014 Share price (in R$) 10.92 Exercise price (in R$) 8.73 Expected volatility (year) 35.62% Option life (last exercise date) Jan. 2, 2022 Expected dividends (payouts) 80.00% Risk-free interest rate (p.a., 252 trading days) 10.57%


104

Data & Assumptions 2013 Additional Options Program

Grant date Jan. 2, 2014 Share price (in R$) 10.92 Exercise price (in R$) 5.46 Expected volatility (year) 35.62% Option life (last exercise date) Jan. 2, 2022 Expected dividend (payouts) 80.00% Risk-free interest rate (p.a., 252 trading days) 10.57%

Data & Assumptions 2013 Board’s Stock Options Program

Grant date Jan. 2, 2014 Share price (in R$) 10.92 Exercise price (in R$) 10.92 Expected volatility (year) 35.62% Option life (last exercise date) Apr. 30, 2022 Expected dividends (payouts) 80.00% Risk-free interest rate (p.a., 252 trading days) 10.57%










Grant date Jan. 3, 2011

Share price (in R$) 13.40

Exercise price (in R$) 12.91

Expected volatility (year) 25.00% Option life (last exercise date) Jan. 3, 2018 Expected dividend (payouts) 80% Risk-free interest rate (p.a., 252 trading days) 11.78%


Grant date Mar. 2, 2009

Share price (in R$) 5.80

Exercise price (in R$) 6.60

Expected volatility (year) 67.57%

Option life (last exercise date) Dec. 30, 2016

Expected dividend (payouts) 50%


105

Risk-free interest rate (p.a., 252 trading days) 13.47%

c. method and assumptions adopted in capturing the expected effects of early exercise

The stock options granted under our plan resemble European-style options in that early exercise is not allowed until the vesting date, but may also be said to resemble American-style options in that thereafter, meaning after the options vest, they may be exercised earlier than their expiration date. Options that bear these features are commonly known as Bermudan or Mid-Atlantic options. Thus, they should by construction be priced within the price range provided by the prices of both European and American options. As for dividend payments, two effects on the option pricing should be taken into account: (i) a fall in share price at ex-dividend dates; and (ii) the influence of dividend payments on an early-exercise decision.

Taking the above factors into account, in determining the fair price of these stock options, we use the binomial-tree model developed by Hull. This pricing model produces results equivalent to those of the Black-Scholes model for simple European options with the advantage of capturing the effects of early exercise and dividend payments associated with the options concerned.

d. method for determining expected volatility

In accounting for implied volatility to price stock options granted under our stock options plan, we use the exponentially weighted moving average (EWMA), which we extrapolated from the historical price series for BVMF3 stocks. And, as is internationally accepted, we determine EWMA based on a 40-day window (business days) and a 0.94 weighting factor.

e. other option features taken into account in measuring fair value.

The discussion above covers the principal features and considerations related to the stock options granted under our plan.

13.10 Existing pension plans for directors and executive officers.


Number of members n/a 5 5

Pension scheme name Mercaprev

Number of executives eligible for retirement n/a 1 1

Number of executives eligible for early retirement n/a n/a n/a

Present value of contributions paid into pension plan at the close of most recent full year, discounting direct contributions from executives

n/a R$4,716,903.61 R$4,716,903.61

Total cumulative value of contributions paid into pension plan over most recent full year, discounting direct contributions from executives

n/a R$283,489.00 R$283,489.00

Conditions of early redemption (if any) n/a Yes.

Employee portion only -

13.11 Average compensation paid to directors, executive officers and fiscal council members.

(1)


Board of Directors Board of executive officers Fiscal Council (*)

Number of members 11 4,92 n/a

Highest individual compensation (in R$) 1,724,453.24 15,562,374.97 n/a

Lowest individual compensation (in R$) 306,762.65 6,851,693.28 n/a

Average individual compensation (in R$) 452,037.81 8,338,423.02 n/a

Observations (1) (2) (3)

(2) We should further note that one of our directors was not earning compensation in 2013, while some of the board members were replaced at the annual meeting held in April 2013, so that information on lowest individual compensation paid to directors in 2013 takes into account the just the six directors (out of a total of eleven) that were actively in office throughout the year, from January to December. And highest compensation information considers the full set of compensation data, as recognized

in the statement of income for the year ended December 31, 2013. The average compensation paid to directors in 2013 totaled R$497,241.59. (3) For purposes of the information set forth in the table above, we should note that as one officer stepped down in May, his replacement having been appointed in July, lowest compensation information considers just the number of executive officers actively in office throughout the year. And highest compensation information considers the full set of compensation data, as recognized in the statement of income for the year ended December 31, 2013. The highest compensation figure was paid to an executive officer that was actively working from January to December 2013.

(4) Our fiscal council is not active at this time. However, we have an Audit Committee whose external members were paid aggregate R$1,277,830.96 in 2013. Taking into account the compensation paid to the four external committee members that received compensation over the full 12-month period, from January to December, the highest compensation recognized for 2013 totaled R$332,451.85; the lowest R$294,249.23. The average compensation was R$306,957.74.


106


Board of Directors Executive Board Fiscal Council (*)

No. of members 11 5 n/a





(1) We should further note that one of our directors was not earning compensation in 2012, such that information on lowest-highest individual compensation paid to directors in 2012 takes into account the just ten of the eleven directors that were actively in office throughout the year, from January to December. The reported figures include all compensation we recognized in the income statement for the year ended December 31, 2012.

(2) For purposes of the information set forth in the tableabove, we should note the executive officers were all actively in office throughout the year, from January to December, such that compensation paid to them over the full 12-month period was recognized in the statement of income for the year ended December 31, 2012.Our fiscal council is not active at this time. However, we have an Audit Committee. Taking into account the compensation paid to three of the

four external committee members that received compensation over the full 12-month period, from January to December, (one member took a temporary leave of absence) the highest compensation recognized for 2012 totaled R$280,002.81; the lowest R$240,876.42. The average compensation was R$249,441.37.

(1) Year ended December 31, 2011

Board of Directors Executive Board Fiscal Council (*)

No. of members 10.75 5.67 n/a





(2) We should further note that one of our directors was not earning compensation in 2011. Moreover, because our current board of directors was elected at the annual meeting held in April 2011, with some members having been reelected, information on lowest individual compensation paid to directors in 2011 takes into account the nine directors that were actively in office throughout the year, from January to December. Additionally, for information on highest yearly compensation paid to directors, the reported figures include all compensation we recognized in the income statement for the year. The director that earned the highest compensation was in office throughout the year, from January to December. The average annual compensation paid to our directors in 2011 amounted to R$412,275.39. (3) For purposes of the information set forth in the table above, we should note that the organizational restructuring process implemented in September 2011 modified our board of executive officers in the following ways: (i) th ree executive officers resigned; and (ii) two new executive officers were later appointed. Thus, information on lowest individual compensation paid to executive officers in 2011 takes into account the three executive officers that were in office for the full 12 months of the year. Additionally, for information on highest yearly compensation paid to executive officers in 2011 the reported figures include compensation we recognized in the income statement for the year ended December 31, 2011. The executive officer that earned the highest compensation worked throughout the year, from January to December.

