Derivatives Market

Derivatives ProductsInternational and local Context

Source: WFE

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

Jun,

98

Jun,

99

Jun,

00

Jun,

01

Jun,

02

Jun,

03

Jun,

04

Jun,

05

Jun,

06

Jun,

07

Jun,

08

Jun,

09

Jun,

10

Jun,

11

Jun,

12

Jun,

13

Jun,

14

Volume by product line

Options

Futures

STANDARDIZED DERIVATIVES PRODUCT

LINES (15)

Futures

Single Stocks

Stock Indexes

ETF

ST Interest Rate

LT Interest Rate

Currencies

Commodities

Others(Exotic, Real Estate, CPI)

Options

BVC

BVC

BVC

BVC

BVC

BVC

International Context

0

2

6

4

8

10

12

Shan

gai

Buen

os A

ires

Tel.A

viv

Esp

aña

Mal

aysia BVC

Taila

ndia

Kore

aIn

dia

Mos

cú Ja

pón

Euro

next

Ist

ambu

lCM

EM

exDer

Eure

x

Bov

espa

Joha

nnes

burg

o

Number of product lines14

12

6 6 6 67 7

89 9 9 9

10

1213

1415

Standardized Futures in Colombia Launching Strategy and Milestones

Derivatives Market Milestones

*AlgoTrading: Algorithmic Trading - **DMA: Direct Market Access.

Derivatives MarketLaunch

Spot market complement

Indexation

The BVC Derivatives Market was launched in 2008 providing a complement for spot markets and offering a new tool for risk management.

2009

2008

USD Futures Bond Basket Futures

Single Stocks Futures

Stock Index Futures

IBR Futures Inflation Futures

Single Bond Futures

Options MarketDMA**

Overnight Index Swap

2010

2011

2012

Market adjustment

2013

OTC trend and Algotrading*

2014

2016

COLCAP Index

Preferencial Bancolombia

Ecopetrol

Pacific Rubiales

Grupo Sura

Preferencial Grupo Sura

Nutresa

Éxito

ISA

Preferencial Grupo Aval

Cementos Argos

PF Cementos Argos

Grupo Argos

Equity Futures

TRM

TRS

Exchange Rate Futures

OTC derivatives repository

OTC Products

Single TES

TES 16

TES 18

TES 19

TES 20

TES 22

TES 24

TES 26

TES 28

TES 30

TES Basket (TES, TEM, TEL)

CPI Futures

OIS (Overnight Index Swap)

Interest Rate Futures

Local Context: Listed products

(L): Colombia time.(NY): New York time.* Subject to change by CCP

Mnemonic identifier

Underlying

Contract Size

Tick Size

Settlement method

Expiration date

Trading hours

Total Margin on Position*

Last trading day

Contract Months

FUTURE

TES - TEM - TEL

TES Basket

COP 250.000.000

2 quarterly contracts (H, M, U, Z) and 2 monthly

0.005

Physical

First friday of the expiration month

1 work day before the expiration date

8:00 a.m (L) - 4:00 p.m (L)

S=2%; M=3,5%; L=5%

TES

Mnemonic identifier

Underlying

Contract Size

Tick Size

Settlement method

Expiration date

Trading hours

Total Margin on Position*

Last trading day

Contract Months

FUTURE

T16 - T18 - T19 - T20 - T22 - T24 - T26 - T28 – T30

Single TES

COP 250.000.000

2 quarterly contracts(H, M, U, Z) and 2 monthlyes

0.005

Cash

First friday of the expiration month

1 work day before the expiration date

8:00 a.m (L) - 4:00 p.m (L)

0,5% - 8% based on the modified duration

TES

Listed Futures specifications

(L): Colombia time. (NY): New York time. * Subject to change by CCP.

