BM&FBOVESPA S.A.

Bolsa de Valores, Mercadorias e Futuros

The Brazilian Securities, Commodities and Futures Exchange

Reference Form 2010 (Free Translation)

TABLE OF CONTENTS 1. Identification of persons responsible for the information in this form 2. Independent auditors 3. Selected financial and operating information 4. Risk factors 5. Market risks 6. Background 7. Business 8. Economic group 9. Material Assets 10. Managements discussion and analysis 11. Projections 12. Management and shareholders meetings 13. Board and management compensation 14. Human resources 15. Controlling ownership 16. Related party transactions 17. Capital stock 18. Securities Information 19. Buyback programs and treasury stock 20. Securities trading policy 21. Disclosure policy 22. Extraordinary transactions 3 3 4 11 27 36 39 78 80 90 119 121 138 158 160 161 163 165 170 174 176 177

1. Identification of the persons responsible for the information provided in this form I, Edemir Pinto, acting herein in the capacity of chief executive officer of BM&FBovespa S.A., hereby declare that (i) I have reviewed this filled out Reference Form; (ii) the information contained herein fulfills the requirements of CVM Instruction No. 480 dated 2009, in particular the requirements under articles14 through 19 thereof; and (iii) the totality of the information provided herein truthfully, accurately and completely reflects the financial position and results of operations of our Company, the risks inherent in its activities and its issued and outstanding securities. I, Eduardo Refinetti Guardia, acting herein in the capacity of investor relations officer of BM&FBovespa S.A., hereby declare that (i) I have reviewed this filled out Reference Form; (ii) the information contained herein fulfills the requirements of CVM Instruction No. 480 dated 2009, in particular the requirements under articles 14 through 19 thereof; and (iii) the totality of the information provided herein truthfully, accurately and completely reflects the financial position and results of operations of our Company, the risks inherent in its activities and its issued and outstanding securities. 2. Independent Auditors 2.1. Information regarding the independent auditors:
2009 Name of the auditing firm Auditors in charge, taxpayer ID (CPF) and contact data PricewaterhouseCoopers Auditores Independentes Name: Edison Arisa Pereira CPF 006.990.038-81 Phone number (11) 3674-2000 Email: edison.arisa@br.pwc.com Retention date Description of agreed services Auditors replacement Justification for the replacement Reasons of the auditors April 24, 2009 Auditing the full-year financial statements and reviewing the quarterly financial reports Not applicable Not applicable Not applicable 2008 PricewaterhouseCoopers Auditores Independentes Name: Ricardo Baldin CPF 163.678.040-72 Phone number (11) 3674-2000 Email: ricardo.baldin@br.pwc.com June 16, 2008 Auditing the full-year financial statements and reviewing the quarterly financial reports Not applicable Not applicable Not applicable

2.2. Total compensation paid to the independent auditors in the most recent full year, detailing the amount of fees paid for auditing services and fees paid for any other services.
Fees paid to the independent auditors Auditing services Auditing-related services Other unrelated services Total in 2009
(in R$ thousands)

910 290 431 1,631

Other unrelated services refer to services of comparison of the price structure adopted in the Bovespa segment vis--vis other international equities markets and description of other execution environments. 2.3. Other information the registrant may deem material to report. Not applicable.

3. Selected Financial and Operating Information 3.1. Consolidated financial statements

2009
(in R$ thousands)

2008
(in R$ thousands)

Shareholders equity Total assets Net revenues Gross income Net income Number of shares issued and outstanding, not including treasury stock Shareholders equity per share Earnings per share

19,709,749 21,201,183 1,502,544 1,186,574 881,050

(in number of shares)

19,291,724 20,430,089 1,602,011 859,904 645,596

(in number of shares)

2,004,766,312
(in Brazilian reais)

2,010,990,091
(in Brazilian reais)

9.831445 0.439478

9.593147 0.321034

Our Company was incorporated on December 14, 2007, under the name T.U.T.S.P.E. Empreendimentos e Participaes S.A., and was not active up until May 8, 2008. As of that date, an extraordinary shareholders meeting approved the merger with Bolsa de Mercadorias & Futuros - BM&F S.A. (BM&F, then an independent commodities and futures exchange) and a merger of the shares of Bovespa Holding S.A. (Bovespa Holding, which then operated the So Paulo stock exchange), setting off a corporate reorganization process aimed to integrate the activities of BM&F and Bovespa Holding. Moreover, also as of that date the shareholders changed to BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros the name of the company surviving the merger with BM&F and merger of the shares of Bovespa Holding (then Nova Bolsa S.A.). For this reason, the financial information provided herein refers only to the years ended December 31, 2008 and 2009. In addition, operating data provided herein for the year ended December 31, 2007 and the period ended May 8, 2008 refer to the independent operations of each of the commodities and futures exchange operated by BM&F and the stock exchange operated by Bovespa Holding. For additional background information on our company, see section 6 of this Reference Form. 3.2. Measures not contemplated in generally accepted accounting principles: EBITDA for 2009 amounted to R$975,108 thousand, a 6.7% year-on-year rise from R$913,493 thousand in the prior year. Likewise, the EBITDA margin (EBITDA divided by net income) climbed to 64.9% from 57.0% one year ago.
EBITDA reconciliation 2009
(in R$ thousands)

2008
(in R$ thousands)

Variation 2009/2008
%

Operating income (+) Depreciation and amortization EBITDA EBITDA margin

932,712 42,396 975,108 64.9%

878,353 35,140 913,493 57.0%

6.2% 20.6% 6.7% 7.9 pp

EBITDA information is developed by us as a measure of our operating performance. As used by us, EBITDA consists of operating income plus depreciation and amortization expenses. EBITDA is not a measure of financial performance under Brazilian GAAP, is not representative of cash flow for the periods presented, and should not be considered in isolation, or as an alternative to net income as a measure of operating performance or an alternative to operating cash flow as an indicator of liquidity. EBITDA has no standardized meaning and our definition of EBITDA may not compare to EBITDA as used by other companies. Because Management uses EBITDA as a measure of our performance, we understand it is important to provide this information herein. Management believes EBITDA provides a deeper understanding of our operating performance and allows for better comparability with other companies that operate in the same industry, even if other companies calculate EBITDA differently. In addition to providing EBITDA information, per the above, we also released pro forma financial information for 2008 due to the substantial non-recurring expenses we incurred in that year, and made adjustments to our 2009 income for better comparability of operating performance.

Income statement for the year ended December 31, 2009

The income statement for 2009 was impacted by certain changes to accounting standards under Brazilian GAAP, which include standards requiring us to recognize costs related to our stock option plan as expenses, and recognize deferred tax liabilities in connection with the tax amortization of goodwill. Additionally, our income statement was impacted by the recording of tax assets related to tax losses incurred in the second half of 2009. As a result, for better understanding of our performance and enhanced comparability with prior periods, our financial statements for 2009 include three adjustments totaling R$342,713 thousand, with no impact on cash flow, as follows: addition of R$318,580 thousand related to the recognition of deferred taxes related to tax amortization of goodwill; addition of R$59,636 thousand in expenses with the stock option plan; and reduction of R$35,503 related to tax offsetting. During the second quarter of 2009, income tax and social contribution credits were recorded in the amount of R$35,503. These assets correlate with tax losses of the former Bovespa Holding which were not offset at the time Bovespa Holding merged into BM&FBOVESPA due to a supposed 30% limitation over net income adjusted for use of the tax losses. In conjunction with our legal advisors, Management has since reconsidered this procedure based on the understanding that the limitation is not applicable to a merger transaction, as in this case the merged company ceases to exist and therefore the limitation on the offsetting of existing tax losses no longer applies. As a result, the Company has recorded the aforementioned tax assets.

Recurring operating expenses

The operating expenses have been adjusted to eliminate expenses with our stock option plan, depreciation expenses and doubtful account expenses as a means of establishing the expense target measure, given that we also release information on our budget forecast for the year. Adjusted recurring expenses for 2009 amounted to R$446,677 thousand, which was within the yearly forecast of R$450,000 thousand disclosed in the first quarter of 2009. In addition, the expenses were adjusted by R$18,000 thousand in severance expenses incurred in the quarter to March 2009. Actual total expenses for 2009 amounted to R$569,832 thousand, and as adjusted to eliminate expenses with no impact on cash flow this line item totaled R$446,677 thousand. The table below sets forth a reconciliation of adjusted operating expenses to operating expenses.
Reconciliation of Expenses Year ended December 31, 2009
(in R$ thousands)

Recurring expenses (as adjusted)

Severance expenses

(=) Expenses with impact on cash flow

Stock option expenses Depreciation expenses Provision for Doubtful accounts

(=) Total expenses

446,677 18,000 464,677 59,634 42,396 3,125 569,832

Income statement for the year ended December 31, 2008

The income statement for 2008 was impacted by our business integration process, such that for a deeper understanding of our operating performance adjustments were made to eliminate non-recurring expenses related to the integration process and the demutualization and IPO expenses previously incurred by each of Bovespa Holding and BM&F. Adjusted net income. After adjustments on the order of R$264,008 thousand to include non-recurring items and the effects of changes in accounting standards under Brazilian GAAP, as part of the process of convergence to IFRS, GAAP net income of R$645,696 thousand climbed to adjusted net income of R$909,605 thousand. These adjustments break down as follows: R$153,178 thousand in demutualization and IPO expenses for both BM&F and Bovespa Holding, and integration expenses; R$324,421 thousand in goodwill amortization expenses; R$25,935 thousand in expenses with the stock option plan; and R$239,646 thousand related to the recalculation of current and deferred tax liabilities associated with the effects of goodwill amortization and with the determination of interest on shareholders equity. Adjusted operating expenses. The GAAP operating expenses of R$723,658 thousand were adjusted by a total of R$179,113 thousand to eliminate R$153,178 thousand in non-recurring expenses related to the demutualization and IPOs of each of BM&F and Bovespa Holding, and subsequent integration process, R$25,935 thousand in expenses with the stock option plan, resulting in adjusted operating expenses of R$544,545 thousand in 2008.

The following table sets forth, for the year ended December 31, 2008, a reconciliation of our net income with our adjusted net income, which excludes non-recurring or non-cash expenses.
Year ended December 31, 2008 Adjustments for Consolidated non-recurring Consolidated pro forma GAAP income statement items income statement
(in R$ thousands, except margins) (in R$ thousands) (in R$ thousands, except margins)

Gross operating revenues Net operating revenues Operating expenses (i) Operating income Operating margin Goodwill amortization (ii) Income interest(iii) Income before profit taxation Current and deferred income tax and social contribution Net income for the year Net margin
________________________________________

1,783,358 1,602,011 (723,658) 878,353 54.8% (324,421) 305,972 859,904 (212,741) 645,596 40.2%

179,113 179,113 324,421 121 503,655 (239,646) 264,009 -

1,783,358 1,602,011 (544,545) 1,057,466 66.0% 306,093 1,363,559 (452,387) 909,605 56.8%

(i) (ii) (iii)

This line item refers to the aggregate of adjustments to new Brazilian GAAP and the demutualization, IPO and integration expenses. Goodwill amortization has been eliminated in the consolidated pro forma income statement. Adjustment recognizing the financial expenses under financial leases, as required under new Brazilian GAAP.

Taxes. Current and deferred taxes were adjusted to the effects of goodwill amortization, non-recurring expenses and the offsetting of interest on shareholders equity. The table below sets forth a reconciliation of pro forma current and deferred taxes with current and deferred taxes. As adjusted, current taxes increased from R$331,879 thousand to R$458,529 thousand, whereas the deferred taxes decreased from (positive) R$119,138 thousand to (positive) R$6,060 thousand.
Year ended December 31, 2008
(in R$ thousands)

(GAAP) Current income tax and social contribution (-) Tax effects of goodwill amortization (as of December 2008) (-) Deferred goodwill amortization (-) Interest on shareholders equity (-) Effects of non-recurring expenses Pro forma current income tax and social contribution (GAAP) Deferred income tax and social contribution (-)Tax effects of goodwill amortization (-) Accounting adjustment for recognition of financial lease expenses (new Brazilian GAAP) (-) Interest on shareholders equity (+) Amortization of deferred goodwill Pro forma deferred income tax and social contribution

(331,879) (11,168) (1,303) (69,419) (44,760) (458,529) 119,138 (78,200) (500) (35,681) 1,303 6,060

The table below sets forth summary income statement information for the year ended December 31, 2009, as compared to adjusted income statement information for the year ended December 31, 2008.
Years ended December 31, 2009 2008 (pro forma)
(in R$ thousands) (in R$ thousands)

Variation 2009/2008
(%)

Operating revenues Revenues from transaction fees - BM&F segment Revenues from transaction fees - Bovespa segment Other operating revenues Deductions from revenues Net operating revenues Operating expenses Operating income Interest income Income before profit taxation Income tax and social contribution Minority interest

1,672,894 552,492 1,032,201 88,201 (170,350) 1,502,544 (569,832) 932,712 253,862 1,186,574 32,085 (1,019)

1,783,358 634,230 1,055,028 94,100 (181,347) 1,602,011 (544,545) 1,057,466 306,093 1,363,559 (458,497) (1,567)

-6.2% -12.9% -2.2% -6.3% -6.1% -6.2% 4.6% -11.8% -17.1% -13.0% -107.0% -35.0%

Net income for the year Deferred liabilities Stock option plan Recognition of tax losses Adjusted net income Adjusted operating expenses

Adjustments

881,050 318,580 59,636 (35,503) 1,223,763 (446,675) 975,108

909,605

-3.1%

909,605 (512,603) 1,089,408

34.5% -12.9% -10.5%

EBITDA

3.3. Subsequent event to the most recent full-year financial information which substantially changes said financials. On February 12, 2010, we released a notice of material fact disclosing negotiations held within the scope of the relationship we maintain with the CME Group, Inc, which resulted in the execution of a protocol of intent pursuant to which the two exchanges agree a global preferred strategic partnership (i) for both parties 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; (ii) for the two exchanges to combine efforts for joint development of a multi-asset class electronic trading platform; (iii) for our Company to acquire additional shares in the CME and increase to 5% the total ownership interest in CME shares, which as of the date of the notice of material fact represented aggregate investment of approximately US$1 billion; and (iv) giving us right to designate a representative to sit on the CME board of directors. This global strategic partnership is set for an initial fifteen-year term, with realignment of strategic and commercial fundamentals at the fifth and tenth anniversaries. In addition, for the development and implementation of all stages of a multi-asset class electronic trading platform, including acquisition of technology and related intellectual property rights, we estimate making investments over a ten-year period on the order of US$175 million, whose present value is estimated at US$100 million. Moreover, as approved at the extraordinary shareholders meeting held on April 20, 2010, the investment we will be making in raising to 5% our interest in CME shares is on the order of US$620 millio n. The definitive agreement of global strategic partnership were signed with the CME Group on June 22, 2010. For additional information on the global strategic partnership with the CME Group, see item (b) under subsections 10.3 and 10.10 of this Form. In notice to the market released on July 16, 2010, we announced the conclusion of the issuance of US$612 million in senior unsecured notes due 2020. The notes will bear interest at the annual rate of 5.50%, payable semi-annually in January and July of each year. The Company used the proceeds of the offering to increase its equity participation in CME Group, Inc. and for other corporate purposes.

3.4. Dividend and other distributions policy

Year ended December 31, 2009 From net income for the year, as determined after the deductions set forth in article 53 of our Bylaws, we make the following allocations, as applicable: (a) 5% allocation to the legal reserve, up to a legally prescribed limit; (b) The remainder after the allocation to the legal reserve, if any, as adjusted by allocation to a contingency reserve or by a contingency reversal, as applicable, will be available for distribution and allocations in the following order: ( i) at least 25% will be allocated to paying the mandatory dividend to shareholders; and ( ii) 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).(ii) above must not exceed the amount of our capital stock; (d) If our board of directors deems the bylaws reserve ( item (b).(ii) above) sufficient to meet our investment and safeguard requirements, may propose (to the shareholders meeting) ( i) that we allocate to the bylaws reserve less than the portion required under the bylaws (item (b).(ii) above); and/or ( ii) a reversal of part of the bylaws reserve for distribution to shareholders in the form of dividends; and (e) After meeting the allocation requirements set forth in paragraph 1 of article 54 of the Bylaws, the shareholders meeting may decide to retain that portion of net income for the year which has been forecast in the capital expenditure budget approved pursuant to Article 196 of Brazilian Corporate Law. Under our Bylaws, shareholders mandatory distribution of dividends shareholders equity in the aggregate least to 25% of the net income for the pursuant to the corporate legislation. are assured a and interest on corresponding at year, as adjusted Year ended December 31, 2008 From net income for the year, as determined after the deductions set forth in article 53 of our Bylaws, we make the following allocations, as applicable: (a) 5% allocation to the legal reserve, up to a legally prescribed limit; (b) The remainder after the allocation to the legal reserve, if any, as adjusted by allocation to a contingency reserve or by a contingency reversal, as applicable, will be available for distribution and allocations in the following order: ( i) at least 25% will be allocated to paying the mandatory dividend to shareholders; and ( ii) 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).(ii) above must not exceed the amount of our capital stock; (d) If our board of directors deems the bylaws reserve ( item (b).(ii) above) sufficient to meet our investment and safeguard requirements, may propose (to the shareholders meeting) ( i) that we allocate to the bylaws reserve less than the portion required under the bylaws (item (b).(ii) above); and/or ( ii) a reversal of part of the bylaws reserve for distribution to shareholders in the form of dividends; and (e) After meeting the allocation requirements set forth in paragraph 1 of article 54 of the Bylaws, the shareholders meeting may decide to retain that portion of net income for the year which has been forecast in the capital expenditure budget approved pursuant to Article 196 of Brazilian Corporate Law. Under our Bylaws, shareholders mandatory distribution of dividends shareholders equity in the aggregate least to 25% of the net income for the pursuant to the corporate legislation.. are assured a and interest on corresponding at year, as adjusted

Rules on earnings retention

Rules on dividend distributions

Dividend distribution frequency

Year ended December 31, 2009 Dividends are distributed pursuant to a decision of the annual shareholders meeting, which typically takes place in April. However, our board of directors may decide (a) to declare dividends based on income determined in semi-annual financial statements; (b) to declare dividends based on income determined in interim financial statements drawn up for shorter periods, provided the total dividends paid in any given six-month period must not exceed the amounts accounted for as capital reserves such as contemplated in Article 182, paragraph 1, of Brazilian Corporate Law; (c) to distribute interim dividends based on retained earnings determined in the most recent annual or semiannual 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. Under Brazilian Corporate Law, we are permitted to suspend the distribution of the mandatory dividend contemplated in item (ii) of paragraph 1 of article 54 of our Bylaws in any year in which our board of directors reports to the annual shareholders meeting that the distribution would be inadvisable given our financial condition. In this case, the fiscal council, if active, should review the matter and issue an opinion on the matter. Moreover, within five days after the date of the shareholders meeting, Management would be required to file justification with the CVM. Net income not distributed on account of a suspension (paragraph 5 of article 56 of our Bylaws) must be allocated to a separate special reserve and, if not absorbed by subsequent losses, is required to be distributed as dividends as soon as our financial condition should permit it.

Year ended December 31, 2008 Dividends are distributed pursuant to a decision of the annual shareholders meeting, which typically takes place in April. However, our board of directors may decide (a) to declare dividends based on income determined in semi-annual financial statements; (b) to declare dividends based on income determined in interim financial statements drawn up for shorter periods, provided the total dividends paid in any given six-month period must not exceed the amounts accounted for as capital reserves such as contemplated in Article 182, paragraph 1, of Brazilian Corporate Law; (c) to distribute interim dividends based on retained earnings determined in the most recent annual or semiannual 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. Under Brazilian Corporate Law, we are permitted to suspend the distribution of the mandatory dividend contemplated in item (ii) of paragraph 1 of article 54 of our Bylaws in any year in which our board of directors reports to the annual shareholders meeting that the distribution would be inadvisable given our financial condition. In this case, the fiscal council, if active, should review the matter and issue an opinion on the matter. Moreover, within five days after the date of the shareholders meeting, Management would be required to file justification with the CVM. Net income not distributed on account of a suspension (paragraph 5 of article 56 of our Bylaws) must be allocated to a separate special reserve and, if not absorbed by subsequent losses, is required to be distributed as dividends as soon as our financial condition should permit it.

Restrictions on dividend distributions

3.5. Summary of distributed earnings and retained earnings:

2009 Adjusted net income, as for purposes of dividend distributions (in R$ thousands) Distributed earnings (in R$ thousands) Distributed earnings, as a percentage of adjusted net income Earnings distributed by kind and class of shares Distribution payment dates Rate of return on shareholders equity (ROE) Retained earnings (in R$ thousands) Date of retention approval Distribution payment dates April 15, 2008 September 2, 2008 September 2, 2008 April 15, 2009 May 12, 2009 881,050 705,000 80.0%
See the table below See the table below

2008 645,596 512,762 79.4%

See the table below See the table below

4.5% 155,191 ASM - April 20, 2010 Gross distribution per share (in R$) 0.020320 0.072995 0.069969 0.069307 0.030317

3.3% 127,433 ASM April 28, 2009 Total gross distribution

(in R$ thousands)

Earnings Interest on shareholders equity Interest on shareholders equity Dividends Interest on shareholders equity Dividends

Type of shares common common common common common stock stock stock stock stock

20,539 149,203 143,019 139,376 60,625

Total of 2008 Interest on shareholders equity Interest on shareholders equity Dividends Dividends Interest on shareholders equity Dividends Total of 2009 common common common common common common stock stock stock stock stock stock 29/05/2009 26/08/2009 26/08/2009 24/11/2009 08/01/2010 14/05/2010 0.055931 0.070653 0.016727 0.074888 0.009976 0.123602

512,762 112,000 141,500 33,500 150,000 20,000 248,000 705,000

For additional information, see the discussion on dividend and other distributions policy in the above subsection 3.4. 3.6. Dividends declared in the last three financial years out of the retained earnings account or other profit reserves accounted for in previous years We have not in the last two financial years declared dividends out of any retained earnings or other profit reserves previously accounted for. 3.7. Level of indebtedness: Not applicable. 3.8. a. b. c. d. Amount of debt obligations by time to maturity (as indicated below): debt maturing within 1 year; debt maturing in over 1 year and less than 3 years; debt maturing in over 3 years and less than 5 years; debt maturing in over 5 years.

Not applicable. 3.9. Other information deemed to be material. Financial leases Our financing arrangements correlate with financial lease agreements related mainly information technology equipment. As of December 31, 2009 the balance of financial leases was R$11,790 thousand, with maturity set for 2011. Management information system implementation We are now implementing a management information system (MIS) whose primary purpose is to allow for results to be released by product, business area, market segment, customer segment and type of investor, in addition to meeting our analysis and reporting requirements, which will contribute to nimbler decision-making and assist us in strategic planning and costing and budgeting processes, as well as in projecting and maximizing resources.

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

Expected benefits
Greater agility and quality in determining and releasing management reports (revenues, expenses, cash flows, balance sheets) for nimbler decision-making; Detailed information for improved control, analyses and projections;

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TOTAL synergy with our accounting; Quantitative analysis of the variables particular to each business line; Segmentation of results; Flexibility for preparation of managerial reports at all company levels.

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

a.

To the Company

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

We depend heavily on information technology for the operation of our businesses and any failure or malfunction of our systems may have an adverse effect on us.
Our business depends on the integration and performance of computer systems and supporting communication systems. Speed, scale and scaleability, availability of hardware and software, reliability and ongoing updating of our technological platforms constitute important factors for the performance of our operations, so as to attract a larger number of participants. We operate in an industry that continues to undergo significant and rapid technological changes. In recent years, securities and derivatives traded through electronic platforms have grown significantly and our clients demand for diversified methods of trade execution has increased. We are constantly required to make significant investments in our platforms to increase capacity to handle growing demand for our services. In 2009, we invested R$75.9 million in information technology and systems. We are currently in the process of relocating our four data centers. Furthermore, in connection with our cooperation with CME, we intend to invest, over the next 10 years, approximately US$175 million to develop a new multi-asset platform. See BusinessCooperation with CME. In order to remain competitive, we must continue to improve and enhance functionality and accessibility of our systems, as well as the characteristics of our trading platforms, software, systems and technologies. If we are unable to continue to improve and enhance our systems, the brokers, clearing agents and financial institutions that use our platform could migrate to other preferable platforms and we would consequently be adversely affected.

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

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

The success of our business depends, in part, on our ability to maintain or increase the volume of transactions carried out and/or registered in our trading, clearing and settlement systems. We offer a variety of products and trading channels to brokers, clearing agents and to financial institutions. Our revenues could be materially adversely affected if we are unable to retain brokerage firms and/or participants that represent a significant portion of the volume of transactions carried out and/or registered in our trading, clearing and settlement systems or if the level of activity declines. Our revenues are highly dependent on the level of activity on our securities exchanges, including the volume and price of securities and derivatives traded, market capitalization of listed companies, and the number of brokerage firms and other financial institutions with access to our markets, among other factors. We have no direct control over these variables, which depend, among other things, on the attractiveness of the securities and derivatives traded on our exchange and of equity investments compared to other investments, as well as on our ability to be perceived as an attractive venue for the trading of these securities and derivatives when compared with other exchanges and trading platforms. These variables, in turn, are influenced by the overall economic conditions in Brazil, in Latin America and worldwide, in terms of (i) growth levels, liquidity and political stability, (ii) the regulatory environment for securities and derivatives, and (iii) activity and performance of global markets. Additionally, we may be more significantly affected by global crises and capital market crises than other companies in our sector, given that these factors directly affect the ADTV on our exchange, an activity that accounts for a significant proportion of our revenues. In December 2009, the ten most traded shares in the Bovespa segment accounted for 44.8% of the trading on our securities exchange. Taking into consideration the relative influence from the level of market activity of such companies on our revenues, if one or more of these companies is delisted or if the volume of their shares traded in the market decreases significantly, our revenues and results of operations may be adversely affected. Macroeconomic and regulatory factors that are beyond our control have tended to have a significant impact on this business and the volume of contracts negotiated. During late 2008 and 2009, the global financial services industry and securities markets experienced significant and adverse conditions, including significantly increased volatility, outflows of customer funds and securities, losses resulting from declining asset values, defaults on securities and reduced liquidity. Changes in the prices of common shares of public companies, lack of available credit, reductions in spending, the general slowdown of the global economy, exchange rate instability and inflationary pressure has, and may continue to, adversely affect, directly or indirectly, the Brazilian economy and securities market. In addition, financial institutions may be unable to renew, extend, or grant new lines of credit under economically favorable conditions, or may even be unable or unwilling to honor existing obligations. Decreases in the volume of negotiation of derivative contracts in our trading systems, especially exchange and interest rate future contracts, which are responsible for a significant portion of our revenues in the BM&F

12

business, may adversely affect our revenues and profitability, affecting our business, financial condition and financial results.

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

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

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

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

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

We intend to continue to explore acquisitions, investments and other strategic alliances. We may not be successful in identifying opportunities or in integrating the acquired businesses. Any such transaction may not produce the results we anticipate which could adversely affect our business and our stock price.
We intend to continue to explore and pursue acquisitions and other strategic opportunities to strengthen our business and grow our company, including the increase of our ownership interest in CME to 5.0%, which could help us penetrate new markets, offer new products and services, and develop or enhance our trading systems and

13

technologies. We may make acquisitions or investments or enter into strategic partnerships, joint ventures and other alliances. There is no guarantee that our efforts will be successful. We may not realize the anticipated growth and other benefits from strategic growth initiatives we have made or will make in the future and we may have to incur significant expenditures to address the additional operational and control requirements as a result of our growth, which may have an adverse impact on our financial condition and operating results. Furthermore, some of our partnership agreements might restrict our ability to seek strategic alliances with other relevant players in the market, preventing us from taking advantage of business opportunities presented by such players. See Business Material AgreementsCooperation with the CME Group.

The interpretation of Brazilian tax authorities on the effects of the conversion of BM&F and Bovespa into for-profit companies in 2007 may differ from our interpretation, which could result in material tax contingencies.
In response to a formal consultation presented by the Brazilian Exchanges Commission (Comisso Nacional de Bolsas), or CNB, the Brazilian tax authorities have indicated that the demutualization of not-for-profit exchanges is not permitted pursuant to current regulation since: (1) the section of the Brazilian Civil Code dealing with dissolution of not-for-profit organizations would prevent the transfer of assets and liabilities to for-profit corporations; and (2) only a legal entity organized as a corporation would be able to approve its spinoff, since there would be no legal provision authorizing not-for-profit organizations to implement a spin-off. Based on the opinion of counsel, we believe that the interpretation of the Brazilian tax authorities is not in accordance with the applicable laws. Therefore, we presented a similar formal consultation to the Brazilian tax authorities specifically relating to our demutualization, but the Brazilian tax authorities responded in a manner consistent with their response to the CNB and provided no additional information. Current or future interpretations by the Brazilian tax authorities regarding our demutualization may result in material tax contingencies, which could cause a material adverse effect on our results of operations and financial condition. See BusinessLegal and Administrative ProceedingsTax Claims.

b.

the direct or indirect controlling shareholder or controlling group

We do not have a controlling shareholder or controlling group of shareholders, which may lead to shareholder coalitions, control contests, shareholder activism, or similar other events correlated with the lack of a controlling shareholder or controlling group of shareholders. Ownership in our shares is widespread, and we currently do not have a controlling shareholder or controlling group of shareholders. As a result, we may be vulnerable to takeover bids, including a hostile takeover, and similar other disruptions correlated with lack of a controlling interest in our shares. If a successful bidder were to obtain control over a majority of our shares, there could be sudden and unexpected shifts in our policies and strategic plans, and our directors and officers could be replaced. Under our bylaws and the Novo Mercado listing regulation, a disposition of our control through either a single or a series of transactions, is subject to a condition precedent or dissolving condition requiring the acquirer of control to conduct tender offer to purchase all our shares, extending fair and equalitarian treatment to all shareholders, pursuant to deadlines and conditions prescribed by Brazilian Corporate Law, the applicable regulation and our bylaws. In addition, the lack of a person or group holding a controlling interest in our shares could negatively affect our decision making processes, as there may be instances where the shareholders are unable to gather sufficient affirmative or negative votes to meet the legally prescribed quorum to pass certain decisions at a shareholders meeting. Any sudden or unexpected change in management team or our policies and strategic plans, or any attempt at obtaining a controlling stake in our shares, and similar other disruptions could adversely affect our business and results of operations.

c.

our shareholders

Certain brokerage firms and other financial institutions that operate on our markets, agents and customers

14

are also our shareholders, which may create conflicts of interest with our other shareholders and with ourselves.
Some of our shareholders are financial institutions that operate on our markets, whose sources of revenues include brokerage activities, custody and settlement of securities, with respect to the Bovespa segment, and negotiation and clearing of derivatives, with respect to the BM&F segment. For this reason, there is a risk that certain shareholders may try to interfere with decisions for their own interests, through voting as a block in shareholders meetings or otherwise influencing our management to reduce the price of our services, which may adversely affect us. The relative volatility and illiquidity of the Brazilian securities market may substantially limit our shareholders ability to sell their shares at the price and time at which they wish to sell them. Investing in securities that trade on emerging markets, such as Brazil, often involves greater risk than investing in securit ies traded on more developed and mature international markets, and such investments are generally considered to be more speculative in nature. The Brazilian securities market is substantially smaller, less liquid, more concentrated and can be more volatile than major international securities markets. Highly active and liquid markets comparatively experience less volatility and enhanced order execution efficiency. As a result, the local market characteristics could substantially limit our shareholders ability to sell their shares at the price and time at which they wish to sell them, which in turn could negativ ely affect the market price of our shares. In addition, volatility could lead to substantial sales of our shares or to market perception that such sales may occur, which could result in further declines in the market price of our shares. Our bylaws include provisions aimed to protect share dispersion, which may hamper or delay transactions that may be of interest to our shareholders. Our bylaws contain provisions designed to avoid the concentration of our shares in the hands of a single or small number of shareholders, in order to provide for a more dispersed shareholders base. One such provision requires a shareholder or group of shareholders sharing similar interests, which becomes a holder of shares representing 15% or more of our capital stock, to carry out or file a tender offer to purchase all our outstanding shares within 30 days of the date of the date of purchase or event resulting in ownership interest in excess of the 15% threshold. Any such provision may hamper or prevent takeover attempts, and may discourage, delay or hinder a merger or acquisition transaction, including a transaction in which investors could receive a premium on the market value of their shares. d. our subsidiaries and affiliates Risk factors related to our subsidiaries and affiliates are the same as related to us.

e. our suppliers

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

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

A significant portion of our revenues is highly dependent on the trading of securities of a limited number of issuers. As of December 2009, the top ten stocks most actively traded on our stock exchange market (Bovespa segment) accounted for 44.84% of our total trading value. Given the relative importance of the market activity of these securities on our combined revenues, if one or more of these companies were to delist from our exchange or if the outstanding shares of one or more of these companies were to significantly decrease (including as a result of corporate restructuring, acquisition, merger or exchange for shares of a company that is not listed on our exchange), our combined revenues and operating results could be adversely affected.

Foreign investors.
We are highly dependent on the level of activity of foreign investors. In 2009, foreign investors accounted for 34.2% of the total volume traded on the Bovespa exchange. The Brazilian government may implement changes in the tax system that affect foreign investment in Brazil, including investors trading on our exchanges. For instance, in October 2009, in an effort to decrease the rate of appreciation of the real against the U.S. Dollar, the Brazilian government increased the IOF tax rate on inflow of foreign funds to invest in Brazilian securities from zero to 2.0%. In a related move, the IOF tax rate to newly issued ADRs was increased from zero to 1.5%. Such measures had a negative impact on our market (mainly our Bovespa segment), increasing the burden for foreign investments in Brazil. It also created a certain level of uncertainty and concerns for any additional measures the Brazilian government may implement. The market value of securities issued by Brazilian companies is affected to varying degrees by the inflow of capital from foreign investors. A decrease in the inflow of capital from foreign investors on our stock exchange may reduce its average daily trading value, which may have an adverse effect on us. g. for sectors of the economy in which the Company operates

We face significant competition in securities and derivatives trading, and we expect this competition to intensify in the future.
We face significant competition from foreign exchanges, particularly concerning trading with securities and derivatives, and we expect that this competition will intensify in the future. Our current and potential competitors are numerous and include stock markets, both organized and over the counter, in Brazil and abroad, and other commodities and futures exchanges. We compete with existing and new market participants in various aspects, including with respect to cost, quality and speed of trades, conduct of business, liquidity, functionality, ease of use and performance of trading systems, variety of products and services offered to the trading participants, and technological innovation. Entry of new competitors into our markets can also increase price competition and reduce margins in all of the existing securities and futures markets, including those in which we operate. In addition to traditional and new competitors, new technologies and the Internet may create environments that are favorable for replication of our business, redirecting market participants to these new environments. The current international stock market environment has encouraged the creation of new, alternative trading centers with different market structures and new business models that would be replicated in our market in the future. Wellcapitalized competitors in other markets, such as the U.S. and Europe, could attempt to expand their operations into our markets of operation. If we are not successful in promptly adapting to the structural changes in our markets, to technological and financial innovation and to other competitive factors, we could be unable to maintain or increase the volume of transactions carried out and/or registered on our trading, clearing and settlement systems, and our revenues, business, financial condition and operating results could be materially adversely affected.

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In our BM&F and Bovespa segments, our average rate per contract, or RPC, and trading fees margin, respectively, are subject to significant fluctuation due to a number of factors, and as a result you will not be able to rely on our average RPC or trading fees margin in any particular period as an indication of our future average RPC and future trading fees margin.
The average RPC in our BM&F segment, which impacts our operating results, is subject to fluctuation due to shifts in the mix of products traded, the trading venue and the mix of customers and the impact of our pricing structure. For example, we earn a lower RPC for interest rate trades denominated in reais with shorter maturity. We also earn lower RPC in reais for contracts where the fees are U.S. dollar denominated (such as FX futures) if the real appreciates against the U.S. dollar. Variations in each of these factors is difficult to predict and will have an impact on our average RPC in the relevant period. Because of this fluctuation, you may not be able to rely on our average RPC in any particular period as an indication of our future average RPC. The margin in our Bovespa segment, which impacts our operating results, is subject to fluctuation due to changes in the mix of customers and to the share of each market in the overall ADTV. For example, we earn a lower margin on day trades and on the trading from local institutional investors. Additionally, we charge higher fees on the forward and options market compared to cash market transactions. In addition, the revenues we earn from trading in our Bovespa segment is subject to fluctuation due to changes in the stocks prices, once we charge a percentage fee on the value traded, a decrease in the price of the stocks can reduce the value traded. Variations in each of these factors is difficult to predict and will have an impact on our average margin on value traded in the relevant period. Because of this fluctuation, you may not be able to rely on our average transaction margin in any particular period as an indication of our future average trading fees margin. h. the regulation of industries in which the company operates

We operate in a highly regulated industry and are subject to existing and future regulations and restrictions, and may be subject to penalty fines and other sanctions if we fail to comply with our legal and regulatory obligations.
We operate in a highly regulated industry and are subject to extensive regulation. Our industry is subject to broad governmental regulation and may be subject to increasing regulatory scrutiny. This regulation is designed to preserve the integrity of the securities market and of other financial markets and to protect the interests of investors. Our operations depend on the authorization of governmental agencies and on the continuity of this authorization. Our ability to comply with applicable laws and regulations is highly dependent on our ability to maintain adequate systems and procedures. The Brazilian Monetary Council (Conselho Monetrio Nacional), or CMN, and the CVM regulate Brazilian

stock and futures exchanges and have broad powers to audit, investigate and enforce compliance with their rules and regulations, as well as to impose sanctions in the event of non-compliance. In recent years, a number of regulatory changes that have been introduced have impacted our operations, including CVM Rule 461 in 2007 governing the organization, operation and dissolution of stock, futures and commodity exchanges and OTC markets. Any regulatory changes may have an adverse effect on us and on the current and future users of our services. For instance, regulatory authorities may implement changes that reduce the attractiveness of listing on our markets or the use of our services, or cause companies listed on our trading platform to migrate to alternative markets that may have more flexible trading or corporate governance rules. The loss of a substantial number of users or a reduction in the level of the trading activities on our exchange and OTC markets may have an adverse effect on us. Additionally, the Central Bank may adopt rules or procedures regarding the clearing and settlement of securities, and also require additional collateral for transactions executed occurring on our markets, which may result in changes to our existing clearing, settlement and risk control procedures or in higher costs to comply with these requirements, all of which may have an adverse effect on us. As a consequence of the recent international financial crisis, stricter rules on financial institutions are being discussed worldwide. If such rules are implemented abroad, the Central Bank and the CMN may also implement 17

part of these stricter rules in Brazil, which may impact our activities. The Central Bank and the CVM have broad administrative powers to fine, suspend or interrupt our activities. In the event of actual or alleged non-compliance with regulatory requirements, we may be subject to investigations, and administrative or legal proceedings, which may lead to substantial penalties and, in extreme cases, the cancellation of our authorization to act as a securities market operator. Any investigation or proceeding, regardless of the outcome, may result in substantial costs and may also adversely affect our reputation and, therefore, our results of operations.

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

Not applicable 4.2. Expectations that exposure to these risks will reduce or increase over time. We continually assess and weigh the risk factors to which we and our business are exposed, in particular those with potential to materially and adversely affect our business, financial condition and results of operations. With the aim of managing, controlling and mitigating these and other risk factors, we adopt practices for continuing pursuit of improvements to our infrastructure and services, which include (i) providing efficient, reliable and cost effective trading, clearing, settlement and other systems to markets which we operate and manage; (ii) strengthen ing and expanding our market data activities, for more nimble, accurate and cost effective retrieval and transmission of market data to vendors, market participants, investment research analysts, advisory services and, ultimately, the investment decisions of customer 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) implementin g our investor education programs, which include retail investors, local and foreign institutional investors; and (vi) implementing and enhancing compliance and surveillance activities. In addition, given that we act as central counterparty to ensure clearing and settlement of transactions carried out on equities markets, and provide clearing and settlement services to each of the markets we operate and manage, we adopt risk management and safeguard structures at each of our clearing facilities with th e aim of controlling and mitigating the risks inherent in these activities. For further information on risk management and safeguard structures , see the information under section 5 of this form. 4.3 List of arbitration proceedings, and court or administrative cases (classified by legal nature, i.e., labor, tax, civil law or other) having the Company or any subsidiary as a party, which (i) are not conducted under privilege of information; and (ii) are deemed to be potentially material for the Company or subsidiary. The Company and its subsidiaries are parties to administrative and court cases relative to matters of tax, labor and civil la w. Our provisions policy is as specified by the Brazilian Securities Commission (CVM) under Resolution No. 594 dated Septemb er 15, 2009. Given that the information presented herein in connection with court and administrative and arbitration proceedings include outcome assessments based on distinct criteria than those that are contemplated in CVM Resolution No. 594/09, the tabl es below include information about cases whose prospects for a defeat have been evaluated as remote, which therefore have not been reserved as contingent liabilities in our financial statements for periods preceding the date of this form.

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(I) Labor claims As of December 31, 2009, the Company and subsidiaries were parties to 219 (two hundred and nineteen) labor claims, which classify into two main groups: I Claims brought by former employees of the Company or subsidiaries. These refer to 69 labor cases (32% of the total) involving claims for salary differences (mostly related to overtime, salary equalization and health hazard allowance). In this group, 26 claims involve contingent liabilities of R$3,999,316.29, regarding which the prospects for defeat were evaluated as probable, whereas 43 claims involve contingent liabilities of R$12,594,464.44, where the prospects for defeat were evaluated as possible, as shown in the table below.
Party Company BVRJ BSM BBM TOTAL Number of claims evaluated as probable defeat 17 8 0 1 26 Contingent liabilities assessed as probable defeat 3,634,562.14 298,839,49 0 65,914.66 3,999,316.29 Number of claims evaluated as possible defeat 34 8 1 0 43 Contingent liabilities assessed as possible defeat 10,236,549.95 1,802,302.33 555,612.16 0 12,594,464.44

II - Claims brought by third parties (other than former employees). These refer to 150 claims (68% of the total) filed by third parties seeking to have the Company or a subsidiary (as co-defendant) held liable, either jointly with, or subsidiarily to, another party, on grounds that Precedent 331 of the Superior Labor Court (TST) is applicable. These claims substantially classify into three groups, as follows: a. 74 claims have been brought by former pit traders, who used to work on the exchange floor in our premises, against a number of brokerage firms and the Company. Based on evaluations by counsel, Management classifies the prospects for a defeat as remote, given that the rightful employers of these claimants are the brokerage firms, there being no valid legal grounds to justify their claim of liability due to indirect employment relationship with us, as the exchange floor was merely their place of work as traders for the brokerage firms that employed them. b. 49 claims have been brought by former employees of outsourced providers of cleaning and security services to the Company. These claimants allege to be owed severance payments by their former employers, i.e., Pires Servios Gerais a Bancos e Empresas Ltda. (cleaning services, now bankrupt) and Salvaguarda Servios de Segurana Ltda. (security services, which failed to answer and have been found indebted pursuant to judgments by default). As a result, the Company is susceptible of being found subsidiarily liable in 22 of these claims, which involve contingent liabilities of R$1,259,038.80 (the prospects for a defeat have been deemed probable). In another 27 claims, which involve contingent liabilities in the amount of R$1,125,570.95, the prospects for a defeat have been evaluated as possible.
Party Number of claims evaluated as probable defeat 22 Contingent liabilities assessed as probable defeat 1,259,038.80 Number of claims evaluated as possible defeat 27 Contingent liabilities assessed as possible defeat 1,125,570.95

Company

c. 27 claims have been brought by former employees of outsourced providers of IT and other services. The contingent liabilities concerning cases involving IT providers amount to R$10,009,159.43, whereas contingent liabilities related to case s involving other service providers amount to R$1,417,665.62. The prospects for a defeat in these cases have been evaluated as possible.
Party Company BVRJ TOTAL Number of claims evaluated as possible defeat 25 2 27 Contingent liabilities assessed as possible defeat 11,097,504.87 329,320.18 11,426,825.05

The Company makes accounting provisions for the amount involved in claims where the risk of the Company not prevailing is classified as probable. For this reason, the Company understands that the employment claims do not represent a material risk to its business.

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(II) Tax Cases II.1 BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) II.1.1)
Court of origin Stage (degree of jurisdiction) Filing date Litigating parties Case No. 2007.61.00.030994-8 4th Lower federal court of the judiciary subsection of So Paulo (SP) Appellate degree November 12, 2007 Plaintiff: Bolsa de Mercadorias & Futuros S.A. BM&F S.A. (merged with BM&FBOVESPA on May 8, 2008) Defendant: Brazilian Government Amounts, assets or rights at risk This is a declaratory action seeking a court decree recognizing the absence of taxation relationship permitting the government to charge the Additional Social Security 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 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 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 held the action valid. Prospects for defeat Impact in case of defeat Legal obligation Because the amounts being litigated are deposited with the court, in the event of a defeat on final judgment, the Company could lose the amount deposited, with no further impact. R$5,639,285.61

Purpose and principal related facts

Provisioned amount

(III) Civil law cases III.1 BM&FBOVESPA and BVRJ III.1.1)

Court of origin Stage (degree of jurisdiction) Filing date Litigating parties Case No. 2007.001167284-8 2nd lower business court of the judicial district of Rio de Janeiro (RJ) Appellate degree October 2, 2007 Plaintiffs: Naji Robert Nahas, Selecta Participaes e Servios S/C Ltda. and Cobrasol Companhia Brasileira de leos e Derivados Defendants: BVRJ and Bolsa de Valores de So Paulo BOVESPA (currently BM&FBOVESPA) Amounts, assets or rights at risk Purpose and principal related facts R$10,000,000,000.00 (claim for moral and actual damages) This is an action for damages (ordinary proceedings) in which plaintiffs seek to have BVRJ and the So Paulo stock exchange (formerly BOVESPA) sentenced to pay indemnity for moral and actual damages allegedly incurred as a result of certain stock trades late in the 1980s. Following the answers, replies and rebuttals, the lower court decision found against the plaintiffs. Both plaintiffs and defendants filed motions to clarify, which were partially granted. The plaintiffs next appealed the decision, which the Court of Appeals of Rio de Janeiro rejected. Remote 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

Prospects for defeat Impact in case of defeat

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level of the indemnity claimed by plaintiffs. Provisioned amount No amount has been provisioned.

III.1.2)
Case No. 96.0037050-8 22nd lower federal court of the judiciary subsection of So Paulo (SP) Appellate degree November 19, 1996 Plaintiffs: Rubens Taufic Schahin et Al. Defendants: BM&FBOVESPA, BVRJ, CVM, Indstrias de Chocolate Lacta S.A., Kraft Suchard Brasil S.A., Kibon Indstrias Alimentcias Ltda. et Al. Amounts, assets or rights at risk Indemnity for actual damages, if any, would be arbitrated in liquidation of award proceedings. The value originally attributed on the action was amended to R$109,518,846.03 (as of November 1996), which however is not reflective of the financial value intrinsic in the plaintiffs claim. This is an action for damages where the plaintiffs seek compensation based on the difference between the true value of the preferred shares of LACTA, of which plaintiffs allege to have been deprived, and the amount actually paid, in addition to loss of earnings (in the form of dividends not earned). The plaintiffs allege to have been compelled to sell their shares in an auction at the stock exchange, after the courts had annulled the decision of a shareholders meeting authorizing a share issuance in which plaintiffs purchased their equity interest in Lacta shares. Kraft filed counterclaim, seeking repayment of dividends previously paid. After the answers, replies and rebuttals, the lower court decision found the claim and counterclaim invalid ordering the plaintiffs and Kraft to bear loss of suit expenses, including fees of counsel. As a result, the plaintiffs and defendants Kraft, Silb Participaes, CVM and Philip Morris appealed the decision. In addition, BM&FBOVESPA and BVRJ filed adhesive appeal seeking to increase the arbitrated fees of counsel. The Regional Federal Court rejected the plaintiffs appeals and granted 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, regarding which the parties are expected to filed counter-arguments of appeal. Remote 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. No amount has been provisioned.

Court of origin Stage (degree of jurisdiction) Filing date Litigating parties

Purpose and principal related facts

Prospects for defeat Impact in case of defeat

Provisioned amount

III.2 BM&FBOVESPA III.2.1)

Court of origin Stage (degree of jurisdiction) Filing date Litigating parties Case No. 5830019927258890 11th lower civil court of the judicial district of So Paulo (SP) First degree of jurisdiction June 26, 1992 Bankruptcy estate of Spread Commodities Mercantil e Corretora de Mercadorias Ltda. Creditor and party of interest (in the action): BM&FBOVESPA (as successor of BM&F after the merger). Amounts, assets or rights at risk Purpose and principal related facts Membership certificate in BM&F (then a mutualized non-profit entity, later demutualized and merged into BM&FBOVESPA). Spread Commodities Mercantil e Corretora de Mercadorias Ltda. originally filed for corporate reorganization. Given the failed process, the court declared the company bankruptcy. The receiver-manager applied to have the membership certificate impounded for sale, but at that time such certificate had already been cancelled due to the holders default in paying maintenance fee. Nonetheless, given the application of the receiver-manager and the fact that BM&F had been demutualized and merged into BM&FBOVESPA, the court ordered the equivalent in shares of the Company impounded. Just before the release of this Reference

21

Form, we were notified that following our petition and that of the Public Prosecution Office, the judge quashed the impound order. The receiver-manager filed interlocutory appeal against such decision setting the impound order aside, which is currently pending judgment. Prospects for defeat Impact in case of defeat Provisioned amount Possible The bankrupt estate would have to be refunded for the market value of the membership certificate. No amount has been provisioned.

III.2.2)
Case No. 583.00.2005.204334-9 11th lower civil court of the judicial district of So Paulo (SP) Appellate degree November 30, 2005 Plaintiff: Welinton Balderrama dos Reis Defendant: BM&FBOVESPA Amounts, assets or rights at risk Purpose and principal related facts Membership certificate in BM&F (then a mutualized non-profit entity, later demutualized and merged into BM&FBOVESPA). This is an action seeking to annul a decision of the board of directors of BM&F (then a mutualized entity), which excluded the plaintiff from membership due to default related to membership fees, in addition to seeking to regain possession of the membership certificate (pursuant to then current bylaws) as adjusted for inflation between 1990 and 1999. Following the answer, reply and rebuttal, the lower court decision held the action invalid. While the appellate court rejected the plaintiffs appeal, it recognized his right to have possible credits against BM&F calculated and established. Both parties filed motions to clarify; ours was partially granted, whereas the plaintiffs was rejected. As our second motion to clarify (the latter decision) was rejected, we filed interlocutory appeal, which is currently pending decision. The plaintiff in turn filed both a special appeal and extraordinary appeal against the appellate court decision. Possible Payment of plaintiff's credits resulting from elimination from BM&F membership (BM&F was then a mutual entity), which we estimate to correspond to R$866,963.32. No amount has been provisioned.

Court of origin Stage (degree of jurisdiction) Filing date Litigating parties

Prospects for defeat Impact in case of defeat

Provisioned amount

III.2.3)
Administrative Wrongdoing Actions Nos. 1999.34.00020289-0 and 1999.34.00019665-0; Popular Actions Nos. 1999.34.00.009903-7, 1999.34.00.010188-7, 1999.34.00.014390, 1999.32660-4 and 1999.34.00.012074-3 Court of origin 22nd lower civil court of the Federal District judiciary section Stage (degree of jurisdiction) Filing date Litigating parties First degree of jurisdiction Between April 20 and June 25, 1999 Plaintiffs: The Federal Public Prosecution Office, Plaintiff in the administrative wrongdoing actions; Luiz Carlos Tanaka and Arnaldo Saldanha Pires, Plaintiffs in the popular actions; Defendants: Banco Marka S/A, Banco FonteCidam S/A, BM&FBOVESPA, Edemir Pinto (then Managing Director of BM&F, a mutualized entity, currently Chief Executive Officer of BM&FBOVESPA), Antnio Carlos Mendes e Barbosa and Paulo Roberto Garbato (former officers of BM&F, then a mutualized entity) et Al. Amounts, assets or rights at risk Refunding the Brazilian Treasury for alleged losses from certain trades by the two defendant banks: losses supposedly caused by Banco Marka estimated at R$1,047,225,000.00 (base date January 1999); losses supposedly caused by Banco FonteCidam estimated at R$519,820,000.00 (base date January 1999). The administrative wrongdoing actions also claim 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 futures which

Purpose and

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principal related facts

were agreed between the Central Bank and the two banks (Marka and FonteCidam) 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 entity, later demutualized, merged into, and succeeded by BM&FBOVESPA), and its officers at the time appear as co-defendants for allegedly having participated in structuring the transactions, which supposedly benefitted the Exchange for being allowed to forgo with internal operations related to the clearing and settlement process. The answers, replies and rebuttals followed. The court granted requests for expert examination to be carried out. In addition, given the identity of purposes found in these actions, the expert examination will be accepted as valid in each case. The expert examination has yet to begin. Remote In case of a defeat, a proportionate part of the award for refund; penalty fine; ban on transactions with the Government; ban on tax incentives. No amount has been provisioned.

Prospects for defeat Impact in case of defeat Provisioned amount

III.2.4) Case No. 000.00.612656-1

Court of origin Stage (degree of jurisdiction) Filing date Litigating parties Amounts, assets or rights at risk Purpose and principal related facts 3rd lower civil court of the judicial district of So Paulo (SP) Appellate degree September 18, 2000 Plaintiff: Capitnea Distribuidora de Ttulos e Valores Mobilirios Ltda. Defendant: BM&FBOVESPA 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 filed against BM&F (then a mutualized entity, later demutualized, merged into, and succeeded by BM&FBOVESPA) that seeks to quash a board decision dated December 22, 1999, which approved the charge of trading fees ( emolumentos de prego) from holders of rights to operate as Commodity Broker and Clearing Participant Member, including holders undergoing extrajudicial liquidation, court-administrated reorganization or bankruptcy proceedings, which are not permitted to operate. After the answer, reply and rebuttal, the lower court decision entered held the action invalid, recognizing the charge as lawful. The plaintiff appealed, we responded, and the Court of Appeals rejected the appeal. The plaintiff then filed motion to clarify, which was recently rejected. Remote In the event of defeat, beyond the annulment of the access fees charged, the decision would establish a negative precedent adversely affecting the collection of fees from market participants undergoing extrajudicial liquidation, courtadministrated reorganization or bankruptcy proceedings. No amount has been provisioned.

Prospects for defeat Impact in case of defeat

Provisioned amount

4.4 Describe the legal, administrative and arbitration proceedings that are not confidential (i.e., not being conducted in camera) to which the Company or its controlled companies are party and where the opposing parties are directors or former directors, controlling persons or former controlling persons or investors of/in the Company or its controlled companies informing: On the date on which this Reference Form was disclosed there were no legal, administrative or arbitration proceedings that were not confidential to which the Company or its controlled companies were party and where the opposing parties are directors or former directors, controlling persons or former controlling persons or investors of/in the Company or its controlled companies.

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4.5. In relation to confidential proceedings (i.e., proceedings being conducted in camera) to which the Company or its controlled companies are party and that were not disclosed in items 4.3 and 4.4 above, analyze the impact in case of loss and inform the amounts involved: On the date on which this Reference Form was disclosed there were no material confidential proceedings to which the Company or its controlled companies were party that were not disclosed in the above items. 4.6. Describe repetitive or connected legal, administrative or arbitration proceedings based on similar facts or causes of action that are not confidential and that taken together would be material to which the Company or its controlled companies are party, specifying whether they are employment, tax, civil or other type of proceedings and informing: (I) Employment Proceedings None. (II) Tax Proceedings None (III) Civil Proceedings (III.1) Repetitive Cases I Plaintiffs, courts and process no.

