annual shareholders' meeting - 03.24.2014 - practical guide

8/12/2019 Annual Shareholders' Meeting - 03.24.2014 - Practical Guide

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MANUAL FOR PARTICIPATION IN THE

ANNUAL SHAREHOLDERS MEETING


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So Paulo, February 20, 2014

Dear Shareholders,

It is a pleasure to invite you to participate in the Annual Shareholders Meeting of

BM&FBOVESPA S.A.So Paulo Stock, Commodities & Futures Exchange, which is being

called to be held on March 24, 2014, at 12:00 p.m., at Rua XV de Novembro No. 275,

Downtown, in the City of So Paulo, State of So Paulo, exceptionally not at the Company

headquarters, on the terms of the Call Notice to be published in the Valor Econmico

newspaper and in the Official Gazette of the State of So Paulo on February 21, 2014.

In this introductory letter I would like to highlight that in the operational ambit the year 2013,

such as in previous years, was marked by control of the costs and expenses incurred by the

Company. Within the strategic ambit, BM&FBOVESPA continued with the conduction of its

plan and has advanced in a number of projects that will support its future growth and strengthen

its competitive position, like for example the delivery of the module of actions of the new

PUMA Trading System and the beginning of the tests with the new clearinghouse for

derivatives.

It must stressed that 2013 was also marked by the divulgement (i) of the new Ibovespa (So

Paulo Stock Exchange Index) methodology, causing the mentioned index to represent with

more accuracy the performance of the Brazilian capital market; and (ii) of the IncentiveProgram for expansion of the personal investors base, having the purpose of creating incentives

for an increase of entry of retail investors and of their participations in the spot stock market.

Having presented the comments above, I inform you that the matters to be resolved in the

Meeting are described in the Call Notice, in the Management Proposal and in this Manual, all

of which are being divulged to the market today.

The effective participation of the shareholders in this Meeting is of extreme importance. It is

the opportunity to discuss and vote on the matters set forth for resolution, in view of theinformation disclosed, in order to take a conscious decision.

In this sense, with the purpose of facilitating and encouraging the participation of its

shareholders and strengthening the commitment of adopting the best corporate governance and

transparency practices, BM&FBOVESPA will make available the Assembleias Online

(Online Meetings) system of voting by means of electronic power of attorney, which may be

accessed by registering on sitewww.assembleiasonline.com.br.

I invite you to examine carefully the Manual for Participation in the Meeting and other

documents that are available for the shareholders at the headquarters of the Company, on its
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Investor Relations site (www.bmfbovespa.com.br/ri/), as well as on the site of

BM&FBOVESPA (www.bmfbovespa.com.br) and of the Brazilian Securities Commission

(www.cvm.gov.br).

Very truly yours,

Pedro Pullen Parente

Chairman of the Board of Directors
http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/ri/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.cvm.gov.br/http://www.bmfbovespa.com.br/http://www.bmfbovespa.com.br/ri/


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TABLE OF CONTENTS

CLARIFICATIONS AND ORIENTATIONS ............................................................................... 5

A.PARTICIPATION IN THE ANNUAL SHAREHOLDERSMEETING..................................................... 6

A.1POWER OF ATTORNEY ................................................................................................................. 6

A.1.1 Electronic Power of Attorney ................................................................................................ 6

A.1.1.1 Shareholders not registered on the Assembleias Online platform .................................. 7

A.1.1.2 Shareholders already registered on the Assembleias Online platform........................... 8

A.1.2 Physical Power of Attorney .................................................................................................... 8A.1.2.1PRE-ACCREDITATION.......................................................................................................... 10

A2.PUBLIC PROXY REQUESTS........................................................................................................ 10

B.MATTERS TO BE RESOLVED IN THE ANNUAL SHAREHOLDERSMEETING OF

BM&FBOVESPA ........................................................................................................................... 11

C.DOCUMENTS THAT ARE PERTINENT TO THE MATTERS TO BE RESOLVED IN THE ANNUAL

SHAREHOLDERSMEETING OF BM&FBOVESPA ........................................................................ 14

Attachment I -Executive Officers Review of Financial Condition of BM&FBOVESPA ....... 17

Attachment II -Net Income Allocation Proposal ........................................................................ 37Attachment III -Executive Compensation ................................................................................... 41


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MANUAL FOR PARTICIPATION IN THE ANNUAL SHAREHOLDERS MEETING

OF BM&FBOVESPA CONVENING ON MARCH 24, 2014

CLARIFICATIONS AND ORIENTATIONS

This Manual contains the clarifications that are necessary to facilitate the participation of the

shareholders in the Annual Shareholders Meeting of BM&FBOVESPA to be held on March

24, 2014, as well as information concerning matters to be resolved by the shareholders.

This initiative seeks to coordinate the practices adopted by the Company of timely and

transparent communication with its shareholders and the requirements of Law No. 6.404, of

December 15, 1976, as subsequently amended (Corporations Law), and of CVM Instruction

No. 481, of December 17, 2009 (CVM Instruction No. 481).

In compliance with the determinations of the Corporations Law, BM&FBOVESPA will hold

the Annual Shareholders Meeting called for:

Date: March24, 2014

Venue: Rua XV de Novembro No. 275,

Downtown, So Paulo/SPBrazil

Time: 12:00 p.m.

The following matters included in the agenda will be resolved in the Annual Shareholders

Meeting:

(1) To receive the management report, and to receive, review and judge the consolidated

financial statements as of and for the year ended December 31, 2013;

(2) To resolve on the proposal on allocation of net income for the year ended December 31,

2013; and

(3) To set the aggregate compensation payable in 2014 to members of the board of directors

and the executive officers.

The information on each one of the matters for the Annual Shareholders Meeting is detailed in

item B of this Manual.


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A. PARTICIPATION IN THE ANNUAL SHAREHOLDERSMEETING

The participation of the Shareholders in the Meetings of the Company is of extreme

importance.

We inform that for the convening of the Annual Shareholders Meeting it will be necessary to

have the presence of at least one quarter (1/4) of the capital stock the Company. If this legal

quorum is not attained the Company will announce a new date for holding the Annual

Shareholders Meeting on second call, when it may convene with the presence of any number

of shareholders.

Theparticipationof the shareholders can be personal or by a duly established attorney-in-

fact.

It will be required to present the following documents, as the case may be:

Natural persons ID of the shareholder or, if applicable, ID ofhis/her attorney-in-fact and the relevant power

of attorney

Legal persons Corporate documents that evidence the legalrepresentation of the shareholder

ID of the legal representativeA.1. POWER OF ATTORNEY

A.1.1 Electronic Power of Attorney

With the purpose of facilitating and encouraging the participation of its shareholders

BM&FBOVESPA will once again make available the Assembleias Online system, by means

of which the shareholders can grant powers of attorney for resolution on all of the matters of

the agenda of the shareholders meeting, by means of a valid digital certificate, either private or

of the Infraestrutura de Chaves Pblicas Brasileiras ICP-Brasil (Brazilian Public Code Keys

Infrastructure), on the terms of Provisional Remedy No. 2200-2, of August 24, 2001.

In order to vote via Internet the shareholder must register on address

www.assembleiasonline.com.br and obtain cost-free his/her/its digital certificate. The

shareholders as from now may initiate the procedures to register and obtain the digital

certificate.

A power of attorney granted via the electronic platform must follow the rules described in item

A.1.2 below for appointment of the attorneys-in-fact.
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A.1.1.1 Shareholders not registered on the Assembleias Online platform

Step 1Registration on the portal:

a) Access addresswww.assembleiasonline.com.br,click on cadastro e certificado and select

the adequate profile (individual or legal entity shareholder);

b) Complete the register, click on cadastrar, confirm the data and you will immediately have

access to the instrument of adherence in the case of an individual, or to the instrument of

representation in the case of a legal entity. The instrument must be printed, initialed on all of

the pages and executed with a certified signature.

If the shareholder already has a digital certificate issued by the ICP-Brasil, it is necessary only

to effect the registration and sign digitally the instrument of adherence or the instrument of

representation, as the case may be, in order to be qualified to vote by means of the

Assembleias Online portal. Thus, the shareholder may proceed directly to Step 3 described

below.

Step 2Validation of the registration and receipt of the private digital certificate:

a) The shareholder will receive by email from the Assembleias Online portal a list of

documents that are necessary for validation of the registration, including the instrument of

adherence or the instrument of representation, as the case may be. All of the documents must be

sent by mail to the Assembleias Online address shown in the mentioned email.

b) As soon as the documentation is validated by the Assembleias Online team the shareholder

will receive a new email showing the procedures for issuance of the Assembleias Online

Digital Certificate.

c) After issuance of the certificate the shareholder is ready to vote via Internet in the

Shareholders Meetings of BM&FBOVESPA.

Step 3Granting of power of attorney by electronic means:

a) After completion of the steps designated above, in order to exercise your voting right by

electronic power of attorney access address www.assembleiasonline.com.br, insert your login,

select the Meeting of BM&FBOVESPA, vote and sign the power of attorney electronically;

b) The shareholder will receive proof of his/her/its vote by email from the Assembleias

Online portal.