Mnemonic Identifier

Underlying

Contract Size

Tick Size

Settlement method

Expiration date

Trading hours

Total margin on position*

Last day of trading

Contract Months

TRM - TRS

TRM

TRM USD 50.000�TRS USD 5.000

0.1

Cash

Second wednesday of the expiration month

8:00 a.m (L) - 4:30 p.m (L)

7%

Expiration date

H, M , U, Z (4)and 2 monthly contracts

FUTURE

COL

COLCAP

COP 25.000 by index

0.5

CashPhisical (ECO, PFB, PRE, GRU)�Cash (todos los demás contratos) 

Third friday of the expiration month

8:00 a.m. (L) - 4:00 p.m (NY)

12%

Expiration date

H, M , U, Z (4)

Index Futures

ECO-PFB-PRE-PFG-EXI-NUT-GRA-ISA-PFA-CEM-GRU-PCE

PFB-PRE-PFG-EXI-NUT-GRA-ISA-GRU = 5ECO-PFA-CEM-PCE = 1

COLCAP index stocks

1.000 stock

Physical: the fourth wednesday of the expiration month

Cash: Third friday of expiration month

8:00 a.m. (L) - 4:00 p.m (NY)

ECO 14%- PRE 45% - PFB 12% -EXI 13% - NUT 11% - GRA 12% - ISA 11% - PFA 11% - CEM 15% -

GRU 13% - PCE 15%

Physical: 3 days before expiration date

Cash: expiration date

H, M , U, Z (4)

StockDollar / USD FX

Listed Futures Specification

(L): Colombia time. (NY): New York time. * Subject to change by CCP.

Mnemonic Identifier

Underlying

Contract Size

Tick Size

Settlement method

Expiration date

Trading hours

Total Margin on Position*

Last Trading Date

Contract Months

IB

IBR overnight

COP 500.000.000

0.001

Cash

En 1-3-6-9-12-18 months

8:00 a.m (L) - 1:00 p.m (L)

1 and 3 months (0,11%) -6 (0,23%) -9 (0,34%) -12 (0,45%) -18 (0,68%)

N.A.

6 daily contracts at 1-3-6-9-12-18 months

FUTURE

CPI

Monthly IPC

COP 250.000.000

0.01

Cash

1 work day after the last day of trading

8:00 a.m (L) - 1:00 p.m (L)

0.5%

Fifth day of the expiration month

3 daily contracts

INFLATIONOvernight Index Swap

Characteristics of the listed Futures in the BVC

ACCIONES Y VALORES

ALIANZA VALORES

ADCAP

VALOR ALTA

BBVA VALORES COLOMBIA

BTG PACTUAL

CASA DE BOLSA

CIA PROFESIONALES DE BOLSA

CORREDORES DAVIVIENDA

CREDICORP CAPITAL

GLOBAL SECURITIES

HELM COMISIONISTA

SERVIVALORES GNB SUDAMERIS

VALORES BANCOLOMBIA

ULTRASERFINCO

Brokers

Overall the BVC Derivatives Market has 33 members.

BANCO AGRARIO

BANCO AV VILLAS

BANCO DAVIVIENDA

BANCO DE BOGOTA

BANCO DE OCCIDENTE

BANCO GNB SUDAMERIS

BANCOLOMBIA

BBVA

CITIBANK

CORFICOLOMBIANA

CORPBANCA

JP MORGAN

BANCO SANTANDER DE NEGOCIOS

Banks and Credit Entities

FIDUPREVISORA

PORVENIR AFP

PROTECCIÓN AFP

FIDUBOGOTÁ

FIDUCIARIA BANCOLOMBIA

Pension Funds and Trusts

BVC Derivatives Market Members

CCIONES Y VALORES

ALIANZA VALORES

ADCAP

BTG PACTUAL

CIA PROFESIONALES DE BOLSA

ULTRASERFINCO

BANCOLDEX

CORREDORES DAVIVIENDA

CREDICORP CAPITAL

BANCO SANTANDER DE NEGOCIOS

CITIBANK

BANCO COLPATRIA

JP MORGAN CF

BNP PARIBAS CF

Individual Clearing Members (ICM)

BBVA VALORES COLOMBIA

CASA DE BOLSA

SERVIVALORES GNB SUDAMERIS

GLOBAL SECURITIES

VALOR ALTA

HELM COMISIONISTA

VALORES BANCOLOMBIA

FIDUCIARIA BANCOLOMBIA

FIDUCIARIA BOGOTA

FIDUCIARIA LA PREVISORA

CORPBANCA INVESTMENT TRUST

PROTECCIÓN AFP

PORVENIR AFP

Non Clearing Members (NCM)