1) Civil Appeal no. 994.09.324431-6 (formerly 666.842-4) Court of Appeals of So Paulo - Plaintiff: Carlos Rodrigues Jnior; 2) Ordinary Action Process no. 2008.125496-6 16th Civil Court of the Central Courthouse of So Paulo Plaintiff: Paulo Roberto Ferreira de Sena; 3) Appeal no. 994.09.032357-2 (formerly 630.937-4) Court of Appeals of So Paulo Plaintiff: Jurandir Pinheiro de Castro; 4) Appeal no. 994.09.032149-9 (631.187-4) Court of Appeals of So Paulo Plaintiff: Walter Silva Jnior; 5) Ordinary Action Process no. 2008.136416-9 2nd Civil Court of the Central Courthouse of So Paulo Plaintiff: Egemp Gesto Patrimonial Ltda.; 6) Ordinary Action Process no. 2008.129504-4 12th Civil Court of the Central Courthouse of So Paulo Plaintiff: Esborial Participaes e Empreendimentos Ltda; 7) Ordinary Action Process no. 2008.129505-7 9th Civil Court of the Central Courthouse of So Paulo Plaintiff: Reginaldo Goncales da Silva; 8) Ordinary Action Process no. 2008.130365-7 8th Civil Court of the Central Courthouse of So Paulo Plaintiff: Solidez Corretora de Cmbio, Ttulos e Valores Mobilirios Ltda; 9) Ordinary Action Process no. 2008.125495-3 9th Civil Court of the Central Courthouse of So Paulo Plaintiff: Roberto Duprat; 10) Ordinary Action Process no. 2008.129506-0 40th Civil Court of the Central Courthouse of So Paulo Plaintiff: Jair do Nascimento; 11) Ordinary Action Process no. 2008.130363-1 10th Civil Court of the Central Courthouse of So Paulo Plaintiff: Mrio Srgio Nunes da Costa; 12) Ordinary Action Process no. 2008.130364-4 15th Civil Court of the Central Courthouse of So Paulo Plaintiff: So Paulo Corretora; 13) Ordinary Action Process no. 2008.130362-9 9th Civil Court of the Central Courthouse of So Paulo Plaintiff: Aureum Corretora.; 14) Ordinary Action Process no. 2009.1017857 39th Civil Court of the Central Courthouse of So Paulo Plaintiff: Banex Distribuidora de Ttulos e Valores Mobilirios; 15) Ordinary Action Process no. 2008.243345-0 1st Civil Court of the Central Courthouse of So Paulo Plaintiff: Carmine Enrique Filho; 16) Ordinary Action Process no. 2009.197829-0 12th Civil Court of the Central Courthouse of So Paulo Plaintiff: Future Premium; 17) Ordinary Action Process no. 2008.212130-9 14th Civil Court of the

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Defendant Amounts, assets or rights involved Main facts

Central Courthouse of So Paulo Plaintiff: Granleo Comrcio e Indstria de Sementes Oleagiosas e Derivados; 18) Ordinary Action Process no. 2009.197370-1 12th Civil Court of the Central Courthouse of So Paulo Plaintiff: Marcelo Ferreira da Costa; 19) Ordinary Action Process no. 2009.197372-7 9th Civil Court of the Central Courthouse of So Paulo Plaintiff: Mario Cesar Nassif da Fonseca; 20) Ordinary Action Process no. 2009.197375 20th Civil Court of the Central Courthouse Plaintiff: Miguel Jurno Neto; 21) Ordinary Action Process no. 2009.106268-2 37th Civil Court of the Central Courthouse Plaintiff: Pedro Sylvio Weil; 22) Ordinary Action Process no. 2008.243341-9 37th Civil Court of the Central Courthouse Plaintiff: Renato Enrique; 23) Ordinary Action Process no. 2008.212131-1 10th Civil Court of the Central Courthouse Plaintiff: Shan Ban Chun; 24) Civil Appeal no. 994.09.317709-3 (formerly 652.302-4) Court of Appeals of So Paulo - Plaintiff: Carlos Eduardo Chamma Lutfalla et al.; 25) Ordinary Action Process no. 2009.115872-8 8th Civil Court of the Central Courthouse of So Paulo - Plaintiff: Cludio Coppola Di Todaro; 26) Civil Appeal no. 994.09.300971-3 (formerly 697.897-4) Court of Appeals of So Paulo Plaintiffs: Rivale Representaes Ltda., Marisa Lojas Varejistas ltda. and Dcio Goldfarb; 27) Ordinary Action - Process no. 2007.264023-3 2nd Civil Court of the Central Courthouse of So Paulo Plaintiff: Ernesto and Ike Rahmani; 28) Civil Appeal no. 994.07.018222-9 (formerly 527.322-4) Court of Appeals of So Paulo Plaintiff: Terramar Navegao Ltda. BM&FBOVESPA, then BM&F, and former Associao BM&F (either or both, depending on the case) Seat on former BM&F These are ordinary actions in which the Plaintiffs claim the occurrence of irregularities at the 52nd Extraordinary General Meeting of former BM&F, held with a view to approving the demutualization and spinoff of BM&F, a civil association. They also challenge the value of seats and the relevant conversion into shares which did not reflect the results retained since 1994. At the time they applied for an injunction to nullify the EGM or alternatively/secondarily to nullify the decision that set the new value of the seats, ordering the Defendants to refund the losses allegedly caused to the Plaintiffs in view of their nonparticipation in the adjustment of the seats resulting from the latest special balance sheet. The injunctions were not granted in the lower or appellate courts, which did not hinder the regular holding of the EGM on 20 September 2007. In the following cases, a decision was entered not granting the applications made by the Plaintiffs: Carlos Rodrigues Junior item 1; Jurandir Pinheiro de Castro item 3; Walter Silva Junior item 4; Esborial Participaes e Empreendimentos item 6; Reginaldo Goncales da Silva item 7; Roberto Duprat item 9; Aureum Corretora item 13; and Solidez Corretora item 8; Carlos Eduardo Lutfalla item 24; Cludio Di Todaro item 25; Rivale Representaes et al. item 26; Terramar Navegao item 28; Welinton Balderrama item 29; Banex Distribuidora de Ttulos e Valores Mobilirios item 14; Marcelo Ferreira Costa item 18; and Future Premium item 16. The actions that have already been judged and appealed await judgement, except for: (i) appeal submitted by Esborial Participaes e Empreendimentos (item 6) not accepted because it was not submitted in a timely manner and (ii) appeal submitted by Terramar Navegao (item 28) which was denied by the Court of Appeals while upholding the sentence against it which decision was appealed to the Supreme Court (STJ) and subsequently there was an appeal against the decision not admitting such appeal to the Supreme Court (STJ), awaiting

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Practice that caused such contingent liability Likelihood of loss Analysis of impact in case of loss

Amount provisioned (III.2) Repetitive Cases II Plaintiffs, courts and process no.

judgement. Alleged irregularities occurred at the 52nd Extraordinary General Meeting of former BM&F, the agenda of which was to approve the demutualization and spin-off of BM&F, a civil association, and the value of seats and the relevant conversion into shares in BM&F S.A. Remote Given the current context, the Company understands that a judgement against it would result in compensation for losses and damages since the annulment applications no longer apply as it is impossible to return to the previous status quo. Considering the multiple factors for calculation, the Company also understands that in the unlikely event of a judgement against it, the amount of compensation should be set in a legal decision that establishes the parameters therefor without which it is not possible to estimate the value of any loss. No amount has been provisioned.

Defendant Amounts, assets or rights involved Main facts

1) Civil Appeal no. 994.09.320191-2 (formerly 664.375-1) Court of Appeals of So Paulo - Plaintiff: Lawrence Pih; 2) Ordinary Action Process no. 2008.155286-2 37th Civil Court of the Central Courthouse of So Paulo Plaintiff: Andr Arantes; 3) Civil Appeal no. 994.09.289521-0 (formerly 682.429-4) Court of Appeals of So Paulo - Plaintiff: Chao em Ming.; 4) Ordinary Action Process no. 2009.113283-6 13th Civil Court of the Central Courthouse of So Paulo Plaintiff: Claudio Monteiro da Costa; 5) Ordinary Action Process no. 2009.113286 23rd Civil Court of the Central Courthouse of So Paulo Plaintiff: Fernando Alexandre Esborial ; 6) Ordinary Action Process no. 2009.113284-9 2nd Civil Court of the Central Courthouse of So Paulo Plaintiff: Henrique S. Filho; 7) Ordinary Action Process no. 2009.135484-1 17th Civil Court of the Central Courthouse of So Paulo Plaintiff: Jos Ginaldo de Souza; 8) Civil Appeal no. 994.09.276741-8 (formerly 690.145-4) Court of Appeals of So Paulo Plaintiff: Seeich Abe. BM&FBOVESPA and former Associao BM&F. Seat on former Bolsa de Mercadorias de So Paulo - BMSP These are actions brought against BM&FBOVESPA and former Associao BM&F seeking recognition of the ineffectiveness of provisions contained in that certain partial spin-off Registration and Justification entered into in September 2007 by and between former BM&F and then BM&F S.A. The Plaintiffs allege that because the provisions intended to terminate seats on former BM&F before implementation of the merger with BMSP such provisions were incompatible with the Letter of Intent entered into in 1991 by and between BM&F and BMSP. All decisions entered so far (Lawrence Pih item 1; Andr Arantes item 2; Chao em Ming item 3; Cludio Monteiro da Costa item 4; and Seeich Abe item 8) were against the applications made by the Plaintiffs. Awaiting judgement of the appeals by the Court of Appeals of So Paulo. Alleged irregularities in the partial spin-off Registration and Justification entered into in September 2007 by and between former BM&F and then BM&F S.A. because since the provisions contemplated the termination of seats on former BM&F before implementation of the merger thereof with BMSP such provisions were incompatible with the Letter of Intent entered into in 1991 by and between BM&F and BMSP.

Practice that caused such contingent liability

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Likelihood of loss Analysis of impact in case of loss Amount provisioned

Remote Shares (or the market value thereof) equal to the ones granted to owners of a seat on BM&F. No amount has been provisioned.

4.7. Describe other material contingent liabilities not encompassed by the preceding items. On the date on which this Reference Form was disclosed the Company and its controlled companies did not have further contingent liabilities in addition to the legal or administrative proceedings mentioned in item 4.3 above. 4.8 In relation to the rules of the country of origin of a foreign issuer and the rules of the country in which the securities of a foreign issuer are held in custody if different from those of the country of origin, identify the following: Not applicable.

5. Market risks 5.1. Discussion of key market risks to which the registrant is exposed both quantitatively and qualitatively, including in particular foreign exchange and interest rate risks.

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

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

27

restrict our ability to access the international financial markets, and lead to anti-inflationary policies, which could affect our business and the market price of our shares.

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

Exchange rate fluctuations could adversely affect our company and the market price of our shares.
Over the past four decades the Brazilian government implemented a number of economic plans and different exchange rate policies, including sudden devaluations, periodic mini-devaluations (during which the timing of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating rate system. From time to time, there were significant fluctuations in Brazilian real exchange rate to U.S. dollar and other currencies. Depreciations of the Brazilian real relative to the U.S. dollar could create additional inflationary pressures in Brazil and lead to increases in interest rates, which would negatively affect the Brazilian economy as a whole, the trading activities on our stock and contract markets and the market price of our shares. Additionally, the depreciation of the Brazilian real could significantly impact the cost of our debt denominated in U.S. doll ars and negatively affect the market value of our securities portfolios, with similar effects for our borrowers. In contrast, appreciation of the Brazilian real against the U.S. dollar and other currencies could result in deterioration of Brazilian cu rrent accounts denominated in foreign currencies and a slowdown in export growth. Depending of the circumstances, dep reciation or appreciation of the Brazilian real could materially and adversely affect the conditions for growth of the Brazilian econom y, and our growth plan, our business, financial condition and results of operations. There have been from time to time significant fluctuations in the Brazilian real exchange rate to the U.S. dollar and other currencies. In 2002 the Brazilian real depreciated 52.3% against the U.S. dollar, partially due to political uncertainties a bout the presidential election and the effects of a global economic slowdown. Although the Brazilian real exchange rate appreciated against the U.S. dollar by 11.8%, 8.7%, 17.2% and 25.5% in 2005, 2006, 2007 and 2009, respectively, in 2008 it depreciated by 31.9% primarily due to the credit crunch and global economic downturn. We can give no assurances that the Brazilian real will depreciate or appreciate against the U.S. dollar in the future. As of December 31, 2009, the PTAX selling rate compiled and released by the Central Bank was R$1.74/US$1.00. In 2009, approximately 51% of our revenues from derivatives, or 16% of the overall revenues from trading, were denominated in U.S. dollars, and correlated primarily with transactions in Forex futures and options, in particular where the underlying is the exchange rate for the Brazilian real against the U.S. dollar. Given that we charge fees in U.S. dollars for these contracts and options, appreciation of the Brazilian real against the U.S. dollar could discourage trading in these contracts and options, which would adversely affect our revenues and results of operations.

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

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Risks related to our financial investments

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

Interest rate risk

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

Floating positions. Given the advisability of, and need for securing immediate liquidity with as little as possible mismatch
resulting from fluctuations in interest rates, our policy on financial investments calls for financial assets and liabilities to track either floating or pegged rates. The chart in subsection 5.2(d) of this Form, under the heading Risk Factors (consolidated), sets forth consolidated data on investments in bank deposit certificates (CDBs, which track the interbank deposit rate), and in government bonds, repo transactions, and units of open-ended funds benchmarked to the interbank deposit rate (DI) or the base interest rate (Selic rate). This strategy mitigates the impact eventual fluctuations in interest rate may have on the fair or present value of our financial assets and liabilities.

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

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

Exchange rate risk

Exchange rate risk correlates with fluctuations in the exchange rate for the purchase price of equipment and materials, the selling price of products and the price of transactions in financial instruments (which prices are denominated in foreign currency) as fluctuations in the exchange rate could negatively impact the equivalent value in Brazilian reais. In addition to receivables and payables denominated in foreign currency, we also record foreign currency liabilities consisting of third-party collaterals deposited by foreign investors to secure the settlement of transactions carried out on our markers, as well as our own financial resources located abroad. As of December 31, 2009, our net exposure to exchange rate risk amounted to R$16,930 thousand. However, per the percentage data shown in the chart in subsection 5.2(d) of this Form, below, under the heading Risk Factors (consolidated), we consider the impact of possible materialization of risk in these cases would not be material.

Positions in inflation and gold derivatives

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

Our role as Central Counterparty (CPP) to clearing and settlement transactions

Through our clearing facilities (derivatives, FX, debt securities and equities clearinghouses) we act as central counterparty (CPP) to ensure multilateral clearings and settlements for the derivatives market (including futures, forward, options and swap markets), and the spot FX market, the government debt securities markets (cash, forward, and repo and securities lending markets) and, in addition, for the equities markets (including cash, forward, options, futures and securities lending markets) and the private debt securities markets (cash and securities lending markets). We are directly or indirectly exposed to important credit risks, which are intrinsic to our role as central counterparty to clearing and settlement transactions an d correlate with the roles of the following participants: Clearing participants, clearing agents and participant brokerage firms that operate at our clearinghouses; Customers of participant brokerage firms that operate at our clearinghouses; and Financial institutions that are participants in our FX clearinghouse. A default by a clearing participant, clearing agent, brokerage firm or participant in our FX clearinghouse could correlated with factors as a bankruptcy, intervention, extrajudicial liquidation, lack of liquidity or operating failure, among other factors beyond our control. While our clearing facilities are not directly exposed to market risks because they do not carry net long or short positions in

29

any contract or financial asset traded on our markets, default by a market participant would entail our exp osure to market risks associated with a third-party position which our clearinghouse would be required to clear and settle, as it is pledges to do in any transaction where a participant acts as intermediation agent. Market risks that correlate with exposure to thirdparty positions include: The market price of stocks and stock indices traded on our equities markets; The Brazilian real to U.S. dollar exchange rate; The interbank rate denominated in Brazilian reais; U.S. dollar-denominated Brazilian yield curve (cupom cambial) e The market prices of agricultural commodities. The potential value at risk associated with these and other market risk factors essentially correlate with the value of open positions in default, and on the nature of collateral posted as part of the risk management mechanisms adopted by our clearinghouses. Typically, the prospects for materialization of risk associated with events of default are positively correlated with the following factors: Heightened volatility in market prices and rates, in particular those that define the value of securities and contracts cleared and settled in our systems; Heightened degree of financial leveraging; Uncertainties over the macroeconomic conditions in Brazil and across the world; Disruption of the liquidity flows in local and international markets; Developments in the local or international credit markets, which affect institutions the Central Bank considerers systemically important; Sudden political changes in Brazil or in advanced market economies; Catastrophic events, such as natural disasters or war. Acting in the capacity of central counterparty, we absorb the risks of the counterparties in -between a trade transaction and its clearing and settlement, carrying out multilateral activities for financial settlement and clearing of securities and other financial assets, such that in the event of default we may have to resort to certain established safeguard mechanisms, or in extreme situations we may have to resort to our own net assets. 5.2. a. Market risk management policy: risks against which hedge protection is sought

1) Risks related to our financial investments

Our policy for investment of cash balances recommends that we focus on lower-risk investment alternatives, which translates into substantial portions invested in Brazil government bonds or repurchase agreements whose underlying are government bonds from our portfolio, which we originally acquire through investment funds or directly in the market. In any event, in most cases our policy is one of concentrating financial investments in conservative investment funds, whose portfolios substantially correlate with Brazil government bonds, which track the Selic rate or the interbank deposit (CDIs).

2) Our role as Central Counterparty (CCP)

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

1) Risks related to our financial investments

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

2) Our role as Central Counterparty (CCP)

Hedging strategies we use are designed to cover potential losses related to our role as central counterparty (CPP) to clearing and settlement transactions. These strategies correlate primarily with potential market risks intrinsic in our central counterparty activities and aimed to protect us against these risks. The safeguard structure of a clearing facility represents a set of

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resources and mechanisms we may use to hedge potential loss arising from failed delivery or settlement by one or more market participants. The formation of these safeguard structures is contemplated under article 4 of Law No. 10,214 dated March 27, 2001, which governs activities performed by clearing and settlement facilities within the realm of the Brazilian payment system and the capital markets. At BM&FBOVESPA a risk management safeguard structure includes these safeguard mechanisms, a set of policies, standards, procedures and systems and practices. c. hedging tools used for protection

1) Risks related to our financial investments

Derivative financial instruments in which we transact include futures contracts and options based on the local interest rate, which are recognized at their market value. These financial instruments make part of the portfolios of exclusive funds, which were consolidated and are user with the aim of covering exposure to fixed rate risks by acquiring a similar position in floating rate (CDIs) contracts. The table below sets forth our hedged position as of December 31, 2009.
Year ended December 31,2009 Benchmark Interest rate
(in thousands of Brazilian reais)

Market price
(in thousands of Brazilian reais)

Accumulated result
(in thousands of Brazilian reais)

Futures contract short position

LTN (National Treasury Bills) Net position

(37,757) 38,240 483

(39,937) 40,333 396

(810) 819 9

2) Our role as Central Counterparty (CCP)

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

Derivatives Clearinghouse
Collaterals pledged by participants of the derivatives clearinghouse (futures contracts and other derivatives);
Pledged collaterals Brazil government bonds Bank letters of guarantee Stocks Bank Deposit Certificates (CDBs) Gold Cash collateral BM&F FoF (FIC Banco BM&F) BB-BM&F Financial Investment Fund ( FIF BB-BM&F) Rural Commodity Notes (CPRs) Total Year ended December 31,2009
(in thousands of Brazilian reais)

Year ended December 31,2008

(in thousands of Brazilian reais)

53,754,858 1,479,341 3,351,593 1,307,762 60,865 555,106 95,595 343 60,605,463

89,760,722 3,690,835 2,678,991 2,161,736 319,831 327,644 78,130 29,049 829 99,047,767

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

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

participant fund (year-end positions amounting to R$1,126,126 thousand in 2009 versus R$1,145,908 thousand in 2008) was set up as a mutual fund to ensure the settlement of collateralized transactions in the event of default by one or more clearing participants and holders of access permits granting settlement and trading rights. The minimum contribution clearing participants are required to make to the fund vary in correlation to the type of settlement right s (direitos de liquidao , or DL) granted under the access permit issued to any particular clearing participant ( R$5,500 thousand, R$6,500 thousand and R$7,500 thousand for Type 1,Type 2 or Type 3 settlement rights, respectively. The minimum contribution commodity brokerages are required to make to the fund amounts to R$6,000 for holders of

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permits granting full trading rights, and R$4,000 for holders of permits granting restricted trading rights (for trading in interest rate contracts, exchange rate contracts, equity index contracts). Participants holding rights to trade in derivatives cleared and settled at our derivatives clearing facility contribute minimum R$3,000 thousand. The minimum contribution for certain traders we define as Locals amounts to R$1,600 thousand both in the case of locals holding full trading rights and holders of permits granting restricted rights to traded in interest rate contracts, exchange rate contracts and equity index contracts. Finally, permit holders with rights to trade in other futures contracts cleared and settled at our derivatives clearing facility contribute minimum R$1,000 thousand;
Contributed assets Brazil government bonds Bank letters of guarantee Bank Deposit Certificates (CDBs) Stocks BM&F FoF (FIC Banco BM&F) Gold Cash collateral Total contributions Minimum membership contributions from clearing agents and trading participants Surplus contributions Year ended December 31,2009
(in thousands of Brazilian reais)

Year ended December 31,2008

(in thousands of Brazilian reais)

859,804 156,200 81,310 20,098 1,781 582 6,351 1,126,126 (1,009,500) 116,626

863,451 160,730 98,683 17,647 4,177 1,220 1,145,908 (1,026,700) 119,208

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

Clearing Participant special fund (Fundo especial dos membros de compensao) Derivatives Clearinghouse.

This special clearing fund (R$40,000 thousand as of December 31, 2009 and 2008) was set up to ensure settlement of transactions, regardless of the type of contract being settled;

Clearing Fund (Fundo de liquidao de operaes) Derivatives Clearinghouse. R$378,113 thousand as of December 31,

2009 versus R$387,236 as of December 31, 2008) was set up to ensure settlement of transactions registered and accepted at the derivatives clearinghouse in the event of default by one or more clearing agents, if other safeguard mechanisms run out of assets with which to ensure clearing and settlement and completed. The minimum individual contributions amount to R$2.000 thousand, R$3.000 thousand and R$4.000 thousand, for holders of access permits granting Type 1, Type 2 and Type 3 settlement rights. Moreover, each clearing participant is required to pay R$500 thousand by designated holders of trading rights for whose activities the clearing participant undertakes certain responsibilities.
Contributed assets Brazil government bonds Bank letters of guarantee Bank Deposit Certificates (CDBs) Stocks Gold Cash collateral BB-BM&F Financial Investment Fund ( FIF BB-BM&F) Total contributions Minimum membership contributions from clearing agents and trading participants Surplus contributions Year ended December 31,2009
(in thousands of Brazilian reais)

Year ended December 31, 2008

(in thousands of Brazilian reais)

314,304 33,000 20,200 6,634 2,925 1,050 378,113 (319,500) 58,613

324,979 30,000 18,560 7,763 1,928 4,005 1 387,236 (333,500) 53,736

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

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Equities Clearinghouse
Collaterals pledged by participants of the equities clearinghouse (stocks, equity securities and private debt securities);
Pledged collaterals Brazil government bonds Stocks Foreign government bonds Bank Deposit Certificates (CDBs) Bank letters of guarantee Cash collateral Gold BB-CBLC Financial Investment Fund ( FIF BB-CBLC) Other Total Year ended December 31, 2009
(in thousands of Brazilian reais)

Year ended December 31, 2008

(in thousands of Brazilian reais)

15,665,732 17,208,344 1,944,896 997,944 296,442 247,477 2,476 8,179 65,884 36,437,374

10,185,946 9,101,835 1,219,499 467,649 239,625 101,927 25,958 6,140 132,692 21,481,271

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

Settlement Fund (Fundo de liquidao) - Equities Clearinghouse. As of December 31, 2009, the settlement fund has

contributed assets worth R$322,268 thousand (versus R$350,209 thousand in the prior year) as a result of contributions from clearing and settlement agents for assurance of completion of clearing and settlement transactions;
Contributed assets Brazil government bonds BM&FBOVESPA investments in exclusive investment funds, Brazil government bonds and repo transactions Cash collateral Total contributions Year ended December 31, 2009
(in thousands of Brazilian reais)

Year ended December 31, 2008

(in thousands of Brazilian reais)

322,261 7 322,268

190,629 159,580 350,209

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

FX Clearinghouse
Collaterals pledged by FX market participants;
Collaterals pledged Brazil government bonds Cash collateral Total contributions Year ended December 31, 2009
(in thousands of Brazilian reais)

Year ended December 31, 2008

(in thousands of Brazilian reais)

3,766,090 3,766,090

3,550,223 174,060 3,724,283

Participation fund (Fundo de participao) FX Clearinghouse. The participation fund (year-end positions amounting to
R$154,056 thousand in 2009 versus R$140,584 thousand in 2008) was set up to cover financial losses resulting from risks related to the banking operations in our FX clearinghouse. Bank contributions may be in the form of currencies or financial instruments;
Contributed assets Brazil government bonds Year ended December 31,2009
(in thousands of Brazilian reais)

Year ended December 31,2008

(in thousands of Brazilian reais)

154,056

140,584

Operating Fund FX Clearinghouse. The operating fund was set up to cover losses from failed executions and participant
clerical errors during the trading cycle. R$50,000 thousand; As of December 31, 2009 and 2008 the fund held contributed assets worth

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

from mid-2009, this fund was discontinued. Contributions to the guarantor fund formerly included deposits in cash and assets made by us and participants to cover financial losses resulting from mistakes or clerical erro rs during the trading cycle, as from exchange rate fluctuations between a trade on the spot U.S. dollar pit and the final acceptance by the bank for which the trade was intended. As of June 30, 2009, when we shut down the trading floor and the spot pit, t his fund was discontinued. Total contributed assets then amounted to R$27,759 (as of that date our contributions totaled R$15,000);
Contributed assets Brazil government bonds Bank letters of guarantee Cash collateral BM&FBOVESPA contribution Total contributions Year ended December 31, 2009
(in thousands of Brazilian reais)

Year ended December 31, 2008

(in thousands of Brazilian reais)

13,812 240 480 15,000 29,532

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

Debt Securities Clearinghouse

Collaterals pledged by participants in the bonds market;
Collateral pledged Brazil government bonds Year ended December 31,2009
(in thousands of Brazilian reais)

Year ended December 31,2008

(in thousands of Brazilian reais)

832,125

1,423,484

Operating Fund Debt Securities Clearinghouse. The operating fund was set up to cover losses from failed executions and
participant clerical errors during the trading cycle. As of December 31, 2009 and 2008 the fund held contributed assets worth R$40,000 thousand;

Pursuant to article 5 of Law No. 10,214 dated March 27, 2001, and article 19 of Central Banks Circular Directive No. 3,057 dated August 31, 2001, which govern and regulate activities by clearing and settlement facilities within the realm of the Brazilian payment system and the capital markets, as of December 31, 2009 our Debt Securities clearinghouse operated with especially allocated net assets worth R$22,373 thousand versus R$20,277 thousand in the prior year. d. guidelines adopted in managing these risks

1) Risks related to our financial investments

Our risk management policy calls for cash balances to be invested in low-risk investment alternatives, earning floating or fixed interest rates. This strategy mitigates the impact eventual fluctuations in interest rate may have on the fair or present value of our financial investments. The table below sets forth information on market risk factors correlated with exposure of financial instruments as of December 31, 2009, which we use to structure financial investment strategies:
Risk factors (Consolidated) Risk factors CDI (interbank deposit certificates) Fixed rate (fixed interest rate) USD (Brazilian real exchange rate to U.S. dollar) Inflation Gold Risk A fall in the market price for CDIs A rise in fixed rate Appreciation of Brazilian real rate against U.S. dollar A decline in the inflation rate A fall in the market price for Gold 2009 Percentage 98.03% 1.27% 0.50% 0.00% 0.20% 100.00%

2) Our role as Central Counterparty (CCP)

The safeguard structures we adopt at our clearing facilities are based to a large extent on a loss sharing model known as

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

1) Risks related to our financial investments

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

2) Our role as Central Counterparty (CCP)

Such as previously discussed, our clearing facilities do not carry net long or short positions in any contract or financial asset traded on our markets. In addition, these clearing facilities do not trade in other markets seeking to hedge positions. f. organizational risk management and control structure

1) Risks related to our financial investments

Our policy on financial investments was established by our board of directors. Management routinely monitors our financial investments and compliance with the policy.

2) Our role as Central Counterparty (CCP)

Risk management policies adopted at our clearing facilities are established by our market risk committee use in line with the guidelines and framework set by our board and executive officers. In May 2009 we established the Risk Committee as a board advisory body whose primary responsibilities include monitoring economic and market developments, and evaluating and accessing market, liquidity, credit and systemic risks related to markets we operate and manage, substantially through a strategic and structural approach. The risk committee is composes of four members, including the chairman and independent directors. Currently appointed members of our risk committee include Arminio Fraga Neto (independent director and chairman of our board), Fbio de Oliveira Barbosa (independent director), Julio de Siqueira Carvalho de Arajo (director) and Luis Stuhlberger (director). Under our bylaws, the market risk committee is a body whose members include the officer in charge of risk management and the clearing and depository facilities, the chief operations officer and the settlement officer among other officers. The responsibilities of the market risk committee include (i) assessing the domestic policy and macroeconomic conditions and their impact on the markets we operate; (ii) determining the models we use for margin requirement calculation and for control of the intraday risk underlying transactions carried out in our markets; (iii) setting parameters for these models, in particular stress

35

scenario parameters for each type of risk factor; (iv) establishing the list of acceptable collaterals, and the collateral valuation methods, usage limitations and risk-based haircuts; and (v) other research and analyses. Our risk management officer is responsible for executing the risk management policies set by the market risk committee in connection with our activities as central counterparty to multilateral clearing and settlement transactions, and responsible also for continually monitoring policy suitability vis--vis current market conditions. The risk management officer reports to our officer in charge of risk management and the clearing and depository facilities. As of December 31, 2009, our risk management department included 38 active employees. g. suitability of the operating structure and internal controls for assessment of the effectiveness of the risk management policy

1) Risks related to our financial investments

We routinely monitor, and periodically evaluate of our operating structure and internal controls to ensure they are suitable and effective.

2) Our role as Central Counterparty (CCP)

Such as discussed in the preceding item, the decision-making structure related to risk management processes associated with our role as central counterparty to multilateral clearing and settlement transactions involves a number of professionals at different levels (strategic, management, operational), from different departments and practice areas, and is instrumental in prompting awareness and adherence to the policies guidelines and standards, in addition to spurring objective and sharp evaluations of effectiveness. 5.3. Disclosure on whether there has been in the last year any significant change regarding the primary market risks to which the registrant is exposed, or to the adopted risk management policy

1) Risks related to our financial investments

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

2) Our role as Central Counterparty (CCP)

There have been no significant changes to the key risk factors related to our activities as central counterparty (CCP) to clearing and settlement transactions. 5.4. Additional information deemed to be material.

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

6. Company history 6.1. Company incorporation: Date: December 14, 2007, is the date of incorporation of T.U.T.S.P.E. Empreendimentos e Participaes SA , the company which originated BM&FBOVESPA. In its current configuration, BM&FBOVESPA SA Securities, Commodities and Futures Exchange is the result of the integration between the Brazilian Mercantile & Futures ExchangeBM&F SA and BOVESPA Holding SA, as approved by their respective Extraordinary General Meetings of Shareholders held on May 8, 2008. Type: Joint stock company

Country of incorporation: Brazil 6.2. Report Company term The Company is established for an indefinite period of time.

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6.3. Brief Company history BM&FBOVESPA is the company that resulted from the merger of BM&F and BOVESPA Holding, as approved by their respective Extraordinary General Meetings of Shareholders held on May 8, 2008. We present below a brief history of both exchanges, as well as of BM&FBOVESPAs. BM&F Segment History The path of achievements and success led by BM&F was started in January 1986. During the 1990s, it strengthened its position in the domestic market and consolidated itself as the major derivatives trading center in Latin America. In order to narrow its relationship with foreign exchanges and regulatory agents, it created a representative office, BM&F USA Inc., in New York City in 1993. Among other activities, BM&F USA Inc. is responsible for analyzing potential strategic alliances. With the purpose to provide an integrated set of services, in 2002 BM&F acquired a controlling interest in the Rio de Janeiro Stock Exchange (BVRJ) and coordinated the creation of the Brazilian Commodities Exchange. Also in 2002, it introduced the Foreign Exchange Clearinghouse, whose implementation was made possible in the wake of the new Brazilian Payment System. In 2004, the activities of both Government Bond Clearinghouse and BM&F Settlement Bank were also inaugurated, thus broadening the strategic position occupied by BM&F. The process for the BM&F demutualization was initiated in 2007, in preparation for its initial public offering. The equity rights of its former members were detached from the access rights and converted into share participation. In September 2007, BM&F enter into an acquisition agreement with General Atlantic LLC pursuant to which General Atlantic agreed to acquire from BM&F shareholders 10% of its capital stock. After this acquisition, BM&F business began to be conducted seeking a long-term benefit for its shareholders. One month later, in October 2007, BM&F and the CME Group started a partnership involving a cross-investment arrangement and the creation of an electronic network linkage for the routing of orders for the products traded in their respective trading environments. The scope of this partnership was extended in February 2010, as described in items 10.3(b) and 10.4(b) of this Reference Form. In November 30, 2007, BM&F shares started trading on the Sao Paulo Stock Exchange (BOVESPA) Novo Mercado segment under ticker BMEF3 and, on August 20, 2008, they were converted into BM&FBOVESPA stock (under ticker BVMF3) at the ratio of 1:1. BOVESPA Segment History BOVESPAs origin dates back to 1890, when the Bolsa Livre was created. Beginning in the 1960s, BOVESPA became a mutualized not-for-profit stock exchange, and through the years it continued to operate as a mutual organization until its demutualization. Also in the 1960s, when new legislation was enacted to regulate the Brazilian capital markets, the name Sao Paulo Stock Exchange was adopted. The Bovespa Index (Ibovespa) was launched in 1968 with the purpose to serve as an indicator of the average market behavior. The integrity of its historical series has been maintained since its inception, without any methodological modifications. In the 1970s, an automated system was implemented for the registration of trades, and price quotations and other information on traded securities also began to be promptly disseminated in electronic form. By the late 1970s, BOVESPA pioneered the trading of stock options on the Brazilian capital markets. In the early 1980s, two fundamental factors contributed decisively to the BOVESPA development: The creation of mutual funds, including equity-oriented funds and pension funds, and the transition from a physical to an electronic booking system for the securities custody service, which contributed to more efficient settlement procedures and greater market liquidity. In the early 1990s, BOVESPA introduced a computer assisted trading system, or CATS, developed by the Toronto Stock Exchange, which operated in conjunction with the open outcry trading sessions, using remote terminals installed in the facilities of its broker members. In mid-1990s, the electronic trading system was replaced by an advanced system developed by the then Paris Bourse (currently NYSE Euronext). In addition, the Brazilian Clearing and Depository Corporation (CBLC) was organized to operate a modern structure for securities depository and clearing services, which permitted banking institutions to operate as clearing agents.

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In 2000, for purposes of consolidating all Brazilian equity trading on a single exchange, BOVESPA led an integration program with the other eight Brazilian stock exchanges, thus becoming the only exchange operator for equities in Brazil accessed by brokers all over the country. During the integration process, BOVESPA acquired the Settlement and Custody Company (CLC), which was then in charge of settlement and custody services for the securities traded on the Rio de Janeiro Stock Exchange (BVRJ). In 2000, BOVESPA also launched three special listing segments with additional corporate governance requirements: The Novo Mercado and Corporate Governance Tiers 1 and 2. In 2001, it launched BOVESPA FIX, an electronic platform for the trading of fixed-income securities, and in 2002, with the incorporation of SOMA, an OTC market, it began operating and later concentrated all trading on the organized Brazilian equity market. In September 2005, BOVESPA closed its trading floor and became a fully electronic market. On August 28, 2007, the BOVESPA demutualization was approved, and all of BOVESPAs and CBLCs equity holders became BOVESPA Holding shareholders. In October 2007, the BOVESPA Holding shares were first traded on the Novo Mercado segment, under ticker BOVH3, and on August 20, 2008, they were converted into BM&FBOVESPA stock (under ticker BVMF3) at the ratio of 1:1.42485643. BM&FBOVESPA History The Company was incorporated on December 14, 2007, with the name T.U.T.S.P.E. Empreendimentos e Participaes SA and the purpose to participate in other companies as partner or shareholder, in Brazil or abroad (holding company). On April 8, 2008, the Company shareholders decided to change its name to Nova Bolsa (New Exchange) SA. On May 8, 2008, the integration of the activities developed by both BM&F and BOVESPA Holding was implemented through the following measures: (i) Merger of BM&F into Nova Bolsa SA and (ii) merger of the BOVESPA Holding shares into Nova Bolsa SA, with its subsequent name change to BM&FBOVESPA SA Securities, Commodities and Futures Exchange. With the integration of their activities, BM&F and BOVESPA have created one of the largest exchanges in the world by market capitalization, the second exchange in the Americas and the leading exchange in Latin America. BM&FBOVESPA offers much more than a trading venue, as it also acts on the listing of companies and funds, on the trading of equities, securities and derivatives, on price dissemination, on market index production, on system and software development, and on technology enhancements. BM&FBOVESPA provides a fully integrated business model with four clearinghousesfor equities, derivatives, securities and FX spot marketand a complete custody system. Trading is fully electronic. BM&FBOVESPA provides its clients with a wide range of transactions which include equity purchase and sale, market risk transfer (hedging), market and/or asset price arbitrage, investment diversification and allocation, and position leveraging. BM&FBOVESPA effectively contributes to the Brazilian economic growth. 6.4. CVM registration date On August 12, 2008, the Brazilian Securities and Exchange Commission (CVM) granted BM&FBOVESPA a public company registration. Approval for BM&FBOVESPAs registration as a management entity for the securities market was given on June 18, 2009, by means of SMI Circular Letter #018/2009. 6.5. Major corporate events, such as mergers, acquisitions, spin-offs, changes or acquisitions of control, changes or acquisitions of major assets, which have affected the Company or any of its controlled companies

As reported in items 6.1 and 6.3 above, in its current configuration BM&FBOVESPA is the result of the merger between BM&F and BOVESPA Holding. Their merger occurred as follows:

Nova Bolsa SA;

The BM&F Extraordinary General Meeting of Shareholders held on May 8, 2008, approved the merger of BM&F into

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

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total shares issued by BOVESPA Holding into Nova Bolsa SA; The Nova Bolsa SA Extraordinary General Meeting of Shareholders held on May 8, 2008, approved the merger of the total shares issued by BOVESPA Holding into Nova Bolsa SA. Also, the name Nova Bolsa SA was changed to BM&FBOVESPA SA Securities, Commodities and Futures Exchange. It should be noted that, during these first steps, the total shares issued by BOVESPA Holding were merged into Nova Bolsa SA, but the BOVESPA Holding legal status was not extinguished then, as it continued to exist as a wholly owned subsidiary of BM&FBOVESPA. In addition to BOVESPA Holding, the Sao Paulo Stock Exchange and the CBLC also underwent the following corporate restructuring: The Sao Paulo Stock Exchange Extraordinary General Meeting of Shareholders held on August 29, 2008, approved the merger of the Sao Paulo Stock Exchange into BOVESPA Holding; The BOVESPA Holding Extraordinary General Meeting of Shareholders held on August 29, 2008, approved the merger of the Sao Paulo Stock Exchange into BOVESPA Holding, which led to the extinction of the Sao Paulo Stock Exchange. Also, the name BOVESPA Holding was changed to Sao Paulo Stock ExchangeBVSP (New BVSP); The New BVSP Extraordinary General Meeting of Shareholders held on November 28, 2008, approved the merger of the New BVSP into BM&FBOVESPA; The CBLC Extraordinary General Meeting of Shareholders held on November 28, 2008, approved the merger of the CBLC into BM&FBOVESPA; The BM&FBOVESPA Extraordinary General Meeting of Shareholders held on November 28, 2008, approved the merger of the New BVSP and CBLC into BM&FBOVESPA, which led to the extinction of both merged companies. As a result of these corporate restructurings, the companies Brazilian Mercantile & Futures ExchangeBM&F SA, Bovespa Holding SA, Sao Paulo Stock Exchange SA and Brazilian Clearing and Depository Corporation (CBLC) ceased to exist and were all merged into BM&FBOVESPA SA Securities, Commodities and Futures Exchange. 6.6. Bankruptcy proceeding No bankruptcy and/or judicial or extrajudicial recovery proceedings have been filed against the Company. 6.7. Other information deemed relevant by the Company There is no further relevant information regarding this item 6 which was not contemplated above.

7. Business 7.1. Overview of the business of the Company and its subsidiaries

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

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

39

overseeing activities by market participants and all trading, clearing and settlement transactions performed within the realm of the markets we manage.

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

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

BM&F USA Inc.

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

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

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

BM&FBOVESPA Superviso de Mercados (BSM), a market surveillance entity.

BM&FBOVESPA Superviso de Mercados (BSM) was established in 2007 as a not-for-profit and financially autonomous functional entity, with its own budget, infrastructure and specialized employees, to perform oversight activities in the stock market, ensuring market integrity, enhanced investor protection and sound market practices. BSM has been conceived and implemented to operate in accordance with the principles and standards set under CVM Instruction No. 461/07, of the Brazilian Securities Commission, pursuant to best recommended international standards for stock markets oversight and private auditing, and in keeping with the internationally accepted public regulatory and standard-setting framework for excellence in equities markets. Then, starting from 2008, with the integration of the primary Brazilian stocks and derivatives exchanges, Bovespa and BM&F, under BM&FBOVESPA, the core activities of BSM were extended to encompass also the roles of guardian and regulator for the commodities and futures markets, such that it is currently the oversight and regulatory entity for all the markets we operate. CVM Instruction 461/07 requires that we establish enforcement mechanisms to ensure compliance with the rules and standards set by that regulatory agency and BSM, as well as with applicable regulations and legislation, by identifying and punishing illegal trading or market behavior and other unlawful practices tending to circumvent or breach the regulatory framework, or to jeopardize market security, transparency and credibility. BSMs mission is thus one of ensuring efficient protection of investors by enforcing the regulatory framework, as required by the CVM, facilitated by us and expected by investors and market participants.

40

In performing its oversight and regulatory roles, BSM uses and manages multiple mechanisms, including the Investor Compensation Mechanism (Mecanismo de Ressarcimento de Prejuzos), or MRP, as originally contemplated in CVM Instruction 461/07, and as an alternate to similar mechanisms previously adopted by Bovespa (through an investor guarantee fund) and by BM&F (through a segregated investor compensation reserve). The Investor Compensation Mechanism was established as a fund whose sole purpose is to give investors a refund mechanism for losses arising from intermediary improper actions or failures, which is set into motion through claim processes which, if ultimately held valid, result in the losses being refunded within limits set under applicable rules and legislation.

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

BVRJ is an inactive stock exchange. It has signed a protocol of intent with the state government of Rio de Janeiro which contemplates proposed alternatives to strengthen the local financial market. 7.2. Operating segment included in the most recent consolidated full year financial statements i. Products sold and services offered

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

Clearing houses for the BM&F segment

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

41

Clearinghouse can originate from private trading on the OTC market or from online trading through our Sisbex electronic system. The BM&F Settlement Bank performs an important supplementary role for the operation of our three clearinghouses and risk management systems. Through the BM&F Settlement Bank, these clearinghouses can promptly access the intraday Central Bank credit facility, which mitigates possible liquidity risks, particularly when it is necessary to access customer collateral and/or liquidate government securities pledged as collateral. In addition, the BM&F Settlement Bank provides market participants, in particular commodity brokers and clearing agents, with services and solutions designed to facilitate efficient and cost-effective settlement processes and management of collaterals, assets and securities under custody.

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

Custody system for agribusiness securities. Through our Agribusiness Securities Custody Registration System (Sistema de Registro de Custdia de Ttulos do Agronegcio), or SRCA, we provide custody of rural product notes, or CPRs, of

farming certificates of deposit and related farming warrants, or CDAs and WAs, agribusiness credit bills, or LCAs, agribusiness credit certificates, or CDCAs, agribusiness receivables certificates, or CRAs, and other agribusiness securities. These securities are registered in our SRCA system to trade on the Brazilian Commodities Exchange. Certain of these securities may also be pledged as collateral for transactions registered in the Derivatives Clearinghouse systems. In the future, we may also accommodate physical delivery of certain agribusiness futures through agribusiness securities registered in our SRCA system. This added capability is expected to improve trading in agricultural commodity derivatives.

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

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

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

Registration services for OTC transactions

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

Primary sources of revenues

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

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

Registration fees.
Clearinghouses.

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

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

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Physical delivery fees.

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

Financial and commodity derivatives

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

Volumes traded and revenue per contract

The volumes traded in the BM&F segment in 2009 reached daily average of 1.52 million, a 3.3% drop year-on-year from 2008, primarily due to 16.4% and 8.7% falls in volumes traded in FX and stock-index contracts, respectively. These declines in turn were counterbalanced by a 7.0% rise in average daily volume traded in BRL interest rate contracts, to 843.5 thousand from 788.7 thousand previously. The average daily volume traded in 2008 was 1.57 million, down 9.6% from the prior year. Average revenue per contract (RPC) in the BM&F segment amounted R$1.365 in 2009, down 10.3% year-on-year. The drops in RPC for 2008 and, to a lesser extent, for 2009 were due in part to the transition to the new pricing policy implemented in February 2009, and for a while increased the RPC for 2008 thus affecting comparability. Between 2007 and 2008, RPC climbed 24.7% year-on-year, from R$1.22 to R$1.53, primarily as a result of the changes in our pricing policy and the depreciation of the Brazilian real to U.S. dollar exchange rate, as the fees for certain contracts of are set in U.S. dollars or referenced to U.S. dollars. In addition, at year-end in 2007 the fees for all derivatives contracts had been adjusted to offset the levy of PIS and COFINS taxes on our revenues.

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On a year-on-year comparison of 2009 versus 2008, these revenues declined due to the slump in volumes traded in derivatives (except for BRL interest rate contracts) and the drop in revenue per contract (except for USD interest rate and exchange rate contracts). The tables below set forth data on evolution of average daily traded volumes and average revenues per contract for the periods indicated, by group of derivatives contracts.
Average Daily Traded Volume ADTV Exchange Equities Commodities rate OTC market Web trading

Year

Interest rate BRL

Interest rate USD 87,877 94,281 78,298 7.3% -17.0%

ADTV
(In number of contracts)

2007 2008 2009 2008/2007 2009/2008

988,112 788,.665 843,480 -20.2% 7.0%

472,995 534,922 447,093 13.1% -16.4%

111,973 87,632 80,015 -21.7% -8.7%

10,062 14,916 10,236 48.2% -31.4%

11,485 12,447 9,273 8.4% -25.5%

57,764 40,478 52,637 -29.9% 30.0%

1,740,268 1,573,342 1,521,032 -9.6% -3.3%

Year

Interest rate BRL 0.950 1.141 0.979 20.1% -14.2%

2007 2008 2009 2008/2007 2009/2008

Interest rate USD 0.965 1.283 1.357 32.9% 5.8%

Average revenue per contract RPC Exchange Equities Commodities rate 1.859 2.065 2.161 11.1% 4.6% 1.501 2.145 1.620 42.9% -24.5% 3.195 3.587 2.307 12.3% -35.7%

OTC market 2.111 2.355 1.655 11.5% -29.7%

Web trading 0.054 0.162 0.176 200.8% 8.5%

ADTV
(In Brazilian reais)

1.224 1.527 1.365 24.7% -10.6%

In the period between 2008 and 2009 participation in volumes traded in derivatives by type of investor changed primarily as follows: volumes from trading by financial institutions fell to 45% from 48% previously; the order flow from foreign investors increased to 20% from 10% of the consolidated volume one year earlier; volumes from institutional buyers rose to 24% from 23% in the prior year. For comparison, in the period between 2007 and 2008 participation in volumes traded in derivatives by type of investor changed primarily as follows: volumes from trading by financial institutions fell to 48% from 49% previously, whereas the order flow from foreign investors increased to 19% from 17% of the consolidated volume for the prior year. In the two-year period between 2007 and 2009, participation in the consolidated volume traded in derivatives by type of investor shows the order flow from foreign investors increased considerably, whereas the volumes from financial institutions fell. Growth in volumes traded by foreign investors speaks of the significant development and stature achieved by the domestic derivatives markets and, in particular, of the consistently surging order flow from high frequency traders. The table below sets forth additional data on participation in volumes traded by type of investor.
Year 2007 2008 2009 2008/2007 2009/2008 Institutional buyers 22.63% 22.60% 24.26% -0.03 p.p. 1.65 p.p. Foreign investors 16.86% 18.79% 20.02% 1.92 p.p. 1.23 p.p. Retail investors 9.15% 7.97% 7.63% -1.18 p.p. -0.34 p.p. Financial institutions 49.16% 47.60% 45.46% -1.56 p.p. -2.14 p.p. Corporate investors 2.13% 2.90% 2.53% 0.77 p.p. -0.37 p.p. Central Bank 0.06% 0.15% 0.11% 0.08 p.p. -0.04 p.p.

BRL interest rate derivatives. These comprise futures contracts and options based on the local interest rate, in addition to inflation-indexed derivatives, meaning contracts based on local inflation indices. The average revenue per contract (RPC) in these cases varies based on time to expiration or maturity. The underlying in the most actively traded contract in this group is the interbank deposit rate (depsito interfinanceiro), or DI. As a result, DI futures are also the most liquid derivative contract in the segment. DI futures basically allows for trading in the fixed interest rate most commonly used in the financial market for different periods of time. DI futures are very important for the Brazilian financial system and are often traded as a hedging mechanism for debt obligations under loans and financing arrangements, or to hedge obligations referenced to Brazilian government securities, or to leverage positions or in arbitrage strategies. Options on DI futures and options on DI index (or IDI) are also very popular amongst our customers for permitting more sophisticated hedging strategies.

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The tables below set forth data on average daily traded volumes (ADTV) and average revenues per contract (RPC) for BRL interest rate futures, which also reflect the different fee rates based on maturity, as applicable.
BRL interest rate futures, by maturity (2007) BRL interest ADTV(*) RPC(**) rate st 1 maturity 53,723 0.211 2nd maturity 55,133 0.447 3rd maturity 98,617 0.676 4th maturity 57,105 0.818 5th maturity 723,533 0.991 Total 988,112 0.950 BRL interest rate futures, by maturity (2008) BRL interest ADTV(*) RPC(**) rate st 1 maturity 80,073 0.293 2nd maturity 80,611 0.555 3rd maturity 80,459 0.802 4th maturity 34,597 1.038 5th maturity 513,748 1.121 Total 789,488 1.140 BRL interest rate futures, by maturity (2009) BRL interest ADTV(*) RPC(**) rate st 1 maturity 113,905 0.233 2nd maturity 123,265 0.432 3rd maturity 88,302 0.529 4th maturity 51,905 0.814 5th maturity 466,104 1.063 Total 843,480 0.979

__________________________ ( ) (

* ADTV - Average daily traded volume **) RPC Average revenue per contract

Average daily trading volume for 2009 went up 7.0% year-on-year, whereas average revenue per contract fell to R$0.979 from R$1.141 in 2008 due mainly to greater concentration on trades in shorter-term contracts, from which we derive lower RPC as these contracts are charged at lower fee rates, which is shown in the tables above. Average daily trading volume for 2008 had fallen 20.1% year-on-year, whereas RPC had risen to R$1.141 from R$0.950 in 2007, primarily as a result of the changes in pricing policy started in the second half of 2008, such as discussed above. As of December 2009 the most active investors in these types of contracts included financial institutions, institutional buyers and foreign investors, with shares of 50.3%, 30.2% and 18.0% of the volume, respectively. FX derivatives. These encompass futures contracts based on the Brazilian real to U.S. dollar exchange rate and the Brazilian real to Euro exchange rate, in addition to options bases on the Brazilian real to U.S. dollar exchange rate. The fees we charge on these transactions are based on the exchange rate for the U.S. dollar, such that fluctuations in the currency rates affect our average revenue per contract. The most actively traded contracts in this group are US dollar futures, which do not permit settlement through physical delivery, rather requiring the loss/gain (as determined on the basis of the Brazilian real to U.S. dollar exchange rate (PTAX) compiled and disclosed daily by the Central Bank) to be cash-settled upon expiration. Investors typically trading in these contracts include bank treasurers, fund managers and non-resident investors, in addition to trading and other companies engaging in import and export activities. For the most part these trades are sought to hedge receivables and debt obligations denominated in U.S. dollars, or in arbitrage opportunities that may appear in other currency markets or to leverage positions. Options on U.S. dollar futures and options on spot U.S. dollar are very liquid contracts as well and are frequently used as part of the currency hedging strategies designed by our customers. Average daily trading volume for 2009 went down 16.4% year-on-year, whereas average revenue per contract climbed to R$2.161 from R$2.065 in 2008. This high in RPC correlates mainly with the depreciation of the average exchange rate between the two periods, given that the fee rates for these contracts are based on the U.S. dollar, whereas the fall in volumes was partially counterbalanced by the increase in high frequency trading, which in December 2009 accounted for 4.4% of the volume from exchange rate contracts, despite high frequency traders enjoying a 70% fee discount under the 2008 revised pricing policy. Average daily trading volume for 2008 had gone up 13.1% year-on-year, whereas average revenue per contract had climbed to R$2.065 from R$1.859 in 2007, which highs were also due to the changes in pricing policy and the depreciation in the exchange rate for the U.S. dollar, both in the second half of 2008. As of December 2009 the most active investors in these types of contracts included financial institutions, foreign investors and institutional buyers, with shares of 45.7%, 29.0% and 17.1% of the volume, respectively. USD interest rate derivatives. These encompass futures based on the local U.S. dollar interest rate, on Brazil Global Bonds or on U.S. Treasury Notes. Futures based on the local U.S. dollar interest rate consist of futures on the spread between the local interbank deposit rate and the exchange rate fluctuation, or ID versus USD spread futures contract ( futuro de cupom cambial), which may be traded either directly as a futures contract or pursuant to a structured transaction under a forward rate agreement. A FRA strategy permits

45

the customer to combine in a single transaction the buying and selling of a short position in the underlying spread with the buying and selling of a long position in the same underlying, so as to meet its own operating requirements. The average revenue per contract for these futures varies based on time to expiration and the actual Brazilian real to U.S. dollar interest rate. Average daily trading volume for 2009 fell 17.0% year-on-year, whereas average revenue per contract climbed to R$1.357 from R$1.283 in 2008. In 2008 the average volume had risen 7.3% year-on-year, while RPC had climbed to R$1.283 from R$0.965. As of December 2009 the most active investors in these types of contracts included financial institutions, foreign investors and institutional buyers, with shares of 69.3%, 15.3% and 13.6% of the volume, respectively. Index-based derivatives. These encompass futures contracts based on the Bovespa Index, or Ibovespa, and the IBrX-50, or Brazil 50 Index, in addition to options on Ibovespa-based futures. Ibovespa-based futures is the third most liquid derivative traded on BM&F segment and an efficient, cheap and highly liquid alternative for investors seeking to hedge long positions in listed stocks, in particular in bear market periods. It is also an attractive investment alternative for investors seeking to bet on a bullish trend in the stock market. In the case of index-based derivatives we charge trading fees at a fixed rate, instead of a rate based on the index points. The average revenue per contract will vary in correlation with day trading volumes and the order flow from high frequency traders, as these enjoy a 70% discount on the regular fee rates. Average daily volume traded in 2009 fell 8.7% from the year before, while average revenue per contract dropped to R$1.620 from R$2.145 in 2008 primarily due to increased high frequency volumes. High frequency traders make use of computer programs to enter large orders, with the computer algorithm deciding on aspects of the orders, such as timing, price, and quantity. Trading in index-based derivatives accounted for 23.9% of the volume traded in the year to December 2009. In 2008 it had dropped 21.7% from the prior year, while the RPC had climbed to R$2.145 from R$1.501 in 2007. As of December 2009 the most active investors in these derivatives included foreign investors, institutional buyers and retail investors, with shares of 38.3%, 26.6% and 18.7% of the volume, respectively. In August 2009, the Commodity Futures Trading Commission, or CFTC, granted approval for us to offer and sell in the United States full-sized and mini-sized futures contracts and options based on the Ibovespa (or Bovespa Index). Commodity derivatives. Our offerings of commodity derivatives include futures contracts based on Arabica coffee, Conillon coffee, livestock, feeder cattle, soybean, ethanol, corn, crystal sugar, cotton and gold, in addition to options on these futures. The average revenue per commodity derivative contract (RPC) varies in correlation to the contract combination making up the volume traded in any particular period, as for some of them we charge fees at a rate set in Brazilian reais, whereas other of these derivatives are charged at rates set in U.S. dollars. Average daily volume traded in 2009 fell 31.4% from the year before, while average revenue per contract dropped to R$2.307 from R$3.587 in 2008. In 2008 volumes had climbed 48.2% year-on-year, whereas average revenue per contract had increased to R$3.587 from R$3.195 in the earlier year, which increase was due primarily to exchange rate depreciation, as the fees for a number of these derivatives is set in U.S. dollars. As of December 2009 the most active investors in these derivatives included corporate investors, retail investors and financial institutions, with shares of 37.7%, 36.9% and 13.7% of the volume, respectively. As with our financial derivatives, and despite the important growth trend of the last few years, the market for commodity derivatives was significantly affected by the deleveraging process that took place in the wake of the global financial meltdown. This 31.4% year-on-year fall in average daily volume traded in 2009 was due mainly to 47% slump in volumes traded in derivatives based on livestock, in addition to drops of 20.6% and 25.3% in volumes traded in coffee and corn, respectively. A highlight for the quarter to December 2009, the average daily volume traded in derivatives based on corn soared 71.4% yearover-year, to 2.0 thousand average daily contracts, while having surged 38.3% quarter-on-quarter. In either case, we believe must of this strong performance is due to the launch in September 2008 of cash-settled corn futures contracts. Our action plan designed to strengthen the commodity derivatives market include the launch of other cash-settled commodity futures, such as ethanol futures for example, and an educational program for farmers and producers in the agribusiness sector.

