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BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
The Brazilian Securities, Commodities and Futures Exchange
Quarterly Financial Statements at
March 31, 2010
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.2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE FIRST QUARTER 2010
Dear Shareholders,
We are pleased to present to you this discussion and analysis of our financial condition
and results of operations for the first quarter 2010.
OPERATING PERFORMANCE
Our performance for the volumes traded in the first quarter 2010 consolidated the post-
crisis recovery, with volumes growing in both segments. In the BM&F segment, a
particular highlight was the record breaking trading volumes of 2.45 million contracts per
day for the first quarter and 3.12 million contracts for March 2010.
In the BM&F segment, an additional highlight was the growth in the volume traded by high
frequency traders and the utilization of Direct Market Access (DMA).
In the Bovespa segment, the growth in volumes traded in the first quarter 2010 when
compared to 1Q09 was a result of two completely different macroeconomic situations, and
the volumes traded in first quarter 2010 showed the consolidation of our equities market
recovery started in 4Q09.
Set forth below is a discussion of the Company's operational
performance.
BM&F segment
The average daily volume of contracts traded in the first quarter 2010 climbed 66.7% from
the same period a year ago to 2.45 million from 1.47 million earlier, a new record for the
segment. This climb was primarily due to an 86.3% increase in trades in interest rate
contracts and a 55.8% growth in volume traded in FX contracts. The average daily volume
of contracts traded in March 2010 reached a record high of 3.12 million, surpassing the
previous record of 2.18 million a month earlier.
In the quarter to March 2010, the average daily volume traded climbed 57.4% quarter-on-
quarter, primarily due to a 100.5% surge in volume traded in BRL interest rate contracts,
to 1,605.8 thousand contracts, from 800.8 thousand previously. In the first quarter 2010,
trading in these contracts was positively influenced by the different market expectations in
relation to the decisions of the Central Bank Monetary Policy Committee (Copom)
concerning the reference interest rate for March.
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.3.
Source: BM&FBOVESPA.
Source: BM&FBOVESPA.
The Revenue per Contract (RPC) for the first quarter 2010 in the BM&F segment was
BRL1.126, shrinking 16.3% from the same period a year ago. This drop is due to the
following factors:
the greater volume of trading in BRL interest rate contracts, particularly in shorter-
term contracts, which have lower fees;
the appreciation of the Brazilian real against the U.S. dollar, which adversely
impacted revenues from FX, USD interest rate and commodities contracts, as the
fee rates for these contracts are based on the exchange rate; and
to a lesser extent, the rate discounts applicable to DMA trading activities and high
frequency trading.
In the quarter to March 2010, average revenue per contract shed 15.5% sequentially due
to more active trading in shorter-term contracts, which have lower revenue per contract.
1Q09
2Q09
3Q09
4Q09
1Q10
Var.
1Q10/1Q09
Var.
1Q10/4Q09
Interest Rates in BRL
861.8
959.3
755.6
800.8
1,605.8
86.3%
100.5%
FX Rates
378.6
452.6
463.0
494.1
589.8
55.8%
19.4%
Stock Indices
72.8
80.1
69.6
98.4
85.2
17.0%
-13.5%
Interest Rates in USD
92.5
73.9
64.4
83.2
77.9
-15.8%
-6.4%
Commodities
10.1
9.4
10.1
11.3
11.5
14.1%
2.1%
Mini Contracts
51.2
51.2
50.7
57.6
68.2
33.3%
18.4%
OTC
4.8
9.8
8.8
13.8
15.3
219.5%
11.1%
Total
1,471.7
1,636.3
1,422.3
1,559.2
2,453.6
66.7%
57.4%
BM&F Segment- ADTV (thousands of contracts)
1.5
1.6
1.4
1.6
2.5
1.345
1.389
1.391
1.333
1.126
0,000
0,300
0,600
0,900
1,200
1,500
1,800
-
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
1Q09
2Q09
3Q09
4Q09
1Q10
R
P
C
A
D
T
V
BM&F Segment - ADTV and Revenue per Contract (RPC)
ADTV (millions of contracts)
RPC (BRL)
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.4.
Source: BM&FBOVESPA.
Direct Market Access (DMA) evolution
The volume of trading via Direct Market Access (DMA) accounted for 12.8% of the total in
March 2010, reaching a record average daily volume of 800 thousand contracts (both
sides of the trade), with most of DMA trading activities concentrated on the Traditional
DMA channel. However, the other DMA models, meaning order routing from the CME
Globex and DMA via a Provider, have been growing at higher rates these last few months,
as shown in the chart below.
Source: BM&FBOVESPA.
The flow of orders routed through the CME Globex system reached an average daily
trading volume of 171
1
thousand contracts (both sides of the trade), representing 2.7% of
total trading volume
2
in March 2010, compared to the record average daily trading volume
of 176 thousand contracts in the previous month and 120 thousand in January, and an
1
Of the 171,000 contracts traded each day, 170,000 are made up of a combination of FX, equity index and mini
contracts, and the remaining 1,000 are a combination of all other types of contracts.
2
We determine this percentage by dividing the volume of contracts by two (2), as we take into account both sides of the
trade, meaning buy and sell sides, which is an industry practice adopted by exchanges across the world.
1Q09
2Q09
3Q09
4Q09
1Q10
Var.
1Q10/1Q09
Var.
1Q10/4Q09
Interest Rates in BRL
0.886
0.941
1.068
1.037
0.838
-5.4%
-19.2%
FX Rates
2.422
2.333
2.031
1.927
1.929
-20.4%
0.1%
Stock Indices
1.572
1.779
1.559
1.577
1.527
-2.9%
-3.2%
Interest Rates in USD
1.554
1.644
1.178
1.017
1.218
-21.6%
19.7%
Commodities
2.077
2.357
2.440
2.345
1.878
-9.6%
-19.9%
Mini Contracts
0.185
0.196
0.175
0.150
0.134
-27.7%
-10.6%
OTC
2.192
1.756
1.485
1.508
1.526
-30.4%
1.2%
Total
1.345
1.389
1.391
1.333
1.126
-16.3%
-15.5%
BM&F Segment - Revenue per Contract (BRL)
82 161
227 199 190 195 177 195 221 266 202 177 242
323 402
-
-
11
14
32
45
58
70
85
155
122 107
120
176
171
-
3
4 53
47
48
58
65
100 114
144
178
202
-
-
-
-
-
3
7
12
15
13
17
20
25
3.0%
6.4%
6.8% 6.9% 7.7%
7.8% 10.1%
11.3%
12.4%
15.1%
15.2%
13.1%
13.7%
15.9%
12.8%
-1%
2%
5%
8%
11%
14%
17%
-
100
200
300
400
500
600
700
800
900
Traditional DMA
CME Globex
DMA Provider
CoLocation
% of DMA in overall ADTV
BM&F Segment - DMA Evolution (thousands of contracts)
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.5.
average daily trading volume of 156.5 thousand contracts in the first quarter 2010,
compared to 128.5 thousand in the previous month, a 22% growth in quarterly volume.
The chart below sets forth data on the evolution of trading volume through this channel,
based on which the most actively traded contracts are FX contracts, index-based
contracts and mini contracts (WebTrading).
Source: BM&FBOVESPA.
It is important to highlight the ongoing evolution of the volume traded by High Frequency
Traders, setting a new record in March 2010, with an average daily volume of 209
thousand contracts traded (both sides of the trade), as shown in the chart below. Despite
this record volume, the share of volume traded by these investors accounted for 3.5% of
the overall volume due to the record volume of trading in BRL interest rate contracts,
which are not yet actively traded by these investors.
12
14
23
23
33
36
31
51
43
33
35
66
70
4
10
12
14
22
49
37
30
31
45
41
10
11
13
19
31
51
40
43
54
65
59
0.3% 0.4%
1.1%
1.2%
2.1%
2.5%
2.8%
4.7%
4.2%
3.4% 3.2%
4.0%
2.7%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
0
30
60
90
120
150
180
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
FX (Thousands)
Equities (Thousands)
Web Trading (Thousands)
% in Overall Volume
CME - Globex Evolution - thousands of contracts
11 14 23 23
31 46 45
64 46 38 43
78 83
4
11 12
17 27
58
41
34 33
46 43
3
5
4
2
7
11
12
18
36
59
50
49
68
81 82
0.1% 0.2%
0.4% 0.5%
1.2%
1.2%
2.0%
3.1%
3.8%
6.0%
5.1%
4.2%
4.0%
5.0%
3.5%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
0
50
100
150
200
250
FX (Thousands)
Equities (Thousands)
Web Trading (Thousands)
% in Overall Volume
High Frequency Traders Evolution - thousands of contracts
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.6.
Source: BM&FBOVESPA.
High frequency investors have been focusing largely on FX contracts, index-based
contracts and mini contracts. The chart below sets forth data on evolution of high
frequency trading by type of contract, where index-based and mini contracts stood out in
March 2010, having accounted for 29.2% and 58.7% of the overall volume, respectively.
This evolution tends to diminish revenue per contract, not only due to rate discounts
granted in each trade, but also because of predominant day-trading activities, which are
charged at lower rates.
Source: BM&FBOVESPA
Regarding the participation of investors in the BM&FBOVESPA markets, the highlight was
the increase in trading by institutional investors, which accounted for 29% of the overall
volume in first quarter 2010, up from 25% in the previous quarter, showing the recovery of
this type of investor, which had been negatively impacted by the financial crisis.
Trading by financial institutions in the first quarter 2010 accounted for 43% of total volume,
down from 44% in the previous quarter. Trading by foreign investors for the quarter stood
at 22% of the overall volume.
Source: BM&FBOVESPA.
7.3%
29.2%
58.7%
0%
10%
20%
30%
40%
50%
60%
70%
FX contracts
Index-based contracts
Mini contracts
High Frequency Traders Evolution
48%
46%
44%
44%
43%
21%
24%
26%
25%
29%
19%
19%
20%
22%
22%
9%
8%
8%
6%
4%
3%
3%
2%
2%
2%
1Q09
2Q09
3Q09
4Q09
1Q10
BM&F Segment - Investor's Participation in Total Volume Traded
Central Bank
Companies
Individuals
Foreign Investors
Institutional Investors
Financial Institutions
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.7.
Bovespa segment
The average daily trading volume reached R$6.6 billion in the first quarter 2010, a 68.9%
increase from the same period one year ago and a 3.5% drop in the quarter-on-quarter
comparison.
The average daily number of trades in the first quarter 2010 was 406 thousand, increasing
46% from the 278 thousand in the same period one year ago and 3.7% from the 392
thousand in the previous quarter.
Source: BM&FBOVESPA.
Source: BM&FBOVESPA.
3.9
5.2
5.2
6.8
6.6
278
326
334
392
406
-
50
100
150
200
250
300
350
400
-
2,0
4,0
6,0
8,0
10,0
1Q09
2Q09
3Q09
4Q09
1Q10
N
u
m
b
er

o
f

T
r
a
d
es

(
t
h
o
u
s
a
n
d
s
)
A
D
T
V

(
B
R
L

b
i
l
l
i
o
n
s
)
Average Daily Value Traded and Number or Trades
ADTV (BRL billions)
Number of Trades (thousands)
1Q09
2Q09
3Q09
4Q09
1Q10
1Q10/1Q09
(%)
1Q10/4Q09
(%)
Stocks and Equity Deriv.
3,906.2 5,211.6
5,212.4 6,839.8
6,598.2
68.9%
-3.5%
Cash market
3,622.5 4,916.1
4,885.6 6,377.1
6,110.1
68.7%
-4.2%
Derivatives
283.7
295.5
326.8
462.7
488.1
72.0%
5.5%
Forward market
66.6
71.5
113.0
134.8
157.9
137.0%
17.2%
Options market (stocks / indices)
217.1
224.0
213.8
327.9
330.2
52.1%
0.7%
Fixed income and other spot securities
1.8
0.9
2.1
1.5
1.4
-24.5%
-7.5%
Total
3,908.1 5,212.6
5,214.4 6,841.3
6,599.6
68.9%
-3.5%
AVERAGE DAILY TRADED VALUE (BRL MILLIONS)
1Q09
2Q09
3Q09
4Q09
1Q10
1Q10/1Q09
(%)
1Q10/4Q09
(%)
Stocks and Equity Deriv.
278,324
325,774
334,356 391,793
406,420
46.0%
3.7%
Cash market
216,645
267,397
279,924 318,872
326,660
50.8%
2.4%
Derivatives
61,678
58,377
54,432
72,921
79,761
29.3%
9.4%
Forward market
937
1,103
1,441
1,821
1,923
105.3%
5.6%
Options market (stocks / indices)
60,742
57,274
52,991
71,100
77,838
28.1%
9.5%
Fixed income and other spot securities
8
6
6
7
10
35.8%
57.2%
Total
278,331
325,779
334,362 391,800
406,431
46.0%
3.7%
AVERAGE DAILY NUMBER OF TRADES
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.8.
The stock exchange's aggregate market capitalization reached R$2.4 trillion at the end of
the first quarter 2010, soaring 58% from the end of the same period a year ago. Based on
a 3-month rolling average, turnover velocity
3
rose to 64.7% in March 2010.
Source: BM&FBOVESPA.
The net flow of foreign investments to the stock market fell to R$4.5 billion in the first
quarter 2010, from R$12.6 billion in the previous quarter, but registered an increase in
comparison to the same period a year ago, when it reached R$1.3 billion. The share of
volume traded by foreign investors in the first quarter 2010 pulled back to 27.2% from
31.6% in 4Q09, primarily due to the 2% Tax on Financial Transactions (IOF) implemented
in October 2009
Source: BM&FBOVESPA.
3
Turnover velocity refers to the annualized ratio between volume traded on the cash market in the period and
average market capitalization for the same period.
1Q09
2Q09
3Q09
4Q09
1Q10
1.5
1.8
2.1
2.3
2.4
Market Captalization (BRL trillions)
(15.4)
43.2
1.3
16.0
13.3
12.6
4.5
2008
2009
1Q09
2Q09
3Q09
4Q09
1Q10
Bovespa Segment- Foreign Investment Flow
(BRL billions)
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.9.
Retail investors accounted for 31.4% of the volume traded in the first quarter 2010,
surpassing the 29.1% share of volume traded in the previous quarter, but less than the
33.5% share of volume traded in the same period a year ago. The number of active
custody accounts at the end of the first quarter 2010 was 581 thousand, higher than the
548 thousand active custody accounts at the end of the same period one year earlier, and
virtually unchanged from the 576 thousand active accounts at the end of the fourth quarter
2009.
Retail investors now account for the largest share of volume traded in the equities market,
with 31.4% of total volume, surpassing foreign investors, which accounted for 27.2% of
the volume in the first quarter of 2010.
Source: BM&FBOVESPA.
Increasingly, retail investors have been trading via the Home Broker (a DMA trading
model for the Bovespa segment). The volume of trading via the Home Broker system
soared to 21.2% of total volume traded in the Bovespa segment in the first quarter 2010,
compared to 17.5% and 19.3% in the first quarter 2009 and fourth quarter 2009,
respectively.
548
543
538
576
581
100
200
300
400
500
600
1Q09
2Q09
3Q09
4Q09
1Q10
Number of Investor Accounts (thousands)
33,5%
30,4%
30,4%
29,1%
31,4%
23,6%
24,7%
26,3%
27,3%
29,9%
34,3%
36,6%
34,6%
31,6%
27,2%
6,5%
5,8%
6,5%
9,8%
9,1%
2,0%
2,4%
2,1%
2,1%
2,3%
0,1%
0,0%
0,1%
0,1%
0,0%
1Q09
2Q09
3Q09
4Q09
1Q10
Bovespa Segment - Investors' Participation in Total Value Traded
Individuals
Institutional Investors
Foreign Investors
Financial Insitutions
Companies
Others
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.10.
Source: BM&FBOVESPA.
Exchange-traded funds
­
ETFs
Whilst still not significant, volumes traded in ETF quotes have been growing steadily. The
average daily value traded in quotes of the index funds that track the Ibovespa, the
SmallCap and the MidLarge Cap indices increased by 125.9% from R$11.2 million, at
launch in December 2008, to R$25.3 million in March 2010. The Ibovespa ETF (BOVA11)
is the most traded ETF, accounting for 68.9% of the total volume in March 2010. In
addition, the quotes of the PIBB Brazil-50 Index Fund (PIBB11), which trade on our
market since July 2004, are the second most actively traded ETF quotes, accounting for
29% of the total volume.
In addition, three new index funds were launched on February 23, 2010, as follows:
iShares IBrX
­
Brazil Index (IBrX-100) Fund
iShares BM&FBOVESPA Consumer Index Fund
iShares BM&FBOVESPA Real Estate Index Fund
BM&FBOVESPA has also recently announced its procedures for managers/administrators
interested in launching ETFs, the first of which will be for the Financial Service Index.
17.5%
16.5%
18.3%
19.3%
21.2%
0,0%
4,0%
8,0%
12,0%
16,0%
20,0%
24,0%
1Q09
2Q09
3Q09
4Q09
1Q10
Home Broker's Share in Overall ADTV (%)
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.11.
Source: BM&FBOVESPA.
Public Offerings
This quarter in the IPO market, Multiplos, Alliance, OSX, BR Properties and Ecorodovias
went public, while INPAR, PDG Realty and Gafisa carried out follow-on offerings, in the
aggregate having raised R$8.9 billion.
In April 2010, Mills and Julio Simões went public, whereas additional follow-on offerings
were carried out by JBS, Even and Hypermarcas, all of which raised an aggregate of
R$4.3 billion. Ten other offerings are in the pipeline, including seven initial public offerings
and three follow-ons.
The chart below sets forth data on volumes raised through initial public offerings and
follow-on offerings, on an annual basis.
* Up to April 28, 2010
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10
11.2
8.8
5.3
11.4
20.3
22.0
23.5
21.7
21.5
26.6
25.6
18.3
16.9
22.2
27.1
25.3
ETFs - Average Daily Volume (BRL Millions)
2004
2005
2006
2007
2008
2009
2010*
4.5
5.4
15.4
55.6
7.5
23.8
7.0
4.3
8.5
15.1
14.5
26.8
22.2
6.2
IPO
Follow-On
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.12.
Securities lending (BTC)
The volume of open interest positions at the end of first quarter 2010 reached R$19.4
billion, soaring 97.6% from the same period one year ago and 22.9% from the fourth
quarter 2009. This expansion is associated mainly with recovery of market prices and
volatility levels in the past few months, driving higher exposure in securities lending.
Source: BM&FBOVESPA.
OTHER HIGHLIGHTS
On January 27, 2010, we implemented changes to the prices of services rendered by the
Central Depository, in order to eliminate cross subsidies across our services. Changes in
the pricing policy for the Central Depository were originally scheduled to be implemented
in three phases, but only the first one was effectively implemented. Therefore, a new
pricing policy for the Central Depository will be implemented in June of 2010.
In March 2010, changes were implemented in the charges per excess unexecuted orders
and per excess orders per minute entered in the Mega Bolsa system for the purpose of
reducing the charges. The participant premiums were increased, the maximum number of
orders per executed trade was increased to eight (from six) and the charge per excess
order was reduced to R$0.03 (from R$0.04).
On April 8, 2010, discussions were held with BM&FBOVESPA market participants to
implement a New Fee Structure Policy for transactions carried out by high frequency
investors.
On April 26, 2010, BM&FBOVESPA authorized Non-Sponsored Brazilian Depository
Receipts (BDR) Level I for trading. In order to afford institutions interested in trading BDRs
the same conditions of participation in this market, the Exchange will require them to
participate in a competitive process to obtain authorization for registration of Non-
Sponsored BDRs Level I for trading. Irrespective of the competitive process, due to the
relevant contribution made by Deutsche Bank S.A. to the process of development of
operational procedures for the product, the Company has authorized that bank to submit
an advance request for the registration of a Non-Sponsored BDR Level I, with collateral
based on ten different securities.
9.8
12.9
16.5
15.8
19.4
53.9
58.6
63.8
61.1
69.6
-
20,0
40,0
60,0
80,0
-
5,0
10,0
15,0
20,0
25,0
1Q09
2Q09
3Q09
4Q09
1Q10
N
u
mb
er

