Annual Shareholders' Meeting - 04.18.2016 - Management Proposal

8/18/2019 Annual Shareholders' Meeting - 04.18.2016 - Management Proposal

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ANNUAL GENERAL MEETING OF

BM&FBOVESPA

4/18/2016


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MANAGEMENT PROPOSAL AND GUIDELINES ONPARTICIPATING IN GENERAL MEETING Annual General Meeting of 4/18/2016

São Paulo

March 15, 2016

Dear Shareholder,

It is a great pleasure to invite you on behalf of the Board of Directors to participate in the

Annual General Meeting of Shareholders in BM&FBOVESPA S.A. – Bolsa de Valores,

Mercadorias e Futuros convened for April 18, 2016, at 11:00 a.m., exceptionally not at its

head offices but at Rua XV de Novembro 275, in the city of São Paulo, State of São Paulo

State, in accordance with the Call Notice to be published on March 17, 2016 in the daily

newspaper Valor Econômico and the Diário Oficial do Estado de São Paulo.

In this letter I would like to begin by stressing the many challenges faced by the Company

and the markets generally in 2015 with the markets managed by BM&FBOVESPA been

impacted distinctly by the deterioration of the Brazilian economy and the changes in the

global scenario. Increased volatility in the market and a sharp devaluation of the Brazilian

Real against the US Dollar had a positive effect on revenues from the BM&F segment. In

the Bovespa segment, however, we saw a major fall in the market value of listed

companies and, in consequence, in volumes traded.

Other revenues not related to volumes in the equities and derivatives markets also

increased during the year, mainly reflecting changes in the Company’s commercial

policies, growth in the securities lending market and the Treasury

Direct (Tesouro Direto) platform, as well as currency devaluation, which had a positive

effect on market data revenues.

Thus, in spite of the challenges posed by the macroeconomic scenario, total revenues

rose 9.5% over 2014, reflecting the diversification of revenues and the soundness of the

Company’s business model. This growth, combined with diligent expense control, results

an increase of 11.4% of the Company's operating results.

Another not operational important event which impacted the 2015 financial results was the

partial sale of 20% of the investment in CME Group shares, in due to reduce the

Company’s balance sheet risk exposure, impacting the results positively.

Keeping the Management's commitment to return the Company's results to its

shareholders, over R$1.2 billion were distributed as payout in addition to the repurchase of

1.5% of the outstanding shares (R$ 286.8 million), which is equivalent to a total return of


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7.6% calculated over the average market capitalization of the Company within this year.

Aware of its inducing role for the development of the market covered by BM&FBOVESPA,

the Management understands that an important element of the process of maintaining a

strong and globally competitive capital market is the continuous improvement of thecorporate governance of the listed companies. In this sense, we work together with other

entities and industry experts in order to present a voluntary adherence program aimed at

mixed capital companies (state-owned enterprises) which may intend to improve their

corporate governance practices and be recognized for it. In addition, at the end of 2015 we

started a discussion process that will seek to improve the rules of the special listing

segments (Novo Mercado, Levels 1 and 2).

With regard to the strategic purposes of the Company, we also brought forward the new

unified clearing project (BM&FBOVESPA Clearing), which technological development of

the equity stage was completed in 2015. In addition, new products were launched and we

continued on initiatives that seek to expand the liquidity of listed products, such as the

expansion of market makers programs and the promotion of the securities’ lending

platform.

BM&FBOVESPA also focused on the continuous improvement of its corporate governance

practices. In this context, special note should be taken of the series of meetings held by

the CEO and Chairman with shareholders, at the General Meeting in which the Board of

Directors was renewed.

Finally, we believe BM&FBOVESPA remains well-positioned to capture the opportunities

for market growth, although it is important to acknowledge the challenges imposed by the

deterioration in macroeconomic scenario. Management remains focused on investing in

new products and technologies, which we believe have been fundamental for improving

the quality of the services we offer and diversifying revenues over recent years.

Moving on from these general remarks, please note that the topics to be discussed andvoted on at the Annual General Meeting are listed in the Call Notice and in the present

document, which contains Management’s proposals and general guidelines on the

participation of shareholders in the meeting. Both this document and the Call Notice are

being disclosed to the market today.

Effective participation by Shareholders in these meeting is an opportunity to discuss and

vote on the items of the agenda, contributing to conscientious decisions based on the

information made available.

Management is committed to facilitating and encouraging Shareholder participation in


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general meetings. With this goal in mind, and to reinforce its commitment to fostering best

practice in corporate governance, BM&FBOVESPA will voluntarily make available a

remote voting system in accordance with CVM Instruction 481/2009, as amended. You will

find a detailed explanation of how you can vote by remote voting form below.

In addition, as it has done in recent General Meetings, BM&FBOVESPA will again offer an

electronic proxy voting system that can be accessed by registering at

www.assembleiasonline.com.br . This procedure is also explained in detail below.

You are cordially invited to read this document carefully, as well as other documents

relating to the meeting that have been placed at your disposal at the Company’s head

office and on its Investor Relations website (www.bmfbovespa.com.br/ri/), on the Company’s

main website (www.bmfbovespa.com.br ), and on the website of CVM, the Brazilian

Securities Commission (www.cvm.gov.br ).

Pedro Pullen ParenteChairman of the Board of Directors

http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/ri/http://www.assembleiasonline.com.br/


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SUMMARY

CLARIFICATIONS AND GUIDELINES ................................................................... 6

A. Participation in Annual General Meeting ........................................................ 7

A.1. Personnal Participation ................................................................................. 8

A.2. Remote Voting Form ...................................................................................... 8

A.2.1. Remote voting via service providers......................................................... 9

A.2.2. Remote voting form delivered directly to the Company .......................... 9 A.3. Guidelines for Proxy Voting ........................................................................ 10

A.3.1. Electronic Proxies ..................................................................................... 10

A.3.1.1. Shareholders not yet registered at Assembleias Online .................... 11

A.3.1.2. Shareholders already registered with Assembleias Online ............... 12

A.3.2. Physical Proxies ....................................................................................... 12

A.3.2.1. Preregistration ....................................................................................... 15

A.4. Public Proxy Solicitations ........................................................................... 15

B. MANAGEMENT’S PROPOSAL ................................................................... 16 C. DOCUMENTS PERTAINING TO THE ITEMS TO BE DISCUSSED AT THE

ANNUAL GENERAL MEETING OF BM&FBOVESPA ......................................... 24


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MANAGEMENT PROPOSAL AND GUIDELINES ON PARTICIPATING INBM&FBOVESPA’S ANNUAL GENERAL MEETING TO BE HELD ON

APRIL 18, 2016

CLARIFICATIONS AND GUIDELINES

This document contains Management’s proposals and guidance to facilitate participation

by shareholders in the Annual General Meeting of BM&FBOVESPA called for April 4,

2016, as well as information about the agenda for this meeting.

The aim of this initiative is to ensure timely and transparent communication between the

Company and its shareholders while complying with the requirements of Law 6404, dated

December 15, 1976, as amended (“Corporation Law ”), and CVM Instruction 481, dated

December 17, 2009, as amended (“CVM Instruction 481”).

In compliance with the aforementioned Corporation Law, therefore, BM&FBOVESPA

hereby convenes an Annual General Meeting as follows:

Date: April 18, 2016

Venue: Rua XV de Novembro, 275, São

Paulo, Brazil

Time: 11:00 a.m.

The order of business for the Annual General Meeting is as follows:

(1) to receive Management’s annual report, and to receive, review and judge the

Financial Statements as of and for the year ended December 31, 2015;

(2) to consider the proposal on allocation of net income for the year ended December31, 2015;

(3) to elect a member of the Board of Directors; and

(4) to set the aggregate compensation amount payable in 2016 to members of the

Board of Directors and Executive Officers.

Management’s proposals for the above Annual General Meeting agenda, together with

information on each item, are set out in Section B.1 of this document.


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A. Participation in Annual General Meeting

Participation by shareholders in the Company’s general meetings is of paramount

importance.