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Mini contracts. Mini contracts are derivative contracts that typically represent 20% of the equivalent full-sized contracts. Most our mini contract offerings consist of derivatives based on stock indices and forex futures. Changes in average revenue per type of mini contract correlates with the changes in RPC for the equivalent full-sized derivative contract. Average daily volume traded in 2009 went up 30.0% year-on-year, while the average revenue per contract climbed to R$0.176 from R$0.162 in the earlier year. This climb in RPC was in line with the variation for the equivalent full-sized derivative contracts, with emphasis for contracts based on stock indices and FX derivatives. Damping down this climb in RPC however were the surging high frequency flows (trading fees are charged from high frequency traders at a 70% discount), which in December 2009 accounted for 45.5% of the total volume. In 2008 the volume traded in mini contracts had declined 29.9% year-on-year, while RPC had risen to R$0.162 from R$0.054 in 2007 substantially due to the 2008 change in our pricing policy. As of December 2009 the most active investors in these derivatives included retail investors, foreign investors and institutional buyers, with shares of 40.4%, 37.2% and 13.7% of the total volume, respectively. OTC derivatives. OTC derivatives include interest rate swaps (for both fixed and floating interest rates), inflation swaps, forex and currency swaps (for U.S. dollar, Euro and Yen), equity swaps (the equity leg may include stock market indices, such as the Ibovespa and the IBrX-50 or a basket of selected stocks), and gold, in addition to flexible barrier options on the U.S. dollar rate, on Ibovespa, or on the local interest rate, where the customers setting expiration date, size, strike price, exercising style, in addition to barrier event and knock-in or knock-out condition). Average daily volume traded in these OTC derivatives in 2009 fell 25.5% year-on-year, while average revenue per contract dropped to R$1.655 from R$2.355 in 2008 primarily due to the 2008 change in pricing policy. In 2008 average daily volume traded in OTC derivatives had climbed 8.4% year-on-year, whereas RPC rose to R$2.355 from R$2.111 one year earlier; again, mainly due to the 2008 change in pricing policy. As of December 2009 the most active investors in these derivatives included financial institutions, institutional buyers and corporate investors, with shares of 69.7%, 25.8% and 2.8% of total volume, respectively.

DMA (Direct Market Access)

In 2008 we began implementing connections for direct access to the derivatives markets comprising the BM&F segment. Our DMA (Direct Market Access) program was implemented pursuant to four models, i.e., traditional DMA and DMA via Providers, DMA via Direct Connection and co-location arrangements. The former two comprised stages I and II of the program and were implemented in the second half of 2008, whereas the latter two models, or stages III and IV of the program, were implemented in 2009. Additionally, the trading floor for BM&F segment was shutdown in June 2009. The trading floor for Bovespa segment had been shutdown in September 2005. For additional information on our DMA models, see subsection 7.3 of this Form. With the implementation of our DMA program we welcomed to our trading platforms a new kind of trader, meaning high frequency traders, who up to that point lacked the appropriate infrastructure to tap into our markets. The charts below set forth data related to the evolution of trading activities performed in BM&F segment via our different DMA models, including high frequency trading activities. The volume of trading based on any of the alternatives we offer for Direct Market Access has been growing steadily over the last several months, having accounted for 15.2% of the overall volume in November 2009 to close the year at 13.1%. In addition to the Traditional DMA, which provides electronic access to a multitude of participants and investors, volumes traded via order routing to the CME Globex system and via DMA Providers now begin to compete for space. Moreover, the order flow from co-location arrangements is just beginning to show. Technological evolution for access to our markets correlates with the heightened level of sophistication of our customers, in particular those that engage in high frequency trading.

47

600 500 400 300 200

100 -

BM&F Segment - DMA Evolution (thousands of contracts)

12.4%

15.1%
12

17%

15.2%
15

65

13.1%
13

14% 11% 8% 5%
2% -1%

11.3%

6.8% 6.4% 3.0%

6.9% 7.7%

7.8% 10.1%

11 227

14 3 199

32 4

53 45

82

161

47 58

48 70

58
85

155

100 122

114 107

190

195

177
Jul-09

195

221

266

202

177

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09

Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

Traditional DMA

CME Globex

DMA Provider

CoLocation

% of DMA in overall ADTV

We believe a substantial part of the volume transacted via Traditional DMA correlates with changes in the manner by which investors approach their trading activities, whereas trading routed to the CME Globex and trading via DMA Provider correlate more closely with new volumes and the order flow from new investors, in particular high frequency traders. The table below sets forth the fast pace of volume growth from the flow of orders routed to the CME Globex system. In 2009, the volume of trades routed to that system peaked in October 2009, when it accounted for 4.7% of the overall volume, having closed the year at 3.4% of the consolidated volume, concentrated mainly on FX contracts, stock-index contracts and mini contracts.

CME - Globex Evolution - thousands of contracts

180 150 4.7% 4.2% 3.4% 2.5% 90 60 30 0 2.8% 51 40 31 22 31
Sep-09

5,0% 4,5% 4,0% 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% 0,5% 0,0%

120

2.1%
49

43 37 30

1.1% 0.3%
12
Mar-09

1.2%
11 10 23
Jun-09

0.4%
14
Apr-09

10 4 23
May-09

13 12

19 14 36
Aug-09

33
Jul-09

51

43
Nov-09

33
Dec-09

Oct-09

FX (Thousands)

Equities (Thousands)

Web Trading (Thousands)

% in Overall Volume

In addition, we see a growth trend related to the DMA model implemented via co-location arrangements. A sophisticated form of access to electronic trading systems, this solution permits participants to have the exchange host their servers in its data center, directly connected to the exchanges technology infrastructure, which gives them the ability to make drastic cuts in order entry time. We started offering co-location arrangements to market participants in June 2009. While the flow of orders entered through co-location still accounts for less than 1% of the total volume, it has been growing consistently, as demand for co-location arrangements from both participants and traders goes up. We started the process of implementing our DMA program in August 2008. Then, in January 2009 high frequency traders started trading on BM&F segment. The high frequency flows quickly grew, having peaked in October 2009 at 6.0% of the overall volume, to close the year at 4.2% of the volume for the segment. High frequency flows tend to focus on certain contracts, such that in December 2009 volumes from high frequency trading accounted for 23.9%, 45.5% and 4.4% of the overall volumes traded in stock-index contracts, mini-contracts and FX contracts, respectively.

48

200 180 160 140

High Frequency Traders Evolution - thousands of contracts

6.0% 59 3.8% 3.1% 1.2% 11 11 23 2.0% 12 12 18 17 46 36 27 45 64 58 41

7,0% 6,0%

5.1% 4.2% 50 49 34 38

5,0% 4,0% 3,0% 2,0%

120 100 80
60 40 20 0 1.2% 7 4 23

0.1% 3

0.2%

0.4% 4 11

0.5% 2 14

31
Jul-09

46

1,0%
0,0%

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09

Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

FX (Thousands)

Equities (Thousands)

Web Trading (Thousands)

% in Overall Volume

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

High Frequency Traders Evolution

45.5%

23.9%

4.4%

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

FX contracts

Index-based contracts

Mini contracts

The fast pace of growth in volumes traded via DMA, which includes volumes from trading via order routing to the CME Globex system and high frequency flows, resulted from significant investments in improvements to our technology infrastructure and trading systems, as well as in the types of access to the systems. In addition, the pricing policy BM&F segment, which we finished implementing in February 2009, is friendly to high frequency traders, who enjoy substantial discounts in trading fees. The FX Clearinghouse and spot U.S. dollar contracts At our FX Clearinghouse we transact with customers and settle exchange rate transactions carried out on the spot interbank market. These contracts, which we call spot U.S. dollar contracts ( dlar pronto), are traded for physical delivery on T+0, T+1 or T+2. Our trading fees for spot U.S. dollar contracts are calculated daily and allocated on a daily basis by applying different rates to price bands based on the gross amount of transactions registered and settled on our systems. We currently adopt five different price bands to determine our fees. For a given customer, the higher the amounts traded, the lower the fees we charge. All fees are payable to us in Brazilian currency. In addition our FX Clearinghouse provides transaction registration, clearing and settlement services, as well as risk management services for trades carried out in the interbank spot U.S. dollar market. In providing these services, we act as central

49

counterparties to ensure clearing and settlement on a payment versus payment basis, or PVP, which eliminates the risk of default on principal. The financial value traded and settled in this market reached R$638.0 billion in 2009, a 17.2% year-on-year decline, primarily attributable to the appreciation of the Brazilian real over 2009. In contrast, the financial value traded and settled in this market in 2008 had climbed 9.4% year-on-year to of R$771.0 billion from R$704 billion in the prior year, which was attributable mainly to the depreciation of the Brazilian real over the second half of 2008.

Securities Clearinghouse
Our Securities Clearinghouse is responsible for the registration, clearing, settlement and risk management of transactions involving Brazilian government bonds and debt securities, which includes purchase and sale transactions for prompt or forward settlement, repo and lending transactions, which are also cleared and settled on a delivery versus payment basis, or DVP, thereby averting the risk of default. At the Securities Clearinghouse, we charge registration fees to register trades and transaction fees for the clearing and settlement of trades in debt securities. In addition, given that transactions registered in this clearinghouse have a relatively short settlement cycle, we do not charge permanence fee. Transactions in government bonds and securities which are registered, cleared and settled at our Securities Clearinghouse include the following: Buy and sell transactions, on cash or forward markets, of Brazilian government bonds and debt securities (which may earn fixed or floating interest, or be inflation-indexed or pegged to the Brazilian real to U.S. dollar exchange rate); and Repurchase (repo) or securities lending transactions in Brazilian government bonds and debt securities. The average volume traded in Brazilian government bonds and debt securities in 2009 dropped 76.9% from the prior year, whereas the volume traded in 2008 had declined 87.8% from 2007. These plunges reflect the bearish market for government bonds and debt securities in the relevant periods.

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

The Brazilian Commodities Exchange operates under contract with Companhia Nacional de Abastecimento (CONAB) in implementing the Policy on Assured Minimum Prices (Poltica de Garantia de Preos Mnimos), and in providing public and private electronic auction services for the trading of commodities and agribusiness services, centralizes the trading of agricultural commodities and OTC agribusiness securities, such as rural product notes, or CPRs, of farming certificates of deposit and related farming warrants, or CDAs and WAs, agribusiness credit bills, or LCAs, agribusiness credit certificates, or CDCAs, and agribusiness receivables certificates, or CRAs. The Brazilian Commodities Exchange stands out as a transaction venue and execution facility for the agribusiness. Its operations in 2009 presented the following results: (i) 6.7 million tons of agricultural commodities worth R$1.84 billion were sold in trades at CONAB auctions; (ii) 2.3 million tons of agricultural commodities were traded at CONAB options auctions; (iii) the highlight amongst transactions in OTC-traded agricultural commodities were cotton contracts worth R$3.5 billion, and; (iv) the financial value traded in OTC agribusiness securities was approximately R$4.4 billion. In 2008, 4.1 million tons of agricultural commodities worth R$1.038 billion were sold in trades at CONAB auctions. Coffee auctions administered by the Brazilian Ministry of Agriculture, Livestock Breeding and Supply amassed transaction worth R$33 million. In addition, transactions for physical delivery of agricultural commodities and trades in agribusiness securities totaled R$2.77 billion.

BM&F Settlement Bank

The BM&F Settlement Bank offers our clearing houses and participants with access to our clearing houses facilities that simplify the clearing, settlement and custody of securities and other financial assets. Service offerings include settlement of transactions registered and accepted at our clearing houses, the operation of a depositary facility and the central registration facility; clearing and settlement of bonds, securities, derivatives and foreign exchange transactions; local representation and custody services for non-resident investors; and support to investment clubs.

50

The BM&F Settlement Bank provides important risk mitigation and operational support for our clearing houses and for market participants. It performs activities in line with the strategies and guidelines of the parent and in accordance with its corporate purposes.

Bovespa segment Trading.

We offer market participants several mechanisms and tools for the trading of equities and fixed securities on exchange and organized OTC markets. We operate the only domestic exchange and organized OTC markets for the trading of equities, including stocks, share receipts, depository receipts representing shares of Brazilian and foreign issuers (Brazilian Depository Receipts, or BDRs), equity derivatives, subscription warrants, stock warrants, units of closed-end investment funds, units representing cinematic investment certificates (certificados de investimento audiovisual) and other securities authorized by the CVM, all of which are traded cleared and settled in our integrated fully-electronic systems, resulting in a fully automated process covering the entire trade life cycle.

Clearing and settlement. We are the only Brazilian CCP for the equities and private fixed-income securities markets, and

provider of risk management services and other protection mechanisms to handle payment default or failed delivery. We act as central counterparties for all clearing agents, absorbing the risks of the counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities to ensure the financial settlement and clearing of securities. In addition, we provide gross settlement services, without acting as a CCP, so that participants may set a date and time for settlement. We also provide clearing and settlement services for securities offerings that take place on the non-organized OTC market. We derive revenues from clearing and settlement services by charge transaction fees at a rate that varies in correlation to the trade of trade and the market on which it is carried out. Our revenues from fees charged on clearing and settlement transactions, and the evolution of this type of revenue over time closely correlate with those related to trading fees charged on trades executed on our equities and fixed-income markets. Pursuant to data provided in the table below by type of activity, this rate may vary based on type of investor and transaction:
Equities markets Cash market Retail and other investors Investment funds; investment clubs Day traders (regardless of investor type) Options exercise of written call positions Options on indices exercise of spread options Options market Retail and other investors Investment funds; investment clubs Day-traders (regardless of investor type) Options on indices market Retail and other investors Investment funds; investment clubs Day-traders (regardless of investor type) Forward market Retail and other investors Investment funds; investment clubs Trading activities 0.0285% 0.019% 0.019% 0.019% 0.0275% 0.058% 0.040% 0.025% 0.033% 0.024% 0.025% 0.031% 0.031% Clearing and settlement 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.006% 0.070% 0.049% 0.014% 0.045% 0.030% 0.014% 0.028% 0.028% Transaction registration TOTAL 0.0345% 0.025% 0.025% 0.025% 0.0335% 0.134% 0.095% 0.045% 0.084% 0.060% 0.045% 0.065% 0.065%

Our equities markets, meaning the markets for stocks, equity securities and equity derivatives which comprise the Bovespa segment, include a cash market, a forward market, an options market, a futures on single stocks market and a fixed-income market. We provide below a brief description of each of these markets.

Cash market. This is the market where buy and sell transactions are executed for cash settlement within three business

days. Stocks traded on this market are traded either as round lots (and their multiples) or as odd lots (less than the standard trading unit).

Forward market. This is the market where buy and sell transactions 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 be: (i) ordinary forward contracts, in which case clearing and settlement take place at the agreed price; (ii) a flexible forward, in which case the stocks delivered at maturity may be

51

the equivalent substituting the underlying as of the execution date; or (iii) an indexed forward, in which case the agreed price is adjusted by an agreed index on a daily basis for the period between the execution date and the settlement date (indices frequently used in these cases include the foreign exchange rate and 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 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 by us. Depending on whether or not they are exercisable on or before expiration, or only on expiration, these put or call options are said to be American options or European options. The following types of options may be traded on this market: (i) stock options, which are rights to buy or sell stock lots exercisable on predefined exercise periods 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 requires physical delivery of the underlying stocks, whereas exercising an index option implies paying or receiving upon exercise or at expiration an amount of cash equal to the difference between the strike price and the closing price for the underlying index. In any event the strike price under a stock option or a stock index option may be indexed to either the foreign exchange rate or the IGPM or any other index.

Fixed-Income market. We provide two trading platforms on which to trade in fixed-income securities of private issuers: the Bovespa Fix, a trading platform on our stock exchange, and the 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 fully-electronic integrated platform systems. The assets traded on these platforms include debentures, commercial papers and securities originating from the securitization market, as well as real estate receivables certificates, or CRIs, units of receivables investment funds, or FIDCs, and units of receivables funds of funds, or FIC-FIDCs. The average daily volume traded on Bovespa segment at start-of-year in 2009 was far below the average in prior years. Starting from the second quarter however volumes traded bounced back taking the year-end daily average to R$5.3 billion, just 4.3% below the average for the year before. This rebound in stock prices was critical for the recovery in volume traded on Bovespa segment between the quarter to December 2008 and the quarter to June 2009. At year-end in 2009 the market capitalization reached R$2.3 trillion, surging 70% year-on-year. However, the average market capitalization fell 10.3% year over year. In contrast, at the end of 2008 the average daily volume traded had risen 12.9% year-on-year, to R$5.5 billion from R$4.9 billion in 2007, whereas the average market capitalization had increased by 2.9%.
2007 Year-end market capitalization Average market capitalization 2,477.60 1,979.25 2008
(in billions of Brazilian reais)

2009 2,334.72 1,826.91

2009 vs. 2008 (%) 69.8% -10.3%

2008 vs. 2007 (%) -44.5% 2.9%

1,375.27 2,037.27

The average daily number of trades, which in 2008 had climbed 60.1% from the prior year, picked up 35.7% year-on-year in 2009. As a result, we saw a reduction in the average ticket which is currently down to R$15.9 thousand from R$32.0 thousand in 2007 primarily due to the increase in number of retail investors, in particular those that trade through our HomeBroker platform, as the flow from orders entered through this platform accounted for about 18.0% of the overall volume for the segment in 2009.
2007 4,555.0 156.0 180.0 4,891.0 2007 113.0 2.0 38.0 153.0 Equities Markets 2008 5,162.3 177.8 180.2 5,520.3 2008
(in thousands)

Average daily traded volume Cash market Forward market Options market Total Average daily number of trades Cash market Forward market Options market Total Margin Cash market Forward market Options market

2009 4,943.7 96.5 245.0 5,285.2 2009 270.6 1.3 60.4 332.3 2008
(basis points)

2009x2008 -4.2% -45.7% 36.0% -4.3% 2009x2008 38.8% -40.9% 26.6% 35.7%

2008x2007 13.3% 14.0% 0.1% 12.9% 2008x2007 72.6% 10.0% 25.5% 60.1% 2009 6.0 13.1 14.5

(in millions of Brazilian reais)

195.0 2.2 47.7 244.9 2007 5.8 13.1 15.3

6.0 13.0 15.1

52

Total Average tick Cash market Forward market Options market Total

6.4 2007 40.3 78.0 4.7 32.0

6.5 2008
(in thousands of Brazilian reais)

6.5 2009 18.3 74.2 4.1 15.9

26.5 80.8 3.8 22.5

The order flow of from retail investors reached a record high in 2009 at 30.5% of the overall volume for the segment, in large part represented by the flow from our HomeBroker platform, which is a traditional form of providing retail investors with direct market access, or DMA, and implies usage of a brokers technology infrastructure. In 2009 the retail order flow accounted for 17.9% of the overall volume for Bovespa segment, versus 12.6% and 8.4% in 2008 and 2007, respectively. Additionally, the flow of orders from foreign investors accounts for another significant share of the overall volume traded on the equities markets, which remains true despite the slowdown in demand that followed in the wake of the global economic downturn and the creation in October 2009 of a 2.0% tax on hot money inflows for portfolio investments.
Bovespa segment Share of traded volume by type of investor
0.2% 10.4%

2.2%

0.1% 7.8%
35.3%

2.8%

0.1% 7.4%

2.2%

34.5%

34.2%
25.7%

29.8%

27.1% 26.8%

23.0%

30.5%

2007 Individuals Institutional Investors

2008 Foreign Investors

Financial Insitutions

2009 Companies

Others

Number of accounts and Home Broker Share

700
Accounts (thousands)

17.9% 12.9%

600

500 400
300

8.4%

457

536

552

200
100

20,0% 17,0% 14,0% 11,0% 8,0% 5,0% 2,0% -1,0%

2007

2008

2009

Number of Accounts (thousands)

Home Broker Share in Overall ADTV (%)

As for market concentration, the table below sets forth data indicating the concentration of volumes traded in the 10, 50 and 100 most liquid stocks listed on our exchange. The share of overall value traded attributable to the 10 most liquid stocks declined by 50.4%, 54.97% and 44.8% year over year between 2007 and 2009, respectively, primarily due to the increase in number of listings and the heightened liquidity of stocks of issuers that conducted follow-on offerings in the periods presented.
Market Concentration by Issuers Concentration of volumes traded on the cash market: In the largest, most liquid stock ...................................................................................... In the top 10 largest, most liquid stocks .......................................................................... In the top 50 largest, most liquid stocks .......................................................................... In the top 100 largest, most liquid stocks ........................................................................ 2007 (%) 16.98 50.42 83.88 94.35 2008 (%) 19.92 54.97 87.35 96.75 2009 (%) 9.80 44.84 82.92 95.31

In addition, the tables below set forth data on market concentration by issuer industry, including financial intermediaries, which currently concentrate 22.3% of total market capitalization and 10.6% of the volume traded, oil & gas, and biofuels, which concentrate 17.3% of total market capitalization and 17.7% of the volume traded, mining with 10.9% of total market cap and 15.86% of the volume, which figures are attributable mainly to top stocks of issuers as ItauUnibanco, Bradesco and Banco do Brasil (banks; financial intermediaries), Petrobras (oil & gas, and biofuels) and Vale (mining).

53

% do Home Broker

Industry Financial intermediaries Oil & gas, biofuels Mining Electricity Telecommunications Steel and iron Beverages Processed food Financial services Transportation Other TOTAL

Market capitalization by industry 2007

(in billions of R$)

2008 21.7 17.5 10.3 10.0 8.4 5.3 4.1 3.6 2.2 1.8 15.0 100.0
%

2009
(in billions of R$)

473.71 437.23 291.66 181.96 170.70 135.55 79.07 178.17 66.12 52.72 410.66 2,477.55

19.1 17.6 11.8 7.3 6.9 5.5 3.2 7.2 2.7 2.1 16.6 100.0

(in billions of R$)

298.93 241.13 141.92 137.52 115.87 72.46 56.60 49.35 30.43 24.67 206.40 1,375.27

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

22.3 17.3 10.9 8.0 5.7 5.6 4.2 3.6 3.0 2.5 17.0 100.0

Industry Oil & gas, biofuels Mining Financial intermediaries Steel and iron Electricity Telecommunications Transportation Processed food Financial services Beverages Other TOTAL

Financial value traded by industry 2007

(in billions of R$)

2008 17.66 15.86 10.60 9.67 7.65 6.22 3.21 3.09 2.66 1.51 21.87 100.0
%

2009
(in billions of R$)

170.5 153.1 102.4 93.4 73.8 60.1 31.0 29.8 25.7 14.5 211.2 965.4

17.66 15.86 10.60 9.67 7.65 6.22 3.21 3.09 2.66 1.51 21.87 100.0

(in billions of R$)

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

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

17.66 15.86 10.60 9.67 7.65 6.22 3.21 3.09 2.66 1.51 21.87 100.0

Securities lending
Our equities clearinghouse operates a securities lending facility known as BTC, which permits investors to lend securities traded on our exchange against receipt of collateral pledged by borrowers engaging in short selling ale or arbitrage transactions, which increases the liquidity of these securities. We act as central counterparties to ensure the settlement of all securities lending transactions. In doing so, we adopt strict lending and risk management standards to ensure this market operates in an orderly fashion. Increase in the traded value of securities lending transactions has had a significant role in the increased liquidity of the cash stock market in the last few years. To a large extent, this increase in liquidity is a result of securities borrowed for sale in arbitrage transactions, followed by purchases of other securities with the proceeds from the arbitrage sale. Upon maturity of the lending transaction, a reverse arbitrage transaction takes place. As the facilitating agent in the lending process, our securities lending facility contributes to improving the efficiency of the clearing and settlement process related to these transactions, as in the event of failed delivery the BTC will promptly intervene and compulsorily procure so-called automatic loans to ensure the transaction is properly cleared and settled. Borrowers are charged fees on each lending transaction registered in our system, which fees are set at rate of 25 bps by year on the financial value of open interest positions, calculated on a pro rata basis. The financial value of an open interest position is determined based on either the average market price for the borrowed securities as of the trading session immediately preceding the lending transaction date (i.e., on its registration), or the average market price for the underlying as of the trading session immediately preceding the maturity date, as defined by lender and borrower upon registering the transaction (such date being designated the fee base date). Additionally, we charge minimum R$10.00 fee per registered transaction. However, we do not charge minimum fees if we are required to procure automatic loans. With the aim of pushing volume growth in the securities lending market, started from May 2009 our securities lending facility offers local securities lenders a 0.05% rebate. The volume of securities lending transactions taking place in our securities lending facility in 2009 did bounce back from the financial crisis. The financial value of open interest positions by end-2009 had soared 127.6% year-on-year, to R$15.8 billion

54

from R$6.9 billion in the prior year, after having plunged 71% year-on-year from the average registered in 2007. However, due to cooler demand in the first half of 2009, the average financial value of open interest positions dropped 24.8% from the average for 2008, which in turn had dropped 8.7% from the average in 2007.

Evolution of open interest positions at the securities lending facility (BTC)

25.000

20.000

15.000

10.000

5.000

Aug-07

Aug-08

Nov-08

Nov-07

Aug-09

May-07

May-08

May-09

Mar-08

Mar-07

Mar-09

Yearly average Open interest positions (in millions of Brazilian reais) Average volume (in millions of Brazilian reais) Number of transactions

2007 18,518 22,706 47,383

2008 16,902 25,292 52,285

2009 12,712 21,576 59,332

2009 vs. 2008 -24.8% -14.7% 13.5%

Nov-09

Dec-09

Dec-07

Dec-08

Oct-07

Feb-07

Sep-08

Feb-09

Sep-07

Feb-08

Apr-09

Apr-07

Apr-08

Sep-09

Oct-09

Oct-08

Jan-08

Jan-07

Jun-08

Jun-07

Jan-09

Jun-09

Jul-09

Jul-07

Jul-08

2008 vs. 2007 -8.7% 11.4% 10.3%

Securities listings
We maintain different listing segments on our exchange and the organized OTC market. Listing activities performed by us correlate with registering, i.e., placing on a list (or board) securities issued by a particular company (the issuer) to trade on our exchange or, as the case may be, the organized OTC market. Our revenues from the activity correlate with fees we charge from issuers on a annual basis at a rate computed over the amount of each issuers capital stock, the minimum fees currently amounting to R$35,000.00 and the maximum capped at R$850,000.00. In addition, from investment funds, incentivized companies and other companies whose units or shares are listed on our organized OTC market we charge fixed annual listing fees of R$7,700.00. The new price schedule for listing and annual fees was implemented at the start of 2009 with the adoption of a transition period spanning two years (2009 and 2010), during which discounts on the new fees will be granted. In December 2009 we registered 434 total listings on our stock exchange, versus 439 in the prior year and 449 in 2007. Listings on the organized OTC market totaled 77 in 2009, versus 89 both in 2008 and 2007. A note should be made that the reduction in listings is attributable to the cancellation of the public company registration of issuers whose free float is too small and the stocks very illiquid.
2007 449 89 137 675 2008 439 89 149 677 2009 434 77 131 642

Stock market listings Organized OTC market listings Funds; other Total

The IPO market, where demand had cooled in the wake of the economic crisis, staged a comeback in 2009 to present the second highest volume of proceeds from offerings in the history of the domestic market. Total proceeds amounted to an aggregate of R$46.0 billion, where R$23.8 billion are attributable to six initial public offerings, whereas R$22.2 billion are

55

attributable to 18 follow-on offerings. These offerings included the first and fourth largest offerings conducted in the world capital markets in 2009 (based on data from Reuters) by Banco Santander Brasil, which raised gross proceeds of R$13 billion, and Cielo (formerly Visanet), which raised gross proceeds of R$8.4 billion. Additionally, four IPOs and eight follow-on offerings raised aggregate gross proceeds of R$34.3 billion in 2008, versus over R$70.0 billion in 2007, when this market saw 64 IPOs and 12 follow-on offerings.
Bovespa segment IPO market (in billions of Brazilian reais) 70.1 14.5

46.0
34.3 55.6 26.8 23.8 22.2

7.5
2007 2008 Initial public offerings Follow-on offerings 2009

Listing segments
Companies registered on our exchange are listed on one of four different segments: Novo Mercado, Nvel 2, Nvel 1 or the traditional market. The Novo Mercado, Nvel 2 and Nvel 1 listing segments are our special listing segments that require companies to voluntarily adopt additional corporate governance practices not prescribed by law or applicable regulations. These requirements typically focus on (i) achieving a more transparent management of the company through heightened disclosure and reporting standards, and (ii) better balancing the rights of all shareholders to ensure both controlling and minority shareholders are extended similar treatment. Adherence to any of these special listing segments is voluntary and takes place by means of execution of an agreement between the issuer, its controlling shareholders and management team (including members of the board of directors, fiscal council members and executive officers), and our company. Additionally, to join the Novo Mercado or Nvel 2 segments the issuer must amend its bylaws to comply with a set of requirements, particularly an arbitration commitment to settle all disputes through the Market Arbitration Panel (Cmara de Arbitragem do Mercado), or CAM. As of December 31, 2009, listings on our special corporate governance segments included securities of 159 issuers, 105 of whom on Novo Mercado, 19 on Level 2 and 35 on Level 1. As of that date securities of 329 other companies were listed to trade on the traditional listing segment. In addition, we have established the Bovespa Mais, a special trading segment for the organized OTC market mirrored on the Novo Mercado, which also adopts heightened corporate governance standards not prescribed by law. The Bovespa Mais segment was established with the aim of enhancing the role of the capital markets as a source of finance for a wider universe of companies, in addition to becoming the natural path for a move onto the Novo Mercado listing segment. Bovespa Mais is a segment designed for companies that wish to adopt a strategy of gradual access to the capital markets, such as those that wish to conduct offerings at lower volumes than typically conducted by Novo Mercado issuers or those that wish to carry out offerings to a limited number of investors or even those that would only conduct an offering after their listing on this market segment.
At December 2007 Stock exchange special listing segments At December 2008 160 99 18 43 9 270 439 1 At December 2009 159 105 19 35 10 265 434 1

Novo Mercado Nvel 2 or Level 2 of corporate governance standards Nvel 1 or Level 1 of corporate governance standards
Foreign issuers Traditional stock market Total listings BOVESPA Mais (organized OTC market)

156 92 20 44 9 284 449 -

56

The specific requirements to join each of our special listing segments have been all included in their respective listing regulations and generally aim at enhancing transparency in corporate management, promoting the widespread share ownership, and better balancing shareholders rights by granting more rights to minority shareholders. The listing requirements applicable to our special segments may be classified into three primary sets of rules:

Share ownership dispersion. a minimum of 25% of the shares of capital stock should be in free float and any offering of
shares should include mechanisms favoring the dispersion of share ownership

Transparency. issuers must fulfill additional disclosure and reporting requirements not prescribed by law, including
disclosure of the annual calendar of corporate events and of transactions with related parties; and

Corporate governance. in the event of a disposition of control, tag-along rights must be extended to all shareholders; in
the event of a going private transaction or a process to delist from one of our special segments, the issuer or the controlling shareholder must conduct a tender offer to buy all outstanding shares for no less than their fair value; a board of directors must be composed of a minimum of five members, 20% of them being independent directors; the directors must be elected for unified terms of office. We are in the process of revising the listing regulations for these segments and expect to complete this process in 2010.

Depository, custody and back-office services

We operate the only central securities depository, or CSD, existing in Brazil. As such we provide depository and safe custody services to customers in our equities and fixed-income securities markets. We also provide fungible custody services pursuant to which we hold fiduciary title to securities under custody. For assurance of the integrity of these securities we adopt a process for daily reconciliation with the underlying assets, and keep the securities in book-entry form, as identified by an ISIN code (International Securities Identification Number) under a segregated account structure that identifies the ultimate beneficial owner. These service offerings are provided to issuers and investors in equities and in fixed-income securities alike, and include custody accounts identified by investor, provision of account and position statements by mail or online through the Internet; incident treatment, money transfer and payment receipt, recording of conversion, exchange and other transactions in the securities, and account operations processed in real time. In addition, we communicate with issuers and fiduciary agents to facility interaction with customer investors for more streamline processes. The number of active investors in the Bovespa segment grew moderate 3.1% year-on-year, to a universe comprising 575.7 thousand investors at the end of 2009 from 558.6 thousand one year ago. Retail investors accounted for about 96% of this total, or a universe of 552.4 thousand investors. In the five-year period between 2005 and 2009, the number of active investors grew on average 36.3% by year, reflecting the sound performance of the stock market in recent years and our concentrated efforts in making the stock market a popular investment alternative.

Custody accounts

477,872
2007

558,561

575,664

2008

2009

Revenues we derive from depository and custodial activities correlate with charges of a monthly fee of R$6.90 by custody account registered at our depository and, since May 2009, also a percentage fee we charge to open interest positions in excess of R$300 thousand. The tables below set forth data on our current fee schedule and the fee schedule that will take effect from June 2010.

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Custody fees
While we originally intended to implement the monthly fee charge in three stages, we have completed just the first stage and have been collecting just one third of the fee. The fee has been set as a rate of the financial value of assets held in custody, calculated on a pro rata basis. A new fee schedule is expected to take effect from June 2010. The tables below set forth data on our current fee schedule, and on the revised fee schedule set to take effect from June 2010.
Fee on assets under custody Current fee schedule Value range Yearly rate Exempt 0.0132% 0.0076% 0.0043% 0.0030% 0.0021% 0.0015% 0.1000% R$1,500.00 Yearly rate 0.013000% 0.007200% 0.003200% 0.002500% 0.001500% 0.000500%

Equities
From R$0 to R$300,000.00 Between R$300,000.01 and R$ 1,000,000.00 Between R$1,000,000.01 and R$10,000,000.00 Between R$10,000,000.01 and R$100,000,000.00 Between R$100,000,000.01 and R$1,000,000,000.00 Between R$1,000,000,000.01 and R$10,000,000,000.00 In excess of R$10,000,000,000.01

Fixed income securities

Up to R$1,500,000.00 In excess of R$1,500,000.01 Fee on assets under custody Fee schedule effective from June 2010 Value range From R$0 to R$1,000,000.00 Between R$1,000,000.01 and R$10,000,000.00 Between R$10,000,000.01 and R$100,000,000.00 Between R$100,000,000.01 and R$1,000,000,000.00 Between R$1,000,000,000.01 and R$10,000,000,000.00 In excess of R$10,000,000,000.01

Participant access permits

Under applicable legislation and regulations, trading activities on regulated organized markets, including ours, are typicall y performed through intermediation agents, in particular brokerage firms. In our structure, intermediation agents holding permits for access to our exchange and organized OTC markets are called market participants. The requirements applicable to intermediation agents applying for rights of access to our trading markets and clearing and settlement facilities have bee n released by means of Circular Letter No. 078/2008, and include the following: a. Fee requirements Permit applications for access rights to either of BM&F or Bovespa markets. Applicants for permits granting access rights to either market segment are required to commit to the following fee requirements: Licensing fee: this is a one-time charged for the application processing and licensing procedure; Trading rights access fee: this is a one-time fee charged upon issuance of a permit granting trading rights; Settlement rights access fees: this is a one-time fee charged upon issuance of a permit granting clearing and settlement rights; and, Annual fees: this fee is intended to cover brokerage auditing costs. It is charged at 5% over the base access fee (permits granting trading or settlement rights, as applicable). As of the date of this Form, we have yet to start collecting this fee. b. Technology requirements Technology package required for applicants to operate in Bovespa markets. The technology package consists of a specified set of technology requirements comprising the minimum products and services we provide for access to the trading environments of the equities markets, which include the following: MegaBolsa workstations (MegaBolsa being a trading system); Gateways for transmission of orders; Additional contingency SLC servers for use at trading desks and brokerage branches;

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Contracting of order turnaround by minute, based on agreed volume bands, as selected pursuant to the order flow (volume) and operating strategy of each particular brokerage firm. As of December 31, 2009, 81 licensed brokerage firms had been granted permits for access to our equities markets, while 62 had permits to operate in the derivatives market, 66 in the forex market and 80 in the bonds m arket. Brokerage firms are entitled to apply for permits to operate in more than one segment.
Registered brokerage firms Stock market Derivatives market Forex market Government bonds market 2008 76 119 90 124 2009 81 62 66 80

Other services Market Data

We sell data and information generated in our equities and fixed-income markets, and in our financial and commodity derivatives markets, in addition to information on our stock indices, and news reports on our markets to authorized local and international agents across the world. We currently authorize vendors and brokers to broadcast our information signals. Vendors are companies that purchase directly from us the rights to broadcast or retransmit our information signals, thereby benefiting from our infrastructure and technical support for the receipt of signals directly transmitted by us or indirectly by other intermediating vendors. We also sell market data and information to brokers and broker-dealers, who can access our information signals in either of two ways: (i) directly from us, in which case they benefit from our infrastructure and technical support for signal receipt, or (ii) indirectly through a vendor or HomeBroker provider. At December 2009, we had 410,5 thousand vendor customers for our market data, 391.4 thousand being local customers and 19.1 thousand international customers, a 7.6% year-on-year climb as set forth in the table below.
Customers Brazil Overseas Total At December 2008 363,183 18,319 381,502 At December 2009 391,386 19,130 410,516 Variation 7.8% 4.4% 7.6%

Commodity classification services

Through our classification laboratories, we provide cotton, coffee and corn classification services. The So Paulo Commodities Exchange, or BMSP, began to provide cotton and coffee classification services in 1922 and 1978, respectively. These activities were later transferred to us. In 2004, we began to provide corn classification services. Our laboratories are located: (1) in the city of Sorriso, state of Mato Grosso, with capacity to classify 655 thousand cotton bales per year; and (2) in the city of Rondonpolis, state of Mato Grosso, with capacity to classify 1 million cotton bales per year. The agreement we executed with the Brazilian Association of Cotton Exporters (Associao Nacional dos Exportadores de Algodo), or ANEA, permits us to classify high quality cotton for exports and issue certificates which are subsequently used both for export and domestic sales purposes. We have classified 1.5 million samples for the cotton and coffee markets in 2009, an increase of 8% over 1.39 million samples classified in the prior year. With volume of 1.2 million tons, the Brazilian 2009 raw cotton crop fell 25% from the prior year. We classified 24% of this crop, the highest cotton classification volume for the last six years. The four top Brazilian states in production volume are the states of Mato Grosso, Bahia, Gois and Minas Gerais, which account for about 94% of the domestic production. We classified approximately 22% of the production of these four states.
Brazil: Raw cotton production Our share of the classification market 2007 2008 Domestic Production 1,524.0
(In thousands of tons)

2009 1,214.0

1,602.0

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Classification at BM&FBOVESPA BM&FBOVESPAs share of the classification market (%)

285.0 18.7%

273.0 17.1%

295.0 24.3%

Coffee classification volume for 2009: 9% year-on-year growth, to 13.6 thousand samples from 12.4 thousand in the earlier year.
Classification at BM&FBOVESPA Historical data on coffee classification samples 2007 11,136 2008 12,439 2009 13,569

Equity in income of affiliate Ownership interest in the CME Group

We hold 1.8% ownership interest in the CME Group, which in 2009 paid us dividends amounting to R$12,592 thousand, versus R$20,650 one year ago. ii. Revenues derived by each relevant operating segment, including as a percentage of total net revenues.
(in thousands of Brazilian reais) Year ended December 31, 2009 % Gross operating revenues BM&F segment markets Derivatives clearinghouse FX clearinghouse Debt securities clearinghouse Brazilian Commodities Exchange BM&F Settlement Bank Bovespa segment markets Trading trading fees Clearing and settlement transactions fees Securities lending fees Listing fees Depositary, custody and back-office fees Participant access fees Other operating revenues 1.672.894 552.492 516,052 20,849 155 7,146 8,290 1.032.201 617,000 232,166 32,989 39,549 70,231 40,266 88.201 57,691 4,304 26,206 100.0% 33.0% 30.8% 1.2% 0.0% 0.4% 0.5% 61.7% 36.9% 13.9% 2.0% 2.4% 4.2% 2.4% 5.3% 3.4% 0.3% 1.6% 2008 % 100,0% 35.6% 33.7% 1.2% 0.0% 0.4% 0.2% 59.2% 35.6% 14.5% 2.7% 1.7% 3.5% 1.1% 5.3% 2.4% 0.2% 2.6% Var % -6.2% -12.9% -14.2% -2.1% -53.0% -9.1% 139.7% -2.2% -2.8% -10.5% -32.0% 32.8% 12.3% 103.8% -6.3% 33.1% 21.8% -44.5%

1,783,358 634,230 601,275 21,302 330 7,865 3,458 1,055,028 635,091 259,355 48,528 29,776 62,523 19,755 94,100 43,359 3,535 47,206

Vendors market data sales

Commodity classification fees Other

iii.

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

We do not calculate income or loss for each operating segment. 7.3. Products and services comprising each operating segment discussed under 7.2 above i. Production process characteristics

Organized markets
The regulated securities markets include the exchange market and the organized OTC market (organized markets).

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Certain characteristics of these organized markets include: Provision of electronic trading systems and environments for the registration of previously agreed transactions; Trading system or environments that adopt specific price formation standards; Permission to trade directly with no assistance from an intermediation agent; Permission to delay disclosure of market data and information; The order flow entered and executed in a markets electronic systems; Type of investor for whom a market caters. Brazilian law grants powers and authority for the Brazilian Securities Commission, or CVM, the Brazilian National Monetary Council (CMN) and the Central Bank to regulate activities in the Brazilian financial and capital markets, each of them acting within its own sphere of competence. As the operator of organized markets (meaning securities and derivatives exchanges, as well as OTC market), our company is required to perform a dual role of market manager and regulatory entity licensed by the CVM. For this purpose applicable regulations and the CVM recognize BM&FBOVESPA as a self-regulatory entity with powers and authority to regulate activities in these markets and those of market participants.

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

Organized and non-organized OTC markets

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

Evolution of the electronic trading platforms

For a great many years trading activities on stock exchanges and on futures exchanges were performed on the trading floor, in open outcry environments where traders and stock brokers gathered around the pit would hand signal frantically to outdo the competition in buying and selling equities, futures and other derivatives, with demand determining market prices. Such was the

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

BM&F segment
The electronic trading system for derivatives first launched in 2000 as the GTS platform (acronym for Global Trading System). This first version of the platform had been developed by then Bourse de Paris (currently NYSE Euronext). Early in 2008 that system was replaced with a new proprietary system we developed and implemented internally, but still call GTS platform. After the trading floor shut down in June 2009, all trading activity for the derivatives markets is processed through the GTS platform. In addition, technology developments implemented in recent years and over the course of 2009 brought the round-trip time, or RTT, down to 10 milliseconds at year-end from 70 milliseconds at end of year in 2007. Throughput capacity in turn supports 200.0 thousand daily trades since before 2009, for average daily demand at year-end comprising approximately 50.0 thousand daily trades. RTT is the time required to send a signal in both directions over a particular communication link and is the soonest that it is possible to receive acknowledgement of a message through a particular system. In the context of electronic trading systems, RTT is the primary metric to determine a trading systems performance. Our investments in technology aim to place our GTS system amongst the most advanced across the world. Throughput capacity in turn currently supports 200.0 thousand daily trades, up from 55.0 thousand daily trades at the end of 2007.
BM&F segment Round-trip time (in milliseconds) Derivatives markets Throughput (in thousands of daily trades) Derivatives markets Daily average Peaks 2007 70 2007 55 23 42 2008 25 2008 200 29 49 2009 10 2009 200 39 76

Bovespa segment
The electronic trading system of Bovespa, then an independent exchange, first launched in 1990 as the CATS trading platform (acronym for Computer Assisted Trading System). Later, in 1997, it was replaced with the MegaBolsa system, an advanced system developed by then Bourse de Paris (currently NYSE Euronext). Since then, the MegaBolsa underwent different stages of development to reach the current configuration as V900 version of the MegaBolsa system. As with the GTS system, technology developments implemented in recent years and over the course of 2009, including the upgraded version for the MegaBolsa system, brought the round-trip time, or RTT, down to 10 milliseconds at year-end from 450 milliseconds at end of year in 2007, whereas throughput capacity increased tenfold.
Bovespa segment Round-trip time (in milliseconds) Stock market Throughput (in thousands of daily trades) Stock markets Daily average Peaks 2007 450 2007 390 153 343 2008 300 2008 770 245 414 2009 10 2009 1.500 332 591

Common investments in technology

While we were quite successful in cutting latency down in both our GTS and MegaBolsa systems (round-trip time in each system decreased by 85.7% and 97.7%, respectively), we are still planning to develop and implement a new and improved

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multi-asset class electronic trading platform. Our investment plan contemplates, among other things, a system designed to operate with on-peak 50% idle capacity. Beyond offering lower latency and higher throughput capacity, improvements recently implemented also included investments in direct access infrastructure and connectivity. For example, in July 2009 we launched the BM&FBOVESPA Communication Network, or RCB, which was designed to supply demand associated with the expansion and increased sophistication of the Brazilian capital markets and to supplement services previously offered through the Financial Community Communication Network, or RCCF. The RCB is an open communication network for high speed connectivity between market participants and the exchanges electronic trading systems, based on a high performing structure with heightened data transmission capacity and greater flexibility, which gives participants the ability to make choices as to alternative telecommunications providers, data transmission technologies, network capacity and velocity, and contingency resources. Furthermore, we adopt the FIX protocol (Financial Information eXchange) in our messaging and trading systems. FIX protocol is an open specification intended to streamline electronic communications in the financial securities industry, which supports multiple formats and types of communications between market participants and the trading systems, including email, trade allocation, order submissions, execution reporting. It is technology commonly used in our industry, making it easier for new participants to access our markets.

DMA program development

In addition to reducing latency and increasing capacity, the Company implemented different alternatives to ensure to customers efficient direct market access, or DMA, to the trading systems, whereas enhancing our market data distribution and transmission capacity. Moreover, developing efficient direct market access through electronification of the entire flow, whereas offering streamlined order execution and friendly environments for high frequency trading (high frequency traders make use of computer programs to enter orders with the computer algorithm deciding on aspects of the order, such as timing, price, and quantity). Already high frequency trading accounts for significant portions of the volumes traded in sophisticated international markets, but in Brazil high frequency flows are still incipient, and account for a very small portion of consolidated volumes (in December 2009, high frequency volumes accounted for 4.2% of the volume traded in derivatives and 10.0% of the volume traded in equities.). The rationale behind the concept for our DMA program is to give investors the ability to access from his workstation our market data feeds and the order book for a number of securities, and to enter buy and sell orders directly into our trading systems. However, we should note that provision of these services will not dispense with the role of the intermediation agents, as any investor will only be permitted to have access to DMA facilities through his brokers and under their authorization given in the context of a fully established commercial relationship. In addition, a broker offers services that no access model could fulfill and performs a key role in the trade life cycle and liability chain, which therefore also includes the clearing and settlement process. The figure below shows how the DMA models operate.
NET

Traditional DMA

NET

Via DMA Provider

NET

NET

Provider of DMA

Direct Connection
NET

Via DMA Co-location

Remote access tracking and maintenance

Application of Co-location

Below is a brief description of each of the four DMA models we have implemented: Type 1 Traditional DMA, which takes advantage of the infrastructure of participant brokerage firms to connect end users to the exchange;

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Type 2 DMA via Provider, including for order routing to the CME Globex system, which uses the infrastructure of online routing providers for the order routing process; Type 3 DMA via Direct Connection, which permits the user to hire a direct link to the Exchange foregoing usage of a screen or a brokers specific interface; and Type 4 DMA via Co-location arrangements, pursuant to which we host the customer server in our data center for automated execution registration. These four DMA models are available to participants and investors in BM&F segment, are fully operational and generating business. The Traditional DMA (Type 1) and the access for order routing to the CME Globex system (Type 2) were implemented in August and September 2008, respectively. These were followed by implementation of all other connections for DMA via Provider (Type 2), which now includes five licensed providers. Then in June 2009 we implemented the DMA via Colocation model (Type 4) and in October 2009 the DMA via Direct Connection. These same DMA models, which do not dispense with broker intermediation, is available to market participants and investors in Bovespa segment since September 1, 2010. The traditional DMA model for the Bovespa segment first launched in 1999 as the HomeBroker platform to provide direct access to retail investors.

Post-trade activities at the clearing houses

We operate the following central counterparty clearing facilities absorbed during the exchange integration process of BM&F and Bovespa, which the Central Bank deems to perform systemically material roles: (i) equities clearinghouse (formerly CBLC), (ii) derivatives clearinghouse, (ii) FX clearinghouse; and (iii) government securities clearinghouse. Our clearing facilities operate pursuant to Law No. 10,214 dated March 27, 2001, which authorizes multilateral clearings and settlements, regulates the role of central counterparty performed by systemically material clearing facilities, and permits the use of collaterals posted by defaulting participants to settle their obligations within the scope of our clearing and central counterparty activities, including in the event of insolvency, intervention, bankruptcy and extrajudicial liquidation. As trades are executed in one of our trading segment, data on these trades are automatically fed to the systems in our clearing houses and promptly relayed to intermediation agents for them to designate the actual principal under each transaction, in a process known as specification. In the next phase of the trading cycle, the relevant clearing house will act for physical delivery (for transfer of the security or the underlying or, as the case may be, for registration of the transaction) or financial settlement (for transfer of monetary resources) to be carried through, as applicable. In doing so, our clearing houses may act or not act as central counterparty to ensure multilateral settlement. The role as central counterparty is mandatory for the clearing and settlement of exchange-traded derivatives, FX derivatives, government securities and stocks, but is voluntary where the clearing and settlement of trades in OTC derivatives and private debt securities. Our clearing houses typically act as central counterparty (CPP) for the derivatives market (including futures, forward, options and swap markets), the spot U.S. dollar market, the government debt securities markets (cash, forward repo and securities lending markets), for the equities markets (cash, forward options, futures and securities lending markets) and the private fixedincome securities market (cash and securities lending markets). Our central counterparty clearing houses are responsible for providing efficiency and stability to the market by ensuring trades are properly cleared and settled. A CCP interposes itself between counterparties to financial transactions, becoming the buyer to the seller and the seller to the buyer. Acting in the capacity of central counterparty, our clearing houses absorb the risks of the counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities for financial settlement and clearing of securities and financial assets, in the event of default resorting to certain safeguard mechanisms, or in extreme situations resorting to our own net assets. In modeling and managing CCP risks, we focus on calculation, controls and mitigation of credit risk intrinsic to clearing participants. For proper risk mitigation, each clearing house has its own risk management system and safeguard structure. These structures comprise the universe of mechanisms and remedies a clearing house may resort to cover losses from failed settlement by a participant. he key components of these safeguard structures include collateral deposited by market participants, often as margin, plus special funds intended to cover possible losses due to defaults and, in addition, co-liability undertaken by broker and clearing agents regarding transactions they intermediate or clear. Models adopted for margin calculation are stress-test based, meaning they seek to assess market risk by taking into account not only recent historical volatility in market prices, but also the possibility that unexpected events could change historical behavior patterns for prices and the market as a whole.

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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, futures 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 BRL fixed interest rate curve; the forward structure of the U.S. dollar-denominated Brazilian yield curve (cupom cambial), the Bovespa index and the cash prices for stocks. As of December 31, 2009, collaterals deposited by participants totaled an aggregate of R$101,641.1 million, down 19.1% from total collateral deposits of R$125,676.8 million in the prior year. This fall correlates mainly with 38.8% decline in the volume of collaterals for financial assets cleared at our derivatives clearinghouse as a result of toned down risk levels, in a clear indication of the improvement in market conditions as of the dates under observation. This decline in the volume of collaterals pledged to the derivatives clearinghouse was counterbalanced by 69.6% increase in the volume of collaterals deposited at the equities clearinghouse, primarily due to heightened trading activities on Bovespa segment.
Clearinghouses Equities and private fixed-income securities Government bonds Stocks Other* Derivatives Government bonds and debt securities Sureties Other* FX Debt securities Total Pledged collaterals December 2009
(in millions of Brazilian reais)

December 2008
(in millions of Brazilian reais)

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

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

BM&F Settlement Bank

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

Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

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

Distribution channels
Commodity and securities brokerage firms are market participants with direct access to our trading systems, entitled to engage in proprietary trading and perform intermediation activities on behalf of their customers. Brokerage firms currently licensed by us and holding rights to access our markets include 62 brokerages operating in derivatives markets, 81 securities brokerages operating in the cash market for equities, 66 operating in the foreign exchange market and 80 brokerage firms licensed to operate in the government bonds and securities market.