(4) Our fiscal council is not active at this time. However, we have an Audit Committee whose external members were paid aggregate compensation of R$973,513.44 in 2011. Taking into account the compensation paid to the four external committee members that received compensation over the full 12-month period, from January to December, the highest compensation recognized for 2011 totaled R$287,136.99; the lowest R$228,792.15. The average compensation was R$243,378.36.

13.12 Compensation, indemnification, pension arrangements with directors and executive officers in case of dismissal or retirement, and effects for the Company.

The company adopts no policy or arrangements or schemes contemplating retirement or termination compensation for directors and executive officers in case of dismissal or retirement, except in the latter case for benefits contemplated in our existing pension plan (as discussed in subsection 13.10 above). It is worth noting that the Directors & Officers (D&O) liability insurance policy taken out by us provides no coverage related to dismissal or retirement; rather, it merely gives directors and officers and other senior managers financial protection against claims arising from day-to-day decisions, so they have peace of mind to perform their duties. In addition, this policy both protects us and gives us an additional talent retention tool.

13.13 Percentage of total compensation attributable to directors, executive officers and fiscal council members


107

that are related parties (as defined under relevant accounting standard) of the controlling shareholders.

Given that we have a widespread ownership structure and no controlling shareholders, there has never been compensation paid

to any director or executive officer deemed to be a related party of any direct or indirect controlling shareholder and, therefore, none has been recognized in any income statement.

13.14 Compensation (recognized in the income statement) paid to directors, executive officers and fiscal council members (grouped by body) for reasons other than their position in the company (such as commissions or fees for advisory or consulting services).

No amounts are recognized in the income statement as compensation for directors and executive officers on any account or for any reason other than their serving in the position they hold in our company.

13.15 Compensation paid to directors, executive officers and fiscal council members of the company, as recognized in the income statements of direct or indirect controlling shareholders, companies under common control or the company’s subsidiaries.

Given that we have a widespread ownership structure and no controlling shareholders, the above premise is not applicable with regard to controlling shareholders or companies under common control. Additionally, no amount has been recognized in our income statement in connection with payments by any subsidiary or affiliate by way of fees or compensation to our directors and executive officers.

13.16 Additional reportable information

Supplemental Information to Subsection 13.2

a. average number of members per governance body over the past three years

Year ended December 31, 2013 Year ended December 31, 2012 Year ended December 31, 2011

Month Board of Directors Board of

executive officers Board of Directors

Board of executive officers

Board of Directors Board of

executive officers

January 11 5 11 5 10 6

February 11 5 11 5 10 6

March 11 5 11 5 10 6

April 11 5 11 5 11 6

May 11 5 11 5 11 6

June 11 4 11 5 11 6

July 11 5 11 5 11 6

August 11 5 11 5 11 6

September 11 5 11 5 11 5

October 11 5 11 5 11 5

November 11 5 11 5 11 5

December 11 5 11 5 11 5

Total 132 59 132 60 129 68

Average 11 4.92 11 5 10.75 5.67

b. long-term incentive in the form of stock options

2012 Programs – Pursuant to a decision of our board of directors, the long-term incentive attributable to officers and executives in the form of stock options to reward performance in any given year materializes in the form of option grants awarded at the start of the next year. Thus, options to reward 2012 performance were granted in January 2013, with effects on results for 2013.

BVMF 2012 Stock Options Program and Additional Stock Options Program – According to guidelines set within the scope of our stock options plan, we adopted in 2012 both a stock options program (the “2012 Stock Options Program”) and an additional options program (the “2012 Additional Options Program”), the latter as an added incentive for retention of key professionals in our talent pool. As approved by our board in January 2013, the option grants awarded under the BVMF 2012 Stock Options Program entail rights to buy aggregate 3,300,000 shares, or 0.17% of the shares issued and outstanding, whereas the option grants awarded under the BVMF 2012 Additional Options Program entail rights to buy aggregate 1,001,185 shares, or 0.05% of the shares issued and outstanding. In either case, the exercise price was defined according to rules set out in the stock options plan.

Ultimately, the exercise price was set at R$5.55 for option grants of the BVMF 2012 Stock Options Program and R$6.98 for option grants of the BVMF 2012 Additional Options Program, pursuant to a fair price calculation method that takes into account certain market variables at grant time and the particular features of each program. As compared with the data for both 2011 programs set forth in the tables first provided under subsection 13.2, the fair price for exercise of options granted under these 2012 programs came up substantially higher than the fair price of option grants awarded under the prior year programs. Nonetheless, there have been no changes in pricing method, so that the difference in fair price is attributable primarily to changes in market conditions between the two periods, as discussed under subsections 13.6 and 13.9.

2011 Programs – Pursuant to a decision of our board of directors, the long-term incentive attributable to officers and executives in the form of stock options to reward performance in any given year materializes in the form of option grants awarded at the start of the next year. Thus, options to reward 2011 performance were granted in January 2012, with effects on results for 2012.

BVMF 2011 Stock Options Program and Additional Stock Options Program – According to guidelines set within the scope of our


108

stock options plan, we adopted in 2011 both a stock options program and a new additional options program, the latter as an added incentive for retention of key professionals in our talent pool. This means the new program gave key employees the right to exchange options for shares at preset exercise prices and, as a prerequisite for the grant, these employees are expected to buy shares issued by us (Own Shares) and keep them for a holding period at least equal to the vesting period under the additional option grants, failing which the option holder loses the options.

As approved by our board in January 2012, we have completed two rounds of option grant awards, one within the scope of the “BVMF 2011 Stock Options Program”, the other within the scope of the “BVMF 2011 Additional Options Program” with effects on our results for 2012. The first round contemplated stock option grants awarding rights to buy aggregate 3,250,000 shares, or 0.16% of the shares issued and outstanding, whereas the second round contemplated additional options granting rights to buy aggregate 1,337,170 shares, or 0.07% of the shares issued and outstanding. The exercise price was defined according to rules set out in the stock options plan.

Ultimately, the exercise price was set at R$2.79 for option grants of the BVMF 2011 Stock Options Program and R$4.19 for option grants of the BVMF 2011 Additional Options Program, pursuant to a fair price calculation method that takes into account certain market variables at grant time and the particular features of each program.

2010 Program – Pursuant to a decision of our board of directors, the long-term incentive attributable to officers and executives in the form of stock options to reward performance in any given year materializes in the form of option grants awarded at the start of the next year. Thus, stock options to reward 2010 performance were granted in January 2011, with effects on results for 2011.