The shareholder will have the period from March 7, 2014 to 6:00 p.m. on March 21, 2014 to

grant a power of attorney through the Assembleias Online portal.
http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/http://www.assembleiasonline.com.br/


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A.1.1.2 Shareholders already registered on the Assembleias Online platform

In the event that the shareholder has already carried out previously steps 1 and 2 of item

A.1.1.1 above, he/she/it must verify the validity of his/her/its digital certificate, so that if the

term of effectiveness as expired he/she/it can provide for its renewal.

For a renewal of the digital certificate issued by Certisign, it will be necessary to access the

administrative menu through the Assembleias Online address, and opt for the service of

renewal of digital certificate.

After confirming the validity of his/her/its digital certificate, the shareholder is qualified to

grant powers of attorney by means of the Assembleias Online platform, with observance of the

instructions shown in address www.assembleiasonline.com.br and of step 3 of item A.1.1.1

above.

A.1.2 Physical Power of Attorney

In addition to the granting of a power of attorney in electronic form, the powers of attorney

may also be granted in the traditional form, by means of a physical instrument.

On the terms of Article 126, Paragraph One, of the Corporations Law, the shareholder may be

represented by an attorney-in-fact that has been appointed since one (1) year ago and that is a

shareholder, attorney, financial institution or administrative officer of the Company.

If the shareholder cannot be present at the Shareholders Meeting or cannot be represented by

an attorney-in-fact of his/her/its choice, the Company makes available the names of three

attorneys-in-fact to represent him/her/it following the voting orientation rendered by the

shareholder:

1) to vote the shares IN FAVOR of the proposals and matters included in the order ofbusiness:

Roberto Augusto Belchior da Silva, Brazilian, married, attorney, domiciled in this Capital

City of So Paulo at Praa Antonio Prado No. 48, enrolled with at OAB/SP (Brazilian Bar

Association Chapter So Paulo) under No. 113.495 and enrolled with the Individual

Taxpayers Register of the Ministry of Finance under CPF/MF No. 867.075.747-87.

2) to vote the shares AGAINST of the proposals and matters included in the order of

business:

Marcelo de Siqueira Ferraz, Brazilian, divorced, business administrator, domiciled in this

Capital City of the State of So Paulo at Praa Antonio Prado No. 48, bearer of Identity Card

RG No. 15.992.504-SSP/SP, enrolled with CPF/MF under No. 800.202.676-49.
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3) to ABSTAIN FROM VOTING the shares regarding the proposals and matters

included in the order of business:

Claudio Avanian Jacob, Brazilian, married, economist, domiciled in this Capital City of theState of So Paulo at Praa Antonio Prado No. 48, ID No. 20.772.903-7SSP/SP, enrolled with

the CPF/MF under No. 163.260.048-02.

Accordingly we present the sample of instrument of power of attorney below.

The Company will not require certified signatures and/or consularization of the instruments of

power of attorney granted by the shareholders to their relevant representatives.

POWER OF ATTORNEY

POWER OF ATTORNEY

[SHAREHOLDER], [IDENTIFICATION] (Grantor), in its capacity as shareholder of

BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (Company),hereby establishes and appoints as its attorneys-in-fact:

Roberto Augusto Belchior da Silva, Brazilian, married, attorney, domiciled in thisCapital City of So Paulo, at Praa Antonio Prado No. 48, enrolled with at OAB/SPunder No. 113.495 and enrolled with the Individual Taxpayers Register of the Ministryof Finance under CPF/MF No. 867.075.747-87, to vote FAVORABLY on the mattersshown in the agenda, in accordance with the orientation expressed below rendered by theGrantor;

Marcelo de Siqueira Ferraz, Brazilian, divorced, business administrator, domiciled inthis capital City of the State of So Paulo, at Praa Antonio Prado No. 48, bearer ofIdentity Card RG No. 15.992.504-SSP/SP, enrolled with CPF/MF under No.800.202.676-49, to vote AGAINST on the matters shown in the agenda, in accordancewith the orientation expressed below rendered by the Grantor;

Claudio Avanian Jacob, Brazilian, married, economist, domiciled in this Capital Cityof the State of So Paulo, at Praa Antonio Prado No. 48, ID No. 20.772.903-7SSP/SP,enrolled with CPF/MF under No. 163.260.048-02, to ABSTAIN on the matters shown inthe agenda, in accordance with the orientation expressed below rendered by the Grantor;

granting to them powers to attend, examine, discuss and vote on behalf of the Grantor inthe Annual Shareholders Meeting of the Company to be held on March 24, 2014, at

12:00 p.m., at Rua XV de Novembro No. 275, Downtown, in the City of So Paulo,State of So Paulo, exceptionally not at the Company headquarters, in accordance withthe orientations established below, concerning the following matters shown in the

Agenda.


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Agenda

(1) To receive the management report, and to receive, review and judge the consolidatedfinancial statements as of and for the year ended December 31, 2013;

In favor ( ) Against( ) Abstention( )

(2) To resolve on the proposal on allocation of net income for the year ended December31, 2013;


(3) To set the aggregate compensation payable in 2014 to members of the board ofdirectors and the executive officers.


[City], [month] [day], [2014]

_____________________________

Grantor

By: (name)

(title)

A.1.2.1PRE-ACCREDITATION

For the case of granting powers of attorney by physical means, the documents referred to inAand A.1.2can be delivered at the headquarters of BM&FBOVESPA up to the time for

opening the Shareholders Meeting.

However, aiming at facilitating the access of the shareholders to the Shareholders Meeting, we

ask that the delivery of such documents be made as early as possible, as from March 7, 2014.

The documents must be delivered at Praa Antonio Prado No. 48, 4th floor, Centro, CEP:

01010-901, So Paulo/SP Brazil, care of the Investors Relations Executive Office, tel.: + 55

11 2565-5142, email: [email protected].

A2.PUBLIC PROXY REQUESTS

Shareholders that detain zero-point-five percent (0.5%) or more of the capital stock may enter

public proxy requests on the Assembleias Online system, on the terms of the Corporations

Law and of CVM Instruction No. 481.

The public proxy requests must be accompanied by a draft of the power of attorney and by the

information and other documents required in CVM Instruction No. 481, particularly in its

Exhibit 23, and delivered at Praa Antonio Prado No. 48, 7 th floor, Downtown, Postal Code:

01010-901, So Paulo/SP Brazil, care of the Products and Investors Relations Executive


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Officer of the Company, Mr. Eduardo Refinetti Guardia.

The Company will fulfill the public proxy requests submitted by the shareholders within two

(2) business days counting from the date of the relevant request, showing the same highlight on

the Assembleias Online system as for the other documents made available by the Company.

The Company and its management are not responsible for the information contained in public

proxy requests made by shareholders.

B. MATTERS TO BE RESOLVED IN THE ANNUAL SHAREHOLDERSMEETING OF

BM&FBOVESPA

On the terms of the Corporations Law once every year, within the first four months following

the end of the fiscal year, it is necessary to provide for the holding of Annual Shareholders

Meeting to resolve on the financial statements, the allocation of net income, the establishment

of the amount of the remuneration of the administrative officers and, if applicable, the election

of the members of the Board of Directors and of the Audit Committee.

Below are presented the clarifications of the Management of BM&FBOVESPA concerning

each one of the items that are to be resolved in the Annual Shareholders Meeting of March 24,

2014:

First Item To receive the management report, and to receive, review and judge theconsolidated financial statements as of and for the year ended December 31, 2013.

The Management Report and the Financial Statements of the Company prepared by the

management of BM&FBOVESPA, together with the opinion of the independent auditors and

the report of the Audit Committee, relative to the fiscal year ended December 31, 2013, and

published on February 14, 2014 in the Valor Econmico newspaper and on February 15,

2014 in the Official Gazette of the State of So Paulo, were approved by the Board of

Directors in a meeting held on February 13, 2014.

Financial Statements

The Financial Statements convey the economic-financial situation of the Company, as well as

the statements of net equity of the last fiscal year, enabling the shareholders to assess the equity

situation and the level of profitability of BM&FBOVESPA.

Such Statements comprise the Balance Sheet, the Statement of Stockholders Equity, the

Statement of Cash Flows, the Statement of Income and the Statement of Added Value. The

financial statements are supplemented by explanatory notes that have the purpose of assisting

the shareholders in analyzing and understanding the statements.


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Management Report

Accompanying the Financial Statements is the Management Report, a document that presents

information of a financial nature, such as for example the principal accounts of the statement of

income for the last fiscal year and also information of a non-financial, statistical and

operational nature, such as information related to the collaborators of the Company, to itscontrolled subsidiaries, to its social responsibility, to its corporate governance and to the capital

market, in significantly encompassing format.

Opinion of the Independent Auditors

Ernst&Young Auditores Independentes examined the mentioned financial statements and

issued an opinion that they represent adequately, in all of the relevant aspects, the equity and

financial position of BM&FBOVESPA and of its controlled subsidiaries.