BANCO AGRARIO

BANCO AV VILLAS

BANCO POPULAR

BANCO DAVIVIENDA

BANCO DE BOGOTA

BANCO DE OCCIDENTE

BANCO GNB SUDAMERIS

BANCOLOMBIA

BBVA

CORPBANCA

CORFICOLOMBIANA

General Clearing Members (GCM)

Brokers, Pension Funds and Financial societies

NCM (13)

Banks and Credit Entities

GCM (11)

Just CCPmembers

Brokers, Banks and Credit Entities

ICM (14)

Clearing and settlement structure CRCC

Derivatives Market Figures

P: Proprietary Trading - T: Third PartiesSource: BVC, @ 31.03.2016

Volumes in COP and number of contracts

COP MM Interest RateExchange RateEquity

Total Market

188.8153.6

0.7

343.2

154106.9

2.9

263.9

253.288.93.9

346.1

258.9127.4

6.8

393.2

223.62011 2012 2013 2014 2015

273.53.7

500.8

176.32016

358.45.4

540.1

Interest RateExchange RateEquity Total Market

-18,4%-30,4%314,3%-23,1%

64,4%-16,8%34,5%31,1%

2,3%43%

74,4%13,6%

-13,6%114,7%-45,6%27,4%

-21,2%31,0%45,9%7,8%

∆ 2012 ∆ 2013 ∆ 2014 ∆ 2015 ∆ 2016∆ Year by Year

Interest Rate futures Equity Futures Exchange Rate futures

Open Interest

Interest RateEquity Exchange Rate Total amount

0

2

4

6

8

10

12

14

16

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

2012-1

2012-3

2012-5

2012-7

2012-9

2012-11

2013-1

2013-3

2013-5

2013-7

2013-9

2013-11

2014-1

2014-3

2014-5

2014-7

2014-9

2014-11

2015-1

2015-3

2015-5

2015-7

2015-9

2015-11

2016-1

2016-3

Trill

ion

CO

P

Con

trac

ts

Futures Market Volumes Average daily trading volume

Interest Rate Exchange Rate Equity

$ 2.931 $ 17.045

$ 102.680

$ 343.238

$ 263.869

$ 346.136

$ 393.248

$ 500.866

$ 540.265

$ 0

$ 100.000

$ 200.000

$ 300.000

$ 400.000

$ 500.000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Mill

ion

- 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000

100.000 TES: 5,636 OIS: 6,755Equity: 38,169Exchange Rate: 3,404Total: 53,964

1/1/2

012

4/1/2

012

7/1/2

012

10/1/2

012

1/1/2

013

4/1/2

013

7/1/2

013

10/1/2

013

1/1/2

014

4/1/2

014

7/1/2

014

10/1/2

014

1/1/2

015

4/1/2

015

7/1/2

015

10/1/2

015

1/1/2

016

1/1/2

016

Main Products Figures

Securities 31/03/2016Billon COP

T18

T19

T20

T24

TOTAL TES

T30

Other TES

Futures

PFA

ECO

EXI

PFB

CEM

Other Single Stocks Futures

COL

TOTAL EQUITY

TRM

TRS

OIS

TOTAL MARKET

TOTAL FX

$1,462.48

$87.24

$345.75

$327.01

$18.73

$3,377.50

$5,272.98

$290.36

$176.84

$424.73

$387.96

$72.23

$110.34

$10.24

$35.34

$12.03

$21.83

$0.67

$0

$7.11

NOA Equity Futures

$ 0,0

$ 0,5

$ 1,0

$ 1,5

$ 2,0

$ 2,5

$ 3,0

$ 3,5

0 10 20 30 40 50 60 70 80 90

01/2

014

02/2

014

03/2

014

04/2

014

05/2

014

06/2

014

07/2

014

08/2

014

09/2

014

10/2

014

11/2

014

12/2

014

01/2

015

02/2

015

03/2

015

04/2

015

05/2

015

06/2

015

07/2

015

08/2

015

09/2

015

10/2

015

11/2

015

12/2

015

01/2

016

02/2

016

03/2

016

Billi

on

Billi

on

PFA ECO EXI

PFB CEM ISA

PCE GRA GRU

PFG NUT PRE

COL (RA)