BVMF 2010 Stock Option Program – As approved by our board in January 2011, the stock option grants under the BVMF 2010 Stock Options Program are exercisable for aggregate 3,420,000 shares, or 0.17% of the shares issued and outstanding. The exercise price was defined at R$4.50 according to rules set out in the stock options plan and a fair price calculation method which takes into account certain market variables at grant time and the particular features of the program.

c. current year compensation and incentives

The table below sets forth our estimates regarding annual compensation (including incentives) attributable to directors and executive officers for the current year, as approved at the annual shareholders meeting held on March 24, 2014.

Mid-Term Incentive – Given that the short- to mid-term variable compensation (profit sharing payments) attributable to executive officers has been tied to certain annual performance targets being accomplished, our projections assume a ‘probable-results’ scenario and may change to the extent our actual adjusted net income and operating expenses (both of which determine the profit sharing pool) depart from the 2014 budget, in particular the opex budget. For example, pursuant to the method set out in subsection 13.1(c) above, if the actual year-end result were to hit a 10% threshold above the expected adjusted net income, and as long as we adhered to the operating expense budget, the profit-sharing pool (short- to mid-term compensation) would be adjusted by an additional amount of R$1,126,398.01, which is equivalent to a 10% increment in expected adjusted net income for the year.

Long-Term Incentive: 2013 Option Programs – Pursuant to a decision of our board of directors, the long-term incentive attributable to officers and executives in the form of stock options to reward performance in any given year materializes in the form of option grants awarded at the start of the next year. Thus, stock options to reward 2013 performance were granted in January 2014,

with effects on results for 2014.

As with the 2012 and 2011 options programs, we adopted in 2013 both a stock options program (“BVMF 2013 Stock Options Program “) and an additional options program (“BVMF 2013 Additional Options Program”), the latter as an added incentive for retention of key professionals in our talent pool. Moreover, you should bear in mind that under the additional stock options program, a grantee is expected to buy shares issued by us (Own Shares) and keep them for a holding period at least equal to the vesting period under the additional option grants, failing which the grantee loses the options.

As approved by our board in January 2014, the option grants awarded under the BVMF 2013 Stock Options Program entail rights to buy aggregate 3,500,000 shares, or 0.18% of the shares issued and outstanding, whereas the option grants awarded under the BVMF 2013 Additional Options Program entail rights to buy aggregate 1,477,340 shares, which correspond to an interest in 0.07% of the shares issued and outstanding (because of the correlation between exercise price and the price per share grantees pay in acquiring Own Shares – in the present case, R$9.88 per Own Share). In each case, the exercise price was defined according to rules set out in the stock options plan.

Ultimately, the exercise price was set at R$3.43 for options granted under the BVMF 2013 Stock Options Program and R$4.33 those granted under the BVMF 2013 Additional Options Program, pursuant to a fair price calculation method that takes into account certain market variables at grant time and the particular features of each program. As compared with the data for both 2012 programs set forth in the tables first provided under subsection 13.2, the fair price for exercise of options granted under the 2013 programs came up substantially lower than the fair price of option grants awarded under the prior year programs. Nonetheless, there have been no changes in pricing method, so that the difference in fair price is attributable primarily to changes in market conditions between the two periods, as discussed under subsections 13.6 and 13.9 below.

In addition, at the extraordinary meeting of April 15, 2013, the shareholders approved a proposal to amend our stock options plan for adoption of a special mechanism by which stock options can be awarded as a long-term incentive to our directors. Consistent with the amended plan, option grants related to our 2013 programs (BVMF 2013 Stock Options Program and BVMF 2013 Additional Options Program) were awarded early in January 2014 and, thus, should influence our results for 2014.

Estimates for the year ending December 31, 2014


No. of members 11 5 n/a 16


109

Estimates for the year ending December 31, 2014


Annual fixed compensation (in R$) R$ 5.966.971,74 R$ 5.694.947,90 n/a R$ 11.661.919,64













Share-based payments R$983,400.00 R$18,401,882.20 n/a R$19,385,282.20


d. compensation of Audit Committee members (as established under the bylaws)

As discussed elsewhere herein, our fiscal council is not active at this time. However, we take the view that the functions of a fiscal council are adequately fulfilled by the Audit Committee, which has been established with responsibilities that overlap with those legally assigned to a fiscal council under Brazilian Corporate Law. The company’s Audit Committee has five independent members, four of whom are external members and another one is an independent director. The Audit Committee members were appointed for a two-year term. All of them meet the requirements set forth under CVM Ruling 308/99, as amended.

Our estimate of compensation attributable to the four external audit committee members over the full year ending December 31, 2014, totals aggregate R$1,284,274.80. The aggregate compensation paid to the external committee members over the years ended December 31, 2013, 2012 and 2011, amounted to R$1,227,830.96, R$997,765.48 and R$973,513.44, respectively.

Supplemental Information to Subsection 13.11

We should note that, pursuant to our stock options plan and a decision of our board of directors, share-based long-term incentive attributable to performance of officers and executives in any particular year materializes in the form of stock option grants at the start of the next year. Thus, stock options to reward 2013 performance were granted on January 2, 2013, with effects on our results for 2014. Likewise, stock options to reward 2012 performance were granted on January 2, 2013, with effects on our results for 2013, rewards for 2011 performance were granted on January 2, 2012, with effects on our results for 2012, whereas 2010 performance was rewarded with option grants on January 3, 2011, with effects on our results for 2011.

14. HUMAN RESOURCES

Description of the human resources structure

a. headcount (by type of activity and geographic location)


Geographic location Activity Number of employees Total by geographic location

São Paulo

Senior executives 5

1,514

Executives 29

Managers 94

Other heads of department 171

Specialists 999

Operating personnel 127

Interns 89

Rio de Janeiro Operating personnel 1 1

Porto Alegre Specialists 1 1

Mato Grosso Specialists 2

3 Operating personnel 1

TOTAL 1,519



São Paulo

Senior executives 5

1,521

Executives 29

Managers 97


Specialists 995

Operations personnel 140

Interns 85

Rio de Janeiro Specialists 1 1


110


Mato Grosso Specialists 2

3 Operating personnel 1

TOTAL 1,526



São Paulo

Senior executives 5

1,538

Executives 30

Managers 92


Specialists 1,014

Operations personnel 157

Interns 88

Rio de Janeiro Specialists 2 2


Mato Grosso Specialists 2 2

TOTAL 1,543

b. number of outsourced personnel (by type of activity and geographic location)


Geographic location Activity Outsourced personnel Total by geographic location

São Paulo Specialists 65 65







c. turnover rate;

Turnover rate (%)

Year ended December 31, 2013 14.66%



d. exposure to labor liabilities and contingent liabilities.

For more information on our exposure to labor liabilities and contingent liabilities, see subsection 4.3 of this Form.

14.2. Material changes.

Other than the information provided in 14.1 above, we have no additional comments to make at this time.

14.3. Description of employee compensation policy

a. fixed and variable compensation policy;

Our aim is to have a competitive compensation policy vis-à-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 long-term 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,


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promoting healthy lifestyles and cultural activities and offering them good entertainment.

c. characteristics of 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 perfo rmance.