Documents Presented by the Management of the Company

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

at the headquarters of the Company, on its Investors Relations page and on the sites of

BM&FBOVESPA and of the Brazilian Securities Commission:

(a)Management Report;(b)Financial Statements for fiscal year 2013;(c)Comments of the board members on the financial situation of BM&FBOVESPA that

are required by item 10 of the Reference Form, as per Instruction No. 480, of December

7, 2009, of the Brazilian Securities Commission (CVM Instruction No. 480), which

are also shown in Exhibit I to this document;

(d)Opinion of the Independent Auditors;(e)DFP (Standardized Financial Statements) Form; and(f) Report of the Audit Committee, which presents its conclusions concerning the

activities conducted by it in year 2013.

Second Item To deliberate about the proposal on allocation of net income for the year

ended December 31, 2013.

The net income of R$1,081,516,765.50 earned by BM&FBOVESPA in the fiscal year ended

December 31, 2013 corresponds to the results obtained in that fiscal year after deduction of theprovision for Income Tax and social contributions.

In a meeting held on February 13, 2014 the Board of Directors of the Company resolved to

allocate the net income for the fiscal year as described on the terms below, which proposal will

be submitted for approval by the shareholders in the Annual Shareholders Meeting:

(i) R$865,213,000.00 for the mandatory dividends, which after offsetting the interimdividends paid relative to fiscal year 2013, in the amount of R$669,510,000.00, and

of the interest on equity paid for fiscal year 2013, in the amount of

R$50,000,000.00, will result in an outstanding balance of R$145,703,000.00, which


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it is proposed be distributed to the shareholders on account of dividends, resulting in

a value of R$0.07847515 per share (estimated value, which can be modified on

account of the disposal of treasury shares to fulfill the exercise of purchase options

for shares granted based on the Purchase Option Plan for Shares of the Company

and for any acquisition of shares within the scope of the Plan for Repurchase ofShares of the Company); and

(ii) R$216,303,765.50 for accrual of the statutory reserve for investments andcomposition of the funds and mechanisms for safeguarding the Company.

The proposal of the Management of BM&FBOVESPA also provides that the payment be

effected on June 27, 2014, with observance of the value of R$0.07847515 per share (estimated

value, which can be modified on account of the disposal of treasury shares to fulfill the exercise

of purchase options for shares granted based on the Purchase Option Plan for Shares of the

Company and for any acquisition of shares within the scope of the Plan for Repurchase of

Shares of the Company), using as a calculation base the equity position on June 11, 2014.

The information concerning allocation of net income required by Exhibit 9-1-II of CVM

Instruction No. 481 is shown in Exhibit II hereto.

Third Item To set the aggregate compensation payable in 2014 to members of the

board of directors and the executive officers.

In a meeting held February 13, 2014 the Board of Directors of the Company resolved that theproposal for annual overall remuneration to be presented to the Annual Shareholders Meeting

is of not more than R$5,967,000.00 for the Board of Directors and not more than

R$18,085,000.00 for the Executive Board. These amounts of remuneration concern the period

comprised from January to December 2014.

The mentioned proposed remuneration is presented below, with details that enable a more

accurate analysis by the shareholders:

Proposal of Remuneration for Fiscal Year 2014 (R$M)

DIRECTORS AND

OFFICERS

Fixed

Remuneration Benefits

Short-Term

Variable

Remuneration

TOTAL

Board Members 5,967 - - 5,967

Executive Officers 4,778 917 12,390 18,085

TOTAL 10,745 917 12,390 24,052


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Fixed Remuneration

The fixed compensation of the executive officers is paid in 13 monthly payments over the year.

The compensation is adjusted on a yearly basis, as required under the collective bargaining

agreement.

In addition to earning a fixed monthly compensation, the directors that participate in any boardadvisory committees are further entitled to an additional fixed monthly remuneration. For the

Chairman of the Board of Directors, there is an additional fixed six-monthly remuneration.

Benefits

The benefits represent the aggregate of a package consisting of health and dental care plan,

medical check-up, life insurance, meal vouchers, use of company car (including parking

privileges), mobile phone, and pension fund. The benefits package has been designed to attract

and retain top executive talent, and offer executive officers advantages at least comparable to

market practices at a level of similar functions.

Short-Term Variable Remuneration

Short-term variable compensation is based on performance target indicators and goals which

are taken into account for purposes of allocating and apportioning the short-term variable

compensation, which are: (i) in line with our variable compensation policy, as applied using

salary multiples that differ in correlation to executive rank, (ii) on the basis of both individual

performance evaluations (which assess function-related factors and job level), and (iii) the

Companys overall performance (actual versus target indicators), as further detailed below.

The key performance indicator the board elected as the 2013 performance target has been set in

terms of level of spending. The aggregate amount of the 2013 short-term variable compensationpayable to officers and executives of the Company will be calculated on the basis of actual

adjusted net income (GAAP net income), taking into account the level of spending vis--vis the

operating expense budget for 2013. Thus, assuming the spending target is met, the variable

compensation should represent 3.5% of GAAP net income. However, if spending exceeds the

target, the amount attributable to officers and executives by way of variable compensation will

decrease by a given reduction factor. Of this total, a portion will be allocated to the Statutory

Executive Board and its distribution will follow the rule of salary multiples per level and

differentiation based on individual performance.

The information on the remuneration of the administrative officers required by item 13 of the

Reference Form provided by CVM Instruction No. 480 is shown in Exhibit III hereto.

C. DOCUMENTS THAT ARE PERTINENT TO THE MATTERS TO BE RESOLVED IN THE

ANNUAL SHAREHOLDERSMEETING OF BM&FBOVESPA

The following documents are available for the Shareholders at the headquarters of the

Company, in its Investors Relations site (www.bmfbovespa.com.br/ri/), as well as in

BM&FBOVESPA site (www.bmfbovespa.com.br) and Brazilian Securities Commission site

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


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Call Notice Financial Statements for the fiscal year ended December 31, 2013 (Management

Report, Financial Statements, Opinion of the Independent Auditors and of the

Audit Committee)

Form DFP (Standardized Financial Statements) Report of the Audit Committee Minutes of the meeting of the Board of Directors held on February 13, 2014 with

the Proposal for Allocation of Profit for the fiscal year ended December 31, 2013

Proposal by the Board of Directors showing the information relative to theproposal for allocation of the results required in Exhibit 9-1-II of CVM

Instruction No. 481

Comments by the Executive Officers on the financial situation ofBM&FBOVESPAitem 10 of the Reference Form, as per CVM Instruction No.

480

Information on the remuneration of the administrative officers item 13 of theReference Form, as per CVM Instruction No. 480.

We stress that in order to clarify any doubts the Investors Relations Executive Office should be

contacted on telephones +55 11 2565-4007, 2565-4729, 2565-4418, 2565-4834 or 2565-4207

or by email sent [email protected].
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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ATTACHMENTS


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ATTACHMENT I

Executive Officers Review of Financial Condition of BM&FBOVESPA

(Reference Form, Section 10)

10. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

10.1 Managements discussion and analysis.

a. financial condition and net equity position

Year ended December 31, 2013 compared with year ended December 31, 2012.

The year 2013 was marked by important developments pertaining to the markets we operate as well as

developments related to our products and offerings.The stock market has seen a boost in trading activity whichled to record high average value traded, to R$7.42 billion in 2013 from R$7.25 billion in 2012, in the wake of anupsurge in turnover velocity1, despite the unmoving equity market capitalization2. In contrast, while the volumestraded in financial and commodity derivatives were somewhat subdued, to 2.85 million in 2013 from 2.90 millionin 2012, a slightly decrease of 1.8% in the average daily traded value, and the average rate per contract (RPC)went up 7.6%, to R$1.282 in 2013 from R$1.191 in 2012, raising revenues, primarily because a substantialportion of the volumes correlate with contracts for which we charge U.S. dollar-denominated fees, so thatultimately these revenues were positively influenced by the depreciation of the Brazilian real against the U.S.dollar.

In a striking note of market performance, while in the first half of 2013 value traded in cash equities as well asvolume traded in financial derivatives hit record highs, in the second half of the year trading value and volumesplummeted, unveiling a shift in market mood triggered by sinking risk appetite and deteriorating marketexpectations, as portfolios investment outflows soared.

Ultimately, our diversified revenue base and innovative products and services offerings (including securitieslending and Treasury Direct services, products as exchange-traded real estate funds (FIIs) and agribusinesscredit bills (LCAs) added to the positive effects of our market making program for options on single stocks, andequity offerings worth R$23 billion in gross proceeds (the largest equity-financing volume in three years), allcontributed to spring a 3.5% year-on-year climb in total revenues.

Reflecting this performance, our consolidated total revenues climbed 3.5% year-over-year, to R$2,370,229thousand in 2013 from R$2,289,023 thousand one year ago, as the outcome of a 5.9% rise in revenues fromtrading and clearing fees earned in our BM&F segment coupled with a 1.0% drop in revenues from trading andclearing fees earned in our Bovespa segment; and an important contribution from revenues unrelated to tradingvolumes, which surged 10.4% year-over-year.