Please note that the Annual General Meeting cannot begin without the presence of

shareholders representing at least a quarter (1/4) of the Company’s registered share

capital. If this quorum is not reached, the Company will publish a new Call Notice

announcing a new date for the Annual General Meeting to be held on second call, in which

case there is no legally established quorum.

Shareholders may participate in person, by duly constituted proxy, or by remote

voting system in accordance with CVM Instruction 481.

For the purpose of shareholder participation, the following documents must be filed –

originals or authenticated copies will be accepted:

Individuals Shareholder’s ID with photograph or proxy’s ID

with photograph and respective proxy form

Legal entities

Investment funds

Most recent constitutional documents (articles of

association or incorporation, bylaws etc.) and

power of attorney proving right of representation

Legal representative’s ID with photograph

Most recent consolidated fund bylaws andconstitutional documents of fund administrator or

manager, as applicable, proving compliance with

fund’s voting policy and power of attorney

proving right of representation

Legal representative’s ID with photograph

NB: The Company will not require sworn translations of documents originally written in


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Portuguese, English or Spanish, or documents in other languages accompanied by a

translation into any of these three languages. Accepted identification (ID) documents

include Brazilian identity cards (RG, RNE), Brazilian driver’s licenses (CNH), passports,

and officially recognized professional or association membership cards; all must bear the

holder’s photograph.

A.1. Personnal Participation

Shareholders who wish to attend the Company’s General Meetings in person are kindly

requested to come to Rua XV de Novembro, 275, on April 18, 2016, from 10:30 a.m.,

bearing the above documents.

A.2. Remote Voting Form

As announced in the Notice to the Market issued on January 15, 2016, the Company will

voluntarily adopt the remote voting system established by article 21-A of CVM Instruction

481, as amended by CVM Instruction 561/2015. In 2016 the special procedures for postal

voting established by CVM Deliberation 741/2015 will apply to the Company’s

shareholders’ meetings in addition to the procedures established by CVM Instruction 481.

As of now, therefore, shareholders may send voting instructions for the Annual GeneralMeeting agenda:

(i) by instructing their custody agent (if the agent provides this service) on

completion of the remote voting form, in the case of shareholders who hold

shares deposited with a central securities depository; or

(ii) by completing the remote voting form and sending it directly to the Company in

accordance with the instructions in Attachment I to this document, in the case ofall shareholders.

With the exception provided for in CVM Instruction 481, in the event of divergence

between a remote voting form received directly by the Company and voting instructions

contained in the consolidated voting map sent by the Central Securities Depository for the

same federal taxpayer number (CNPJ or CPF), the voting instructions contained in the

voting map will prevail and the form received directly by the Company will be disregarded.

Shareholders may change their voting instructions as many times as they deem necessary


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during the voting period. The last voting instruction will be considered in the Company’s

voting map.

Once the voting period is closed, shareholders may no longer change the voting

instructions already sent. Any shareholder who considers a change necessary must attend

the Annual General Meeting personally, bearing the required documents described above,

and ask for the voting instructions sent by remote voting form to be disregarded.

A.2.1. Remote voting via service providers

Shareholders who opt to exercise their voting rights through a service provider must

transmit voting instructions to their custody agent in accordance with the rules established

by the custody agent, and the custody agent will then deliver the shareholder’s votes toBM&FBOVESPA’s Central Securities Depository. To this end, such shareholders should

contact their custody agent to find out what procedures have been established for them to

issue voting instructions, and also to be told what documents and other information are

required.

In accordance with CVM Instruction 481, as amended, shareholders’ voting instructions

must arrive at their custody agent not later than seven (7) days before the General

Meeting, i.e. by April 12, 2016 inclusive, unless a different deadline is set by the custody

agent

Also in accordance with CVM Instruction 481, BM&FBOVESPA’s Central Securities

Depository will ignore a shareholder’s voting instructions it receives via a custody agent if

they conflict with instructions issued with the same federal taxpayer number (CNPJ or

CPF).

A.2.2. Remote voting form delivered directly to the Company

Shareholders who opt to exercise their voting rights by post may choose instead to send

their form directly to the Company. If so, they must deliver the following documents to

BM&FBOVESPA’s Investor Relations Department at Rua XV de Novembro, 275, 5º andar,

Centro, CEP: 01013-001, São Paulo/SP – Brazil:

(i) a physical copy of Attachment I hereto, completely filled out, initialed and signed;

(ii) authenticated copies of the documents described in the chart in item A above, as


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applicable.

Shareholders who prefer to do so may digitize the above documents mentioned in (i) and

(ii) and send them by email to [email protected] , in which case they must also mail

the original remote voting form and authenticated copies of the required documents by

April 14 to BM&FBOVESPA at Rua XV de Novembro, 275, 5º andar, Centro, CEP: 01013-

001, São Paulo/SP – Brazil.

When the Company receives the above documents mentioned in (i) and (ii), it will notify

the shareholders concerned and tell them whether or not the documents have been

accepted in accordance with CVM Instruction 481, as amended.

If any form is sent directly to the Company and not completely filled out or accompanied by

the requisite documents as per item (ii) above, it will be disregarded and the shareholder

concerned will be notified by an email message sent to the address furnished in item 3 of

the ballot paper.

The documents mentioned in (i) and (ii) must be filed and time-stamped at the Company

not later than four (4) days before the date of the General Meeting, i.e. by April 14, 2016

inclusive. Ballot papers received by the Company thereafter will be disregarded.

A.3. Guidelines for Proxy Voting

A.3.1. Electronic Proxies

To facilitate and encourage participation by its shareholders, BM&FBOVESPA will again

offer an online proxy voting system ( Assembleias Online) through which shareholders can

vote by proxy through the proxy holders designated by the Company on all items of the

agenda for the Annual General Meeting, by means of a valid private digital certificate or

the Brazilian Public Key Infrastructure (ICP-Brasil), in accordance with Provisional

Measure (Medida Provisória) 2200-2, dated August 24, 2001.

To vote via the internet, shareholders must register at www.assembleiasonline.com.br and

obtain a digital certificate free of charge. The procedure for this is detailed below and may

be followed as of today.

Proxies granted via the electronic platform will be distributed to three proxy holders

designated by the Company as detailed in A.3.2 below.


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A.3.1.1. Shareholders not yet registered at Assembleias Online

Step 1 – Registration on the portal:

a) Go to www.assembleiasonline.com.br , click on “Registration and Certificate” and select

the appropriate profile (individual investor or institutional investor);

b) Complete the registration form, click on “Register”, and confirm the details. You will then

access the Instrument of Agreement, Ownership and Liability, which must be printed,

initialed on all pages, and signed. The signature must be notarized.

Shareholders who already own a digital certificate issued by ICP-Brasil may simply

register and digitally sign the Instrument of Agreement, in order to be entitled to vote online

via the Assembleias Online portal. In this case, skip Step 2 and go straight to Step 3.

Step 2 – Validate registration and receive private digital certificate:

a) The shareholder will receive an email message from Assembleias Online with a list of

the documents required to validate registration, including the Instrument of Agreement. All

documents must be mailed to Assembleias Online at the postal address supplied in the

email message.

b) Assembleias Online checks that the documentation is all in order and sends another

email message detailing the procedure for issuance of the Assembleias Online Digital

Certificate.

c) Once the digital certificate has been issued, the shareholder will be able to vote online

in BM&FBOVESPA’s General Meeting.

Step 3 – Electronic proxy form:

a) Having completed the previous steps, shareholders exercise their right to vote by

electronic proxy by logging on to www.assembleiasonline.com.br, selecting

BM&FBOVESPA’s General Meeting, voting, and digitally signing the proxy form.

b) Shareholders will receive a receipt confirming their votes by email from Assembleias

Online.

Shareholders can electronically appoint proxies via Assembleias Online between March


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30, 2016 and 6:00 p.m. on April 15, 2016.

A.3.1.2. Shareholders already registered with Assembleias Online

Shareholders who have previously performed Steps 1 and 2 of A.3.1.1 above should

check the validity of their digital certificate. Digital certificates that have expired must be

renewed in order to for the holders to vote.