$-

$500

$1.000

$1.500

$2.000

$2.500

$3.000

$3.500

$4.000

$4.500

0

200

400

600

800

1000

1200

1400

1600

1800

2000

01/2

014

03/2

014

05/2

014

07/2

014

09/2

014

11/2

014

01/2

015

03/2

015

05/2

015

07/2

015

09/2

015

11/2

015

01/2

016

03/2

016

Billi

on

Billi

on

T18 T19 T20 T24 T30 T26 T16 T22 T28 Future OIS (RA)

NOA Interest Rate Futures

TRM TRS (RA)

NOA Exchange Rate Futures

0

5

10

15

20

25

30

35

40

0 100 200 300 400 500 600 700 800 900

1000

01/2

014

02/2

014

03/2

014

04/2

014

05/2

014

06/2

014

07/2

014

08/2

014

09/2

014

10/2

014

11/2

014

12/2

014

01/2

015

02/2

015

03/2

015

04/2

015

05/2

015

06/2

015

07/2

015

08/2

015

09/2

015

10/2

015

11/2

015

12/2

015

01/2

016

02/2

016

03/2

016

Billi

on

Billi

on

Source: BVC, @ 31.03.2016

Derivatives Market FiguresNotional Outstanding Amount

P: Proprietary Trading - T: Third Parties

TES Futures

Source: BVC, @ 31.03.2016

Open Interest

T18: 1,229T19: 720T20: 1,521T24: 1,392T30: 308Total: 5,636

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

1/31/2

012

4/30/2

012

7/31/2

012

10/31/2

012

1/31/2

013

4/30/2

013

7/31/2

013

10/31/2

013

1/31/2

014

4/30/2

014

7/31/2

014

10/31/2

014

1/31/2

015

4/30/2

015

7/31/2

015

10/31/2

015

1/31/2

016

T18 T19 T20 T24 T30 T26 T16 T22 T28 TEL TEM TES

Con

trac

ts

0

2

4

6

8

10

12

14

0

10.000

20.000

30.000

40.000

50.000

201

2-1

201

2-3

201

2-5

201

2-7

201

2-9

201

2-11

201

3-1

201

3-3

201

3-5

201

3-7

201

3-9

201

3-11

201

4-1

201

4-3

201

4-5

201

4-7

201

4-9

201

4-11

201

5-1

201

5-3

201

5-5

201

5-7

201

5-9

201

5-11

201

6-1

201

6-3

Trill

ion

CO

P

Con

trac

ts TES Futures Market

Otros T19 T18 T24 T16 TEL TEM TES T20

CREDICORP P

CREDICORP T

BTG PACUAL P

BTG PACTUAL T

BANCO DAVIVIENDA P

BANCO AGRARIO P

OTHERS

BBVA P

Market share by volume at march 2016Interest Rate futures

27%

10%

7%

10% 17%

14%

6%

5%

37%

14%

6%

5%

21%

Market Makers Program

The conditions that assure its purpose are:

A 70% presence in the month trading sessions, with 10 daily measurements of three conditions:

Trading of 5 Specific Reference instruments of the Market Makers Program (16, 18, 19, 20, 24, 26, 28, 30).

Bid-Offer Spread (from 0.2 to 1 point of price as a function of the bond maturity).

A minimum trading of 10 contracts for TES maturity > 5 years and of 20 contracts for TES maturity < 5 years, simultaneously in a bid and offer book order price.

1.

2.

3.