o
f
T
r
a
d
es
O
p
en

I
n
t
er
es
t
Bovespa Segment - Securities Lending (BTC)
Open Interest (BRL billions)
Monthly Average Number of Trades (thousands)
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.13.
Technological developments
As of March 9, 2010, SunGard Global Trading (formerly GL Trade) was authorized by
BM&FBOVESPA to operate as a DMA provider in the BM&F market segment
(derivatives).
On March 3, 2010, BM&FBOVESPA announced the launch of the SINACOR+ system,
which incorporates enhancements and new functionalities into the Sinacor system
­
a
system developed by the Exchange to facilitate the management of back, middle and
front-office activities carried out by the institutions participating in the BM&FBOVESPA
markets.
On April 9, 2010, the Exchange implemented a new version of the MegaDirect software,
which transmits orders to the Mega Bolsa system through automated gateways.
BM&FBOVESPA has entered into a partnership with Trading Technologies (TT), a
provider of trading screens, and TT will install a server in the co-location area to allow its
clients to directly connect to the Exchange trading systems, thereby reducing latency time
and increasing the distribution of our products.
On April 16, 2010, the Exchange announced an increase in the speed of the Financial
Community Communications Network (RCCF) and BM&FBOVESPA Communication
Network (RCB) Links for Trading and Market Data.

Subsequent Events

Based o
n the Extraordinary Shareholders' Meeting held on April 20, 2010,
BMFBOVESPA´s shareholders approved the increase of the ownership interest in the
CME Group, in order to raise its equity stake to 5% (from the current ownership of 1.78%),
representing an investment of approximately US$620 million. Therefore, the total
investment by BM&FBOVESPA in the CME Group will amount to approximately US$1
billion.
The shares of CME Group are subject to trading restrictions (lock up) until
February 26, 2012.

The acquisition is contingent upon the execution of agreements with regards to the
implementation of a global preferred strategic partnership and the development of a multi-
asset class electronic trading platform, pursuant to the material fact released on February
11, 2010, which also announced that BM&FBOVESPA will
receive a seat on CME's Board
of Directors.
Concerned with the best interest of the company's shareholders, Management
understands that the qualitative features of the relationship between the two companies
characterize the existence of a significant influence of BM&FBOVESPA on the CME
Group upon the execution of the aforementioned agreements and the acquisition of the
additional ownership interest. Under this scenario, the investment will be evaluated by the
method of equity equivalence (pursuant to CPC 18-Investment in associates), by applying
the percentage of ownership interest that BM&FBOVESPA holds to the net worth of the
CME Group, recognizing the corresponding effect on the revenues.
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.14.
Distributions of 2009 and 2010 net income
For the 2009 fiscal year, BM&FBOVESPA announced dividends amounting to R$705
million, R$ 248 million of which will be paid on May 14, 2010.
For
the 2010 fiscal year, we paid interest on shareholders' equity in the amount of R$90
million, R$30 million of which was paid on March 11, 2010 and R$60 million was paid on
April 13, 2010.
Central Counterparty Risk
­
Risk Management
The following clearinghouses, which resulted from the integration of BM&F and Bovespa
Holding, are managed by BM&FBOVESPA:
(i)
Equities Clearinghouse (formerly CBLC),
(ii)
Derivatives Clearinghouse,
(iii)
FX Clearinghouse; and
(iv)
Government bonds Clearinghouse.
These clearinghouses are considered systemically important by the Central Bank of Brazil
and act as central counterparties (CCPs) of their respective markets.
The main purpose of a CCP is to ensure that trades are properly settled by acting as the
buyer to every seller and the seller to every buyer.
For proper risk mitigation, each BM&FBOVESPA clearinghouse has its own risk
management system and safeguard structures. The safeguard structures comprise the
universe of mechanisms and remedies that may be utilized by a clearinghouse to cover
losses from a failed settlement by a participant. The key components of these safeguard
structures include collateral deposited by market participants, often in the form of margin,
plus special funds intended to cover possible losses due to defaults, in addition to co-
liability undertaken by broker and clearing agents for the transactions they intermediate or
clear.

Margin deposited by market participants in the course of trading in BM&FBOVESPA
markets consist of collaterals in the form of cash, government and corporate debt
securities, sureties and stocks, among other things. As of March 31, 2010, deposited
collateral totaled R$123.2 billion, 74.8% of which were represented by government bonds
and cash (versus R$114 billion as of March 31, 2009), up 21.2% from the R$101.6 billion
(73.6% of which were represented by government bonds and cash) as of December 31,
2009, as follows:
In billions of R$
Clearing Center
03/31/2010
12/31/2009
03/31/2009
Derivatives
76.9
60.6
85.4
Foreign Exchange
3.8
3.8
3.7
Government bonds
0.8
0.8
1.0
Equities ­ CBLC
41.7
36.4
24.5
TOTAL
123.2
101.6
114.6
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.15.
This increase in the quarter to March 2010 is due to the increase in volume for the
quarter, particularly in the BM&F segment (derivatives). Margin deposited in the BM&F
segment rose to R$76.9 billion in the first quarter 2010 versus R$60.6 billion in the
previous quarter.
ANALYSIS OF THE MAIN LINE ITEMS IN THE CONSOLIDATED INCOME STATEMENT
FINANCIAL PERFORMANCE
Operating revenues
Gross operating revenues for the first quarter 2010 climbed 45.1% to R$510.7 million from
R$351.9 million one year ago primarily due to recovery in volumes traded in our markets
and, therefore, in revenues from trading.
Revenues from trading and settlement activities in the Bovespa segment totaled R$256.5
million, increasing 64.7% from the same period one year ago and accounting for 50.2% of
our total gross revenues for the quarter due to a rise in volumes traded in the quarter to
March 2010.

Revenues from trading and settlement activities in the BM&F segment totaled R$170.2
million, climbing 34.7% from the same period the year before and accounting for 33.3% of
total gross revenues also due to a rise in volumes traded in the quarter.
As a result, revenues from trading and settlement activities in both equities and
derivatives markets accounted for 83.5% of total revenues, versus 80.2% in first quarter
2009.
Other revenues amounted to R$84.0 million, a 20.3% increase over the first quarter 2009
(R$69.8 million), primarily due to changes in the following items:
Access fees from trading participants: revenues of R$12.4 million for the first quarter of
2010 accounted for 2.4% of total revenues, having climbed 13.8% from R$10.9 million for
the same quarter in the prior year. This increase is due primarily to increased broker
demand for permit categories that allow for a higher flow of trades and orders and for
which we charge higher access fees. This boost in demand is the result of market
rebound having prompted a surge in order flow at brokerage firms;
Market data (vendors): revenues for the quarter to March 2010 amounted to R$19.6
million, or 3.8% of total revenues, representing a 53.1% year on year rise. This increase
correlates with implementation of our new pricing policy started in April 2009, despite the
moderate impact that appreciation in the exchange rate for the U.S. dollar may have had
on revenues originating from non-resident customers (which receivables are denominated
in other currencies). In addition, we registered a 16.6% increase in the number of
customers for our market data, which rose to 441.5 thousand from 377.7 thousand in the
prior period, with a note made to the 18.8% rise in the average number of retail investors
(non-professional customers for our market data), to 391 thousand in the quarter to March
2010 from 329 thousand one year ago.
Listing fees: revenues of R$11.5 million, or 2.3% of total revenues in the quarter to March
2010 climbed 8.5% year on year, due mainly to our new pricing policy on listing fees
charged from issuers and offering registration fees, which totaled R$670 thousands in the
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.16.
period, and did not amount to revenues in the 1Q09. Amounts paid in connection with this
fee, after the closing of the offering, are withdrawn from annual fees paid by the issuers.
Depository / Custody / Back Office: 1Q10 revenues of R$20.9 million (4.1% of total
revenues) went up 29.9% year on year from R$16.6 million for the same quarter the year
before, as follows:
Depository activities: revenues increase to R$16 million or 34.5% year on year
from 11.9 million in the 1Q09, due mainly to the additional fee we now charge on
the value of assets under custody (except for foreign investors), which was
implemented in May 2009 and, additionally, due to 4.8% year on year growth in
number of custody accounts (to 581.3 thousand from 554.7 thousand previously);
Treasury Direct (Tesouro Direto): 4.7% year on year drop, to R$3.2 million from
R$3.4 million earlier.
Securities lending: 1Q10 revenues of R$10.5 million accounted for 2.1% of total revenues
and a 71.7% year on year surge when compared to R$6.1 million for the same quarter in
2009, primarily due to a 29% rise in the financial value of open interest positions pushing
up the average financial value by 113.0% to R$18.9 billion from R$8.9 billion in the same
quarter one year ago, and also as a result of the market rebound which drove volumes up
29%, to 208.8 thousand transactions from 161.6 thousand previously.
Taxes on revenues amounted to R$51.5 million, and represented approximately 10.1% of
gross operating revenues.
Operating Expenses
Operating expenses totaled R$133.8 million in the first quarter 2010, shrinking 10.1% from
the same period one year ago. This drop is due mainly to changes in the following line
items:
Personnel: expenses of R$63.7 million for the quarter dropped 25.4% when compared
to the first quarter 2009, primarily due to severances incurred in the first quarter 2009 in
the amount of R$ 18.0
million, and to a decline in the costs related to the employees'
Stock Option Plan in the first quarter 2010, amounting to R$9 million, compared to
R$18.8 million in the same period a year earlier;
Data processing: data processing expenses of R$21.3 million for the quarter were down
20.3% from the year before. These expenses dropped due to planning projects under
analysis and cost reductions related to equipment maintenance;
Third party services: outsourced services amounted to R$9.6 million, up 5.5% from the
same quarter a year ago; and
Marketing and promotion: these expenses amounted to R$5.3 million, up 132.5% from
the same quarter in 2009 as a result of increased
costs related to the company's
marketing campaign, pursuant to marketing and promotion programs scheduled for
2010.
Other expenses: expenses under this line item totaled R$12.6 million, versus R$5.5
million in the quarter to March 2009, a year on year increase of 128.1% due:
R$3.7 million correlate with intangibles written off (Capex reversal) in connection
with discontinued projects started 2008 and 2009;
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.17.
R$1,9 million: receivables previously provisioned by BVRJ in connection with
litigation related
to claims involving BVRJ's guarantee fund;
R$1.0 million: labor-related provisions; and
R$1.2 million: contributions and donations, such as payments made to
Associação BRAIN (Brasil Investimento e Negócios), a regional financial center
project.
Financial Net income
Net interest income for the quarter to March 2010 reached R$67.7 million, remaining
stable compared to the first quarter 2009. This drop correlates mainly with: i) a fall in
financial revenues to R$72.8 million from R$74.3 million in the same quarter one year
ago; and ii) a drop in financial expenses to R$5.1 million from R$6.4 million in the same
quarter one year ago.
Income tax and social contribution
Income before taxes for first quarter 2010 totaled R$393.0 million versus R$235.6 million
in the quarter to March 2009, or a 65.6% increase, due to a rise in the net income, which
impacted on trading revenues.
The line item `income and social contribution taxes' totaled R$
108.8 million and consists
primarily of the following elements:
the constitution of deferred tax liability amounting to R$111.6 million resulting from
transitory adjustment for differences from the tax amortization of goodwill in the first
quarter 2010, with no impact on cash flow;
the recognition of tax credits amounting to R$5.2 million related to tax losses (resulting
from payment of interest on own capital) and to negative base generated in the
quarter; and
other transitory provisions amounting to R$0.6 million.
The aforementioned liability for the first quarter 2009 was atypically recorded in the
second quarter 2009, when such accounting practice was adopted and when liabilities for
both quarters were recorded.
EBITDA and net income
EBITDA for the first quarter of 2010 was R$334.6 million, representing growth of 89.3%
over R$176.7 million in the same period one year ago. In addition, the EBITDA margin
rose to 72.9% in the first quarter 2010 from 55.8% in the same quarter a year earlier. The
rises in EBITDA and EBITDA margin correlate primarily with increase in volumes traded.
Net income for the first quarter 2010, of R$284.5 million, was up 25.3% from R$227.0
million for the same period one year earlier. The higher net income correlates primarily
with the company's improved operational performance
as a result of a rise in revenues
and a decline in costs, despite the incidence of deferred liability for first quarter 2010.
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.18.
Main lines items under Assets
Total Assets
At the end of the quarter to March 2010, the consolidated balance sheet of
BM&FBOVESPA S.A. registered total assets of R$21,615.5 million, representing a 3.7%
climb from R$20,837.8 in the quarter to December 2009.
Cash and cash equivalents; financial investments
Cash and cash equivalents, including short- and long-term financial investments,
amounted to R$4,038.1 million at the end of the quarter to March 2010 and accounted for
18.7% of total assets. This is up 20.7% from R$3,346.1 million in the previous quarter,
when cash and cash equivalents accounted for 16.1% of total assets. This climb from the
fourth quarter 2009 directly correlates with increase in the volume of collaterals deposited
by participants, as registered in the line item `collateral for transactions' under Curr
ent
Liabilities
Non-current assets
Non-current assets totaled R$17,422.6 million, where long term receivables (including
financial investments) amount to R$995.6 million, investments amount to R$39.3 million,
property and equipment amount to R$255.0 million, and intangible assets (goodwill)
amount to R$16,132.7 million.
Intangible assets consist primarily of goodwill associated to the expectation of future
profitability from the acquisition of Bovespa Holding. Goodwill was tested for impairment in
December 2009. The test was based on an evaluation report elaborated by experts and
has not revealed the need for any adjustment to the goodwill amount. For the first quarter
2010, Management has not identified any internal or external indicators that could
changes the conclusions reached in December 2009 in terms of the need for any
adjustment to the goodwill amount.
Main lines items under Liabilities and Shareholders' Equity
Current liabilities
Current liabilities amounting to R$1,645.9 million represent 7.6% of total liabilities at the
end of the quarter to March 2010, and are 44.1% higher than R$1,142.1 million,
representing 5.5% of total liabilities at the end of the previous quarter. This increase is due
mainly to growth in cash collaterals deposited by market participants, which went up to
R$1,171.4 million from R$810.3 million earlier.
Long-term liabilities
Long-term liabilities at the end of the quarter to March 2010 amounted to R$455.7 million,
29.1% higher than in the previous quarter and consisting primarily of deferred income and
social contribution taxes, as well as provision for contingencies and legal obligations.
Deferred taxes were up 34.2% as a result of the transitory adjustment for differences from
the tax amortization of goodwill recorded in the semester.
Shareholders' equity
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.19.
Shareholders' equity totaled R$
19,514.0 million, up 0.9% from the previous quarter.
Shareholders' equity is
mainly composed of capital stock of R$2,540.2 million and capital
reserves of R$16,501.3 million.
INDEPENDENT AUDITORS
The Company and its subsidiaries have retained PricewaterhouseCoopers to audit the
financial statements.
The policy that governs the engagement of external audit services by the Company and
subsidiaries is based on internationally accepted accounting principles which preserve
service independence and include the following practices: (i) the auditors cannot hold
executive or managerial functions at the Company and its subsidiaries; (ii) the auditors
cannot perform operating activities at the Company and its subsidiaries that could
compromise the auditing function; and (iii) the auditors must be impartial in order to avoid
conflicts of interest and loss of independence, and must be objective in their opinions and
reports about the financial statements.
In the quarter to March 2010, the independent auditors and related parties did not provide
external audit-unrelated services that accounted for more than 5% of the total fees paid
for external auditing.
CORPORATE GOVERNANCE AND RISK MANAGEMENT
In the first quarter 2010, BM&BOVESPA established the Corporate Risk Management
Office, whose primary goal will be to oversee the Exchange's risk exposure and act as the
focal point for all internal control system activities. This Office will hierarchically report to
the Chief Executive Officer and will functionally report to the Risk Committee which assists
the Board of Directors. Among the Office's responsibilities, we highlight the following: i) to
consolidate all risk assessment activities; ii) to assess the adequacy of risk management
activities and monitor residual risks in accordance with the risk tolerance levels defined by
Management; iii) to assess the adequacy of risk models and economic capital; iv) to
monitor the effectiveness of the Company's responses in order to enhance t
he internal
control system and its incentive mechanisms; and v) to disseminate the company's risk
management culture and corresponding corporate policies across all levels of staff.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A.
­
Bolsa de Valores, Mercadorias
e Futuros
Review Report of Independent Accountants
on Quarterly Information
March 31, 2010
background image
2
(A free translation of the original in Portuguese)

Review Report of Independent Accountants


To the Board of Directors and Shareholders
BM&FBOVESPA S.A.
­
Bolsa de Valores, Mercadorias e Futuros

1
We have reviewed the accounting information included in the Quarterly Information (Parent
Company and Consolidated) of BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e
Futuros
(the "Company")
and subsidiaries for the quarter ended March 31, 2010, comprising
the balance sheet, the statements of income, of comprehensive income, of changes in
shareholders'
equity, of cash flows and of value added, explanatory notes and the
management report. This Quarterly Information is the responsibility of the Company's
management.