Once again, our unwavering efforts to controlling costs and expenses drove us to successfully contain the build-upin adjusted expenses3below the average inflation rate to R$575,764 thousand in 2013 from R$563,487 thousand in2012, an increase of 2.2%. In addition, we continue to pledge steadfast commitment to return capital to

shareholders by combining cash distributions and share buybacks effectively and without affecting our solidfinancial position.

Thus, our consolidated operating income climbed 2.5% year-on-year to R$1,334,635 thousand from R$1,301,670thousand previously, while the consolidated GAAP net income (attributable to BM&FBOVESPA shareholders)increased 0.7% to R$1,081,516 thousand from R$1,074,290 thousand one year ago.

Last, but not least, BM&FBOVESPA is well-positioned to capture future growth opportunities the Brazilian marketwill certainly continue to offer, though it must be said the economic outlook as 2013 came to a close became morechallenging in light of the present macroeconomic conditions. Nonetheless, we believe our investments in productdevelopment and technology infrastructure are key factors for the future growth and diversification of our revenue

1Turnover velocity for the year is defined as the ratio of annualized turnover (value) of stocks traded on the cash market over a twelve-month period

to average market capitalization for the same period.2

Equity market capitalization is a measure of the size of the stock market given by the total market capitalization of all listed issuers, where the market

capitalization by issuer is calculated as stock price multiplied by the number of shares outstanding of each listed issuer (Bovespa segment).3The operating expenses have been adjusted to eliminate expenses with depreciation, the stock options plan, taxes related to equity in results of investees (CME

Group), allowance for doubtful accounts, and a R$92,342 thousand contribution to the Investor Compensation Mechanism (MRP) late in 2011. The purpose ofthese adjustments is to measure operating expenses after eliminating expenses with no impact on cash flow and non-recurring expenses.


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base, for the improvement of our services, and will be critical in consolidating the efficiency and strength of theBrazilian capital markets. It is our firm belief the development and implementation of our business strategy willcontinue to bear fruit in the years ahead.


BM&FBOVESPA delivered solid operating performance in 2012, which in our BM&F segment (financial andcommodity derivatives) translated into growth and record high volumes, whereas growth in our Bovespa segment

(equities, equity-based derivatives and index-based derivatives) was driven primarily by increase in turnovervelocity, spurred mainly by the increase in average daily value traded by foreign investors. The primary reasons forthis are twofold: one, the fact that most of the high frequency trading volume originates cross border; two, a shiftin monetary policy which in December 2011 led the Government to remove the 2% tax on financ ial transactions(IOF tax) levied on hot money inflows for investments in variable-income securities.

In turn, the record growth in the BM&F segment was pushed mainly by increase in average daily volume traded inBrazilian-interest rate contracts, the most actively traded contract group. In addition, the average rate per contract(RPC) climbed both as a result of the increase in volumes traded in longer-maturity Brazilian-interest rate contractsand because the RPC for FX contracts was positively influenced by the depreciation of the Brazilian real against theU.S. dollar, since our rates for these contracts are denominated in U.S. dollars. A combination of factors explainsthe increase in trading volume and greater concentration on longer term interest rate contracts, prime amongwhich are the structural change brought about by drastic cuts in the real interest rate, coupled with increasedcredit availability and the greater portion of fixed interest-bearing government debt relative to total public debt.

Reflecting this operating performance, our consolidated total revenues climbed 8.2% year-over-year, toR$2,289,023 thousand from R$2,115,983 thousand one year ago, driven by (i) a 7.2% rise in revenues fromtrading and clearing fees derived in the Bovespa segment; (ii) a 13.9% climb in revenues from trading and clearingfees earned in the BM&F segment; and (iii) a 0.5% drop in other operating revenues unrelated to trading volume.

The consolidated total expenses fell 6.6% year-over-year, to R$763,080 thousand from R$816,664 thousand in theprior year. As adjusted to eliminate non-recurring expenses and expenses with no impact on cash flow, theadjusted expenses decreased 3.6% to close the year quite near the lower endpoint of the revised budget interval.In August 2012, true to our commitment to controlling costs and expenses, we revised the adjusted opex guidanceto an interval between R$560,000R$580,000 thousand from R$580,000R$590,000 thousand previously.

Contrasting to operating performance, which the slash in real interest rates strengthened by spurring tradingvolumes in the BM&F segment, our interest revenues dwindled as a result of a plunge in interest earned on ourcash availabilities and financial investments (the large part of which earn fixed-interest rates), coupled with a jumpin interest expenses attributable to the appreciation of the U.S. dollar against the Brazilian real, as most our

interest expenses are denominated in U.S. dollars. As a result, net interest income shrank 25.6% year-over-year toR$208,851 thousand from R$280,729 thousand one year earlier.

Thus, the consolidated operating income climbed 19.6% from one year ago, while the consolidated net incomeattributable to shareholders rose 2.5%. Our performance in 2012 bolstered our strong financial position further.

b. Capital structure; likelihood of share redemption.

The table below sets forth year-end data on the composition of consolidated capital structure in the last threeyears:

(i) at December 31, 2013 - 74.5% equity and 25.5% liabilities, (ii) at December 31, 2012 - 80.4% equity and19.6% liabilities, (iii) at December 31, 2011 - 81.6% equity and 18.4% liabilities.

Year ended December31,



2013 2012 2011

(in R$ thousands, except for percentages)Current and noncurrent liabilities 6,597,767 25.5% 4,733,232 19.6% 4,332,431 18.4%

Shareholders equity 19,298,892 74,5% 19,413,882 80.4% 19,257,491 81.6%

Total liabilities and shareholdersequity

25,896,659 100.0% 24,147,114 100.0% 23,589,922 100.0%

Under total liabilities, part of our onerous liabilities relates mainly to debt issued abroad in connection with globalsenior notes issued in a cross-border bond offering completed on July 16, 2010 (see subsection 10.1(f)).

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

2013 2012 2011

(in R$ thousands, except for percentages)

Total onerous liabilities 1,468,322 7.1% 1,279,121 6.2% 1,172,225 5.7%

Interest payable on debt issued abroad and loans 42,129 36,882 33,566

Debt issued abroad and loans 1,426,193 1,242,239 1,138,659

Shareholders equity 19,298,892 92.9% 19,413,882 93.8% 19,257,491 94.3%

Total onerous liabilities and shareholders equity 20,767,214 100.0% 20,693,003 100.0% 20,429,716 100.0%


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As translated into Brazilian reais, the balance of our debt under the global notes as of December 31, 2013, wasR$1,468,322 thousand (including accrued interest of R$42,129 thousand), as compared to R$1,279,121 thousand(accrued interest of R$36,882 thousand) at December 31, 2012 and R$1,172,225 thousand (accrued interest ofR$33,566 thousand) at December 31, 2011. Moreover, at December 31, 2013, the fair value of our debt underthe notes, as determined based on market data, was R$1,528,651 thousand (Source: Bloomberg).

Starting from the notes issue date (July 16, 2010), we have designated as hedging instrument that portion of the

principal under the notes which correlates with changes in exchange rates in order to hedge the foreign currencyrisk affecting that portion of our investment in the CME Group Inc. which correlates with the notional amount ofUS$612 million (a hedging instrument in a hedge of net investment in a foreign operation, per Note 7 to ourfinancial statements as of and for the year ended December 31, 2013). Accordingly, we have adopted netinvestment hedge accounting pursuant to accounting standard CPC-38 (IAS 39 -Financial Instruments: Recognitionand Measurement), for which purpose the hedging relationship has been formally designated and documented,including as to (i) risk management objective and strategy for undertaking the hedge, (ii) category of hedge, (iii)nature of the risk being hedged, (iv) identification of the hedged item, (v) identification of the hedging instrument,(vi) evidence of the actual statistical relationship between hedging instrument and hedged item (retrospectiveeffectiveness test) and (vii) a prospective effectiveness test.

Under CPC 38 (IAS 39) we are required to assess the hedge effectiveness periodically by conducting retrospectiveand prospective tests. On testing backward-looking effectiveness, we adopt the ratio analysis method, also calleddollar offset method, as applied on a cumulative and spot-rate basis. In other words, this method compareschanges in fair values for the hedging instrument and hedged item attributable to the hedged risk, as measuredon a cumulative basis over a given period (from the hedge inception to the reporting date) using the foreigncurrency spot exchange rate at each relevant date in order to determine the ratio of cumulative gain or loss onthe notes principal amount to cumulative gain or loss on the net investment in a foreign operation over therelevant period. And on testing forward-looking effectiveness, we adopt stress scenarios which we apply to thehedged variable in performing foreign currency sensitivity analysis so as to determine degree of sensitivity tochanges in exchange rates. We have tested the hedge effectiveness retrospectively and prospectively, havingdetermined that there was no realizable ineffectiveness at December 31, 2013.

The table below sets forth data related to our debt service coverage ratio.