The features of the share-based compensation plan to which our middle management employees are eligible are similar to 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 São Paulo (Sindicato dos Empregados de Agentes Autônomos do Comércio e em Empresas de Assessoramento, Perícias, Informações e Pesquisas e de Empresas de Serviços Contábeis no Estado de São 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, we negotiate annual collective bargaining agreements with the union that represents our employees. These agreements establish regulate the terms and conditions of our profit sharing program.

15. CONTROLLING OWNERSHIP

15.1 and 15.2. Material shareholder ownership interests

Shareholder Common shares % of shares issued and

outstanding

Last changed

Brazilian or foreign

shareholder

Shareholders’ or voting

agreements

Ties with controlling shareholder

Funds managed by OppenheimerFunds, Inc. 198,348,826 10.44 3/11/2014 Foreign No No

Funds managed by Vontobel Asset Management, Inc.

129,910,260 6.84 2/4/2013 Foreign No No

CMEG Brasil I Participações Ltda. 101,078,580 5.32 12/13/2011 Brazilian No No

Funds managed by BlackRock, Inc. 95,366,266 5.02 4/22/2014 Foreign No No

Other 1,315,367,684 69.23 - - - -

Treasury stock 59,928,384 3.15 4/24/2014 - - -

Total 1,900,000,000 100.00

15.3. Ownership structure; stock dispersion.

ASM on March 24, 2014

Number of individual shareholders 51,924 Number of corporate shareholders 1,313 Number of institutional investors 1,932

Total number of investors 55,169

Free float – April 24, 2014 1,836,666,702

(96.67%)

15.4. 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 of participants in the controlling group, directors and officers.

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.

As of December 31, 2013, our directors and officers held combined ownership interest in 0.157% of our issued and outstanding shares, or an aggregate of 3,109,446 common shares of stock, versus 3,936,618 common shares (0.199% of total shares) at December 31, 2012, and 4,328,186 common shares (0.219% of total shares) at December 31, 2011.


The information filled in 15.3 refers to: i) the annual general meeting of March 24, 2014 with respect to the number of shareholders and (ii) March 11, 2014 relative to the free float.


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16. RELATED PARTY TRANSACTIONS

16.1. Rules, policies and practices regarding related party transactions.

Our policy on related party transactions and other circumstances involving or potentially involving conflicts of interest (Policy on Conflict of Interest and Related Party Transactions) was approved by our board of directors on February 13, 2014. This policy sets rules aimed to ensure that 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.

Under our Policy, a related party is defined as any natural or legal person with whom the Company could potentially engage in contractual arrangements other than on an arm’s length basis, as would be the case if the Company had been negotiating with any unrelated third party.

Additionally, under Accounting Standard No. 5, or CPC-5, issued by the Brazilian Accounting Standards Board (Comitê de Pronunciamentos Contábeis), or CPC, and endorsed by the CVM pursuant to CVM Resolution 560/08, a related party is defined as a person having relations with an entity, such as our company, in a number of ways, including as follows:

(a) where said person is a controlling shareholder or a subsidiary or company under common control (which includes a controlling shareholder or subsidiary); or where said person is interested in shares issued by us to an extent which gives it the ability to exercise significant influence over our company; or where said person exercises joint control over our company;

(b) where said person is an affiliate of ours or of a third-party entity under common control with us;

(c) where said person is a joint venture (i.e., a JV company) in which we are an investor;

(d) 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 conflict of interest and related party transactions, in negotiating contractual arrangements with related parties, we are required to observe the same principles and procedures we would use to negotiate with independent, unrelated parties and, in any event, arrangements with related parties are required to be put in writing, in proper contractual form.

Additionally, the policy prior consent from Management to be obtained for any agreement with a related party and, if involving a ‘material amount’ (which our policy defines as an amount at least equivalent to 0.1% of the book value of our shareholders’ equity), the transaction must also be approved by our board of directors.

Under our policy on conflict of interest and related party transactions, on identifying a matter or proposal involving or potentially involving a related party transaction or other instance potentially implying a conflict of interest, directors and officers are required promptly to disclose the conflict of interest to us. In addition, a conflicted person is required to abstain from taking part in any discussions concerning any such matter or proposal and from voting on any such matter or proposal.

Where a director or executive officer (who could potentially ascertain a personal gain from any particular decision) fails to make proper disclosure about any particular conflict of interest, any peer having knowledge of the circumstance is encouraged and allowed to make such disclosure. If a director or officer were to silence about a conflict of interest, this would be deemed to be

a breach of our policy and the matter would be submitted to the consideration of our board of executive officers for a recommendation about corrective actions to be made to our board of directors.

Our policy on conflict of interest and related party transactions and the rules it conveys are in line with the requirements of Brazilian Corporate Law, particularly as it prescribes directors and officers have a duty of loyalty towards the Company.

16.2. Related party transactions

Related Party Relation to Co. TXN date Transaction Amount Outstanding balance

(at year-end)

Amount attributable to Related Party

Security & Perf. Bonds

Term Termination

Loans or other credit transactions

(In R$

thousands) (In R$ thousands)

(In R$ thousands)

Rio de Janeiro Stock Exchange

(BVRJ)

BM&FBOVESPA is a member of BVRJ

(affiliate)

Monthly Expenses w/ cash advances

re funding of operating costs

2013: ……2 2012: ……1 2011: ……0

Acct, Receivable: 2013: …………….2 2012: …….………1 2011: …………….0

N/A N/A N/A N/A NO

-

Expenses refunded: 2013: ……………25 2012: …….………5 2011: …………….0

Brazilian Commodities

Exchange

BM&FBOVESPA is a sponsor member

of the Brazilian Commodities

Exchange

Monthly

Expenses w/ cash advances re funding of operating

costs & use of IT infrastructure

2013: ……88 2012: ……92 2011: ……62

Acct, Receivable: 2013: …………….9 2012: ……………21 2011: …………...8

N/A N/A N/A N/A NO

Monthly Membership fees 2013: …… (1,159) 2012: …… (1,198) 2011: …… (1,271)

Acct, Payable: 2013: …………(100) 2012: ……………(51) 2011: …………(218)

N/A N/A N/A N/A NO

Monthly Rent payments -

Acct, Payable: 2013: ………….(23) 2012: ………….(22) 2011: ………….(21)

N/A N/A N/A N/A NO


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(at year-end)


Security &

Perf. Bonds Term

Termination


BM&FBOVESPA Settlement

Bank

Wholly-owned

subsidiary

Not applicable

-

Cash & cash equivalents 2013: ………2,338 2012: ………………0 2011: ………………0

N/A N/A N/A N/A NO

Monthly Use of our IT and

logistics infrastructure; use of staff.