To renew a digital certificate issued by Certisign, the shareholder must log on to

Assembleias Online, choose “Registration & Certificate” on the header menu, and go

through the digital certificate renewal procedure.

Once the validity of the digital certificate is confirmed, shareholders will be accredited to

appoint proxies via Assembleias Online by following the instructions on the website

(www.assembleaisonline.com.br) and in Step 3 of A.3.1.1 above.

A.3.2. Physical Proxies

Straightforward conventional proxy voting also remains available via physical proxy.

In this case, according to Law 6404, article 126 (1), proxies appointed by individual

shareholders to vote in the Annual General Meeting must have been constituted less thana year previously and must be either (i) a shareholder in the Company, (ii) a lawyer, (iii) a

financial institution, or (iv) an officer of the Company.

In the case of corporate shareholders (legal entities), in compliance with the decision of a

plenary meeting of CVM, the Brazilian Securities Commission, on November 4, 2014

(Processo CVM RJ2014/3578) the Company does not require proxies to be either (i) a

shareholder in the Company, (ii) a lawyer, (iii) a financial institution, or (iv) an officer of the

Company. However, such shareholders must be represented in accordance with their

constitutional documents.

For shareholders who cannot be represented by proxies of their our choice, the Company

offers three proxy holders who can represent them in strict conformity with the voting

instructions issued by the shareholder concerned:


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1) To vote FOR the resolutions or proposals on the agenda:

Sônia Aparecida Consiglio Favaretto, Brazilian, married, journalist, domiciled at

Praça Antonio Prado, 48, in the city and state of São Paulo, identity card no. RG

15.895.199-2 – SSP/SP, federal taxpayer no. CPF/MF 091.199.808-09

2) To vote AGAINST the resolutions or proposals on the agenda:

Érico Rodrigues Pilatti, Brazilian, single, lawyer, domiciled at Praça Antonio Prado,

48, in the city and state of São Paulo, bar association no. OAB/SP 235.366, federal

taxpayer no. CPF/MF 221.402.578-20.

3) To ABSTAIN on the resolutions or proposals on the agenda:

André Grunspun Pitta, Brazilian, married, lawyer, domiciled at Praça Antonio Prado,

48, in the city and state of São Paulo, bar association no. OAB/SP 271.183, federal

taxpayer no. CPF/MF 316.939.698-66.

To assist shareholders in proxy voting, we offer the proxy form template shown below.

The Company will not require shareholders or their legal representatives to have

signatures notarized on proxy forms or to have proxy forms consularized, and will not

require sworn translation for proxy forms and documents originally written in or translated

into Portuguese, English or Spanish

PROXY FORM TEMPLATE

PROXY APPOINTMENT FORM

[SHAREHOLDER’S NAME], [ID AND OTHER DETAILS] (“Grantor ”), being ashareholder in BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias eFuturos (“Company”), hereby appoint the following as my proxies:

Sônia Aparecida Consiglio Favaretto, Brazilian, married, journalist, domiciledat Praça Antonio Prado, 48, in the city and state of São Paulo, identity card no.RG 15.895.199-2 – SSP/SP, federal taxpayer no. CPF/MF 091.199.808-09, tovote FOR the resolutions or proposals on the agenda in accordance with theexpress instructions established below by me as Grantee;

Érico Rodrigues Pilatti, Brazilian, single, lawyer, domiciled at Praça Antonio


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Prado, 48, in the city and state of São Paulo, bar association no. OAB/SP235.366, federal taxpayer no. CPF/MF 221.402.578-20, to vote AGAINST theresolutions or proposals on the agenda in accordance with the expressinstructions established below by me as Grantee;

André Grunspun Pitta, Brazilian, married, lawyer, domiciled at Praça AntonioPrado, 48, in the city and state of São Paulo, bar association no. OAB/SP271.183, federal taxpayer no. CPF/MF 316.939.698-66, to ABSTAIN on theresolutions or proposals on the agenda in accordance with the expressinstructions established below by me as Grantee.

I hereby grant the above proxies power of attorney to attend the Annual GeneralMeeting of the Company called for April 18, 2016, at 11:00 a.m., exceptionallynot at its head offices but at 275 Rua XV de Novembro, in the city of São Paulo,São Paulo State, to sign the shareholder attendance register, and to examine,discuss and vote on proposals and resolutions on my behalf as Grantee, in strictconformity with the instructions established below regarding each item of theagenda.

Agenda

(1) To receive Management’s annual report, and to receive, review and judgethe Financial Statements as of and for the year ended December 31, 2015;

For ( ) Against ( ) Abstain ( )

(2) To consider the proposal on allocation of net income for the year endedDecember 31, 2015, as proposed by Management;


(3) Election of a member of the Board of Directors restoring the quantity ofmembers of Board of Directors set forth in the Bylaws, as proposed byManagement;


(4) To set the aggregate compensation amount payable in 2016 to members ofthe Board of Directors and Executive Officers.


The power of attorney hereby granted shall be used exclusively for attendanceof the Annual General Meeting on first call, and if necessary on second call, andfor voting as instructed above, with no rights or obligations to take any actionother than that required to carry out the aforementioned mandate. The aboveproxies are hereby authorized to abstain from discussing or voting on any matterregarding which in their opinion they have not received sufficiently specificinstructions.


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This instrument of proxy appointment shall be valid only for the general meetingsof the Company cited herein, whether held on first or second call.

[City], [month] [day], [2016]

_____________________________[Signature]For: [name]

[job title]

A.3.2.1. Preregistration

Documents accompanying physical proxy forms, as per “A” and “A.3.2” above, may be

filed with BM&FBOVESPA at its head offices up to the scheduled time for General Meeting

to begin.

However, please file these documents as soon as possible as of March 30, 2016, in order

to facilitate shareholder access to the General Meeting.

The documents must be delivered to the following address, Investor Relations Office, Rua

XV de Novembro, 275, 5º andar, Centro, CEP: 01013-001, São Paulo/SP, Brazil, e-mail:

[email protected].

A.4. Public Proxy Solicitations

Any shareholder who represents one half of one per cent (0.5%) of the Company’s

registered share capital or more may post a public proxy solicitation on the Assembleias

Online system, in accordance with Law 6404 and CVM Instruction 481.

Public proxy solicitations must be accompanied by a draft power of attorney as well as the

information and other documents required by CVM Instruction 481, especially in Annex 23,

and delivered to Daniel Sonder, Chief Financial & Investor Relations Officer, at Praça

Antonio Prado, 48, 7º andar, Centro, CEP: 01010-901, São Paulo/SP, Brazil.

In accordance with the applicable legal rules, the Company will respond to public proxy

solicitations submitted by shareholders within two (2) business days, giving them the same

visibility on the Assembleias Online system as the other documents published by the


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Company.

Neither the Company nor Management shall be held liable for the veracity of the

information contained in public proxy solicitations by shareholders.

B. MANAGEMENT’S PROPOSAL

The Management of BM&FBOVESPA submits the proposal described below to the Annual

General Meeting to be held on April 18, 2016.

B.1. Items to be discu ssed at the A nnu al General Meeting of BM&FBOVESPA

The Corporation Law (Law 6404) requires public companies to hold an annual general

meeting of shareholders within four months of the end of each financial year to discuss

and vote on the financial statements for the year, net income allocation, the compensation

paid to executive officers, and the election of new board members, if any.

Management’s clarifications regarding each item of the proposal to be discussed at the

Annual General Meeting to on April 18, 2016, are detailed below.

Item 1 To receive Management’s annual report, and to receive, review and judge

the Financial Statements as of and for the year ended December 31, 2015.

Management’s Discussion & Analysis and the financial statements drawn up by the

Management of BM&FBOVESPA for the financial year ended December 31, 2015,

accompanied by the independent auditors’ report and the Audit Committee’s report, were

published on February 19, 2016, in the newspaper Valor Econômico and Diário Oficial do

Estado de São Paulo and approved by the Company’s Board of Directors on February 18,

2016.