2
Our review was carried out in accordance with specific standards established by the Institute
of Independent Auditors of Brazil (IBRACON), in conjunction with the Federal Accounting
Council (CFC), and mainly comprised: (a) inquiries of and discussions with management
responsible for the accounting, financial and operating areas of the Company with regard to
the main criteria adopted for the preparation of the Quarterly Information and (b) a review of
the significant information and of the subsequent events which have, or could have,
significant effects on the financial position and operations of the Company and its
subsidiaries.

3
Based on our review, we are not aware of any material modifications that should be made to
the accounting information included in the Quarterly Information of the Parent Company
referred to above in order that it be stated in accordance with technical pronouncement CPC
21 - Interim Statements, applicable to the preparation of Quarterly Information, consistent with
the standards issued by the Brazilian Securities Commission (CVM).
4
Based on our review, we are not aware of any material modifications that should be made to
the accounting information included in the Consolidated Quarterly Information referred to
above in order that it be stated in accordance with the accounting practices adopted in Brazil
applicable to the preparation of Quarterly Information, consistent with the standards issued by
the Brazilian Securities Commission (CVM).
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BM&FBOVESPA S.A.
­
Bolsa de Valores, Mercadorias e Futuros


3
5
As mentioned in Note 2, the Brazilian Securities Commission (CVM), through Deliberation
CVM no. 603/09, provided that companies could submit their Quarterly Information during the
year 2010 based on accounting standards effective until December 31, 2009, provided that
those interim financial statements were subsequently restated, including comparative figures,
to meet the new standards. Accordingly, the present Quarterly Information differ from that
originally disclosed by the Company on May 11, 2010, in compliance with CVM Deliberation
no. 603/09 and CVM Instruction no. 457/07.
São Paulo, February 17, 2011



PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5



Edison Arisa Pereira
Contador CRC 1SP127241/O-0
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
at March 31, 2010 and 2009
(In thousands of reais)
(A free translation of the original in Portuguese)
Assets
Notes
3/31/2010
12/31/2009
3/31/2010
12/31/2009
Current assets
3.459.917
2.734.723
3.532.520
2.778.968
Cash and cash equivalents
4 (a)
46.335
46.746
48.238
50.779
Financial investments
4 (b)
3.252.303
2.561.793
3.320.428
2.599.784
Accounts receivable - net
5
71.780
39.042
72.565
40.205
Other receivables
6
17.544
21.598
19.054
22.656
Taxes recoverable and prepaid
56.360
51.143
56.487
51.143
Deferred income tax and social contribution
20
9.057
5.688
9.057
5.688
Prepaid expenses
6.538
8.713
6.691
8.713
Non-current
18.290.092
18.265.737
18.469.670
18.422.215
Long-term receivables
513.777
503.434
749.176
715.951
Financial investments
4 (b)
386.080
378.537
616.412
585.648
Other receivables - net
6
745
555
4.745
4.555
Deferred income tax and social contribution
20
41.860
40.853
41.860
40.853
Judicial deposits
15 (g)
85.092
83.489
86.159
84.895
Investments
1.417.231
1.417.947
1.319.386
1.319.439
Interest in subsidiaries
7 (a)
100.139
100.791
-
-
Other investments
7 (b)
1.317.092
1.317.156
1.319.386
1.319.439
Property and equipment
8
236.280
226.457
278.277
268.895
Intangible assets
9
16.122.804
16.117.899
16.122.831
16.117.930
Goodwill
16.064.309
16.064.309
16.064.309
16.064.309
Software and projects
58.495
53.590
58.522
53.621
Total assets
21.750.009
21.000.460
22.002.190
21.201.183
BM&FBOVESPA
Consolidated
The accompanying notes are an integral part of this Financial Statements.
4
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Balance Sheet
at March 31, 2010 and 2009
(In thousands of reais)
(A free translation of the original in Portuguese)
Liabilities and shareholders' equity
Notes
3/31/2010
12/31/2009
3/31/2010
12/31/2009
Current
1.411.140
978.946
1.645.579
1.162.075
Collateral for transactions
18
1.171.426
810.317
1.171.426
810.317
Earnings and rights on securities in custody
10
31.490
31.897
31.490
31.897
Suppliers
27.539
21.318
27.588
21.443
Salaries and social charges
37.151
42.525
37.916
43.237
Provision for taxes and contributions payable
11
23.755
24.404
23.972
24.616
Income tax and social contribution
-
886
780
3.697
Financing
13
9.065
9.295
9.065
9.295
Dividends and interest on own capital payable
62.816
20.839
62.816
20.839
Redemption of preferred shares to be settled
12
1.839
1.839
1.839
1.839
Other liabilities
14
14.364
15.626
246.992
194.895
Unearned discount
31.695
-
31.695
-
Non-current
423.363
311.765
424.727
313.002
Financing
13
163
2.495
163
2.495
Deferred income tax and social contribution
20
372.784
261.060
372.784
261.060
Provision for contingencies and legal obligations
15
50.416
48.210
51.780
49.447
Minority interest in subsidiaries
-
-
16.378
16.357
Shareholders' equity
16
19.915.506
19.709.749
19.915.506
19.709.749
Capital
2.540.239
2.540.239
2.540.239
2.540.239
Capital reserve
16.675.489
16.666.489
16.675.489
16.666.489
Revaluation reserves
23.406
23.551
23.406
23.551
Legal reserve
3.453
3.453
3.453
3.453
Statutory reserves
706.119
706.119
706.119
706.119
Treasury shares
(214.889)
(230.102)
(214.889)
(230.102)
Retained earnings
181.689
-
181.689
-
Total liabilities and shareholders' equity
21.750.009
21.000.460
22.002.190
21.201.183
BM&FBOVESPA
Consolidated
The accompanying notes are an integral part of this Financial Statements.
5
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Income
Periods ended March 31, 2010 and 2009
(In thousands of reais, unless otherwise stated)
(A free translation of the original in Portuguese)
BM&FBOVESPA
Notes
1
th
Quarter 2010
1
th
Quarter 2009
Gross operating revenues
506.117
347.155
Trading and/or settlement system - BM&F
170.935
127.170
Derivatives
166.203
121.434
Foreign exchange
4.704
5.692
Assets
28
44
Trading and/or settlement system - Bovespa
314.823
200.503
Negotiation ­ trading fees
190.930
113.732
Transactions ­ clearing and settlement
68.905
44.464
Loans of marketable securities
10.520
6.127
Listing of marketable securities
11.511
10.621
Depository, custody and back office
20.436
16.084
Trading participant access
12.521
9.475
Other operating revenues
20.359
19.482
Vendors ­ quotations and market information
15.941
11.521
Commodity classification fee
277
215
Other
22
4.141
7.746
Deductions of revenue
(51.159)
(35.066)
PIS and COFINS taxes
(45.615)
(30.880)
Taxes on services
(5.544)
(4.186)
Net operating revenue
454.958
312.089
Operating expenses
(129.721)
(144.747)
Administrative and general
Personnel and related charges
(61.261)
(84.746)
Data processing
(20.466)
(26.013)
Depreciation and amortization
(11.680)
(8.506)
Outsourced services
(9.009)
(8.575)
Maintenance in general
(2.517)
(2.601)
Communications
(5.912)
(4.962)
Rents
(530)
(671)
Supplies
(450)
(465)
Promotion and publicity
(5.128)
(2.186)
Taxes
(1.036)
(316)
Board and committee members' compensation
(1.048)
(1.129)
Sundry
21
(10.684)
(4.577)
Equity in the results of subsidiaries
7
(1.509)
1.594
Financial results
66.221
65.552
Income before taxation of profit
389.949
234.488
Income tax and social contribution
20 (c)
(107.348)
(7.508)
Current
-
(271)
Deferred
(107.348)
(7.237)
Net income for the year
282.601
226.980
Outstanding shares at the end of the year
2.007.361.225
2.000.012.441
Net income per share at the end of the year (in reais)
0,140782
0,113489
The accompanying notes are an integral part of this Financial Statements.
6
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Income
Periods ended March 31, 2010 and 2009
(In thousands of reais, unless otherwise stated)
(A free translation of the original in Portuguese)
Consolidated
Notes
1
th
Quarter 2010
1
th
Quarter 2009
Gross operating revenues
510.660
351.918
Trading and/or settlement system - BM&F
173.948
130.547
Derivatives
166.203
121.434
Foreign exchange
4.704
5.692
Assets
28
44
Bolsa Brasileira de Mercadorias (Brazilian Commodities Exchange)
1.114
1.406
Bank
1.899
1.971
Trading and/or settlement system - Bovespa
314.823
200.503
Negotiation ­ trading fees
190.930
113.732
Transactions ­ clearing and settlement
68.905
44.464
Loans of marketable securities
10.520
6.127
Listing of marketable securities
11.511
10.621
Depository, custody and back office
20.436
16.084
Trading participant access
12.521
9.475
Other operating revenues
21.889
20.868
Vendors ­ quotations and market information
15.941
11.521
Commodity classification fee
277
215
Other
22
5.671
9.132
Deductions of revenue
(51.532)
(35.370)
PIS and COFINS taxes
(45.887)
(31.066)
Taxes on services
(5.645)
(4.304)
Net operating revenue
459.128
316.548
Operating expenses
(136.632)
(148.760)
Administrative and general
Personnel and related charges
(63.718)
(85.462)
Data processing
(21.266)
(26.683)
Depreciation and amortization
(12.130)
(8.951)
Outsourced services
(9.637)
(9.119)
Maintenance in general
(2.682)
(2.826)
Communications
(5.971)
(4.991)
Rents
(665)
(825)
Supplies
(472)
(477)
Promotion and publicity
(5.328)
(2.292)
Taxes
(1.145)
(495)
Board and committee members' compensation
(1.048)
(1.129)
Sundry
21
(12.570)
(5.510)
Financial results
67.696
67.859
Income before taxation of profit
390.192
235.647
Income tax and social contribution
20 (c)
(107.843)
(8.372)
Current
(495)
(1.135)
Deferred
(107.348)
(7.237)
Minority interest
252
(295)
Net income for the year
282.601
226.980
The accompanying notes are an integral part of this Financial Statements.
7
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Changes in Shareholders' Equity
Period ended March 31, 2010
(In thousands of reais)
Revaluation
Statutory
Treasury
Capital
reserve
Legal
reserves
shares
Retained
Notes
Capital
reserve
(Note 16(c))
reserve
(Note 16(d))
(Note 16(b))
earnings
Total
At December 31, 2009
2.540.239
16.666.489
23.551
3.453
706.119
(230.102)
-
19.709.749
Realization of revaluation reserve - subsidiaries
-
-
(145)
-
-
-
-
(145)
Disposal of treasury shares
19
-
-
-
-
-
15.213
(10.912)
4.301
Recognition of stock option plan
19
-
9.000
-
-
-
-
-
9.000
Net income for the year
-
-
-
-
-
-
282.601
282.601
Appropriation of net income:
Interest on own capital
16(e)
-
-
-
-
-
-
(90.000)
(90.000)
At March 31, 2010
2.540.239
16.675.489
23.406
3.453
706.119
(214.889)
181.689
19.915.506
Revenue reserves
The accompanying notes are an integral part of this Financial Statements.
8
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Cash Flows
Periods ended March 31, 2010 and 2009
(In thousands of reais)
(A free translation of the original in Portuguese)
BM&FBOVESPA
1
th
Quarter 2010
1
th
Quarter 2009
Accumulated
Accumulated
Cash flows from operating activities
Net income for the period
282.601
226.980
Adjustments for:
Depreciation and amortization
11.680
8.506
Profit on sale of property and equipment
(5)
188
Deferred income tax and social contribution
107.348
7.237
Equity in results of subsidiaries
1.509
(1.594)
Expenses related to the stock option plan
9.000
18.759
Others
-
(2.272)
Variation in financial investments and collateral for transactions
(336.944)
(20.426)
Variation in taxes recoverable and prepaid
(5.217)
(7.346)
Variation in accounts receivable
(32.738)
(32.500)
Variation in other receivables
395
(3.332)
Variation in prepaid expenses
2.175
1.628
Variation in judicial deposits
(1.603)
(2.493)
Variation in earnings and rights on securities in custody
(407)
348
Variation in suppliers
6.221
(6.247)
Variation in provision for taxes and contributions payable
(649)
(22.225)
Variation in provisions for income tax and social contribution
(886)
271
Varition in salaries and social charges
(5.374)
8.921
Variation in other liabilities
(1.262)
120
Variation in unearned discount
31.695
32.073
Variation in provision for contingencies
2.206
1.065
Net cash provided by operating activities
69.745
207.661
Cash flows from investing activities
Receipt on sale of property and equipment
192
418
Payment for purchase of property and equipment
(20.995)
(7.420)
Dividends received
3.469
-
Receipt on sale of assets held for sale
-
668
Capital increase in subsidiaries
(1.002)
(917)
Variation in other investments
-
(2)
Variation in software and projects
(5.536)
(4.888)
Net cash (used in) provided by investing activities
(23.872)
(12.141)
Cash flows from financing activities
Disposal of treasury shares - stock options exercised
4.301
3.032
Repurchase of shares
-
(75.125)
Variation in financing
(2.562)
(517)
Payment of dividends and interest on own capital
(48.023)
(9.886)
Net cash used in financing activities
(46.284)
(82.496)
Net increase in cash and cash equivalents
(411)
113.024
Cash and cash equivalents at the beginning of the year
46.746
40.921
Cash and cash equivalents at the end of the year
46.335
153.945
The accompanying notes are an integral part of this Financial Statements.
9
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Cash Flows
Periods ended March 31, 2010 and 2009
(In thousands of reais)
(A free translation of the original in Portuguese)
Consolidated
1
th
Quarter 2010
1
th
Quarter 2009
Accumulated
Accumulated
Cash flows from operating activities
Net income for the period
282.601
226.980
Adjustments for:
Depreciation and amortization
12.130
8.951
Profit on sale of property and equipment
(5)
188
Deferred income tax and social contribution
107.348
7.237
Equity in results of subsidiaries
21
-
Expenses related to the stock option plan
9.000
18.759
Others
-
(2.687)
Variation in financial investments and collateral for transactions
(390.299)
(207.199)
Variation in taxes recoverable and prepaid
(5.344)
(7.346)
Variation in accounts receivable
(32.360)
(32.925)
Variation in other receivables
(57)
(5.747)
Variation in prepaid expenses
2.022
1.621
Variation in judicial deposits
(1.264)
(2.511)
Variation in earnings and rights on securities in custody
(407)
348
Variation in suppliers
6.145
(6.205)
Variation in provision for taxes and contributions payable
(644)
(22.237)
Variation in provisions for income tax and social contribution
(2.917)
(1.313)
Varition in salaries and social charges
(5.321)
8.958
Variation in other liabilities
52.097
50.030
Variation in unearned discount
31.695
32.073
Variation in provision for contingencies
2.333
1.064
Net cash provided by operating activities
66.774
68.039
Cash flows from investing activities
Receipt on sale of property and equipment
192
418
Payment for purchase of property and equipment
(21.146)
(7.451)
Dividends received
3.469
-
Receipt on sale of assets held for sale
-
668
Variation in other investments
(10)
3
Variation in software and projects
(5.536)
(4.884)
Net cash (used in) provided by investing activities
(23.031)
(11.246)
Cash flows from financing activities
Disposal of treasury shares - stock options exercised
4.301
3.032
Repurchase of shares
-
(75.125)
Variation in financing
(2.562)
(517)
Payment of dividends and interest on own capital
(48.023)
(9.886)
Net cash used in financing activities
(46.284)
(82.496)
Net increase in cash and cash equivalents
(2.541)
(25.703)
Cash and cash equivalents at the beginning of the year
50.779
40.227
Cash and cash equivalents at the end of the year
48.238
14.524
The accompanying notes are an integral part of this Financial Statements.
10
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Value Added
Periods ended March 31, 2010 and 2009
(In thousands of reais)
(A free translation of the original in Portuguese)
BM&FBOVESPA
1
th
Quarter 2010
1
th
Quarter 2009
Accumulated
Accumulated
1 - Revenues
506.117
347.155
Trading and/or settlement system
485.758
327.673
Other operating revenues
20.359
19.482
2 ­ Goods and services acquired from third parties
54.166
49.379
Operating expenses (a)
54.166
49.379
3 ­ Gross value added (1-2)
451.951
297.776
4 - Retentions
11.680
8.506
Depreciation and amortization
11.680
8.506
5 ­ Net value added produced by the company (3-4)
440.271
289.270
6 ­ Value added transferred from others
65.639
68.783
Equity in results of subsidiaries
(1.509)
1.594
Financial income
67.148
67.189
7 ­ Total value added to be distributed (5+6)
505.910
358.053
8 - Distribution of Value Added
505.910
358.053
Personnel and related charges
61.261
84.746
Board and committee members' compensation
1.048
1.129
Income tax, taxes and contributions (b)
159.543
42.890
Interest and rents (c)
1.457
2.308
Interest on own capital and dividends
90.000
-
Loss on disposal of treasury shares
10.912
1.346
Net income for the year retained
181.689
225.634
(b) Including: taxes, PIS, COFINS, ISS and income tax and social contribution (current and deferred).
(c) Including: rents and financial expenses.
(a) Operating expenses (excludes personnel, Board and committee members' compensation, depreciation, rents and taxes) and
The accompanying notes are an integral part of this Financial Statements.
11
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BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Statement of Value Added
Periods ended March 31, 2010 and 2009
(In thousands of reais)
(A free translation of the original in Portuguese)
Consolidated
1
th
Quarter 2010
1
th
Quarter 2009
Accumulated
Accumulated
1 - Revenues
510.660
351.918
Trading and/or settlement system
488.771
331.050
Other operating revenues
21.889
20.868
2 ­ Goods and services acquired from third parties
57.926
51.898
Operating expenses (a)
57.926
51.898
3 ­ Gross value added (1-2)
452.734
300.020
4 - Retentions
12.130
8.951
Depreciation and amortization
12.130
8.951
5 ­ Net value added produced by the company (3-4)
440.604
291.069
6 ­ Value added transferred from others
72.771
74.303
Financial income
72.771
74.303
7 ­ Total value added to be distributed (5+6)
513.375
365.372
8 - Distribution of Value Added
513.375
365.372
Personnel and related charges
63.718
85.462
Board and committee members' compensation
1.048
1.129
Income tax, taxes and contributions (b)
160.520
44.237
Interest and rents (c)
5.740
7.269
Minority interest
(252)
295
Interest on own capital and dividends
90.000
-
Loss on disposal of treasury shares
10.912
1.346
Net income for the period retained
181.689
225.634
(b) Including: taxes, PIS, COFINS, ISS and income tax and social contribution (current and deferred).
(c) Including: rents and financial expenses.
(a) Operating expenses (excludes personnel, Board and committee members' compensation, depreciation, rents and taxes).
The accompanying notes are an integral part of this Financial Statements.
12
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13
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)