2013: ……8,314 2012: ……6,450 2011: ……6,617

Acct, Receivable: 2013: …………673 2012: ………1,283 2011: …………597

N/A N/A N/A N/A NO

Not applicable

Foreign exchange transactions to settle

-

Transactions to settle: 2013: …………..0 2012: …………..1 2011: …………20

N/A N/A N/A N/A NO

BM&FBovespa Market

Surveillance (BSM)

Our Company is the principal member and

sponsor of BSM

Monthly

Agmt. for cost recovery re

expenses w/ cash advances

and refund for use of infrastructure and staff.

2013: ……3,171 2012: ……2,801 2011: ……2,441

Acct, Receivable: 2013: …………276 2012: …………826 2011: …………636

N/A N/A N/A N/A NO

Not applicable

Operational funding contribution

2013: ………(561) 2012: …(15,000) 2011: ………….…0

Acct, Payable: 2013: ……(8,061) 2012: ….(15,000) 2011: …………...0

N/A N/A N/A N/A NO

Investor Compensation

Mechanism Fund (MRP)

Guarantee fund managed by of

BSM. BM&FBovespa

is the principal member and

sponsor of BSM

Monthly Pass-through of broker

contributions (based on value traded)

-

Funds transferable: 2013: ………..…0 2012: ………..…0 2011: ……….(81)

N/A N/A N/A N/A NO

Not applicable

Restricted funds transferred to the MRP for unification of

safeguard funds under management of BSM

(previously registered as a bylaws reserve)

-

Non-recurrent expense: 2013: ………….....0 2012: ………….....0 2011: ……(92,342)

N/A N/A N/A N/A NO

BM&F (USA) Inc.

Wholly-owned

subsidiary Monthly

Expenses with representation services

abroad -

Sundry expenses: 2013: ………(2,012) 2012: ………(1,839) 2011: ………(1,207)

N/A N/A N/A N/A NO Acct, Payable: 2013: …………(117) 2012: ………………0 2011: ………………0

BM&FBOVESPA UK Ltd.

Wholly-owned subsidiary

Monthly Expenses with

representation services abroad

-

Sundry expenses: 2013: ………(1,394) 2012: ………(1,208) 2011: ………(1,924)

N/A N/A N/A N/A NO Acct, Payable: 2013: …………(164) 2012: ………………0 2011: ………………0

BM&FBOVESPA Institute

BM&FBOVESPA is the founding and

sponsor member of this civil society

organization (CSO)

Not applicable


costs -

Acct, Receivable: 2013: …………1 2012: …………3 2011: …………2

N/A N/A N/A N/A NO

Not applicable

Pass-through of funds designed for the

BM&FBOVESPA Social Investment Exchange

(operated by the Institute)

-

Acct, Payable: 2013: …………10 2012: …………0 2011: …………0

N/A N/A N/A N/A NO

BM&F Association

BM&FBOVESPA is

an honorary member of the

association

Not applicable

General cost recovery -

Acct, Receivable: 2013: ……………0 2012: ……………0 2011: ……6,517

N/A N/A N/A N/A NO

Not applicable


costs & use of our infrastructure

-

Acct, Receivable: 2013: …………2 2012: ………115 2011: …………0

N/A N/A N/A N/A NO

Not applicable

- -

Expenses refunded: 2013: …….……496 2012: …….……538 2011: …………….20

N/A N/A N/A N/A NO

Not applicable

Contribution: 2013: …………….0 2012: ……(2,173) 2011: ….…………0

N/A N/A N/A N/A NO

Bovespa Association

BM&FBOVESPA is

an honorary member of the

association

Not applicable


costs -

Acct, Receivable: 2013: ……………1 2012: ……………5 2011: …………..3

N/A N/A N/A N/A NO


114


(at year-end)


Security &

Perf. Bonds Term

Termination


Expenses refunded: 2013: …….………13 2012: …….………13 2011: …….………12

CME Group,

Inc. Affiliate Monthly

Outstanding balance payable in connection with

the perpetual license for use of modules pertaining

to the multi-asset electronic trading system

named PUMA Trading System, developed

pursuant to a BM&FBOVESPA - CME

Group cooperation agreement

Acct, Payable: 2013: ………(60,178) 2012: …………………0 2011: ………………(59)

N/A N/A N/A N/A NO

Interest Expenses: 2013: ………(437) 2012: ……………0 2011: ……………0

N/A N/A N/A N/A NO

Dividends Receivable: 2013: ………71,878 2012: ………………0 2011: ………………0

N/A N/A N/A N/A NO

Abbreviations per abbreviations_itc-nrcs-usda-gov_scdm_doc_OD-Abbreviations.pdf at http://www.itc.nrcs.usda.gov (2010)

Our policy on conflict of interest and related party transactions formally acknowledges key management staff as our related parties. Given that the compensation we pay to our key management persons 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. Measures to tackle conflict or interest and evidence related party transactions are agreed on an arm’s length basis (mutually beneficial or adequately compensated transactions).

a. actions taken to tackle conflict of interest

Our transactions with other parties, in particular transactions with related parties, are typically subject to approval eithe r by our board of directors or board of executive officers, as pertaining to each of their spheres of authority and provided in ou r 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 related party transactions are agreed on an arm’s length basis.

Set forth below is additional information about transactions with related parties carried out last year, as shown in the table under subsection 16.2 above.

BVRJ (the Rio de Janeiro Stock Exchange). The payments of membership dues we made to BVRJ are required to be made under their bylaws, which provide that members (as we are) must pay dues in a timely fashion. At a meeting held on December 13, 2004, the Board of BVRJ set the minimum monthly dues payable per membership certificate at R$400.00. Additionally, in a meeting held on January 28, 2011, the Board of BVRJ terminated the minimum monthly contribution previously charged from BM&FBOVESPA, as the company is now financially independent.

Brazilian Commodities Exchange. Payments we made to Brazilian Commodities Exchange are required under their bylaws, which provides that members (as we are) must pay membership dues in a timely fashion. The ordinary general meeting held on December 18, 2003, set at of R$ 500.00 the minimum monthly dues payable per membership certificate. For inactive members, the board of directors of Brazilian Commodities Exchange set the monthly dues at twice the minimum monthly contribution. In addition, BM&FBOVESPA was reimbursed for expenses incurred on behalf of Brazilian Commodities Exchange with technical assistance, system development and data processing equipment maintenance.

BM&FBOVESPA Settlement Bank. Payments the BM&FBOVESPA Settlement Bank makes to us are relate to refund for use of our resources in their operations, as contemplated in the relevant agreement between us and the bank. These payments are made pursuant to a specification report prepared by us and approved by the BM&FBOVESPA Settlement Bank, as required under the agreement.

BSM Market Surveillance. We charge BSM for costs related to the use of our resources and infrastructure in their operations. These costs are calculated and charged on a monthly basis pursuant to a contractually agreed calculation method. These operations also include management of the Investor Compensation Mechanism Fund (MRP), which BSM operates.

17. CAPITAL STOCK

17.1. Capital stock

Our capital stock is represented solely by shares of common stock.