Financial Statements

The financial statements express the Company’s economic and financial situation, and the

changes in net worth that occurred during the financial year, enabling shareholders to

assess BM&FBOVESPA’s financial health and profitability.

The methodologies used to prepare the financial statements are based on the international

financial reporting standards (IFRS) issued by the International Accounting Standards


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Board (IASB) and interpretations issued by the International Financial Reporting

Interpretations Committee (IFRIC), as implemented in Brazil through the Brazilian

Accounting Pronouncements Committee (CPC) and its technical interpretations and

guidelines, which are approved by the Brazilian Securities Commission (CVM). These

financial statements comprise the balance sheet, income statement, comprehensive

income statement, statement of changes in equity, cash flow statement, and value added

statement. The financial statements are supplemented by explanatory notes designed to

help shareholders analyze and understand the financial statements.

Management’s Discussion & Analysis

The Management’s Discussion & Analysis presents financial information, covering the key

items in the income statement for the previous financial year, for example, as well as non-

financial, statistical and operational information, such as information on the workforce,

subsidiaries and affiliates, social responsibility, corporate governance, and the capital

markets in general.

Independent Auditors’ Report

Ernst Young Auditores Independentes examined the financial statements and concluded in

its report that in all material respects they accurately and fairly represent the financial and

equity positions of BM&FBOVESPA and its subsidiaries and affiliates as at December 31,

2015.

Documents presented by Management

The following documents relating to this item of the agenda are available to shareholders

at the Company’s head offices, on its investor relations portal, and on the websites of

BM&FBOVESPA and CVM:

(a) Management’s Discussion & Analysis;

(b) Financial Statements for 2015 fiscal year;

(c) Directors’ comments on BM&FBOVESPA’s financial situation required by item 10 of

the Reference Form, in accordance with CVM Instruction 480, dated Dec. 7, 2009,

as amended (“CVM Instruction 480”), and reproduced as Attachment II to this

document;(d) Independent Auditors’ Report;


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(e) Standardized Financial Statement Form (DFP);

(f) Audit Committee’s Report presenting the committee’s 2015 findings and activities.

Item 2 To consider the proposal on allocation of net income for the year ended

December 31, 2015, as proposed by Management

BM&FBOVESPA’s net income in the financial year ended Dec. 31, 2015, amounted to

R$2,202,238,045.10. This is after-tax net income (i.e. after deduction of provision for

corporate income tax and social contributions).

At a meeting held on Feb. 18, 2016, the Board of Directors approved a proposal to allocate

this net income for the financial year ended on Dec. 31, 2015, as follows:

(i) R$1,242,614,000.00 to the mandatory dividend, which has already been paid to

shareholders as intermediate dividend and interest on shareholder’s equity for

2015 fiscal year in the amount of R$223,581,000.00 and R$1,019,033,000.00

respectively;

(ii) R$959.624.045,10 to the statutory reserve for investment and to replenish the

Company’s safeguard funds and mechanisms..

The net income allocation information required by Annex 9-1-II of CVM Instruction 481 can

be found in Attachment III to this document.

Item 3 To elect a member of the Board of Directors

The present members of BM&FBOVESPA’s Board of Directors were elected at the Annual

General Meeting held on March 30, 2015, for a term lasting until the 2017 Annual General

Meeting.

One of the members elected on that occasion, Mr. André Santos Esteves, resigned

irrevocably and irreversibly from the Board on November 29, 2015. Thus, given such

vacancy, on 2/26/2016 the Board of Directors nominated, as per the recommendation of

the Nomination and Governance Committee and pursuant to article 27 of the bylaws, Mr.

Laércio José de Lucena Cosentino to serve until the next General Meeting of the

Company, when the shareholders should deliberate on his election to compose the Board

to its full complement and serve a full term until the 2017 Ordinary General Meeting, in line


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with the terms of the other Board members. Considering that the Annual General Meeting

addressed in the present document consists of the General Meeting that follows such

resolution of the Board, the Board of Directors proposes, as described above, and as per

the recommendation of the Nomination and Governance Committee, the election of Mr.

Laércio José de Lucena Cosentino to serve for the remaining term, that is, until the 2017

Ordinary General Meeting, as an independent member.

The nominee’s academic qualifications and professional experience are summarized

below.

Laércio José de Lucena Cosentino, 55 years old

Founder and CEO of TOTVS, Latin America’s largest enterprise software, platform and

consultancy company, Laércio Cosentino, 55, graduated in electrotechnical engineering

from the University of São Paulo. His career and history have been mainly devoted to the

IT sector, especially with the founding of TOTVS in 1983. Since then the company has

become absolute leader in Brazil and present in 41 countries. Today Cosentino is one of

the leading players in the Brazilian software market, actively working to defend and

strengthen the IT industry. Besides leading the company, he chairs the Executive

Committee of the Brazilian Association of Information & Communication Technology

Companies (Brasscom), and the Boards of Directors of Instituto Empreender Endeavor

and Mendelics, among other activities.

Unless the General Meeting approves an exception, candidates for election to the Board of

Directors must comply with legal and regulatory requirements and with the criteria set out

in article 22 (4) of BM&FBOVESPA’s Corporate Bylaws: (a) they must be more than 25

years old; (b) they must have an unblemished reputation and be familiar with the markets

managed by BM&FBOVESPA and/or its subsidiaries, as well as being well-versed in other

knowledge areas specified in the Board’s bylaws; (c) they must not have spouses, life

partners or first- or second-degree relatives in management positions at or employed by

BM&FBOVESPA or its subsidiaries; (d) they must not be employees or officers of a

company that can be considered a competitor of BM&FBOVESPA or its subsidiaries, and

must not have, or represent anyone who has, interests that conflict with those of

BM&FBOVESPA and its subsidiaries – persons who meet all the following criteria

cumulatively are presumed to have interests that conflict with the company’s: (i) being


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elected by a shareholder who also elected a member of the Board of Directors of a

competitor, and (ii) having a relationship of subordination to the shareholder who elected

them; and (e) they must be effectively available to perform the duties of a Board member,

regardless of the offices they may hold in other entities, as board members and/or

executives. Mr. Laércio Cosentino meets all the requirements established by the

Corporate Bylaws, according to a verification performed before he was nominated for

membership of the company’s Board of Directors by means of a declaration that he has

signed and that is at the disposal of shareholders together with the Call Notice for the

General Meeting.

The bylaws of BM&FBOVESPA’s Board of Directors, in turn, establish that in making

nominations the Board must seek candidates who, besides meeting the applicable legal

and regulatory requirements and the criteria laid down in the Company’s own internal

rules, have experience and knowledge, practical or academic, in at least one of the

following areas: administration, auditing and accounting, economics, finance,

management, legislation and regulation, risk, and information technology. Mr. Laércio José

de Lucena Cosentino’s knowledge in the area of information technology is widely

recognized.

Rules on the composition of the Board of Directors

A majority of the Board of Directors must be independent members according to CVM

Instruction 461. Mr. Laércio José de Lucena Cosentino is a candidate for the position of

independent Board member.

As defined in this Instruction, an independent board member is one who has no links with

(i) the company, its direct or indirect parent company, or any of its subsidiaries and

affiliates; (ii) management of the company, its direct or indirect parent company, or any of

its subsidiaries; (iii) any person authorized to operate in the markets managed by the

company; and (iv) any holder of 10% or more of the company’s voting stock.

Moreover, according to the rules for the Novo Mercado segment on which the company

trades, an independent Board member is one who (i) has no links with the company

except ownership of its stock; (ii) is neither a controlling shareholder, nor a spouse or first-

or second-degree relative of a controlling shareholder, and for the past three (3) years has


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had no links with any company or entity related to a controlling shareholder (links with

public education and/or research institutions are excluded from this restriction); (iii) for the

past three (3) years has been neither an employee nor a director of the company, a

controlling shareholder, or a corporate entity controlled by the company; (iv) is not a direct

or indirect supplier or buyer of the company’s services and/or products to an extent that

may entail loss of independence; (v) is not an employee or executive officer of a company

or entity that is offering to supply or buy the company’s services and/or products to an

extent that may entail loss of independence; (vi) is not a spouse or first- or second-degree

relative of any executive officer of the company; and (vii) receives no remuneration from

the company other than the compensation paid to Board members (earnings on company

stock are excluded from this restriction).