The BVC has a market makers program designed to promote liquidity, assure the price formation and promote the development of new products.In the TES Futures of Specific Reference market makers program, the Derivatives Market has the following partners:

P: Proprietary Trading - T: Third Parties

OIS Futures

Source: BVC, @ 31.03.2016

49%

32%

13%

4%

1% 1% 0%

55%

25%

7%

5% 5% 3%

I03

I01

I06

I12

I18

I19

Volume by maturity

Open Interest and NOA

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

11/1/2

01

12/1/2

01

1/1/2

015

2/1/2

015

3/1/2

015

4/1/2

015

5/1/2

015

6/1/2

015

7/1/2

015

8/1/2

015

9/1/2

015

10/1/2

01

11/1/2

01

12/1/2

01

1/1/2

016

2/1/2

016

3/1/2

016

Billi

ons

of C

OP

Con

trac

ts I01H99F

I03H99F

I06H99F

I09H99F

I12H99F

I18H99F

NOA (ED)

Market Share by Volume

BANCO DAVIVIENDA

BBVA

CREDICORP

BANCOLOMBIA

BTG PACTUAL

ULTRASERFINCO

Type of participant

PROPIETARY

THIRD PARTIES

99%

1%

P: Proprietary Trading - T: Third PartiesSource: BVC, @ 31.03.2016

Exchange Rate Futures

Market share by volume at march 2016Exchange Rate futures

14 of the 24 members have traded

CREDICORP P

CREDICORP T

ALIANZA P

ALIANZA T

ADCAP COLOMBIA P

ADCAP COLOMBIA T

BTG PACTUAL P

BTG PACTUAL T

ULTRASERFINCO P

ULTRASERFINCO T

OTHERS

17%

28%

24% 12%

12%

6%

11%

13%

11% 7%

6%

6%

7%

3%

3%

17%

Open Interest

TRM Futures TRS Futures

TRM: 2,164TRS: 1,240Total: 3,404

0

5000

10000

15000

20000

1/31/2

012

4/30/2

012

7/31/2

012

10/31/2

012

1/31/2

013

4/30/2

013

7/31/2

013

10/31/2

013

1/31/2

014

4/30/2

014

7/31/2

014

10/31/2

014

1/31/2

015

4/30/2

015

7/31/2

015

10/31/2

015

1/31/2

016

Con

trac

ts

TRS TRM Exchange Rate

0

2

4

6

8

10

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2012-1

2012-3

2012-5

2012-7

2012-9

2012-11

2013-1

2013-3

2013-5

2013-7

2013-9

2013-11

2014-1

2014-3

2014-5

2014-7

2014-9

2014-11

2015-1

2015-3

2015-5

2015-7

2015-9

2015-1

1

2016-1

2016-3

Trill

ion

CO

P

Con

trac

ts

Exchange Rate Futures Market

P: Proprietary Trading - T: Third PartiesSource: BVC, @ 31.03.2016

Equity Futures

Open Interest

Market share by volume at march 2016Equity futures

12 of the 15 members have traded

ULTRASERFINCO P

ULTRASERFINCO T

CORREDORES DAVIVIENDA P

CORREDORES DAVIVIENDA T

CREDICORP P

CREDICORP T

BTG PACTUAL P

BTG PACTUAL T

OTHERS

VALORES BANCOLOMBIA P

VALORES BANCOLOMBIA T

16%

31%

20%

14%

13%

11%

14%

7%

14% 5%

9%

9%

4%

6%

4% 12%

Equity Futures Market

Otros COL GRA PFA EXI PFB ECO

0

50

100

150

200

250

300

350

400

450

500

2012-1

2012-3

2012-5

2012-7

2012-9

2012-11

2013-1

2013-3

2013-5

2013-7

2013-9

2013-11

2014-1

2014-3

2014-5

2014-7

2014-9

2014-11

2015-1

2015-3

2015-5

2015-7

2015-9

2015-11

2016-1

2016-0

3

Billi

on C

OP

0

10000

20000

30000

40000

50000

60000

70000

80000

1/31/2

012

4/30/2

012

7/31/2

012

10/31/2

012

1/31/2

013

4/30/2

013

7/31/2

013

10/31/2

013

1/31/2

014

4/30/2

014

7/31/2

014

10/31/2

014

1/31/2

015

4/30/2

015

7/31/2

015

10/31/2

015

1/31/2

016

PFA ECO EXI PFB CEM ISA PCE GRA GRU PFG NUT PRE COL

PFA: 8,830ECO: 27,397EXI: 783PFB: 829CEM 57COL: 0Total: 46,465

Con

trac

ts

COLCAP index FuturesMarket makers program

The conditions that assure its purpose are:

An 80% presence in the month trading sessions, with 10 daily measurements of 3 conditions:

Orders in the outright COLCAP future contract.