Type of shares

Number of shares

Issued and outstanding

(in R$)

Capital stock

(in R$)

Authorized share capital (in R$)

Payment term

Last changed

http://www.itc.nrcs.usda.gov/


115

Common shares

1,900,000,000 2,540,239,563.88 2,540,239,563.88 2,540,239,563.88 Not

applicable February 13, 2014.

Authorized share capital

Number Amount

(in R$ thousands) Authorization date

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. Share issuances, increases in capital stock amount

Date of decision August 19, 2008

Governance body approving the action Board of directors

Issue date August 19, 2008

Total issuance amount R$ 3,216,300.00

Total shares in the issue 3,216,300

Issue price per share (in R$) R$ 1.00

Manner of payment Issue price id in cash (Brazilian currency) on or before December 31, 2008.

Criterion determining the total issuance

Shares issued within the authorized limit set in our Bylaws. Under article 8, paragraph 1, of our bylaws, the board has powers to decide on any issuance implemented, as well as on the issue price and manner and terms of payment, provide the

issue must be implemented within the authorized limit of the share capital.

Private issuance or public offering Private issuance – shares purchased by holders of vested stock options under our stock

option plan.

Issuance as a ratio of capital stock (%) 0,16%

17.3. Stock splits, reverse splits, 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.


At a meeting held on February 13, 2014, the Board approved the cancellation of eighty million (80,000,000) treasury shares, which were previously repurchased within the scope of share buyback programs adopted by the Company, such that the cancellation entails no reduction in capital stock. As a result, hereafter, the fully subscribed and paid -in capital stock amounting to two billion, five hundred and forty million, two hundred and thirty-nine thousand, five hundred and sixty-three Brazilian reais and eighty eight centavos (R$2,540,239,563.88) is represented by one billion, nine hundred million (1,900,000,000) common shares. Therefore, at the extraordinary general meeting, held on May 26, 2014, on second call, the shareholders amended the main provision of article 5 of the Bylaws accordingly. At a meeting held on December 13, 2011, our board approved the cancellation of 64,014,295 treasury shares following repurchases carried out within the scope of the share buyback program. There was no reduction of capital stock. As a result, our capital stock amounting to R$ 2,540,239,563.88 is now represented by 1,980,000,000 shares of common stock. Additionally, at the extraordinary general meeting held on April 10, 2012, our shareholders amended Article 5 (“Capital Stock; Shares; Shareholders”) of the bylaws to reflect the number of issued and outstanding shares following the cancellation of treasury stock, among other changes to our bylaws. 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

All our shares are shares of common stock. Holders of record of our common shares have tag along rights giving them the ability to sell shares in a tender offer or takeover bid at 100% the bid price offered for the shares or paid for controlling shares, if any (see items ”e” and “h” below in this subsection).

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 55 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


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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

Reimbursement due to exercise of 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.

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 (winding up). 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 in takeover bids and tender offers triggered by acquisition of control

Under the Novo Mercado listing regulation and our bylaws, an acquisition 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 (within the legally prescribed deadline) 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 offered for the controlling shares, if any (equitable treatment), such that in a takeover bid or tender offer triggered by a disposition of control all shareholders may adhere to sell the shares at 100% the selling price paid for all other shares or controlling shares, as applicable. See the information under item (h) below in this subsection 18.1.

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:

(i) Rights to a proportionate participation in profit distributions;

(ii) Right to a proportionate participation in the distribution of assets outstanding in a winding up process (after all corporate liabilities are settled);

(iii) Preemptive rights to subscribe for shares, convertible debenture or subscription warrants, except in certain circumstances permitted by Brazilian Corporate Law.;

(iv) Right to review and judge the company financials and the management of business operations in the manner prescribed under Brazilian Corporate Law; and

(v) Right to withdraw under certain legally prescribed circumstances.

h. other material share features

Under Brazilian Corporate Law, the CVM regulation and the Novo Mercado listing regulation, as well as under our bylaws, a tender offer to purchase all our shares is required in the event our shareholders decide for a going private process (implying our deregistration as public company) or for a delisting from the Novo Mercado segment for our shares to trade on another market. 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 our outstanding shares.

i. foreign issuers

Not applicable, as we are a company organized and existing under the laws of Brazil.

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, because of this voting cap, our Bylaws provide that no shareholders or voting agreement (whether or not filed and registered with us for enforceability) will be permitted to predefine a consistent majority by establishing 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 cast at any particular meeting. For enforcement of these rules, votes cast in excess of the voting cap will not be computed for


117

purposes of determining whether a quorum to resolve has been met.

Moreover, if in response to a takeover bid, and after considering the best interests of shareholders and the interests and prospects

of our subsidiaries, our board of directors were to recommend the offer be accepted, it must then call a shareholders’ meeting to decide on whether our bylaws should be amended to eliminate existing voting caps, provided however the bidder should acquire at least two-thirds of the outstanding shares (thus, not including treasury stock) for the amended Bylaws to take effect.

Tender offer requirements

Any shareholder or group of shareholders sharing similar interests (“acquirer”) that acquire (incrementally or otherwise) a 30% (or higher) interest in our shares, or other rights in our shares as benef icial owners (including by means of usufruct or a trust) in any way granting voting rights over 30% or more of our outstanding shares, must first seek consent from the CVM, and is required (within 30 days after obtaining consent) to initiate or register a tender offer to purchase all other outstanding shares, observing applicable legal and regulatory requirements in jurisdictions where our shares trade at the time, listing regulations and our bylaws.

The bid price per share in a tender offer triggered by accumulation of a 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 beyond the 30% threshold 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 meeti ng their demands, our board of directors will call a shareholder’s 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 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).

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 have abused his 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 volume and stock quotes (highs and lows).

Market price per common share

Highest price Lowest price Average price Average daily trading value Financial value traded

(in R$) (in R$) (in R$) (in R$) (in R$)

2011

First quarter 13.52 10.84 11.77 173,897.77 10,607,764,206.00

Second quarter 12.49 10.22 11.36 133,877.89 8,300,429,256.00

Third quarter 10.95 7.50 9.29 153,076.53 9,949,974,407.00

Fourth quarter 10.82 8.33 9.95 122,792.94 7,490,369,153.00

2012

First quarter 12.65 9.65 11.37 141,125.20 8,749,762,110.00

Second quarter 11.81 8.84 10.30 129,085.47 8,003,229,100.00

Third quarter 13.24 10.24 11.69 142,307.76 8,965,389,091.00

Fourth quarter 14.44 12.00 13.07 138,973.90 8,199,460,218.00

2013

First quarter 14.35 12.80 13.67 144,240.95 8,510,215,789.00

Second quarter 14.63 11.28 13.52 188,469.41 11,873,572,557.00


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Third quarter 13.35 11.13 12.23 139,707.60 9,080,993,422.00

Fourth quarter 13.20 10.44 11.89 115,314.80 7,034,202,630.00

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. Previous securities offerings 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 implemented previously for sale of shares issued by us.

18.9. Previous equity offerings, takeover bids, tender offers for shares of another company.

We have not carried out or registered any equity offering. In addition, there has been no takeover bid for shares issued by us and we have not initiated any tender offers for shares of any other company.