The Corporate Bylaws state that an independent Board member is one who (i) meets all

the independence criteria established by the Novo Mercado Listing Rules and CVM

Instruction 461/07; and (ii) does not directly or indirectly own more than 7% of the

company’s total stock or voting stock and has no links with any shareholder who does own

more than said percentage.

In compliance with article 10 of CVM Instruction 481, information about candidates for

election to the Board of Directors put forward by Management must be disclosed in items

12.5-12.10 of the Reference Form required by CVM Instruction 480 and are included in the

present document as Attachment IV.

Item 4 To set the aggregate compensation amount payable in 2016 to members of

the Board of Directors and Executive Officers

At a meeting held on Feb. 18, 2016, the Board of Directors decided to propose to the

Annual General Meeting overall annual compensation of up to R$9,074 thousand for the

Board of Directors and up to R$40,153 thousand for the Executive Officers. The proposal

refers to the period January-December 2016.

A detailed breakdown of the proposed global compensation is shown below to facilitate

analysis by shareholders:


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Proposal for Director and Officer Compensation in 2016 fiscal year (R$ million)

ADMINISTRATORSFixed

RemunerationBenefits

Short-TermVariable

Remuneration

Long-TermVariable

RemunerationTOTAL

Board Members 7.257 0 0 1.817 9.074

Executive Officers 5.606 1.075 12.605 20.867 40.153Total 12.863 1.075 12.065 22.684 49.227

Fixed Remuneration

The fixed remuneration paid to Executive Officers consists of thirteen (13) salaries per

year and corresponding vacation pay, adjusted annually in accordance with a collective

agreement.

Members of the Board of Directors are paid a fixed monthly fee, plus an additional fixed

monthly fee for participating in the Board’s advisory committees. The Chairman of the

Board receives an additional fixed semiannual fee.

Benefits

The benefits package, including medical and dental care, life insurance, meal tickets, a

pension fund, use of a motor vehicle, regular checkups and use of a cell phone, is

designed to be attractive and minimally compatible with market standards for the

performance of similar duties.

Short-Term Variable Remuneration

The following performance indicators are taken into account in determining short-term

variable remuneration: (i) the Company’s variable remuneration policy, which is based on

the concept of salary multiples varying with the level of each position; (ii) individual

performance assessments; and (iii) the Company’s global performance indicators, as

described below.

In 2016, the total amount of short-term variable remuneration established by the Board of

Directors for payment to administrators and employees of the Company during 2016 fiscal

year will be calculated on the basis of the Company’s adjusted EBIT, excluding the

expenditure incurred with the Company’s Stock Grant Plan (principal, social security

contributions and related employment charges). It must comply with the adjusted


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expenditure cap established in the annual budget and must represent 4.2% of this result if

the expenditure target set by the Board of Directors is met. Should actual expenditure

exceed the amount budgeted for 2016 fiscal year, a reduction factor will be applied to the

percentage of adjusted EBIT to be distributed to administrators and employees.

Part of the total amount of short-term variable remuneration calculated as described above

will be allocated to the Executive Officers and distributed on the basis of salary multiples

according to level and individual performance. The above proposal to allocate

R$12,605,000 assumes maximum individual performance. However, actual individual

performance assessments will be performed at the end of the financial year.

Long-Term Variable Remuneration

Long-term variable remuneration consists of stock grants awarded under the Stock Grant

Plan approved by the Extraordinary General Meeting held on May 13, 2014. Stock grants

are awarded on the basis of indicators relating to the Company’s overall results and the

individual’s level of responsibility, potential and performance, with the aim of aligning the

interests of the administrators with those of the Company and its shareholders over the

long term and also to retain key personnel in the Company.

In the case of stock awards to Executive Officers, there is a mandatory minimum period of

three (3) years between the date on which the stock is awarded and the last date on which

shares are transferred. In addition, there is a mandatory minimum period of twelve (12)

months (i) between the date on which the stock is awarded and the first date on which

shares are transferred, and (ii) between each of the dates on which shares are transferred

after the first transfer.

For approximately 30% of the total amount of long-term variable remuneration, stock willbe awarded only if the Executive Officers concerned undertake to purchase a matching

amount of Company shares and hold them for the mandatory minimum period as a

condition for effectively receiving the stock.

The Board of Directors has also ruled that stock grants for any given financial year will

always be made at the start of the next financial year. Thus the stock grants for 2015 fiscal

year will take effect only in January 2016, with an impact on the Company’s expenditure

between fiscal year 2016 and completion of the program.


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The Board of Directors therefore approved two stock grant programs under which stock

will be awarded on January 8, 2016, for 2016 fiscal year: the “2015 BVMF Stock Grant

Program” and the “2015 BVMF Additional Stock Grant Program”.

The estimate for Executive Officers is R$13,210,000 under the “2015 BVMF Stock Grant

Program and R$7,657,000 under the “2015 BVMF Additional Stock Grant Program”, with

grants being awarded only if Executive Officers undertake to purchase a matching amount

of Company shares.

The Stock Grant Plan also provides for a specific mechanism to award stock grants to

members of the Board of Directors, who may receive an annual total of up to 172,700

shares, representing R$1,817,000 on January 8, the date of the award. This is for linear

distribution among the Board members. The grant is made in a single lot and there is a

mandatory minimum period of two (2) years following the end of an individual’s term of

office as Board member until transfer is effective.

The values proposed as long-term variable remuneration do not include the social security

contributions and other employment charges arising from the effective transfer of stock.

The information on remuneration of administrators disclosed in item 13 of the Reference

Form, as required by CVM Instruction 480, can be found in Attachment V to the present

document.

C. Documents pertaining to the items to be discussed at the AnnualGeneral Meeting of BM&FBOVESPA

The following documents are at the disposal of shareholders at the Company’s head

offices, on its investor relations portal (www.bmfbovespa.com.br/ri/), and on the websites

of BM&FBOVESPA (www.bmfbovespa.com.br) and CVM, the Brazilian SecuritiesCommission (www.cvm.gov.br):

Call Notice

Financial Statements for the financial year ended December 31, 2015

(MD&A, Financial Statements, Independent Auditors’ Report, Audit

Committee’s Report)

Standardized Financial Statement Form (DFP)

http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/ri/


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Minutes from the meeting of the Board of Directors held on February 18,

2016, with the proposed allocation of net income for fiscal year 2015

Information relating to the net income allocation proposal required by

Annex 9-1-II of CVM Instruction 481

Directors’ comments on BM&FBOVESPA’s financial situation – item 10 of

the Reference Form, in accordance with CVM Instruction 480

Information on the candidate for election to the Board of Directors – items

12.5-12.10 of the Reference Form, in accordance with CVM Instruction

480

Information on the remuneration of Directors and Executive Officers –

item 13 of the Reference Form, in accordance with CVM Instruction 480

Questions and requests for additional information should be addressed to the Investor

Relations Department, by telephone on +55 11 2565-4418, 2565-4834 or 2565-4729, or by

email at [email protected] .

mailto:[email protected]:[email protected]:[email protected]:[email protected]


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ATTACHMENTS


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ATTACHMENT I

REMOTE VOTING TEMPLATE FORM – ANNUAL GENERAL MEETING OFBM&FBOVESPA TO BE HELD ON 4/18/2016

1. Shareholder’s name 2. Shareholder’s CNPJ or CPF

3. Email address for the company to send confirmation that it has received the

postal ballot paper

4. Instructions on how to cast your vote

This remote voting form must be completed by you as a shareholder if you opt to vote

by remote voting in accordance with CVM Instruction 481, as amended.

In this case the above fields must be completed with the shareholder’s full name and

federal taxpayer number (CNPJ or CPF), and an email address for contact.