1
Operations

BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) is a
publicly traded corporation, with headquarters in São Paulo, whose main objective is to invest in
companies engaged in the following activities:
Management of organized markets of marketable securities, providing for the organization,
performance and development of free and open markets for the negotiation of any types of
securities or contracts, that have as reference or objective financial assets, indices, indicators,
rates, goods, currencies, energy, transportation, commodities and other assets or rights directly
or indirectly related to such assets, for spot or future delivery;
Maintenance of proper environments or systems for carrying out purchases, sales, auctions
and special operations involving marketable securities, securities, rights and assets, in the
stock exchange market and in the organized over-the-counter market;
Rendering services of registration, offset and settlement, both physical and financial, through
an internal agency or a company especially incorporated for this purpose, assuming or not the
position of central counterparty and guarantor of the definite settlement, under the terms of the
legislation in force and its own regulations;
Rendering services of central depository and fungible and custody of non-fungible goods,
marketable securities and any other physical and financial assets;
Providing services of standardization, classification, analysis, quotations, statistics,
professional education, preparation of studies, publications, information, libraries and
software on matters of interest to the Company and the participants of markets directly or
indirectly managed by it;
Providing technical, administrative and managerial support for market development, as well as
carrying out educational, promotional and publishing activities related to its objective and to
the markets managed by it;
Performance of other similar or correlated activities explicitly authorized by the Brazilian
Securities Commission (CVM); and
Investment in the capital of other companies or associations, headquartered in Brazil or
abroad, as a partner, shareholder or member pursuant to the regulations in force.

BM&FBOVESPA organizes, develops and provides for the operation of free and open securities
markets, for spot and future delivery. Its activities are organized through its trading systems and
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
14
clearinghouses and include transactions with securities, interbank foreign exchange and securities
under custody in the Special System for Settlement and Custody (Selic) markets.

BM&FBOVESPA develops technology solutions and maintains high performance systems,
providing its customers with security, agility, innovation and cost efficiency. The success of its
activities depends on the ongoing improvement, enhancement and integration of its trading and
settlement platforms and its capacity to develop and license leading-edge technologies required
for the proper performance of its operations.

Its subsidiary Bolsa Brasileira de Mercadorias is involved in the registration and settlement of
spot, forward and options transactions involving commodities, assets and services for physical
delivery, as well as the securities representing these products, in the primary and secondary
markets.

With the objective of responding to the needs of clients and the specific requirements of its
markets, its wholly-owned subsidiary Banco BM&F de Serviços de Liquidação e Custódia S.A.
provides its members and its clearinghouses with a centralized custody service for the assets
pledged as collateral for transactions.

BM&F USA Inc., a wholly-owned subsidiary located in the city of New York (USA), with a
representative office in Shanghai (China) and a wholly-owned subsidiary in London
(BM&FBOVESPA (UK) Ltd. ­ constituted in the last quarter of 2009), represents
BM&FBOVESPA abroad through relationships with other exchanges and regulatory agents, as
well as assisting in the procurement of new clients.


2
Preparation and Presentation of the quarterly information

This quarterly information was approved by the Board of Directors of BM&FBOVESPA on
February 17, 2010.

As provided by Deliberation CVM no. 457/07 and Deliberation CVM no. 603/09, the company´s
management decided to present its Quarterly Information using the accounting practices adopted
in Brazil up to December 31, 2009. Therefore, this quarterly information is different from that
presented on May 11, 2010 and has been restated according to the new accounting practices.



The quarterly financial information - ITR were prepared and have been presented in accordance
with accounting practices adopted in Brazil, in compliance with the provisions contained in the
Brazilian Corporate Law, and embody the changes introduced through the Law 11,638/07 and
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
15
11,941/09, complemented by new pronouncements, interpretations and guidelines of Accounting
Pronouncements Committee ­ CPC, approved by resolutions of the Federal Accounting Council
­ CFC and rules of Brazilian Securities Commission ­ CVM. Additionally the quarterly
information contemplate the disclosure requirements established by CPC 21 ­ Intermediate
Statements, as well as other information deemed relevant.

As stated by CVM Deliberation 609/09 (CPC 37 ­ Initial Adoption of international accounting
standards) and CVM 610/09 (CPC 43 ­ Initial Adoption of Technical Pronouncements), the
international standards and/or the changes in the accounting practices were implemented
retroactively as from January 1, 2009


The reconciliation of shareholders' equity and net income for the period between the accounting
practices previously adopted and the new accounting practices is presented below:




BM&F BOVESPA and Consolidated
Shareholders´ equity reconciliation
01/01/2009
03/31/2009
12/31/2009
Shareholders´ equity disclosed in accordance with previous
accounting practices (CPC 1 to 14)
19,291,724
19,463,879
19,709,749
Impairment of investment in CME Group (a)
(460,610)
(460,610)
(460,610)
Mark to market adjustment of shares of CME Group classified as
available for sale (b)
-
65,992
77,396
Additional to the minimum mandatory dividend before the balance sheet
date (c)
200,001
200,001
- 20,000
Contribution to constitution of BSM previously treated as investment
(20,000)
(20,000)
(20.000)
19.026.454
19,249,262
19,326,535
Non-controlling shareholders´ interest (e)
15,339
15,634
16,356
Shareholders´ equity disclosed in accordance with new accounting
practices
19,026,454
19,264,896
19,342,891


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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
16
BM&FBOVESPA and
Consolidated
Net income reconciliation
03/31/2009
12/31/2009
Net income disclosed in accordance with previous accounting
practices (CPC 01 to 14)
226,980
881,050
Non-controlling shareholders (e)
295
1,019
Net income disclosed in accordance with new accounting
practices
227.275
882,069
(a)
In accordance with the standards in effect until December 31, 2009, the investment in CME
Group was recorded at historical cost in Permanent Assets, in accordance with CPC 14, and the
value of the investment was analyzed for impairment considering the discounted cash flow
(Value in Use), as determined by CPC 1 for investments recorded on the cost method.

With the adoption of CPC 38 in 2010, the investment was reclassified to financial instruments, in
the category of Financial Assets Available for Sale, and adjusted to fair value. Also according to
the referred pronouncement, the price of the asset being used to determine the fair value has
become his stock in an active market (Stock Exchange).

Upon classification in this category, the impairment analysis is performed by the comparison of
the market value of the shares with the cost of acquisition (CPC 38), and an indicator of
impairment is the significant or prolonged decline in the market price of the shares.

As a result, an impairment loss on the investment in CME Group, in the amount of R$ 460,610,
net of tax, was recognized in Shareholders´ equity at December 31, 2008, the "as of" adoption
date for the new accounting standards effective in 2010, given the significant decline in the
market price of the shares of CME Group in the fourth quarter of 2008. Thus, the new cost basis
for the investment was established at R$ 578,306 at December 31, 2008.

With the acquisition of an additional equity stake in the CME Group, in July 2010, the
investment is now valued by the equity method and the portion relating to the impairment, net of
tax, amounting to R$460,610 was reversed against equity, establishing a new cost basis for
investments classified according to CPC 18.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
17
1.
During the year 2009, based on the new level of cost of the investment, CME Group shares, as a
result of the change in fair value, generated a positive effect of marking to market in the amount
of R$77,396 for the year and R$65,992 for the quarter, net of tax.
(c)
In According to the Technical Interpretation ICPC08 - Accounting for Proposed Dividend, the
portion that exceeds the mandatory minimum dividend (including interest on own capital) must
be maintained in equity, in a specific account until final determination of shareholders
(d)
The revision of the new useful lives for depreciation purposes according to Technical
Interpretation ICPC 10, was performed for all fixed assets with the results recorded prospectively
as from January 1, 2010.

The economic lives of assets were evaluated by specialists and in line with guidelines of the
Brazilian Institute of Evaluations and Expert Engineering (IBAPE) and ASA (American Society
of Appraisers).

The table below presents the changes in the annual rates of depreciation of fixed assets:

Previous
Current
Buildings
4%
2,5%
Furniture and fixtures
10%
10%
Machinery and equipment
10%
10%
Computer equipment
20%
25%
Facilities
10%
10%
Telephone equipment
10%
20%
Other
10% to 20%
11% to 33%
(e)
Other CPCs implemented in 2010 that did not generate impacts in the balance sheet and income
statement include:

i. Segment Reporting (CPC 22) - The BM&FBOVESPA is disclosing the consolidated quarterly
financial information by operating segment (Note 24);
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
18


ii. Presentation of the Financial Statements (CPC 26) - The interest of non-controlling
shareholders was reclassified to shareholders´ equity;

iii. Earnings per Share (CPC 41) - Earnings per share is now presented based on the net income
of the period and the weighted average outstanding shares during the year, excluding treasury
shares. The diluted earnings per share is also disclosed, taking into consideration the potential
impact of the stock options that may dilute the net income by increasing the number of shares.
(f)
Application of new accounting practices:

The interim financial information has been presented in accordance with CPC 21,.
BM&FBOVESPA prepared the reconciliation of the quarterly information previously presented
with the new accounting practices.

The information of prior periods, which has been restated for comparison purposes, was
prepared using the same accounting practices adopted in the preparation of the financial
information of March 31, 2010.
(g)
Exemptions to the retrospective application

In preparing the financial information in accordance with the new accounting practices adopted in
Brazil, the BM&FBOVESPA applied the mandatory material exceptions and certain optional
exemptions in relation to the retrospective full application of the new accounting practices
outlined below, following the prerogatives of CPC 37.

The main exemptions listed in CPC 37 are not applicable to the BM&FBOVESPA considering
the reasons listed below:
(i)
Business combinations - BM&FBOVESPA has applied the business
combinations exemption described in CPC 37 and therefore did not restate the
business combinations that occurred before January 1, 2009, the transition date;
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
19
(ii)
Deemed cost of fixed assets - BM&FBOVESPA has opted to use the values
recorded under previous accounting practices and did not use the exemption of
deemed cost on the transition date;
(iii)
Leases - BM&FBOVESPA chose to reassess the contracts within the scope of
IFRIC 4, considering the facts and circumstances of the transition date. No
impacts were identified as the previously adopted practices were already
aligned;
(iv)
Share-Based Payment - The Brazilian accounting practices are already aligned
(v)
Assets and liabilities of subsidiaries - The initial adoption of new practices were
implemented concurrently and consistently in all subsidiaries.

(h)
Exceptions to the retrospective application

The Company applied the main mandatory exceptions in the retrospective application:


The estimates used in preparing these financial statements as of January 1, 2009 and December
31, 2009 are consistent with estimates made on the same dates in accordance with accounting
practices previously adopted in Brazil.

The other mandatory exceptions did not apply because there were no significant differences with
regard to accounting practices previously adopted in Brazil.

Principles for the consolidation of the Financial Statements
The consolidated financial statements include the balances of BM&FBOVESPA and its
subsidiaries, in compliance with the provisions of CVM Instruction 247/1996, as well as the
special purpose entities, comprising the exclusive investment funds (CVM Instruction 408/2004),
as presented below:
Stake %
Subsidiaries and controlled entities
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
20
Banco BM&F de Liquidação e Custódia S.A. ("Banco BM&F")
100,00
Bolsa Brasileira de Mercadorias
50,12
Bolsa de Valores do Rio de Janeiro ­ BVRJ ("BVRJ")
86,09
BM&F USA Inc.
100,00

Exclusive investment funds
Supremo Renda Fixa ­ Fundo de Investimento em Cotas de Fundos de Investimento
Bradesco Fundo de Investimento Multimercado Letters

In preparing the consolidated financial statements, the balances of assets and liabilities of the
subsidiaries and the exclusive investment funds were consolidated, except for those investing in
retail funds' shares. The shareholders' equity of the subsidiaries and the balances of assets and
liabilities resulting from transactions carried out between the consolidated subsidiaries and
consolidated entities are eliminated, and minority interests in the shareholders' equity and
statement of income are separately disclosed.




3
Significant Accounting Practices
a.
Revenue Recognition
Revenues from the Trading and/or settlement system are recognized upon the completion of
the transactions or the provision of service, under the accrual method of accounting. The
amounts received as annual fees, as in the cases of listing of securities and certain contracts of
sale of market information, are recognized pro rata on monthly over the contractual term.
b.
Cash and cash equivalents

The balances of cash and cash equivalents for cash flow statement purposes comprise cash
and bank deposits.


c.
Financial instruments
(i) Classification and calculation
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
21
The Company classifies its financial assets in the following categories: recorded at market
value through profit or loss, loans and receivables, held to maturity and available for sale. The
classification depends on the purpose for which the financial assets were acquired.
Management determines the classification of the financial assets when they are first recorded.
Financial assets recorded at fair value through profit or loss
The financial assets recorded at fair value through profit or loss are financial assets held for
active and frequent trading or assets designated by the entity, when first recorded, as
measurable at fair value through profit or loss. Derivatives are also classified as held for
trading and accordingly, are recorded in this category. The assets in this category held for
trading are classified as current assets. Gains or losses arising from the fair value variations of
financial assets recorded at fair value through profit or loss are recorded in the statement of
income in "financial results" for the period in which they occur.
Loans and receivables
These comprise loans granted and receivables which are non-derivative financial assets with
fixed or determinable payments, not quoted in an active market. Loans and receivables are
included in current assets, except for those with maturity of more than 12 months after the
balance sheet date (which are classified as non-current assets). The Company's loans and
receivables comprise trade accounts receivable and other accounts receivable. Loans and
receivables are recorded at amortized cost, based on the effective interest rate method.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives which are classified in this category or
not classified in any other. They are included in non-current assets, unless the management
intends to sell the investment within 12 months subsequent to the balance sheet date.
Available-for-sale financial assets are recorded at fair value. Interest on available-for-sale
securities, calculated based on the effective interest rate method, is recognized in the statement
of income as financial income. The amount relating to the fair value variation is recorded in
shareholders' equity, in the Carrying value adjustments account, and is realized in net income
when the asset is sold or becomes impaired.
Fair value
Fair values of investments with public quotations are based on current market prices. For
financial assets without an active market or public quotation, the Company determines fair
value through valuation techniques, such as option pricing models.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
22
BM&FBOVESPA evaluates, at the balance sheet date, if there is objective evidence that a
financial asset or a group of financial assets is deteriorated.
(ii) Derivative instruments and hedge activities
Initially, the derivatives are recognized at fair value on the date on which the derivative
agreement is signed and, subsequently, they are recalculated at their fair value, with the fair
value variations recorded in income, except when the derivative is recorded as a cash flow
hedge.
The fair value of the derivative instruments is presented in Note 4.

d.
Accounts receivable, other receivables and allowance for doubtful accounts

Accounts receivable and other receivables are initially stated at present value, less the
allowance for doubtful accounts. Management adopts a policy of recording a full provision
for doubtful debts on credits overdue for more than 60 days.
e.
Prepaid expenses

Prepaid expenses mainly recognize amounts related to software maintenance contracts and
insurance premiums, which are amortized based on the terms of the contracts in force.
f.
Investments
Investments in entities and subsidiaries are recorded and evaluated based on the equity
accounting method, with the related income (or expense) recognized in income for the year
as operating income (or expense). The accounting practices of the subsidiaries are consistent
with the practices adopted by the Company.
Other investments are recorded at cost of acquisition or merger, less the provision for
adjustment to realizable value when the loss is considered permanent.
g.
Intangible assets

An intangible asset is an identifiable non-monetary asset without physical substance, such as
goodwill.
Goodwill
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
23
Goodwill represents the positive difference between the amount paid and / or payable for the
acquisition of a business and the net fair value of assets and liabilities of the acquired
subsidiary. Goodwill from acquisitions of subsidiaries is recorded in "intangible assets". If
the difference is negative, representing a discount to fair value, it must record the amount as a
gain in income at the date of acquisition. Goodwill is tested annually for impairment.
Goodwill is stated cost value less accumulated impairment losses. Recognized impairment
losses on goodwill are not reversed.

The portion corresponding to the market value adjustment of assets was allocated to the
corresponding acquired/merged assets. The upward market value adjustment is amortized as
the corresponding assets are realized over a period of up to 22 years.

The portion based on estimated future profitability is recorded in the intangible group and
until December 31, 2008, was amortized over a 10-year period, to the extent of and in
proportion to the projected results on which it was based. The portion based on the
expectation of future profitability is no longer amortized as from January 1, 2009.
Software and projects

Software licenses acquired are capitalized and amortized over their estimated useful life, at
the rates described in Note 9.