Debt service coverage ratioYears ended December 31,

2013 2012 2011(in R$ thousands)

Gross debt service 1,468,322 1,279,121 1,172,225

Cash and cash equivalents, plus short- and long-term

financial investments (*) 2,747,846 2,672,429 2,242,351

Net debt service (1,279,524) (1,393,308) (1,070,126)(*) In determining our debt service coverage ratio and in order to better evidence the actual ratio of cash available for debt servicing, we

calculate total cash and cash equivalents plus short- and long-term financial investments (current and noncurrent assets) after eliminating

amounts recognized under the line item collateral for transactions, as well as payouts and rights on securities under custo dy at our central

securities depository under the current liabilities line item.

(ii) other long-term transactions with financial institutions

In the normal course of our business we transact on an arms length basis with some of the primary financialinstitutions operating in Brazil. These are transactions agreed pursuant to customary market practices. Otherthan as set forth herein, we have no long-term transactions agreed with financial institutions and ournoncurrent liabilities record no other long-term liabilities.

(iii) debt subordination

In terms of subordination, the liabilities we recognize in the line items under current and noncurrent liabilities inour balance sheet statement rank as follows:

Collateral for transactions pursuant to articles 6 and 7 of Law No. 10,214/01 (clearing and settlementwithin the scope of the Brazilian Payment System) and articles 193 and 194 of Law No. 11,101/05(Bankruptcy and Reorganization Law), the financial assets pledged to our clearing houses as collateral fortransactions rank senior to and have priority over any other guarantee up to the amount of the transactionsthese collaterals secure, and are not affected in any way in the event of bankruptcy or judicialreorganization proceedings.

Tax and payroll liabilitiespursuant to article 83 of Law No. 11,101/05 (Bankruptcy and ReorganizationLaw), government credits for tax liabilities and government or employee credits for social security andpayroll liabilities (recognized in the line items personnel and related charges and income tax andcontributions payable/recoverable) constitute preferred debt and, thus, have priority over other types ofdebt.

Other payment obligations other obligations recognized under current and noncurrent liabilities in ourbalance sheet statement as of December 31, 2013, constitute unsecured debt.


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(iv) restrictions related to indebtedness level and new financing, dividend declaration,assets sales, new issues and transfer of control

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

Limitation on liensa provision limiting our and our subsidiaries ability to secure debt by creating liens(other than certain permitted liens, as defined); Limitation on sale and lease-back transactions; General liens basketaprovision permitting us to undertake additional debt provided the sum of (a) the

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

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

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

g. Restrictions on use of the proceeds of financing previously undertaken.Not applicable. Other than the funding transaction discussed under 10.1(f) above, we have taken no loans orfinancing.

h. Significant changes to line items of the financial reports.

Our consolidated financial statements as of and for December 31, 2013, and the comparative financial statementsas of and for December 31, 2012 and 2011, have been prepared and are presented in accordance with theaccounting standards generally accepted in Brazil.

Moreover, started from 2011, the results of the financial intermediation operations (custody services and localrepresentation for nonresident investors) of our subsidiary BM&FBOVESPA Settlement Bank were reclassified tothe other revenues line item, with no impact on net income and shareholders equity. Before 2011 we recognizedthese results under thenet interest income (expense) line item.

Selected financial information. The tables below set forth selected financial information from our financialstatements at December 31, 2013, 2012 and 2011. For better comparability and understanding of our performance,the tables below set forth data related only to the main line items of the statement of income and balance sheetstatement, and changes to these line items, as selected by management upon applying the materiality criteria setforth below.

Selected financial information from the consolidated statements of income. Information selected fromresults presents only the revenue line items that accounted for over 3.0% of net revenue for the yearended December 31, 2013; expense line items that accounted for over 5.0% (by expense module) of netrevenue for the same year, in addition to income line items, and line items related to deductions fromrevenue and taxes.

Selected financial information from the consolidated balance sheet statements. Information selected fromthe balance sheet presents only the main line items which accounted for over 4.0% of total assets as ofDecember 31, 2013.

Other selected financial information. Other financial information selected by management includes dataunder lines items related to one-off, extraordinary or non-recurring and other events, which are likely toprovide a clearer understanding of our statement of income.

Selected Financial Information(from the Consolidated Statements of Income)

Years ended December 31,

2013 AV% 2012 AV% 2011 AV%Variation Variation2013/201

2

2012/201

1

(In R$

thousands) (%)(In R$

thousands) (%)(In R$

thousands) (%) (%) (%)

Total revenues 2,370,229 111.2 2,289,023 110.9 2,115,983 111.1 3.5 8.2

Revenues from trading and/or clearing services -

BM&F segment 916,530 43.0 865,874 41.9 760,245 39.9 5.9 13.9Derivatives 897,098 42.1 848,858 41.1 744,018 39.1 5.7 14.1

Revenues from trading and/or clearing services- 1,023,978 48.0 1,034,007 50.1 964,702 50.6 -1.0 7.2


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Bovespa segment

Trading feestrading systems 192,985 9.1 243,181 11.8 540,391 28.4 -20.6 -55.0

Clearing feesclearing and settlement systems 804,570 37.7 769,221 37.3 396,023 20.8 4.6 94.2

Other revenues 429,721 20.2 389,142 18.8 391,036 20.5 10.4 -0.5

Securities lending 102,186 4.8 77, 063 3.7 74,030 3.9 32.6 4.1

Depository, custodian, back-office services 116,305 5.5 102,763 5.0 91,353 4.8 13.2 12.5

Market data (vendors) 69,236 3.2 67,668 3.3 65,049 3.4 2.3 4.0

Deductions from revenues (238,434) -11.2 (224,273) -10.9 (211,299) -11.1 6.3 6.1Net revenue 2,131,795 100.0 2,064,750 100.0 1,904,684 100.0 3.2 8.4

Expenses (797,160) -37.4 (763,080) -37.0 (816,664) -42.9 4.5 -6.6

Personnel and related charges (356,120) -16.7 (353,880) -17.1 (351,608) -18.5 0.6 0.6

Data processing (111,797) -5.2 (102,805) -5.0 (104,422) -5.5 8.7 -1.5

Depreciation and amortization (119,661) -5.6 (93,742) -4.5 (75,208) -3.9 27.6 24.6

Marketing and promotion (15,043) -0.7 (19,280) -0.9 (38,609) -2.0 -22.0 -50.1

Operating income 1,334,635 62.6 1,301,670

63.0

% 1,088,020 57.1 2.5 19.6

Equity in results of investees 171,365 8.0 149,270 7.2 219,461 11.5 14.8 -32.0

Interest income, net 181,535 8.5 208,851 10.1 280,729 14.7 -13.1 -25.6

Interest income 300,023 14.1 297,217 14.4 357,720 18.8 0.9 -16.9

Interest expenses (118,488) -5.6 (88,366) -4.3 (76,991) -4.0 34.1 14.8

Income (loss) before taxation on profit 1,687,535 79.2 1,659,791 80.4 1,588,210 83.4 1.7 4.5

Income and social contribution taxes (606,588) -28.5 (585,535) -28.4 (539,681) -28.3 3.6 8.5

Current (60,097) -2.8 (67,314) -3.3 (49,422) -2.6 -10.7 36.2

Deferred (546,491) -25.6 (518,221) -25.1 (490,259) -25.7 5.5 5.7

Net income (loss) for the year 1,080,947 50.7 1,074,256 52.0 1,048,529 55.1 0.6 2.5Net income attributable to BM&FBOVESPA

shareholders 1,081,516 50.7 1,074,290 52.0 1,047,999 55.0 0.7 2.5

Selected Financial Information(from the Consolidated Balance Sheet

Statements)

Years ended December 31,

2013 AV% 2012 AV% 2011 AV%Variation Variation

2013/2012

2012/201

1

(In R$ thousands) (%) (In R$ thousands) (%) (In R$ thousands) (%) (%) (%)

ASSETS

Current assets 4,319,483 16.7 3,536,282 14.6 2,401,134 10.2 22.1 47.3

Cash and cash equivalents 1,196,589 4.6 43,642 0.2 64,648 0.3 2,641.8 -32.5

Financial investments 2,853,393 11.0 3,233,361 13.4 2,128,705 9.0 -11.8 51.9

Noncurrent assets 21,577,176 83.3 20, 610,832 85.4 21,188,788 89.8 4.7 -2.7

Long-term receivables 1,135,424 4.4 808,868 3.3 1,767,411 7.5 40.4 -54.2

Financial investments 820,778 3.2 573,636 2.4 1,589,058 6.7 43.1 -63.9

Investments 3,346,277 12.9 2,928,820 12.1 2,710,086 11.5 14.3 8.1

Investment in associate 3,312,606 12.8 2,893,632 12.0 2,673,386 11.3 14.5 8.2

Intangible assets 16,672,325 64.4 16,512,151 68.4 16,354,127 69.3 1.0 1.0

Goodwill 16,064,309 62.0 16,064,309 66.5 16,064,309 68.1 0.0 0.0

Total assets 25,896,659

100.

0 24,147,114

100.