In addition, for this form to be considered valid and the votes recorded here to be

counted in the quorum for the respective General Meeting:

- all fields below must be correctly completed;

- all pages must be initialed;

- you, the shareholder, or your legal representative(s), as applicable, must sign at

the end in accordance with the relevant legislation;

- signatures and other required documentation do not need to be notarized or

consularized.

5. Instructions for sending your form

If you opt to exercise your voting rights by remote voting form, you may: (i) complete

this form and send it directly to the company; or (ii) transmit instructions for completion

of the form to an appropriately qualified service provider, as follows:

5.1. Remote voting via service provider – remote voting system

If you opt to exercise your voting rights through a service provider, you must transmit


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your voting instructions to your custody agent in accordance with the rules established

by the custody agent, and your custody agent will then deliver your votes to

BM&FBOVESPA’s Central Securities Depository. Please contact your custody agent to

find out what procedures have been established for you to issue remote voting

instructions, and also to be told what documents and other information are required

from you for this purpose.

In accordance with CVM Instruction 481, as amended, you must send your voting

instructions to arrive at your custody agent not later than seven (7) days before the

General Meeting, i.e. by 4/12/2016 (inclusive), unless a different deadline is set by your

custody agent.

Also in accordance with CVM Instruction 481, BM&FBOVESPA’s Central Securities

Depository will ignore voting instructions it receives from any custody agent if they

conflict with instructions received from a shareholder with the same federal taxpayer

number (CNPJ or CPF).

5.2. Delivering your form paper directly to the company

When you opt to exercise your voting rights by form, you may choose instead to send

your remote form paper directly to the company. If so, you must deliver the following

documents to BM&FBOVESPA’s Investor Relations Department at Rua XV de

Novembro, 275, 5º andar, Centro, CEP: 01013-001, São Paulo/SP – Brazil:

(i) a physical copy of this form completely filled out, initialed and signed;

(ii) authenticated copies of the following documents:

(a) For individuals:

Personal ID with a photograph of you;

(b) For legal entities:

a copy of the most recent constitutional documents (articles of

association or incorporation, bylaws etc.) and power of attorney proving

its legal right to represent the shareholder;

the legal representative’s ID with photograph.


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(c) For investment funds:

a copy of the fund’s most recent consolidated bylaws;

a copy of the fund administrator or manager’s constitutional documents,

as applicable, pr oving compliance with the fund’s voting policy and

power of attorney proving its legal right to represent the shareholder;

the legal representative’s ID with photograph.

If you prefer, you may also digitize this form paper and the above documents and send

them by email to [email protected] , in which case you must also mail the original

form paper and the authenticated copies of the other required documents toBM&FBOVESPA at Rua XV de Novembro, 275, 5º andar, Centro, CEP: 01013-001,

São Paulo/SP – Brazil, until 4/14/2016.

The company will not require sworn translations of documents originally written in

Portuguese, English or Spanish, or documents in other languages accompanied by a

translation into any of these three languages. Accepted identification (ID) documents

include Brazilian identity cards (RG, RNE), Brazilian driver’s licenses (CNH),

passports, and officially recognized professional or association membership cards; all

must bear the holder’s photograph.

Once the company has received your form and the required accompanying

documentation, the company will notify you and tell you whether or not they have been

accepted in accordance with CVM Instruction 481, as amended.

If this form is sent directly to the company and not completely filled out or not

accompanied by the required documents as per item (ii) above, it will be disregarded

and you will be notified by an email message sent to the address furnished in item 3

above.

This form and the required accompanying documents must be filed and time-stamped at

the company not later than four (4) days before the date of the General Meeting, i.e. by

4/14/2016 (inclusive). Forms received by the company thereafter will be disregarded.

Voting instructions for the Annual General Meeting (AGM)

mailto:[email protected]:[email protected]:[email protected]:[email protected]


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6. Presentation and approval of Management’s reports and accounts. Examination,

discussion and approval of the company’s financial statements for the financial year

ended December 31, 2015.

[ ] Approve [ ] Reject [ ] Abstain7. Deliberation on Management’s proposal to allocate net income for the financial year

ended December 31, 2015 (FY2015), as follows:

(i) R$1,242,614,000.00 to the mandatory dividend, which has already been paid

to shareholders as intermediate dividend and interest on equity (JCP) for

FY2015 in the amount of R$223,581,000.00 and R$1,019,033,000.00

respectively;

(ii) R$959,624,045.10 to the statutory reserve for investment and to replenish

the company’s safeguard funds and mechanisms.

[ ] Approve [ ] Reject [ ] Abstain

8. Election of a member of the Board of Directors nominated by Management.

Candidate – Laércio José de Lucena Cosentino


9. Establishment of overall compensation in FY2016 for members of the Board of

Directors at up to R$9,074,000.00 and for Executive Officers at up to

R$41,376,000.00, as proposed by Management.


10. Do you wish to set up a Supervisory Board (Conselho Fiscal ) pursuant to Law 6404

(1976), article 161?

[ ] Yes [ ] No

11. If this General Meeting is held on second call, do the above voting instructions also

apply to the decisions to be made during the meeting held on second call?

[ ] Yes [ ] No

[City], [date]

__________________________________________

Signed by [Shareholder’s name]


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ATTACHMENT II

MANAGEMENT’S DISCUSSION ON COMPANY FINANCIAL STATEMENT

10.1 – Management’s discussion on:

a. General financial condition and net equity position

CONSOLIDATED YEARS ENDED DECEMBER 31, 2015 AND DECEMBER 31, 2014

Throughout 2015, the markets operated by BM&FBOVESPA were notably impacted by a deteriorating Brazilian economyand changing global scenario. The increase in market volatility levels and the strong depreciation of the Brazilian realagainst the US dollar had a positive effect on the revenues of the BM&F Segment (financial and commodity derivatives).The average daily volume of contracts traded was 2.9 million in 2015, up 10.7% year-on-year. Interest rate in USD andMini contracts were the main highlights, growing 31.7% and 67.5%, respectively. In the Bovespa Segment (equities andequity derivatives), an important reduction from R$2.39 trillion in 2014 to R$2.21 trillion in 2015 was noticed in theaverage market capitalization1 of the companies listed. As a result, the volumes traded also decreased, closing the year

at R$6.79 billion, down 6.9% year-on-year.

The group of other revenues not related to volumes traded on the equities and derivatives markets also increased in theperiod, rising 19.6% against 2014, and particularly reflecting the improvements in the Company’s commercial policies,the growth in the securities lending market and in the Treasury Direct ( Tesouro Direto ) platform, as well as theexchange rate depreciation, which had a positive impact on the revenues from vendors.

From the standpoint of effective expenses control, management continued to focus its efforts on maintaining the growthin adjusted expenses2 below the average inflation rate, at R$614,350 thousand in 2015, up 3.7%. In addition, wemaintained our commitment to return capital to shareholders through a combination of dividend payouts and sharebuybacks without compromising the strength of the Company’s balance sheet.

Two important moves in the year are worthy of note: the partial sale of 20% of the investment in the CME Groupshares, in an attempt to reduce the risk exposure of the Company’s balance sheet; and the investment of R$43,633

thousand for acquisition of an 8.3% stake in the Bolsa de Comercio de Santiago .

In addition, the negative performance of the Bovespa Segment, particularly in the last quarter of 2015, and the reviewof the growth expectations, led to impairment of the Bovespa Holding, in the amount of R$1,662,681 thousand, with nocash impact, but negatively impacted the Company's results.

Operating income was R$1,365,978 thousand, up 11,4%, while net income (attributable to BM&FBOVESPA shareholders)totaled R$2,202,238 thousand in 2015, strongly impacted by the partial divestment of CME Group shares, discontinuanceof the equity method of accounting for the remaining investment in the CME Group, and impairment of part of theBovespa Holding goodwill.

In summary, BM&FBOVESPA is still well positioned to capture opportunities, although it is important to recognize thechallenges imposed by the deteriorating macroeconomic scenario. Management remains focused on investing in newproducts and technologies, and believes that these have played a main role in improving the quality of services offeredand the diversification of the Company’s revenues in the past years.