Bid-Offer Spread (20 ticks or 10 price points).

A minimum trading of 10 contracts simultaneously in a bid and offer book order price.

1.2.3.

The BVC has a market makers program designed to promote liquidity, assure the price formation and promote the development of new products.

In the Futures market makers program of COLCAP index, the Derivatives Market has the following partner:

Source: BVC, @ 31.03.2016

Type of Participant and Market

Since the beginning of 2016, 90,7% of total volume traded was Exchange Registered.

Exchange Traded Volume as a share of Total Volume

Interest Rate and FX Futures Interest Rate Future FX Futures

0%

20%

40%

60%

80%

100%

201

2-01

201

2-03

201

2-05

201

2-07

201

2-09

201

2-11

201

3-01

201

3-03

201

3-05

201

3-07

201

3-09

201

3-11

201

4-01

201

4-03

201

4-05

201

4-07

201

4-09

201

4-11

201

5-01

201

5-03

201

5-05

201

5-07

201

5-09

201

5-11

201

6-01

201

6-03

38,9% of traded volume in 2016 has been done by third parties participants.

Volume Share of Third Parties Participants

Total Futures Interest Rate Futures FX Futures Equity Future

0%

20%

40%

60%

80%

100%

201

2-01

201

2-03

201

2-05

201

2-07

201

2-09

201

2-11

201

3-01

201

3-03

201

3-05

201

3-07

201

3-09

201

3-11

201

4-01

201

4-03

201

4-05

201

4-07

201

4-09

201

4-11

201

5-01

201

5-03

201

5-05

201

5-07

201

5-09

201

5-11

201

6-01

201

6-03

Month Exchange Registered

Exchange Traded

2016-01 85.7% 14.3%

2016-02 92.4% 7.6%

2016-03 94.0% 6.0%

Controls and Limits

Prices

Booking, portfolio management

Prices

Proprietary

Mutual Funds

Third Parties

Front

Middle

Back

Risk

AccountingValuation

Price Providers

Brokers, Pension Funds and Financial societies

NCM (13)

Banks and Credit Entities

GCM (11)

Brokers, Banks and Credit Entities

ICM (15)

Futures Market infrastructure

Creation and setting of standarized futures.

Nasdaq´s X-Stream platform administration.

Ensure correct price formation, transparency and behaviour of the market.

Controls and manages counterparty risk.

Ensure clearing and settlement processes.

Collateral daily management and Profit and Loss controls.

BVC and CCP role

Provides training and assistance about the different products to the market participants

Product´s Other Aspects

*Depends on CCP definitions, updated 14.07.2015.

Please refer to Sections 6.3.1 and 6.3.2 of the ‘Circular Única’ of CCP to see the detail on the collaterals and its haircuts.

CCP accepts the following collaterals:

Cash in Colombian pesos.

Fixed Income TES and UVR according to the list presented below.

Futures listed shares.

1.

2.

3.

Haircut Ticker*

Nemotécnico Haircut

TFIP10040522

TFIP10281015

TFIP11241018

TFIP15240720

TFIP15260826

TFIP16280428

TFIT01030715

TFIT02010716

TFIT03111115

TFIT06110919

TFIT06211118

TFIT07150616

TFIT10040522

TFIT10281015

TFIT11241018

TFIT15240720

TFIT15260826

TFIT16240724

TFIT16280428

TFIT16180930

TUVT08170517

TUVT06170419

TUVT10100321

TUVT17230223

TUVT20250333

32,23%

2,00%

9,70%

2,56%

17,06%

7,89%

2,00%

2,00%

2,00%

2,00%

2,00%

2,00%

16,11%

2,00%

4,85%

2,00%

8,53%

3,32%

3,94%

3,79%

4,27%

2,00%

2,00%

13,14%

4,59%

Haircut*

Nemotécnico Haircut

ECOPETROL

PFBCOLOM

PREC

GRUPO SURA

ÉXITO

NUTRESA

ISA

PREFERENCIAL AVAL

CEMENTOS ARGOS

PREFERENCIALCEMENTOS ARGOS 50%

PREFERENCIALGRUPO SURA

GRUPO ARGOS

50%

50%

50%

50%

75%

50%

50%

50%

50%

50%

50%

Leverage and Collateral

Strategies

A really good alternative for importers and exporters to hedge against exchange rate fluctuations.