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 (in US$ million) 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 5.50% per annum will be payable semi-annually on each January and July.

Trustee, Registrar, Transfer Agent and Paying Agent (the “Trustee”): Deutsche Bank Trust Company Americas

CVM Instruction No. 461/07 As BM&FBOVESPA is a managing entity of the organized market, pursuant to CVM Instruction No. 461/07, any shareholder or Group of Shareholders intending to acquire (i) direct or indirect participation equal or exceeding 15% of the total shares issued by the Company; or (ii) other shareholders rights, including usufruct, conferring a right to vote on shares of the Company representing more than 15% of its capital, must obtain prior authorization from CVM, as prescribed in regulations issued by such autarchy.

19. BUYBACK PROGRAMS; TREASURY STOCK

19.1. Implemented share buyback programs

The table below sets forth information related to our share buyback programs.

Program (or program extension) approval date: June 16, 2011

(1) June 26, 2012

(2) June 25, 2013

(3) February 13, 2014

(4)

(a) Number of shares in the program (by share type and class)

60,000,000 common shares




(b)

Authorized buyback as a percentage of total shares issued and outstanding (by type and class)

3.12% 3.11% 3.13% 5.40%


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(c) Repurchase period July 1, 2011

to June 30, 2012 July 2, 2012

to June 28, 2013 July 1, 2013

to June 30, 2014 February 14, 2014 to June 30, 2014

(d) Reserves, earnings available for allocation to the program

R$16,837,920,000.00 R$16,615,253,000.00 R$16,851,454,000.00 R$15,997,052,000.00

(e) Other key program features

(1) (2) (3) (4)

(f) Actually repurchased (by type and class)

31,284,700 20,862,700 60,000,000 17,256,000

(g) Weighted average repurchase price (by type and class)

R$9.22 per share (R$288,584 thousand)

R$12.61 per share (R$263,103 thousand)

R$10,63 per share (R$637,934 thousand)

R$10,83 per share (R$186,942 thousand)

(h) Actual repurchases as a ratio of authorized buyback

52,14% 34,77% 100.0% 17.26%

(1) On June 16, 2011, with the aim of maximizing shareholder value through efficient capital-structure management, our board approved a buyback program (“2011-2012 Program”) spanning from July 1 st to December 31, 2011, which authorized the repurchase of no more than 30 million shares. Then, on December 13, 2011, our board extended the program through June 30, 2012, and the maximum number of authorized repurchases increased to 60 million shares.

(2) On June 26, 2012, with the aim of maximizing shareholder value through efficient capital-structure management, our board of directors approved a share buyback program (“2012-2013 Program”) spanning from July 2, 2012, through June 28, 2013 , which authorized the repurchase of no more than 60 million shares.

(3) On June 25, 2013, with the aim of maximizing shareholder value through efficient capital-structure management, our board approved a share buyback program (“2013-2014 Program”) spanning from July 1st, 2013 to June 30, 2014, which authorized the repurchase of no more than 60 million shares, or 3.13% of the total number of shares issued and outstanding. We successfully completed this buyback program on Jan uary 29, 2014.

(4) On August 12, 2010, with the aim of maximizing shareholder value through efficient capital-structure management, our board approved a new share buyback program (“2014 Program”) spanning from February 14 to December 31, 2014, which authorized the repurchase of no more than 100 million shares, or 5.40% of the total number of shares issued and outstanding.

19.2. Treasury stock information


Treasury stock 2013 2012 2011

Type of security Common shares

Number of

treasury shares

Aggregate value

Weighted

average repurchase

price per share

Number of

treasury shares

Aggregate value

Weighted

average repurchase

price per share

Number of

treasury shares

Aggregate value

Weighted

average repurchase

price per share

(R$ thousands) (in R$)



Balance at start of year 48,427,505 484,620 10.00 52,008,012 521,553 10.03 64,093,102 613,903 9.58

Total repurchases for the year 43,912,700 458,088 10.43 1,732,200 16,281 9.40 57,602,500 606,888 10.54

Treasury shares reissued (sold) 5,923, 061 67,655 10.42 5,312,707 53,247 10.02 5,673,295 57,284 10.10

Treasury shares cancelled 0 0 0.0 0 0 0.0 64,014,295 641,955 10.03

Balance at year-end 86,417,144 875,053 10.13 48,427,505 484,587 10.01 52,008,012 521,553 10.03

19.3 Treasury stock at year-end

Repurchase date

Number of treasury shares

Weighted average repurchase price per share

As a percentage of total shares issued and outstanding

(in R$) (%)

December 31, 2013 86,417,144 11.05 4.56%

19.4 Additional reportable information

At a meeting held on December 13, 2011, our board approved the cancellation of 64,014,295 treasury shares following repurchases carried out within the scope of the share buyback program. There was no reduction of capital stock. As a result, our capital stock, which amounts to two billion, five hundred and forty million, two hundred and thirty-nine thousand, five hundred and sixty-three Brazilian reais and eighty-eight centavos (R$2,540,239,563.88), is now represented by 1,980,000,000 shares of common stock. Additionally, at the extraordinary general meeting which convened on second call on April 10, 2012, our shareholders amended the bylaws to reflect the present number of shares issued and outstanding.

At a meeting held on February 13, 2014, our board approved the cancellation of 80,000,00 treasury shares following repurchases carried out within the scope of the share buyback program. There was no reduction of capital stock. As a result, our capital stock, which amounts to two billion, five hundred and forty million, two hundred and thirty-nine thousand, five hundred and sixty-three Brazilian reais and eighty-eight centavos (R$2,540,239,563.88), is now represented by 1,900,000,000 shares of common stock. Additionally, at the extraordinary general meeting which convened on second call on May 26, 2014, our shareholders amended the bylaws to reflect the present number of shares issued and outstanding.

Supplemental Information to Subsection 19.1 – Share Buyback Programs

“2011/2012 Program”


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Periods Number of shares Average price per share Total repurchase amount

(in R$) (in R$)

July 2011 6,500,000 9.90 64,378,535.00 August 2011 19,000,000 8.92 169,531,039.00 September 2011 1,771,900 9.31 16,496,138.00 October 2011 240,500 8.72 2,097,641.00 November 2011 1,252,500 9.52 11,923,993.00 December 2011 787,600 10.00 7,875,425.00

May 2012 1,250,000 9.22 11,525,173.00 June 2012 482,200 9.86 4,755,642.00

Sum total for 2011/2012 Buyback Program 31,284,700 9.22 288,583,586.00

“2012/2013 Program”


(in R$) (in R$)

April 2013

3,147,500 13.30 41,855,721.00 June 2013 17,715,000 12.49 221,246,864.00

Sum total for 2012/2013 Buyback Program

20,862,700 12.61 263,102,585.00

“2013/2014 Program”


(in R$) (in R$)