CONSOLIDATED YEARS ENDED DECEMBER 31, 2014 AND DECEMBER 31, 2013

The year 2014 was marked by a heatedly contested presidential race, which resulted in heightened volatility andincreased trading volumes in the second half of the year, down to the voting day. However, this pre-electoral boost intrading activity was insufficient to make up for the thin volume of trading in the earlier part of the year, so thatultimately the overall volume traded fell short of the prior year volume both in markets comprising our BM&F Segmentand the markets comprising our Bovespa Segment.

1

Result of the multiplication of the volume of equities issued by companies listed in the Bovespa Segment, by the respective market prices.2 Expenses adjusted by: (i) depreciation and amortization; (ii) stock grant plan – principal and charges – and stock options plan; (iii) taxes related todividends received from the CME Group; and (iv) recording and transfer of fines. The purpose of this adjustment is to show the Company’s operatingexpenses, except for those with no impact on cash or that are not recurring.


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The BM&F Segment average daily volume reached 2.6 million contracts in 2014, down 9.3% on 2013, reflecting mainlythe 23.7% decrease in volume traded in Brazilian-interest rate contracts, which are typically the top traded contracts inthis segment, while average rate per contract (“RPC”) rose 5.3% to R$ 1.350, due notably to (i) increased average RPCof Brazilian-interest rate contracts (change to the mix of contracts by maturity) and (ii) increased RPC in U.S. dollar-denominated interest rate contracts and forex contracts, that were positively impacted by the depreciation of theBrazilian real against the US dollar in the period, as both contracts reference the US currency. As for the BOVESPASegment, the average daily traded value in the stock market and the equity derivatives markets dwindled by slight 1.7%year-on-year, reaching R$ 7.29 billion, to a large extent having trailed the fall in average market capitalization of listedfirms, which is attributable to the country’s deteriorating macroeconomic landscape.

BM&FBOVESPA therefore ended 2014 with total revenues (before PIS/COFINS and other tax reductions) of R$ 2,246,452thousand, down 5.0% on 2013. This reduction was observed in both segments and in regard to other revenues too (notrelated to trading and settlement).

From the standpoint of effective costs and expenses control, management held fast to its efforts to hold growth inadjusted expenses below the average inflation rate, at R$592,349 thousand in 2014 from R$575,763 thousand in 2013,up only 2.9%. In addition, we continue to pledge our steadfast commitment to return capital to shareholders through aneffective combination of dividend payouts and share buybacks whereas staying clear of any action susceptible tocompromising the financial health of our Company.

Thus, our consolidated operating income fell 8.2% year-on-year to R$1,226,363 thousand from R$1,335,824 thousandpreviously, while the GAAP net income (attributable to BM&FBOVESPA shareholders) fell 9.7% to R$977,053 thousand in2014, from R$1,081,516 thousand one year previously.

Last, but not least, BM&FBOVESPA is well-positioned to capture the future growth opportunities that the Brazilian marketwill certainly continue to offer, although it must be said the economic outlook as 2014 came to a close became morechallenging in light of the present macroeconomic conditions. Nonetheless, we believe our investments in productdevelopment 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 Braziliancapital markets. It is our firm belief the development and implementation of our business strategy will continue to bearfruit in the years ahead.

b. Capital structure

The Company’s (consolidated) capital structure composition was as follows: (i) 30.2% liabilities and 69.8% equity as ofDecember 31, 2015; (ii) 24.8% liabilities and 75.2% equity as of December 31, 2014; (iii) 24.9% liabilities and 75.1%equity, as of December 31, 2013, according to the table below:

Year ended December31,



2015 2014 2013

(in R$ thousands, except for percentages)

Current and noncurrent liabilities 7,956,682 30.2% 6,275,079 24.8% 6,394,730 24.9%Shareholders’ equity 18,352,214 69.8% 18,988,403 75.2% 19,298,892 75.1%

Total liabilities and shareholders’equity

26,308,895 100.0% 25,263,482 100.0% 25,693,622 100.0%

Regarding third parties’ capital, part of our onerous liabilities relates mainly to debt issued abroad on July 16, 2010 (seeitem 10.1.f).

Thus, the Company has a conservative degree of leverage, whether on the basis of our total liabilities (current andnoncurrent liabilities) or only our total onerous liabilities (indebtedness and interest on debt), as shown below.

Year ended December 31, Year ended December 31, Year ended December 31,

2015 2014 2013

(in R$ thousands, except for percentages)

Total onerous liabilities 2,454,265 11.8% 1,666,491 8.1% 1,468,322 7.1%Interest payable on debt issued abroad and loans 70,181 47,368 42,129

Debt issued abroad and loans 2,384,084 1,619,123 1,426,193


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Shareholders’ equity 18,352,213 88.2% 18,988,403 91.9% 19,298,892 92.9%

Total onerous liabilities and shareholders’ equity 20,806,478 100.0% 20,654,894 100.0% 20,767,214 100.0%

c. Capacity to service the debt

BM&FBOVESPA has strong cash generation capacity, as evidenced by consolidated operating income of R$1,365,978thousand in 2015, R$1,226,363 thousand in 2014 and R$1,335,824 thousand in 2013, and consolidated operatingmargins of 61.6%, 60.4% and 62.8%, respectively, as well as yearly net income attributable to shareholders amountingto R$1,694,973 thousand3, R$977,053 thousand and R$1,081,516 thousand for the same three years, respectively.

Our consolidated cash and cash equivalents coupled with short- and long-term financial investments reachedR$10,054,994 thousand (38.2% of total assets) in 2015, including R$4,853,598 regarding the shares in the CME Groupand the Bolsa de Comercio de Santiago , R$3,855,527 thousand in 2014 (15.3% of total assets); and R$4,870,760thousand in 2013 (18.8% of total assets). It should be noted that cash and cash equivalents, as well as financialinvestments, include cash collateral pledged by participants in the course of their dealings and registered in currentliabilities in the amount of R$1,338,010 thousand in 2015, versus R$1,321,935 thousand and R$2,072,989 thousand in2014 and 2013, respectively.

Our net indebtedness ratio was R$6,213,495 thousand negative in 2015 (including R$4,853,598 regarding the shares inthe CME Group and the Bolsa de Comercio de Santiago , reported as financial investments), R$820,812 thousandnegative in 2014, and R$1,279,524 thousand negative in 2013, denoting our low degree of financial leverage and verystrong capacity to service our debt (see item 10.1.f). Also worthy of note is the fact that our policy on investment ofcash balances favors the preservation of capital, allocating funds to highly conservative, highly liquid low-riskinvestments, which translates into an expressive proportion of positions in Brazilian sovereign risk bonds that typicallytrack the base interest rate (interbank lending - CDI /Selic rate). We therefore believe our Company is fully capable ofservicing its financial commitments both in the short- and long-term.

d. Sources of financing for working capital and investment in noncurrent assets used

The Company’s primary source of financing for working capital and investment in noncurrent assets is its ownoperational cash generation, which is sufficient to support its working capital needs.

Currently, the Company also access the capital markets (Senior Unsecured Notes issued in 2010) as an alternative tofinance its investments. The characteristics of our debt obligations are described in item 10.1.f. below.

e. Sources of financing for working capital and investments in noncurrent assets that thecompany intends to use to cover liquidity deficiencies

As previously noted, the primary source for funding our working capital and investments in noncurrent assets is our ownoperating cash generation.

The Company may also consider alternative sources of funding by taking bank loans, or accessing government financingprograms or the domestic or international capital markets.

f. Indebtedness levels and characteristics of debt obligations

i. Material loans and financing transactions

On July 16, 2010 BM&FBOVESPA issued Senior Unsecured Notes with total nominal amount of US$612,000 thousand, atthe price of 99.635% of the nominal value, resulting in net proceeds of US$609,280 thousand (at the time equivalent toR$1,075,323 thousand). The notes pay interest coupon of 5.50% per annum, payable every six months, in January andJuly, and mature on July 16, 2020. The actual cost was 5.64% per annum, including negative goodwill and otherfunding-related costs, such as: rating fees paid to Standard & Poor’s and Moody’s, commissions paid to structuringbanks, custody expenses, listing fees and legal expenses. We used the net offering proceeds to purchase additionalequity interest in the CME Group on the same date, thereby increasing our ownership interest from 1.8% to 5%.