Leverage allows a greater efficiency when using a hedging strategy.

Reduce price movements market risk for the different assets traded on the Colombian Spot Market.

Since the begining of the trade you can set the price to buy or sell an asset regardless on the fluctuation of prices.

HEDGING STRATEGY

Hedging

Speculative strategies are powered by futures leverage. This allows higher yields while a higher risk is taken.

Look for the highest capital profit according to your market spectations

Take advantage of the market opportunities regardless of the trend.

SPECULATIVE STRATEGY

Speculative Trades

Capture market imperfections through a simultaneous operation in two markets.

Possibility of arbitrage between the future market and spot market or between the future market and the OTC derivatives market.

Investment strategy without any risk exposure and the capital efficiency of using leverage and CCP collateral netting.

ARBITRAGE STRATEGY

Arbitrage

New Products

The OIS Future is a new instrument designed to manage short term interest rate risk. It was created under the same structure of the OTC market but it also has the added values of the standardized market.

a. Daily traiding of specific maturities:1, 3, 6, 9, 12 and 18 months.b. Settlement at expirationc. Efficiency in the management of collateral: netting and no daily adjustments of P&L.

Performance:

Structure:

SellerFixed Rate

Floating Rate

Nominal COP 500.000.000 Buyer

IBR Zero Coupon Curve

Historical leg

Valuation date

Proyected leg

Rp= 1+ -1360n

te-1 ri * di

360i=ts

[ [

OIS Future

OTC Products

As a result of the global regulatory changes, in Colombia, through the Decree 4567 of 2011, the Superintendencia Financiera requires the registration of every derivatives transaction carried out by entities supervised in the OTC market.

In order to implement an agile and efficient OTC registration system which allows the fulfillment of the obligation, the BVC and Bloomberg have made an alliance to offer its Registration OTC platform.

Entity 1

Entity 2

1. Entities trades OTC

2. Entities make the register of the operation through the Bloomberg Platform

3. The operation is sent to the BVC

4. BVC reports the operation to the SFC

OTC registration

Information Tools

Official BVC Website Traders BVC WebsiteDerivatives MarketMonthly Report

Web

Vend

ors

News and newsletters Product´s Standardizedfeatures

Market data onreal-time or lagged

e-BV

C

Market members support

Nicolás Mayorga M.Derivatives Manager

nmayorga@bvc.com.coTel: 3139800 (1111)

Anton GlatzDerivatives Director aglatz@bvc.com.coTel: 3139800 (1550)

Diego BlancoDerivatives Professional

dblanco@bvc.com.coTel: 3139800 (1265)

Celso Guevara C.Operations Manager

cguevara@bvc.com.coTel: 3139800 (2033)

Ross MacDonaldOperations Leader

rmacdonald@bvc.com.coTel: 3139800 (2015)

Derivatives Team Operations Team

Sandra TorrenteSales Manager

storrente@bvc.com.coTel: 3139800 (1114)

Carlos SuárezSales Director

csuarez@bvc.com.coTel: 3139800 (1138)

Juan Carlos TéllezSales Director

jtellez@bvc.com.coTel: 3139800 (1535)

Sales Team

Julián LeónDerivatives Professional

jleonh@bvc.com.coTel: 3139800 (1227)

Juliana PrietoBusiness Professionaljprieto@bvc.com.coTel: 3139800 (2014)

The Bolsa de Valores de Colombia SA expressly states that this material has just educational and informational purposes. This document does not contain any advice on the operation of the derivatives market and the implementation of these mentioned strategies is responsibility of those who use them and not responsibility of the BVC. The BVC rules that regulate the derivatives market and its norms constitute the official source to consult the current contract specifications and its applicable regulations.

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