0 23,589,922

100.

0 7.2 2.4LIABILITIES AND SHAREHOLDERSEQUITY

Current liabilities 2,710,846 10.5 1,660,609 6.9 1,929,946 8.2 63.2 -14.0

Collaterals for transactions 2,072,989 8.0 1,134,235 4.7 1,501,022 6.4 82.8 -24.4

Noncurrent liabilities 3,886,921 15.0 3,072,623 12.7 2,402,485 10.2 26.5 27.9

Debt issued abroad and loans 1,426,193 5.5 1,242,239 5.1 1,138,659 4.8 14.8 9.1Deferred income tax and social

contribution 2,295,774 8.9 1,739,644 7.2 1,204,582 5.1 32.0 44.4

Shareholders equity 19,298,892 74.5 19,413, 882 80.4 19,257,491 81.6 -0.6 0.8

Capital and reserves attributable to

shareholders

Capital stock 2,540,239 9.8 2,540,239 10.5 2,540,239 10.8 0.0 0.0

Capital Reserves 16,056,681 62.0 16,037,369 66.4 16,033,895 68.0 0.1 0.0

Total liabilities and shareholders equity 25,896,659

100.

0 24,147,114

100.

0 23,589,922

100.

0 7.2 2.4


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COMPARATIVEANALYSISOFCONSOLIDATEDSTATEMENTSOFINCOME


Total revenuesTotal revenues for the year ended December 31, 2013, amounted to R$2,370,229 thousand, rising 3.5% year-over-year due primarily to increase in revenues from operations in the segment for financial and commodity derivativesas well as other revenues unrelated to trading and clearing activities, which, however, were counterbalanced by the

year-on decrease in revenues earned in the Bovespa segment.Revenues from trading and clearing fees BM&F segmentThis line item increased 5.9% year-over-year totaling R$916,530 thousand (38.7% of total revenues), whereR$897,098 thousand relates to fees earned on trades in financial and commodity derivatives. This climb is duemainly to a 7.6% year-on climb in average RPC, which, however, was not fully captured due to a 1.8% tumble involumes traded within the segment.

Revenues from trading and clearing fees Bovespa segmentThis line item gave back 1.0% year-on-year totaling R$1,023,978 thousand, and accounted for 43.2% of totalrevenues. This fall is explained by a 4.5% margin drop (to 5.423 basis points from 5.676 basis points one yearago) attributable primarily to changes in pricing policies (including rate cuts for trades in cash equities by foreignand retail investors) coupled with a spike in trading activity by investors that enjoy discounts by volume rangeand a plunge in value traded in single stocks (relative to overall trading value). Nonetheless, the impact of thismargin drop was somewhat evened out by a 2.3% upsurge in average trading value.

Trading Fees trading systems. This revenue line item declined 20.6% year-on-year, to R$192,985 thousand fromR$243,181 thousand one year ago, due primarily to the changes in pricing policies implemented in April 2013 for aprice structure rebalancing (trading and clearing fee rates) which included a cut in trading fees for differentinvestor groups.

Clearing fees clearing and settlements systems. This revenue line went up 4.6% year-over-year, to R$804,570thousand from R$769,221 thousand one year earlier, due in part to a price structure rebalancing across thesegment (trade and post-trade fees rates mainly) which resulted in changes in pricing policies implemented in April2013, including changes in fees charged from local institutional investors and intraday traders.

Other revenuesOther revenues hit R$429.721 thousand, a 10.4% rise from the year-ago, and accounted for 18.1% of totalrevenues, primarily as a result of changes in revenue line items unrelated to trading and clearing operations, asfollows:

Securities lending services. Revenues of R$102,186 thousand (4.3% of total revenues) soared 32.6% year-over-yeardue mainly to a 27.5% year-on rise in financial value of open interest positions at year-end, whose average reachedR$40.8 billion.

Depository, custody, back office services. Revenues of R$116,305 thousand (4.9% of total revenues) went up13.2% year-on-year explained mainly by a 4.6% climb in average number of custody accounts (assets undercustody at our central securities depository) as well as the higher revenues we derived from operating the TreasuryDirect platform and from registration services for transactions in agribusiness credit bills (locally known as LCAs,Letras de Crdito do Agronegcio).

Market data (vendors). At R$69,236 thousand (2.9% of total revenues) this revenue line item picked up 2.3%year-over-year. This slight climb is attributable mainly to appreciation of the U.S. dollar versus the Brazilian real, aswe derive about half of this revenue line from fees denominated in U.S. dollars which we charge from foreigncustomers.

Deductions from revenueDeductions from revenue totaled R$238,434 thousand, a 6.3% year-on rise (proportionately higher than the climbin revenues) attributable mainly to the lower offsettable amount of credits from PIS and Cofins taxes related torevenue inputs. However, we should note that some of the PIS-Cofins related tax credits generated in 2013 will beoffsettable against 2014 revenues.

Net revenueAs a result of the changes in revenue line items discussed above, the net revenue climbed 3.2% year-over-year, toR$2,131,795 thousand from R$2,064,750 thousand one year ago.

ExpensesExpenses totaling R$797,160 thousand rose 4.5% year-over-year. Set forth below is a discussion of the principalchanges in operating expense line items.

Personnel and related charges. This expense line totaled R$356,120 thousand, up slight 0.6% year-on-year.However, the comparability of these expenses has been somewhat hampered by a R$27,533 thousand provisionrecognized in 2012 in connection with our employees healthcare plan. As adjusted to eliminate the provision, thisline item would have recorded a 9.1% year-on surge in expenses with personnel and related payroll charges,reflecting mainly the annual wage increase prescribed under our collective bargaining agreement and a fall incapitalized personnel expenses related to ongoing projects (capitalized personnel expenses for 2013 came R$9.5


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million lower than the amount capitalized one year ago).

Data processing. The expenses in this line item totaled R$111.797 thousand, up 8.7% year-on-year due mainly toa rise in expenses with software and hardware services and maintenance related to trading platforms rolled outover the year, including the equities module of our PUMA Trading System in April 2013.

Depreciation and amortization. The expenses in this line item totaled R$119.661 thousand, up 27.6% year-on-yearprimarily due to the start of operations of our new information technology platforms, in particular, the ensuing

additional depreciation of (i) the equities module of our PUMA Trading System; and (ii) the ERP solutionimplemented in 2013.

Marketing and promotion. This expense line hit R$15,043 thousand plummeting 22.0% year-on-year due primarilyto the reprioritization of our marketing campaigns for the year and cuts in advertising expenses.

Sundry. This expense line hit R$55,715 thousand, down 13.7% year-on-year due primarily to R$15 million inproceeds from fines having been transferred to BM&FBOVESPA Market Surveillance (BSM) at end-2012 to fund itsoperations.

Operating incomeAt R$1,334,635 thousand, the operating income (revenues, net of expenses) was up 2.5% from R$1,301,670thousand in the prior year.

Gain (loss) on equity-method investment (equity in the results of subsidiaries and investees)We account for our investment in shares of the CME Group under the equity method of accounting and recognizegains and losses through profit or loss in the statement of income. Our net share of gain from the equity-methodinvestment in CME Group shares went up 14.8% from one year ago, totaling R$171,365 thousand, where R$64,847thousand were provisioned as recoverable tax paid abroad. This rise in equity-method gain reflects not only theimproved results of operations ascertained by the CME Group, but also the effects of the local currencydepreciation vis--vis the U.S. dollar.

Interest income, netNet interest income for the year hit R$181.535 thousand, down 13.1% year-on-year due primarily to a 34.1% jumpin interest expenses, which hit R$118.488 thousand in 2013, due mainly to the local currency depreciation againstthe U.S. dollar, since most our interest expenses correlate with debt under global senior notes issued in a July 2010cross-border offering. In turn, our interest income was up mere 0.9%, virtually keeping a steady line from theprior year to R$300,023 thousand.

Income before taxation on profitIncome before taxation on profit rose by 1.7% year-over-year, to R$1,687,535 thousand from R$1,659,791 thousandone year ago.

Income tax and social contributionIncome before taxes totaled R$606,588 thousand and include R$60,097 thousand in current income tax and socialcontribution (related mainly to the offset portion of R$64,847 thousand in income tax paid overseas and recognizedunder equity in results of investee, with the balance of R$4,750 thousand consisting of temporary tax credits forfuture offsetting). Additionally, at R$546,491 thousand, the line item deferred income tax and social contributionbreaks down as follows: (i) recognition of deferred tax liabilities of R$555,648 thousand related to temporarydifferences attributable mainly to amortization of goodwill for tax purposes, with no impact on cash flow; and (ii)recognition of deferred tax assets amounting to R$9,157 thousand related mainly to temporary differences andreversal of deferred tax liabilities.

Net income for the yearNet income for the year rose 0.6% year-over-year to R$1,080,947 thousand from R$1,074,256 thousand at December31, 2012.