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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 any category of access permit provided they fulfill certain related requirements. These requirements include minimum net equity and net current assets for protection of liquidity, in addition to professional qualification, technology infrastructure, operating and other requirements. Permit categories are classified according to market and practice area, granting a participant rights to perform certain permitted activities in certain markets, both of which define the type of participant. Permits for access to Bovespa segment in turn are granted only to securities firms, and are classified into (i) full access permits; (ii) regional access permits; and (iii) pioneering access permits. Furthermore, in addition to brokerage firms, investment banks and securities dealers are also eligible to apply for permits to access the fixed-income market and the organized OTC market. Permits that grant rights to trade on BM&F segment, or trading rights, may grant either full or restricted rights. In the latter case, the permit grants restricted rights to trade on certain markets in certain types of derivatives, including in financial derivatives, or in agribusiness derivatives, or in OTC derivatives, or in spot FX contracts for physical delivery, or in government bonds and securities. A permit granting restricted rights to trade in financial derivatives may restrict trading to certain types of contracts (such as interest rate contracts or FX derivatives or index-based derivatives or energy or metal derivatives, or a combination thereof). Our board of directors reviews and evaluates applications for access permits submitted by any new brokerage firm.

Operational Qualification Program PQO

Brokers typically represent important distribution channels for our products and actively and for the very nature of their business actively work in prospecting and expanding our customer base. For this reason, we launched in 2005 a quality certification program for brokers and brokerage firms that operate in BM&F segment, which program includes training and guidance on market standards with the aim of strengthening their position as market participants, whereas ensuring minimum efficiency and performance standards in intermediation activities, as well as sound market practices. We adopted several criteria to grant qualification seals under any of five categories of brokerage activities, as follows:
Qualification Seal Description of Operations

Web Broker ........................................................retail and non-financial investors with brokerage services and direct access to the mini Provides derivative contract market. Retail Broker ...................................................... With a customer base typically represented by non-financial and retail investors, provides brokerage services supported by a dedicated structure that includes sales and research departments, customer services and consultancy. Agro Broker ....................................................... in brokerage services provided to customers that operate in agricultural commodity markets, Specializes providing dedicated support structure. Carrying Broker .................................................. Accepts give-up trades and provides custody and settlement for large blocks, with emphasis on credit risk management. Execution Broker ................................................ Focuses largely on the execution of block orders for institutional buyers (such as treasuries, investment funds, hedge funds, etc.), supported by low-latency automated systems.

For purposes of obtaining a qualification seal, brokerage firms are required to operate pursuant to certain standards and practices based on which qualification is recognized. Every brokerage firm is required to observe and practice certain general standards, which constitute minimum qualification requirements, in addition to special standards applicable to each qualification category, which a brokerage firm must observe and adopt consistent with their business and qualification seal. Adherence to both general and special quality standards is verified pursuant to audit processes conducted by exchange auditors. In addition, a qualification seal is granted only upon issuance of an opinion by our PQO Qualification Committee (composed of exchange executives and officers) advising that the applicable requirements are fulfilled and recommending the brokerage qualification. At the end of 2009, we had granted qualification seals to 80 brokerage firms, versus 75 at the end of 2008, including eleven new qualification seals. Moreover, we had cancelled the qualification seals of six brokerage firms. The high standard by which brokerage firms operate in our markets underpins the development of Brazilian capital markets, and assures our products and services are efficiently distributed to end customers. We plan to extend the program in the course of 2010 to the participants of Bovespa segment.

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iii. i.

Market characteristics in relevant operating segments, in particular: Share of each relevant market segment

Because we operate the only domestic exchange markets for listed equities and derivatives, at December 2009 our share of these markets was 100%. In the case of the organized OTC markets, our share of the market for OTC equity securities was close to 100% and for OTC derivatives was approximately 20%. In addition, as compared to other Latin American exchanges, at end-2009 our exchange accounted for approximately 81.0% of the financial value traded in equities and 61.4% of the total market capitalization by exchange.
8%

11.9%

11%

10.6%

16.2%

61.4%

81%

BM&FBOVESPA

Mexican SE

Other

BM&FBOVESPA

Mexican SE

Santiago SE

Other

Moreover, in the context of trading in stocks of Brazilian issuers in 2009, trades on our stock exchange accounted for 51.73% of the overall financial value traded in these stocks, whereas trades on U.S. exchange markets, such as the New York Stock Exchange, or NYSE, accounted for the remainder. In 2008 and 2007, trades on our stock exchange accounted for 46.42% and 53.12% of the overall financial value, respectively. It should also be noted that between 2007 and 2009 our stock market registered 74 new listings and IPOs, with just one entrant applying for dual listing (with us and the NYSE).
Bovespa segment 53.12% 46.42% 51.73% NYSE 46.88% 53.58% 48.27%

2007 2008 2009

ii.

Competitive market conditions

Brazilian Stock Market Industry

The Brazilian stock market industry began in 1845 with the creation of the Rio de Janeiro Stock Exchange (Bolsa de Valores do Rio de Janeiro), or BVRJ. Other stock exchanges emerged later, including in 1890 the So Paulo Stock Exchange, under the name of Free Exchange (Bolsa Livre), which in 1895 changed to So Paulo Government Funds Exchange (Bolsa de Fundos Pblicos de So Paulo). In the mid-1960s it was renamed BOVESPA. In 2000 an agreement was signed to consolidate the nine stock exchanges then operating in Brazil. Pursuant to this agreement, all trading of equity securities on stock exchanges in Brazil moved to Bovespa. Five of those exchanges were later terminated by their members. In the case of the derivatives market, BM&F was organized in 1985 under the name Brazilian Mercantile & Futures Exchange, and has since been the only domestic exchange for the trading of derivatives contracts. Two well-defined trading segments emerged from the consolidation of the domestic stock markets into Bovespa, meaning the equities and fixed-income securities segment operated by Bovespa, and the derivatives segment, comprising the trading of commodities, derivatives based on equities, indices, interest rates and currency rates, in addition to federal, state and local government debt securities, which was operated by BM&F.

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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, 2009, we had no local competition in either the securities or the derivatives exchange markets, or in the organized OTC market for equity securities. However, we did have competition in the OTC markets for derivatives and government and private debt securities, in addition to having competition for certain of the services provided by the BM&F Settlement Bank. The Brazilian equities and derivatives markets, as comprising issuers and market participants as well as the activities and services performed in these markets are governed by a number of local laws and regulations, and are subject to the regulatory authority of the Brazilian Securities Commission, (Comisso de Valores Mobilirios), or CVM. The tables below set forth 2009 data on the rankings of world exchanges both by financial value traded and market capitalization, based on data compiled by the World Federation of Exchanges, or WFE. At December 2009 our exchange ranked 19th by financial value traded and 9th by market capitalization. In addition, according to data released by the Futures Industry Association, or FIA, our derivatives market ranked 6th in number of contracts traded.
Financial value traded Exchange 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 NASDAQ OMX NYSE Euronext (US) Shanghai SE Tokyo SE London SE Shenzhen SE Deutsche Brse NYSE Euronext (Europe) BME Spanish Exchanges Korea Exchange Hong Kong Exchanges TSX Group Australian SE Borsa Italiana Taiwan SE Corp. National Stock Exchange India SIX Swiss Exchange NASDAQ OMX Nordic Exchange BM&FBOVESPA Johannesburg SE

(In millions of US$)

2009 28,951,348.5 17,784,586.2 5,061,985.7 3,987,776.8 3,402,495.6 2,774,319.3 2,240,330.7 1,971,920.8 1,610,210.2 1,575,190.4 1,501,689.1 1,245,457.4 966,985.5 948,146.9 909,550.6 791,930.1 789,883.9 778,356.1 644,732.4 342,356.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Market capitalization Exchange

US$)

(In millions of
December 2009 11,837,793.3 3,306,081.9 3,239,492.4 2,869,393.1 2,796,444.3 2,704,778.4 2,305,142.8 1,676,814.2 1,337,247.68 1,306,520.2 1,297,226.9 1,292,355.3 1,261,909.3 1,224,806.4 1,064,686.5 868,374.0 834,596.5 817,222.8 799,023.7 657,609.5

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

2009 Top 10 Futures Exchanges

Rank 1 2 3 4 5 6 7 8 9 10 Exchange Korea Exchange Eurex (Includes ISE) Chicago Mercantile Exchange (CME) NYSE Euronext (includes all EU and US markets) Chicago Board Options Exchange (includes CFE) BM&FBOVESPA National Stock Exchange of India Nasdaq OMX Group (includes all EU and US markets) Russian Trading Systems Stock Exchange Shanghai Futures Exchange Number of contracts traded 3,102,891,777 2,647,406,849 2,589,551,487 1,729,965,293 1,135,920,178 920,377,678 918,507,122 814,639,771 474,440,043 434,864,068

iv.

Seasonality, if any

There are no records showing seasonality significantly influences our business, results of operations and financial condition.

68

v.

Principal raw materials and supplies

Our relationships with suppliers and service providers are conducted in strict compliance with the notion of cooperative relationships based on mutual good faith commercial relations. Our main suppliers are technology and IT solutions providers, including servers, network equipment, mainframes and other hardware, equipment maintenance services, technical support and specialist providers (in the case of special projects). Typically, contracts and prices are negotiated by project or program. Where the price is agreed in foreign currency we will be subject fluctuations in exchange rate, and where agreed in Brazilian reais there may be adjustments for inflation, which typically track the fluctuations of either the extended consumer price index (IPCA) or the general market price index (IGPM). In some cases the price may be tied to performance, such as in the case of the MegaBolsa trading system, as the maintenance fees for this system closely correlate with throughput. We have a service agreement with Primesys, the network communications provider for the Financial Community Communication Network (Rede de Comunicao da Comunidade Financeira ), or RCCF, the open communication network for connectivity between market participants and our trading systems. We rely on Primesys for the provision of network communications related to post-trade services. Our main suppliers are the following: Software and hardware: HP; EMC Computer; Hitachi Data System; IBM; Compusoftware; AtosEURONEXT (NYSE), among others; Services: 7COMm; IBM; Multirede; Hitachi Data Systems Specialist providers: 7COMm; GPTI; 3CON Consultoria and Stefanini. 7.4. Customers whose purchases account for over 10% of total net revenues In our case customer revenue concentration is not a factor of dependence, as our customer are the principals in trades carried out on our markets, who for this purpose use our services. 7.5. Material effects that government regulations may have on business operations, and in particular: i. Any operating licensing requirements, in addition to the background on relations with government entities as far as related to these operating licenses;

Regulation of the industry

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

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

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

69

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

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

Government licenses and consents

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

70

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

We have not expressly adhered to international environmental standards because the nature of our business is not conducive of significantly impacting the environment, which means our activities are not subject to special regulatory environmental requirements and do not incur material costs to comply with applicable environmental requirements, nor to adopt practices for protection of the environment. Still we are deeply committed to socially and environmentally responsible practices, and make part of 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, we adopt a waste management program pursuant to which we provide special recycling bins for collection of recyclable waste from our employees. A recycling company retrieves this waste for the recycling process and separates the organic waste, which is delivered for composting at the appropriate facility. In 2004, in a partnership with the Brazilian Ministry of Development, Industry and Foreign Trade, we started to implement the Brazilian carbon market. Within the realm of this market, we developed and implemented the following projects:

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

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

Carbon credit trading system.

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

FINEP cooperation agreement: The Brazilian Ministry of Science and Technology established a science and technology research financing agency known by the acronym of FINEP (Financiadora de Estudos e Projetos). FINEP and the
government of Japan have entered into a cooperation agreement pursuant to which we were designated as coordinator of a professional qualification program within the scope of the Clean Development Mechanism developed under the Kyoto Protocol, which is aimed to provide training and professional skills for the development of carbon credit generating projects. Pursuant to estimates by the World Bank, which is an intervening party to the cooperation agreement, Brazil has good prospects to capture about 10% of the global carbon market.

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BM&FBOVESPA initiatives towards encouraging and disseminating environmentally responsible practices and sustainable development of public companies include the following:

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

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

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

Carbon Efficient Index, or ICO2 (ndice Carbono Eficiente). On December 15, 2009, BM&FBOVESPA and the Brazilian National Social and Economic Development Bank (Banco Nacional de Desenvolvimento Econmico e Social) announced
during the 15th UN Climate Change Conference (COP-15) in Copenhagen, the development of the Carbon Efficient Index. The objective of this index is to stimulate public companies to reduce greenhouse gas emissions (GHG) and adopt environmentally sound practices, a fundamental step in terms of climate change management. The index will be weighed by the inventory of carbon emissions associated with the activities of any given company.

The Carbon Efficient Index, which is still being developed, will have a structure based on the IBrX50, which is a liquidity-weighted, total return index of the 50 most actively traded stocks listed on our stock exchange. The new index has been designed to measure the carbon footprint performance of large cap companies whose stocks make up the IBrX50. In terms of carbon footprint performance, the lower the ratio of greenhouse gas emissions to revenues, the greater the carbon efficiency. As a result, the stocks of more carbon efficient and better performing companies will tend to increase in weight when compared to the ranking provided by the IBrX-50, whereas the stocks of less efficient companies will tend to decrease in weight vis--vis their weight in the IBrX-50. The market has been actively participating in the project, having made meaningful contributions to the index calculation method. iii. Dependence on patents, trademarks, licenses, concession grants, franchise arrangements or other royalty-related contracts, which are material for the business operations;

1) Patents and trademarks BM&FBOVESPA and its subsidiaries own a number of registered trademarks, in addition to trademark applications previously filed with the National Institute of Industrial Property (Instituto Nacional da Proppriedade Industrial), or INPI, the local patent and trademark office (see the discussion under subsection 9.1(b) of this Form). Our main trademarks and service marks include BM&FBOVESPA, BM&FBOVESPA A Nova Bolsa, BM&F, BM&F Brasil, GTS - Global Trading System, Bolsa Brasileira de Mercadorias, BM&F Trading System, Sisbex, Bovespa e Ibovespa, and are duly registered or the subject of trademark applications previously filed with the INPI, as applicable, classified as trademarks and services marks in the several classes of services and product we and our subsidiaries provide. Previously, BM&F being a highly recognizable trademark, we applied to secure highly renowned trademark status for the brand. Recognition of highly renowned status secures special protection rights for the trademark throughout Brazilian territory and across the spectrum of economic activity. Currently, the application proceeding is still pending. In addition, as of December 31, 2009, we had 63 trademarks and service marks registered in other countries in South America, Europe, Asia and the United States, including the Bovespa Bolsa de Valores de So Paulo, Ibovespa and Bovespa So Paulo Stock Exchange trademarks. Currently, having completed the integration process which combined BM&F and Bovespa into BM&FBOVESPA, we are in the process of reviewing our portfolio of brands, marks and logos. Additionally, a process to update trademark registrations and amend trademark applications existing at the INPI is on course. Moreover, as of December 31, 2009, we had three patent applications pending at the INPI in Brazil and five in other countries, all of them related to the GTS trading system. 2) Domain names As of December 31, 2009, BM&FBOVESPA and subsidiaries owned 140 domain names registered in Brazil (112 of which on behalf of BM&FBOVESPA) and 15 domain names registered in other countries, all of them on behalf of our company. As of that date, our main registered domain names were bmfbovespa.com.br, bmfbovespa.com, bvmf.com.br,

72

bmf.com.br, bbmnet.com.br, www.bovespasupervisaomercado.com.br, www.abolsadobrasil.com.br and www.bovespaonline.com.br. 3) Computer programs and software

sisbex.com.br,

www.bovespa.com.br,

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. As for the countries in which the registrant derives substantial revenues, identify: i. Revenues attributable to customers located in the country where the principal place of business is located, including as a percentage of total net revenues;

The charts below provide data on the allocation of revenues attributable to different types of investors. These data permit determining that trading activities by retail investors, institutional buyers, corporate investors and financial institutions accounted for aggregate 65.8% of the volume traded on Bovespa segment in 2009 versus 64.5% in 2008, whereas having accounted for aggregate 77.5% of the volume traded on BM&F segment in 2009 versus 78.3% in 2008. This group of investors substantially correlates with domestic investors trading in our markets.

Allocation of trades by type of investor- Bovespa segment

7.8% 2.8% 7.4% 2.2%

35.3%

34.2%

27.1%

25.7%

26.8%

30.5%

2008 Retail Investors Corporate Investors

Institutional Financial Institutions

2009 Foreign Investors Other

73

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

0.15% 2.90% 0.11% 2.53%

47.60%

45.46%

7.97% 18.79%

7.63% 20.02%

22.60%

24.26%

2008 Institutional Financial Institutions Foreign Investors Non financial Institutions

2009 Retail Investors Central Bank

ii.

Revenues attributable to customers located in each foreign country in which the registrant operates, including as a percentage of total net revenues;

The tables below set forth the financial value traded by foreign investors in Bovespa markets and the volume traded by foreign investors in BM&F markets in the periods presented, as allocated by home country based on statements provided by these investors. Bovespa markets
2008 % of Overall Financial Value Traded by Foreign Investors 51.06% 15.71% 10.71% 5.78% 2.62% 2.43% 1.49% 1.44% 1.06% 1.05% 0.98% 0.66% 0.61% 0.52% 0.49% 0.49% 0.38% 0.36% 0.29% 0.22% COUNTRY 2009 % of Overall Financial Value Traded by Foreign Investors 44.37% 21.05% 12.19% 5.37% 3.87% 2.77% 1.51% 1.22% 1.00% 0.87% 0.84% 0.78% 0.55% 0.39% 0.36% 0.32% 0.27% 0.27% 0.23% 0.23%

COUNTRY

Financial value traded

COUNTRY

Financial value traded

(in Brazilian reais)

UNITED STATES URUGUAY GREAT BRITAIN (UK) LUXEMBOURG HOLLAND FRANCE IRELAND CAYMAN ISLANDS JAPAN SOUTH KOREA ARGENTINA CANADA SWITZERLAND NORWAY PORTUGAL UNITED ARAB EMIRATES AUSTRALIA SPAIN CHILE SINGAPORE 497,026,846,905 152,902,181,644 104,257,096,495 56,271,631,831 25,497,188,494 23,667,723,627 14,487,346,646 13,970,402,578 10,276,788,443 10,245,013,082 9,498,400,050 6,446,063,434 5,982,356,093 5,052,333,179 4,777,313,161 4,734,418,845 3,678,975,903 3,496,025,500 2,863,443,247 2,096,836,959

(in Brazilian reais)

UNITED STATES GREAT BRITAIN (UK) URUGUAY LUXEMBOURG FRANCE HOLLAND IRELAND JAPAN CANADA SOUTH KOREA NORWAY CAYMAN ISLANDS AUSTRALIA CHILE SWITZERLAND PORTUGAL UNITED ARAB EMIRATES DENMARK SAUDI ARABIA SINGAPORE 392,668,942,885 186,333,285,698 107,862,263,030 47,567,368,154 34,228,829,529 24,529,918,550 13,355,817,208 10,775,266,056 8,865,310,187 7,688,259,587 7,425,598,619 6,878,349,528 4,846,269,850 3,446,617,437 3,174,129,611 2,825,490,000 2,417,101,082 2,375,237,822 2,019,070,162 2,012,425,336

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OTHER FOREIGN INVESTORS - TOTAL

16,204,668,816 973,433,054,932

1.63% 100.00%

OTHER FOREIGN INVESTORS - TOTAL

13,756,861,529 885,052,411,860

1.53% 100.00%

BM&F markets
2008 % of Overall COUNTRY Volume Traded (in number of by Foreign contracts) Investors UNITED STATES 85,370,297 60.81% ENGLAND (UK) 21,411,651 15.25% PORTUGAL 9,996,410 7.12% SPAIN 4,391,576 3.13% UNITED KINGDOM 4,328,728 3.08% FRANCE 3,278,664 2.34% URUGUAY 2,584,006 1.84% THE NETHERLANDS (HOLLAND) 2,554,661 1.82% GREAT BRITAIN (UK) 2,164,391 1.54% CANADA 2,009,846 1.43% COLOMBIA 1,211,075 0.86% BERMUDAS 591,710 0.42% IRELAND 229,825 0.16% LUXEMBOURG 192,072 0.14% CAYMAN ISLANDS 40,461 0.03% ARGENTINA 11,219 0.01% ISRAEL 8,620 0.01% GERMANY 7,986 0.01% AUSTRALIA 6,215 0.00% SWITZERLAND 5,005 0.00% OTHER 1,183 0.00% FOREIGN INVESTORS - TOTAL 140,395,601 100.00% Volume Traded 2009 % of Overall COUNTRY Volume Traded (in number by Foreign of contracts) Investors UNITED STATES 81,163,287 57.49% ENGLAND (UK) 20,525,005 14.54% UNITED KINGDOM 8,188,162 5.80% PORTUGAL 7,419,419 5.26% CANADA 5,990,514 4.24% FRANCE 3,397,235 2.41% SPAIN 3,392,101 2.40% THE NETHERLANDS (HOLLAND) 2,986,465 2.12% URUGUAY 2,707,426 1.92% GREAT BRITAIN (UK) 2,259,091 1.60% ISRAEL 1,588,147 1.12% THE BERMUDAS 748,120 0.53% IRELAND 445,655 0.32% LUXEMBOURG 163,788 0.12% MEXICO 106,070 0.08% COLOMBIA 42,290 0.03% GERMANY 30,911 0.02% UNITED ARAB EMIRATES 7,950 0.01% CAYMAN ISLANDS 5,565 0.00% ARGENTINA 2,245 0.00% OTHER 13,878 0.01% FOREIGN INVESTORS - TOTAL 141,183,324 100.00% Volume Traded

iii.

Total revenues attributable to customers located in foreign countries, including as a percentage of total net revenues.

The charts above show that foreign investors trading in Bovespa segment accounted for 34.2% of the volume traded in these markets in 2009 versus 35.3% of the volume in 2008, whereas foreign investors trading in BM&F segment accounted for 20.02% of the volume traded in 2009 versus 18.79% in 2008. 7.7. With regard to countries of operation, as discussed under 7.6 above, report the extent to which the registrant is subject to the jurisdiction of such countries and how the applicability of such laws influences the business. We are subject to the regulatory authority of the U.S. Commodity Futures Trading Commission, or CFTC, which is the independent agency created by the U.S. Congress in 1974 with the mandate to regulate commodity futures and option markets in the United States. The regulatory framework provided by the CFTC applies to us to the extent we: Provide local market participants with direct access to U.S. derivatives markets. On September 26, 2008, the CFTC issued a no-action letter indicating that no civil or criminal action will be taken against BM&FBOVESPA for engaging in the activity of providing direct access to trading systems in U.S. derivatives markets, nor against any market participants (meaning local brokerage firms or clearing agents for BM&F segment markets) or authorized U.S. persons accessing trading systems in U.S. derivatives markets through BM&FBOVESPA, provided certain CFTC requirements are met. Among other things, these include reporting requirements concerning volumes and types of contracts traded, new contract offerings, changes to the organizational structure of the Company and so forth.

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Offer and sell in the United States derivatives contracts based on the Bovespa Index. We have been granted CFTC approval to offer and sell in the United States full-sized and mini-sized futures contracts and options based on the Ibovespa (or Bovespa Index). Under applicable U.S. law, offerings by a foreign exchange of derivatives based on a stock index must meet certain contract requirements and criteria for composition and compilation of the index (as provided under Section 2(a)(1)(C)(ii) of the U.S. Commodity Exchange Act of 1936, as amended). These criteria include the underlying stock index constituting a broad-based index (as opposed to a narrow-based security index, as defined). Dated August 26, 2009, the CFTC permitted us to offer and sell to U.S. persons any of the following futures contracts and strategies: Ibovespa Futures; Mini Ibovespa Futures; American-Style Call Options on Ibovespa Futures; American-Style Put Options on Ibovespa Futures; Forward Points on Ibovespa Futures (FWI); Ibovespa Rollover (IR1). On that same occasion, the CFTC also permitted us to provide direct access to our electronic platforms through an order routing program established with the CME Group (routing through the CMEs Globex system). In addition, we have applied to offer and sell in the United States derivatives contracts based on the IBrX50 index. This latter application to the CFTC is currently pending response. 7.8. Discussion on long-term material relationships not discussed elsewhere in this form. Not applicable. 7.9. Other information deemed to be material. Market Ombudsman In 2001, in an initiative to enhance the credibility and transparency of the Brazilian capital markets, we created the office of the market ombudsman. The role of the market ombudsman is to hear and investigate complaints, mediating fair settlements between investors and participants with access to our markets. These complaints may refer to trading, clearing and settlement or securities custody processes and in most cases are the result of some clerical error or irregular procedure by a market participant, or ensue from limited knowledge on the part of the investor. In 2009 the Ombudsman received a total of 2,112 complaints, a significantly lower number than in 2008, which is clearly attributable to the international financial crisis. The role of the market ombudsman has grown over time; complaints have increased in number since the job was first created. This however is not indicative of any degradation in the quality of services, reflecting rather the significant expansion the domestic capital markets has undergone as the Brazilian economy grew over the last decade. Given the prospects for future market growth, in 2009 we made the decision to expand the role of the market ombudsman further and make it more proactive, rather than limited to just mediating investor complaints. Thus, going forward, in addition to receiving complaints from investors, the market ombudsman will act as the liaison officer and hear commentary and complaints from audiences as diverse as our shareholders, brokerage firms, traders, regulatory entities, institutions that operate in the capital markets and even the press. Social and Environmental Projects In addition to operations within the realm of our core business, we also engage in activities aimed to providing financial and market education and training courses, in addition to exercising our corporate citizenship by engaging in socially and environmentally responsible practices and projects, such as discussed below.

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BM&FBOVESPA Educational Institute

The mission of BM&FBOVESPA Educational Institute is to disseminate knowledge about the securities and derivatives markets amongst the public at large, including specialized knowledge amongst market professionals, pursuant to high standards of integrity and teaching knowledge. In disseminating specialized knowledge, the Institute is responsible for informational, training and qualification, and specialization and postgraduate courses provided to persons from the public at large, and to brokers, traders and other market professionals, including regulatory agencies personnel. Moreover, the Institute is responsible for conducting the process of certification of professionals for the Operating Qualification Program, or PQO, for which it offers a professional development program which permits a person acquiring specialized knowledge and building a career in the intermediation industry. In addition to regular courses taught at our premises in downtown So Paulo, the Institute also organized in-company training courses targeted for employees of financial and non-financial institutions. As the primary center in Latin America for dissemination of specialized knowledge on securities and derivatives markets, the Institute taught 3,700 students enrolled in personal attendance courses and distance learning courses. In 2009 the Institute launched a MBA program with focus on Capital Markets and Derivatives, in addition to a program on introduction to capital markets. The Institutes library has a catalog of over eight thousand works, in addition to specialized local and international periodicals. BM&FBOVESPAs corporate citizenship and social investment initiatives include the following:

BM&FBOVESPA: Institute for Social and Environmental Responsibility (Instituto BM&FBOVESPA de Responsabilidade Social e Ambiental)
The Institute was organized in 2007 as a public interest non-governmental organization locally known as OSCIP (organizao da sociedade civil de interesse pblico) for the purpose of integrating and coordinating the Companys social and environmental projects. The three principal initiatives the Institute manages are: Sports and Cultural Space (Espao Esportivo e Cultural) located in Paraispolis, a poor and overpopulated district in the city of So Paulo, it is a center for the practice of sports and cultural and artistic activities by children and teenagers of the region. The Space also offers a library with a catalog comprising over four thousand books. In 2009, 456 youngsters were enrolled in sports classes, 196 participated in cultural activities and 149 were enrolled in supplementary learning classes; BVS&A The Environment and Social Investment Exchange (Bolsa de Valores Sociais e Ambientais) this is a pioneering program inspired in the operating model of a stock exchange, which works as a hub for investors interested in contributing to environmental improvements and the advancement of education and community projects in search of sponsors and financing. In 2009 the program captured R$691 thousand to finance 24 projects (five projects are now complete, two of them being community-oriented projects and three environmental projects); Contributions to nonprofit and anchor institutions active in different sectors of the community contributions in excess of R$1.35 million were made to 69 such institutions in 2009. BM&FBOVESPA Job Training Association (Associao Profissionalizante BM&FBOVESPA) Created in 1996, this job training association is committed to promoting social inclusion. For this it implements social assistance and education actions aimed to modify present conditions to ensure that young adults are given an opportunity to build on their capabilities and skills for a better future. Programs offered by the Association include Building Employability Skills (Capacitao para Empregabilidade), Handyman (Faz Tudo) and Beauty Space (Espao Beleza). In addition to activities in its base, So Paulo, the association developed a partnership with the Mangueira Samba School (originated in the Mangueira favela of Rio de Janeiro) to implement the Handyman program in the city of Rio de Janeiro. Previously, in 2008, it had already implemented the Beauty Space program in Rio de Janeiro as well. Over 500 young adults benefited from these programs in So Paulo and Rio de Janeiro.

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BM&FBOVESPA Athletic Club The Company actively supports sports since 1988, when the Ouro Olmpico award (Olympic Gold award) was established to reward Brazilian athletes for outstanding performance in Olympic Games. In 2002, the Athletic Club was organized to permit us to take a more inclusive approach to corporate citizenship and a more active role in the preparation and sponsorship of track and field athletes. Track and field athletics is very popular and has a highly positive impact on lower income communities. In addition to working with youngsters from the community with a view to promoting social inclusion, our Athletic Club sponsors a number of outstanding track and field athletes, 99 of whom were competing in 2009 at an international level under sponsorship of the Company, which funds the athletes expenses with uniforms, equipment and gear, transportation, training, pays a stipend and in some cases housing allowance as well. In 2009, the Club won the Brazilian Track and Field Trophy for the eighth consecutive time. Sustainability committee and commission The sustainability committee has been established within the scope of our sustainability program. The committee is chaired by the chief executive, Edemir Pinto, three other executive officers, three officers, the market ombudsman and one external member. The very existence and standing of this committee evidence our deep commitment to sustainability and our decision to taking a multidisciplinary approach to the matter, in a way that engages all of us, from top to bottom, in the effort. The primary responsibility of the committee is to provide strategic guidance in setting our sustainability agenda, to approve and oversee implementation of the sustainability plan and macro initiatives, and other related actions and campaigns. Additionally, the committee is supported by a sustainability commission created at the level of middle management with the responsibility of developing the sustainability agenda and tackling day-to-day activities, reporting to the sustainability committee. 8. Economic group 8.1. Description of the economic group of which the registrant is a member a. direct and indirect controlling shareholders

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

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

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

BM&F USA Inc.

BM&F USA Inc. is a wholly-owned subsidiary based in New York, which also operates a representative office in Shanghai, China, and a wholly-owned subsidiary in London, U.K., named BM&FBOVESPA (UK) Ltd. Our operations in these bases consist of acting as our cross-border representative offices, establishing professional relationships with other exchanges and regulatory agencies, and prospecting customers for BM&FBOVESPA markets. For additional information on BM&F USA Inc., see section 7 of this Form under the heading Business.

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Brazilian Commodities Exchange (Bolsa Brasileira de Mercadorias)

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

BM&FBOVESPA Superviso de Mercados (BSM), a market surveillance entity.

BM&FBOVESPA Superviso de Mercados (BSM) was established in 2007 as a not-for-profit and financially autonomous functional entity, with its own budget, infrastructure and specialized employees, to perform oversight activities in the stoc k market, ensuring market integrity, enhanced investor protection and sound market practices. BSM has been conceived and implemented to operate in accordance with the principles and standards set under CVM Instruction No. 461/07 of the Brazilian Securities Commission, and pursuant to best recommended international standards for stock market oversight and private auditing, and in keeping with the internationally accepted public regulatory and standard-setting framework for excellence in equities markets. Then, starting from 2008 with the integration of the primary Brazilian stocks and derivatives exchange s, Bovespa and BM&F, under BM&FBOVESPA, the core activities of BSM were extended to encompass also the roles of guardian and regulator for the commodities and futures markets, such that it is currently the oversight and regulatory entity for all the market s we operate. CVM Instruction 461/07 requires that we establish enforcement mechanisms to ensure compliance with the rules and standards set by that regulatory agency and BSM, as well as with applicable regulations and legislation, by identifying and punishing illegal trading or market behavior and other unlawful practices tending to circumvent or breach the regulatory framework, or to jeopardize market security, transparency and credibility. BSMs mission is thus one of ensuring efficient protection for investors by enforcing the regulatory framework, as required by the CVM, which is facilitated by us and expected by investors and market participants. In performing its oversight and regulatory roles, BSM uses and manages multiple mechanisms, including the Investor Compensation Mechanism (Mecanismo de Ressarcimento de Prejuzos ), or MRP, as originally contemplated in CVM Instruction 461/07, and as an alternate to similar mechanisms previously adopted by Bovespa (through an investor guarantee fund) and by BM&F (through a segregated investor compensation reserve). The Investor Compensation Mechanism was established as a fund whose sole purpose is to give investors a refund mechanism for losses arising from intermediary improper actions or failure, set into motion throu gh the processing of claims which, if ultimately held valid, result in losses being refunded within limits set under applicable rules and legislation. While we do control BSM, which is a wholly-owned subsidiary, our investment in BSM is recognized at the acquisition cost.

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

BVRJ is an inactive stock exchange. It has signed a protocol of intent with the state government of Rio de Janeiro which contemplates proposed alternatives to strengthen the local financial market. BVRJ is a mutualized entity in which we hold 99 membership certificates representing 86.09% of its net assets. c. Equity holdings in companies belonging to the economic group
Equity holding(%) 99.99% 100.00% 50.12% 86.09% 100.00%

Subsidiaries and affiliates BM&FBOVESPA Superviso de Mercados Banco BM&F de Servios de Liquidao e Custdia S.A. Bolsa Brasileira de Mercadorias Bolsa de Valores do Rio de Janeiro BMF (USA) Inc.

79

d.

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

There are no such holdings by our subsidiaries or affiliates. e. Companies under common control.

We hold no interest in companies under common control with other parties. 8.2. Organizational chart of the economic group BM&FBOVESPA GROUP ORGANIZATIONAL CHART

8.3. Description of the restructuring processes within the economic group, including spin off, consolidation, merger or share merger transactions, dispositions or acquisitions of ownership control or of material or substantial assets There have been no restructuring transactions materially impacting our economic group, other than the transactions set forth in subsection 6.5 of this Form. 8.4. Other information the registrant may deem relevant. There is no additional material information related to our economic group and this subsection.

9. Relevant assets 9.1. Noncurrent assets which are relevant to the development of Company activities

a.

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

Type of property Building Building Building

Property address 48 Antonio Prado Sq 275 15 de Novembro St 195 Florncio de Abreu St 80

City So Paulo So Paulo So Paulo

State SP SP SP

Rented/Leased from third parties NO NO NO

Building Office spaces Office spaces Office spaces Office spaces Office spaces Office spaces* Warehouses

38 3 de Dezembro St 344 Marechal Deodoro St 126 Carijs St 11 Mercado Street (Ground Fl/ Mezzanine) 1234 Andradas St 471 Lbero Badar St, 6th Fl 20 15 de Novembro Sq 20 Alta Floresta St

So Paulo Curitiba Belo Horizonte Rio de Janeiro Porto Alegre So Paulo Rio de Janeiro Sorriso

SP PR MG RJ RS SP RJ MT

NO NO NO NO NO NO NO NO

*The relevant building belongs to BVRJ, a Company subsidiary.

i.

Patents , trademarks, licenses, concessions, franchises, and technology transfer agreements 1) Registration requests and relevant trademark registration in Brazil
Trademark Process 900170212 200010476 829295089 829344411 Status Req Reg Req Req Category NCL 36 NCL 42 NCL 16 NCL 36 Deposit 1/30/2007 5/29/1998 9/4/2007 10/9/2007 Registration 6/19/2001

BM&F SETTLEMENT BANK BOVESPA SAO PAULO STOCK EXCHANGE BOVESPA BDR INTERNATIONAL BOVESPA MARKET NOT SPONSORED BDR INTERNATIONAL BOVESPA MARKET NOT SPONSORED BDR INTERNATIONAL BOVESPA MARKET NOT SPONSORED BVS&A BOVESPA SOCIAL AND ENVIRONMENTAL EXCHANGE BVS&A BOVESPA SOCIAL AND ENVIRONMENTAL EXCHANGE

829344420

Req

NCL 42

10/9/2007

829344438

Req

NCL 16

10/9/2007

829549455 829549463 829678557 829678565 830006273 830006281 830006524 830006532 830050159 830322876 830323465 830323511 830323520 830404660 830467351 830501428 812290143 813834600 813878128 813878144 815089414 816169683

Req Req Req Req Req Req Req Req Req Req Req Req Req Req Req Req Reg Reg Reg Reg Reg Reg

NCL 36 NCL 41 NCL 41 NCL 36 NCL 41 NCL 36 NCL NCL NCL NCL NCL NCL NCL NCL NCL 41 36 36 36 41 36 42 36 41

2/15/2008 2/15/2008 5/6/2008 5/6/2008 12/8/2008 12/8/2008 12/8/2008 12/8/2008 2/5/009 8/6/2009 8/7/2009 8/7/2009 8/7/2009 10/23/2009 12/21/2009 1/6/2010 11/7/1985 9/22/1987 10/29/1987 10/29/1987 9/22/1989 7/4/1991 10/27/1987 2/6/1990 2/6/1990 2/6/1990 3/17/1992 7/12/1994

BM&FBOVESPA BM&FBOVESPA
BM&FBOVESPA THE NEW EXCHANGE BM&FBOVESPA THE NEW EXCHANGE

IBOVESPA IBOVESPA SINACOR iMERCADO (iMarket) BVMF BVMF BVMF

BM&FBOVESPA CHALLENGE

Educar BM&FBOVESPA

(BM&FBOVESPA Education) IFNC Financial BM&FBOVESPA Index

NCL 36 36.50/60/70 NCL 36 NCL 36 NCL 36 NCL 36 NCL 36

BM&F IBOVESPA BOVESPA

IBOVESPA FUTURES

BM&F BM&F BRAZILIAN MERCANTILE

81

& FUTURES EXCHANGE SAO PAULO COMMODITIES EXCHANGE BOVESPA SAO PAULO STOCK EXCHANGE

816690154 820693081 820833193 821874640 821877259

Reg Reg Reg Reg Reg

36.70 NCL 36 NCL 36 36.10/70 36.10/70

5/19/1992 5/28/1998 8/10/1998 12/15/1999 12/16/1999

1/25/1994 4/3/2001 2/17/2004 8/25/2009 4/18/2006

BOVESPA BTC CBLC SECURITIES

LENDING

BRAZILIAN CLEARING AND DEPOSITORY CORPORATION (CBLC) CBLC MULTIBROKER CBLC BRAZILIAN CLEARING
AND DEPOSITORY CORPORATION CBLC BRAZILIAN CLEARING AND DEPOSITORY CORPORATION

821877348 822059380 822472791

Reg Reg Reg

36.10/70 NCL 36 NCL 36

12/16/1999 3/14/2000 7/27/2000

4/18/2006 10/13/2009 9/12/2006

822472813

Reg

NCL 38

7/27/2000

9/12/2006

SISBEX BOVESPA FIX CORPORATE

DEBT SECURITIES MARKET

822744260 823194264 823411656 823411680 823411710 823454258 827242328 827634048 828056102 828232202 828232253 828232296

Reg Req Reg Reg Reg Req Reg Reg Reg Req Req Req

NCL 36 NCL 36 NCL 36 NCL 36 NCL NCL NCL NCL NCL 36 36 36 36 36

5/22/2000 4/23/2001 7/5/2001 7/5/2001 7/5/2001 7/20/2001 3/17/2005 8/12/2005 1/20/2006 3/29/2006 3/29/2006 3/29/2006

8/22/2006

BM&F GLOBAL TRADING SYSTEM BRAZILIAN MERCANTILE & FUTURES EXCHANGE (BM&F)
BM&F BRAZIL

2/21/2007 2/21/2007 2/21/2007 11/20/2007 12/26/2007 3/18/2008

GLOBAL TRADING SYSTEM (GTS) MB - MEGABOLSA

BOVESPA VALUE INDEX ISE CORPORATE SUSTAINABILITY INDEX NVEL 1 BRAZIL BOVESPA BRAZIL BOVESPA NOVO MERCADO NVEL 2 BRAZIL BOVESPA

NCL 36 NCL 36 NCL 36

i.

Term

The term for trademarks in Brazil is the one mandated by Law #9279/1996 (Industrial Property Law), which is: 10 years counted as from the granting date and renewable for equal and successive periods, without maximum limitation. ii. Brazil. iii. Events that may lead to the loss of rights involving assets Region involved

Currently, we are not aware of any events which may lead to the loss of rights involving said trademarks, other than the cases contemplated by law. Also, we do not anticipate any events which might lead to the loss of rights involving said trademarks, which are not subjected to any third-party administrative or judicial dispute. iv. Possible consequences of loss of rights to issuer

The loss of rights would result in the need to discontinue use of said trademarks, a case which is not currently anticipated, subject to the information referred to in item iii above. 2) Registration of relevant trademarks abroad
Country Argentina Argentina Trademark Process 2039057 1980146 Status Reg Reg Category NLC 36 NLC 36 Deposit 1/7/2004 12/1/2003

IBRX
BOVESPA INDEX

82

Argentina Argentina Canada Canada Chile Chile Chile Chile Chile Singapore Office for Harmonization in the Internal Market Spain United States of America United States of America United States of America France Hong Kong Hong Kong Japan Mexico Paraguay Paraguay Paraguay Paraguay Paraguay Paraguay Paraguay Portugal Portugal United Kingdom of Great Britain and Northern Ireland United Kingdom of Great Britain and Northern Ireland United Kingdom of Great Britain and Northern Ireland South Korea Switzerland Taiwan Taiwan Uruguay Uruguay Uruguay

BOVESPA SAO PAULO

STOCK EXCHANGE BOVESPA SAO PAULO STOCK EXCHANGE BOVESPA INDEX

1983386 1983387 TMA502264 TMA502354 680921 680922 681837 681838 703162 T9502807G 003657641

Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg

NLC 36 NLC 41 NLC 16/35/36 NLC 16/35/36 NLC 36 NLC 36 NLC 36 NLC 36 NLC 36 NLC 36 NLC 36

4/20/1993 2/2/2004 5/12/1995 5/12/1995 12/15/1992 12/15/1992 4/21/1993 4/21/1993 2/12/2004 2/10/2004

IBOVESPA
BOVESPA INDEX

IBOVESPA SAO PAULO STOCK EXCHANGE (BOVESPA) BOVESPA SAO PAULO

STOCK EXCHANGE

IBRX IBOVESPA IBRX IBOVESPA IBRX PIBB - BRAZIL BOVESPA

INDEX SECURITIES

1996972 3112388 3187956 3247943 95557762 199803186 199806844 4055845 509242 256303 259791 259792 260020 260021 260022 270402 307429 307430 2021172

Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg Reg

NLC 36 NLC 36 NLC 36 NLC 36 NLC 36/41 NLC 36 NLC 36 NLC 36 NLC 36 NLC 42 NLC 36 NLC 36 NLC 41 NLC 36 NLC 36 NLC 36 NLC 35 NLC 36 NLC 16/35/36 NLC 36

5/23/1995 2/18/2004 7/13/2004 7/27/2004 2/10/1995 4/25/1995 4/25/1995 4/14/1995 3/3/1995 11/17/1992 11/16/1992 5/22/2003 5/7/1993 4/23/1993 4/23/1993 1/9/2004 2/17/1995 2/17/1995 5/22/1995

IBOVESPA IBOVESPA
BOVESPA INDEX

IBOVESPA IBOVESPA IBOVESPA BOVESPA

BOVESPA INDEX

IBOVESPA BOVESPA SAO PAULO

STOCK EXCHANGE STOCK EXCHANGE

BOVESPA SAO PAULO SAO PAULO STOCK EXCHANGE (BOVESPA) IBRX IBOVESPA IBOVESPA IBOVESPA PIBB - BRAZIL BOVESPA
INDEX SECURITIES

2367095A

Reg

6/30/2004

PIBB - BRAZIL BOVESPA

INDEX SECURITIES

2367095B

Reg

NLC 36

6/30/2004

IBOVESPA IBOVESPA IBOVESPA IBOVESPA IBRX IBOVESPA BOVESPA SAO PAULO

STOCK EXCHANGE

34906 427536 83189 84268 352300 347426 348234

Reg Reg Reg Reg Reg Reg Reg

NLC 36 NLC 16/35/36 NLC 35 NLC 36 NLC 36 NLC 36 NLC 36

4/6/1995 3/29/1995 3/9/1995 3/9/1995 1/13/2004 11/17/1992 4/23/1993

83

i.

Term

The term of trademarks abroad is the one mandated by law in the countries where the relevant trademark protection was required (usually, 10 years counted as from the granting date and renewable for equal and successive periods without maximum limitation). ii. Region involved

Argentina, Canada, Office for Harmonization in the Internal Market (OHIM), Switzerland, Chile, Spain, France, United Kingdom, Hong Kong, Japan, South Korea, Mexico, Portugal, Paraguay, Singapore, Taiwan, United States and Uruguay. iii. Events that may lead to the loss of rights involving assets

Currently, we are not aware of any events which may lead to the loss of rights involving said trademarks, other than the cases contemplated by law. Also, we do not anticipate any events which might lead to the loss of rights involving said trademarks, which are not subjected to any third-party administrative or judicial dispute. iv. Possible consequences of loss of said rights to issuer

The loss of rights would result in the need to discontinue use of said trademarks, a case which is not currently anticipated, subject to the information referred to in item iii above. 3) Patent requests in Brazil
Req # PI 0801789-1 PI 0801983-5 PI 0801982-7 Deposit date 4/30/2008 5/29/2008 5/29/2008 Publication date Not published yet 2/9/2010 2/9/2010 Title OPERATIONALIZATION SYSTEM OF A STOCK MARKET TRANSACTION PRICING SYSTEM AND PROCESS PROCESS FOR A STOCK MARKET TRANSACTION AND ASSISTANCE SYSTEM Status Patent request in effect Patent request in effect Patent request in effect

i.

Term

The term of invention patents is the one mandated by Law #9279/1996 (Industrial Property Law), which is: 20 years counted as from the deposit date. We highlight the fact that no patent has been issued to BM&FBOVESPA yet. ii. Brazil. iii. Events that may lead to the loss of rights involving assets Region involved

Currently, we are not aware of any events which may lead to the loss of rights involving said patent requests, other than the cases contemplated by law. Also, we do not anticipate any events which might lead to the loss of rights involving said patent requests, which are not subjected to any third-party administrative or judicial dispute. iv. Possible consequences of loss of said rights to issuer

The loss of rights would result in the need to discontinue use of the objects of said patent requests, a case which is not currently anticipated, subject to the information referred to in item iii above. 4) Patent Applications Abroad
Country Argentina Argentina International PCT Request Number P 09 01 01948 P 09 01 01947 PCT/BR2009/000120 Filing Date May 29, 2009 May 29, 2009 April 30, 2009 Status Patent application in effect Patent application in effect International patent application in effect

84

International PCT International PCT

PCT/BR2009/000154 PCT/BR2009/000153

May 29, 2009 May 29, 2009

International patent application in effect International patent application in effect

i.

term

The term of an invention patent is that which is stipulated by the rules and regulations of the countries for which patent protection was requested (generally, 20 years counted from the filing date). In the case of the Patent Cooperation Treaty (PCT), which constitutes a mechanism for the international filing of patent applications, the protection time frame will vary according to the countries for which the aforementioned protection is being requested, as indicated by the applicant. It should be noted that BM&FBOVESPA has not yet been granted any patents abroad. ii. covered territory

Argentina and other territories to be opportunely defined under PCTs international application procedures. iii. events that may cause the loss of rights related to such assets

Besides the legally stipulated cases, we are not currently aware of any events that may cause the loss of rights related to such patent applications. No events that may cause the loss of rights related to such patent applications are currently envisaged. In addition, such patent rights are not subject to any administrative or judicial dispute by third-parties. iv. possible consequences for the Company of the loss of such rights

The loss of such rights would result in the need to discontinue the use of the aforementioned patent applications. This possibility cannot be currently envisaged based on the information contained in item iii above. 5) Relevant Technology Contracts i. duration

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

Mostly in Brazil, with possible effects on other countries due to the nature of the activities performed by BM&FBOVESPA. iii. events that may cause the loss of rights related to such assets

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

No events that may cause the loss of the rights arising from the aforementioned contracts are currently envisaged. In addition, there are alternative solutions to those currently used by the company, which could be replaced in case of termination of the contractual relationship. 5.1) Overview

Currently, the technology contracts that are relevant for the development of our activities are as follows: (i) software assignment and transfer contract, signed with Multibroker S.A, through which we were assigned ownership of the web-based transaction management and processing software called Multibroker Electronic Securities Trading System; (ii) license and maintenance contracts for use of (a) the software applications for the trading engine of our electronic trading platforms (Megabolsa and GTS described below) and (b) a trading system, also for the GTS, called GLWin, with GL Trade, in addition to RiskWatch, which measures the risk of the regular equities settlement cycle; (iii) license contracts for use of the software applications used to develop our activities, signed with the holders of the rights on the aforementioned software applications; and (iv) contracts for the update, technical support and maintenance of equipment used to develop our activities, including the

85

technological platforms of our trading systems, signed with information technology service providers. In addition to the aforementioned contracts, we have signed contracts with companies (vendors) specialized in the dissemination of market data for our markets (executed trades and market quotes). 5.2) 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. 5.2.1) Mega Bolsa

After seven years using a version of the CATS system, which was developed by the Toronto Exchange, in 1997 we began to use Mega Bolsa electronic trading platform, which was developed by the SBF-Paris Bourse, currently called Atos Euronext Market Solution, which, in 1995, after its open-outcry platform was closed, assumed the processing of all equities transactions carried out in our markets. In addition, our trading, clearing and settlement systems and depository services are fully integrated. Our equities trading system processes bids and asks electronically, with reliability, agility and transparency, allowing investors, Intermediary Institutions and online data agencies to visualize all offers in real time via Internet or via private networks connected to our system. In addition, the Mega Bolsa system allows transactions to be monitored in order to track and identify any problems in the case of a deviation in response time, permitting not only the collection of data for control analysis purposes, but also the development of tools that speed up the transmission of orders to the market and make possible the automatic registration of stock purchases and sales via automated offers (program trading). Via automated connections or gateways, the Exchange allow orders to be received through the order routing mechanism, which is geared to the following types of investors: a) Retail Investors individual investors, non-financial companies and investment clubs; b) Institutional Investors mutual funds, pension funds, insurance companies and others; and c) Portfolio managers customer portfolios managed by duly authorized and registered managers. The available order routing functionalities are limited when compared to those available in the Mega Bolsa terminals. 5.2.2) GTS and Sisbex

Our electronic derivatives trading platform (Global Trading System, or GTS) was introduced in 2000. All derivatives contracts authorized by BM&FBOVESPA can be traded on GTS, except for the OTC contracts. The use of this platform is supported by the license and maintenance contract for use of the software applications called NSC and Hub1, signed with the SBF-Paris Bourse (later succeeded by Atos Euronext Market Solutions). We also have an electronic trading system, called the Sisbex, which was especially adapted for the execution of transactions with federal government bonds, particularly definitive purchase and sale transactions, repo transactions and stock lending transactions. 5.2.3) Bovespa Fix and Soma Fix

The electronic fixed income trading system is the SIOPEL, which was developed by Mercado Abierto Electronico S.A. (MAE), the main debt securities market in Argentina. In 2001, after acquiring the trading platform, BVSP entered into a partnership with MAE and Bolsa Electronica de Valores del Uruguay S.A. (BEVSA) to further develop and enhance the software. Since the software was originally developed for the debt securities market, it incorporates trading characteristics of that market, such as trading in rate, price quotation requests and spread orders. Besides providing the fixed income market with a safe, modern and reliable environment, one of the SIOPEL systems major These systems have been licensed to us by their owners for time frames of up to 20 years. We have maintenance contracts with these owners stipulating the provision of software updates and the correction of defects, among other services.
1

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advantages is the flexibility that it provides to market managers and traders. In addition to being used by BM&FBOVESPA (for its government bond market), the SIOPEL system is also used by the Colombia Exchange and the Colombia Republic Bank. 5.3) Sinacor

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

b.

The entities in which the Company has an equity interest

Name BM&FBOVESPA Settlement and Custody Bank S.A. So Paulo - Brazil Facilitates clearing and cash settlement of the transactions carried out in the BM&FBOVESPA trading environments and acts as an important risk mitigation and operational support mechanism Brazilian Commodities Exchange Braslia Brazil It makes possible the commercialization of agricultural products, provides services to the public sector through the electronic auction system, and provide services related to the acquisition of goods and services to the private sector. 50.1% Controlled Not registered as a publicly held company

Main office

Activities developed

Equity interest Controlled or affiliated Registration at CVM Book value of the equity interest (in thousand BRL) Market value of the equity interest based on the stock price quotations for the last business day of the fiscal year (in thousand BRL) Appreciation or depreciation of such equity interest, in the last 2 fiscal years, based on the book value (in thousand BRL)

100.0% Controlled Not registered as a publicly held company

39,955

8,013

Not applicable

Not applicable

None (except for a positive adjustment for equity equivalency in the amount of BRL 5,275 (15.21%))

None (except for a positive adjustment for equity equivalency in the amount of BRL 79 (1%))

Appreciation or depreciation of such equity interest, in the last 2 fiscal years, based on the market value, based on the stock price quotations at the end of each fiscal year (in thousand BRL)

Not applicable

Not applicable

Total dividends received in the last 2 fiscal years (in thousand BRL)

Reasons for the acquisition and maintenance of such equity interest

Provide access right holders and BM&FBOVESPA Clearinghouses with settlement and asset custody functionalities.

Develop and operate trading systems for commodities, goods, services and securities, making possible the creation of a major domestic market for agricultural commodities.

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Name Main office

Rio de Janeiro Stock Exchange (BVRJ) Rio de Janeiro Brazil The BVRJ is not currently active. Since 2004, the Exchange has been renting to the public a portion of the physical space belonging to its main office building. Equipped with state-of-theart technological resources, the BVRJ Convention Center is available for seminars, conferences, training activities and private meetings, allowing various set-up configurations and adapting itself to various types of institutional and social events. 86.1% Controlled Not registered as a publicly held company

BM&F USA Inc. New York - USA

Activities developed

Support to the stock and commodities exchanges that conduct activities involving foreign customers and relationships with foreign regulatory and governmental bodies, as well as foreign exchanges, in order to (i) assess the potential for strategic alliances, (ii) broadcast BM&FBOVESPA market data to foreign investors and (iii) gather relevant international data.

Equity interest Controlled or affiliated Registration at CVM Book value of the equity interest (in thousand BRL) Market value of the equity interest based on the stock price quotations for the last business day of the fiscal year (in thousand BRL) Appreciation or depreciation of such equity interest, in the last 2 fiscal years, based on the book value (in thousand BRL) Appreciation or depreciation of such equity interest, in the last 2 fiscal years, based on the market value, based on the stock price quotations at the end of each fiscal year (in thousand BRL)

100.0% Controlled Not registered as a publicly held company

51,875

948

Not applicable

Not applicable

None (except for a positive adjustment for equity equivalency in the amount of BRL 4,074 (7.22%))

None (except for a negative adjustment for equity equivalency in the amount of BRL 3,054(1.24%))

Not applicable

Not applicable

Total dividends received in the last 2 fiscal years (in thousand BRL)

Reasons for the acquisition and maintenance of such equity interest

With the evolution of the stock market, since 2000, integration agreements have transferred equities trading in Brazil to the So Paulo Stock Exchange. In 2002, the Brazilian Commodities & Futures Exchange (BM&F) acquired BVRJs equity memberships, becoming the holder of the rights to manage and operate the Federal Government Bond trading system (Sisbex).

Relationships with exchanges and regulatory bodies and prospection of new foreign customers for the Brazilian market.

Name Main office

BM&FBOVESPA Market Supervision So Paulo - Brazil

CME Group Chicago - EUA The CME Group acts as risk manager for customers worldwide. As an international marketplace, it attracts buyers and sellers to its electronic trading systems, CME Globex, and open-outcry system. It offers a wide range of products, including all the main asset categories, as follows: futures and options based in interest rates, stock indices, exchange rates, agricultural commodities and other products, such as weather and real estate products.