July 2013

3,350,000 12.33 41,318,792.00 August 2013

5,200,000 11.61 60,394,268.00

September 2013

2,500,000 12.43 31,076,278.00 October 2013

2,050,000 12.72 26,078,456.00

November 2013

1,100,000 11.77 12,951,483.00 December 2013

8,850,000 10.81 95,696,845.00

Total for 2013

43,912,700 12.08 530,618,707.00

January 2014

36,950,000 10.02 370,418,230.00

Sum total for 2013/2014 Buyback Program

60,000,000 10.63 637,934,352.00

“2014 Program”


(in R$) (in R$)

March 2014

9,583,100 10.34 99,236,083.00 April 2014

7,672,900 11.44 87,706,423.00

May 2014

- - - June 2014

- - -

July 2014

- - - August 2014

- - -

September 2014

- - - October 2014

- - -

November 2014

- - - December 2014 - - -

Sum total for 2014 Buyback Program

20. SECURITIES TRADING POLICY

20.1. Securities trading policy.

a. Date of adoption

The securities trading guidelines, standards and rules that apply to our directors, officers, fiscal council members (where it is active) and members of technical or advisory committees established under our bylaws are stated in our “Material Disclosures and Securities Trading Policy Rulebook,” which was approved at a board meeting held on May 8, 2008, and amended pursuant

to a board decision in a meeting held on December 11, 2012. The Policy Rulebook regulates confidential treatment of privileged information and provides rules on trading in our securities by a number of persons, including so-called ‘connected persons’ (see item b below) and our Company as well.

b. Persons bound by the policy

As stated in the Policy Rulebook, our securities trading policy applies to, and is binding on our directors, officers, consultants and other insiders (i.e., subject persons). In addition, it bans our Company from trading in its own securities during certain periods which the rulebook defines.

c. Key policy features

Policy Rulebook

The policy sets guidelines and standards that subject persons to close or blackout periods during which trading is restricted.


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These trading restrictions are triggered, among other things:

(i) before the public disclosure of any material act or fact with respect to us, our business, our subsidiaries and affiliates, and their businesses;

(ii) 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;

(iii) 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.

Exceptions to trading restrictions under the Policy Rulebook

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:

(i) 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;

(ii) a purchase of shares issued by us using the proceeds of variable compensation paid by way of profit sharing; or

(iii) 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 as well as programmed use and source of funds, and 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.

d. provisions governing blackout and close periods; compliance and enforcement processes.

Our employees 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.

Moreover, our directors, officers, fiscal council members and members of technical or advisory standing committees (established under the bylaws) are required to notify us of their holdings in our shares as well as the holding of connected persons (as defined in our Code of Conduct, discussed in subsection 20.2 below), and of any changes to such holdings. These notices are required to be given to our Company (1) on the first business day after they take office, and (2) no later than five days after any buying or selling transaction closes.


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 Ruling 358/02.

Code of Conduct

The Code of Conduct provides a set of rules that express the values that guide our ethical conduct, including as to trading in securities issued by us (and other issuers), and to this extent it incorporates rules and standards provided in our securities trading policy. The Code is binding on our and our subsidiaries’ directors and officers, fiscal council and committee members, employees and interns, consultants and regular service providers, all of whom we call Collaborators.

The definition of ‘connected persons’ further includes investment funds in which a Collaborator holds powers to influence the investment decisions of the fund manager or administrator. Accordingly, there will be no restrictions to a Collaborator investing in investment funds where the actual management of funds and assets is deferred to independent professional managers, such that a Collaborator would hold no power to influence investment decisions.

Under our Code, 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 and other securities markets operated by our Company (i.e., on markets comprising our BM&F segment or Bovespa segment). Additionally, Collaborators and connected persons are not permitted to join or invest in investment clubs.

Exceptions to the rule banning trading on our markets include a permission for Collaborators and connected persons to


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(1) invest in shares or units of index ETFs listed on our stock exchange (Bovespa segment), as long as they hold no powers to influence the fund administration or asset management, and provided a 90-day period spans between any buying and selling in the fund’s shares or units; (2) invest in shares of open-end, non-exclusive, diversified portfolio funds, as long as they hold no powers to influence the fund administration or portfolio management; and (3) invest in securities that trade on Bovespa markets on the basis of an individual investment program previously approved by us. 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. In addition, Collaborators and connected persons are permitted to invest in government bonds and other government debt securities traded on our Tesouro Direto (Treasury Direct) platform.

Our audit office continually monitors trading activities by our Collaborators. Where there are indications of a breach, formal clarification is sought; the case is investigated, analyzed and referred to our 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.

21. DISCLOSURE POLICY

21.1. Guidelines, rules and internal procedures applicable to release of financial information.

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. Our board of directors approved the disclosure policy on the same date and jointly with our securities trading policy (see subsection 20.1 above).

21.2. Material disclosure policy; privileged information.

All our directors and officers, as well as our insiders as employees, consultants and providers with access to privileged 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 (IRO), who is responsible for ensuring proper disclosure in accordance with our policy and article 3 of CVM Ruling 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 on which our shares are listed to trade.

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 include:

(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) Disclosures of information related to material litigation contingencies are required to observe certain objective criteria;

(iv) 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;

(v) 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

(vi) The investor relations officer is charged with providing additional clarification related to any particular disclosure of material development, whenever so requested by the relevant regulatory entities.

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.

Notices to the market and material disclosures are published, in accordance with our Policy, through the new portal http://www.valor.com.br/valor-ri/fatos-relevantes.

Material litigation disclosures are required to observe certain objective criteria, including the following:

Material litigation

Assessment of prospects for a defeat

Probable defeat Possible defeat Remote defeat

Below 1 RV(*) -- -- --

Between 1 RV and 3 RV Material Fact Release Notice of Material Fact --

Above 3 RV Material Fact Release Notice of Material Fact Release Notice of Material Fact (*) “RV” is an acronym for Reference Value, which our bylaws define as an unit amount in the equivalent of 1% of the book value of shareholders’ equity, as determined in the most recent full-year balance sheet statement.

http://www.valor.com.br/valor-ri/fatos-relevantes


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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 party’s benefit, which includes any type of insider t rading. 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. Moreover, any person bound under our disclosure policy is required to sign an instrument of adherence to the policy.

Under our disclosure policy and pursuant to the main provision of article 6 of CVM Ruling 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.

21.3. Directors and officers responsible for implementing, enforcing, assessing, 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.


Under article 10 of our bylaws, every shareholder or group of shareholders sharing similar interests are required to give notice to us disclosing any shares purchases (incremental or otherwise) which ultimately result in aggregate ownership interest in excess of 5% of our issued and outstanding shares of common stock. Thereafter, any purchase of additional 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 Ruling 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, thereby raising from 1.8% to 5% our total ownership interest in shares of the CME Group.

As result of our acquisition of additional shares in the CME Group, 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).

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.


There is no additional material information to be provided at this time under this section.

2014 Reference Form - Version 3

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Transcript of 2014 Reference Form - Version 3