Net income attributable to BM&FBOVESPA shareholdersNet income attributable to BM&FBOVESPA shareholders climbed 0.7% year-over-year to R$1,081,516 thousandfrom R$1,074,290 thousand the year before, primarily due to the higher revenues earned in our BM&F segmentand revenues from services unrelated to trading and clearing operations (volume-unrelated revenues) and gain onthe equity-method investment, which were partially canceled out by higher than anticipated expenses and theretreat in net interest income.


Total revenuesTotal revenues for the year ended December 31, 2012, amounted to R$2,289,023 thousand, rising 8.2% year-over-year due primarily to revenue increases in both the Bovespa and BM&F segments.

Revenues from trading and clearing fees BM&F segmentAt R$865.874 thousand (where R$848,858 thousand relates to fees earned on trades in financial and commodityderivatives), this line item increased 13.9% year-over-year reflecting a 7.3% climb in overall trading volume for the

segment and 7.7% jump in average rate per contract, as previously discussed herein.Revenues from trading and clearing fees Bovespa segmentAt R$1,034,007 thousand, this line item jumped 7.2% year-over-year due mainly to an 11.7% rise in trading


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volume for the segment, which, however, was partially counterbalanced by a 2.2% margin drop (to 5.676 bps from5.793 bps one year earlier) attributable to the higher volumes of high frequency and intraday trading, since wecharge lower fees these types of transactions. In addition, on a year-over-year basis, the 2012 revenues weretoned down by fewer trading sessions than last year (246 trading sessions in 2012 versus 249 in 2011).

Trading Fees trading systems. This revenue line item declined 55.0% year-on-year, to R$243,181 thousand fromR$540,391 thousand one year ago, driven by our pricing policy implemented in September 2011, which rebalanced

the price structure in line with our cost structure, ultimately cutting down the average fee rate for trading, whereaspushing up the average fees for clearing and settlement transactions, such that the cost of trading for investorswould not be impacted.

Clearing fees clearing and settlements systems. The revenue from fees our equities clearing house charges onclearing and settlement transactions (Bovespa segment) went up 94.2% year-over-year, to R$769,221 thousandfrom R$396,023 thousand in 2011, due mainly to the price structure rebalancing previously discussed.

Other revenuesOther revenues of R$389,142 thousand went down slight 0.5% from the year-ago primarily as a result of changesin revenue line items unrelated to trading and clearing operations, as follows:

Securities lending services. This revenue line hit R$77,063 thousand (3.4% of total revenues), a 4.1% year-over-year upsurge due mainly to a 5.9% year-on rise in financial value of the balance of open interest positions at year-end, which amounted to R$32.0 billion.

Depository, custody, back office services. The line for revenues derived from the operations of our central

securities depository hit R$102.763 thousand (4.5% of total revenues) rising 12.5% year-over-year mainly due to a2.6% climb in average financial value of assets under custody, not including custody of ADRs and custody servicesprovided to foreign investors. In addition, the revenue from fees related to custody of Brazils government bondstraded in our Treasury Direct (Tesouro Direto)platform soared 30.1% year-on-year.

Market data (vendors). At R$67.668 thousand (3.0% of total revenues) this revenue line item picked up 4.0%year-over-year. While the number of customers for our market data shrank somewhat, this climb is attributablemainly to appreciation of the U.S. dollar versus the Brazilian real, as we derive 40.0% of this revenue line from feesdenominated in U.S. dollars which we charge from foreign customers.

Deductions from revenueDeductions from revenue totaled R$224,273 thousand, a 6.1% upsurge in line with the increase in total revenues.

Net revenueAs a result of the changes in revenue line items discussed above, the net revenue shot up 8.4% year-over-year, toR$2,064,750 thousand from R$1,904,684 thousand one year ago.

ExpensesExpenses totaling R$763,080 thousand declined 6.6% year-over-year. However, the comparability of this line itemhas been hampered because of certain non-recurring expenses recorded in 2011 and 2012.

Personnel and related charges. This expense line totaled R$353.880 thousand, up slight 0.6% year-over-year, andcorrelate primarily with: (i) the provision for expenses with healthcare plans, which totaled R$27,553 thousand andwas recognized in accordance with accounting standard CPC 33/IAS 19 (Employee Benefits). The provisioncorrelates with the expense accrual related to vested rights of employees that contributed to a (post-retirement)healthcare plan in the period between 2002 and 20095. Pursuant to Law No. 9,656/98 and additional requirementsset forth under Brazilian Healthcare Agency (ANS) Normative Resolution No. 279 dated November 2011, anemployee that contributes to the corporate healthcare plan with any sum of money is entitled to continue on asbeneficiary after the employment termination or retirement, as long as such employee bears the burden of payingfor the plan costs. The potential liabilities thus reserved relate to the difference, over time, between the averagecost of the corporate healthcare plan and the estimated average cost for inactive beneficiaries had they not stayed

on as plan beneficiaries (indirect benefit); and (ii) expenses with the stock options plan, which at R$32,306thousand (versus R$53,630 thousand in 2011) fell by 39.8% year-over-year; and (iii) a R$18.290 thousand year-onincrease in capitalized expenses with personnel engaged in certain ongoing technology projects. The effects ofinflation on the line item for personnel and related charges have been balanced out by these factors (see thediscussion under subsection 10.2(c) below).

Data processing. This line item totaled R$102,805 thousand, a 1.5% drop from the prior year.

Depreciation and amortization. The expenses in this line item totaled R$93.742 thousand, up 24.6% year-over-year and in line with the increase in investments implemented in previous years.

Marketing and promotion. This expense line hit R$19.280 thousand, plummeting 50.1% year-over-year dueprimarily to the reprioritization of our marketing campaigns for the year and cuts in advertising expenses.

Operating incomeAt R$1,301,670 thousand, the operating income (revenues, net of expenses) was up 19.6% from R$1,088,020

5Starting from May 2009, the employee healthcare plan is no longer a defined contribution plan, such that only part of our active employees will beentitled to all or some of benefit.


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thousand in the prior year.

Gain (loss) on equity-method investment (equity in the results of subsidiaries and investees)We account for our investment in shares of the CME Group under the equity method of accounting and recognizegains and losses through profit or loss in the statement of income. Our gain from this investment totaledR$149,270 thousand, 32.0% down from one year ago, in line with the yearly results of the CME Group. It is worthnoting this line item includes recognition of R$60,196 thousand worth of tax benefit in the form of income tax to

offset against income tax paid abroad.Interest income, netNet interest income of R$208,851 thousand plunged 25.6% year-over-year mainly due to a 16.9% year-ondecrease in interest revenues, which totaled R$297,217 thousand. Additionally, the interest revenues werenegatively impacted by an increase in interest expenses, which at R$88,366 thousand climbed 14.8% year-over-year. This increase in interest expenses is explained by the appreciation of the U.S. dollar against the Brazilianreal, since we are required to make U.S. dollar-denominated coupon payments under the global senior notes issuedin our July 2010 cross-border offering.

Income before taxation on profitIncome before taxation on profit rose by 4.5% year-over-year, to R$1,659,791 thousand from R$1,588,210 thousandone year ago.

Income tax and social contributionIncome tax and social contribution for the year totaled R$585,535 thousand. This line item comprises current

income tax and social contribution amounting to R$67,314 thousand, including R$60,196 thousand which we offsetagainst income tax paid abroad (such as discussed previously under gain (loss) on equity-method investment).Additionally, at R$518,221 thousand, the line item deferred income tax and social contribution comprises (i)recognition of R$539,075 thousand in deferred tax liabilities related to temporary differences attributable mainly toamortization of goodwill for tax purposes, with no impact on cash flow for the year; and (ii) recognition ofR$20,854 thousand in deferred tax assets related mainly to temporary differences and reversal of deferred taxliabilities.

Net income for the yearNet income for the year rose 2.5% year-over-year to R$1,074,256 thousand at December 31, 2012, fromR$1,048,529 thousand one year ago.

Net income attributable to BM&FBOVESPA shareholdersNet income attributable to BM&FBOVESPA shareholders likewise climbed 2.5% year-over-year to R$1,074,290thousand from R$1,047,999 thousand the year before, primarily due to an increase in revenues earned on a higher

trading volume base coupled with a reduction in expenses, which were partially counterbalanced by lower gain onthe equity-method investment and a decline in net interest income.

MAINLINEITEMSOFTHECONSOLIDATEDBALANCESHEETSTATEMENTS


TOTALASSETSTotal assets of R$25.896.659 thousand climbed 7.2% from R$24.147.114 thousand one year ago.

Current assetsCurrent assets surged 22.1% year-over-year, to R$4,319,483 thousand (16.7% of total assets) from R$3,536,282thousand the year before due mainly to an increase in investments maturing in the near term (less than 12months) and the upcoming maturity of a number of government bonds in our investment portfolio.