Activities developed

Responsible for overseeing transactions and activities performed by market participants and clearing and/or custody agents at the CBLC, as well as for the management of the Loss Reimbursement Mechanism (MRP).

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Equity interest Controlled or affiliated Registration at CVM Book value of the equity interest (in thousand BRL) Market value of the equity interest based on the stock price quotations for the last business day of the fiscal year (in thousand BRL) Appreciation or depreciation of such equity interest, in the last 2 fiscal years, based on the book value (in thousand BRL) Appreciation or depreciation of such equity interest, in the last 2 fiscal years, based on the market value, based on the stock price quotations at the end of each fiscal year (in thousand BRL)

99.9% Not applicable Not registered as a publicly held company

1.8% Not applicable Registered at the Securities Exchange Commission (SEC)

20,000

1,276,199

Not applicable

695,572

Not applicable

Not applicable

Not applicable

2009 - BRL 117,266 (20.28%) 2008 - (BRL 697,893) (-54.69%) Refer to item 9.2

Total dividends received in the last 2 fiscal years (in thousand BRL)

2009 - BRL 12,592 2008 - BRL 20,650

Reasons for the acquisition and maintenance of such equity interest

To oversee and strengthen the BM&FBOVESPA markets.

Refer to paragraph (b) of item 10.3, regarding the Global Preferred Strategic Partnership.

9.2. Other information that the Company deems relevant The Companys equity interest in the CME Group originates from the cross investment made on February 26, 2008, which resulted in the incorporation of CMEG Brazil 2 Participaes Ltda. by BM&F S.A. As a result of this incorporation, BM&F S.A. acquired a direct equity interest in the CME Group of 1,189,066 ordinary shares class A, and the CME Group, through its controlled companies, became the holder of 101,078,580 ordinary shares issued by BM&F S.A. The CME Group shares are subject to trading restrictions (lock up) until February 2012, subject to the agreed upon contractual exceptions. The CME Group shares are evaluated based on the cost of acquisition, that is, based on the 1.8% equity interest investment in the CME Group. BM&FBOVESPAs Management periodically monitors all relevant internal and external indicators to track this investment, such as stock price quotations, earnings evolution, operational performance, rules and regulations and changes in the U.S. markets, in order to objectively identify a potential reduction in the recoverable value (impairment) of the investment. To this end, BM&FBOVESPA has hired two independent consultants to conduct an economic/financial evaluation of the CME Group, by using the discounted cash flow method (i.e., an evaluation method called Value in Use, pursuant the provisions set forth in CPC 01). The evaluation results has not revealed the need for recognizing losses at fair value for the investment in CMEG Brazil 2 Participaes Ltda. for the 2009 and 2008 fiscal years. To conduct the evaluation, the consultants projected the CME Groups future earnings based on 10-year models, nominally and in U.S. Dollars, with a perpetuity growth assumption after the 10th year. Only data in public domain was collected. The projections were based on the expected growth in volumes, measured by the number of contracts traded, as well as on average unit revenue per contract. To this end, both consultants have aligned their projections with the consensus in the market for the first two years of their models, that is, 2010 and 2011, with a growth rate for future years based on their respective evaluation models. The growth indicators for net revenues and EBITDA were applied to the 10-year projection and aligned with the perpetuity so that growth for the first 10 years could reach a peak and then gradually diminish until reaching the perpetuity level in the last years. The perpetuity used by the consultants was essentially based on the expected future behavior of the U.S. GDP.

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The rate used to discount the future cash flows was calculated based on the Weighted Average Capital Cost (WACC), according to which own capital and third-party capital are weighted by their respective costs. The calculated rate depends on both macroeconomic and marketing factors.

10. Managements discussion and analysis 10.1 Management should discuss the following with regard to the financial statements: a) the financial condition and net equity position; The year 2009 dawned in anxiety, amid the uncertainties of a distressed economic environment, bleak projections for the global economic future, which redoubled at every turn of events, and with every news headline or market development. This was the economic outlook that emerged from the subprime mortgage crisis started in the United States in 2007 to turn into the worst global financial crisis since the Great Depression in the 1930s. In the years before the crisis, in the folly of the housing derivatives feeding frenzy, lending behavior changed, credit policies became ever more liberal, securitization ubiquitous, players operated in highly-leveraged mode, regulation was lax or lacking, and there was too little transparency in over-the-counter transactions. As a result, the scenario that emerged early in 2009 after the crisis peaked was one of severe credit crunch, pointing to general deleveraging, amidst a lively debate over the need for more stringent and efficient regulation for the financial and capital markets, strong contraction in the prices of commodities and financial assets, and governments across the board moving towards quantitative easing. This combination of factors directly impacted performance in markets BM&FBOVESPA operates. In the equities market (Bovespa segment), volumes tumbled due mainly to the falling prices of stocks prompted by bearish sentiments and risk aversion, whereas in the derivatives market (BM&F segment), hedging activities sank due mainly to the credit crunch, which coupled with general risk aversion and deleveraging significantly depressed volumes. This low-volume scenario prevailed for most of the first half of 2009. However, despite the doom-and-gloom facing world economies, Brazil differently from developments in previous crises reacted positively and was one of the few countries to emerge relatively unscathed from the crisis. While the level of economic activity did decrease, the country was less affected by the downturn than most other countries, flow of foreign investment increased in strides in the second half of the year, pushing strong appreciation in the Brazilian real against the U.S. dollar. In the latter half of the year, an improved landscape and brighter prospects for the domestic economy positively impacted the equities markets. The Bovespa Index soared in the highest rise on record, the biggest gainer among securities markets across the world. The IPO market rebounded and boomed as the worlds most active after China, closing 2009 as our second best year on record in total proceeds, making Brazil the 4th best performing country in terms of proceeds from IPOs, and 7th by overall offering proceeds, in addition to having hosted the countrys largest IPO ever, conducted by Banco Santander Brasil. These movements were topped by a surging stock market, which in the fourth quarter reached the highest ever average daily trading volume. Meanwhile, in the BM&F segment the market move towards deleveraging continued to affect volumes traded negatively including in the second half of 2009. Key indicators that directly affect our overall performance include the following: The target interest rate, or Selic Meta, defined by the Brazilian Monetary Policy Committee (Comit de Poltica Monetria), or Copom, fell to 8.75% in December 2009 from 13.75% at start-of-year, evidencing the expansionist monetary policy the Brazilian government has adopted; The exchange rate for the Brazilian real against the U.S. dollar (per the PTAX selling rate compiled by the Central Bank) closed the year at R$1.7412, down 25.5% in the year from a March 3 peak of R$2.4218, but up from November 9 when it reached its lowest at R$1.7024; 90

Availability of domestic credit grew, with the credit-to-GDP ratio going up to 45.0% in December from 40.0% in January 2009; and The market prices for some of the most actively traded commodities produced in Brazil and exported by the country, such as oil, pulp and soybean, rebounded. However, while these improvements in the economic landscape and the outlook for the local market positively impacted our performance and results of operations for the second half of the year, they were insufficient to prevent 2009 revenues from falling on a year-over-year basis. Another factor influencing performance in our markets was the creation of two new types of taxes on financial transactions (IOF). On October 20, 2009, with the stated objective of arresting the appreciation of the Brazilian real, the government adopted a 2.0% tax on money inflows for portfolio investments (stocks, fixed-income securities and derivatives) in domestic capital markets Then, because the actual impact of the tax (IOF) would have been to divert trading away from the local markets, draining precious onshore liquidity, on November 19 the Brazilian government announced a 1.5% IOF tax on issuances of American Depositary Receipts (ADRs), admittedly in a move to eliminate the competitive disadvantage it had created with the IOF tax on money inflows, for it increased the cost of raising capital in the Brazilian market. These two measures negatively impacted our markets, in particular the equities markets, both because of the increased cost foreign investors now incur to invest in the local market and as a result of uncertainty about additional measures the Brazilian government could take. These two government measures impacted the flow of foreign capital to our markets and negatively affected trading activities particularly in the Bovespa segment, as they increased the cost of trading in local markets, in addition to having added to the equation an element of uncertainty about other measures the government may take in the future. Finally, differently from the economic outlook at the end of 2008, this time there are good prospects for Brazilian economy to resume the growth trend, whereas there are encouraging signs recovery is on course in most economies. If the positive projections do materialize, this will positively impact our results of operations. In addition, while 2010 should continue see the roaring debate evolve around re-regulating the international financial and capital markets, which was so pervasive last the year, in Brazil substantive regulation already is in place, more or less in keeping with the models in debate, including in the form of regulation by BM&FBOVESPA, which encourages and prefers transactions in exchange-traded assets to over-the-counter trades. b) the capital structure and likelihood of a redemption of shares or quotas, including: i) events of redemption; ii) reimbursement value calculation method. Other than as legally provided, the Company is not contemplating any share redemption, nor any event that would trigger redemption rights. c) the Companys capacity to service its debt; Our financial income for the year to December 2009 reached R$253,862 thousand and breaks down as follows: interest income R$289,686 thousand, down 20.6% year-on-year, mainly due to decline in the benchmark interest rate paid to financial investments; and R$35,824 thousand in financial expenses, which were 39.2% down from a year ago. EBITDA was R$975,108 thousand, representing a 6.7% rise from R$913,493 thousand in the previous year, whereas EBITDA margin rose to 64.9% from 57.0% previously. Net income for the year amounted to R$881,050 thousand, 36.5% up year-on-year, primarily due to the reduction in expenses. Our year-end consolidated balance sheet registered total assets of R$21,201,183 thousand, where 91

15.3% or R$3,236,211 thousand represent cash and cash equivalents and financial investments. As a percentage, non-current assets of R$18,422,215 thousand accounted for 86.9% of total assets, under which the main account is intangible assets of R$16,117,930 thousand, followed by investments totaling R$1,319,439 thousand. As a percentage of total liabilities, current liabilities of R$1,162,075 thousand accounted for 5.5% and correlates mainly with cash collaterals received from customers in the amount of R$810,317 thousand, and liabilities under repurchase agreements on the order of R$144,513 thousand. Non-current liabilities of R$313,002 thousand accounted for 1.5% of total liabilities, primarily made up of deferred income tax and social contribution amounting to R$261,060 thousand, which correlate with the provision on temporary differences from tax amortization of goodwill in the year. Shareholders equity as of December 31, 2009, totaled R$19,709,749 thousand, composed by capital stock of R$2,540,239 thousand (12.9%), capital reserve of R$16,666,489 thousand (84.6%), revaluation reserves of R$23,551 thousand (0.1%), statutory reserves of R$706,119 thousand (3.6%), legal reserve of R$3,453 thousand (0.02%) and in addition, by treasury stock resulting from the share buyback program and recorded in a contraequity account at R$230,102 thousand. We should note that our policy calls for low risk investment of cash balances, earning relatively low interest rates, which correlates with a substantial volume of government bonds in our portfolio, often bought through investment funds. We typically direct our financial investments to more conservative investment funds, whose assets are invested in diversified bond portfolios whose performance benchmark follows the interbank deposit rate or the Selic rate. Given the above, reflecting our consolidated short- and long-term liabilities, our low indebtedness, and liquidity and cash positions, we understand our Company is fully capable of paying the service of out short- and long-term indebtedness. d) the sources of financing for working capital and capital expenditures (noncurrent assets); e) the sources of financing for working capital and capital expenditures (noncurrent assets), which the Company plans to use to cover liquidity deficiencies; We primarily finance our working capital and investments in non-current assets from our operating cash flow. In addition, we have entered into certain leasing agreements, which substantially correlate with IT-related equipment. Pursuant to the accounting standard under pronouncement CPC 06 Leases, approved by CVM Resolution 554/08, we classify lease contracts as either financial or operating leases based on the characteristics of each. The balance of lease arrangements as of December 31, 2009 was R$11,790 thousand, with future payments through to 2011, versus a balance of R$4,087 thousand as of December 31, 2008. f) the level of indebtedness level and the characteristics of such debt obligations Not applicable. g) limitations on use of the proceeds of financing previously undertaken; Not applicable.

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h) significant changes to any line item in the financial reports; Statements of income comparison - Years ended December 31, 2009 and 2008 Gross operating revenues Gross operating revenues in the amount of R$1,672,894 thousand for the year to December 31, 2009, declined 6.2% from R$1,783,358 thousand one year ago, primarily as a result of a 4.3% fall in volumes traded on the equities markets and a 3.3% drop in volumes for the derivatives markets, in either case due to factors correlated with the global financial crisis which peaked in 2008 but continued to adversely affect the capital markets primarily in the first half of 2009. Trading and/or settlement system BM&F segment The revenues from transaction fees we charge on trading and clearing activities on the derivatives markets (BM&F segment) tumbled 12.9% to R$552,492 thousand at year-end from R$634,230 thousand in the prior year. This decrease correlates mainly with the following items: Derivatives The revenues from fees charged on derivatives trading and clearing transactions (derivatives clearinghouse) fell 14.2% year-on-year, to R$516,052 thousand for the year from R$601,275 thousand previously, as a result of the 3.3% decline in volume traded in derivatives contracts and 10.3% slump in average revenue per contract (RPC). Foreign exchange The revenues from fees charged on forex trading and clearing transactions (foreign exchange clearinghouse) tossed 2.1% year-on-year, to R$20,849 thousand for the year from R$21,302 thousand in the earlier year, due mainly to appreciation of the Brazilian real against the U.S. dollar. Government securities The revenues from fees charged on trades in government bonds and debt securities, and on clearing transactions (debt securities clearinghouse) sank 53.0% year-on-year, to R$155 thousand at end of year from R$330 thousand the year before, as a result of the 76.9% plunge in volume traded. Bolsa Brasileira de Mercadorias The revenues from trades in agricultural commodities on the exchange operated through Bolsa Brasileira de Mercadorias fell 9.1% year-on-year, to R$7,146 thousand for the year from R$7,865 thousand in the year before, due to the fall in volume traded in agricultural notes. Settlement bank The revenues from the operations of BM&FBOVESPAs settlement bank increased by 139.7% year-on-year, to R$8,290 thousand at end of year from R$3,458 thousand previously, as a result of the rise in volume of services sold. Trading and/or settlement system Bovespa segment The revenues from trading and transaction fees we charge on trading and clearing activities in the equities markets (Bovespa segment) fell 2.2% year-on-year, to R$1,032,201 thousand for the year from R$1,055,028 thousand one year earlier. This drop correlates mainly with the following items: 93

Trading trading fees The revenues from fees charged on trading in equities tossed 2.2% year-on-year, at R$617,000 thousand at yearend from R$635,091 thousand one year ago, reflecting the 4.3% decline in volumes traded on the equities markets. Clearing and settlement transaction fees The revenues from fees charged on clearing and settlement transactions tumbled 10.5% year-on-year, to R$232,166 thousand at the close of year from R$259,355 thousand in the year before, also the 4.3% decline in volumes traded on the equities markets and due to a change in our pricing policy. Loans of marketable securities The revenues from securities lending services through the depository facility known as CBLC fell 32.0% year-onyear, to R$48,528 thousand for the year from R$32,989 thousand in the prior year, due to a slump in the volume of securities lending. Listings of marketable securities The revenues from listing fees we charge on securities listings climbed 32.8% year-on-year, to R$39,549 thousand from R$29,776 thousand in the previous year, mainly due to implementation of a new price schedule for listings of securities which we adopted in January 2009, gradually terminating discounts we had been granting in the last few years to promote listings in our special corporate governance trading segments. Depository, custody and back office The revenues from fees charges for depository, custody and back-office services increased by 12.3% year-on-year, to R$62,523 thousand at year-end from R$70,231 thousand in the earlier year, primarily as a result of a 3.1% increase in the number of custody accounts, and to implementation of our new pricing policy as of May 2009, which adopted a custody fee by volume deposited with the depository facility. Participant access fees We charge access fees from participants acquiring trading rights for access to our markets. The revenues from access fees soared 103.8% year-on-year to R$40,266 thousand from R$19,755 thousand one year ago, due primarily to the new policy for access to our markets which we adopted in January 2009. Other operating revenues Other operating revenues decreased 6.3% year-over-year, to R$88,201 thousand from R$94,100 thousand in the previous year. This drop correlates mainly with the following items: Vendors market data The revenues from distribution and sale of market data comprising quotations and other market information were up 33.1% year-on-year to R$57,691 thousand from R$43,359 thousand the year before, as a result of our new pricing policy for these services implemented as of April 2009. Commodity classification fees The revenues from fees we charge for grading commodities have climbed 21.8% year-over-year, to R$4,304 thousand at end of year from R$3,535 thousand in the prior year, due mainly to increase in the volume to cotton bags graded at our testing facilities. 94

Other Other revenues dropped 44.5% year-on-year, to R$26,206 thousand at end of year from R$47,206 thousand in the earlier year, due primarily to lower than average dividends paid to us by the CME Group, and to the reversal of provisions recorded in previous years. Deductions from revenues The deductions from revenues decreased by 6.1% to R$170,350 thousand at end of year from R$181,347 thousand previously, which is consistent with the fall in gross operating revenues. Net operating revenue As a result of the year-over-year changes in revenues discussed above, net operating revenue fell 6.2% to R$1,502,544 thousand for the year versus R$1,602,011 thousand one year ago. Operating expenses The operating expenses tossed 21.3% year-on-year to R$569,832 thousand from R$723,658 thousand one year ago, due primarily to the synergy identification plan we established in connection with the integration of BM&F S.A. and Bovespa Holding S.A., and implemented with the aim of capturing synergy savings by eliminating duplicate work and through action related to the items discussed below. Personnel and related charges The expenses with personnel and related charges increased by 17.2% year-on-year to R$289,806 thousand from R$247,349 thousand in the previous year, due primarily to increase in expenses for the year with stock options granted to key management personnel 2009, which reached R$59,634 thousand versus R$26,359 thousand in the year before. Data processing The data processing expenses dropped 27.4% year-on-year to R$102,596 thousand from R$141,282 thousand in the prior year, due primarily to synergy savings captured from the integration process (Bovespa and BM&F). Depreciation and amortization The expenses with depreciation and amortization increased by 20.6% year-on-year to R$42,396 thousand from R$35,140 thousand one year earlier, due primarily to acquisitions in the asset group of computer equipment and IT facilities. Outsourced services The expenses with outsourced services remained virtually unchanged with slight rise of 3.3%, to R$45,495 thousand for the year versus R$44,043 thousand the year before. The synergy savings we had captured in connection with this line item were more than cancelled out by expenses with outsourced services related to specific and strategic projects, in particular in the quarter to December 2009 when ongoing projects included, among other things, some of the magnitude of the partnerships with the CME Group and Nasdaq OMX, and the operating qualification program (PQO) for brokerage firms. General maintenance The expenses with general maintenance dropped by 18.7% year-on-year to R$11,007 thousand from R$13,536 95

thousand in the earlier year, due to synergy savings captured from the integration process (Bovespa and BM&F). Communications The expenses with communications were up 25.1% year-on-year to R$23,428 thousand from R$18,721 thousand in the prior year, due mainly to increase in volume traded on Bovespa segment, as the exchange sends notices of trade execution by mail addressed to the investors, for confirmation of the transactions. Rents The expenses with rents incurred in the year to December 31, 2009, dropped 30.3% to R$3,032 thousand from R$4,351 thousand one year ago, due to synergy savings captured from the integration process (Bovespa and BM&F). Supplies The expenses with supplies fell 30.8% year-on-year to R$2,510 thousand from R$3,629 thousand one year ago, due to synergy savings captured from the integration process (Bovespa and BM&F). Promotion and marketing The expenses with promotion and marketing declined 37.8% year-on-year to R$19,555 thousand from R$31,446 thousand the year before, due to synergy savings captured from the integration process (Bovespa and BM&F). Taxes Taxes on fees paid by us increased by 40.4% year-on-year to R$2,323 thousand from R$1,655 thousand one year ago, primarily due to taxes charged on remittances abroad for payment of outsourced services related to certain specific and strategic projects of ours. Board members compensation The expenses with remuneration paid to directors in the year to December 31, 2009, dropped 43.0% year-on-year to R$5,252 thousand from R$9,219 thousand in the earlier year. This decline is due to the existence of two exchanges and two different boards prior to the May 2008 integration process that combined Bovespa and BM&F into BM&FBOVESPA, and due also to the fact that the members of both boards continued to provide services to our Company for a few more months during the transition period towards our consolidation. Integration expenses The expenses with the integration process amounted to R$129,576 thousand in the year ended December 31, 2008, and did not recur in the year to December 31, 2009. Sundry Sundry expenses dropped 48.7% year-on-year to R$22,432 thousand form R$43,711 thousand one year earlier, due to synergy savings captured from the integration process (Bovespa and BM&F). Goodwill amortization The expenses with amortization of goodwill which in the year to December 31, 2008, amounted to R$324,421 thousand collapsed to R$0 (naught) in the year to December 31, 2009, due to the change in the accounting standard determining the accounting treatment of goodwill, as under certain CPC pronouncements issued in 2008, starting from January 1, 2009, goodwill is no longer subject to amortization recognized in the income statement. 96

Financial income Financial inform for the year ended December 31, 2009, dropped 17.0% to R$305,972 thousand from R$ 253,862 thousand in the prior year, due mainly to the decline in interest rates that remunerate our demand deposits and financial investments. Income before taxes Income before taxes increased by 38.0% to R$1,186,574 thousand for the year from R$859,904 thousand a year ago, and correlates mainly with the 21.3% decrease in operating expenses and the change in the accounting standard that determines the accounting treatment of goodwill, as previously discussed. Income tax and social contribution Income tax and social contribution for the year increased 43.1% and amounted to R$304,505 thousand at end of year, as compared to R$212,741 thousand one year earlier as follows: The line item for current income tax and social contribution, which at December 31, 2008, registered an expense of R$331,879 thousand, at December 31, 2009, registered revenue of R$32,085 thousand, or a 109.7% decrease. The line item for deferred income tax and social contribution, which at December 31, 2008, registered a revenue of R$119,138 thousand, at December 31, 2009, registered an expense of R$336,590 thousand, or a 382.5% decrease. After Bovespa Holding S.A. merged with BM&F S.A. in November 2008, the goodwill came to be deductible for purposes of income tax and social contribution on net income. As a result, starting from December 2008 we took advantage of the tax benefit, such that the portion of goodwill which had been amortized but not taken as a deduction gave rise to income tax and social contribution credits recorded as tax assets in the amount of R$76,702 thousand. In addition to recording tax assets from amortized goodwill, we recorded tax assets for tax losses in the amount of R$35,036 thousand. Deferred income tax and social contribution liabilities as of December 31, 2009, derived from recognition of the temporary difference between the tax base of goodwill and its carrying value in the balance sheet, considering that while goodwill continued to be amortized for tax purposes, starting from January 1, 2009, goodwill is no longer amortized for accounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value. As of December 31, 2009, the total deferred tax liabilities related to amortization of goodwill for tax purposes was R$333,917 thousand. In the second quarter of 2009, we recognized income tax and social contribution credits in the amount of R$35,503 thousand, as related to tax losses and negative tax base of social contribution of the former Bovespa Holding, which had not been used at the time of the merger of Bovespa Holding due to the supposed deductibility limitation set at 30% of adjusted net income. Our Company reconsidered this procedure in the second quarter of 2009, in conjunction with our legal advisors, based on the understanding that this limitation is not applicable in the event of a merger of the investee, as in such case there is no continuity and the investee ceases to exist, such that therefore the purported limitation on deductibility is removed and the tax losses may be used in full. As a result, the Company has recorded the tax credits previously mentioned. Minority interests Minority interests refer to those portions of our subsidiaries Bolsa Brasileira de Mercadorias and Bolsa de Valores do Rio de Janeiro consolidated in our financial statements, which are not owned by us. Minority interests amounted to R$1,019 thousand in the year to December 31, 2009, versus R$1,567 thousand the year before, a 35.0% decrease. 97

Net income for the year Net income for the year of R$881,050 thousand surged 36.5% year-over-year from R$645,596 thousand one year ago. This rise is due primarily to the 21.3% reduction in operating expenses and expenses from the change in the accounting standard determining the accounting treatment of goodwill, which were only partially counterbalanced by the 43.1% increase in the income tax and social contribution line item, resulting from recognition of deferred tax liabilities. Comparison of the main line items in the balance sheet Years ended December 31, 2009 and 2008 Current assets Current assets as of December 31, 2009, increased 41.4% year-on-year to R$2,778,968 thousand (13.1% of total assets) from R$1,965,461 thousand one year earlier (9.6% of total assets). The main changes to current assets were the following: Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, together with short- and long-term, liquid investments through prime banks, financial investment funds, government bonds and so forth. As of December 31, 2009, cash and cash equivalents and financial investments amounted to an aggregate of R$3,236,211 thousand, which accounted for 15.3% of our total assets at that date, and represented increase of 34.0% over R$2,414,241 thousand one year ago, when they accounted for 11.8% of our total assets. This increase in cash and cash equivalents and financial investments was pushed by the higher volume of cash collaterals deposited by market participants as margin for transactions, which in turn was driven by the soaring volume of trades on the equities markets in the quarter to December 2009, versus the same quarter one year earlier. The collaterals are included in current assets and in current liabilities. Accounts receivable, net Accounts receivable largely comprise trading and transactions and other fees receivable from customers, and market data transmission fees receivable from vendors. Accounts receivable dropped by 61.8% year-over-year, to R$40,205 thousand from R$105,169 thousand in the prior year. This fall is attributable to change in the due date for payment of most trading and transaction fees charged in the equities markets, which starting from October 1, 2009, we collect as of the third business day after the trade date, whereas previously these fees would be paid up to two months after the trade date. Deferred income tax and social contribution Deferred income tax and social contribution recorded under both current and non-current assets were reduced by 61.9% year-on-year, from R$122,070 thousand in the prior year to R$46,541 thousand as of December 31, 2009. This decrease resulted from a change in the accounting standard related to the accounting treatment of goodwill amortization, according to which we now recognize a deferred tax liability on tax amortizations of goodwill. The balance of deferred tax assets recorded one year ago (in the amount of R$76,702 thousand) was reclassified as a liability in 2009, thus representing the net amount of tax credit attributable to goodwill. Non-current assets Non-current assets were substantially unchanged, with slight drop of 0.2% to R$18,422,215 thousand as of December 31, 2009 (86.9% of total assets) from R$18,464,628 thousand one year ago (90.4% of total assets). Other than previously explained, the main changes to noncurrent assets were the following: 98

Judicial deposits Judicial deposits totaled R$84,895 thousand at end of year, a 9.6% declined as compared to R$93,885 thousand in the prior year. This drop correlates mainly with deposits withdrawn from court in 2009. Other investments Other investments which at end of year amounted to R$1,319,439 thousand, representing 6.2% of total assets, kept a steady line from the year before when it totaled R$1,318,282 thousand representing 6.5% of total assets. This line item correlates primarily with our ownership interest in the CME Group recorded at R$1,276,199 thousand. In 2010 this investment will be reclassified pursuant to the standard provided by technical pronouncement CPC 38, as discussed in item 10.4.b below. Property and equipment Property and equipment climbed 8.5% to R$268,895 thousand at end of year, representing 1.3% of total assets, from R$247,850 thousand one year earlier when it represented 1.2% of total assets, mainly as a result of increase in computer equipment and IT facilities. Intangible assets Intangible assets went up slightly by 0.2% year-on-year to R$16,117,930 thousand from R$16,089,633 thousand previously. Intangible assets comprise (i) goodwill, which kept a steady line at R$16,064,309 thousand at end of year in either year, and represented 75.8% and 78.6% of total assets as of December 31, 2009 and 2008, respectively; and (ii) software and projects, which went up 111.7% to R$53,621 thousand at end of year from R$25,324 thousand one year ago, due mainly to acquisition, implementation and development of new software and systems. Current liabilities Current liabilities rose 8.0% to R$1,162,075 thousand as of December 31, 2009 (5.5% of total liabilities) from R$1,075,744 thousand one year earlier (5.3% of total liabilities). The main changes to current liabilities were the following: Collaterals for transactions Collateral for transactions which at end of year amounted to R$810,317 thousand (3.8% of total liabilities) jumped 38.3% when compared to R$585,963 thousand one year ago (2.9% do total liabilities). This change correlates with an increase in margin received from market participants and deposited in the form of cash, as a result mainly of volume growth in the quarter to September 2009 as compared to the same period in the prior year. Earnings and rights on securities in custody The 11.4% decline in earnings and rights on securities in custody, which at end of year amounted to R$31,897 thousand as compared to R$36,020 thousand one year ago, is due primarily to the fall in earnings from judicial deposits. Financing The 127.4% climb in financing, which at end of year amounted to R$9,295 thousand as compared to R$ 4,087 thousand in the year before, is due mainly to financial lease arrangements for IT-related equipment.

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Other liabilities The line item other liabilities climbed 15.7% to R$194,895 thousand at end of year (0.9% of total liabilities) from R$168,404 thousand in the previous year (0.8% of total liabilities), which correlates primarily with deposits and repurchase agreements related to the operations of Banco BM&F, the settlement bank. Non-current liabilities Non-current liabilities in the amount to R$313,002 thousand at December 31, 2009, (1.5% of total liabilities) surged 569.8% when compared to R$46,729 thousand at the end of the prior year (0.2% of total liabilities). This change is due primarily to our having recognized deferred income tax and social contribution at end of year in the amount of R$261,060 thousand, as derived from the temporary difference between the tax base of goodwill and its carrying value in the balance sheet, considering that while goodwill continues to be amortized for tax purposes, starting from January 1, 2009, goodwill is no longer amortized for accounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value. Shareholders equity Shareholders equity rose 2.2% to R$19,709,749 thousand at December 31, 2009, when it represented 93.0% of total liabilities, from R$19,291,724 thousand one year earlier, when it represented 94.4% of total liabilities, and as resulting from the formation of a reserve for investments and funding of safeguard mechanisms and guarantee funds we keep in connection with clearing and settlement activities, as required under our bylaws (under the statutory reserve line item) and pursuant to the proposal on allocation of net income for the year. 10.2 Management is expected to discuss: a) The results of operations and, in particular: i) Important revenue components; Our consolidated gross operating revenues for the year ended December 31, 2009, totaled R$1,672,894 thousand, down 6.2% from R$1,783,358 thousand one year ago, primarily reflecting the following: revenues from transaction fees we charge on trading and clearing activities on the equities markets (Bovespa segment) accounted for 50.8% of gross operating revenues, or R$849,166 thousand, in a 5.1% year-on-year decline as a result of the 4.3% drop in volumes traded when compared to the prior year. Despite having tumbled in the first half of 2009, volumes bounced significantly in the second half, and revenues from fees on trading and clearing transactions surged 34.5% over the period to June 2009, to peak in the quarter to December 2009, which registered record high volumes; and revenues from transaction fees we charge on trading and clearing activities in BM&F segment accounted for 32.1% of gross operating revenues, or R$537,056 thousand, plunging 13.8% year-over-year. This decline correlates with a 10.3% fall in average revenue per contract (RPC), while overall volume traded tossed 3.3% from one year earlier. As a result, revenues derived from transaction fees we charge on trading and clearing activities in the equities and derivatives markets accounted for 82.9% of our total revenues in the year to December 2009, versus 85.1% of total revenues for 2008. Taxes charged on these revenues amounted to R$170,350 thousand, or approximately 10.2% of our gross operating revenues. ii) Factors that have materially affected the results of operations; The year 2009 dawned in anxiety, amid the uncertainties of a distressed economic environment, bleak projections 100

for the global economic future, which redoubled at every turn of events, and with every news headline or market development. This was the economic outlook that emerged from the subprime mortgage crisis started in the United States in 2007 to turn into the worst global financial crisis since the Great Depression in the 1930s. In the years before the crisis, in the folly of the housing derivatives feeding frenzy, lending behavior changed, credit policies became ever more liberal, securitization ubiquitous, players operated in highly-leveraged mode, regulation was lax or lacking, and there was too little transparency in over-the-counter transactions. As a result, the scenario that emerged early in 2009 after the crisis peaked was one of severe credit crunch, pointing to general deleveraging, amidst a lively debate over the need for more stringent and efficient regulation for the financial and capital markets, strong contraction in the prices of commodities and financial assets, and governments across the board moving towards quantitative easing. This combination of factors directly impacted performance in markets BM&FBOVESPA operates. In the equities market (Bovespa segment), volumes tumbled due mainly to the falling prices of stocks prompted by bearish sentiments and risk aversion, whereas in the derivatives market (BM&F segment), hedging activities sank due mainly to the credit crunch, which coupled with general risk aversion and deleveraging significantly depressed volumes. This low-volume scenario prevailed for most of the first half of 2009. Net income for the year to December 2009, in the amount of R$881,050 thousand, is 36.5% up from the year before, due mainly to certain previously mentioned cost savings. In addition, (i) unlike 2008, when we incurred R$129,576 thousand in non-recurring expenses from the integration of the former two exchanges, BM&F S.A. and Bovespa Holding S.A., in 2009 we incurred no such expenses; (ii) also in 2008 we recognized through profit and loss the expense related to proportionate amortization of goodwill from the merger of shares of Bovespa Holding S.A., in the amount of R$324,421 thousand, with net impact of R$235,075 thousand; whereas (iii) in the year we recorded deferred tax liabilities of R$333,917 thousand on temporary differences from tax amortization of goodwill in the year, with no impact on cash flow. Taking the above amounts into account, the actual tax rate for 2009 was 25.7%. b) Any variation in revenues attributable to changes in prices, exchange rates, inflation rates, changes in volumes and offerings of new products and services; Variations in our revenues correlate primarily with changes in our pricing policy and the impact of fluctuations in exchange rates, as set forth below. Listing fees: a 32.8% year-over-year climb in listing fees, due to a change in prices and the end of certain discounts previously granted to companies listing securities to trade on our special corporate governance trading segments; Depository facility: revenues from depositary and custody and back office services went up 12.3% from one year ago, following a change in our pricing policy which established an additional fee charged from Brazilian-resident investors holding custody accounts in excess of R$300,000 thousand, which is based on the market price of securities and other assets held in custody; Access fees: revenues from access fees surged 103.8%, as a result of the policy for access to markets within both segments; Sales of market data to vendors: sales of market data rose 33.1% year-on-year due to implementation of our revised pricing policy in April 2009; Securities lending: revenues from securities lending dropped 32.0% primarily due to the plunge in transaction volume in the first half of 2009, after which however volumes in this market bounced back to show significant improvement; and Average revenue per contract (RPC) traded on BM&F segment: RPC fell 10.3% from a year ago primarily due to (i) the August 2008 decision to terminate certain discounts on transaction fees after November 2008. The discount period had pushed volumes driving revenue per contract upwards in the period; (ii) strong appreciation of the Brazilian real against the U.S, dollar, which negatively influenced revenues from FX contracts, from USD interest rate contracts, and from commodities contracts; and (iii) the granting of 101

discounts for access to our systems via certain DMA (Direct Market Access) models, and for high frequency traders. c) The impact of inflation, of changes in the prices for the principal raw materials and other supplies, and of changes in exchange and interest rates, on the results of operations and financial condition. For information on impacts of our pricing policies and changes in exchange rates impacting the results of operations, see item (b) under paragraph 10.2 above. 10.3 Management should discuss the material effects any of the events listed below have had or are expected to have on the financial statements and results of operations: a) Formation a new operating segment; disposition of an operating segment; No new operating segment has been formed and not operating segment was disposed of by the Company in the years to December 2009 and 2008, and no such event has had or is expected to have effects on our financial statements and results of operations. b) Organization of associate entities, acquisition or disposition of equity interest; On February 11, 2010, we released a notice of material fact disclosing negotiations held within the scope of the relationship we maintain with the CME Group, Inc, which resulted in the execution of a protocol of intent pursuant to which the two exchanges agree a global preferred strategic partnership (i) for both parties 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; (ii) for the two exchanges to combine efforts for joint development of a multi-asset class electronic trading platform; and (iii) for the Company to acquire additional shares in the CME, and increase to 5% its total ownership interest in CME shares, which as of the date of the notice of material fact would represent aggregate investment of approximately US$1 billion. The investment the Company will be making in raising its equity interest in the CME is on the order of US$620 million, and will give BM&FBOVESPA the right to designate a representative to the CME board. The transaction was approved in an extraordinary general meeting held in April 20, 2010.
Management believes that the transaction with the CME Group is in the best interest of BM&FBOVEPSA and the shareholders, and that given the agreements executed on June 22, 2010 and our recent acquisition of an additional ownership interest in CME shares, the qualitative features of our mutual relationship with the CME Group will be enhanced, such that BM&FBOVESPA will have the ability to exert some measure of influence over the CME Group, for the mutual benefit of both. Against this backdrop, Management took the decision that for accounting purposes, based on the accounting standard provided under CPC 18, our investment will be designated investment in an associate entity and registered according to the equity method of accounting pursuant to our proportionate interest in the shareholders equity of the CME Group, with the effects thereof being recognized in the income statement.

The definitive agreement of global preferred strategic partnership were signed with the CME Group, Inc. on June 22, 2010.

In notice to the market released on July 16, 2010, we announced the conclusion of the issuance of US$612 million in senior unsecured notes due 2020. The notes will bear interest at the annual rate of 5.50%, payable semiannually in January and July of each year. The Company used the proceeds of the offering to increase its equity participation in CME Group, Inc., as per the Notice to the Market released on June 23, 2010, and for other corporate purposes. c) Special events and operations. In the years to December 31, 2009 and 2008, there were no special or unusual events or operations related to the Company and/or its activities, which have had, or are expected to have a material impact on our financial statements or results of operations. 102

10.4 Management should discuss: a) Significant changes in accounting practices; Law 11,638/07 and Provisional Measure 449/08, as converted into Law 11,941/09 With the enactment of Law 11,638/07 and publication of Provisional Measure 449/08, converted into Law 11,941/09, certain provisions of Brazilian Corporation Law were changed, revoked and introduced as regards accounting practices and the presentation of the financial statements, effective as from the fiscal year ended December 31, 2008. The main purpose of this law and MP was to adapt Brazilian corporate legislation to facilitate the process of convergence of the accounting practices adopted in Brazil with the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB). Moreover, as a result of the enactment of this law and provisional measure, certain accounting pronouncements were published in 2008 by the Brazilian Accounting Pronouncements Committee (CPC), applicable to all corporations, including publicly traded and largesized companies. The main changes to the accounting practices and their effects on the financial statements of BM&FBOVESPA as of and for the years ended December 31, 2009 and 2008 include the following: (i) Share-based Compensation Pursuant to CPC 10 Share-based compensation, approved by CVM Deliberation 562/08, BM&FBOVESPA recognized as expense portions of the contracts existing at December 31, 2008 relating to the Stock Option Plans granted to administrators and employees. The main features and information relating to the stock option plans are presented in Note 19. (ii) Deferred Charges Expenditures recorded in deferred charges related to software licenses acquired and software development were reclassified to intangible assets. (iii) Non-operating results MP 449/08, converted into Law 11,941/09, eliminated the segregation of the nonoperating result group in the statement of income for the year. The revenues and expenses previously presented as non-operating results are now presented in the operating results group. (iv) Financial Leases BM&FBOVESPA had financial lease agreements mainly related to information technology equipment. In accordance with the provisions determined in accounting pronouncement CPC 06 Leases, approved by CVM Resolution 554/08, the Company classified the lease agreements as either financial or operating, based on their specific characteristics. The IT equipment leased under the financial lease agreements was recorded in property and equipment and the corresponding obligation in the Financing account. In the addition, the related effects were recognized in the statement of income. Recent Accounting Pronouncements The standards and interpretations listed below were published and are mandatory for financial years starting as of or after January 1, 2010. Besides these, other standards and interpretations were published that change generally accepted accounting principles adopted in Brazil, or BR GAAP, in the process of convergence towards International Financial Reporting Standards, or IFRS. The standards and interpretations set forth below are expected to impact our financial statements: CVM Resolution 577/2009 CPC 20 Borrowing Costs; CVM Resolution 581/2009 CPC 21 Interim Reporting; CVM Resolution 582/2009 CPC 22 Segment Reporting; CVM Resolution 583/2009 CPC 27 Fixed Assets; CVM Resolution 592/2009 CPC 23 Accounting Practices, Changes in Accounting Estimates and Correction of 103

Errors; CVM Resolution 593/2009 CPC 24 Events After the Balance Sheet Date; CVM Resolution 594/2009 CPC 25 Provisions, Contingent Liabilities, Contingent Assets; CVM Resolution 595/2009 CPC 26 Presentation of Financial Statements; CVM Resolution 597/2009 CPC 30 Revenues; CVM Resolution 598/2009 CPC 31 Non-Current Assets Held for Sale and Discontinued Operations; CVM Resolution 599/2009 CPC 32 Income Taxes; CVM Resolution 600/2009 CPC 33 Employee Benefits; CVM Resolution 601/2009 ICPC 08 Accounting for Proposed Dividend Payments; CVM Resolution 604/2009 CPC 38 Financial Instruments: Recognition and Measurement; CVM Resolution 604/2009 CPC 39 Financial Instruments: Presentation; CVM Resolution 604/2009 CPC 40 Financial Instruments: Disclosures; CVM Resolution 605/2009 CPC 18 Investments in Associates; CVM Resolution 606/2009 CPC 19 Interests in Joint Ventures; CVM Resolution 607/2009 CPC 35 Separate Financial Statements; CVM Resolution 608/2009 CPC 36 Consolidated Financial Statements; CVM Resolution 609/2009 CPC 37 First-time Adoption of International Financial Reporting Standards; CVM Resolution 610/2009 CPC 43 First-time Adoption of Accounting Pronouncements CPC 15 to 40; CVM Resolution 613/2009 ICPC 03 Supplemental Aspects of Lease Accounting; CVM Resolution 614/2009 ICPC 04 Scope of Accounting Pronouncement CPC 10 Share-based Payments; CVM Resolution 615/2009 ICPC 05 Accounting Pronouncement CPC 10 Sharebased Payments Transactions in Equity Instruments of a Group Entity or Treasury Stock; CVM Resolution 618/2009 ICPC 09 Individual Financial Statements, Separate Financial Statements, Consolidated Financial Statements and Application of the Equity Method; CVM Resolution 619/2009 ICPC 10 Clarifications on Accounting Pronouncements CPC 27 Fixed Assets and CPC 28 Investment Properties. The above pronouncements and interpretations are applicable to the financial statements for the year ending December 31, 2010, and also to the 2009 financial statements which will be presented together with the 2010 financial statements for comparison purposes. b) Significant effects of changes in accounting principles; Management does not expect the adoption of the new pronouncements and interpretations above to generate significant impacts on the net income and shareholders' equity of the Company, except with respect to the accounting for the investment in CME Group CPC38 Financial Instruments: Recognition and Measurement Under the accounting standards effective up to December 31, 2009, the investment in CME Group has been recorded at historical cost as an investment, in accordance with CPC 14, and the carrying value of the investment has been subject to an impairment analysis. This impairment analysis has been based on the discounted cash flow from the investment (value in use), as allowed by CPC 01 for investments recorded under the cost method. Effective from January 1, 2010, which is the date of CPC 38, the investment in CME Group will be reclassified to financial instruments as a financial asset available for sale and adjusted to fair value. In accordance with CPC 38, the quoted stock price of the investee should be used to determine the fair value. As a financial asset available for sale, CPC 38 will require the impairment analysis to be made by comparing the market value of the shares with their acquisition cost, and a loss should be recognized if there is a significant or prolonged decline in the market price of the shares. Because of the significant decline in the market price of the shares of CME Group in the fourth quarter of 2008, the initial adoption, for comparison purposes, of CPC 38 as of December 31, 2008 (beginning of 2009) will result in the 104

recognition of an impairment of the investment in CME Group in the amount of R$ 460,610, net of tax, which will be recognized in shareholders equity as of December 31, 2008. The new cost basis of the investment at that date will therefore become R$ 578,306. Additionally, during the year ended December 31, 2009, using this new cost basis as a reference, the market value of the investment in CME Group stock increased, generating a positive effect of R$ 77,396, net of tax. Under the new accounting standards, considering the effects mentioned above, the adoption of CPC 38 will reduce the balance of shareholders equity of the Company at December 31, 2009 by R$ 383,214, net of tax effects. It should be noted that these adjustments will not alter the bases for the distribution of dividends and interest on own capital in 2008 and 2009, which were based on the standards in effect at the time. CPC10 Share-based Payments Pursuant to pronouncement CPC 10 Share-Base Payments, approved and confirmed by CVM Resolution 562/08, our obligations under stock options existing at December 31, 2008, were recognized for the period in which the options vested (typically at the end of the period in which the services are provided), which impacted our financial statements in the following ways: (i) directly, on shareholder equity for the previous year, with regard to sharebased payments for services provided prior to the date of adoption of the accounting standard under pronouncement CPC 10, i.e., January 1, 2008; (ii) in the statement of income, through recognition of expenses regarding stock options attributable to services provided over 2008; (iii) prospectively, for the coming three years, which is the period for fulfillment of the agreed exercise conditions (provision of future services). Accordingly, as a result of having adopted pronouncement CPC 10, the Company recognized R$229,519 thousand in profit reserves with a contra account to capital reserves and, in addition, recognized expenses of R$26,359 thousand incurred in 2008 in a contra account to capital reserves in the statement of income. c) Qualifications and emphasis of matter paragraphs included in the independent auditors report. There have no qualifications or emphasis of matter paragraphs in the independent auditors reports regarding the financial statements as of and for the years ended December 31, 2008 and 2009. 10.5 Management is expected to indicate and discuss critical accounting practices adopted by the registrant, analyzing in particular estimates requiring Managements judgment on, and subjective assumptions related to 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 non-current assets, pension plans, adjustments from foreign currency translations, environmental recovery costs, or impairment and recoverability testing standards for assets and financial instruments, among other things. In preparing the financial statements Management is required to use estimates and assumptions for the measurement and recognition of certain assets, liabilities and other transactions. As a result, our financial statements include estimates related to contingent provisions, the fair value of certain financial instruments, the determination of certain income tax provisions and the useful life of certain assets, recognition of asset impairment and analysis of recoverability and similar other elements. Actual results may differ from our estimates and assumptions, which we revise at least once every year at the time of preparation of the financial statements of BM&FBOVESPA and the consolidated entities. Significant accounting practices a. Financial instruments

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(i) Classification; measurement The Company classifies financial assets in the following categories: recorded at fair value through profit or loss, loans and receivables, held to maturity and available for sale. The classification depends on the purpose for which the financial assets are acquired. Management determines the classification of the financial assets when they are first recorded. Financial assets measured at fair value through profit and loss Financial assets measured at fair value through profit or loss are financial assets held for active and frequent trading or assets designated by the entity, when first recorded, as measurable at fair value through profit or loss. Derivatives are also classified as held for trading and accordingly, are recorded in this category. The assets in this category held for trading are classified as current assets. Gains or losses arising from changes in the fair value of financial assets recorded at fair value through profit or loss are recorded in the statement of income in the "financial results" line item for the period in which they occur. Loans and receivables These comprise loans granted and receivables which are non-derivative financial assets with fixed or determinable payments, not quoted in an active market. Loans and receivables are included in current assets, except for those maturing more than 12 months after the balance sheet date (which are classified as non-current assets). The Company's loans and receivables comprise trade accounts receivable and other accounts receivable. Loans and receivables are recorded at amortized cost, based on the effective interest rate method. Financial assets held to maturity These are financial assets quoted in an active market which are acquired with the intent and financial ability to be held in the portfolio up to maturity. They are recorded at the acquisition cost, plus related earnings with a contraentry to income for the year, based on the effective interest rate method. Available-for-sale financial assets Available-for-sale financial assets are non-derivatives which are classified in this category or not classified in any other. They are included in non-current assets, unless management intends to sell the investment within 12 months subsequent to the balance sheet date. Available-for-sale financial assets are recorded at fair value. Interest on available-for-sale securities, calculated based on the effective interest rate method, is recognized in the statement of income as interest income. The amount related to changes in fair value is recorded in shareholders' equity, in the carrying value adjustments account, and is realized in net income when the asset is sold or becomes impaired. Fair value Fair values of investments with public quotations are based on current market prices. For financial assets without an active market or public quotation, the Company determines fair value through valuation techniques, such as option pricing models. The Company evaluates, at the balance sheet date, if there is objective evidence that a financial asset or a group of financial assets is overstated (impaired) in relation to its recoverable value. (ii) Derivatives Instruments and hedging activities Derivatives are initially recognized at fair value as of the date of the derivatives instrument and, subsequently, measured at their fair value, with changes in fair value recorded in income, except where a derivative is recorded as a cash flow hedge. 106

While the Company trades in derivatives through exclusive investment funds for protection purposes, it does not adopt hedge accounting. b. Accounts receivable, other credits; allowance for doubtful accounts Accounts receivable and other receivables are initially stated at present value, less the allowance for doubtful accounts. Management adopts a policy of recording a full provision for doubtful debts on credits overdue for more than 60 days.

c. Investments
Investments in entities and subsidiaries are recorded and evaluated based on the equity method of accounting, with the related income (or expense) recognized in income for the year as operating income (or expense). The accounting practices of the subsidiaries are consistent with the practices adopted by the Company. Other investments are recorded at cost of acquisition or merger, less the provision for adjustment to realizable value when the loss is considered permanent.

d. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance, such as goodwill. Goodwill Goodwill or negative goodwill on the acquisition of an investment is calculated as the difference between the purchase amount and book value of the shareholders' equity of the company acquired. Goodwill or negative goodwill is subdivided into two categories: (i) market value adjustment, either upward or downward, of assets, comprising the difference between the book value of the company acquired and the fair value of assets and liabilities and (ii) future profitability, comprising the difference between the fair value of assets and liabilities and the purchase amount. The portion corresponding to the market value adjustment of assets was allocated to the corresponding acquired/merged assets. The upward market value adjustment is amortized as the corresponding assets are realized over a period of up to 22 years. The portion based on estimated future Software and projects Software licenses acquired are capitalized and amortized over their estimated useful life, at the rates described in Note 9. Costs of software development or maintenance are expensed as incurred. Expenditures directly associated with identifiable and unique software, controlled by the Company and which will probably generate economic benefits greater than the costs for more than one year, are recognized as intangible assets. Direct expenditures include remuneration of the software development team Expenditures for development of software recognized as assets are amortized using the straight-line method over their useful lives.

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e.

Contingent assets and liabilities, and legal obligations

The recognition, measurement, and disclosure of contingent assets and liabilities and legal obligations comply with the criteria defined in CVM Resolution 489/2005 Contingent assets - These are not recorded, except when management has full control over their realization or when there are secured guarantees or favorable decisions to which no further appeals are applicable, such that the gain is almost certain. Contingent assets with realization considered probable, where applicable, are only disclosed in the financial statements Contingent liabilities - These are recognized based on a number of factors including: the opinion of legal advisors; the nature of the lawsuits; similarity to precedents; the complexity of the proceedings; and prior court decisions. They are recognized whenever the loss is evaluated as probable, since this would give rise to a probable outflow of resources for the settlement of the obligations, and the sums involved are measurable with sufficient reliability. The contingent liabilities classified as possible losses are not recorded and are only disclosed in the notes to the financial statements, and those classified as remote are neither recognized nor disclosed. Legal obligations Legal obligations result from tax lawsuits in which the Company is discussing the validity or constitutionality of certain taxes and charges. These are fully recognized in the financial statements, regardless of the assessment of their probability of success.

f. Impairment of assets
Property, plant and equipment and other non-current assets, including goodwill and intangible assets, are reviewed annually to identify evidence of unrecoverable losses, and also whenever events or changes in the circumstances indicate that the book value may not be recoverable. In this case, the recoverable value is calculated to verify if there is any loss. Loss is recognized at the amount by which the book value of the asset exceeds its recoverable value, which is the higher of net sales price and the value in use for an asset. For evaluation purposes, assets are grouped at the lowest level (smallest identifiable group of assets) for which there are separately identifiable cash flows. g. Provisions Provisions are recognized when the Company has a legal or informal present obligation as a result of past events, a cash outflow to settle the obligation is probable and a reliable estimate of the amount can be made. h. Employee benefits (i) Pension obligations The Company has no defined benefit plans. The Company offers its employees a defined contribution plan and pays contributions on contractual or voluntary bases. Once the contributions have been made, the Company has no obligations related to additional payments. The regular contributions comprise net periodic costs for the period in which they are payable and, therefore, are included in the personnel costs. (ii) Share-based compensation (stock options) The Company offers to its employees and executives share-based remuneration plans, to be settled in Company stock, according to which the Company receives services in consideration for stock options. The fair value of options granted related to services to be provided is recognized as an expense during the period in which the right is obtained, i.e., the period during which specific vesting conditions must be met. On the date of the balance sheet, the Company revises the estimated number of options which will vest and subsequently, recognizes the impact of the change on initial estimates, if any, in the statement of income, with a contra-entry to the capital reserve in shareholders' equity on a prospective basis. 108

i. Foreign currency translation Transactions in foreign currency are translated into Brazilian reais using exchange rates as of the transaction dates. Balance sheet account balances are translated at the exchange rate in effect on the balance sheet date. Foreign exchange gains and losses resulting from the settlement of these transactions and from the translation of monetary assets and liabilities denominated in foreign currency are recognized in results.

j. Deferred income tax and social contribution Deferred taxes are calculated on income tax and social contribution losses and the temporary differences between the tax calculation bases of assets and liabilities and the respective book values in the financial statements. The currently defined tax rates of 25% for income tax and 9% for social contribution are used to calculate deferred tax assets and liabilities Deferred tax assets are recognized to the extent that it is probable sufficient future taxable profit will be available to be offset by temporary differences and/or tax losses, considering projections of future income prepared based on internal assumptions and future economic scenarios which may, accordingly, undergo change. Deferred tax liabilities are recognized in relation to all taxable temporary differences, that is, differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. The full financial accounting practices adopted by the Company are described in Notes to Financial Statements of the Company. 10.6 Internal controls used to ensure reliable financial reporting a) the degree of efficiency of such controls, possible imperfections and actions adopted to correct them; Internal Audit Internal audit activities at BM&FBOVESPA are under responsibility of the internal audit officer, who runs the internal audit department. Internal audit activities performed by the department in the year to December 2009 comprised evaluations of the internal controls of the Company pursuant to the internal audit plan approved by the audit committee, and included internal audits of the financial and accounting department; the IT general control department; the market monitoring and management department, and the activities of the settlement bank, or Banco BM&F. The internal audit reports are presented to the audited departments, the chief executive officer and the audit committee. The internal audit findings and evaluation results are reviewed, discussed and action plans designed for improvement of internal controls. In addition, the internal audit department monitors compliance with the policy and guidelines on trading in securities by employees, as established in the Companys Code of Conduct, addressing notices of violations to the code of conduct committee, where appropriate. Information Security Policy A new information security management model was adopted in 2009, which defines and implements new and 109

improved controls. In addition, the information management security department was entirely restructured pursuant to the ISO/IEC 27001 standard, the only auditable international standard which defines the requirements for an Information Security Management System (ISMS). These measures permitted reconciling, integrating and unifying policies and procedures previously adopted by Bovespa and BM&F, improved our internal controls, reduced risks and the Companys exposure to potential loss, in addition to strengthening important governance support mechanisms. Improvements to Internal Controls The improvements to internal controls planned for 2009 were part of an audit and action plan designed to ensure efficient and reliable controls and procedures for financial reporting across the combined structure emerged from the integration of the two former exchanges as BM&FBOVESPA and its subsidiaries. For this purpose, multiple initiatives were implemented with the aim of improving our internal controls, which included revising financial reporting procedures, mapping and revising processes and the information flow, monitoring the first stage of the ERP system integration, and improving accounting support reports. Going forward, we intend to implement in 2010 a coordinated ERP workflow model for all purchases, hirings and payments; a new budget and management information system and a costing by activity system; in addition to a unified chart of accounts for the BM&FBOVESPA group and the formation of a corporate risk department. These planned initiatives, coupled with those that have been implemented previously, will enhance our the quality of internal controls structure and financial reporting procedures, ensure the reliability of our internal processes, whereas giving us the ability to capture gains from efficiency, and reinforce our dependability vis--vis customers and suppliers. b) Deficiencies and recommendations on internal controls included in the independent auditors report. Having received preliminary internal controls report prepared by our independent auditors, and considered their findings and recommendations, we discuss below those that we believe to be their more meaningful recommendations: Issue raised The auditors find that the investment in this company is registered at the acquisition cost despite BSM being a wholly-owned subsidiary of BM&FBOVESPA. The Company should reconsider the consolidated reports for fulfillment of express requirements of Brazilian Corporate Law and conformity with the accounting principles pursuant to which it prepares financial statements with regard to BSM. The auditors note that approximately 700 meters separate the data center located at Rua XV de Novembro, in downtown So Paulo, and the backup data center located at Rua Florncio de Abreu, also downtown in So Paulo, which is not in keeping with best recommended practices and international standards, which recommend selecting a Management comments The matter has been taken under consideration for a decision on the adequate accounting approach

In 2009 we set up a project to consider and plan the construction of two new data centers, comprising a primary unit and a backup facility, both aimed to meet the requirements of our growing business. Among other things, the project calls for careful consideration about the matter of distance between these two data centers. The 110

location where the contingency and recovery facility will not be exposed to similar risks as the primary data center in case a disaster were to disable the primary location. The Company should reconsider location of the contingency data center to ensure the primary and backup data centers are sufficiently afar to offer reasonable safety margin.

matter was discussed at length and we came to the conclusion that the ideal minimum distance in terms of location should be such that no facility is exposed to similar risk factors. In 2010 we started to survey plots of land on which to build. For this purpose, we retained (i) corporate realtors (CBRE) and (ii) IT consultants (IBM) to assist us in enhancing the degree of maturity of the two data centers. The project should be complete and implemented within two years after we purchase the land (mid-2012 by our estimate). Our strategy is to build our contingency center first (completion of construction estimated for mid-2011), following which we will proceed to implement the network project for interconnection between data centers and move backup equipment and systems. Full completion is expected to take place by end-2011. In addition, also in 2010, we have taken the decision to implement an intermediary data center based on colocation and hosting arrangements. After a survey, we have also decided to implement this data center in Tambor. In the phase after construction we plan to move all backup trading equipment (now located downtown at the UEC) and at TIVIT (in Santo Amaro) and all post-trade production equipment. Pursuant to the model we adopted, after completion, production will be run from our headquarters downtown, with a contingency facility in Tambor, whereas post-trade production will be run from Tambor, with a backup units downtown at our XV de Novembro premises and the UEC. The project is set to implement by end 2010.