Costs of software development or maintenance are expensed as incurred. Expenditures
directly associated with identifiable and unique software, controlled by the Company and
which will probably generate economic benefits greater than the costs for more than one
year, are recognized as intangible assets. Direct expenditures include remuneration of the
software development team.
Expenditures for development of software recognized as assets are amortized using the
straight-line method over their useful lives, at the rates described in Note 9.
h.
Step Acquisition of affiliate
The cost of an affiliate acquired in steps is measured by the total amount paid in each
transaction.

The gains or losses previously recognized in other comprehensive income, while classified as
available for sale, are reversed against the investment account to recompose the cost.

Goodwill is calculated at each step of acquisition as the difference between the acquisition
cost and the fair value of net assets in proportion to the interest acquired
.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
24
i.
Property and equipment
Recorded at cost of acquisition or construction. Depreciation is calculated on the straight-line
method and takes into consideration the useful economic life of the assets.

Subsequent costs are included in the carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits will flow to the item and
that the cost of the item can be measured reliably. All other repairs and maintenance are
recorded in income, when incurred.
j.
Contingent assets and liabilities and legal obligations

The recognition, measurement, and disclosure of contingent assets and liabilities and legal
obligations comply with the criteria defined inCPC25.
Contingent assets - These are not recorded, except when management has full control
over their realization or when there are secured guarantees or favorable decisions to
which no further appeals are applicable, such that the gain is almost certain. Contingent
assets with realization considered probable, where applicable, are only disclosed in the
financial statements.
Contingent liabilities - These are recognized based on a number of factors including: the
opinion of legal advisors; the nature of the lawsuits; similarity to precedents; the
complexity of the proceedings; and prior court decisions. They are recognized whenever
the loss is evaluated as probable, since this would give rise to a probable outflow of
resources for the settlement of the obligations, and the sums involved are measurable
with sufficient reliability. The contingent liabilities classified as possible losses are not
recorded and are only disclosed in the notes to the financial statements, and those
classified as remote are neither recognized nor disclosed.
Legal obligations ­ These result from tax lawsuits in which the Company is discussing
the validity or constitutionality of certain taxes and charges. These are fully recognized in
the financial statements, regardless of the assessment of their probability of success.
k.
Judicial deposits
Judicial deposits are monetarily restated and presented in non-current assets.

l.
Other assets and liabilities
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
25
These are stated at their known and realizable/settlement amounts plus, where applicable,
related earnings and charges and monetary and/or exchange rate variations up to the balance
sheet date.
m.
Impairment of assets

Property, plant and equipment and other non-current assets, including goodwill and
intangible assets, are reviewed annually to identify evidence of unrecoverable losses, and also
whenever events or changes in the circumstances indicate that the book value may not be
recoverable. In this case, the recoverable value is calculated to verify if there is any loss.
Loss is recognized at the amount by which the book value of the asset exceeds its recoverable
value, which is the higher between the net sales price and the value in use of an asset. For
evaluation purposes, assets are grouped at the lowest level for which there are separately
identifiable cash flows.
n.
Leases

Leases of property and equipment in which the Company substantially assumes all ownership
risks and benefits are classified as financial leases. These financial leases are recorded as a
financed purchase, recognizing at the beginning of the lease a property and equipment item
and a financing liability (lease). Property and equipment acquired in finance leases are
depreciated at the rates of its useful lives.
A lease in which a significant portion of the ownership risks and benefits remains with the
lessor is classified as an operating lease. Operating lease payments (net of all incentives
received from the lessor) are charged directly to results.
o.
Provisions
Provisions are recognized when the Company has a legal or informal present obligation as a
result of past events, a cash outflow to settle the obligation is probable and a reliable estimate
of the amount can be made.
p.
Employee benefits
(i)
Pension obligations
The Company has no defined benefit plans. The Company offers its employees a defined
contribution plan and pays contributions on contractual or voluntary bases. Once the
contributions have been made, the Company has no obligations related to additional
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
26
payments. The regular contributions comprise net periodic costs for the period in which they
are payable and, therefore, are included in the personnel costs.
(ii) Share-based remuneration (stock options)
The Company offers to its employees and executives share-based remuneration plans, to be
settled in Company stock, according to which the Company receives services in
consideration for stock options. The fair value of options granted related to services to be
provided is recognized as an expense during the period in which the right is obtained, i.e., the
period during which specific vesting conditions must be met. On the date of the balance
sheet, the Company revises the estimated number of options which will vest and
subsequently, recognizes the impact of the change on initial estimates, if any, in the statement
of income, with a contra-entry to the capital reserve in shareholders' equity on a prospective
basis.
(iii) Profit sharing
The provision is recorded as an accrual basis in accordance with the remuneration policy of
the BM&FBOVESPA

q.
Financing
Financing is initially recognized at fair value, upon receipt of the funds, net of transaction
costs. Subsequently, the financing is presented at amortized cost, that is, plus charges and
interest in proportion to the period incurred ("pro rata temporis").
r.
Current and non-current assets and liabilities
The segregation between current and non-current assets/liabilities is based on a period of 365
days as from the base date of the financial statements.


s.
Foreign currency translation

Transactions in foreign currency are translated into reais using the exchange rates effective
on the transaction dates. Balance sheet account balances are translated at the exchange rate in
effect on the balance sheet date. Foreign exchange gains and losses resulting from the
settlement of these transactions and from the translation of monetary assets and liabilities
denominated in foreign currency are recognized in the income statement.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
27

The items included in the quarterly information for each of the consolidated companies of
BM&FBOVESPA are measured using the currency of the primary economic environment in
which the company operates ("functional currency"). The quarterly information is presented
in Brazilian reais, which is the functional currency of BM&FBOVESPA and also the
presentation currency of the consolidated.

The transactions with foreign currencies are translated into the functional currency, using the
exchange rates prevailing on the transaction dates or evaluation dates. The foreign exchange
gains and losses arising from the settlement of these transactions and of the translation, at the
exchange rates at the end of period, of assets and liabilities in foreign currencies, are
recognized in the income statement, except when deferred in equity as part of a hedge of net
investment abroad.
t.
Taxes and contributions

BM&FBOVESPA is a for-profit business corporation and accordingly its income is subject
to certain taxes and other contributions which are listed below.

Provisions for income tax, social contribution and other taxes are calculated at the rates
presented below:
Income tax
15,00%
Additional income tax
10,00%
CSLL
9,00%
PIS
1,65%
COFINS
7,60%

Banco BM&F de Serviços de Liquidação e Custódia S.A. calculates the contributions to PIS
and to COFINS at the rates of 0,65% and 4%, respectively, and CSLL at 15%.

The subsidiaries Bolsa Brasileira de Mercadorias and BVRJ are not-for-profit entities and
calculate the contribution to PIS at the rate of 1% on payroll.
u.
Deferred income tax and social contribution
Deferred taxes are calculated on income tax and social contribution losses and the temporary
differences between the tax calculation bases of assets and liabilities and the respective book
values in the financial statements. The currently defined tax rates of 25% for income tax and
9% for social contribution are used to calculate deferred tax assets and liabilities.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
28

Deferred tax assets are recognized to the extent that it is probable sufficient future taxable
profit will be available to be offset by temporary differences and/or tax losses, considering
projections of future income prepared based on internal assumptions and future economic
scenarios which may, accordingly, undergo change.

Deferred tax liabilities are recognized in relation to all taxable temporary differences, that is,
differences that will result in taxable amounts in determining taxable profit (tax loss) of
future periods when the carrying amount of the asset or liability is recovered or settled.
v.
Net income per share

For purposes of disclosure of earnings per share, the basic earnings per share is calculated by
dividing the net profit attributable to shareholders of the parent by the average number of
outstanding during the period. The diluted earnings per share is calculated similarly, except
that the quantities of outstanding shares are adjusted to reflect the additional outstanding
shares with potentially dilutive effects, due to the stock option plan (Note 16g), had been
issued during the respective periods.
w.
Dividends distribution
The dividend distribution to shareholders of the BM&FBOVEPA is recognized as a liability in
the quarterly information at the end of the period, based on the BM&FBOVESPA´s bylaws.
Any amount above the minimum required is only recognized when approved by shareholders
General Meeting.
x.
Segment Report presentation
The report by operating segments is presented in a consistent manner with the internal report
provided to the management, which is responsible for the main operational and strategic
decisions of the Company.

y.
Critical accounting estimates and judgments
b)
Equity method of accounting

BM&FBOVESPA applies the equity method for its investments when it has the ability to
exercise significant influence over the operations and financial policies of the investee. The
judgment of BM&FBOVESPA regarding the level of influence over the investment takes
into account key factors such as the percentage of interest, representation on the Board of
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
29
Directors, participation in defining policies and business settings and material transactions
between the companies.


c)
Impairment

Annually, BM&FBOVESPA performs tests of impairment, specifically related to goodwill
and fixed assets, according to the accounting policy described in note 3.

d)
Classification of financial instruments

BM&FBOVESPA classifies the financial assets in the categories of (i) measured at fair value
through profit or loss and (ii) available for sale. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of
financial assets at initial recognition. The record of financial assets, starting with its original
classification, is described in Note 3.c.

e)
Stockoption plan

BM&FBOVESPA offers a stock option plan to its employees and executives. The fair value
of these options is recognized as expense over the period in which the right is acquired.
Management reviews the estimated amount of options that will achieve the conditions for
vesting and subsequently recognizes the impact of changes in initial estimates, if any, in the
statement of income, with an offset to the reserve account in equity, as shown in note 3.o.







4
Cash and Cash Equivalents and Financial Investments
a.
Cash and Cash Equivalents
For the purposes of the statement of cash flows, the following balances are being considered
as cash and cash equivalents:
BM&FBOVESPA
Details
03/31/2010
12/31/2009
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
30
Banks - deposits in domestic currency
193
62
Banks - deposits in foreign currency
46,142
46,684
Total
46,335
46,746
Consolidated
Details
03/31/2010
12/31/2009
Banks - deposits in domestic currency
361
160
Banks - deposits in foreign currency
47,877
50,619
Total
48,238
50,779























b.
Financial Investments
The breakdown of financial investments by nature and time to maturity is as follows:


BM&FBOVESPA
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
31
Details
Without
maturity
Up to 3
months
More than 3
months and
up to 12
months
More than
12 months
and up to 5
years
More than 5
years
03/31/2010
12/31/2009
Financial investment funds (1)
1,570,579
­
­
­ ­ 1,570,579 1,518,855
Bank certificates of deposit
­
­ 545
493
­ 1,038 4,656
Securities purchased under
resell agreements
­
­ 1,656,884
­ ­ 1,656,884 1,015,439
Financial Treasury Bills
­ 5,510
84
385,451
­ 391,045 383,353
National Treasury Bills
National Treasury Notes
­
­ 59
98 38 195 213
Shares
11,831
­
­
­
­ 11,831 11,604
Other investments
6,811
­
­
­
­ 6,811 6,210
Total financial investments
1,589,221 5,510
1,657,572
386,042 38 3,638,383 2,940,330
Short term
3,252,303 2,561,793
Long term
386,080 378,537

















CONSOLIDATED
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
32
Details
Without
maturity
Up to 3
months
More than 3
months and
up to 12
months
More than
12 months
and up to 5
years
More than 5
years
03/31/2010
12/31/2009
Financial investment funds (1)
1,018,379
­
­
­ ­ 1,018,379 977,428
Bank certificates of deposit
­
­ 545
493
­ 1,038 6,320
Securities purchased under
resell agreements
­ 517,555
1,676,196
­ ­ 2,193,751 1,488,578
Financial Treasury Bills
­ 43,917
31,238
583,217 20,693 679,065 644,407
National Treasury Bills
­ 506
2,783
11,873
­ 15,162 40,333
National Treasury Notes
­
­ 59
98 38 195 213
Shares
13,190
­
­
­
­ 13,190 13,126
Other investments
6,811
­ 9,249
­
­ 16,060 15,027
Total financial investments
1,038,380 561,978
1,720,070
595,681 20,731 3,936,840 3,185,432
Short term
3,320,428 2,599,784
Long term
616,412 585,648


(1)
Investments in funds that invest in quotas of other financial investment funds, the
portfolios of which mainly comprise investments in federal government bonds, securities
purchased under resell agreements and bank certificates of deposit and have the CDI as
their profitability benchmark. The balances presented in the table of BM&FBOVESPA
also include the exclusive investment funds which were consolidated in the financial
statements. Detailed information about these funds is presented in Note 7(c).
The net assets of the exclusive investment funds included in the process of consolidation of the
quarterly information are: (i) Supremo Renda Fixa
- FICFI - R$ 372,143at March 31, 2010 (R$
364,792 at December 31, 2009), (ii) Bradesco FI Multimercado Letters - R$ 180.058 at March
31, 2010 (R$ 176,550 at December 31, 2009).



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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
33


The main investment funds that were not consolidated are detailed in the table below:
BM&FBOVESPA and
Consolidated
Fund
Bank
Details
03/31/2009
12/31/2009
FIC Megainvest
Santander
Exclusive fund that invests in
quotas of retail funds;
654,598
642,020
FIC Referenciado DI
Federal
Bradesco
Retail fund that invests in quotas
of other investment funds;
363,460
335,177
The government bonds are held in custody at the Special System for Settlement and Custody
(SELIC), the quotas of investment funds are held in custody with their respective managers and
the shares are in the custody of CBLC. (BM&FBOVESPA's Equity and Corporate Debt
Clearinghouse).
Classification

Considering the nature and objective of the Company and its financial investments, these are
classified as financial assets recorded at fair value through profit or loss, designated by
management when they are first recorded.

Fair value

The fair value of the main financial investments is calculated as follows:

Quotas of investment funds ­ fair value calculated based on the amount of the quota determined
on the last business day prior to the balance sheet date, as disclosed by the corresponding
Manager.

Federal government securities ­ calculated based on the amounts and prices disclosed by the
Brazilian Association of Financial and Capital Market Institutions (ANBIMA) or, when these are
unavailable, on the price defined by management which best reflects the sales price, determined
based on information gathered from other institutions.

Bank certificates of deposit (CDB) and securities purchased under resell agreements (guaranteed
by Federal Government Bonds) ­ calculated at amounts adjusted to the balance sheet date, based
on contractual interest, indexed to the CDI/Selic rate.

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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
34
Derivative financial instruments

The derivative financial instruments comprise One-Day Interbank Deposit Futures Contracts
(DI1) and are stated at their market values. These contracts are included in the exclusive fund
portfolios which were consolidated (Note 2) and are used to cover the fixed interest rate
exposure, swapping the interest rate to floating (CDI). Even though these derivatives are
designed to provide protection, hedge accounting is not adopted.


The net result from derivative transactions and the related financial instrument refers to the short
position contracts for future interest rates, with market value (R$ 25) on March 31, 2010 and (R$
396) on December 31,2009


The DI1 contracts have the same maturity dates as the National Treasury Notes (fixed interest
rate) to which they are related.

Financial risk management policy
The Company's investment policy emphasizes low risk cash alternatives, mainly federal
government bonds, acquired frequently through investment funds. As a result, in general,
BM&FBOVESPA has most of its investments in conservative investment funds, with portfolios
backed by federal government bonds that are indexed to the SELIC/CDI rate.
Sensitivity analysis
The table below presents a summary of the financial instruments' exposure classified by market
risk factors at March 31, 2010 and December 31, 2009:
Risk Factors (Consolidated)
03/31/2010
12/31/2009
Risk factor
Risk
Percentage
Percentage
CDI
Falling CDI
98.34%
98.03%
Fixed interest rate
Rising fixed rate
0.94%
1.27%
USD
Falling dollar
0.42%
0.50%
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
35
Gold price
Falling gold price
0.30%
0.20%
100.00%
100.00%

Interest Rate Risk

This risk arises from the possibility that fluctuations in future interest rates for the corresponding
maturities could affect the fair value of the Company's transactions.
Floating-rate Position
As a financial investment policy and considering the need for immediate liquidity with the least
possible impact from interest rate fluctuations, the Company maintains its financial assets and
liabilities indexed to floating interest rates. The table of Risk Factors (Consolidated) includes the
investments in CDB, securities purchased under resell agreement and quotas of retail investment
funds which use CDI/SELIC as a benchmark.
This strategy minimizes the impact on the fair value or present value arising from possible
variations in future interest rates. Accordingly, the effective impact of these fluctuations on the
fair value of financial investments is not material.
Fixed-rate Position
The Company has a portion of its financial investments bearing fixed interest rates with results in
a net exposure to fixed interest rates. However, in terms of percentage, considering the amounts
involved as presented in the table of Risk Factors (Consolidated), the effects on the portfolio are
not considered material.





Exchange rate risk
This arises from the possibility that fluctuations in the exchange rates for the acquisition of
services, product sales and the contracting of financial instruments could have an impact on the
related domestic currency amounts.

In addition to the amounts payable and receivable in foreign currencies, the Company has third-
party deposits in foreign currency to guarantee the settlement of transactions by foreign investors
and also own funds in currency abroad. At March 31, 2010 the Company's net foreign currency
exposure amounted to R$16,260 (R$16,930 ­ December 31, 2009). Considering the amounts
involved, as presented in percentage terms in the table of Risk Factors (Consolidated), the effects
on the portfolio are not considered material.
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
36

Inflation index and gold position

Considering the amounts and percentages involved, as detailed in the table of Risk Factors
(Consolidated), the effects on the portfolio are not considered material.