Cash and cash equivalents; short-and long-term financial investments. These encompass line items registeredunder both current assets (cash and cash equivalents comprising cash on hand and demand deposits, in addition

to short-term financial investments) and noncurrent assets (long-term financial investments). Short- and long-termfinancial investments are liquid investments with prime banks, and investments in financial investment funds,government bonds and other highly liquid financial assets. At December 31, 2013, cash and cash equivalents plusshort- and long-term financial investments totaled R$4,870,760 thousand, a 26.5% year-on-year rise fromR$3,850,639 thousand one year ago due primarily to an upsurge in cash collateral (R$1,154,902 thousand) marketparticipants pledged to our clearing houses in the course of their dealings. Cash collateral received by us isrecorded under current liabilities.

Noncurrent assetsNoncurrent assets of R$21,577,176 thousand (83.3% of total assets) climbed 4.7% year-on-year fromR$20,610,832 thousand one year ago. Set forth below is a brief discussion of main changes to line items undernoncurrent assets not previously discussed.

Investments. This line item rose 14.3% year-on-year to R$3,346,277 thousand from R$2,928,820 thousandpreviously. The investments line consists primarily of investment in associa te which we account for under the

equity method of accounting, and relates to our ownership interest in shares of the CME Group, which at December31, 2013, were recorded at R$3,312,606 thousand. The year-on-year rise in investment value is attributable mainlyto depreciation of the Brazilian real against the U.S. dollar and our recognition of gain on equity-method


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investment.

Intangible assets. This line rose by 1.0% year-on-year, to R$16,672,325 thousand from R$16,512,151 thousandpreviously. Intangible assets consist of (i) goodwill, which at R$16,064,309 thousand remained unchanged (andaccounted for 62.0% and 66.5% of total assets at December 31, 2013 and 2012, respectively); and (ii) softwareand projects, which jumped 35.8% year-on-year to R$608,016 thousand from R$447,842 thousand one year ago,due mainly to acquisition, development and implementation of new software applications and systems.

Current liabilitiesCurrent liabilities climbed 63.2% year-on-year to R$2,710,846 thousand from R$1,660,609 thousand the yearbefore. This change is attributable mainly to 82.8% surge in the collateral for transactions line item, as the year-end balance of cash collateral pledged by market participants went up to R$2,072,989 thousand from R$1,134,235thousand one year ago.

Noncurrent liabilitiesNoncurrent liabilities of R$3,886,921 thousand were up 26.5% from R$3,072,632 thousand in the prior year. Setforth below is a brief description of the main changes to line items under noncurrent liabilities.

Debt issued abroad and loans. Loans and financing amounting to R$1,426,193 thousand rose 14.8% fromR$1,242,239 thousand one year earlier primarily on account of depreciation of the Brazilian real (our functionalcurrency) against the U.S. dollar (the transaction currency for our global senior notes issued abroad in a July 2010cross-border bond offering).

Deferred income tax and social contribution. Deferred income tax and social contribution liabilities of R$2,295,774

thousand versus R$1,739,644 thousand one year ago, climbed 32.0% year-on-year surge resulting fromrecognition of the temporary differences between the tax base of goodwill and its balance sheet carrying value(while goodwill continues to be amortized for tax purposes, from January 1, 2009, it is no longer amortized foraccounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value).

Shareholders equityShareholders equity of R$19,298,892 thousand was virtually unchanged with a scanty 0.6% year-on-year dropfrom R$19,413,882 thousand one year ago.


TOTALASSETSAt R$24.147.114 thousand, total assets climbed 2.4% from R$ 23,589,922 thousand one year ago.

Current assetsCurrent assets surged 47.3% year-on-year, to R$3,536,282 thousand (14.6% of total assets) from R$2,401,134

thousand one year ago, due mainly to increase in short term financial investments (less than 12 months) and theupcoming maturity of a number of government bonds in our investment portfolio.

Cash and cash equivalents; short-and long-term financial investments. These comprise line items registered undercurrent assets (cash and cash equivalents comprising cash on hand and demand deposits, in addition to short-term financial investments) as well as under noncurrent assets (long-term financial investments). Short- and long-term financial investments are liquid investments with prime banks, and in financial investment funds, governmentbonds and other highly liquid financial assets. At December 31, 2012, cash and cash equivalents plus short- andlong-term financial investments totaled R$3,850,639 thousand, a 1.8% year-on-year rise from R$3,782,411thousand one year ago.

Noncurrent assetsNoncurrent assets of R$20,610,832 thousand (85.4% of total assets) fell 2.7% year-on-year from R$21,188,788thousand one year ago. Set forth below is a brief discussion of main changes to line items under noncurrent assetsnot previously discussed.

Investments. This line item increased 8.1% year-on-year to R$2,928,820 thousand from R$2,710,086 thousandpreviously. The investments line consists primarily of investment in associate which we account for under theequity method of accounting, and relates to our ownership interest in shares of the CME Group, which at December31, 2012, was recorded at R$2,893,632 thousand. The year-on-year rise first noted above is attributable mainly todevaluation of the Brazilian real against the U.S. dollar and our recognition of the gain on equity-methodinvestment.

Intangible assets. This line rose by 1.0% year-over-year, to R$16,512,151 thousand from R$16,354,127 thousandpreviously. Intangible assets consist of (i) goodwill, which at R$16,064,309 thousand kept a flat line in each year,and accounted for 66.5% and 68.1% of total assets at December 31, 2012 and 2011, respectively; and (ii)software and projects, which soared 54.5% year-over-year to R$447,842 thousand from R$289,818 thousand oneyear ago due mainly to acquisition, implementation and development of new software applications and systems.

Current liabilitiesCurrent liabilities decreased 14.0% year-over-year to R$1,660,609 thousand from R$1,929,946 thousand the year

before. This change is attributable mainly to a 24.4% decrease in the collateral for transactions line item, as theyear-end balance of cash collateral pledged as margin by market participants declined to R$1,134,235 thousandfrom R$1,501,022 thousand one year ago.


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Noncurrent liabilitiesNoncurrent liabilities of R$3,072,632 thousand went up 27.9% from R$2,402,485 thousand in the prior year. Setforth below is a brief description of the main changes to line items under noncurrent liabilities.

Debt issued abroad and loans. Loans and financing amounting to R$1,242,239 thousand rose 9.1% fromR$1,138,659 thousand one year earlier primarily on account of the devaluation of the Brazilian real(our functionalcurrency) against the U.S. dollar, which is the transaction currency for our global senior notes issued abroad (in a

July 2010 cross-border bond offering).Deferred income tax and social contribution. Deferred income tax and social contribution liabilities amounted toR$1,739,644 thousand versus R$1,204,582 thousand one year ago, a 44.4% year-on-year surge resulting fromrecognition of the temporary difference between the tax base of goodwill and its balance sheet carrying value(while goodwill continues to be amortized for tax purposes, from January 1, 2009, it is no longer amortized foraccounting purposes, thus resulting in a goodwill tax base that is lower than its carrying value).

Shareholders equityShareholders equity of R$19,413,882 thousand was virtually unchanged with a scanty 0.8% year-on-year dropfrom R$19,257,491 thousand one year ago.

10.2. Managements discussion and analysis of results of operations

a. Material revenue components

Year ended December 31, 2013 compared to year ended December 31, 2012

Our consolidated total revenues climbed by 3.5% year-on-year to R$ R$2,370,229 thousand from R$2,289,023thousand one year ago.

Revenues from trading and clearing fees earned within our Bovespa segment. These declined 1.0% from theprior year and amounted to R$1,023,978 thousand, primarily due to a 4.5% margin drop (to 5.423 basispoints from 5.676 basis points one year ago) which was counterbalanced by a 2.3% rise in average valuetraded.

Revenues from trading and clearing fees earned within our BM&F segment. These jumped 5.9% year-on-year, to R$916,530 thousand (38.7% of total revenues), due primarily to a 5.7% year-on-year upsurge inaverage volume traded and a 7.6% rise in average rate per contract (RPC).

Revenues unrelated to trading and clearing operations. These surged 10.4% year-on-year to R$429,721thousand (18.1% of total revenues).

Year ended December 31, 2012 compared to year ended December 31, 2011.

Our consolidated total revenues climbed 8.2% year-on-year R$2,289,023 thousand from R$2,115,983 thousand

one year ago.

Revenues from trading and clearing fees charged within our Bovespa segment climbed 7.2% year-on-year toR$1,034,007 thousand, reflecting a combination of 11.7% rise in average trading volume, which however waspartially counterbalanced by fewer trading sessions than the year before (246 in 2012 versus 249 in 2011),and a 2.2% fall in average basis point margin (to 5.676 bps from 5.793 bps in the earlier year). This margindrop is in line with the higher volumes attributable to high frequency and intraday trading, from which wederive fees at lower-than-average margins.

Revenues from trading and clearing fees charged within our BM&F segment jumped 13.9% year-on-year, toR$865,874 thousand, due primarily to a 7.3% year-on-year upsurge in volumes traded and a 7.7% climb inaverage rate per contract (RPC).

Revenues unrelated to trading or clearing activities totaling R$389,142 thousand in 2012 kept a virtuallyunchanged line from R$391,036 thousand one year ago.

b. Factors that materially influence the results of operations

Year ended December 31, 2013 compared to year ended December 31, 2012

The average daily value traded on equities markets hit an all-time record hi