The auditors remark the following regarding our business continuity and IT contingency plan: - absence of a business impact analysis, or BIA, defining recovery priority requirements for key business processes; the business continuity and IT contingency plan was not released for publication; -

(i) In order to better understand and cover all our operating requirements, we conducted a survey in 2009 to gather critical information across our company (25 departments), evaluate it and put in place a very comprehensive business continuity plan in 2010. Initiatives comprised by this macroabsence of business continuity plans for the ERP project include system (or RM System), the fee collection (1) Impact analysis covering all departments system (or TEM), the messaging system fot the and identification of internal critical processes Central Banks Reserve Transfer System (or for recovery. The final report will be referred SGR), the banking accounting system (or CTB), to the upper management for approval. the online current account system (or EB) and the volume-based fee discount system (or SRE) (2) Mapping the processes in each department to prepare the operational systems. continuity plan. The business continuity and IT contingency (3) A program to disseminate corporate 111

plan should be revised for improvements and the Company should consider the following: (i) conducting business impact analysis under disaster and contingency scenarios; (ii) gradually raising complexity levels to test for multiple and increasingly adverse disaster scenarios, assigning ever shorter recovery point objectives (RPO) and recovery time objectives (RTO), which for an effective response demand well trained and highly integrated teams, quite familiar with the recovery process and the procedures for specific crisis types; (iii) establishing a crisis management plan and processes for continuing improvement of the plan, procedures and documentation related to damage assessment, recovery and validation; for management and circulation of the plan and updates, and for team training management.

awareness of our BCP. (ii) Our business continuity plan has been released on March 16, 2010 through Internal Communication 002/2010-DP. It includes recovery objectives that contemplate disaster events under scenarios where the workplace is unavailable. Improvements to time to recovery are another clear requirement, stated in our business continuity plan. The testing schedule includes testing the scenarios proposed in our policy. (iii) The business continuity plan proposes the continuity structure we will be implementing. Our documentation management process will be guided by a business continuity program that contemplates continuing management and governance processes through training, testing, maintenance processes and critical analyses.

10.7 Management comments in the event an offering of securities has been carried out Not applicable. 10.8 Management is expected to discuss off-balance sheet arrangements, and indicating: a) Off-balance sheet items (assets and liabilities directly or indirectly held by the registrant), such as: Collaterals for transactions Transactions carried out in BM&FBOVESPA markets require customers to provide guarantees in the form of margin deposits, and consist mainly of cash, government bonds, private debt securities, sureties and stocks, among other things. These collaterals are segregated and treated off-balance sheet, except for cash collaterals deposited as margin. For additional information, see the discussion under item 10.9 below. i) Operating lease arrangements, as both lessor and lessee; Operating leases The table below sets forth the minimum non-cancellable future payments under operating leases for IT-related equipment, expressed as aggregates payable under and over one year: Year to December 31, Under one year Over one and under five years Total 2009 (in thousands of Brazilian reais) 2,451 2,451 2008 13,729 5,425 19,154

ii) any obligation retained, or risk supported by the registrant under any written off pool of receivables; discuss the related liabilities; Not applicable. 112

iii) commitments for future purchase or sale of products or services; Not applicable. iv) Unfinished construction contracts; Not applicable. v) Commitments to accept future financing; Not applicable. b) Other off-balance sheet arrangements. There are no other material arrangements not recorded in the financial statements. 10.9 Management comments with regard to each off-balance sheet arrangement reported under item 10.8 Central counterparty risk Credit risk BM&FBOVESPAs role as central counterparty to ensure multilateral clearings and settlements in our markets BM&FBOVESPA manages the following central counterparty clearing facilities absorbed during the exchange integration process of BM&F and Bovespa, which the Central Bank deems to perform systemically material roles: (i) equities clearinghouse (formerly CBLC), (ii) derivatives clearinghouse, (ii) FX clearinghouse; and (iii) government securities clearinghouse. Our clearing facilities operate pursuant to Law No. 10,214 dated March 27, 2001, which authorizes multilateral clearings and settlements, regulates the role of central counterparty performed by systemically material clearing facilities, and permits the use of collaterals posted by defaulting participants to settle their obligations within the scope of our clearing and central counterparty activities, including in the event of insolvency, intervention, bankruptcy and extrajudicial liquidation. Through these clearing facilities, BM&FBOVESPA acts as central counterparty to ensure multilateral clearings and settlements (CCP) for the derivatives market (including futures, forward, options and swap markets), and the spot FX market, as well as and the government debt securities markets (cash, forward and repo markets, in addition to securities lending market) and, in addition, for the equities markets (including cash, forward options, futures and securities lending markets), and the private debt securities market (cash and securities lending markets). This means that in acting as central counterparty, and guaranteeing all transactions carried out or registered in our markets pursuant to applicable regulations, BM&FBOVESPA is responsible for ensuring full completion to a substantial portion of all trading activity in the domestic capital markets. The central counterparty clearing facilities are responsible for providing efficiency and stability to the market by ensuring trades are properly cleared and settled. A CCP interposes itself between counterparties to financial transactions, becoming the buyer to the seller and the seller to the buyer. Acting in the capacity of central counterparty, we absorb the risks of the counterparties in-between a trade transaction and its clearing and settlement, carrying out multilateral activities for financial settlement and clearing of securities and financial assets, and in the event of default resort to certain established safeguard mechanisms, or in extreme situations may have to resort to our own net assets. In modeling and managing CCP risks, we focus on calculation, controls and mitigation of credit risk intrinsic to clearing participants. 113

Our clearing facilities are not directly exposed to market risks, as they do not hold net long positions or net short positions in either contracts or assets traded in our markets. However, an increase in price volatility could affect the magnitude of amounts to be settled by market participants, which in turn could increase the default rate amongst these participants. In addition, as the clearing facilities ensure the clearing and settlement of transactions carried out by participants that fail to perform or pay perform subsequently defaults, this could result in losses for the Company if settlement amounts were to exceed those of existing margin. Thus, while we are not directly exposed to market risks, they may impact and heighten the credit risks to which we are exposed. For proper risk mitigation, each clearing facility has its own risk management system and safeguard structure. These structures comprise the universe of mechanisms and remedies a clearinghouse may resort to in order to cover losses from failed settlement by a participant. The key components of these safeguard structures include collateral deposited by market participants, often in the form of margin, plus special funds intended to cover possible losses due to default and, in addition, co-liability undertaken by brokers and clearing agents regarding transactions they intermediate or clear. These risk management systems and safeguard structures are described in detail in applicable regulations and the operating manuals of our clearinghouses, which were tested and homologated by the Central Bank, pursuant to Resolution 2,882 of 2001 issued by the Brazilian National Monetary Council and Circular 3,057 of 2001 issued by the Central Bank. a) Collateral received from trading, clearing and settlement transactions The table below sets forth data on collaterals deposits at year-end in the periods presented: Clearing facilities Derivatives clearinghouse Brazil Government bonds Bank letters of guarantee Stocks Bank deposit certificates (CDBs) Gold Cash deposits (1) BM&F FoF (FIC BM&F) BB BM&F Financial Investment Fund (FIF BB BM&F) Rural Product Notes Subtotal Foreign exchange clearinghouse Brazil government bonds Cash deposits (1) Subtotal Securities clearinghouse Brazil government bonds Equities clearinghouse (CBLC) Brazil government bonds Stocks Foreign government bonds(2) Bank deposit certificates (CDBs) Bank letters of guarantee Cash deposits (1) Year ended December 31, 2009 2008 (in thousands of Brazilian reais) 53,754,858 89,760,722 1,479,341 3,690,835 3,351,593 2,678,991 1,307,762 2,161,736 60,865 319,831 555,106 327,644 95,595 78,130 343 60,605,463 29,049 829 99,047,767

3,766,090 3,766,090

3,550,223 174,060 3,724,283

832,125

1,423,484

15,665,732 17,208,344 1,944,896 997,944 296,442 247,230 114

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

Gold BB BM&F Financial Investment Fund (FIF BB BM&F) Other Subtotal Total

2,476 8,179 65,884 36,437,127 101,640,805

25,958 6,140 132,692 21,481,271 125,676,805

(1) The balance of cash deposits is recorded under current liabilities in the collaterals for transactions line item. (2) U.S. Treasuries and German Bunds, as well as ADRs.
b) Other information: Clearing Fund (Fundo de liquidao de operaes) - Derivatives Clearinghouse The clearing fund comprises collateral provided by the clearing agents to ensure settlement of transactions registered with the clearinghouse in the event of default by one or more clearing agents. Contributions to the participation fund may be made in the form of cash, gold and bank letters of guarantee or, subject to prior approval by us, in government bonds, private debt securities or other financial instruments satisfactory to us, in our discretion. The clearing agents are jointly and severally liable for maintaining the fund, subject to a limit. The table below sets forth data on year-end positions for the clearing fund in the periods presented:

(1) The balance of cash deposits is recorded under current liabilities in the collaterals for transactions line item.
c)Special Clearing Participant Fund (Fundo de desempenho operacional) Derivatives Clearinghouse This special clearing participant fund was set up as a mutual fund to ensure the settlement of collateralized transactions in the event of default by one or more clearing participants that also hold access permits granting settlement and trading rights, irrespective of the type of transaction involved. Participants applying for settlement and trading access rights are required to make minimum contributions to the fund, and as fund members are liable for maintaining the fund. Contributions to the participation fund may be made in the form of cash, gold and bank letters of guarantee or, subject to prior approval by us, in government bonds, private debt securities or other financial instruments satisfactory to us, in our discretion. The table below sets forth data on year-end positions for the special clearing participant fund in the periods presented:

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(1) The balance of cash deposits is recorded under current liabilities in the collaterals for transactions line item.
d)Participation fund (Fundo de participao) Foreign Exchange Clearinghouse The participation fund was set up to cover financial losses resulting from risks related to the banking operations in our clearinghouse. Banks granted permits to operate in our FX clearinghouse are required to contribute to the fund. Contributions may be in the form of currencies or financial instruments. The table below sets forth data on year-end positions for the participation fund in the periods presented:

e)Guarantor fund for the spot U.S. dollar pit (Fundo garantidor da roda de dlar pronto) Foreign Exchange Clearinghouse As of December 31, 2008, contributions to the guarantor fund included deposits in cash and asset made by both our Company and participants in our FX clearinghouse to cover financial losses resulting from mistakes or failures related to procedures adopted by the participants during the trading cycle, which correlated with changes in exchange rate between a trade on the spot U.S. dollar pit and final acceptance by the bank for whom the trade was intended. In the quarter to September 2009 this fund was discontinued when we shut down the trading floor and that pit. The table below sets forth data on the position for the guarantor fund at December 31, 2008:

Composition Brazil government bonds Bank letters of guarantee Cash deposits (1) BM&FBOVESPA Investments Total deposits

2008 13.812 240 480 15.000 29.532 116

(1) The balance of cash deposits is recorded under current liabilities in the collaterals for transactions line item.
f)Settlement Fund (Fundo de liquidao) of the Equities Clearinghouse, commonly known as CBLC All clearing agents are required to contribute to this mutual settlement fund, which is intended to solely cover possible losses due to defaults by clearing agents, in particular in stress situations or systemic risk. The table below sets forth data on year-end positions for the settlement fund in the periods presented:

(1) The balance of cash deposits is recorded under current liabilities in the collaterals for transactions line item.
10.10 Key components of the strategic plan a) investments i) a quantitative and qualitative description of ongoing and planned investments; Currently ongoing projects correlate mainly with updates of existing trading and other systems to increase throughput and reduce round-trip time latency, to improve cost effectiveness and expand distribution capacity. Investments of this nature in the year to December 2009 amounted to approximately R$95,585 thousand. On February 11, 2010, we released a notice of material fact disclosing negotiations held within the scope of the relationship we maintain with the CME Group, Inc, which resulted in the execution of a protocol of intent pursuant to which the two exchanges agree a global preferred strategic partnership (i) for both parties 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; (ii) for the two exchanges to combine efforts for joint development of a electronic trading platform for derivatives, equities, fixed-income securities and other financial instruments traded on exchange and OTC markets; and (iii) for the Company to acquire additional shares in the CME, and bring to 5% its total ownership interest in CME shares, which as of the date February 11, 2010, would represent aggregate investment of approximately US$1 billion. In our estimate, implementing all stages of the platform development project, including acquisition of technology and related intellectual property, will entail investments on the order of US$175 million over a ten-year period, or present value of US$100 million. The investment the Company will be making in increasing to 5% its equity interest in the CME is on the order of US$620 million, and was approved by Extraordinary General Meeting of Shareholders of the Company held on April 20, 2010. In addition, the definitive transaction documents regarding this global strategic partnership were signed with the CME Group on June 22, 2010. In notice to the market released on July 16, 2010, we announced the conclusion of the issuance of US$612 million 117

in senior unsecured notes due 2020. The notes will bear interest at the annual rate of 5.50%, payable semiannually in January and July of each year. The Company used the proceeds of the offering to increase its equity participation in CME Group, Inc. and for other corporate purposes. ii) sources of financing for these investments; The primary source of funds we use to finance our strategic investment plans is operating cash flow. We may also consider alternative sources of financing, such as bank loans or some government or development bank financing program, or financing through accessing the either the local or the international capital markets. iii) ongoing and planned material divestments; Not applicable. b) as long as previously disclosed, any acquisitions of plants, equipment, patents and other assets, which are expected to materially influence the registrants productive capacity; Not applicable. c) new offerings of products and services, including: i) a description of ongoing research and development processes previously disclosed; Not applicable. ii) total research expenses for development of new products or services; Not applicable. iii) disclosed development projects; BM&F Segment: Ongoing development of back office and middle office solutions targeted to Futures Commission Merchants (FCM); and Launch of cash-settled ethanol futures contracts. Bovespa Segment: DMA Developments: enhanced direct market access solutions for the segment, such as the DMA Model 2 (DMA via providers), the DMA Model 3 (sponsored direct connectivity) and the DMA Model 4 (DMA via colocation arrangements),available since September 1, 2010; MegaLine tool: a pre-trade risk management tool and exposure control mechanism; Market maker for options on stocks; Foreign ETFs: foreign indices will be listed to traded on our markets; Single Clearing facility: the integration of clearing activities into just one clearing facility will improvement cash and risk management, whereas permitting crossmargining; and Fixed-income market: agribusiness and real estate.

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Both segments: iMercado (iMarket): electronification and standardization of the information flow among market participants. iv) total expenses with development of new products or services. Not applicable. 10.11 Other material factors that materially influenced operating performance, and were not discussed in previous items under this section. Bovespa Segment: equities clearing facility: starting from November 2009 the throughput capacity at our equities clearing facility increased to 1.5 million daily trades, from 770 thousand previously; MegaDirect: starting from October 20, we launched this communication software for automated connectivity between brokerage firms and the MegaBolsa and GTS systems. This solution, which replaced the Multigateway solution, reduced roundtrip time latency to estimated 10 milliseconds from 153 milliseconds previously. In addition, it gave market participants the ability to use trading screens solutions offered by independent software vendors (ISVs); and BM&FBOVESPA Communication Network: Given the growing demand and increasing level of sophistication of electronic trading, starting from July 13, 2009, we launched the BM&FBOVESPA Communication Network, or RCB, which supplements the services we currently provide through the Financial Community Communication Network, or RCCF. The RCB is an open communication network for connectivity between market participants and the Exchanges electronic trading systems, based on a high performance structure with heightened data transmission capacity and greater flexibility, which gives participants the ability to make choices as to alternative telecommunications providers, data transmission technologies, network capacity and velocity, and contingency resources.

11. Projections 11.1. Projections should identify:

a.

the projections subject

For 2010, we had projected making investments on the order of R$302,100 thousand and incurring R$550,000 thousand in operating expenses (adjusted to eliminate depreciation expenses, expenses with stock option plan and taxes related to equity accounting). Both projections were reassessed on June 22, 2010, leading investment to R$271,944 thousand and operating expenses adjusted for depreciation, stock option plan and taxes related to equity accounting for R$520,323 thousand. On November 09, 2010, we reviewed the guidance for the adjusted operating expense to an interval between R$540,000 thousand and R$545,000 thousand and for the investments to an interval between R$250,000 thousand and R$272,000 thousand.

b.

the projections time frame and valid time

The projection is valid for 2010, ending on December 31, 2010.

c.

the underlying assumptions, including indication of those that may be influenced by Management and those beyond Managements control

Our projections take into account the 2010 estimates of investments and expenses to be made or incurred in the following areas and projects:

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Technology and post-trading: investments will be allocated to expanding business capacity; to the joint development

(with the CME Group) of a new multi-asset class electronic trading platform (therefore, for derivatives, equities, fixed income and other exchange-traded or OTC assets); to restructuring our data centers (primary and contingency centers); to improving IT systems , to integrating our clearing facilities; Expansion of the customer base and revenues: investments will be allocated to strengthening the market popularization and financial education program; to boosting our issuer prospecting activities ( BovespaMais, Novo Mercado and BDRs); to implementing a new pricing policy for the Bovespa segment; to attracting high frequency traders; to developing new products; to expanding to international markets; and Institutional strengthening: creation of the research and business projects department; bolstering the sustainability area; improvements to internal controls and project management.

The projections of investments and expenses may be influenced by Management.

d.

the value of the existing indicators for the subject of the projection

We estimate making investments to an interval between R$250,000 thousand and R$272,000 thousand in 2010, allocated as follows:

Resources will be allocated to investments in technology and post-trading, which in turn is apportioned as follows: expansion of business capacity; development of a multi-asset class electronic trading platform jointly with the CME Group; restructuring primary and contingency data centers; improvements to IT systems; other projects, including integration of the clearing facilities, the SINACOR upgrade version; information security, and so forth; and Resources will be allocated to institutional strengthening, including creation of a research and business projects department, strengthening the sustainability area; improving internal controls and project management.

In addition, we estimate incurring adjusted operating expenses in 2010 to an interval between R$540,000 thousand and R$545,000 thousand, as follows: in IT, trading and post-trading services; in institutional strengthening; and in expanding the customer base and increasing revenues through strengthening the market popularization and financial education program; boosting our issuer prospecting activities (BovespaMais, Novo Mercado and BDRs); implementing a new pricing policy for the Bovespa segment; attracting high frequency traders; developing new products; expanding to international markets. For 2009 we had projected investments of R$116,000 thousand and expenses (adjusted to eliminate depreciation expenses and expenses with stock option plan) of R$450,000 thousand. We ultimately invested R$95,585 thousand and incurred adjusted expenses of R$446,677 thousand. We had no projections for 2008 because this was the year of the integration process that combined the two formerly independent exchanges, BM&F and Bovespa. 11.2. Projections related to the evolution of its indicators in the past three financial years:

a.

indicate any data for which updated projections are included herein, and which repeat previous projections

The same kind of projections of investments and expenses that we had released in 2009 we are against projecting and releasing, at updated amounts, effective for 2010.

b.

Comparison of the projected data with the actual performance of the indicators

We projected investments for 2009 totaling R$116,000 thousand and adjusted expenses of R$450,000 thousand. We ultimately invested R$95,585 thousand and incurred adjusted expenses of R$446,677 thousand. One of the primary reasons for our actual investments (at R$95,585 thousand) having fallen short of the projection of R$116,000 thousand was our decision to postpone to 2010 the project for implementation of the new data centers, which in the 2009 forecast had been budgeted at R$26,500 thousand. In addition, appreciation of the exchange rate for Brazilian real to U.S. dollar ultimately reduced the cost of other investments. We had no projections for 2008 because this was the year of the integration process that combined the two formerly independent exchanges, BM&F and Bovespa.

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c.

with regard to projections for ongoing periods, indicate whether the projections stand as of the date of this form

In notice to the market as of May 12, 2010, we announced the beginning of the process of reviewing the budgets of Adjusted Operating Expenses (Opex) and Capital Expenditures (Capex) for 2010. In disclosing the 4Q09 results, these budgets were set at R$550,000 thousand and R$302,100 thousand, respectively. In the material fact published on June 22, 2010, the adjusted budget of Opex and Capex for 2010 was revised, to R$520,323 thousand and R$272,000 thousand, respectively. In the material fact published on November 09, 2010, we announced the review of the Opex to an interval between R$540,000 thousand and R$545,000 thousand and Capex to an interval between R$250,000 thousand and R$272,000 thousand for 2010. 12. Shareholders meeting and management 12.1. Administrative structure a. responsibilities of each administrative body and committee;

Responsibilities of the board of directors. Our board of directors is responsible for (a) setting the general business guidelines for us and our subsidiaries, approving or amending the annual budgets, and periodically establishing targets and business strategies, whereas overseeing the budget execution and our performance; (b) electing and removing the officers, whereas approving the internal management regulation pursuant to the Bylaws; (c) monitoring the activities of the Officers, inspecting books and records at any time, as well as requesting information on contracts and agreements, whether executed or set for execution, and any other managerial acts; (d) deciding on whether to convene shareholders' meetings; (e) submitting to the shareholders' meeting, along with its opinion, the managements report and discussion and analysis, in addition to the financial statements as of and for the year ended; (f) submitting to the annual shareholders' meeting the proposal for allocation of net income for the year; (g) giving prior consent for contracts of any type, and for transactions or waivers of rights entailing obligations in excess of the reference amount and not contemplated in the annual budget (under our Bylaws, reference amount is defined as one percent of the book value of our shareholders equity); (h) granting prior approval for investments in excess of the reference amount, if not contemplated in the annual budget; (i) granting prior approval for any loan, financing, issuance or cancellation of simple, non-convertible and unsecured debentures, and for the rendering of collateral or fiduciary guarantees on behalf of subsidiaries, if in excess of the reference amount and not contemplated in the annual budget; (j) authorizing management to acquire, dispose of, or give collateral or establish any liens on permanent assets, for amounts implying liability in excess of the reference amount and not contempl ated in the annual budget; (k) granting prior approval for execution of partners or shareholders agreements by us or our subsidiaries; (l) approving voting instructions for representatives representing us in shareholders' meetings of companies in which we hold equity interest, or give prior consent for amendments to their bylaws, in the event our interest in any such company exceeds the reference amount; (m) appointing the executive officers of subsidiaries, which shall defer to the recommendations of the chief executive officer, unless otherwise decided upon affirmative vote of a qualified majority representing 75% of our directors; (n) deciding on purchases of our own shares by us, whether to be kept as treasury stock or for later cancellation or reissuance; (o) deciding on acquisitions of ownership interest in other companies, and on our membership in charitable associations or organizations, in case any such interest is in excess of the reference amount, and except for interest acquired as part of our financial investments policy; (p) authorizing the rendering of any guarantee on behalf of third parties, whether or not in transactions related to our operating activities, in particular where we may be acting as central counterparty to settlement transactions related to our or a subsidiarys clearing and settlement activities; (q) providing shareholders with the triple list of specialized firms with ability to evaluate our shares and prepare the valuation report, in the event of a going-private process with cancellation of our registration as a public company or for delisting from the Novo Mercado ; (r) approving the hiring of a bookkeeping agent; (s) giving regard to applicable legislation, deciding on distributions of interest on shareholders equity; (t) hiring and replacing the independent auditors, based on a proposal of the audit committee; and (u) appointing the members of the board advisory committees, and those of other committees and temporary work groups it may establish. Additionally, the responsibilities of the board of directors comprise: (a) approving regulations for access to our markets, and rules related to the granting, suspension and cancellation of access permits, as well as other regulatory, operational, and clearing and settlement rules to regulate market operations and define transactions in securities, bonds and contracts listed to trade on our markets and in registration, clearing and settlement systems operated by us or a subsidiary ; (b) approving rules related to listing, suspension and delisting of securities and contracts, and relevant issuers or writers, as applicable ; (c) approving operational regulations and the rules on our clearing facilities and systems for registration, clearing and

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settlement of transactions carried out on markets operated by us or a subsidiary; (d) approving the code of ethics for participants in markets operated by us, which should provide the rules of conduct for proper market practices and to ensure market operations are conducted pursuant to highly ethical standards, in addition to regulating the operations and composition of the Ethics Committee and to elect the members of said committee; (e) establishing the penalties that shall apply in the event of violations to regulatory rules approved by the board of directors; (f) deciding on the granting of access permits to prospective market participants, which decisions may be appealed within a thirty -day period for reconsideration by the shareholders meeting, which shall then issue a final decision on the matter, whereas giving regard to applicable regulations; (g) deciding on whether to suspend or cancel access permits, in addition to reviewing permits in the event of a transfer of control of a market participant and upon replacement of the upper management members of participants holding access permits; (h) ordering limited or full-scale trading halt in the event of serious emergency in markets operated by us or a subsidiary adversely affecting regular market operations, promptly giving notice of the decision and justification to the Brazilian Securities Commission ( Comisso de Valores Mobilirios ), or CVM; (i) approving our and our subsidiaries annual reports on our operational risk control systems and business continuity plan; and (j) deciding on the formation, resource allocation and management of guarantee funds and other safeguard mechanisms in connection with transactions carried out in our markets and systems, including by regulating instances and processes for their use . Responsibilities of the board of executive officers. The board of executive officers represents us and is responsible for managing our business, having powers to (a) abide by and enforce the provisions of these Bylaws and the decisions of the board of directors and the shareholders meetings; (b) within its sphere of authority, perform all acts necessary to ensure the regular course of business and fulfill our corporate purpose, and (c) coordinate the activities of our subsidiaries. The responsibilities of the board of executive officers include (a) deciding on opening, closing or moving branches, representative offices, warehouses, depository facilities or any other establishments in Brazil or abroad; (b) submitting to our board the annual management report, the financial statements and the auditors report, along with the proposal on allocation of net income for the year; (c) preparing yearly and multi-year budget proposals, and proposals on strategic plans, expansion plans and investment programs; (d) granting prior consent for the acquisition or disposition of chattel or real property by us or a subsidiary, and for the rendering of collateral or liens of any nat ure on our assets, the taking of loans or financing and the granting of in rem or fiduciary guarantees, in any event for amounts below the reference amount, and (e) prompted by the chief executive officer, deciding on any matters not allocated to be exclu sive sphere of competence of the board of directors or the shareholders meeting. Additional responsibilities of the board of executive officers include (i) declaring default by participants in our clearing facilities and organized OTC markets, and ordering appropriate action, whereas giving regard to applicable regulations; (ii) setting the operating, credit and risk limits attributable to participants in registration or clearing facilities; (iii) defi ning processes for common adoption by registration and clearing facilities, and for their integration with our trading systems, risk management and margin systems; and (iv) order the closing out of open positions held by permit -holding market participants in any of our markets. Responsibilities of the board advisory committees

Audit Committee. The primary responsibilities of the audit committee include assessing the effectiveness of our

internal controls system and internal and independent auditing processes. This committee is composed of five members, as follows: Marcelo Fernandez Trindade (independent director), Luis Nelson Guedes de Carvalho (external independent member), Paulo Roberto Simes da Cunha (external independent member), Srgio Darcy da Silva Alves (external independent member) and Tereza Cristina Grossi Togni (external independent member).

Compensation Committee. The primary responsibilities of the audit committee include evaluating and adjusting our

compensation guidelines, standards and policy, including as to benefits for directors, com mittee and management members. This committee is composed of three members, as follows: Candido Botelho Bracher (director), Claudio Luiz da Silva Haddad (independent director) and Ren Marc Kern (independent director).

Nomination and Governance Committee. The primary responsibilities of the nomination and governance committee

include tackling corporate governance, protecting our and our subsidiaries credibility and ensuring we practice high business standards. This committee is composed of three members, as follows: Arminio Fraga Neto (independent director and chairman of the board), Jos Roberto Mendona de Barros (independent director) and Luis Stuhlberger (director).

Risk Committee. The primary responsibilities of the risk committee include monitoring and assessing risks, including

market, liquidity and systemic risks affecting markets we operate from a strategic and structural standpoint. This committee is composed of four members, as follows: Arminio Fraga Neto (independent director and chairman of the board), Fbio de Oliveira Barbosa (independent director), Julio de Siqueira Carvalho de Arajo (director) and Luis Stuhlberger (director).

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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 competen ce of the chief executive officer. This committee is composed of nine members, as follows: Amarlis Prado Sardenberg ( chief clearing, depository and risk management officer ), Ccero Augusto Vieira Neto (chief operations officer), Marta Alves (chief product development officer), Agenor Silva Junior (settlement officer), Marcos Costa Santos Carreira (derivatives officer), Andr Eduardo Demarco (operations officer), Henrique de Rezende Vergara (general counsel), Ivan Wedekin (commodities officer) and Luis Antnio B. G. Vicente (risk management officer). 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 r egulations committees, commodity classification and mediation committees and other special committees, whose role, responsibilities, composition and operation will be defined at the time they are created. b. the date the fiscal council was established (if not permanently active), and the dates on which the committees were established;

Our fiscal council is has not been active since our incorporation. We take the view that the absence of an active fiscal coun cil is adequately supplemented by our audit committee because it has been conceived and established to include, among other things, responsibilities (listed under article 47 of our Bylaws) that overlap those legally ascribed to a fiscal council unde r Brazilian Corporate Law. As with our compensation committee and nomination and governance committee (both previously comprising one body named compensation and nomination committee), our audit committee was established at the extraordinary shareholders meeting held on May 8, 2008. Our risk committee was established by the board of directors at a meeting held on May 12, 2009. The executive market risk committee was created on May 8, 2008, having taken the current composition from May 13, 2009. c. the mechanisms for evaluation of performance by each administrative body or committee;

We have no mechanisms for evaluation of the performance of either the board of executive officers or the market risk committee, as collective bodies per se. In addition, the board of directors has adopted a yearly evaluation process whose dimensions are twofold: what and how. The what dimension means evaluating data compiled and grouped into three categories we call (a) strategic focus, (b) knowledge and information on the business, and (c) independence, whereas the how dimension means evaluating data compiled and grouped into categories we call (a) decision-making process, (b) role at meetings and (c) motivation and interest alignment. The objective of the process is to facilitate structured discussions on continuing performance improvements for systematically enhanced efficiency of the role of the board. The first stage encourages 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. the individual powers and responsibilities of the executive officers;

Chief executive officer . The chief executive officer is assigned powers and responsibilities to (a) convene and chair the
meetings of the board of executive officers; (b) propose to our board the internal regulation and the composition of the

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board of executive officers; (c) direct and coordinate the activities of the other officers; (d) coordinate general planning activities for us and our subsidiaries; (e) approve our organizational structure, hiring executives and directing the upper a nd middle management members, and expert professionals, assistants and consultants, as he may deem necessary or appropriate, defining positions, functions and compensation, assigning powers and responsibilities, whereas giving regard to guidelines set in budget forecasts approved by our board; (f) establish the executive market risk committee and the regulation governing the committees operations, composition, role and responsibilities, setting the compensation of committee members, as applicable, whereas giving regard to guidelines set by compensation committee; (g) establish other executive or advisory or operational committees and work groups, and standardization and regulations committees, commodity classification and mediation committees, and other special committees, in addition to defining their role, responsibilities, composition and operating regulation; (h) set prices, fees, commissions and other dues payable by participants holding permits for access to our markets and by other parties, as compensation for our off erings of products and services provided in connection with our core business activities, including our regulatory and surveillance activities, auditing and grading activities, whereas ensuring wide dissemination of price schedules amongst customers and pa rticipants; (i) submit to our board proposals on regulatory, operational, clearance and settlement rules to regulate market activities an d transactions in equities and derivatives listed to trade on our markets and the operation of our electronic trading, registration, clearing and settlement systems and environments; (j) define securities, bonds and contracts that may be listed to trade on our markets or registered, cleared and settled on our systems, in addition to powers to order halts on trading in any securities, bonds or contracts, or delisting them altogether; (k) monitor and inspect in real -time trades and other transactions carried out on our trading, registration, clearing and settlement systems; (l) acting within the scope of our market surveillance activities, take measures and adopt procedures to prevent unfair or illegal or irregular market practices; (m) in the event of serious emergency in markets operated by us or a subsidiary, which adversely affects regular market operations, to order limited or full-scale trading halt, promptly giving notice of this decision and justification to the board and the Brazilian Securities Commission; (n) to take the cautionary measure of suspending the access permit of participants in certain instances contemplated in the access regulation and other rules enacted by our board of directors, or in the event of suspected violation of the code of ethics, whereas promptly communicating the suspension to the CVM and the Central Bank; (o) prevent the completion of transactions entered in our trading, registration, clearing and settlement systems where there are indications of violation of the legislation and regulations which we are responsible for surveilling and enforcing; (p) cancel transactions entered or registered in our trading, registration, clearing and settlement systems, as long as any such transaction is pending settlement, and to halt clearing and settlement of transactions, in any instance where there are indications of violation of the legislation and regulations which we are responsible for surveilling and enforcing; (q) determine special procedures for transactions entered and or registered in our trading, registration, clearing and settlement systems, in addition to establishing clearing and settlement requirements in connection therewith; (r) promptly communicate the CVM of the occurrence of events, including transient events, that affect the markets operated by us; and (s) forward to the CVM, as required from us and within the assigned deadline, inform ation and reports related to transactions entered or registered in our trading, registration, clearing and settlement systems.

Chief financial officer; Investor relations officer . The chief financial officer accumulates responsibilities as investor

relations officer and officer for corporate affairs. As such, this officer has powers and responsibilities to (a) plan and prepare yearly and multi-year budget forecasts, work plans and capital expenditure plans; (b) control the execution of our yearly and multi-year budgets; (c) manage and invest our financial resources, and to supervise performance of these activities by our subsidiaries; (d) direct our accounting, financial planning and taxation departments; (e) perform reporting and disclosure activities, and interface with shareholders, the CVM, the market, other exchanges or markets on which securities issued by us are listed to trade, and to keep current registration information as required by applicable CVM regulation, in addition to fulfilling other requirements of said regulation; (f) provide administrative services as may be required by our business, in particular with regard to contract management, asset management, asset secur ity, supplies and logistics, engineering and maintenance; and (g) supervise the legal team in connection with legal advice on corporate, litigation and tax matters, as well as regarding our regulatory activities.

Chief clearing, depository and risk management officer . The chief clearing, depository and risk management officer

is responsible for (a) administering all clearing activities for the equities, derivatives, fixed -income, commodities and foreign exchange markets, pursuant to transactions carried out in our trading systems, and supervising public offerings and the settlement of transactions carried out within the scope of these offerings; (b) directing and administering the services of the central securities depository and the custody activities provided for equities, fixed-income securities, gold and agricultural securities which are registered or deposited with our central securities depository and our other custody systems; (c) directing our activities as central counterparty to ensure multilateral settlement of transactions at our clearing facilities; and (d) managing the processing of applications for permits for access to our markets and the Brazilian commodities exchange operated by the Brazilian Commodities Exchange ( Bolsa Brasileira de Mercadorias), our subsidiary.

Chief operations officer .

The chief operations officer directs our business operations and information technology activities, and is responsible for (a) administering and monitoring the business operations and the external connections to

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our electronic trading platforms; and (b) developing and managing operating systems control tools and market surveillance mechanisms, in addition to technology solutions related to the processing of transactions within the scope of the capital markets.

Chief business development officer . The chief business development officer is responsible for (a) setting the guidelines

for our business development activities in domestic and international markets; (b) identifying new business opportunities and planning strategies to capture opportunities, in addition to expanding distribution channels including by nurturing and furthering business relationships with market participants; and (c) coordinating institutional marketing and further relationships with users of our products and services.

Chief product development officer . The chief product development officer is responsible for (a) coordinating research
and development of new products, trading structures, researching market requirements, operating in cooperation with market participants, regulatory entities and private capital market institutions; and (b) by acting in cooperation with market participants, regulatory entities and private capital market institutions, promote market efficiency, market education and develop solutions to tackle technical hurdles. e. the mechanisms for evaluation of performance by directors, committee members and officers.

Evaluations of the officers are conducted at the beginning of the year, at which time we set performance targets for the next year in line with our strategic plan. In determining whether performance targets are met, the evaluations are conducted based on a process whose dimensions are twofold: what and how. The what dimension evaluates project realization, adherence to budget and key operating indicators, whereas the how dimension evaluates competencies. In addition, upper management team leaders perform half-yearly evaluations of each upper management member, including members of the board of executive officers, and define evaluation scores which provide feedback for determination of both the shortterm variable compensation (profit sharing bonuses) and the long-term variable compensation (stock options under our stock option plan). The evaluations and scores are subsequently submitted to the board o f 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 indiv idual 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. Description of the rules, policies and practices regarding shareholders meetings:

a.

call notice periods;

Shareholders meetings are called at least fifteen days prior to the date scheduled for the meeting on first call, and eight days prior to the date of the meeting on second call.

b.

powers and responsibilities;

In addition to powers allocated to a shareholders meeting under Brazilian Corporate Law and our Bylaws, the powers and responsibilities of our shareholders convened in properly called meetings include (a) reviewing the management report and judging the financial statements; (b) deciding on the proposal for allocation of net income for the year and on dividend and other distributions of net income; (c) electing and removing the directors and the fiscal council members, if the fiscal coun cil is established; (d) setting the aggregate compensation of the directors and executive officers, and that of fiscal council members, if this is active; (e) approving stock or subscription option plans benefitting our and our subsidiaries management and employees and other service providers; (f) giving regard to existing legal limits and in accordance with our human resources policy, approving profit sharing plans for the benefit of management and our employees; (g) approving our delisting from the Novo Mercado segment of the Brazilian stock exchange, or the cancellation of our registration as a public company upon a going private process; (h) from a list of candidate appointees, designating a specialized firm to determine the fair value of our shares and prepare the valuation report in the event of a going -private process or our delisting from the Novo Mercado; (i) suspending the rights of shareholders in breach of the law or our Bylaws (Article 120 of Brazilian Corporate Law and Article 18 of our Bylaws); (j) deciding on our holding ownership interest in other compan ies and/or associations, consortiums or joint ventures, where any such interest involves an amount in excess of three times the reference amount; (k) deciding on any material disposition of our assets or trademarks; (l) deciding on merger transactions whereby our company or our shares are proposed to be absorbed into another company, and on consolidation or spin -off

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transactions, and on a transformation of our corporate type and on our dissolution, for which purpose the legally prescribed quorum to resolve will be fulfilled, unless the Brazilian Securities Commission ( Comisso de Valores Mobilirios ), or CVM, shall have consented to a lower quorum to resolve, such as permitted under paragraph 2 of article 136 of Brazilian Corporate Law.

c.

locations (street address and website or e-mail address) at which the documents related to a shareholders meeting are made available for analysis by shareholders;

Street address: our registered office, at Praa Antonio Prado, 48, Downtown, So Paulo, State of So Paulo Electronic addresses: www.bmfbovespa.com.br/ri; and www.cvm.gov.br

d.

identification and management of conflicts of interest;

Under applicable Brazilian legislation, if the interests of any shareholder conflict with our interests in any particular mat ter on which a shareholders meeting is to vote, the conflicted shareholder will be prevented from voting his shares. The same is provided in article 19 of our Bylaws, which prohibits conflicted shareholders from voting in the event of a conflict of interest. In addition, under article 115 of Brazilian Corporate Law, a vote cast by a conflicted shareholder woul d constitute abuse of shareholder rights. At this time we adopt no mechanism to detect and identify events where the interests of a shareholder conflicts with our interest in any matter submitted to a shareholders meeting.

e.

proxy requests by management (for purposes of delegating voting rights);

Pursuant to current practices, we consent to have certain management members act as proxies for shareholders that wish to do so and provide sufficient voting instructions on how these proxies are to vote the shares at the relevant share holders meeting.

f.

formal requirements for acceptance of proxies and powers of attorney granted by shareholders, including indication as to whether proxies sent via computer are acceptable;

We accept electronic proxies (powers of attorney) granted by shareholders that meet certain requirements, including original or certified copies of the corporate documents that prove authority of the signatory to grant a proxy (or power of attorney). However we do not require these proxies (or powers of attorney) to be notarized or consularized. In order to facilitate attendance and encourage shareholder participation, we have adopted the practice of making 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, when shareholders were permitted to register for remote voting or voting by proxy and were issued digital certifications by either a private certificate provider or by ICP-Brasil, the certification authority for the Brazilian public key infrastructure established pursuant to Provisional Measure No. 2200-2 dated August 24, 2001.

g.

forums or gateways for receipt via computer of shareholder statements on matters included in the agenda of shareholders meetings;

We keep no forums or gateways for receipt of shareholders statements via computer, regarding matters included in the agenda for any shareholders meetings.

h.

online video and/or audio transmission of shareholders meetings;

We provide no online video or audio transmission of our shareholders meetings.

i.

mechanisms for inclusion of shareholder proposals in meeting agendas.

We adopt no special mechanisms for shareholders to add proposals to the order of business. While thus far no such request has been made by any shareholder, if any such request is actually received we will review the matter on a case -by-case basis, at which time we may agree to do add a proposal to the order of business.

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12.3. Dates and newspapers in which notices to shareholders have been published to announce (a) the notice of release of financial statements; (b) call notices related to annual shareholders meetings held to judge the financial statements; (c) minutes of the annual shareholders meetings held to judge the financial statements; (d) the financial statements:
2009 Publication date(s) Notice of release of financial statements Not published Not published March March March March March March 19, 2010 20, 2010 23, 2010 20, 2010 23, 2010 24, 2010 Newspaper(s) N/A N/A Publication date(s) March 19, 2009 March 20, 2009 March 19, 2009 March 20, 2009 March 31, 2009 April 1, 2009 April 2, 2009 March 31, 2009 April 1, 2009 April 2, 2009 2008 Newspaper(s)

Valor Econmico
Official Gazette of the State of So Paulo

Valor Econmico
Official Gazette of the State of So Paulo

Valor Econmico
Official Gazette of the State of So Paulo

Call notices for annual shareholders meetings

Date of the meeting Minutes of the annual shareholders meeting that judged the financial statements Financial statements

April 20, 2010, 11 am April 22, 2010 Valor Econmico April 23, 2010 February 24, 2010 February 24, 2010 Official Gazette of the State of So Paulo

April 28, 2009, 11:30 am May 14, 2009 Valor Econmico May 14, 2009 March 18, 2009 March 19, 2009 Official Gazette of the State of So Paulo

Valor Econmico
Official Gazette of the State of So Paulo

Valor Econmico
Official Gazette of the State of So Paulo

12.4. Description of the rules, policies and practices regarding the board of directors Our board has the mission of ensuring that business is conducted for protection and appreciation of our assets, whereas maximizing long-term return for shareholders and caring for the health of good order of the markets we operate. Our board of directors is a collective decision-making body, responsible for setting our general business guidelines and deciding on strategic issues. As set forth in our Bylaws, our board is composed of a minimum of seven and a maximum of eleven members, all of whom are elected for two-year terms, reelection being permitted, and may be removed by the shareholders meeting at any time. Our directors may not accumulate responsibilities as our executive officers, nor as officers of our subsidiaries. The chairman and vice chairman of the board are appointed by the absolute majority (50% plus one of all acting directors) of directors attending the first board meeting after their election and investiture. The presence of an absolute majority of our directors (50% plus one of all acting directors) constitutes a quorum to convene any board meeting on first call. On second call, any number of attending 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, the board of directors meets regularly every two months, pursuant to the annual calendar our chairman releases in January every year. In addition, if urgent business so require extraordinary board meetings may be called based on a three-day prior notice given by the chairman or in his absence, the vice chairman, or also by 2/3 of the board members. The table below sets forth the dates of board of directors held in the last two full years.
2008 May 8, 2008 May 20, 2008 June 18, 2008 July 3, 2008 August 12, 2008 August 14, 2008 2009 January 20, 2009 February 17, 2009 March 17, 2009 March 27, 2009 April 14, 2009 April 28, 2009

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August 19, 2008 September 16, 2008 September 24, 2008 October 21, 2008 November 11, 2008 December 16, 2008 December 19, 2008 -

May 12, 2009 May 18, 2009 June 25, 2009 August 11, 2009 September 24, 2009 October 23, 2009 November 10, 2009 December 17, 2009

b.

provisions of shareholders agreements, if any, establishing restrictions on, or in any way tying the votes of directors at board meetings;

There are no shareholders agreements filed at our registered office. c. rules for identification and management of conflicts of interest.

Under article 22, paragraph 4, of our Bylaws, no person may be elected to our board if he or she is a director of a competito r of ours or of a subsidiary, or has a conflict of interest with us or any of our subsidiaries. A person is deemed to have a conflict of interest if, cumulatively, (i) the shareholder seeking to elect such person also has appointed a director of any competitor; and (ii) the person has subordination relations with the shareholder seeking to elect such person. Additionally, to determine whether or not a conflict of interest exists in the above circumstance, our Bylaws make an extrapolation from the votes cast to elect any particular director, by providing that a director is deemed to have been elect ed 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) (b) (c) a continuing relationship based on an employment contract or service provision agreement or an office as director, executive officer, committee member, governing committee or fiscal council member; 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 being a spouse, common law spouse or relative to the second degree of another director.

Paragraph 10 of article 22 of our Bylaws further provides that if a supervening event occurs, or a previously unknown event comes to light, such that a particular director no longer meets the appointment requirements, said director must promptly be replaced. Under the sole paragraph of article 21 of our Bylaws, directors and officers are required to adhere to our policy on material disclosures and securities trading, by singing the instrument of adherence to the policy manual. While for the most part our board is composed by independent directors, the interests of all our directors are in line with o ur 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 Instruction 461/07; and (b) whose interest in our shares, whether directly or indirectly held, represents less than five percent of our shares of common stock and if the director has ties with a shareholder, the latter must not hold an interest representing five percent or more of our shares of common stock.

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In addition, under section 4 of our policy on conflicts of interest and related party transactions and under subsection 15.7 of the board regulation, our directors are required to disclose promptly any existing conflict of interest and are also required to abstain from taking part in deliberations and any decision-making process related to the pertinent matter. Moreover, also under section 4 of our policy on conflicts of interest and related party transactions the 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 any director that would potentially ascertain a personal gain from any given decision were to silence about a conflict of interest, any cognizant peer may reveal the conflict of interest. For his failure to disclose the conflict of interest the conflicted director would be in breach of our policy, and the matter would be submitted to the nomination and corporate governance committee for evaluation and a recommendation to the board of directors as to possible corrective actions. In any event, the conflict of interest disclosure and the conflicted directors abstentions from voting must be properly recorded in the minutes of the relevant board meetings. On taking office, our directors are required to sign a statement acknowledging being aware of, and committing to abide by the requirements of our policy on conflicts of interest and related party transactions. 12.5. Description of the Bylaws provision on arbitration commitment for settlement of disputes among shareholders, or between shareholders and the registrant. Our Bylaws (article 77) require our shareholders, directors, officers and, if in office, also our fiscal council members, to settle by arbitration any disputes which is related to the application, legality, effectiveness, interpretation, violation and effects of violation of the provisions of the agreement for participation in the Novo Mercado or the rules of the Novo Mercado, the arbitration regulation of the market arbitration chamber, the provisions of the Brazilian Corporate Law, the rules issued by the Brazilian Monetary Council (Conselho Monetrio Nacional), or CMN, the Central Bank or the CVM, and other rules generally applying to the Brazilian capital markets. The arbitration proceedings should be carried out before the market arbitration chamber, under its rules. 12.6. Information on the directors, executive officers and fiscal council members 12.6.1 Board of Directors

(Tables 1 and 2)
Table 1 Arminio Fraga Neto 52 Economist 469.065.257-00 Chairman April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Candido Botelho Bracher 51 Business Administrator 039.690.188-38 Director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Claudio Luiz da Silva Haddad 63 Industrial and mechanical engineer 109.286.697-34 Independent director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Craig Steven Donohue 48 Businessman 060.600.507-27 Director April 28, 2009 May 12, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Fbio de Oliveira Barbosa 49 Economist 359.558.996-34 Independent director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Jos Roberto Mendona de Barros 65 Economist 005.761.408-30 Independent director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements

Age Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office

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Other positions

Member of the nomination and governance committee and of the risk committee No

Compensation committee member

Compensation committee member

Risk committee member

Nomination and governance committee member

Appointment by controlling shareholder

No

No

No

No

No

Table 2

Julio de Siqueira Carvalho de Arajo 55 Banker 425.327.017-49 Director April 28, 2009 May 12, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Risk committee member

Luis Stuhlberger 55 Engineer 881.983.918-00 Director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Member of the nomination and governance committee and of the risk committee No

Marcelo Fernandez Trindade 45 Lawyer 776.785.247-49 Vice-Chairman April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Audit committee member

Renato Diniz Junqueira 57 Business Administrator 679.361.308-10 Director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements

Ren Marc Kern 46 Businessman 3560470115 Independent director April 28, 2009 April 28, 2009 Through to the date of the annual shareholders meeting that convenes to judge the 2010 financial statements Compensation committee member

Age Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office

Other positions

Appointment by controlling shareholder

No

No

No

No

12.6.2

Board of Executive Officers

Amarlis Prado Sardenberg 49 Economist 089.545.388-60 Chief Clearing, Depository and Risk Management Officer April 28, 2009 April 28, 2009 2 years Member of the Market Risk Committee Ccero Augusto Vieira Neto 37 Economist 128.501.208-98 Chief Operations Officer April 28, 2009 April 28, 2009 2 years Member of the Market Risk Committee Eduardo Refinetti Guardia 44 Economist 088.666.638-40 Chief Financial Officer (Investor Relations Officer) June 22, 2010 June 22, 2010 2 years Jos Antonio Gragnani 47 Engineer 049.263.118-28 Chief Business Development Officer 25.03.2010 25.03.2010 2 years -

Edemir Pinto Age Profession Taxpayer ID (CPF) Position Chief Executive Officer Appointment date Investiture date Term of office Other positions April 28, 2009 April 28, 2009 2 years 56 Economist 614.304.988-20

Marta Alves 48 Statistical analyst 041.550.438-40 Chief Product Development Officer June 25, 2009 June 25, 2009 2 years Member of the Market Risk Committee

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Appointment by controlling shareholder

No

No

No

No

No

No

12.6.3

Fiscal Council

The fiscal council has not been established. We take the view that the absence of an active fiscal council is adequately supplemented by our audit committee because it has been conceived and established to include, among other things, responsibilities (listed under article 47 of our Bylaws) that overlap those legally ascribed to a fiscal council under Brazilian Corporate Law. Our audit committee is composed of five independent members (one independent director and four external members) appointed by our board for two-year terms, based on recommendations of our nomination and corporate governance committee. In addition, to ensure this committee operates in an exempt and objective fashion, and for the benefit of our company and shareholders, audit committee members are required to be well versed or experienced in either auditing and accounting and taxation or compliance and internal controls, as well as meet the independence standards set forth in article 46 of our Bylaws. 12.7. Board advisory committees Audit Committee
Luis Nelson Guedes de Carvalho 64 Accountant 027.891.838-72 Committee Coordinator May 12, 2009 May 12, 2009 2 years -No Marcelo Fernandez Trindade 45 Lawyer 776.785.247-49 Committee member May 12, 2009 May 12, 2009 2 years Independent Director No Paulo Roberto Simes 60 Accountant 567.047.048-68 External member May 12, 2009 May 12, 2009 2 years -No Srgio Darcy da Silva Alves 65 Financial Consultant 050.933.687-68 External member May 12, 2009 May 12, 2009 2 years Member of the Regulations Committee No Tereza Cristina Grossi Togni 61 Accountant 163.170.686-15 External member May 12, 2009 May 12, 2009 2 years -No

Age Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office Other positions Appointment by controlling shareholder

Nomination and Governance Committee

Arminio Fraga Neto 52 Economist 469.065.257-00 Committee Coordinator May 12, 2009 May 12, 2009 2 years Chairman of the Board No Jos Roberto Mendona de Barros 65 Economist 005.761.408-30 Committee member May 12, 2009 May 12, 2009 2 years Independent director No Luis Stuhlberger 55 Engineer 881.983.918-00 Committee member May 12, 2009 May 12, 2009 2 years Director No

Age Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office Other positions Appointment by controlling shareholder

Compensation Committee
Candido Botelho Bracher 51 Claudio Luiz da Silva Haddad 63 Ren Marc Kern 45

Age

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Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office Other positions Appointment by controlling shareholder

Business Administrator 039.690.188-38 Committee member May 12, 2009 May 12, 2009 2 years Director No

Industrial and mechanical engineer 109.286.697-34 Committee Coordinator May 12, 2009 May 12, 2009 2 years Independent director No

Businessman 3560470115 Committee member May 12, 2009 May 12, 2009 2 years Independent director No

Risk Committee
Arminio Fraga Neto Age Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office Other positions Appointment by controlling shareholder 52 Economist 469.065.257-00 Committee member May 12, 2009 May 12, 2009 2 years Chairman of the Board No Fbio de Oliveira Barbosa 49 Economist 359.558.996-34 Committee Coordinator May 12, 2009 May 12, 2009 2 years Independent director No Julio de Siqueira Carvalho de Arajo 55 Banker 425.327.017-49 Committee member May 12, 2009 May 12, 2009 2 years Director No Luis Stuhlberger 55 Engineer 881.983.918-00 Committee member May 12, 2009 May 12, 2009 2 years Director No

Executive advisory committee Market Risk Committee (Tables 1 and 2)

Table 1 Age Profession Taxpayer ID (CPF) Position Appointment date Investiture date Term of office Other positions Appointment by controlling shareholder Agenor Silva Junior 54 Economist 007.704.018-05 Committee member September 29, 2008 September 29, 2008 Indefinite term Settlement officer No Amarlis Prado Sardenberg 49 Economist 089.545.388-60 Committee member September 19, 2008 September 19, 2008 Indefinite term Chief clearing, depository and risk management officer No Andr Eduardo Demarco 37 Business Administrator 157.259.728-64 Committee member May 13, 2009 May 13, 2009 Indefinite term Operations officer No Ccero Augusto Vieira Neto 37 Economist 128.501.208-98 Committee member May 8, 2008 May 8, 2008 Indefinite term Chief operations officer No Henrique de Rezende Vergara 40 Lawyer 016.734.217-76 Committee member May 13, 2009 May 13, 2009 Indefinite term General Counsel No

Table 2 Age Profession

Ivan Wedekin 56 Agronomic engineer

Luis Antnio B. G. Vicente 41 Mathematician

Marcos Costa Santos Carreira 38 Engineer

Marta Alves 48 Statistical analyst

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Taxpayer ID (CPF) Position Appointment date Investiture date Term of office Other positions Appointment by controlling shareholder

736.816.608-91 Committee member May 8, 2008 May 8, 2008 Indefinite term Commodities officer No

975.138.577-68 Committee member May 8, 2008 May 8, 2008 Indefinite term Risk management officer No

072.442.928-05 Committee member February 10, 2010 February 10, 2010 Indefinite term Derivatives officer No

041.550.438-40 Committee member June 25, 2009 June 25, 2009 Indefinite term Chief product development officer No

12.8. Brief biographical description of the directors, executive officers and fiscal council members Board of directors Arminio Fraga Neto

Chairman of the board

Mr. Fraga Neto holds a bachelors and a masters degree in economics from the Catholic University of Rio de Janeiro (1981) and a PhD degree in Economics from Princeton University (1985). He is the founding partner of Gvea Investimentos (2003), an independent investment management company which focuses on structu red investments and private equity. He is a former governor of the Brazilian Central Bank (March 1999 through December 2002). Previously, he was a managing director of the Soros Fund, based in New York, director for International Affairs and member of th e Central Bank board of governors, a vice president at the Salomon Brothers, in New York, and Chief Economist and Operations Manager of Banco Garantia. In addition, is a former professor for the masters program of the Catholic University of Rio de Janeir o, of the school of Economics of Fundao Getlio Vargas, the School of International and Public Affairs of Columbia University (U.S.) and a visiting assistant professor in the Finance Department at Wharton School of the University of Pennsylvania. Other positions in public companies. Mr. Fraga Neto is a former director of Unibanco Unio de Bancos Brasileiros S.A., whose registration as a public company was cancelled following the merger with Banco Ita in April 2009. He was also a member of the advisory committees of the Bunge group in Brazil (Bunge Alimentos S.A. and Bunge Fertilizantes S.A). Candido Botelho Bracher

Director

Mr. Bracher holds a graduate degree in business administration from Fundao Getlio Vargas. Since 2005, he has been the chief executive officer of Banco Ita BBA. Previously, he was a vice president of Banco Ita BBA (2003 -2005), an executive officer of Banco BBA Creditanstalt (1988-2003), of Banco Itamarati (1987-1988), executive officer and vice chief executive of Banco de Desenvolvimento do Estado de So Paulo (1985-1987), executive officer of Bahia Corretora and a manager of Banco da Bahia Investimentos (1983-1985), a trader in commodities futures at the Paris offices of the Commodities Corporation (1982), a forex trader at the Swiss Bank Corporation, based in Zrich, Switzerland (1982), and assistant manager for exports at Braswey Indstria e Comrcio S.A. (1980). Other positions in public companies. Mr. Bracher has been vice chief executive of Ita Unibanco Holding S.A. since May 2005 and a member of the board of directors since December 2008. In addition, Mr. Bracher is a former member of the board of directors of Unibanco Unio de Bancos Brasileiros S.A., whose registration as a public company was cancelled following the merger with Banco Ita in April 2009. Claudio Luiz da Silva Haddad

Independent director

Mr. Haddad holds a graduate degree in mechanical and industrial engineering from the En gineering Military Institute of Rio de Janeiro (1969), a masters and doctorate degree in economics from the University of Chicago (1974) and is a graduate of the Harvard Business School Owner/President Management Program (1987). He was formerly a full -time professor at the post-graduate School of Business Administration of Fundao Getlio Vargas (1974-1979); chief economist at Banco de Investimentos Garantia S.A. (1979); Central Bank director for sovereign debt and open market (1980 -1982); partner and officer for corporate financing and, later, for investment banking at Banco de Investimentos Garantia S.A. (1983 -1992); chief executive officer of Banco de Investimentos Garantia S.A (1992- 1998). He is the president of Instituto Veris, which owns and maintains the IBMEC So Paulo, and chairman of the board of directors and principal shareholder of Veris Educacional S.A, a higher education organization which also controls the IBMEC schools. Additionally, he is the president and founding member of Instituto Futuro Brasil, member of the board of directors of the Abril Group, member of the Visiting Committee of the Harvard Business School, and a member of the boards of the David Rockfeller Center for Latin American Studies at Harvard University, of Hospital Israelita Albert Einstein, of Ideal lnvest S. and Instituto Unibanco. He is also a member of the International Advisory Committee of the Capital Group and director of the Brazil -Israel Chamber of Commerce.