5
Accounts Receivable

The breakdown of accounts receivable is as follows:
BM&FBOVESPA
Details
03/31/2010
12/31/2009
Trading fees
24,569
15,911
Annuity
24,006
1,610
Vendors ­ Signal broadcast
12,701
10,559
Depository and custody fees
8,006
7,320
Other accounts receivable
9,402 9,626
Provision for doubtful accounts
(6,904) (5,984)
Total
71,780
39,042
Consolidated
Details
03/31/2010
12/31/2009
Trading fees
24,772
16,564
Annuity
24,006
1,610
Vendors ­ Signal broadcast
12,701
10,559
Depository and custody fees
8,006
7,320
Other accounts receivable
9,984 10,136
Provision for doubtful accounts
(6,904) (5,984)
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
37
Total
72,565
40,205
Of the amounts presented above, approximately 90% is represented by receivables falling due
within 60 days.
6
Other Receivables

Other receivables comprise the following:
BM&FBOVESPA
03/31/2010
12/31/2009
Current
Sale of properties receivable
188
195
Advances to employees
1,274
959
Amounts receivable - related parties (note 17)
12,246
13,859
Dividends receivable
1,705
3,333
Advances to suppliers
77
1,402
Other
2,054
1,850
Total
17,544
21,598
Non-current
Sundry
816
626
Total
816
626


Consolidated
03/31/2010
12/31/2009
Current
Sale of properties receivable
188
195
Advances to employees
1,294
970
Restricted deposits (Banco BM&F S.A.)
2,250
1,776
Amounts receivable - related parties
10,799
11,674
Dividends receivable
1,705
3,333
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
38
Advances to suppliers
77
1,402
Other
2,742
3,306
Total
19,055
22,656
Non-Current
Brokers in liquidation
10,425
10,425
Other
816
626
Allowance ­ Other receivables (1)
(6,425)
(6,425)
Total
4,816
4,626

(1)
Allowance for doubtful accounts recorded mainly on the balance of accounts receivable
from brokers in liquidation, which takes into consideration the membership certificates of
the brokers that are pledged.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
39
7
Investments

a.
Investments in subsidiaries

Investments in subsidiaries comprise the following:

BM&F BOVESPA
Subsidiaries and controlled
entities
Adjusted
shareholders'
equity
Total number
of common
shares
Total number
of equity
memberships % Stake
Investment
03/31/2010
Equity in
income 1
th
Quarter 2010
Equity in
income 1
th
Quarter
2009
Banco BM&F de Liquidação e
Custódia S.A.
40,536
24,000
100
40,536 581 1,357
Bolsa Brasileira de Mercadorias
15,851
405
50,12
7,944 (69)
(282)
Bolsa de Valores do Rio de Janeiro
-BVRJ
58,938
115
86,09
50,467 (1,263) 1,381
BM&F USA Inc.
1,192
1,000
100
1,192 (758)
(862)
Total
100,139
(1,509) 1,594

Summary of main financial information of subsidiaries and affiliates:
Description
Banco
BM&F
Bolsa Brasileira
de Mercadorias
Bolsa de Valores
do Rio de
Janeiro-BVRJ
BM&F
USA Inc
Assets
274,956
18,116
60,980
1,202
Liabilities
235,419
2,266
2,042
-
Revenue
1,899
1,472
1,575
-
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
40
Activity in the investments during the year:
Investments
Banco
BM&F
Bolsa Brasileira
de Mercadorias
Bolsa de
Valores do Rio
de Janeiro
BM&F USA
Inc
Total
At December 31, 2009
39,955
8,013
51,875
948 100,791
Equity in results
581 (69)
(1,263) (758) (1,509)
Realization of the revaluation reserve
-
- (145)
- (145)
Capital increase
-
-
-
1,002
1,002
At March 31, 2010
40,536
7,944
50,467
1,192 100,139


b.
Investment Property

Represented by leased properties owned by the subsidiary BVRJ - Bolsa de Valores do Rio de
Janeiro, presented in the group of Investment Properties and depreciated, according to the
estimated useful lives of the asset, in 50 years.
8
Property and Equipment
The breakdown of property and equipment is as follows:
BM&FBOVESPA
Details
03/31/2010
03/31/2009
Cost Depreciation
Net
Net
Buildings
185,668
(99,670
85,998 86,055
Furniture and fixtures
36,771
(24,506)
12,265 12,500
Apparatus and equipment
76,283
(67,723)
8,560
8,650
Computer-related equipment
147,570
(74,725)
72,845 60,468
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
41
Land
21,591
-
21,591
21,591
Facilities
30,763
(10,603)
20,160
19,023
Telephone system
3,932
(2,154)
1,778 1,906
Other
68,330
(41,474)
26,856 26,748
Total
570,908
(320,855)
250,053
236,941



Consolidated
Details
03/31/2010
03/31/2009
Cost Depreciation
Net
Net
Buildings
187,852
(100,329)
87,523
87,601
Furniture and fixtures
37,297
(24,857)
12,440
12,684
Apparatus and equipment
76,448
(67,802)
8,646
8,741
Computer-related equipment
148,313
(75,403)
72,910
60,535
Land
21,743
-
21,743
21,743
Facilities
31,794
(11,065)
20,729
19,618
Telephone system
3,932
(2,154)
1,778
1,906
Other
70,766
(41,536)
29,230
29,111
Total
578,145
(323,146)
254,999
241,939





9
Intangible Assets

Goodwill

The remaining portion of goodwill in the amount of R$16,064,309 is based on estimated future
income and supported by an economic and financial appraisal report of the investment.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
42


In accordance with the pronouncements issued by CPC in 2008, the portion based on the
expectation of future profitability is no longer amortized as from January 1, 2009. However, it is
subject annually to impairment testing, pursuant to Technical Pronouncement CPC 01 ("value in
use" method).

The goodwill based on expected future income was tested for impairment in 2009. The test, based
on an appraisal report prepared by specialists, did not reveal the need for any adjustments to the
goodwill amount. In the first quarter of 2010, the management did not identify internal or
external indicators that could alter the conclusions reached in December 2009 as no need for
adjustments to the value of goodwill.

Software and projects

The balance comprises costs for the acquisition and development of software and systems in the
net amount of R$20,903 (R$20,361 at December 31, 2009), with amortization rates of 20% to
33% per annum, and expenditures in the amount of R$47,468 (R$43,631 at December 31, 2009)
for the implementation and development in progress of new systems and software.
10
Earnings and Rights on Securities in Custody

These comprise dividends and interest on capital received on behalf of the owners of securities
from listed companies, which will be transferred to the custody agents and subsequently to their
clients, who are the owners of the shares.


11
Provision for Taxes and Contributions Payable

At March 31, 2010 and 2009, the breakdown of this balance was as follows:
BM&FBOVESPA
Details
03/31/2010
03/31/2009
Withholding taxes and contributions
payable
3,503
7,783
PIS/Cofins
17,847
14,471
ISS (Municipal service tax)
2,405
2,150
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
43
Total
23,755
24,404

Consolidated
Details
03/31/2010
03/31/2009
Withholding taxes and contributions
payable
3,583
7,838
PIS/Cofins
17,947
14,596
ISS (Municipal service tax)
2,442
2,182
Total
23,972
24,616

12
Redemption of Preferred Shares to be Settled

At March 31, 2010, the remaining balance amounts to R$1,839 (R$1,839 at December 31, 2009)
and mainly refers to amounts payable to foreign investors.

13
Financing

The Company has a financing balance related to financial leases of information technology
equipment. The balance at March 31, 2010 is R$9,228 (R$11,790 at December 31, 2009) with
maturity dates up to 2011.

14
Other liabilities
BM&FBOVESPA
Details
03/31/2010
03/31/2009
Custody agents
4,127
4,108
Finep - Carbon credits
281
281
Amounts payable - related parties (Note 17)
2,444
4,946
Third party services
1,847
1,398
Electricity, water and telephone
748
791
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
44
Other
4,917
4,102
Total
14,364
15,626

Consolidated
Details
03/31/2010
03/31/2009
Custody agents
4,127
4,108
Finep - Carbon credits
281
281
Demand deposits (1)
39,835
35,468
Liabilities for securities purchased under resell
agreements (1)
192,925
144,513
Amounts payable - related parties (Note 17)
388
3,264
Third party services
2,229
1,398
Electricity, water and telephone
748
791
Other
6,459
5,072
Total
246,992
194,895

(1)
Balances related to the transactions of Banco BM&F.


15
Contingent Assets and Liabilities
a.
Contingent assets

BM&FBOVESPA has no contingent assets recognized in its balance sheet, and at present no
lawsuits which are expected to give rise to future gains.
b.
Contingent liabilities

BM&FBOVESPA and its subsidiaries are defendants
in a number of labor, tax and civil
lawsuits which have arisen during their normal operating activities.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
45
The procedure utilized by BM&FBOVESPA for recognition of these obligations is that
specified in CVM Deliberation 594/09. The lawsuits are classified by their probability of loss
(probable, possible or remote), based on an evaluation by the Company and its legal advisors,
using parameters such as previous judgments and the history of loss in similar suits.

The proceedings in which the loss is evaluated as probable mainly comprise the following:
Labor claims mainly filed by employees of outsourced service providers, on account of
alleged noncompliance with labor legislation. There are also claims filed by former
BVRJ employees, specifically as regards to noncompliance with rules related to
collective bargaining agreements;
Civil proceedings, mainly consisting of matters pertaining to civil liability for losses and
damages.
Tax claims are mainly related to the incidence of PIS and Cofins on (i) the
Company's revenues and (ii) receipt of interest on equity.
c.
Legal obligations

These are almost entirely proceedings in which BM&FBOVESPA seeks exemption from
social security additional contributions on payroll and payments to self-employed
professionals, as well as discussions over the legality of Labor Accident Insurance (SAT).

A provision for the amounts related to legal obligations is recorded in full.


d.
Changes in balances

The activity in provisions for contingencies and legal obligations may be summarized as
follows:
BM&FBOVESPA
Civil
Labor
Legal
obligations
Tax
Total
At December 31, 2009
3,671
4,108
28,608
11,823
48,210
New provisions
57
1,163
663 -
1,883
Reversals
-
(106) - -
(106)
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
46
Reassessment of contingent risks
(29) - - -
(29)
Price-level restatement
109
116
37
196
458
At March 31, 2010
3,808
5,281
29,308
12,019
50,416
Consolidated
Civil
Labor
Legal
obligations
Tax
Total
At December 31, 2009
4,227
4,458
28,608
12,154 49,447
New provisions
57
1,270
663 -
1,990
Reversals
-
(106) - -
(106)
Reassessment of contingent risks
(29) - - -
(29)
Price-level restatement
115
126
37
200
478
At March 31, 2010
4,370
5,748 29,308 12,354 51,780

According to the characteristic of provisions there is no cash disbursement forecast
e.
Possible losses

The proceedings classified as a "possible loss" are so classified as a result of uncertainties
surrounding their outcome. They are lawsuits for which jurisprudence has not yet been
defined or which still depend on verification and analysis of the facts, or even involve
specific aspects that reduce the chances of loss.

BM&FBOVESPA and its subsidiaries have tax, civil and labor lawsuits involving risks of
loss classified by management as possible, based on the evaluation of their legal advisors, for
which no provision has been recorded. These proceedings comprise mainly the following:
Labor proceedings, mainly claims filed by employees of outsourced service providers, on
account of alleged noncompliance with labor legislation. The amounts related to the
lawsuits classified as possible at March 31, 2010 are R$21,840 in the parent company (
R$21,534 at December 31, 2009) and R$23,783 on a consolidated basis (R$23,047 at
December 31, 2009);
Civil proceedings mainly consist of matters pertaining to civil liability for losses and
damages. The total amount involved in the lawsuits classified as possible at March 31,
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
47
2010 is R$62,524 in the parent company and on a consolidated basis (R$64,474 at
December 31, 2009).
The majority of this amount is related to a possibility of the Company being required to
deliver shares of BM&FBOVESPA (surviving company of the merger with BM&F
S.A.), in an amount corresponding to the shares resulting from the conversion of the
shares of a commodities broker in the former BM&F, or indemnify the corresponding
amount, if the cancellation of the shares in the former BM&F is found to be illegal, as
alleged by a commodities broker in bankruptcy;
The tax proceedings of BM&FBOVESPA and its subsidiaries mainly involve a dispute
over the classification of exchanges as subject to the payment of social contributions.
Most of these amounts are related to two lawsuits filed by BM&FBOVESPA against the
Federal Government arguing that the Company was not subject to the payment of social
contributions prior to the 1999 fiscal year. The amount involved in the aforementioned
proceedings as of March 31, 2010 is R$42,974 (R$42,393 at December 31, 2009). The
total amount involved in tax proceedings classified as possible is R$66,049 in the parent
company and on a consolidated basis (R$65,388 at December 31, 2009).
f.
Remote losses
BM&FBOVESPA, as successor of the former BOVESPA, and the subsidiary BVRJ are
defendants in an action for material damages and pain and suffering filed by Mr. Naji Robert
Nahas, Selecta Participações e Serviços SC Ltda. and Cobrasol - Companhia Brasileira de
Óleos e Derivados, on the grounds of alleged losses in the stock market sustained in June
1989. The amount attributed to the cause by the plaintiffs is R$10 billion. In relation to the
material damages and pain and suffering claimed, the plaintiffs ask that BVRJ and
BM&FBOVESPA be sentenced in proportion to their responsibilities. On January 22, 2009, a
sentence was published in which the claims made by the plaintiffs were considered
completely unfounded. The Company and its legal advisors consider that the chances of loss
in this lawsuit are remote.

g.
Judicial deposits
BM&FBOVESPA
Consolidated
Details
03/31/2010
03/31/2009
03/31/2010
03/31/2009
Legal obligations
29,263
28,563
29,598
28,563
Tax
51,467
50,673
51,467
51,005
Civil
2,036
1,949
2,036
1,949
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
48
Labor
2,326
2,304
3,058
3,378
Total
85,092
83,489
86,159
84,895
Of the total judicial deposits, R$31,242 (R$30,731 at December 31, 2009) relates to one of
the processes involving a dispute over the classification of exchanges as subject to the
payment of social contributions, classified as possible by management, as described in "e"
above. Given the existence of judicial deposits related to tax processes classified as of
possible loss, the amount of tax contingencies and legal obligations is lower than the total
deposits related to tax claims.
h.
Law 11,941/09

In November 2009, the Company enrolled in the Tax Recovery Program, instituted by Law
11,941/09 and Provisional Measure (MP) 470/09, aimed at cash payment of the amount of
R$ 2,365, related to a portion of the amount disputed in the COFINS court case, and the
amount is deposited in escrow and constituted as probable liability contingency. The value of
R$ 2,151 will be converted to government revenue and R$214 will be recorded in favor of
the Company, representing a discount of 45% of arrears interest, as permitted by those laws.
The provision remains in effect until the approval of the request to cancel part of the
application of the lawsuit, because it is a condition for further discharge of the debt pursuant
to the Tax Recovery Program.


16
Shareholders' equity
a.
Capital

BM&FBOVESPA's capital is R$2,540,239, comprising 2,044,014,295 nominative common
shares with voting rights and no par value, including 2,007,361,225 shares in circulation at
March 31, 2010 (2,000,012,441 shares in circulation at March 31, 2009).
b.
Treasury Shares
Share buyback program
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
49
Through the Share Buyback Program approved by the Board of Directors on September 24,
2008, the Company commenced the repurchase of shares on September 29, 2008 and until
February 6, 2009, 45,686,000 common shares were acquired.
At the meeting held on May 12, 2009, the Board of Directors approved the termination of the
aforementioned Program and established that the balance of the repurchased shares should
remain as treasury stock and be used for the exercise of stock options granted under the
Company's Stock Option Plan.

We present below the activity of treasury shares during the year:
Number of Shares
At December 31, 2009
39,247,983
Sold shares ­ redemption of stock
options (Note 19)
(2,594,913)
At March 31, 2010
36,653,070
Value (R$)
Average cost of treasury shares
5.863
Carrying value of treasury shares
214,889
Market value of treasury shares
441,303

c.
Revaluation reserves

Revaluation reserves were established as a result of the revaluation of works of art in
BM&FBOVESPA and of the property of the subsidiary BVRJ on August 31, 2007, based on
independent experts' appraisal reports.
At March 31, 2010 and 2009, the breakdown of the revaluation reserve was as follows:
BM&FBOVESPA
Realization
method
03/31/2010
03/31/2009
Own assets
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
50
Works of art
8,308
8,308
Disposal
BVRJ's assets
Property
12,663
12,808
Depreciation
Land
2,435
2,435
Disposal
15,098
15,243
Total
23,406
23,551

d.
Statutory reserves

Their purpose is to form funds and safeguard mechanisms required for the adequate
development of the activities of BM&FBOVESPA, assuring the proper settlement and
reimbursement of losses arising from the intermediation of transactions carried out in its
auction systems and/or registered in any of its trading, registration, clearing and settlement
systems, and from custody services.
e.
Dividends and interest on own capital
Pursuant to the bylaws, the shareholders are guaranteed interest on own capital or dividends,
based on the net income of the Company, adjusted under the terms of corporate law, at a
minimum percentage of 25%.






Interest on own capital and dividends distributed are detailed below:
Description
Deliberation
per share
(gross) (R$)
Total amount
(gross)
Interest on own capital
RCA BVMF - 02/23/2010
0.014951 30,000
Interest on own capital
RCA BVMF - 03/25/2010
0.029890
60,000
Total approved in the period
90,000
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
51
f.
Earnings per share
Basic
1
th
Quarter
2010
1
th
Quarter
2009
Numerator
Net income available to shareholders
284,467
226,980
Denominator
Weighted average of outstanding shares
2.007.064.141 2.000.559.613
Basic earnings per share (in R$)
0.141733
0.113458
Diluted
1
th
Quarter
2010
1
th
Quarter
2009
Numerator
Net income available to shareholders
284,467
226,980
Denominator
Weighted average of outstanding shares, adjusted
for the effects of stock option plans
2,021.432.108

2.013.928.934
Diluted earnings per share (in R$)
0.140725
0.112705




17
Related Party Transactions
a.
Transactions and balances with related parties
Assets /
(liabilities)
Revenue / (expenses)
BM&FBOVESPA
Note
03/31/2010
03/31/2009
1
th
Quarter 2010
1
th
Quarter 2009
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
52
Bolsa de Valores do Rio de Janeiro - BVRJ
Accounts payable
14
(1,958)
(1,839)
Contribution on membership certificates
(119)
(119)
Banco BM&F de Serviços de Liquidação e
Custódia S.A.
Cash and cash equivalents
9
9
Accounts receivable
6
418
543
Foreign exchange operations
6
1,018
3,549
Recovery of expenses
1,297
755
Bolsa Brasileira de Mercadorias
Accounts receivable
6
112
88
Accounts payable
14
(444)
(157)
Minimum contribution on membership certificates
(287)
(154)
Recovery of expenses
69
66
BM&FBOVESPA Supervisão de Mercados
Accounts receivable
6
1,907
1,257
Recovery of expenses
650
567




(Continnuing)
Assets /
(liabilities)
Revenue / (expenses)
BM&FBOVESPA
Note
03/31/2010
03/31/2009
1
th
Quarter 2010
1
th
Quarter 2009
Mechanism for Reimbursement of Losses
Accounts receivable
6
14
9
Amounts to be transferred
14
-
(2,907)
Instituto BM&FBOVESPA
Accounts receivable
6
1,504
1,501
Accounts payable
14
(9)
(9)
Associação BM&F
Accounts receivable
6
6,905
6,901
Accounts payable
14
(9)
(9)
Associação Bovespa
Accounts receivable
6 358
5
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
53
Accounts payable
14 (15)
(15)
Outras empresas
Accounts receivable
6 10
6
Accounts payable
14 (9)
(10)
The main transactions with related parties are listed below and were carried out under the
following conditions:

BM&FBOVESPA pays a minimum fee to BVRJ and Bolsa Brasileira de Mercadorias as a
member of these associations.
BM&FBOVESPA, by request of Banco BM&F, Bolsa Brasileira de Mercadorias and
Associação BM&F, contracts companies specialized in providing information technology
services designed to support the activities of these entities and transfers the respective costs
incurred, in full, to the first two entities.
Banco BM&F entered into an agreement with BM&FBOVESPA which, in addition to
granting occupancy of a building owned by the latter, also establishes the utilization of its
technology infrastructure and also its personnel, with transfer of the corresponding costs.