The updated balance of the loan as of December 31, 2015 was R$2,454,265, including accrued interest of R$70,181thousand; as of December 31, 2014, the balance was R$1,666,491, including accrued interest of R$47,368 thousand; asof December 31, 2013, the balance was R$1,468,322, including accrued interest of R$42,129 thousand. As of December

3 Excluding net tax impacts from impairment (R$1,097,370 thousand) and extraordinary impacts related to the CME Group (R$1,604,635 thousand), asdescribed in item 10.1.h.


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31, 2015, the fair value of the debt, as determined based on market data, was R$2,380,489 thousand (Source:Bloomberg).

Starting July 16, 2010, we have designated as hedging instrument the changes in the exchange rate accruing on theprincipal under the debt in order to hedge the foreign currency risk affecting a portion equivalent to US$612,000(notional amount) of our investment in the CME Group. In September 2015, due to discontinuance of the net investmenthedge (Note 7(a) – 2015 Financial Statement), BM&FBOVESPA prepared a new hedge document (cash flow hedge) inorder to hedge a portion of the foreign currency risk linked to CME Group shares held by the exchange. Accordingly, thetransactions were formally designated and documented, including as to: (i) hedging purpose, (ii) type 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 effectivenesstest), and (vii) a prospective effectiveness test.

The backward-looking effectiveness test method adopted by the Company takes into account the ratio of gains andlosses accrued in the hedging instrument due to the gains or losses of the hedged item (“dollar offset method on acumulative and spot basis”). On testing forward-looking effectiveness, we adopt stress scenarios, which we apply to theeffectiveness margin (80% to 125%). The application of said effectiveness tests determined that there was noineffectiveness as of December 31, 2015.

The table below sets forth the Company’s net onerous debt, whose amounts are lower than our cash and cash

equivalents and financial investments4

:

Debt coverage indicator Years ended December 31,

20155 2014 2013(in R$ thousands)

Gross debt service 2.454.265 1.666.491 1.468.322

(-) Cash and cash equivalents, plus short- and

long-term financial investments (excludes

“Collateral for transactions” and “Earnings and

rights on securities in custody”)

(8.667.760) (2.487.303) (2.747.846)

Net debt service (6.213.495) (820.812) (1.279.524)

ii. other long-term transactions with financial institutions

In the normal course of our business, we engage in transactions with some of the primary financial institutions operatingin Brazil. These are transactions agreed pursuant to customary market practices. Our noncurrent liabilities include nolong-term transactions agreed with financial institutions other than those set forth herein.

iii. debt subordination

Taking into account the order of priority in the event of creditors' claims, the subordination of the liabilities recognizedunder current and noncurrent liabilities in the Company’s balance sheet is as follows: Collateral for transactions: pursuant to articles 6 and 7 of Law No. 10214/01, and articles 193 and 194 of Law No.

11101/05, the assets pledged to our clearing houses as collateral for transactions are linked to them up to the limitof the liabilities undertaken, and will not be affected in the event of bankruptcy or judicial reorganizationproceedings.

Tax and payroll credits (salaries and payroll charges; provision for taxes and contributions payable, and income taxand social contribution): the order of priority of these credits will follow as set forth in article 83 of Law 11101/05.

Other obligations recognized under current and noncurrent liabilities in the Financial Statements of BM&FBOVESPAregarding the fiscal year ended in 2015 constitute unsecured debt.

iv. restrictions imposed to the issuer, particularly regarding indebtedness level andnew financing, dividends distribution, assets sales, issue of new securities andtransfer of control, as well as whether the issuer has fulfilled these restrictions

The indenture governing our Senior Unsecured Notes includes certain customary limitations found on the internationaldebt markets, which we believe will not restrict our normal operating and financial activities. The most significantlimitations are:

4

In determining our net onerous debt ratio, the amounts of “collateral for transactions” and “payouts and rights on securities under custody” recorded incurrent liabilities were deducted from the sum of “cash and cash equivalents” and “financial investments” registered in current assets and long-termreceivables, in order to better evidence the actual cash available.5 Cash and cash equivalents include R$4,853,598 related to CME Group and Bolsa de Comercio de Santiago


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Limitation on the ability of the Company and its subsidiaries to create liens to secure obligations (Limitation onLiens);

Limitation on sale and lease-back transactions; Undertaking of new obligations (General Liens Basket) will be allowed despite the above restrictions provided that

the sum of (i) the aggregate principal amount of all debt obligations secured by liens other than certain liensprovided for in the exceptions section (Permitted Liens), and (ii) the debt attributable to sale and lease-backtransactions carried out by us and our subsidiaries should not exceed 20% of the group’s consolidated tangibleassets;

Limitation on mergers, consolidations or business combinations, unless the resulting company assumes theobligation to repay the principal and pay interest on the notes, and meets all other requirements and conditions.

However, these limitations include a number of exceptions, which are set forth in the indenture.

g. limitation on financing undertaken and percentage used

Not applicable. We have taken no financing other than those discussed under 10.1.f above.

h. significant changes to line items of the financial statements

Our consolidated financial statements for the years ended December 31, 2015, 2014 and 2013 have been prepared in

accordance with the accounting standards accepted in Brazil.

Our 2015 financial statements were impacted by the recognition of impairment regarding our Bovespa Holding asset,with no cash impact, due to the disposal, on September 9, of a 20% share held by BM&FBOVESPA in the CME Group(from 5% to 4% of the capital of the CME Group), which combined with other quantitative and qualitative aspect led tothe discontinuance of the equity method of accounting for the investment in the CME Group, with no cash impact, asdetailed below:

BM&FBOVESPA is restating the balances presented in the financial statements as of December 31, 2014, according tothe criteria set forth in CPC 32/IAS 12, which require the net recognition of income-related deferred tax assets andliabilities.

In December 2014, BM&FBOVESPA’s stake in Bolsa Brasileira de Mercadorias (“BBM”) was discontin ued. As aconsequence, for 2013 and 2014, BBM’s contribution to BM&FBOVESPA’s revenues, expenses and financial income was

reclassified to net income from discontinued operations in the consolidated income statement.

The tables below set forth selected financial information from our financial statements at December 31, 2015, 2014 and2013. For better understanding of our performance, the tables below set forth data related only to the main line itemsand changes to these line items, as selected by management, according to the following materiality criteria:

i) consolidated income statement: revenue line items that accounted for over 3.0% of net revenue for the year2015; expense line items that accounted for over 5.0% (by expense module) of net revenue for 2015; and lineitems related to income and deductions/taxes;

ii) consolidated balance sheet: main line items, in addition to those that accounted for over 4.0% of total assets asof December 31, 2015; and

iii) Other line items as deemed important by management to explain the Company’s income, includingextraordinary and/or non-recurring events or other information that are likely to provide a better understandingof our financial statements.

Selected Financial Information (from theConsolidated Statements of Income)

(In R$ thousands) (%) 2015

AV(%)

2014 AV(%)

2013 AV(%)

Var. (%)2015/2014

Var. (%)2014/2013

Total revenues 2,458,847 110.9% 2,246,452 110.6% 2,364,956 111.2% 9.5% -5.0%

Trading and settlement services - BM&F Segment 1,074,531 48.5% 866,577 42.7% 916,530 43.1% 24.0% -5.5%

Derivatives 1,053,513 47.5% 850,607 41.9% 897,098 42.2% 23.9% -5.2%

Trading and settlement services- BOVESPA Segment 903,016 40.7% 977,373 48.1% 1,023,978 48.2% -7.6% -4.6%

Tra

Annual Shareholders' Meeting - 04.18.2016 - Management Proposal

Documents

Transcript of Annual Shareholders' Meeting - 04.18.2016 - Management Proposal