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Other positions in public companies. He holds no other position in public companies.

Craig Steven Donohue

Director

Mr. Donohue is a lawyer and holds an MBA degree from Northwestern University. He has been CEO and a member of the board of directors of the CME Group since January 2004. He has previously occupied a number of important positions at CME Holdings Inc. and the Chicago Mercantile Exchange (CME), including as managing officer. He is the Chairman of the board of directors of the National Council on Economic Education and a member of the board of the Executives Club of Chicago and the Chicagoland Chamber of Commerce. He is also a member of the Commodity Futures Trading Commissions Global Markets Advisory Committee, and a member of the global markets advisory committee of the Commodity Futures Trading Commission, or CFTC. Other positions in public companies. In February 2008, he was elected a member of the board of directors of BM&F, then an independent commodities and futures exchange, whose registration as a public company was cancelled in 2008 following the merger with the So Paulo stock exchange (Bovespa), from which BM&FBOVESPA emerged. Fabio de Oliveira Barbosa

Independent director

Mr. Barbosa holds a graduate degree in economics from the Federal University of Minas Gerais, a masters degree in economics from the University of Braslia, and a specialization certificate in Financial Programming and Policy from the IMF. He has also completed continuing education programs at INSEAD, IMD and MIT. He has been chief financial officer and investor relations officer of Companhia Vale do Rio Doce since 2002, where he is also a perpetual member of the executive risk management committee (since 2005), of the finance committee and of the disclosure and reporting committee. He has held several public office positions, including positions in the Ministry o f Industry and Commerce, Ministry of Labor, the Government of the State of Paran, the Institute of Applied Economic Research among others. He was previously an economic adviser and head of the macroeconomic analysis department at the Ministry of Planning (1988-1990), tax policy coordinator at the Ministry of the Economy, Finance and Planning (1990-1992), advisor to the executive board of The World Bank (1992-1995) and Secretary of the Brazilian Treasury of the Ministry of Finance (1995 -2002). He also served as a member of the board of directors of a number of companies, including at the CAEMI Group, at the federal savings and loans bank (Caixa Econmica Federal ), and Companhia Siderrgica de Tubaro (steel) and Telesp - Companhia Telefnica de So Paulo (telephone). Other positions in public companies. Mr. Barbosa is the CFO and IRO of Vale, and a former member of its board of directors (2000- 2002). He was also chairman of the board of Banco do Estado de So Paulo Banespa (whose registration as a public company was cancelled in 2006 following the merger with Santander), and director of Banco do Brasil S.A, in addition to fiscal council member at Furnas. Jos Roberto Mendona de Barros

Independent director

Mr. Barros holds a graduate degree and a PhD in economics from the University of So Paulo and a post-doctorate degree from the Economic Growth Center at Yale University. He is an independent consultant, founder and managing partner of Mendona de Barros Associados S/S Ltda. (1978), a member of the advisory committee of the Estado de So Paulo publishing group, of the Brazilian Federation of Banks (Febraban) and of Link Partners. He is also a member of the advisory committee for our Novo Mercado listing segment. He is a former Secretary for Economic Policy of the Ministry of Finance and executive secretary of the Presidents Office of Foreign Trade. In addition, he was also a visiting professor at the agricultural economics and rural sociology department at Ohio State University and assistant PhD p rofessor of the economics and business school at the University of So Paulo. Other positions in public companies. Mr. Barros is a former member of the board of directors of CESP - Companhia Energtica de So Paulo, Eletropaulo, CPFL and Comgas (1983-1985), member of the strategic committee of Vale (20022006), of Fertilizantes Fosfatados S.A. Fosfertil (2004-2006), of GP Investments (2006- 2009), of Frigorfico Minerva (20072008). He was also a member of the board of directors of Bovespa Holding S.A., which then operated the So Paulo stock exchange, whose registration as a public company was cancelled in 2008 after the merger with BM&F, from which BM&FBOVESPA emerged. Additionally, he is currently a director of Tecnisa S.A, member of the advisory committee of Companhia Brasileira de Distribuio (Po de Acar group) and director of Banco Santander (Brasil) S.A. Julio de Siqueira Carvalho de Arajo

Director

In March 1978, Mr. Arajo joined Banco BCN S.A., and became executive officer in October 1989. In 1997, the bank was acquired by Banco Bradesco. Since 2000, he has been the deputy chief executive officer of B anco Bradesco and in this capacity he also participates in the boards and committees of several companies within the Bradesco conglomerate. He is member of the steering committee and managing officer of the Bradesco Foundation, alternate member of the boa rd of directors of the Interbank Payment Chamber and a sitting member of the deliberative council of the Brazilian Association of Real Estate Credit and Savings (Abecip). He was formerly a sitting member of the board of directors of the Brazilian Clearin g

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and Depository Corporation (CBLC). Mr. Arajo was elected to our board in 2008. Other positions in public companies. Mr. Arajo is the deputy chief executive officer of Banco Bradesco and in this capacity participates in boards and committees of several other companies within the Bradesco conglomerate, including executive officer and director of Bradesco Leasing S.A. Arrendamento Mercantil. Luis Stuhlberger

Director

Mr. Stuhlberger holds a graduate degree in engineering from Escola Politcnica of the University of So Paulo and a postgraduate degree in business administration from Fundao Getlio Vargas. Having began his career as a futures and commodities trader in 1981, he is currently a minority shareholder of Credit Suisse Hedging -Griffo Investimentos S.A., controlling shareholder of Credit Suisse Hedging-Griffo Corretora de Valores S.A, of Credit Suisse Hedging-Griffo Asset Management S.A and of Credit Suisse Hedging-Griffo Servios Internacionais S.A. He is the executive officer in charge of portfolio management for these three companies, including the Green Investment Fund (Hedging -Griffo Verde) portfolio. Other positions in public companies. He holds no other position in public companies. Marcelo Fernandez Trindade

Independent director

Mr. Trindade holds a law degree from the Catholic University of Rio de Janeiro (PUC-Rio). He has been a member of the law firm of Trindade Sociedade de Advogados since 1986. In addition, since 1993 he has been a tenured Civil Law professor in the Law Department of PUC-Rio. He is currently a business law professor for the postgraduate program of the law school of Fundao Getlio Vargas, in Rio de Janeiro. Previously, he was a partner at the law firms of Cardoso, Rocha, Trindade e Lara Resende Advogados (19941998) and Tozzini Freire Teixeira e Silva Advogados (1999 2000 and 2002 2004). Between 2000 and 2002, he was a director of the Brazilian Securities Commission (CVM) and the CVM Chairman between 2004 and 2007. He was elected our independent director in May 2008. Other positions in public companies. Mr. Trindade is a former a member of the board of directors of BM&F, then an independent commodities and futures exchange, whose registration as a public company was cancelled in 2008 following th e merger with the So Paulo stock exchange (Bovespa), from which BM&FBOVESPA emerged. He was also a member of Globex Utilidades S.A. (2008-2009). Renato Diniz Junqueira

Director

Mr. Junqueira holds a graduate degree in business administration from Fundao Getlio Vargas. He was formerly an executive officer at Banco do Comercio e Industria de So Paulo (19731987), vice chairman of board of the Brazilian Commodities Exchange (20022007). He is currently chairman of the Brazilian Confederation of Exchanges and of the Rio de Janeiro stock exchange (BVRJ), a member of the board of directors of Usina Mand S/A and executive officer of Banco Intercap S/A (since 1987). He is also a cattle raiser and a farmer and grower of sugarcane, soy and corn. Other positions in public companies. Mr. Junqueira was a director of BM&F (19972007) and vice chairman of its board of directors (20012007), prior to the merger with Bovespa from which BM&FBOVESPA emerged as the Brazilian securities, commodities and futures exchange. Ren Marc Kern

Independent director

Mr. Kern holds a B.S. degree from the University of California, Berkeley, and an M.B.A. and an M.A. degree from the University of Pennsylvania. He was formerly a consultant at Bain & Co, having worked previously at General Atlantic and Morgan Stanley. He is currently managing director of General Atlantic, a global growth equity firm where he is also the global lead executive. Mr. Kern is also a director of Getco Holding Company, LLC, an electronic liq uidity provider and trading firm, RiskMetrics Group, Inc., a leading provider of risk management and corporate governance solutions to the financial community, and Intec Telecoms Systems Plc, a provider of business and operations support systems. He has b een our independent director since May 2008. Other positions in public companies. Mr. Kern was formerly a director of BM&F, then an independent commodities and futures exchange, whose registration as a public company was cancelled in 2008 following the mer ger with the So Paulo stock exchange (Bovespa), from which BM&FBOVESPA emerged. 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

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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 integratio n process from which BM&FBOVESPA emerged as the Brazilian securities, commodities and futures exchange, he was elected our chief executive officer. Amarlis Prado Sardenberg

Chief clearing, depository and risk management officer

Ms. Sardenberg holds a graduate degree in economics from the University of So Paulo. She joined Bovespa (then the So Paulo stock exchange) in 1989, and was made operations officer of the Brazilian Clearing and Depository Corporation (CBLC) since its founding in 1997. She is currently a member of the executive committee of the Americas Central Securities Depository Association, after serving as vice president from 1999 to 2003. She was also a member of the Executive Committee of CCP 12, a global association of 22 major international central counterparties and a forum for the exchange of information and experiences in central counterparty activities, which promotes best practices in risk management and risk modeling. Elected in 2008, Ms. Sardenberg is currently responsible for clearing and settlement activities, risk management systems, and the central securities depository. Ccero Augusto Vieira Neto

Chief operations officer

Mr. Vieira Neto holds a graduate degree and a PhD in economics from the school of economics of the University of So Paulo. He joined BM&F in 2001, was executive officer for the BM&F clearinghouses. At our company, prior to the merger with Bovespa, he was head of derivatives clearing and risk management. Since 2008 he has been our chief operations officer, responsible for operations, IT/Trading, IT/Post-trading, IT/Infrastructure & Architecture and IT/External Services. Eduardo Refinetti Guardia

Chief financial officer; Investor relations officer

Mr. Guardia holds a bachelors degree in economics from the economics and business administration school of the Catholic University of So Paulo (PUC-So Paulo), a masters degree from the Institute of Economics of the University of Campinas (Unicamp) and a doctorate degree from the Economic Research Institute of the school of economics of the University of So Paulo (USP). Between 1990 and 1997 he was a professor at PUC-So Paulo. He was also Secretary of the Brazilian Treasury (May to December 2002), Secretary of Finance for the State of So Paulo (January 2003 to January 2006), CFO and IRO of GP Investments (February 2006 to May 2007) and partner of Pragma Gesto de Patrimnio Ltda, an asset management firm, between June 2007 and May 2010. In addition, he is a former chairman of the board of Banco Nossa Caixa and COSESP (Insurance Company of So Paulo) and director of a number of Brazilian companies, including Droga Raia (2008-2010), ETC Participaes S.A (2008-2010), Ideal Invest (2007-2009), CESP/EMAE (2003-2004), Sabesp (2003), CTEEP (2003-2004), Cosipa (2000-2002). He was also a director (2003-2005) and chairman of the board (2005-2006) of the state savings and loans bank (Banco Nossa Caixa), and fiscal council member of Banco do Brasil (1999-2000) and of SABESP (gas utility, 1996-1998). Jos Antonio Gragnani

Chief business development officer

Mr. Gragnani holds a graduate degree in metallurgy engineering from Mackenzie University, in So Paulo, an MBA in Finance from IBMEC and a M.Sc. in Finance from the Massachusetts Institute of Technology. He was formerly Assistant Secretary of the Brazilian Treasury (2003 2006), in charge of managing the Brazilian government domestic debt, and CFO of the Concrdia Banco, an investment bank active which concentrates activities in the food processing industry, and head of management and settlement of leveraged derivatives at Sadia S.A. Mr. Gragnani is a member of the advisory board of the World Banks Gemloc Program (or Global Emerging Markets Local Currency Bond Program), which supports the development of local currency bond markets. He is currently our chief business development officer, and was previously our officer for institutional relations (July 2009 to March 2010). Marta Alves

Chief product development officer

Ms. Alves holds a graduate degree in applied statistics from the University of So Paul o (1982), and an MBA from the University of Chicago (1990), having specialized in finance with a major in accounting. She worked at Banco Ita for 21 years, eventually becoming a senior managing officer, in charge of the corporate treasury desk (domestic and international). She has also worked as head of financial markets at the ING Bank (2004 -2007), where she led the financial department reorganization, and as chief financial officer of BHB Investimentos, of the Bertin group, where she led the market ris k management policy revision process. Elected in June 2009, she is currently our chief product development officer. Fiscal council The fiscal council has not been established.

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b. Judgments of guilt issued in administrative or court proceedings (including of a regulatory or criminal nature) against the directors, officers and fiscal council members Board of directors No judgment of guilt (final or otherwise) has been entered against any of our directors in any disciplinary or court proceedings, except that under CVM sanction proceedings No. 2007-1079 Mr. Fbio de Oliveira Barbosa (in the capacity of IRO of Vale) was acquitted of the accusation of failure in timely disclosure of privileged information, and excused under civil fine of R$100,000.00. The decision was appealed under number 11834 to the Appeals Board of the Brazilian Financial System (CRSFN). Board of executive officers No judgment of guilt (final or otherwise) has been entered against any of our executive officers in any disciplinary or court proceedings, except that under appeal No. 7530 and with grounds on article 11 of Law No. 6,385/76, the Appeals Board of the Brazilian Financial System (CRSFN) reversed the earlier acquittal issued in CVM sanction proceedings No. 37/2000 to enter a judgment of warning against Mr. Edemir Pinto for oversight failure related to transactions in Ibovespa futures. Fiscal council The fiscal council has not been established. 12.9. Marital relationships or domestic partnerships or family relationships (up to the second degree) between:

a.

the directors of the registrant

There are no marital relationships or domestic partnerships or family relationships (up to the second degree) between any directors of the registrant.

b.

(i) the directors of the registrant, and (ii) the directors of its direct or indirect subsidiaries

There are no marital relationships or domestic partnerships or family relationships (up to the second degree) between any directors of the registrant and the directors of its direct or indirect subsidiaries.

c.

(i) the directors of the registrant and its direct or indirect subsidiaries, and (ii) the direct or indirect controll ing shareholders

Not applicable, as we have no controlling shareholders.

d.

(i) a the directors of the registrant, and (ii) the directors of its direct or indirect controlling shareholders

Not applicable, as we have no controlling shareholders. 12.10. Work or employment or service provision relationships, or other subordination relationships in the past three full years, tying any of registrants directors and officers to:

a.

any direct or indirect subsidiary of the registrant

Director Renato Diniz Junqueira was vice chairman of the board of directors of the Brazilian Commodities Exchange ( Bolsa Brasileira de Mercadorias ), or BBM, between 2004 and 2007. Between February 1998 and June 2008, executive officer Amarlis Prado Sardenberg was operations officer of the Brazilian Clearing and Depository Corporation (CBLC), a wholly-owned subsidiary which merged with BM&FBOVESPA in November 2008, and currently comprises our equities clearinghouse, securities lending facility and central securities depository.

b.

any direct or indirect controlling shareholder

Not applicable, as we have no controlling shareholders.

137

c.

any material supplier, customer, debtor or creditor of either the registrant, or a subsidiary, or controlling shareholder or companies under common control

Director Craig Steven Donohue is the CEO and a director of the CME Group, which holds a 4.95% ownership interest in our shares and has an order routing agreement with us. In addition, we hold a 5% interest in CME shares. Additionally, we and the CME Group executed a nonbinding protocol of intent pursuant to which the two exchanges agreed a global preferred strategic partnership, which among other things contemplates our cooperation for joint development of a multi-asset class electronic trading platform, and our acquisition of additional shares in the CME, which was increased to 5% our total ownership interest in CME shares. 12.11. Description of directors and officers liability insurance policies We provide directors and officers liability insurance aimed to cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for our organization. The basic principle underlying D&O insurance is that we and our shareholders are best served by knowledgeable directors and officers who take strategic risks based upon the information reasonably available to them at the time the decision is made, without the threat of personal liability. We purchase D&O insurance policies to cover our and our subsidiaries executive officers and other upper management members for potential losses related to functional activities performed both in Brazil and abroad. The current D&O insurance policies are effective through August 31, 2010. These policies may in our discretion cover potential future claims related to events taking place in the period ending August 31, 2010. 12.12. Other relevant information There is no additional relevant information to be provided at this time under this section.

13.1

Description of compensation policy and practices of the board of directors, board of executive

officers, members of management, the fiscal council members, the advisory committee members and the audit, risk, financial and compensation committee members as regards the following aspects.

a.

Purposes of compensation policy and practices.

As the Company is the result of the integration process that combined BM&F and BOVESPA into BM&FBOVESPA in May 2008 and as there were significant changes in the organization structure and new policies and practices were defined during the year, we have decided to provide the information only regarding financial year 2009 for better understanding of the information disclosed herein, as permitted by CVM Instruction No. 480 of December 7, 2009. Our compensation policy seeks to encourage alignment with the corporate purpose of the Company, and drive employee productivity and efficiency, besides maintaining competitiveness in the market in which we operate.

b.

Compensation breakdown.

(i) Description and purpose of the compensation components

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Board of Directors: For the directors, the compensation is in the form of a fixed monthly remuneration and, for the chairman of the board, the remuneration includes an additional semi-annual fixed payment equivalent to double the compensation received in the six-month period. In the event an executive and management member (though not a member of the board of executive officers) or any other employee is appointed to a position on the board of directors, this professional will not be entitled to any additional compensation. In addition, under article 22, paragraph 1, of our By-laws, no director may be elected to the board of executive officers. Board of executive officers and members of management: The compensation policy for executive officers and other management members breaks down as follows: - A monthly base salary consisting of thirteen monthly compensation payments per year; - Benefit package including health and dental care plan, life insurance, meal voucher, private pension fund, use of Company car, parking and use of Company cell phone; - Semiannual (short-term) variable remuneration established and paid under our profit sharing program according to Law No. 10101, dated December 19, 2000. Our profit sharing program defines potential multiples of monthly base salary attributable pursuant to profit-based overall performance targets, job level responsibilities and evaluation of individual performance; and - Long-term share-based remuneration granted once a year under our stock option program, pursuant to profit-based overall performance targets, job level responsibilities and evaluation of individual performance. Committees: The members of the board advisory committees are entitled to a fixed monthly remuneration. Directors that take part in these committees are entitled to an additional fixed monthly remuneration, limited however to participation in three committees. At this time we have an audit committee, a nomination and corporate governance committee, a compensation committee and a risk committee, all advising the board of directors. To advise the board of executive officers, we have the following committees: agribusiness committee, market committee, market risk committee, athletic club committee and regulation committee. Only the members of the regulation committee receive a fixed monthly compensation. Officers (whether an executive officer or other management member) or other employees that are appointed to serve on any management advisory committee are not entitled to additional remuneration. Fiscal Council: The Companys fiscal council is not active. The compensation policy for fiscal council members, if and when active, will be established in accordance with applicable law. The Company believes the absence of an active fiscal council is leveled and adequately covered by the audit committee, since under article 57 of our Bylaws the scope of the committee responsibilities goes far beyond that which is assigned to a fiscal council under Brazilian Corporate Law. The audit committee is composed of five independent members, four of them being outside members, and one an independent director. Audit committee members serve for two-year terms. The members of the audit committee are nominated by the nomination and corporate governance committee, and appointed by the board of directors. Outside members must have auditing, compliance/controls, accounting, taxation and similar other specialized knowledge and/or experience, in addition to being required to meet the independence standards established in article 46 of the Bylaws, so as to ensure they will perform their duties with exemption, for the benefit and in the interests of the Company and the shareholders. 139

(ii) Proportion of each component of the total compensation

The average proportion of each compensation component in the year 2009 according to our current compensation policy is set forth in the table below.

Monthly remunerati on
Board of directors Board of executive officers and other members of management Committees 100% 28.53% 90.83%

Participatio n in committee s
9.17%

Benefits

Short-term variable remuneration (profitsharing)

0%

Long-term variable remuneration (Stock Option)

0%

Total

0%

100%

0%

4.01%

33.80%

33.66%

100%

0%

0%

0%

0%

100%

(iii) Method of calculation and adjustment of each compensation component

The compensation of paid to directors and officers is revised every year and submitted for approval at the annual shareholders meeting. The compensation paid to members of the audit committee, nomination and corporate governance committee, risk committee and compensation committee is revised every year and submitted to the board of directors for approval. The fixed monthly compensation paid to management is adjusted yearly at rates defined in a collective agreement entered into with the trade union. In addition, under our salary policy, an increase may possibly be given for individual merit. The rules and definitions of the policies for short-term variable compensation (profit-sharing) and long-term variable compensation (stock option) are proposed by the compensation committee and approved by the board of directors according to the guidelines set in the stock option plan of BM&FBOVESPA (Stock Option Plan), which was approved by the extraordinary shareholders meeting held on May 8, 2008. Typically we conduct periodic salary surveys to ensure the Company is in line with good market practices and to sustain our retention strategy of paying commensurate and competitive compensation. Moreover, in keeping with our retention policy we constantly survey market practices on benefits and make adjustments as necessary to remain competitive.

(iv) Reasons that justify compensation composition

Our compensation strategy seeks to balance the short-, medium- and long-term compensation components to ensure alignment with the Companys corporate purpose, whereas permitting us to offer a compensation package that is fair and competitive in our market, can influence attraction and retention, and motivates and compensates our professionals according to the responsibilities of their jobs. Our compensation strategy thus seeks to position the fixed remuneration of our executives at market average, while rewarding them with the differential of shortand long-term variable compensations in line with the overall performance of the Company and the individual. 140

c.

Key performance indicators considered in defining each compensation component.

Performance target indicators we adopt in allocating short- and long-term variable compensation, meaning profitsharing and stock option programs, consist of individual targets and goals we analyze in individual performance evaluations, which are based on factors that are specific to function and job level, and the overall performance target indicators. In 2009, the overall performance indicator adopted by the Company was EBITDA margin. In 2010, the overall performance target indicator established by the board of directors will be the quarterly adjusted net income. The total amount of the short-term variable compensation to be paid to officers and employees in 2010 will represent 3.5% of quarterly adjusted net income actually ascertained, if the amount thus ascertained lies within the range of 70 to 130% of the target. If adjusted quarterly net income actually ascertained falls under 70% of the target, the short-term variable remuneration will be reduced to 2.0% of adjusted quarterly net income. However, if adjusted quarterly net income is more than 130% of the target established by the board, the aggregate short-term variable remuneration will equal the sum of: (i) the amount that corresponds to 3.5% computed over 130% of the target, and (ii) the amount that corresponds to 2.0% computed over that portion of adjusted net income which exceeds 130% of the target. A portion of this aggregate amount will be attributable to Company executive officers, as allocated pursuant to certain base salary multiples that will differ based on individual performance. As for the fixed remuneration and benefits, no performance indicators are taken into account. These compensation components depend on the level of responsibility of the job, and in the specific case of additional fixed remuneration, qualification for the job is also taken into consideration.

d.

Discussion on how the compensation is structured to reflect the evolution of performance

indicators.
According to our short- and long-term variable compensation policy, the pool of profit-sharing and stock options is affected by the scope of the overall performance target we adopt (EBITDA margin in 2009, and adjusted net profit in 2010); in other words, the size of the pool is determined according to year-end results of operations (in 2010, adjusted net income) and the extent to which the performance targets for the year were or were not achieved. In addition, our policy provides for different compensation levels based on individual performance by any of the officers, (meaning both the executive officers elected pursuant to the Bylaws and the executive performing functions as officers) and the employees, taking into account job level and responsibilities.

e.

Discussion on how the compensation policy or practices are aligned with the interests of the

Company on short, medium and long term.

We aim to keep a competitive compensation policy vis--vis the marketplace in order to attract and retain talent, and keep a capable team of skilled and dedicated people with ability to help the Company attain its short-, medium- and long-term goals and strategic objectives. Given that our integrated business model is inextricably linked to the Companys objectives of promoting, developing and expanding the domestic capital markets, which 141

per se imply longer and sustainable cycles, it is crucial for us to have the ability to retain talent, such that our compensation policy must include mechanisms to encourage our people to stay with the us for the long haul. Pursuant to this compensation strategy, we aim to balance short-term compensation (profit sharing) and mediumand long-term compensation (stock option program). Our employees are thus encouraged to attain and exceed the half-yearly and yearly targets which are linked to our profit-sharing program. We also structure our compensation policy so our executives will be motivated to pursue medium- and long-term goals aimed to benefit the business, add value to the Company and drive share appreciation, the incentive for this being our stock option program.

f.

Existence of compensation supported by a subsidiary, affiliate or direct or indirect controlling

shareholder.
There is no compensation supported by a subsidiary, affiliate or direct or indirect controlling shareholder of the Company.

g.

Existence of any remuneration or benefit tied to occurrence of any particular corporate event,

such as disposition of registrants control.

There is no compensation or benefit tied to occurrence of any corporate event involving the Company, such as disposition of control, forming strategic partnerships or otherwise. With regard to the stock option program, in the event of dissolution of the Company, or of a transformation of the corporate type, or any merger, consolidation or spin-off transaction, or corporate restructuring transaction, from which the Company does not emerge as the surviving company, or if it does survive, in case of a delisting or going private process, any outstanding stock options may be transferred to the surviving company or vest at a predefined earlier date, in the discretion of our board, provided the option will then be exercisable within a limited period of time, following which, the stock option program will end and options not exercised will forfeit lapse with no right to indemnity. 13.2 Information on compensation recognized in the income statement for the year to December

31, 2009, and compensation forecast for the current year, as attributable to directors, officers and fiscal council members. The tables and notes below set forth the annual compensation allocated to directors, executive officers and audit committee members, as (i) recognized in the income statement for the year to December 31, 2009, taking into account the yearly average number of members by body, on a monthly basis, as shown in the table below1; and (ii) the forecast for the current year.
Month January February March April May June
1

Board of directors 11 11 11 10 11 11

Board of executive officers 8 6 6 6 5 5

Sum of number of members of each body in each of the months of 2009, divided by 12 (months). This calculation is made pursuant to CVM/SEP Official Letter/Circular No. 03/2010.

142

July August September October November December Total Average

11 11 11 11 11 11 131 10.92

6 6 6 6 6 6 72 6.00

Year ended December 31, 2009 Board of Directors Number of members Yearly fixed remuneration (in R$) Salary or remuneration Direct and indirect benefits Compensation for service in committees Other Variable compensation (in R$) Bonuses Profit Sharing Compensation for participation in meetings Commissions Other Post-employment benefits Benefits upon leaving job Share-based compensation
______________________________________
( )

Board of Executive Officers 6.00 4,855,869.38 4,249,518.66 606,350.72 n/a n/a 5,674,487.40 n/a 5,674,487.40 n/a n/a n/a n/a n/a 7,295,700.00 17,826,056.78

Fiscal Council(*) n/a n/a n/a n/a n/a n/a n/a n/a n/a

Total 17 8,558,217.75 7,612,.454.46 606,350.72 339,412.57 0 5,674,487.40 n/a 5,674,487.40 0

10.92 3,702,348.37 3,362,935.80 n/a 339,412.57 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 3,702,348.37

n/a n/a n/a n/a n/a n/a

0 0 0 0 7,295,700.00 21,528,405.15

Compensation amount

* As discussed in section 13.1, while the fiscal council is not active, its responsibilities are adequately covered by the audi t committee whose scope of responsibilities under article 47 of the Bylaws goes beyond those Brazilian Corporate Law prescribes fo r the fiscal council. The audit committee consists of five independent members, four of them being outside members, and one an independent member, all of whom serve for two-year terms. The compensation paid to the outside committee members in 2009 amounted to R$ 733,668.40 (not included in the above table).

The table and note below set forth information about the compensation of the board of directors, the board of executive officers and the audit committee of the Company for 2010. Since the short-term variable compensation for executive officers (profit-sharing) depends on whether and how the overall performance targets for the year are achieved, the forecasts set forth in the table below assume a scenario based on estimate of probable results, which thus may change based on actual results determining adjusted net income for of the year (basis of determination of the profit-sharing pool). For example, according to the rule described in section 13.1 c, if at year end adjusted net income reaches exceeds the target by 10%, the profit-sharing pool (short-term variable compensation) will be increased by R$ 923,115.12, or 10% of the total estimate. In addition, as decided by our board of directors in connection with the long-term variable compensation, stock option grants under the 2010 program will only be awarded in January 2011. Such as approved by the board of 143

directors, the maximum number of shares under the 2010 program is 3,685,000 shares, or 0.18% of the outstanding shares issued by the Company. According to the stock option plan, the strike price will be defined based on the closing price at which the shares trade in the last 20 exchange sessions of 2010.
Current Year Forecast for 2010 Board of executive Board of directors Number of members Yearly fixed remuneration (in R$) Salary or remuneration Direct and indirect benefits Compensation for service in committees Other Variable compensation (in R$) Bonuses Profit Sharing Compensation for participation in meetings Commissions Other Post-employment benefits Benefits upon leaving job Share-based compensation Compensation amount
______________________________________ ( )

Fiscal council(*) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Total 17 9,228,079.83 7,743,582.28 734,083.91 750,413.64 0 9,231,151.23 0 9,231,151.23 0 0 0 0 0 n/a 18,459,231.06

officers 6 5,153,540.91 4,419,457.00 734,083.91 n/a n/a 9,231,151.23 n/a 9,231,151.23 n/a n/a n/a n/a n/a n/a 14,384,692.14

11 4,074,538.92 3,324,125.28 n/a 750,413.64 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 4,074,538.92

* As discussed in section 13.1, while the fiscal council is not active, its responsibilities are adequately covered by the audi t committee whose scope of responsibilities under article 47 of the Bylaws goes beyond those Brazilian Corporate Law prescribes for the fiscal council. The audit committee consists of five independent members, four of them being outside members, and one an independent member, all of whom serve for two-year terms. The estimated compensation for outside committee members in 2010 amounts to R$816,565.59.

13.3

Information on variable compensation for the year to December 31, 2009, and variable

compensation forecast for the current year. Our variable compensation policy for the executive officers is based on the concept of multiples of monthly base salaries varying based on job seniority. At each job level, individual performance accounts for the differences. The tables below set forth information on variable compensation for the executive officers, as (i) recognized in the income statement for the year ended December 31, 2009, taking into account the number of members in each body actually granted the variable compensation; and (ii) the forecast for the current year.
Year ending December 31, 2009 Board of directors Number of members Bonuses (in R$) Minimum forecast in compensation plan Minimum forecast in compensation plan Amount forecast in compensation plan if the targets are attained Actually recognized in income statement n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Board of executive officers 6 Fiscal council n/a n/a n/a n/a n/a n/a n/a n/a Total 6

144

Year ending December 31, 2009 Board of directors Profit Sharing (in R$) Minimum forecast in compensation plan Minimum forecast in compensation plan Amount forecast in compensation plan if the targets are attained Amount actually recognized in income statement n/a n/a n/a 4,353,266.96 6,097,751.36 5,890.,667.01 5,674,487.40 n/a n/a n/a 4,353,266.96 6,097,751.36 5,890,667.01 5,674,487.40 Board of executive officers Fiscal council Total

The table below sets forth information about the variable compensation forecast for year 2010. Since the shortterm variable compensation for executive officers (profit-sharing) depends on whether and how the overall performance targets for the year are achieved, the forecasts set forth in the table below assume a scenario based on estimate of probable results, which thus may change based on actual results determining adjusted net income for of the year (basis of determination of the profit-sharing pool). According to the rule described in section 13.1 c, the total amount of the short-term variable compensation to be paid to officers and employees in 2010 will be 3.5% of adjusted net profit of the Company actually ascertained if this income lies within the range of 70 to 130% of the target. If the adjusted net income is less than 70% of the target, the amount allocated to total short-term variable remuneration will be reduced to 2% of adjusted net income. If the adjusted quarterly net income is more than 130% of the target established by the board, the aggregate short-term variable remuneration will equal the sum of: (i) the amount that corresponds to 3.5% computed over 130% of the target, and (ii) the amount that corresponds to 2.0% computed over that portion of adjusted net income which exceeds 130% of the target. A portion of this aggregate amount will be attributable to Company executive officers, as allocated pursuant to certain base salary multiples that will differ based on individual performance. On forecasting the minimum and maximum, we took a percentage 10% above or below the expected adjusted net income. In addition, as decided by our board of directors in connection with the long-term variable compensation, stock option grants under the 2010 program will only be awarded in January 2011. Such as approved by the board of directors, the maximum number of shares under the 2010 program is 3,685,000 shares, or 0.18% of the outstanding shares issued by the Company. According to the stock option plan, the strike price will be defined based on the closing price at which the shares trade in the last 20 exchange sessions of 2010.
Current Year Forecast for 2010 Board of Directors Number of members Bonuses (in R$) Minimum forecast in compensation plan Minimum forecast in compensation plan Amount forecast in compensation plan if the targets are attained Actually recognized in income statement Profit Sharing (in R$) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Board of Executive Officers 6 Fiscal Council n/a Total 6

145

Current Year Forecast for 2010 Board of Directors Minimum forecast in compensation plan Minimum forecast in compensation plan Amount forecast in compensation plan if the targets are attained Amount actually recognized in income statement n/a n/a n/a n/a Board of Executive Officers 8,308,036.10 10,154,266.35 9,231,151.23 n/a Fiscal Council n/a n/a n/a n/a Total 8,308,036.10 10,154,266.35 9,231,151.23 n/a

13.4

Information on share-based compensation plan for directors and executive officers as

effective in the most recent full year and as forecast for the current year.

a.

General terms and conditions.

The board of directors approved a proposal prepared by the compensation committee for the yearly stock option programs (stock option programs) defining: (i) the beneficiaries; (ii) the total number of shares to be granted; (iii) the division of option grants into lots, if applicable; (iv) the option strike price; (v) the vesting period and the period for exercise of the option; (vi) the restrictions on transfers of shares deriving from exercise of an option; and (vii) any penalties. Each stock option program establishes further that, based on a proposal of the compensation committee the board in its discretion after hearing the chief executive officer, may increase by an elected percentage the base number of shares allocated to the stock options of any particular program, in order to reward outstanding overall and/or individual performance, limited however by the total number of shares allocated to that particular program. On adopting a particular stock option program, the board will take into consideration the proposal prepared by the compensation committee, and approve the terms and conditions of the stock option agreement which the Company and each beneficiary will be executing at a later date. The stock option agreement stipulates at least the following conditions: a) the number of shares that a beneficiary will be entitled to purchase or subscribe for upon exercising the option, at the strike price per share, pursuant to the stock option program; b) the percentage increase in the base number of options allocated to a beneficiary and the criteria for determining it, as well as the period of management evaluation to determine it c) the initial vesting period during which the option may not be exercised and the option expiration date and last date for total or partial exercise of the option; d) transfer restrictions regarding the shares delivered upon exercise of the option and penalties for not respecting these restrictions; and e) any other terms and conditions not conflicting with the stock option plan (as defined below) or the relevant stock option program. 146

The shares resulting from exercise of an option will enjoy rights established in the stock option plan, in the relevant stock option program and in the stock option agreement, in addition to being assured rights to dividends and other distributions after acquired under an option, whether through subscription or a purchase of shares. The stock option programs and agreements are also subject to the following general conditions: a) no share may be delivered to a beneficiary upon exercise of the option unless all legal and regulatory requirements have been fully satisfied; b) No provision of the stock option plan, the program or the stock option agreements may be construed as assurance that the relevant beneficiary will continue to provide services to the Company as an officer or employee or service provider, or construed in any way that would hinder our right to remove an officer or terminate an employee or service provider as we may deem fit.; c) the stock options granted under the stock option plan, and the option exercise by a beneficiary, are not in any way related to, nor bound to the beneficiarys fixed remuneration or profit-sharing payment; d) the beneficiary will not have shareholder rights or privileges other than those that are provided under the stock option plan and program for options covered by relevant the stock option agreement; and e) the beneficiary will only enjoy full shareholder rights and privileges after having actually subscribed for, or purchased the shares for which the option was exercised.

b.

Key plan objectives.

The purpose of the Companys stock option plan, which was established according to article 168, paragraph 3, of Brazilian Corporate Law (Law 6404/76), is to give the officers, employees and service providers of the Company and of the companies in which it is the direct or indirect controlling shareholder the opportunity to become a shareholder of the Company. The aim is to align the interests of these officers, employees and service providers with those of the Company and the shareholders, including by having them share in the risks inherent in investments in the capital markets, whereas permitting the Company and its affiliates to attract and retain talent at any level, including officers, employees and service providers.

c. policy.

Information on how the plan contributes to these objectives and fits into the compensation

The stock option plan contributes substantially to the total compensation of management members, thus motivating the officers and encouraging strong pursuit of agreed goals. It is an additional incentive for the officers to take medium and long-term actions that aggregating value to the Company, which ultimately reflects on the market price of the shares, besides representing a strong instrument for attraction and retention of talent.

147

e.

Information on how the plan aligns the interests of management members with those of the

Company on medium and long term.

Our stock option plan provides for different levels of compensation based on performance, which is the incentive for redoubling efforts to attain the overall performance targets of the Company and taking medium and long-term actions to aggregate value to the Company, and positively influence the market price of the shares. The officers are strongly encouraged to pursue sustainable results for the Company to the extent that, as shareholders, they have a vested interest in pushing efficient management practices for enhanced results, and in attracting and retaining highly qualified professionals, driving growth and adding value to the business.

f.

Maximum number of shares allocated to the plan; e g. maximum number of option grants.

According to the stock option plan approved at the extraordinary shareholders meeting of May 8, 2008, any stock option program encompasses at most 51,000,000 shares, or up to 2.5% of the capital stock as of the grant date. Based on the number of shares issued by the Company as of December 31, 2009, the total number of shares included in the stock option plan reached 51,100,357. After giving effect to stock options granted before December 31, 2009, there are still 36,521,307 options to be granted, which represent 1.79% of the total number approved under the stock option plan. Other than the total limit established in number of shares under the stock option plan, there is no requirement or express provision setting a maximum number of options attributable to the officers. In addition to the stock option plan, as a result of the merger transaction with BM&F S.A., the Company succeeded to the stock option plan of BM&F S.A. (BM&F stock option plan), approved at the annual shareholders meeting of BM&F S.A. on September 20, 2007. The purpose of this plan which was to grant stock option rights to reward and retain BM&F employees and, after May 8, 2008, BM&FBOVESPA employees, up to the limit of 3% of the shares of stock. This limit is specific for this plan originated from the former BM&F. Also in this case there is no express provision limiting the number of options attributable to the officers. As of December 18, 2007, a total of 27,056,316 options were granted under this plan. There have been no and will be no further option grants after that date, nor any changes in the vesting conditions established under that plan. In connection also with long-term compensation (stock option program), the board of directors decided that no options will be granted during the year 2010 but only on January 1, 2011.

h.

Conditions for acquisition of shares.

A description of the conditions for acquisition of shares under the Companys stock option plan and respective stock option programs is contained in items (a), (j) and (l) of this paragraph 13.4.

i.

Criteria for pricing the option (strike price).

As established in the Companys stock option plan, the strike price is the average of the closing price at the last 20 trading sessions before the date of the option grant under the relevant stock option program. In approving any 148

particular stock option program, the board of directors may authorize up to 20% discounts on the option strike price, provided that the circumstance of a given program authorizing a discount will not require the same or other discounts being authorized under subsequent stock option programs. For the stock option program of 2009, the exercise period was January 29 to February 27, 2009 and the grant date was March 1, 2009, whereas For the stock option program of 2010, the strike price will be established according to the average closing price of the shares in the last 20 trading sessions of the year and the options will be granted in January 2011. None of these programs authorized any discount.

j.

Criteria determining the exercise period.

Under the stock option plan, we grant staggered options. Beneficiaries under any particular stock option program can exercise their options at a rate of one quarter per year. The 2009 stock option program provides the following staggered exercise periods: (i) after December 31, 2009; (ii) after December 31, 2010; (iii) after December 31, 2011; and (iv) after December 31, 2012. At each installment, the options may be exercised fully or partially after the end of the vesting period but in any event within at most seven years from the date on which any portion of the option first vested. In case of partial exercise, the remainder of that particular option will be exercisable, pursuant to the terms and conditions of the relevant program, in any subsequent exercise period through to the expiration of the program, at which time any unexercised options will be automatically forfeited with no right to indemnity.

k.

Form of settlement.

Assuming other conditions and requirements are met, a beneficiary that wishes to exercise vested stock options under any particular program must give the Company written notice of exercise specifying the number of shares he aims to acquire. Validity and effectiveness of this notice are contingent on the options being exercised within the appropriate periods other applicable requirements of exercise is only valid and effective if delivered within the periods established on account of the need to program the availability of shares for acquisition under the stock option programs. After the option is exercised, the Company, the beneficiary and any other parties concerned with the transaction will sign the relevant documents required for consummation of the transaction and delivery of the shares. The transaction documents will include provisions regarding transfer restrictions and ensure the formalities provided in the law and the Bylaws are fulfilled. Shares thus acquired will enjoy the same rights as the other shares issued by the Company. In addition, the beneficiary and the Company will be under obligation of complying with, and ensuring compliance with disclosure requirements related to information on ownership of, and trading in the shares and the options, in accordance with legal and regulatory rules applicable in Brazil and, in certain cases, abroad. Moreover, we may temporarily suspend the exercise rights at any time applicable law or regulations restrict or prevent the beneficiary from trading in Company shares. 149

Payment of the option strike price is to be made in one lump sum by the beneficiary, provided no share will be delivered to the beneficiary unless all the legal, regulatory and other requirements have been fully met.

l.

Transfer restrictions.

Unless the compensation committee proposes, or our board decides otherwise, a beneficiary may only sell, transfer or otherwise dispose of shares acquired under our stock option plan, or any additional shares he may have acquired as stock dividends, or as a result of a share split, share issuance or by any means other than a disbursement of additional funds, or any securities convertible into, or exercisable or exchangeable for shares issued by the Company, provided any such additional shares and other securities correlate with, and are attributable to ownership of shares acquired by exercise of a stock option granted under our stock option plan. In addition, in the discretion of the board and on proposal from the compensation committee, a beneficiary may be subject to transfer restrictions after acquiring the shares for which an option is exercisable, in any event for a period not to exceed two years from the option grant date. Nevertheless, a beneficiary may at any time sell any number of shares, as necessary to pay for all or some of the strike price (in the latter case, provided staggered payment arrangements are permitted under the relevant stock option program). Where staggered payment arrangements are permitted under a stock option program, shares acquired under the relevant program will be subject to transfer restrictions for as long as the strike price has not been paid in full, such that any sale during this period will require prior consent from the board of directors, including as the case may be consent granted upon recommendation of the compensation committee. If consent is granted, the proceeds from the sale will be used primarily to pay off any outstanding balance of the strike price. Additionally, a beneficiary will not be permitted to establish any lien on his shares as long as payment is pending for any portion of the strike price, and for as long as the shares are subject to transfer restrictions. In any event, beneficiaries will undertake not to encumber the shares in any way that would hamper enforcement of the provisions of the stock option plan, the program and the stock option agreement. While any transfer restrictions will apply as provided under the stock option program and the agreement, the Company upon delivering the shares will make a record of the transfer and register the shares to the beneficiary.

m.

Criteria and events triggering suspension, alteration or termination of the stock option plan.

The criteria and events triggering suspension or termination of a beneficiarys rights under the stock option plan are the following: a) removal from office for violation of his responsibilities, or dismissal for cause; b) termination of service agreement for cause; c) removal or resignation from office without cause, or dismissal or termination of service agreement without cause; d) voluntary resignation from office; e) retirement, death or permanent disability. Additionally, in the event of dissolution of the Company, or a transformation of the corporate type, or any merger, consolidation or spin-off transaction, or corporate restructuring transaction, from which the Company does not 150

emerge as the surviving company, or if it does survive, in case of a delisting or going private process, any outstanding stock options may be transferred to the surviving company or vest at a predefined earlier date, in the discretion of our board, provided the option will then be exercisable within a limited period of time, following which the stock option program will end and options not exercised will forfeit with no right to indemnity. The beneficiaries will be given reasonable prior notice of any of the above events so that they can exercise their options at their discretion and within the period established by the board of directors or proposed by the compensation committee, as the case may be.

n.

Information on how a director or officer leaving the Company impacts his rights under the

share-based compensation plan.

In the event of removal from office for a violation of the office responsibilities or any fiduciary or other duties intrinsic to the position, or for dismissal with cause or for termination of service agreement with cause, as defined under Brazilian civil and labor law, any unexercised options will forfeit with no right to indemnity regardless of whether or not the options vested. If the legal relationship between the Company and a beneficiary, whether an employee or service provider, terminates without cause either through removal or resignation from a management office, or due to dismissal or termination of the service, or also due to voluntary resignation, then: (i) vested options will be exercisable within 90 days after the event , provided this period must not exceed the original exercise period under the vested option if the latter is due to expire before the end of a 90-day period; and (ii) vesting options will forfeit. In the event of death or permanent disability of a beneficiary, whether an officer or employee or service provider, vesting options will vest, and his option rights under any existing options will be exercisable by the heirs and successors, or in case of disability, by the beneficiary, within one year after the death or permanent disability. Options not exercised within this one-year period will forfeit with no right to indemnity. In any such event the options will be exercisable either fully or partially for payment in one lump sum, provided that in the case of death of a beneficiary the option rights will be apportioned amongst the heirs and successors according to the relevant will or probate. Shares acquired in any such event will be free of any transfer restrictions and clear for sale at any time. The above applies similarly in the event of retirement, if the beneficiary agrees to a non-compete clause, meaning he must not work, as an employee or otherwise, for companies or institutions operate in any way in the same market as the Company for a 120-day period. No provision of the stock option plan, the program or the stock option agreements may be construed as assurance that the relevant beneficiary will continue to provide services to the Company as an officer or employee or service provider, or construed in any way that would hinder our right to remove an officer or terminate an employee or service provider.