BSM has entered into an agreement with BM&FBOVESPA for the transfer and recovery of
costs which establishes the reimbursement to BM&FBOVESPA of the net amount paid
monthly for expenses incurred in contracting resources and for the infrastructure made
available to BSM to assist in the performance of its supervisory activities.

b.
Remuneration of key management personnel
Key management personnel include Members of the Board, Executive Officers, the Head of
Internal Audit, the Director of Banco BM&F and the Director of Human Resources.
03/31/2010
03/31/2009
Management benefits
Short-term benefits (salaries, participation in
results, etc.)
5,334
3,050
Post-employment benefits
8
12
Employment contract rescission benefits
-
9,662
Share based remuneration (1)
1,877
2,979
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
54
(1)
Represents the expense calculated for the year in relation to the stock options granted to
key management personnel, which was recognized in accordance with the criteria
described in Note 19.
18
Safeguard Structure
a.
Risk management

Credit risk - Performance of BM&FBOVESPA as a central counterparty (CCP) guarantor of
markets (Clearing)

BM&FBOVESPA manages four clearinghouses considered systematically important by the
Central Bank of Brazil, i.e. the Derivatives, Foreign Exchange and Securities Clearinghouses
and the Equity and Corporate Debt Clearinghouse (CBLC).

The activities carried out by the clearinghouses of BM&FBOVESPA are governed by Law
10,214, of March 27, 2001, which authorizes the multilateral clearing of obligations,
establishes the central counterparty role of the systemically important clearinghouses and
permits the utilization of the collateral obtained from the defaulting participants to settle their
obligations in the clearinghouse environment, including in cases of civil insolvency,
composition with creditors, intervention, bankruptcy and out-of-court liquidation.

Through these Clearinghouses, BM&FBOVESPA acts as a CCP in the derivatives market
(futures, forwards, options and swaps), in the equity market (spot, forwards, options, futures
and securities loans), the foreign exchange market (spot US dollar), the federal government
bond market (spot and forward transactions and securities loans) and private debt securities
(spot and securities loans). In other words, by assuming the role of a central counterparty,
BM&FBOVESPA becomes responsible for the proper settlement of trades carried out and/or
registered in its systems, as established in the regulations in force.

The performance of BM&FBOVESPA as a central counterparty exposes it to the credit risk
of the participants that utilize its settlement systems. If a participant fails to make the
payments due, or to deliver the assets, securities and/or commodities due, it will be
incumbent upon BM&FBOVESPA to resort to its safeguard mechanisms, in order to ensure
the proper settlement of the transactions in the established time frame and manner. In the
event of a failure or insufficiency of the safeguard mechanisms of its Clearinghouses, BM&F
BOVESPA might have to use its own equity, as a last resort, to ensure the proper settlement
of trades.

The BM&FBOVESPA Clearinghouses are not directly exposed to market risk, as they do not
hold net long or net short positions in the various contracts traded. However, the increase of
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
55
price volatility can affect the magnitude of amounts settled by the various market
participants, and can also heighten the probability of default by these participants.
Furthermore, as already emphasized, the Clearinghouses are responsible for the settlement of
the trades of a defaulting participant, which could result in losses for BM&FBOVESPA if the
amounts due surpass the amount of collateral available. Accordingly, despite the fact that
there is no direct exposure to market risk, this risk can impact and increase the credit risks
assumed.

To mitigate the risks assumed, each BM&FBOVESPA Clearinghouse has its own risk
management system and safeguard structure. The safeguard structure of a Clearinghouse
represents the set of resources and mechanisms that it can utilize to cover losses relating to
the settlement failure of one or more participants. These systems and structures are described
in detail in the regulations and manuals of each Clearinghouse, and have been tested and
ratified by the Central Bank of Brazil, in accordance with National Monetary Council (CMN)
Resolution 2,882/01 and BACEN Circular 3,057/01.

The main components of the safeguard structure of the Derivatives Clearinghouse are
described below:
Collateral deposited by derivatives market participants;
Joint responsibility for trade settlement by the brokerage house and clearing member
which acted as intermediaries, as well as the collateral deposited by these participants;
Operational Performance Fund, in the amount of R$1,137,792 (R$1,126,126 at
December 31, 2009), formed by resources transferred by holders of settlement rights at
the Derivatives Clearinghouse (clearing members) and holders of full trading rights, for
the exclusive purpose of guaranteeing the operations;
Agricultural Market Trading Fund, in the amount of R$50,000 at March 31, 2010 and
December 31, 2009, intended to hold resources of BM&FBOVESPA allocated to
guarantee the proper settlement of transactions involving agricultural commodity
contracts;
Special Clearing Member Fund, in the amount of R$40,000 at March 31, 2010 and
December 31, 2009, formed by a capital transfer from BM&FBOVESPA., intended to
hold BM&FBOVESPA resources allocated to guarantee the proper settlement of
transactions, regardless of the type of contract;
Clearing Fund, in the amount of R$373,860 (R$378,113 at December 31, 2009), formed
by collateral transferred by clearing members, intended to guarantee the proper
settlement of transactions after the resources of the two previous funds have been used;
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
56
Special equity, in the amount of R$32,348 (R$31,678 at December 31, 2009), in
compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of
Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001.
The main components of the safeguard structure of the Foreign Exchange Clearinghouse are
described below:
Collateral pledged by foreign exchange market participants;
Participation fund, in the amount of R$150,219 (R$154,056 at December 31, 2009),
formed by collateral transferred by Clearinghouse participants, intended to guarantee the
proper settlement of transactions;
Operational Fund of the Foreign Exchange Clearinghouse, in the amount of R$50,000 at
March 31, 2010 and December 31, 2009, with the purpose of maintaining funds of
BM&FBOVESPA to cover losses resulting from operating or administrative failures;
Special equity, in the amount of R$32.374 (R$31,714 at December 31, 2009), in
compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of
Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001.
The main components of the safeguard structure of the Securities Clearinghouse are
described below:
Collateral deposited by federal government bond market participants;
Operational Fund of the Securities Clearinghouse, in the amount of R$40,000 at March
31, 2010 and 2009, with the purpose of maintaining funds of BM&FBOVESPA to cover
losses resulting from operating or administrative failures of participants;
Special equity, in the amount of R$22,881 (R$22,373 at December 31, 2009), in
compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of
Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001.
The main components of the safeguard structure of the Equity and Corporate Debt
Clearinghouse (CBLC) are described below:
Collateral deposited by CBLC's market participants;
Joint responsibility for trade settlement by the brokerage house and clearing member that
acted as intermediaries, as well as the collateral deposited by these participants;
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
57
Settlement Fund, in the amount of R$327,719 (R$322,268 at December 31, 2009),
formed by collateral transferred by clearing members, intended to guarantee the proper
settlement of transactions;
Special equity, in the amount of R$34,582 (R$33,877 at December 31, 2009), in
compliance with the provisions of Article 5 of Law 10,214, of March 27, 2001 and of
Article 19 of Circular 3,057 of the Brazilian Central Bank, of August 31, 2001.
The risk management policy adopted by the Clearinghouses is established by the
BM&FBOVESPA Market Risk Committee, in which BM&FBOVESPA officers participate,
including the Clearinghouses' Chief Officers, the Depositary Chief Officer and the Risk
Chief Officer, the Operations and IT Chief Officers, the Products Chief Officer, as well as the
Risk Management Officer and the Settlement Officer, among others. The main duties of the
Committee are (i) the evaluation of the macroeconomic and political environment and of its
impacts on the markets managed by BM&FBOVESPA. (ii) the determination of the models
utilized for calculation of collateral and for control of the intraday risk of the transactions
performed, (iii) the definition of parameters utilized by these models, especially the stress
scenarios referring to each type of risk factor, (iv) the assets accepted as collateral, their form
of valuation, maximum limits of use and applicable haircut factors, and (v) other studies and
analyses.

In view of the amounts involved, the collateral pledged by the participants who carry out the
transactions represents the most significant component of the Clearinghouse's safeguard
structures.
For most of the contracts, the amount required as collateral is calculated so as to cover the
market risk of the transaction, i.e. its price volatility, during the time frame of two days,
which is the maximum time expected for the settlement of the positions of a defaulting
participant. This time frame may vary depending on the nature of the contracts and assets
negotiated.
The models utilized in the margin requirement calculation are based on stress testing, a
methodology that seeks to gauge market risk considering not only the recent historical price
volatility, but also the possibility of unexpected events that could modify the historical
patterns of prices and of the market in general.
The main parameters utilized by the margin calculation models are the stress scenarios,
defined by the Risk Committee for the risk factors that affect the prices of contracts and
securities traded at BM&FBOVESPA. Among the main risk factors are the Brazilian real/US
dollar exchange rate, the term structure of the local fixed interest rate, the term structure of
the US dollar interest rate, the Bovespa Index and the cash prices of shares, among others.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
58
In the definition of stress scenarios, the Risk Committee utilizes a combination of
quantitative and qualitative analyses. The quantitative analysis is conducted with the support
of statistical models of risk estimation, such as the Extreme Value Theory (EVT), estimation
of implied volatilities, and GARCH family models, besides historical simulations. The
qualitative analysis, in turn, considers aspects related to the domestic and international
economic and political environments, and their possible impacts on the markets managed by
BM&FBOVESPA.
Market risk - Investment of cash funds
Considering the importance of BM&FBOVESPA's equity as a last resource available in the
safeguard structure of its Clearinghouses, its investment policy emphasizes low risk cash
alternatives, normally federal government bonds, including exposure through exclusive and
retail investment funds. As a result, in general, BM&FBOVESPA has most of its investments
in conservative investment funds, with portfolios backed by federal government bonds that
are indexed to the SELIC/CDI rate.
b.
Collateral for transactions

Transactions performed in the BM&FBOVESPA markets are backed by cash margin
deposits, government bonds and corporate securities, letters of credit and other financial
instruments. At March 31, 2010, the pledged collateral totaled R$123,254,804
(R$101,640,805 at December 31, 2009), as follows:

03/31/2010
03/31/2009
Derivatives Clearinghouse
Federal government bonds
68,557,808
53,754,858
Letters of credit
2,255,258
1,479,341
Equities
3,855,464
3,351,593
Bank certificates of deposit (CDBs)
1,427,157
1,307,762
Gold
59,953
60,865
Cash (1)
679,423
555,106
Other
92,462
95,938
Subtotal
76,927,525
60,605,463
Foreign Exchange Clearinghouse
Federal government bonds
3,783,577
3,766,090
Securities Clearinghouse
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
59
Federal government bonds
831,876
832,125
Equity and Corporate Debt Clearinghouse - CBLC
Federal government bonds
17,928,010
15,665,732
Equities
19,671,450
17,208,344
International bonds (2)
2,383,793
1,944,896
Bank certificates of deposit (CDBs)
861,528
997,944
Letters of credit
248,679
296,442
Cash (1)
482,018
247,230
Other
136,348
76,539
Subtotal
41,711,826
36,437,127
Total
123,254,804
101,640,805
(1)
The balance of collateral recorded in current liabilities refers to deposits in currency. The
availability of these funds is managed, and their utilization is dependent on the
fluctuation of the required margin balance.

(2)
US and German federal government bonds, as well as ADRs (American Depositary
Receipt).

c.
Other information - Clearing Fund (Derivatives Clearinghouse)

This is formed by funds invested by the clearing members, with the exclusive purpose of
guaranteeing transactions, and may include bank letters of credit, government bonds and
corporate securities, cash, gold and other assets, at the sole discretion of BM&FBOVESPA.
Collateral represented by securities and other assets depends on prior approval from
BM&FBOVESPA.

The liability of each clearing member is joint and limited, individually. The Clearing Fund
was comprised as follows:
Composition
03/31/2010
03/31/2009
Federal government bonds
311,668
314,304
Letters of credit
35,502
33,000
Bank certificates of deposit (CDBs)
17,700
20,200
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
60
Equities
5,021
6,634
Gold
2,919
2,925
Cash(1)
1,050
1,050
Amounts deposited
373,860
378,113
Amounts that ensure clearing member/trader
participation
(312,500)
(319,500)
Excess collateral
61,360
58,613


(1)
The balance of collateral recorded in current liabilities refers to deposits in currency. The
availability of these funds is managed, and their utilization is dependent on the
fluctuation of the required margin balance.

The minimum contribution for each clearing member is R$2,000, R$3,000 and R$4,000,
depending on whether this member is the holder of a type 1, type 2 or type 3 settlement right,
respectively, in the Derivatives Clearinghouse. In addition, each clearing member must
contribute R$500 per participant entitled to trade under their responsibility. The total amount
deposited in the Clearing Fund is R$312,500 (R$319,500 at December 31, 2009), while the
remainder refers to the surplus of non-enforceable deposited collateral.

d.
Operational Performance Fund (Derivatives Clearinghouse)

This fund is formed by resources transferred by holders of settlement rights in the Derivatives
Clearinghouse (clearing members) and holders of full trading rights, with the exclusive
purpose of guaranteeing transactions. These resources can take the form of bank letters of
credit, government bonds and corporate securities, cash, gold and other assets, at the sole
discretion of BM&FBOVESPA. Collateral represented by securities and other assets depend
on prior approval from BM&FBOVESPA.

The Operational Performance Fund presents the following position:
Composition
03/31/2010
03/31/2009
Federal government bonds
868,236
859,804
Letters of credit
168,721
156,200
Bank certificates of deposit (CDBs)
73,372
81,310
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
61
Equities
15,921
20,098
FIC Banco BM&F Investment Fund
1,815
1,781
Gold
581
582
Cash (1)
9,146
6,351
Amounts deposited
1,137,792
1,126,126
Amounts that ensure clearing member/trader
participation
(993,900)
(1,009,500)
Excess collateral
143,892
116,626

(1)
The balance of collateral recorded in current liabilities refers to deposits in currency. The
availability of these funds is managed and their utilization is dependent on the fluctuation
of the required margin balance.
The minimum contribution for each clearing member is R$5,500, R$6,500 and R$7,500,
depending on whether this member is the holder of a type 1, type 2 or type 3 settlement
right, respectively, in the Derivatives Clearinghouse.

The minimum contribution for each commodities broker is R$6,000 for holders of full
trading rights. The minimum contribution of the holders of full trading rights of interest
rates, exchange rates and Ibovespa is R$4,000. The minimum contribution for the holders of
the trading rights of other contracts settled in the Derivatives Clearinghouse is R$3,000.

The minimum contribution for each special operator is R$1,600 for the holders of full
trading rights and restricted trading rights of interest rates, exchange rates and Ibovespa. For
the holders of trading rights of other contracts settled in the Derivatives Clearinghouse, the
minimum required contribution is R$1,000.

e.
Participation fund (Foreign Exchange Clearinghouse)

Formed by deposits, in assets and currencies, required for the authorization of participants in
the Foreign Exchange Clearinghouse. Their purpose is to guarantee performance of the
obligations assumed by them.

The Participation Fund presents the following position:
Composition
03/31/2010
03/31/2009
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
62
Federal Government Bonds
150,219
154,056

f.
Guarantor Fund of the Floor-Traded Spot US Dollar Market (Foreign Exchange
Clearinghouse)

It was formed by deposits in assets and currencies by the foreign exchange clearinghouse
participants.

The Guarantor Fund presented the following position:

Composition
03/31/2010
03/31/2009
Federal government bonds
327,719
322,261
Cash (1)
-
7
Amounts deposited
327,719
322,268


(1) The balance of collateral recorded in current liabilities refers to deposits in currency. The
availability of these funds is managed and their utilization is dependent on the fluctuation
of the required margin balance.
g.
Guarantee funds and Mechanism for reimbursement
i) BM&FBOVESPA maintains a Guarantee Fund, in the form of a statutory reserve, in the
amount of R$92,342 for the sole purpose of assuring its clients that hold trading and
settlement rights the reimbursement of certain losses provided for in the regulations.

The subsidiaries Bolsa Brasileira de Mercadorias and Bolsa de Valores do Rio de Janeiro
(BVRJ) also maintain Guarantee Funds, special purpose entities without a legal status. The
maximum liability of these Guarantee Funds is limited to the sum of their net assets.