151

13.5

Number of shares and convertible securities issued by the Company or its direct or indirect

controlling shareholders, or subsidiaries or companies under common control, which at end of year were held directly or indirectly, in Brazil or abroad, by directors, executive officers and fiscal council members, as grouped by body.
Company Shares Board of directors Board of executive officers Fiscal council Total Company Shares 150,193 2,062,491 n/a 2,212,684 (%) 0.007% 0.101% n/a 0.108%

13.6

Share-based payments to directors and executive officers recognized in the income statement

for the year ended December 31, 2009, and share-based payments forecast for the current year. The tables below set forth information about the share-based remuneration of the board of executive officers (i) recognized in the year ended December 31, 2009, considering the number of members of each body actually receiving share-based remuneration; and (ii) forecast for the current year.
Year ended December 31, 2009 Board of directors Number of beneficiaries Regarding each option grant: - Date of grant - Number of options grants - Vesting dates n/a n/a n/a n/a Board of executive officers 6 3/1/2009 2,490,000 622,500 - 12/30/09 622,500 - 12/30/10 622,500 - 12/30/11 622,500 - 12/30/12 12/30/2016 n/a R$ 6.60 R$ 6.60 R$ 6.60 R$ 6.60 R$ 6.60 R$ 2,93 0.12% 6 Total

- Last exercise date Transfer restrictions period Strike price: price-weighted average for the following option groups: - Outstanding at start of year - Lost during the year - Exercised during the year - Expired during the year Fair value as of the option grant date Possible dilution for other shareholders after giving effect to exercise of all options granted

n/a n/a n/a n/a n/a n/a n/a n/a n/a

R$ 6.60 R$ 6.60 R$ 6.60 R$ 6.60 R$ 6.60 R$ 2.93 0.12%

Under the BM&F stock option plan which BM&FBOVESPA absorbed through merger as of December 18, 2007, a total of 7,859,384 options were granted to the officers at a set strike price of R$1.00 per share. No further grants were made after that date, nor any changes to the vesting conditions provided under the plan. During this period, some of the officers were granted right to exercise their options on leaving the Company. As of December 31, 2009, there were 2,929,692 outstanding stock options granted to officers under the BM&F stock option plan, which have yet to vest. Pursuant to BM&FBOVESPAs stock option plan, as of December 19, 2008, we granted a number of options which on vesting will be exercisable at a strike price of R$5.174 per share, which was the average closing price in the 20 trading sessions preceding the grant date. This lot comprised a total of 1,540,000 staggered options granted to Company officers, which vest evenly over a period of four years. A first installment of these options vested in 2009. 152

Moreover, also in 2009, some of the options granted to the officers under the 2008 stock option program entered the exercise period. In addition, stock options held by officers that were leaving the Company vested as of the termination date, such that the related expenses we incurred have been recognized in the income statement for the year to December 2009. . As of December 31, 2009, 630,000 vesting stock options granted to Company officers under the 2008 program were outstanding. In connection still with long-term compensation and the 2010 stock option program, the board of directors decided that the grant date for these options will be granted January 1, 2011, rather than any date in the course of 2010.. We estimate that the number of options the board will award to executive officers under the 2010 program could reach approximately 3,685,000 shares, representing 0.18% of outstanding shares issued by the Company. Under the stock option plan, the strike price will be defined based on the closing price at which the shares traded in the last 20 exchange sessions of 2010.
Current Year Forecast for 2010 Board of directors Number of beneficiaries Regarding each option grant: - Date of grant - Number of options grants - Vesting dates - Last exercise date Transfer restrictions period Strike price: price-weighted average for the following option groups: - Outstanding at start of year - Lost during the year - Exercised during the year - Expired during the year Fair value as of the option grant date Potential dilution for other shareholders after giving effect to exercise of options grants n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Board of executive officers n/a Total n/a

n/a n/a n/a n/a n/a n/a n/a n/a

n/a n/a n/a n/a n/a n/a n/a

13.7

Outstanding stock options held by directors and executive officers at the end of the most

recent full year. The tables below set forth information regarding the outstanding options of the executive officers (i) recognized in the year ended December 31, 2009 considering the number of members of each body actually receiving variable remuneration; and (ii) forecast for the current year.
Year ended December 31, 2009 Board of directors Number of beneficiaries Vesting options: Number of vesting options Vesting dates n/a n/a n/a Board of executive officers 6 2,490,000 622,500 12/30/09 622,500 - 12/30/10 622,500 - 12/30/11 622,500 - 12/30/12 12/30/2016 n/a R$ 6.,60 R$ 7.86 Total 6

Last exercise date Transfer restrictions period Strike price in the year: weighted average Fair value as of end of year

n/a n/a n/a

R$ 6.60 R$ 7.86

153

Year ended December 31, 2009 Board of directors Vested options: Number of vested options Last exercise date Transfer restrictions period Strike price in the year: weighted average Option fair value as of end of year Fair value for all options as of end of year n/a n/a n/a n/a n/a n/a Board of executive officers Total

12/30/2016 n/a R$ 6.60 R$ 7.86 R$ 7.86

R$ 6.60 R$ 7.86 R$ 7.86

As set forth in paragraph 13.6 above, as of December 31, 2009 (i) a total of 2,929,692 vesting stock options related to the BM&F stock option plan were held by Company officers, whereas (ii) a total of 630,000 vesting stock options had been granted under the 2008 stock option program. 13.8 Options exercised and shares delivered to directors and executive officers as share-based compensation in the year to December 31, 2009. The table below sets forth information regarding (i) options exercised and shares delivered to executive officers as part of our share-based compensation policy, which we recognized in our financial information for the year to December 2009 (the data below is provided by administrative body); and (ii) our forecast for 2010.
Year ended December 31, 2009 Board of directors Number of beneficiaries Exercised options: Number of shares from option exercise Strike price in the year: weighted average Difference between strike price and the market price of the shares Shares delivered: Number of shares from option exercise Strike price: weighted average Difference between strike price and the market price of the shares n/a n/a n/a n/a 0 0 0 0 0 0 0 0 n/a n/a n/a 0 0 0 0 0 0 n/a Board of executive officers 0 Total 0

As set forth in paragraph 13.6 above, (i) the officers of the Company were granted 7,859,384 stock options under the BM&F stock option plan with a fixed strike price of R$1.00 per share; and (ii) a lot of options was granted under the 2008 stock option program with an strike price of R$5.174 per share equivalent to the average closing price of the last 20 trading sessions before the date of granting, with due regard for the vesting periods. Under the 2008 stock option program 1,540,000 share purchase options were granted to the officers, distributed equally over four vesting dates during a period of four years. As set forth in paragraph 13.6 above, as of December 31, 2009, we had granted (i) a total of 7,859,384 vesting stock options under the BM&F stock option plan, exercisable at a set strike price of R$1.00 per share, and (ii) a 154

total of 1,540,000 staggered stock options had been granted under the 2008 stock option program, which on vesting will be exercisable at a strike price of R$5,174 per share, or the weighted average of the closing price at which the shares traded in the last 20 trading sessions preceding the grant date. These options will vest evenly over a period of four years. A first installment of these options vested in 2009. Moreover, also in 2009, some of the options granted to the officers under the 2008 stock option program entered the exercise period. In addition, stock options held by some officers that were leaving the Company vested as of the termination date, such that the related expenses we incurred have been recognized in the income statement for the year to December 2009. 13.9 Summary information required for a clear understanding of the data provided under paragraphs 13.6 to 13.8, such as an explanation of the method for pricing the shares and options.

a. pricing model;
Because of the factors described in item (c) of this paragraph 13.9, in determining the options fair value we used the binomial pricing model. Due to its simple and iterative structure, the model presents advantages, and since it allows for the specification of nodes, or points in time, it is useful for valuing derivatives such as American options which allow exercise at any point in time until expiration, therefore permitting us to set nodes to account for early exercise and for dividend distributions at different points in time over the option lifespan. The model is also somewhat simple mathematically when compared to counterparts such as the Black-Scholes model, used in valuations of European options, and is therefore relatively easy to build.

b. data and assumptions used taken into account in the pricing model, including price-weighted average, strike price, expected volatility, option lifespan, expected dividends and risk-free interest rate;
The main assumptions used in pricing the options were: the options were valued according to market conditions as at the grant dates under each stock program; the risk-free interest rate was estimated by using interest-based futures contracts assuming a count convention spanning the duration of the option; the prices for the shares were adjusted to account for dividend payments; the expected volatility used for pricing was defined pursuant to item (d) of this paragraph 13.9; and the assumed expiration date of the options was the last exercise date under the option. Other classic assumptions for option pricing models were used, such as removing the possibility of arbitrage and constant volatility over time. The key assumptions are thus the following:
Data and Assumptions Date of grant Share price (R$) Strike price (R$) Expected volatility (year) Option lifespan (last vesting) Expected dividends 2009 Program 3/2/2009 5.80 6.60 67.57% 7 years 50%

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Risk-free interest rate (per year of 252 business days)

13.47%

c. method used and assumptions adopted to incorporate expected effects of early exercise;
In determining the fair value of the options we took into account the following aspects: the stock option model we adopt allows for early exercise after a certain future date (the vesting date) between the grant date and the last exercise date; the underlying shares pay dividends between the grant date and the last exercise date. Therefore, through to the vesting date, the options mimic European-style options (early exercise not permitted) whereas after vested the options may be exercised earlier than anticipated under certain circumstances, mimicking American-style options. Similar options are known as Bermuda or Mid-Atlantic options, and by construal their price must lie between the price of a European option and the price of an American option of like characteristics. For the payment of dividends, two effects on the option price should be taken into consideration: (i) a typical drop in the market price for the shares after they start trading ex-dividend; and (ii) the influence these payments have on an early-exercise decision.

d. form of determining expected volatility;

Given the low liquidity of the shares underlying the options as of the grant dates, the implied volatilities are relatively immaterial. In addition, at the time our stock option plan was approved our shares were a recent listing, such that historic volatility also does not provide enough information on implied volatilities. As a result we estimated the options volatility based on the implied volatility of stocks of similar entities (international stock exchanges) with sufficient liquidity to warrant the relevant data.

e. any other option feature included in measuring the option fair value fair value.
All major characteristics of the options are described and covered in the preceding paragraphs. 13.10 Private pension plans granted to directors and executive officers.
Board of directors Number of members Name of plan Number of officers eligible for retirement Conditions for early retirement Updated amount of contributions accrued in private pension plan up to end of previous year, net of direct contributions by the officers Total accrued contributions over previous year, net of direct contributions by the officers Is early redemption possible and on what conditions n/a Yes, only the employees portion n/a 328,643.83 328,643.83 n/a n/a n/a n/a Board of executive officers 6 Mercaprev 1 n/a 3,199,169.17 1 0 3,199,169.17 Total 6

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13.11 Average remuneration paid to directors, executive officers and fiscal council members. Due to changes in board composition as of April 2009, the information on lowest remuneration takes into account just the five members actually in office throughout the 12-month period, whereas the information on highest remuneration takes into account the aggregate amount recognized in the income statement. This notwithstanding the board member earning the highest remuneration was in office for just the period from May to December 2009. In the case of the board of executive officers, it should be noted two members left the Company in February and one in March, whereas a new officer joined our Company in July. The information on lowest remuneration takes into account the five members actually in office throughout the 12-month period, whereas information on the highest remuneration takes into account the aggregate amount recognized in the income statement for the year to December 31, 2009. The executive officer that earns the highest remuneration was in office for the full year..
Year ended December 31, 2009 Board of directors Number of members Amount of highest individual remuneration (in R$) Amount of lowest individual remuneration (in R$) Average individual remuneration (in R$) 10.92 936,091.88 204,000.00 339,042.89 Board of executive officers 6.00 5,453,734.08 2,326,769.28 2,971,009.46 Fiscal Council n/a n/a n/a n/a

Two members of the board of directors received no remuneration in 2009. The average remuneration of the nine members who did receive remuneration in 2009 was R$415,061.48. 13.12 Discussion on contractual arrangements, insurance policies and other documents used in structuring compensation schemes or indemnity mechanisms covering removal from office or retirement of directors and officers; including information on related financial effects impacting the Company. The Company has D&O insurance, which covers civil liability of directors and officers, so that the officers can take decisions with the support of modern protection that significantly reduces the risk of their jobs. Already widely used in the United States and Europe, the D&O insurance assures the Company financial protection and peace of mind for all and management members, who can thus focus on day-to-day management decisions without too much concern, which is a competitive advantage in retaining qualified talent. We do not adopt any specific policy for the compensation and/or indemnification of officers in the event of termination or retirement, except for benefits granted under the relevant private pension plans in the event of retirement.

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13.13 Information on percentage of total compensation paid to each of the board of directors, board of executive officers and fiscal council, which is attributable to members qualifying as parties related to the direct or indirect controlling shareholders, as defined under applicable accounting principles. There is no compensation recognized in the income statement regarding directors or officers deemed to be parties related to direct or indirect controlling shareholders. 13.14 Information (segregated by body) on amounts recognized in the income statement as remuneration paid to members of each of the board of directors, board of executive officers and fiscal council for any reason other than their responsibilities as members of these bodies, such as, for example, fees and commissions for consulting or advisory services. There is no amount recognized in the income statement as remuneration paid to directors or officers for reasons other than their responsibilities as members of the board of directors or the board of executive officers. 13.15 Information (segregated by body) on amounts recognized in the income statements of subsidiaries, companies under common control and direct or indirect controlling shareholders, as remuneration paid to members of each of the board of directors, board of executive officers and fiscal council, including information specifying on what account these amounts were paid. There are no amounts recognized in the income statements of subsidiaries, companies under common control, or direct or indirect controlling shareholders, as remuneration paid to directors or officers of the Company. 13.16 Other information deemed relevant by the registrant. There is no further information regarding this Section 13 not set forth above.

14. Human resources Business 14.1. Description of the human resources structure

a.

number of employees (grouped by type of activities performed and by geographic location) Year ended December 31, 2009 Activity Number of employees Senior executives 6 Executives 26 Managers 70 Other heads of department 108 Specialists 712 Operating personnel 139 Interns 56 Specialists 1 Operating personnel 4 Interns 1 Specialists 1 Operating personnel 3 Managers 1 Operating personnel 3

Geographic location

Total by geographic location

So Paulo

1,117

Rio de Janeiro Porto Alegre Cear

6 4 4

158

Paran

Operating personnel TOTAL

5 1,136

Geographic location

So Paulo

Rio de Janeiro Porto Alegre Cear

Paran

Year ended December 31, 2008 Activity Number of employees Senior executives 8 Executives 29 Managers 74 Other heads of department 118 Specialists 728 Operating personnel 184 Interns 75 Other heads of department 2 Specialists 3 Operating personnel 6 Specialists 1 Operating personnel 2 Managers 1 Specialists 1 Operating personnel 4 Managers 1 Specialists 1 Operating personnel 5 TOTAL 1,243

Total by geographic location

1,216

11 3 6

b.

number of outsourced personnel (grouping them by type of activities performed and by geographic location) Year ended December 31, 2009 Activity Outsourced personnel Specialists 227 Year ended December 31, 2008 Activity Outsourced personnel Specialists 319

Geographic location So Paulo

Total by geographic location 227

Geographic location So Paulo c.

Total by geographic location 319

employee turnover rate;

Employee turnover in 2009 was 17.42%. We should stress this turnover rate was impacted by the actual cut of 93 jobs over the months of March and April 2009, which resulted from our having captured synergy opportunities arising from the process that integrated the activities of the former two independent exchanges, BM&F and BOVESPA. Given that the integration process started in May 2008, and extended over a certain number of months we cannot provide any accurate turnover rate for that year. d. registrants exposure to labor liabilities and contingent liabilities.

For information on our exposure to labor liabilities and contingent liabilities, see subsection 4.3 of this Form. 14.2. Discussion on any material changes relative to the data provided under item 14.1 of this Form.

We have no additional comments on the matter. 14.3. Description of the employee compensation policy a. salary and variable compensation policy;

Our aim is to have a competitive compensation policy vis--vis the marketplace, one that will give us the ability to attract and retain talent, and keep a capable team of skilled and dedicated people, capable to help us attain our short-, medium- and long-

159

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, 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 quality of life, promoting healthy lifestyles and cultural activities and offering them good entertainment. c. characteristics of any share-based compensation plan for non-management employees

While our stock option plan targets mainly our upper management employees, it also includes middle-management employees amongst the eligible employees. Stock options are granted from time to time as a function of certain global performance indicators set for the Company, coupled with factors as job rank and evaluations of individual performance. The characteristics of the share-based compensation plan to which our middle management employees are eligible are the same as those of the stock option plan for upper management members, and are discussed under subsection 13.4 of this Form. 14.4. Discussion on relations with workers unions

The workers union that represents most of our employees is the Union of Employees of Independent Commercial Agents and Consulting, Expertise, Information, Research and Accounting Firms of the State of So Paulo ( Sindicato dos Empregados de

Agentes Autnomos do Comrcio e em Empresas de Assessoramento, Percias, Informaes e Pesquisas e de Empresas de Servios Contbeis no Estado de So Paulo).

Our relations with these unions 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. To date this has been a productive relationship. In addition, in 2009 we entered into a collective bargaining agreement with the union which specifically sets rules on how our employees can bank time while they are working to cover periods when they are not. An hour bank was agreed along with the terms and conditions of our profit sharing program.

15. Controlling ownership 15.1. Controlling shareholder or group of shareholders

No shareholder or group of shareholder sharing similar interests holds a direct or indirect controlling interest in our issued and outstanding shares. In addition, no shareholders agreement has been filed at our registered office which seeks to control the election of directors and/or regulate the exercise of voting rights by any shareholders.

160

15.2. Groups of shareholders sharing similar interests which in the aggregate hold ownership interest representing five percent or more of the shares of stock (other than those listed under 15.1 above).

Shareholder Funds Managed by BlackRock, Inc.

15.3.

common shares 104.767.426

% 5,12

last change September 7, 2010

Ownership structure as at the date of the most recent shareholders meeting.

Ownership structure as at the combined annual and extraordinary shareholders meeting held on April 20, 2010

By type of shareholders
Number of individual shareholders Number of corporate shareholders Number of institutional investors Free float

Number of shares
97,475 2,230 2,376 2,005,161,991

15.4.

Ownership structure chart

No shareholder or group of shareholder sharing similar interests holds a direct or indirect controlling interest in our shares. Our shares are widespread and control is diffused. In addition, no shareholders agreement has been filed at our registered office which seeks to control the election of directors and/or regulate the exercise of voting rights by any shareholders. 15.5. Shareholders agreements

Not applicable. 15.6. Material changes in ownership interest held by participants in the controlling group and by the registrants directors and officers No shareholder or group of shareholder sharing similar interests holds a direct or indirect controlling interest in our shares. In addition, no shareholders agreement has been filed at our registered office which seeks to control the election of directors and/or regulate the exercise of voting rights by any shareholders. As of December 31, 2009, the aggregate ownership interest our directors and officers held in our shares had dropped to 0.108% of the shares of stock (or 2,212,684 shares), from a total of 0.383% of the shares (or 7,834,824 shares) as of December 31, 2008. 15.7. Other relevant information

There is no additional relevant information to be provided at this time under this section. 16. Related party transactions 16.1. Rules, policies and practices the registrant adopts in connection with related party transactions, such as defined in applicable accounting standards. Our policy on related party transactions and other circumstances involving or potentially involving conflicts of interest was approved by the board of directors on March 17, 2009. 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. Based on Accounting Standard No. 5, or CPC-5, issued by the Brazilian Accounting Standards Board (Comit de Pronunciamentos Contbeis), or CPC, and endorsed by the CVM pursuant to CVM Resolution 560/08, our Policy on Conflicts of Interest and Related Party Transactions defines a related party as a person having relations with our company in any of the

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following ways: (a) Where said person directly or indirectly, through one or more intermediaries, (i) is a controlling shareholder or a subsidiary or company under common control (including a controlling shareholder or subsidiary), (ii) holds an interest in us permitting it to exercise significant influence over our company; or (iii) exercises joint control over our company; (b) Where said person is an affiliate of ours; (c) Where said person is a joint company (joint venture) in which we are an investor; (d) Where said person is a director or key management member of the Company, key management member being defined as a person vested with authority to, and responsibility for planning, directing and overseeing the Companys activities either directly or indirectly (including any director or executive officer of said person). Under our policy, key management member is further defined to include any member of our board of directors, our board of executive officers, and our audit officer, our human resources officer and the chief operational officer of the BM&F settlement bank; (e) Where said person is a close family member of any of the persons listed in items (a) and (d) above, close family member being defined as family members that would be expected to influence, or be influenced by such close family member in his or her business dealings with us, and may include (i) said persons spouse, or common law spouse, and children; (ii) the children of the spouse or common law spouse; and (iii) said persons dependants or the dependants of said persons spouse. (f) Where said person is a subsidiary or company under common control, or is a company significantly under the influence of, or is a company in which the power to significantly affect or influence the decision-making process lies directly or indirectly with any of the persons listed in items (d) or (e); or (g) Where said person is a pension fund operating for the benefit of company employees or of any entity that is a related party of ours. According to our policy on related party transactions, on identifying a matter or proposal involving or potentially involving a related party transaction or other instance of conflict of interest, directors and officers are required promptly to make the conflict of interest known to us. In addition, they are required to abstain from taking part in discussions concerning any such matter or proposal, and from voting on any such matter or proposal. In the event a director or executive officer that would potentially ascertain a personal gain from any particular decision were to silence about a conflict of interest, any cognizant peer may disclose the conflict of interest. In this event, a directors or officers silence will be deemed a breach of our policy and the matter will be submitted to our nomination and corporate governance committee for evaluation and a recommendation to the board of directors as to possible corrective actions. Our policy and the rules it conveys are in line with the requirements of Brazilian Corporate Law, particularly inasmuch as it prescribes that directors and officers have a duty of loyalty towards the company. Except for the requirements set forth in our policy on conflicts of interest and related party transactions, we do not adopt other rules, regulation or procedures in connection with related party transactions. 16.2. Related party transactions

Related Party

Relations between us and the party

Transaction Transaction date subject matter

Amount (In R$) 2009 2008 (475)

Outstanding balance (in R$ thousands) Transaction Acct. Payables 2009 (1,839) 2008 (1,361)

Related Guarantees Term or Termination Party Insurances duratio Expiration Ctrb. n

Loans / Indebtedness Nature Interest Purpose rate

BVRJ Rio de Janeiro Exchange Brazilian Cmdy. Exchange

Monthly Subsidiary

Monthly Subsidiary Monthly

Not

Exchange fees on ownership mbrshp. certificate Costs refund exp. w/ IT services Exchange fees on ownership mbrshp. certificate Bank acct.

(475)

N/A

N/A

N/A

N/A

N/A

N/A

295

2,184 Acct. Receivables (150) Acct. Payables Cash

88

N/A

N/A

N/A

N/A

N/A

N/A

(669)

(157)

(70)

N/A

N/A

N/A

N/A

N/A

N/A

2,760

N/A

N/A

N/A

N/A

N/A

N/A

162

applicable Monthly BM&F Settlement Bank Whollyowned subsidiary Not applicable Not applicable Subsidiary Monthly

deposits Use of our property & IT infrastructure

equivalents 5,898 3,325 Acct. Receivables Acct. Payables Foreign exchange 543 457 N/A N/A N/A N/A N/A N/A

Fgn. exchange cntrct. to close Cost recovery cntrct. for refund of costs re use of our manpower & infrastructure 2,419

3,549 1,257

(831) -

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

BSM Market Surveillance

1,483 Acct Receivables

Investor Compe. Mechanism Bovespa Institute for Social & Envrtl. Respty.

Monthly

Funds to transfer

(2,907) 1,501 (9) 441 6,901 (9)

4,295

N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A

Not Acct. applicable Receivables Not Acct. Subsidiary applicable Payables Not (9,250) Donations applicable Not 441 Cost applicable recovery We Not Acct. BM&F sponsor applicable Receivables Association the Not Acct. association applicable Payables Abbreviations source: http://www.itc.nrcs.usda.gov/scdm/docs/OD-Abbreviations.pdf

As discussed under subsection 16.1(d) above, our policy formally acknowledges key management personnel as our related parties. Given that the compensation we pay to our key management personnel has already been discussed at length under section 13 of this Form, the above table does not include information on compensation, providing data only on our transactions with other related parties, as identified based on the criteria set forth in subsection 16.1 above. 16.3. For each related party transaction or set of transactions discussed under 16.2 above, which has been agreed in the last year, the information should cover: a) identification of actions taken to tackle conflicts of interest Our transactions with other parties, in particular transactions with related parties, are typically subject to approval either by our board of directors or board of executive officers, as pertaining to each of their spheres of authority and provided in our bylaws. Where any director or officer may have a conflict of interest regarding any proposed transaction, this director or officer must abstain from discussing the matter, and from attending and voting in any meeting held to deliberate about the subject. For additional information on conflicts of interest affecting any member of our board of directors, please see subsection 12.4(c) of this Form. We adopt no other formal mechanisms to identify conflicts of interests. b) evidence that the related party transactions have been entered on an arms length basis (mutually beneficial or adequately compensated transactions) We confirm that we only transact with related parties strictly on an arms length basis, pursuant to mutually beneficial and adequately compensated transactions. 17. Capital stock 17.1. Capital stock

Our capital stock is represented by shares of common stock only.

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Type of shares

Number of shares

Issued and outstanding (in R$ thousands)

Capital stock (in R$ thousands)

Authorized share capital (in R$ thousands)

Payment term

Common shares

2,044,014,295

2,540,239,563.88

2,540,239,563.88

2,540,239,563.88

Not applicable

Number

Authorized share capital Amount (R$ mil)

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.
Date of decision

Share issuances and increase in capital stock

Issuance approved by Issue date Total issuance (R$) Total shares in the issuance Issue price (R$) Form of payment Criterion determining the total issuance Private issuance or public offering Percentage over prior capital stock

August 19, 2008

Board of directors

August 19, 2008

3,216,300.00

3,216,300

1.00

Issue price paid in cash on or before December 31, 2008.

Shares issued within the authorized limit set in our Bylaws. Under article 8 of the Bylaws, our board has powers to decide on the issuance (within the authorized limit), the issue price, and the form and conditions of payment.

Private issuance shares subscribed by holders of vested stock options under our stock option plan.

0.16%

Under article 8 of the Bylaws, our board of directors is authorized to share issuances up to the limit of two billion and fiv e hundred million shares of common stock without need to amend our Bylaws. In so deciding, the board must resolve on the total issuance, the issue price per share and the form and conditions for shareholders to pay in the new shares. At a meeting held on August 19, 2008, our board approved the issuance of 3,216,300 additional common shares for fulfillment of vested stock options under the stock option plan which we absorbed upon the merger with BM&F (the former independent commodities and futures exchange), which was approved at a shareholders meeting held on September 20, 2007. This stock option plan was later incorporated into our own stock option plan, which was approved at the extraordinary shareholders meeting of May 8, 2008. As of August 19, 2008, the additional shares were fully subscribed by the relevant holders of vested stock options and paid up in Brazilian currency on or before December 31, 2008. This share issuance was well within the authorized limit of our share capital. As a result, as of August 19, 2008, our capital stock which previously amounted to R$2,537,023,263.88 increased to R$2,540,239,563.88 represented by 2,044,014,295 shares of common stock. At a shareholders meeting held on May 8, 2009, the shareholders approved the new wording of article 5 of the Bylaws, which reflects the current capital stock, as approved at the board meeting of August 19, 2008. 17.3. Share splits, reverse splits and bonus shares

As of the date of this form, there have been no share splits or reverse splits and no bonus shares have been distributed by us. 17.4. Reductions in capital stock

As of the date of this form, there has been no reduction of our capital stock.

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17.5.

Other relevant information

There is no additional relevant information to be provided at this time under this section. For additional information on our share buyback program, see section 19, under the heading Share buyback programs and treasury stock. 18. Securities information 18.1. Rights and prerogatives of each type and class of shares:

a.

Rights to dividends

Under Brazilian Corporate Law and our Bylaws, our shareholders are entitled to any dividend or other distributions, based on their proportionate holdings in shares of stock issued by us. Under article 54 of our bylaws, we are required to pay to shareholders every year mandatory dividends at a rate of 25% of adjusted net income for the year. Our calculation of net income for the year, and the amount available for distribution, includes adjustments made pursuant to Brazilian Corporate Law for allocations to the legal reserve and certain other reserves, such as a contingency reserve, as well as for reversal of previous allocations where appropriate.

b.

Voting rights

Each of our common shares grants its holder right to one vote at decisions of annual and extraordinary shareholders meetings. Under the Novo Mercado listing regulation, all our shares of capital stock are required to be voting shares, such that we are not permitted to issue non-voting shares or shares with restricted voting rights or participation certificates. However, there are certain voting limitations, which are set forth in subsection 18.2 of this form.

c.

Convertibility into other types or classes of shares

Our shares of stock are not convertible into other types or classes of shares. In addition, under our bylaws we are permitted to issue debentures convertible into common shares and subscription warrants. However as of the date of this reference form we had not issued any of these securities.

d.

Reimbursement rights

Withdrawal rights
Under certain circumstances, shareholders that dissent from a decision taken at a shareholders meeting are entitled to exercise withdrawal rights, in which case we must reimburse them for the value of their shares, as determined pursuant to Brazilian Corporate Law. In our case, pursuant to applicable regulations, shareholders will not be entitled to exercise withdrawal rights upon a decision to (a) approve a consolidation transaction or (b) approve a merger transaction where we are not the surviving entity or (c) approve our participation in a corporate group acquire ownership interest in to the extent our shares (1) are liquid shares, meaning they are included in the stock exchange general stock index or a stock index compiled by any other exchange, as defined by the Brazilian Securities Commission, and (2) consist of widely held stock (defined as the controlling shareholders individually or as a group holding less than 50% of the issued and outstanding shares of capital stock).

Redemption
Under Brazilian Corporate Law, our shares may be redeemed upon a decision taken at a shareholders meeting approved by holders of shares representing at least 50% of our capital stock.

Liquidation
Pursuant to Brazilian Corporate Law, in the event of our liquidation in a winding up process, our shareholders are entitled to reimbursement of capital in proportion to their holdings in our shares, provided all our other liabilities must have been previously settled.

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e.

Tag along rights (tender offers triggered by acquisition of control)

Under the Novo Mercado listing regulation, a disposition of our control agreed pursuant to one or a series of successive transactions requires a precedent or dissolving condition being established, whereby the prospective buyer undertakes to conduct a tender offer to purchase all outstanding shares. Under Brazilian Corporate Law and the Novo Mercado listing regulation, the bid price and the payment conditions must be the same as offered for the controlling shares, and the offer should take place within the legally prescribed deadline. In addition, a tender offer is required also in the following instances: Where a transaction is entered for assignment of a sale of subscription or other rights exercisable for shares, or of securities convertible or exchangeable for shares of our capital stock, which upon being exercised or converted or exchanged for shares issued by us would imply a disposition of control; Where one or more transactions for a sale of beneficial ownership in as many shares issued by us as would imply a disposition of control (indirect transfer of control); and Where a shareholder acquires as many additional shares in one or more private transactions as are sufficient to acquire control. In this event, the bid price and payment conditions in the tender offer must be the same as paid under the private purchase transactions and, in addition, shareholders that may have traded shares to the acquirer of control in the preceding six-month period will be entitled to compensation established as the difference between the price per share paid for control and selling price on the stock exchange, as adjusted for inflation in the period. Under Brazilian Corporate Law and the Novo Mercado listing regulation, in a tender offer triggered by a disposition of control all shareholders may adhere to sell the shares at 100% the selling price paid for the controlling shares. Additionally, because our control is widespread, our bylaws require a tender offer to be carried out by any shareholder or group of shareholders that seeks to acquire shares issued by us or other rights in our shares as beneficial owners, including by means of usufruct or a trust granting voting rights over shares in the aggregate comprising a total interest in 15% or more of our issued and outstanding shares. For additional information see subsection 18.2(c) below.

f.

Transfer restrictions (lock up)

There are no transfer restrictions related to our shares.

g.

Conditions to amend rights assigned to the shares

Under Brazilian Corporate Law, neither the bylaws nor the decisions of a shareholders meeting of any corporation may restrict the rights of shareholders regarding any of the following: Rights to a proportionate participation in profit distributions; Right to a proportionate participation in the distribution of assets outstanding in a winding up process (after all corporate liabilities are settled); Preemptive rights to subscribe for shares, convertible debenture or subscription warrants, except in certain circumstances permitted by Brazilian Corporate Law.; Right to review and judge the company financials and the management of business operations in the manner prescribed under Brazilian Corporate Law; and Right to withdraw under certain legally prescribed circumstances.

h.

Other relevant characteristics

Not applicable.

i.

Foreign issuers

Not applicable.

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18.2. Description of bylaws provisions limiting the voting rights of holders of material ownership interest, and of bylaws provisions requiring material shareholders to conduct tender offer.

- Voting limitation
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 limitation 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 agreement regulating the exercise of voting rights were to be filed at our registered office, the relevant contracting shareholders would be deemed to constitute a group of shareholders sharing similar interests, which would be subject to the voting limitation established as discussed above. In addition, as a result of said voting limitation, under paragraph 3 of article 7 of our Bylaws, it is not permitted for any shareholders agreement (whether or not filed at our registered office for effectiveness towards our company and other shareholders) to predefine a consistent majority vote at meetings of shareholders through formation of voting blocs representing aggregate interest in excess of 7% of our issued and outstanding shares, such as discussed above. Additionally, a shareholders meeting convened to decide on amendments to our Bylaws, whether changing or deleting provisions, the applicable voting limitation is one percent (1%) of our issued and outstanding shares. The chairman of a shareholders meeting is responsible for enforcing the voting limitations established under our Bylaws, and must inform shareholders of the number of votes individual 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 relevant limit must not be computed for purposes of determining whether a quorum to resolve has been met.

- Tender offer requirement

Below is a discussion of certain tender offer requirements included in our Bylaws. Where a tender offer is conducted at any time to purchase our outstanding shares, and our board of directors finds the offer meets the interests of the community of shareholders and of the economic segments in which our subsidiaries operate, and votes to recommend the offer be accepted, then our board (and only our board) may also vote to call a shareholders meeting to decide on whether our Bylaws should be amended to eliminate any voting limitations, however under the condition that the bidder should acquire at least two-thirds of the outstanding shares (thus, not including treasury stock) for the amendments to the Bylaws to take effect.
(a) Disposition of control

Under our Bylaws and the Novo Mercado listing regulation, a disposition of control agreed under one or a series of successive transactions requires a precedent or dissolving condition being established, whereby the prospective buyer undertakes to conduct a tender offer to purchase all outstanding shares. Under Brazilian Corporate Law and the Novo Mercado listing regulation, the bid price and the payment conditions must be the same as initially offered for control, to ensure equalitarian treatment is extended to all shareholders. In addition, a tender offer is required also (1) where a transaction is entered for assignment of a sale of subscription or other rights exercisable for shares, or of securities convertible or exchangeable for shares of our capital stock, which upon being exercised or converted or exchanged for shares issued by us would imply a disposition of control, and (2) in the event of a disposition of control over our controlling shareholder (if any). Moreover, under our Bylaws and the Novo Mercado listing regulation, where a shareholder acquires as many additional shares in one or more private transactions as are sufficient to acquire control, the acquiring shareholder must then conduct a tender offer to purchase all outstanding shares. In this event, the bid price and payment conditions in the tender offer must be the same as paid in private transactions for the share granting control and, in addition, shareholders that may have traded shares to the acquirer of control in the preceding six-month period will be entitled to compensation established as the difference between the price per share paid for control and selling price on the stock exchange, as adjusted for inflation in the period Additionally, both our Bylaws and the listing regulation prohibit the actual transfer of shares between sellers and buyer of control, requiring us not to recognize any share transfer unless and until the acquirer of control (whether one or a group of persons sharing similar interests) executes the instrument of adherence to the Novo Mercado listing regulation.

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Another requirement calls the acquirer to take action within six months after the acquisition to restore the free float to minimum 25% of the outstanding shares, as the case may be. Moreover, in a tender offer conducted as part of a going private process, the bidder or bidders (including us, if we conduct the tender offer) to set the bid price at a minimum equivalent to the fair value per share, as determined by a specialist firm in the form prescribed in 62 of our Bylaws. A tender offer requirement applies also where a meeting of our shareholders decides (1) to delist from the Novo Mercado for our shares to trade in a different listing segment or stock exchange, or (2) to implement a corporate restructuring process from which we do not emerge as the surviving company and the company that does emerge as the surviving entity is not listed to trade securities on the Novo Mercado. In any such event, the controlling shareholder or group of shareholders sharing similar interests (if any) or us (if control is diffuse) will be required to conduct a tender offer where the minimum bid price is the fair value per share, as determined by a specialist firm according to the provisions of article 62 of our Bylaws, and other applicable legal and regulatory rules.
(b) Acquisition of control where control is widespread (diffuse control)

If ownership in our issued and outstanding shares is widespread and our control diffuse (as defined in the Novo Mercado regulation) at the time a meeting of our shareholders decides for a going private process whereby we cancel our registration as a public company, we will be required to conduct a tender offer to purchase our issued and outstanding shares, provided we are first required to purchase shares held by holders that vote against our going private process, but adhere to the tender offer, and only then are we allowed to purchase shares of holders voting to approve our going private process. Similarly, if control is diffuse at the time a meeting of our shareholders vote to delist our shares from the Novo Mercado for the shares to trade on a different listing segment or if it votes to implement a corporate restructuring process from which we do not emerge as the surviving company and the company that does emerge as surviving entity is not listed to trade securities on the Novo Mercado, the shareholders that vote to approve the motion will be required to conduct a tender offer to purchase the shares of all other shareholders. Further assuming our control is diffuse, if the stock exchange were to halt trading in our shares because of a breach of our obligations under the listing regulation, or release our stock quotes along with a proviso indicating we are in breach of said regulation due to act or fact of management, we will be required promptly to call a shareholders meeting (through the board, or the fiscal council or certain shareholders, as provided in article 123 of Brazilian Corporate Law) to decide on whether to remove and replace the directors and/or to take prompt action to remedy the breach. Additionally, if the breach of our obligations under the listing regulation is not remedied within the period assigned by the stock exchange, and we are compulsorily delisted from the Novo Mercado segment by virtue of this breach, we will be required to conduct a tender offer to purchase all issued and outstanding shares in a process which will result in the cancellation of our registration as a public company. However, if the shareholders meeting were to decide that we should retain the registration as a public company, the shareholders voting for the motion will be required to conduct the tender offer. Moreover, if the shareholders meeting decides that we are to delist from the Novo Mercado due to said breach of our obligations under the Novo Mercado listing regulation, , the shareholders voting for the motion will be required to conduct the tender offer. If any two or more of these events were to occur more or less concomitantly while our control is diffuse, regulations permit that a single tender offer be conducted as long as their goals can be achieved, the alternative does not harm the interests of shareholders and the CVM consents to this course of action, where consent is required. In any event, the potential bidders in any such tender offer may agree that just one of them or a third party acting for them or, as the case may be, ourselves will conduct offer, provided in any event each party required to conduct the tender offer will still be held liable for the offer consummation and for ensuring it is conducted pursuant to applicable legislation and regulations.
(c) Protection of free float

Any shareholder or group of shareholders sharing similar interests which aims to acquire shares issued by us or other rights in our shares (as beneficial owners, including by means of usufruct or a trust) granting voting rights over shares in the aggregate comprising a total interest in 15% or more of our issued and outstanding shares, must first seek consent from the CVM, while giving regard to applicable legislation, regulatory rules, the stock exchange regulations and our Bylaws.

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Assuming consent is obtained, said shareholder or group of shareholders sharing similar interests (which for the sake of brevity we refer to as acquirer) o will be required within the subsequent 30-day period to conduct a tender offer to purchase all our issued and outstanding shares, whereas giving regard to applicable legislation and regulatory rules in the jurisdictions where our shares are listed to trade, the stock exchange regulations and our Bylaws. In this event, the minimum bid price will be the fair value per share, as determined by a specialist firm in the form prescribed in 62 of our Bylaws. This tender offer requirement will not apply where a person acquires aggregate ownership interest in excess of fifteen (15%) of our issued and outstanding shares by virtue of any of the following events: (i) a share subscription carried out in a single private issuance previously approved at a properly called shareholders meeting which also decides the issue price should be determined on the basis of a fair value valuation conducted by a specialist firm in the form prescribed in article 62 of our Bylaws; and, in addition, (ii) in the event another tender offer is on course to being conducted, where the bid price meets the fair value requirement, as determined by a specialist firm in the form prescribed in paragraph 1 of article 62 of our Bylaws. In this event if the acquirer fails to meets the obligations set forth in our Bylaws (including as to applicable deadlines for the launch of, or application for consent to conduct the tender offer, and for compliance with the requirements and other orders of the CVM), our board of directors will call a shareholders meeting to decide on suspending the rights of the relevant shareholder or group of shareholders acting as acquirer, such as provided in article 120 of Brazilian Corporate Law, however without computing any votes cast the shareholders in question, as they will be impeded from voting. 18.3. Description of exceptions to, or events of suspension of economic and policy (voting) rights granted under the Bylaws. Our Bylaws contemplate certain restrictions affecting economic and policy rights, as follows

Events of exclusion or limitation of 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, no person may be elected to our board if he or she is a director of a competito r of ours or their subsidiaries, or has a conflict of interest with us or any of our subsidiaries. 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, , and in addition must not interfere in any way in any matter in which he or she has a conflicting interest.

Voting limitations
Our Bylaws also contemplate the voting limitations 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 interests conflict with ours. Under article 115 of Brazilian Corporate Law, a shareholder acting on a conflict of interest to approve or disapprove any particular proposal is deemed to incur abuse of voting rights. Moreover, under article 18 of our Bylaws, shareholders convening in a general meeting may suspend the rights, including voting rights, of any shareholder or group of shareholders that acts in violation of statutory or regulatory provisions or our Bylaws. 18.4. Information on volume of trading and stock quotations (highs and lows) in each of the three most recent full years.

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Market price per common share Lowest price Highest price Average price Average daily trading volume Financial value traded

(in R$)
2008 Third quarter (*) Fourth quarter 2009 First quarter Second quarter Third quarter Fourth quarter
( )

(in R$)
13.38 9.27

(in R$)
10.05 5.84

(in R$)
138,159.59 132,264.18

(in R$)
5,940,862,448.00 8,200,379,312.00

6.77 3.90

5.70 6.91 10.45 11.05

7.90 12.78 13.55 14.11

6.62 10.16 11.94 12.34

111,485.35 194,471.38 156,717.79 181,050.08

6,800,606,391.00 11,862,753,941.00 10,029,938,722.00 10,863,004,671.00

* data start from August 20, 2008, when our shares began to trade on the stock exchange under ticker symbol BVMF3

18.5.

Other securities issued

Not applicable. 18.6. Markets in Brazil on which securities issued by the registrant are listed to trade

BM&FBOVESPA S.A. Bolsa de Valores, Mercadorias e Futuros. 18.7. Cross-border markets on which securities issued by the registrant trade

Not applicable. 18.8. Offerings of securities previously conducted by the registrant or other parties, including controlling shareholders, subsidiaries and affiliates, for sale of securities issued the registrant. Not applicable. 18.9. Tender offers previously conducted for either a takeover or acquisition of ownership interest in another company. Not applicable. 18.10. Other relevant information

There is no additional relevant information to be provided under this section at this time. 19. Buyback programs and treasury stock 19.1. Share buyback programs implemented by the registrant: a. dates of any decision to implement a buyback program Our only share buyback program was approved by our board on September 24, 2008. While as legally prescribed, this program period was originally approved to last a maximum of 365 days, therefore in principle ending on September 23, 2009, our board decided to end it as of May 12, 2009. No other buyback program has been approved since. b. detail the following regarding each program: i. number of shares approved for repurchase, by type and class of shares

The abovementioned share buyback program was established for repurchase of up to 71,266,281 shares of common stock.

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ii.

repurchase as a percentage of the total issued and outstanding shares, by type and class of shares

As a percentage, the program contemplated repurchase of approximately 3.5% of the free float, as existing at the time. iii. repurchase period

We began repurchasing shares within the scope of the buyback program on September 29, 2008 and extended these repurchases through February 6, 2009. At a meeting held on May 12, 2009, after we had repurchased 45,686,000 shares of common stock, our board decided to end the program. iv. reserves and earnings available to be allocated to the program
Per income statement as at June 30, 2008
(in R$ thousands)

Buyback base date September 30, 2008

(in R$ thousands)

Capital reserves By-laws reserves Net income for the period Total amount allocated to the program

16,350,975 401,447 308,696 17,061,118

16,350,975 401,447 217,444 16,969,866

v.

other key program features

The share buyback program approved on September 24, 2008, authorized the repurchase of shares for subsequent cancellation with the aim of maximizing value generation for shareholders through efficient management of our capital structure. As of December 16, 2008, our board the earlier decision was amended to authorize us either to cancel the shares at a later date or to keep them as treasury stock for subsequent reissue within the scope of our stock option plan. Other than discussed herein, there are no other key features related to our buyback program. vi. number of shares ultimately repurchased, by type and class of shares By February 6, 2009, following the buyback of a last lot of shares, we had repurchased a total of 45,686,000 common shares. vii. average weighted repurchase price, by type and class of shares

The table below sets forth information related to our repurchase of shares, and shows the average repurchase price was R$5.85 per share.
Periods September 2008 October 2008 November 2008 December 2008 Total for 2008 January 2009 February 2009 Sum total Number of shares 757,800 5,183,400 9,456,300 18,793,975 34,191,200 9,288,300 2,206,500 45,686,000 Average price per share 7.92 7.52 4.76 5.44 5.62 6.46 6.79 5.85 Total amount (in R$) 6,001,650.00 38,983,565.10 45,004,740.00 102,207,863.11 192,197,818.21 60,031,758.37 14,992,125.06 267,221,701.64

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viii. actually repurchased shares as a percentage of the total shares approved for repurchase The total number of shares repurchased within the scope of our buyback program represented 64.1% of the maximum number originally contemplated. 19.2.
Year

Information on treasury stock

Type of shares of stock Total treasury stock at start of year Aggregate value at start of year Average weighted price per share Treasury stock repurchased in the year Aggregate price paid in the year Number of reissued treasury shares Total amount reissued Number of cancelled shares Total treasury stock at end of year Total value at end of year

(R$ thousands)

(in R$)

(R$ thousands)

(R$ thousands)

(R$ thousands)

2008 2009

common common

0 33,024,204

0 185,880

5.628 5.863

34,191,204 11,494,800

192,198 75,024

1,167,000 5,271,021

6,318 30,802

0 0

33,024,204 39,247,983

185,880 230,102

19.3.

Information on treasury stock as of year-end (December 31, 2009)

Average weighted repurchase price per share (in R$) 7.86601 7.97438 8.61941 8.55214 8.28440 6.54524 7.19761 6.92579 7.99580 7.25885 8.39958 8.52570 7.43447 6.29875 6.87471 5.30388 5.16092 5.02184 4.76911 4.45248 4.28236 4.52671 4.62733 4.92020 5.14757 4.80563 4.72035 As a percentage of issued and outstanding shares of common stock 0.019% 0.019% 0.017% 0.017% 0.018% 0.023% 0.021% 0.022% 0.019% 0.021% 0.017% 0.017% 0.020% 0.024% 0.022% 0.028% 0.029% 0.030% 0.031% 0.034% 0.070% 0.066% 0.064% 0.061% 0.058% 0.062% 0.063%

Number of treasury stock 381,400 376,400 348,000 350,800 362,100 458,300 416,900 446,800 375,200 413,000 345,500 351,000 403,200 476,800 435,800 565,400 581,300 597,000 630,000 673,900 1,400,000 1,325,700 1,296,500 1,220,900 1,165,600 1,248,000 1,272,000

Repurchase date

September 29, 2008 September 30, 2008 October 1, 2008 October 2, 2008 October 3, 2008 October 6, 2008 October 7, 2008 October 8, 2008 October 9, 2008 October 10, 2008 October 13, 2008 October 14, 2008 October 15, 2008 October 16, 2008 October 17, 2008 November 13, 2008 November 14, 2008 November 17, 2008 November 18, 2008 November 19, 2008 November 24, 2008 November 25, 2008 November 26, 2008 November 27, 2008 November 28, 2008 December 1, 2008 December 2, 2008

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Number of treasury stock 1,367,100 1,340,600 1,354,500 1,155,800 1,069,700 1,004,000 986,000 1,016,000 1,037,300 1,039,000 1,005,800 983,000 933,000 485,000 508,500 497,800 490,600 445,000 429,100 443,200 451,700 451,600 463,700 456,000 472,600 479,700 470,000 480,000 496,100 509,200 490,400 490,000 480,000 462,900 439,100 440,000 438,000 459,000 455,000 440,000 439,000

Average weighted repurchase price per share (in R$) 4.38892 4.47448 4.43023 5.19198 5.60989 5.97453 6.07296 5.86259 5.78420 5.81919 5.96599 6.29487 6.43211 6.17775 5.95667 6.02942 6.11486 6.57856 6.99177 6.76932 6.65596 6.64202 6.46634 6.58158 6.34811 6.25276 6.38275 6.25452 6.04736 5.90965 6.11728 6.14192 6.38573 6.48047 6.83006 6.82152 6.87768 6.53602 6.59373 6.79407 6.83538

Repurchase date December 3, 2008 December 4, 2008 December 5, 2008 December 8, 2008 December 9, 2008 December 10, 2008 December 11, 2008 December 12, 2008 December 15, 2008 December 16, 2008 December 17, 2008 December 18, 2008 December 19, 2008 December 22, 2008 December 23, 2008 December 29, 2008 December 30, 2008 January 5, 2009 January 6, 2009 January 7, 2009 January 8, 2009 January 9, 2009 January 12, 2009 January 13, 2009 January 14, 2009 January 15, 2009 January 16, 2009 January 19, 2009 January 20, 2009 January 21, 2009 January 22, 2009 January 23, 2009 January 26, 2009 January 27, 2009 January 28, 2009 January 29, 2009 January 30, 2009 February 2, 2009 February 3, 2009 February 4, 2009 February 5, 2009

As a percentage of issued and outstanding shares of common stock 0.068% 0.067% 0.067% 0.057% 0.053% 0.050% 0.049% 0.051% 0.052% 0.052% 0.050% 0.049% 0.046% 0.024% 0.025% 0.025% 0.024% 0.022% 0.021% 0.022% 0.023% 0.023% 0.023% 0.023% 0.024% 0.024% 0.023% 0.024% 0.025% 0.025% 0.024% 0.024% 0.024% 0.023% 0.022% 0.022% 0.022% 0.023% 0.023% 0.022% 0.022%

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Number of treasury stock 413,500

Average weighted repurchase price per share (in R$) 7.25956

Repurchase date February 6, 2009

As a percentage of issued and outstanding shares of common stock 0.021%

19.4.

Other relevant information

There is no additional relevant information to be provided at this time under this section. 20. Securities trading policy 20.1. Policy setting guidelines and standards for direct or indirect controlling shareholders, directors, officers, fiscal council members and members of technical or advisory committees established under the Bylaws to trade in securities issued by the registrant The securities trading rules that apply to our directors, officers, employees, interns and service providers, as well as those of our subsidiaries are stated in our Code of Conduct. a) Date of adoption Our Code of Conduct was approved at a meeting of our board of directors held on March 17, 2009. b) Persons bound to comply with the policy Persons bound to comply with our securities trading policy, as reflected in the Code of Conduct, include all our directors, officers, employees, interns and service providers, as well as those of our subsidiaries, all of whom we call Collaborators, and in addition persons connected with any Collaborator, defined as close family members to the first degree (parents, children, siblings), spouses or common law spouses, and any legal entity in which a Collaborator holds powers to decisively influence the decision-making process. The definition of connected persons includes also investment funds in which a Collaborator holds powers to influence investment decisions being made by the fund manager or administrator. Accordingly, the securities trading policy standards do not apply to investment funds where management of the funds or assets is deferred to professional managers, such that Collaborators holding no powers to influence investment decisions, may freely invest in these funds. c) Principal policy features Under our policy, collaborators and connected persons are required to abstain from trading in any way, directly or through other persons in any markets comprising our BM&F segment. In addition, trading in markets comprising our Bovespa segment is subject to the following rules: - Conditions of trading Except for persons that work in any of our strategic departments (as listed below), Collaborators and connected persons may trade on Bovespa segment markets pursuant to the following rules: Duty to disclose information Our Collaborators are required to disclose to us within five (5) business days any trading activity he or she or any connected person may carry out on the stock market. Restrictions to trading in securities listed on Bovespa segment Collaborators are banned from any of the following: (i) trading in securities of like kind and class, either on buy side or sell side, at time intervals shorter than ninety (90) days;

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(ii) (iii) (iv) (v) (vi)

trading on forward or futures markets; trading on the options market; transacting on the securities lending market in the capacity of borrower; trading under a third partys name or account; and trading in his or her name for the benefit of third parties.

The restriction under item (i) above is not applicable to sales of securities whose market prices may have dropped 20% or more when compared to the price paid for such securities (or as determined based on the price quotes as of the date of the most recent purchase, in the case of positions acquired through more than one trade over a period of time). - Strategic departments Ban on trading activities Our chief executive officer and other Collaborators that work in any of the strategic departments listed below are banned from trading in any way, directly or indirectly under their own or a third partys name, in securities listed on Bovespa segment, including depositary shares or receipts representing securities listed on international markets: Operations Office; Issuer Relations Office; Settlement Office; Depository Office; and Risk Management Office. Collaborators working in any capacity in any of these departments are permitted only to trade on Bovespa segment (i) (ii) By investing in shares of index funds (ETFs) in which they hold no powers to influence the fund administration or asset management; and By trading freely in shares of open-end, non-exclusive, diversified portfolio funds in which they hold no powers to influence the fund administration or portfolio management.

- Investment Clubs Collaborators and any connected persons are banned from organizing or investing through investments clubs, except investment clubs whose membership comprises solely employees of BM&FBOVESPA, and provided the relevant club charter must include a provision to the effect that trading activities by the investment club are subject to the provisions of the Code of Conduct and any additional rules that may be issued in this regard in the future. d) provisions governing lock-up or closed periods, and description of processes adopted to ensure compliance. In any event, none of our Collaborators is permitted to trade in stocks or other securities issued by us in the fortnight preceding any release of quarterly financials (ITR) or full-year financial information (DFP), and in other instances our investor relations officer may define at any time. Our investor relations officer is responsible for circulating internal communication notices for the purpose of indicating the initial and final terms of any such lock-up period. Additionally, our Collaborators are banned from trading in securities of like kind and class, on either buy side or sell side, at time intervals shorter than ninety (90) days. Our audit office continually monitors trading activities by our Collaborators. If there are indications of a breach, formal clarification is sought; the case is investigated, analyzed and referred to the code of conduct committee for a decision. If the committee finds that a breach of conduct has 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 administrative or judicial action. 20.2. Other relevant information

Under article 10 of our bylaws, every shareholder or group of shareholders sharing similar interests is required to give notice to us disclosing any purchases of shares which added to previously held shares result in aggregate ownership interest in excess of 5% of our issued and outstanding shares of common stock, following which any additional purchase of share lots representing

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an interest in 2.5% (or multiples thereof) of our shares must also be disclosed. Any such disclosure must include information on the identities of buyer(s) and seller(s), the purpose of the acquisition, the number of shares and percentage interest acquired and other information required under article 12 of CVM Instruction 358/02. At a meeting held on February 23, 2010, our board of directors approved certain changes to the code of conduct, which include significant changes to the securities trading policy expressed in our code of conduct, which however as of the date of this form have yet to be implemented. Subsection 20.1 above is not a discussion of the securities trading policy applicable to controlling shareholders because our shares are widespread and control is diffuse at this time. 21. Disclosure policy 21.1. Guidelines, regulations and internal processes adopted by the registrant to ensure information requiring disclosure is collected, processed and reported in a timely and accurate fashion. Except as discussed herein based on guidelines, rules and processes stated in our disclosure policy, there are no additional guidelines, regulations or internal processes concerning disclosure of information by us. 21.2. Policy on disclosure of material developments adopted by the registrant.

All our directors and officers, as well as our employees, consultants and providers with access to privileged information, and the controlling shareholders (if any) are required to comply with the guidelines and rules established in our disclosure policy. Any information on material developments related to us necessarily flows to our investor relations officer, who is responsible for ensuring proper disclosure in accordance with our policy and article 3 of CVM Instruction 358/02. The responsibilities of the investor relations officer include ensuring material developments taking place in the course of business or in any way related to us and our subsidiaries are timely and accurately disclosed, using plain language which is easily understood by the market. In addition, our investor relations officer is responsible for ensuring material disclosures are promptly, widely and concomitantly disseminated in any markets in which our shares are listed to trade Under our disclosure policy, in the event of atypical volatility in the quotations or market price of our shares, or in volumes traded in our shares, our investor relations officer is responsible for investigating the matter, including by inquiring persons bound to comply with our policy, in order to determine whether there are indications of insider trading. Our policy requires that we disclose information on material developments as soon as practicable, preferably prior to the start of business or after the close of business on the stock exchange, provided that if our shares trade on more than one market in different time zones, the start and end of business in the Brazilian market prefer. The guidelines on manner and timing for the investor relations officer to disclose information on material developments are the following: i. ii. Material facts occurring in the course of business or in connection with our business operations are to be disclosed promptly after occurring; 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; 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; 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 The investor relations officer is charged with providing on request of the relevant regulatory entities additional clarification related to any particular disclosure of material development.

iii.

iv. v.

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Material disclosures are to be made to the CVM and the relevant stock exchanges as soon as practicable and concomitantly in all relevant markets pursuant to a written document providing details on the material development being disclosed and, where possible or available, the amounts involved and other pertinent clarification. The dissemination of material disclosures is made through press releases published in the wide-circulation newspapers we typically use to publish corporate acts and notices to the market. Pursuant to our disclosure policy, persons with access to privileged information on material developments are required to keep the information strictly confidential until such time as it is properly disclosed to the market. In addition, any person with access to privileged information is required to refrain from acting on such knowledge in any way, directly or indirectly for his own or a third partys benefit, which includes any type of insider trading. These persons are also required to ensure persons working under him or her and persons of trust also refrain from acting on any information to which they have access due to their position, and are held jointly liable for any insider trading or unauthorized disclosure by the latter. Under our disclosure policy and pursuant to the main provision of article 6 of CVM Instruction 358/02, our board may decide to halt prompt disclosure in exceptional instances where disclosing privileged information on a particular material development could jeopardize our legitimate interests. Moreover, in any such exceptional event, the CVM, acting on its own initiative, or on request of our board or management or a shareholder, may analyze the matter further and confirm or disallow the decision to halt the material disclosure on grounds that it could jeopardize our legitimate interests. Additionally, all persons who are bound to comply with our disclosure policy are required to adhere in writing to the policy. 21.3. Directors and/or officers responsible for implementing, enforcing, assessing and monitoring compliance with the disclosure policy. Under our disclosure policy, the investor relations officer is responsible for implementing, enforcing, assessing and monitoring compliance with the policy. 21.4. Other relevant information

Under article 10 of our bylaws, every shareholder or group of shareholders sharing similar interests are required to give notice to us disclosing any purchases of shares which added to previously held shares result in aggregate ownership interest in excess of 5% of our issued and outstanding shares of common stock, following which any additional purchase of share lots representing an interest in 2.5% (or multiples thereof) of our shares must also be disclosed. Any such disclosure must include information on the identities of buyer(s) and seller(s), the purpose of the acquisition, the number of shares and percentage interest acquired and other information required under article 12 of CVM Instruction 358/02. 22. Extraordinary transactions
22.1.

Acquisition or disposition of material assets transacted outside the normal course of business.

There has been no acquisition or disposition of material assets transacted outside the normal course of business. 22.2. Significant changes in the way business is conducted.

There have been no significant changes in the way we do business. 22.3. Material contracts and agreements not directly related to the business activities.

There have been no material contracts or agreement not directly related to our business activities. 22.4. Other relevant information

There is no additional relevant information to be provided at this time under this section.

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