We present below a summary of the main accounting balances of these guarantee funds:
Guarantee Fund ­ Bolsa Brasileira de
Mercadorias
Details
03/31/2010
03/31/2009
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(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
63
Assets
Cash at bank
- 1
Securities purchased under resell agreements
745 730
Other receivables
19 19
Total assets
764
750
Liabilities
Other liabilities
17 15
Net assets
747 735
Total liabilities and net assets
764
750






Guarantee Fund ­ Bolsa de Valores do
Rio de Janeiro
Details
03/31/2010
03/31/2009
Assets
Cash at bank
- 1
Debt securities
2,937 2,878
Equity securities
2,110 2,013
Total assets
5,047
4,892
Liabilities
Provision for contingencies
4,534 4,220
Other liabilities
2,066 2,030
Net assets
(1,553) (1,358)
Total liabilities and net assets
5,047 4,892
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
64
ii) BSM also manages a Mechanism for Reimbursement of Losses, the sole purpose of
which is to assure reimbursement of loss to clients of brokerage firms that trade in
BM&FBOVESPA upon the occurrence of events determined in the regulation. The purpose
of these funds is to assure that their members' clients are refunded for losses resulting from
errors in the execution of orders accepted and from inadequate or irregular use of funds
belonging to clients, under the terms of CVM Instruction 461/07.

We present below a summary of the main accounting balances of this mechanism:
Mechanism for Reimbursement of Losses
Details
03/31/2010
03/31/2009
Assets
Cash at bank
- 9
Investment funds' quotas
83,527 81,921
Securities purchased under resell agreements 71,962 65,411
Debt securities
110,030 107,843
Other receivables
149 8,038
Total assets
265,668 263,222
Liabilities
Other liabilities
5,668 7,522
Net assets
260,000 255,700
Total liabilities and net assets
265,668 263,222
19
Employee Benefits

Stock options ­ BM&F S.A. (Transferred to BM&FBOVESPA)
At the AGE held on September 20, 2007, approval was given for an option plan for shares issued
by BM&F S.A. for the purpose of "granting purchase rights on a number of shares, for
recognition and retention of the employees of BM&F S.A. and, subsequently, of the Company,
after May 8, 2008, up to a limit of 3% of the Company's capital stock".

The stock options granted under the stock option purchase plan of the extinct BM&F were
assumed by BM&FBOVESPA, as decided at the AGE of May 8, 2008.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
65
On December 18, 2007, 27,056,316 stock options were granted under the plan with a fixed
exercise price of R$1.00 per share. Subsequent to this date, no further stock options were granted
or vesting conditions changed under this plan. During the period, some employees acquired the
rights to exercise their options as a result of their dismissal. The number of stock options that
have not yet vested at March 31, 2010 totaled 7,687,092 options which did not acquire the
condition of vesting yet.

The Plan was mainly devised to provide managers and employees of the former BM&F (i) with
consideration for services carried out by the beneficiaries during the period prior to the
demutualization process and also (ii) to retain professionals for a period of four years subsequent
to the approval of the Plan and IPO.

The main items used as a basis for acknowledging these services and for allocating the options
granted were:
(i)
Exercise price fixed at R$1.00;
(ii)
Right to exercise options even if the beneficiary is dismissed by the Company, as
well as on retirement, dismissal as a result of disability or death of the beneficiary;
(iii)
Number of years of service of each beneficiary;
(iv)
Different period for each exercise of options.

The Company recognized, during the period, the expenses related to the stock options of the
employees dismissed that otherwise would have been recognized in future periods. The Company
considered in this calculation an estimated turnover of 5%, i.e. the estimated number of options
which will not vest due to employees who opt to leave the Company.

Stock options ­ BM&FBOVESPA's Plan

On May 8, 2008, at the AGE of BM&FBOVESPA, approval was given to institute a stock option
plan within the authorized limit of 2.5% of the Company's capital, having as its main objective to
align the interests of shareholders with those of directors, managers, employees and service
providers who are considered strategic, and employees considered as talents of
BM&FBOVESPA and its subsidiaries.

On December 19, 2008, the first series of options was granted at an exercise price of R$5.174 per
share, corresponding to the average closing price of trading in the 20 days that preceded the date
on which the options were granted, observing the vesting periods for exercising the options.
4,531,850 stock options were granted, distributed equally on four vesting dates over a four-year
period.

Some employees that had stock options related to the series granted in 2008, acquired the rights
to exercise their options as a result of their dismissal. As a result of the acceleration of vesting in
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
66
the cases of dismissal, the Company recognized, during the period, the total expenses related to
815,200 stock options of the employees dismissed that otherwise would have been recognized in
future periods. At March 31, 2010, there are 2,643,412 stock options granted in 2008 that have
not yet vested.

On January 20, 2009, the Board of Directors approved the 2009 stock option program ( "2009
Program"), which set the date of grant on March 1, 2009. The exercise price of $ 6.60 per share
corresponds to the average closing price of 20 trading days preceding the date of the grant
program in 2009, as established in the plan approved in the shareholders General Meeting on 8
May 2008.

The 2009 program refers to the period from January 1, 2009 to December 31, 2009, the base
period for the performance assessments of the program beneficiaries.

At the meeting on December 17, 2009, the Board confirmed the allocation of individual stock
options within the 2009 program, according to the performance assessment of the Company and
the beneficiaries, in the total amount of 9,947,000 stock options, divided into four qualifying
dates (vesting). At March 31, 2010 there were 7,460,250 stock options which did not acquire the
condition of vesting.

As a result, the Company recognized expenses in the statement of income related to both grants
of this plan in the total amount of R$3,051 during the period, with a counter-entry to capital
reserves in shareholders' equity. The Company considered in this calculation an estimated
turnover of 5%, i.e. the estimated number of options which will not vest due to employees who
opt to leave the Company or whose employment is terminated by the Company before achieving
vested rights to exercise the options.

Considering both programs, the Company has granted stock options corresponding to 0.67% of
the Company's capital (0.22% and 0.45%, respectively). The remainder 1.83% of the authorized
limit will be used to grant new series of stock options for the following years.

As the options are exercised by the employees, the Company will issue new shares, increasing its
capital, or use treasury shares.

Total options granted
Plan
Grant
date
Vesting
period up
to
Exercise
price (in
reais)
Granted
Exercised
during
previous
periods
Canceled
Exercised
during 1st
Quarter
2010
Outstanding
contracts at
03/31/2010
Fair value of
options on
grant date (in
reais)
BM&F S.A.
12/18/2007 12/18/2009
1.00 6,652,596 (4,077,396)
- (2,273,700) 301,500
21.81
BM&F S.A.
12/18/2007 12/18/2010
1.00 6,329,396 (2,216,750)
- - 4,112,646
21.54
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
67
BM&F S.A.
12/18/2007 12/18/2011
1.00 6,244,396 (2,216,750)
- - 4,027,646
21.32
19,226,388 (8,510,896)
- (2,273,700)
8,441,792
BM&FBOVESPA 12/19/2008 6/30/2009
5.174 1,132,962 (532,025) (8,475) (64,613)
527,849
3.71
BM&FBOVESPA 12/19/2008 6/30/2010
5.174 1,132,962 (203,800) (48,025)
- 881,137
3.71
BM&FBOVESPA 12/19/2008 6/30/2011
5.174 1,132,963 (203,800) (48,025)
- 881,138
3.71
BM&FBOVESPA 12/19/2008 6/30/2012
5.174 1,132,963 (203,800) (48,025)
- 881,138
3.71
4,531,850 (1,143,425) (152,550) (64,613)
3,171,262
BM&FBOVESPA 3/1/2009
12/31/2009
6.60 2,486,750 - - (256,600)
2,230,150
2.93
BM&FBOVESPA 3/1/2009
12/31/2010
6.60 2,486,750 - - - 2,486,750
2.93
BM&FBOVESPA 3/1/2009
12/31/2011
6.60 2,486,750 - - - 2,486,750
2.93
BM&FBOVESPA 3/1/2009
12/31/2012
6.60 2,486,750 - - - 2,486,750
2.93
9,947,000 - - (256,600)
9,690,400
Total
33,705,238 (9,654,321) (152,550) (2,594,913)
21,303,454

Total options exercised during the period

As regards the plan transferred to BM&FBOVESPA, 2,273,700 options were exercised during
the period as follows:
Exercise date
Average market
price on exercise
date (in reais)
Number of
options
exercised
1/5/2010 12.97 147,300
1/7/2010 13.68 62,000
1/12/2010 13.47 41,400
1/14/2010 13.65 212,000
1/18/2010 13.56 11,900
1/22/2010 12.66 118,500
1/25/2010 12.66 265,500
1/29/2010 12.71 310,000
2/3/2010 12.96 25,000
2/9/2010 12.09 270,000
2/11/2010 12.22 32,500
2/22/2010 12.75 97,100
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
68
3/4/2010 11.94 102,500
3/10/2010 11.99 239,500
3/24/2010 11.59 338,500
Options exercised during 1
th
Quarter 2010
2,.273,700


As regards BM&FBOVESPA's plan, 312,213 options were exercised during the period as
follows:











Exercise date
Average market
price on exercise
date (in reais)
Number of
options
exercised
1/7/2010 13.68 2,500
1/14/2010 13.65 14,813
1/22/2010 12.66 1,250
1/25/2010 12.66 13,950
1/29/2010 12.71 57,700
2/3/2010 12.96 10,125
2/9/2010 12.09 39,800
2/11/2010 12.22 37,500
2/22/2010 12.75 20,827
3/4/2010 11.94 1,250
3/10/2010 11.99 48,450
3/19/2010 11.53 52,500
3/24/2010 11.59 20,548
Options exercised during 1
th
Quarter 2010
321,213
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
69

Consolidated activity during the year

Quantity
At December 31, 2009
23,952,817
Options exercised
(2,594,913)
Option Canceled
(54,450)
At March 31, 2010
21,303,454


The percentage of capital dilution to which the current shareholders could be subject in the event
that all the options outstanding at March 31, 2010 are exercised is some 1.06%.





Effects arising from the exercise of the options

Amount
Amount received on sale of shares ­ Stock options
exercised
4,301
(-) Cost of treasury shares sold
(15,213)
Effect of disposal of shares
(10,912)


Option Pricing Model

To determine the fair value of the options granted, the Company has taken into account the
following aspects:
a)
The stock options that were granted by the Company allow the exercise in advance as
from a specific future date (vesting date) which is situated between the grant date and the
option expiry date;
b)
The shares pay dividends between the grant date and the option expiry date.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
70
Accordingly, these options present characteristics from the European model (exercise in advance
is not allowed) until the vesting date and characteristics from the American model (possibility of
exercise in advance) between the vesting date and the option expiry date. These options are
known as Bermuda or Mid-Atlantic type and their price must be between the price of a European
option and the price of an American option with similar characteristics. In relation to the
dividend payment, there are two impacts on the price of the option that should be taken into
account: (i) the fall in share prices after the dates on which they become ex-dividend and (ii) the
influence of such payments on the decision to exercise the option in advance.

Considering the aspects above, the Binomial method was used to determine the fair value of the
options granted. This method produces results which are equivalent to the results of the Black &
Scholes model for non-complex European options, having the advantage of being able to
incorporate the characteristics of an exercise in advance and the payment of dividends in relation
to the stock options considered.






The main assumptions considered in the options' fair value determination were:
a)
The options were evaluated based on the market parameters effective on each of the grant
dates of the different plans;
b)
To estimate the risk-free interest rate, the Company used the future interest contracts
negotiated for the maximum exercise period of each option;
c)
The liquidity of the stock options, comprising the respective programs, was low on the
grant dates and accordingly the implied volatilities in these contracts are atypical and it
would not be feasible to use them for estimating volatility. In addition, since the
Company was a recently listed entity at the time the plans were granted, historical
volatility does not provide sufficient information on share volatility, considering the
contractual term for exercising the options. As a result, the Company used as a basis for
estimating the volatility of its shares the implied volatility of similar entities
(international stock exchanges) over periods in which liquidity was sufficient to
guarantee the quality of the data gathered;
d)
The share prices were adjusted in order to take into account the impact of dividend
payments; and
e)
The maximum period for exercising the options granted was used to determine the
maturity of the options.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
71
The remaining usual assumptions related to option pricing models, such as inexistence of
arbitrage opportunities and constant volatility over the period, were also considered in the
calculation.
Pension plan

The private pension fund "Fundo de Pensão Multipatrocinado das Instituições do Mercado
Financeiro e de Capitais (MERCAPREV)" is structured as a defined contribution retirement plan
and is sponsored by the following entities: Adeval, Ancor, BM&FBOVESPA, Sindival and the
brokerage firms Theca, Souza Barros and Talarico. Contributions to the pension plan for the year
ended March 31, 2010 amounted to R$720 by BM&FBOVESPA and for the consolidated
(R$618 at March 31, 2009)












20
Income Tax and Social contribution on Net Income

(a)
Deferred income tax and social contribution

The balance of deferred tax assets and liabilities is as follows:
BM&FBOVESPA
and Consolidated
Details
03/31/2010
03/31/2009
Tax, labor and civil contingencies
5,221
4,742
Tax loss carryforwards
40,275
35,285
Impairment of investment in shares of CME
Group (2)
237,283
237,283
Temporary differences
5,421
6,514
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
72
Total deferred tax assets
288,200
283,824
Goodwill amortization (1)
(399,847)
(297,086)
Other
(4,883)
(3,844)
Total deferred tax liabilities
(404,730)
(300,930)

(1)
Deferred income tax and social contribution liability arises from the temporary difference
between the tax base of goodwill and its carrying amount in the balance sheet,
considering that goodwill is still being amortized for tax purposes but is no longer
amortized for accounting purposes as from January 1, 2009, which results in a tax base
lower than the carrying amount of goodwill in the balance sheet. This temporary
difference may result in taxable amounts in determining taxable profit of future periods
when the carrying amount of the asset is reduced or settled, and therefore requiring the
recognition of a deferred tax liability.
(2)
As described in note 2(a), with the application of CPC38, the investment in CME Group was
impaired in R$ 697,893

(b)
Estimated realization period

The deferred income tax and social contribution assets arising from temporary differences are
recorded in the books taking into consideration the probable realization of these tax assets, based
on projections of future results prepared in accordance with and supported by internal
assumptions and future economic scenarios that may, accordingly, undergo change.

It is expected that deferred tax assets will be realized as follows: R$9,057 (2010), R$3,307
(2013), R$19,436 (2014) and R$19,117 (2015). At March 31, 2010, the present value of the
deferred tax assets amounts to R$35,941.

As the income tax and social contribution taxable bases arise not only from the profit that may be
generated, but also from the existence of non-taxable income, non-deductible expenses, tax
incentives and other variables, there is no immediate correlation between the Company's net
income and the income subject to income tax and social contribution. Therefore, the expectation
of the use of deferred tax assets should not be used as the only indicator of future income of the
Company.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
73

The goodwill amount deductible in the income tax and social contribution calculation for tax
purposes amounts to R$12,112,649 at March 31, 2010.

The realization of the deferred tax liability will occur as the difference between the tax base of
goodwill and its carrying amount is reversed, that is, once the carrying value of goodwill in the
balance sheet is either reduced or liquidated.

(c)
Reconciliation of the income tax and social contribution expense

The income tax and social contribution amounts presented in the parent company and
consolidated statements of income at nominal rates are reconciled as follows:



















BM&FBOVESPA
1
th
Quarter 2010
1
th
Quarter 2009
Net income before income tax and social contribution
392,777
234,488
Income tax and social contribution before additions and exclusions
(133,544)
(79,726)
Additions:
(4,852)
(8,315)
Adjustments from Law 11,638/07
(3,060)
(6,378)
Non-deductible expenses
(1,792)
(1,937)
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
74
Exclusions:
30,087
80,121
Equity
(513)
542
Interest on own capital
30,600
-
Tax incentives
-
79,579
Other
(1)
412
Income tax and social contribution
(108,310)
(7,508)
Consolidated
1
th
Quarter 2010
1
th
Quarter 2009
Net income before income tax and social contribution
393,020
235,647
Income tax and social contribution before additions and exclusions (132,666)
(80,120)
Additions:
(4,931)
(8,586)
Adjustments from Law 11,638/07
(3,060)
(6,378)
Non-deductible expenses
(1,871)
(2,208)
Exclusions:
30,600
79,579
Interest on onwn capital
30,600
-
Tax incentives
-
79,579
Other
(847)
755
Income tax and social contribution
(108,805)
(8,372)
(d)
Transitional Tax System
Provisional Measure 449/08, converted into Law 11,941/09, introduced the Transitional Tax
System (RTT) for taxable income determination purposes, addressing the tax adjustments arising
from the new methods and accounting criteria introduced by Law 11,638/07. The Company
declared its option for the RTT when filing the Corporate Income Tax Return (DIPJ) for 2008. As
a result of the option to use the RTT, the income tax (IRPJ) and social contribution on net income
(CSLL) payable for the two-year period 2008-2009 will continue to be determined based on the
provisions of Brazilian Corporation Law in force at December 31, 2007. Beginning in 2010, the
RTT became mandatory and consistent with the practices adopted in 2008 and 2009.
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
75
21
Sundry Expenses
BM&FBOVESPA
Details
1
th
Quarter 2010
1
th
Quarter 2009
Contributions and donations
1,706
536
Electricity, water and sewage
1,783
1,433
Travel
196
278
Sundry provisions
2,132
1,486
Intagible derecognition
3,687
-
Other
1,180
844
Total
10,684
4,577
Details
Consolidated
1
th
Quarter 2010
1
th
Quarter 2009
Contributions and donations
1,734
530
Electricity, water and sewage
1,835
1,500
Travel
260
355
Sundry provisions
4,221
1,491
Intagible derecognition
3,687
-
Other
833
1,634
Total
12,570
5,510


22
Other operating revenues
BM&FBOVESPA
Details
1
th
Quarter 2010
1
th
Quarter 2009
Dividends from equity interests
2,435
5,371
Other recoveries
1,094
882
Reversal of provisions
-
155
Sundry
609
1,339
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
76
Total
4,141
7,747
Consolidated
Details
1
th
Quarter 2010
1
th
Quarter 2009
Dividends from equity interests
2,435
5,371
Property rents
1,467
1,379
Other recoveries
1,152
888
Reversal of provisions
-
155
Sundry
614
1,340
Total
5,671
9,133

23
Information about business segments
We present below consolidated information based on reports used by management for
making decisions, with the segments comprising Bovespa, BM&F, Corporate products
and Institutional.


Bovespa Segment

Offers various mechanisms and tools for trading of fixed and variable income securities, on stock
markets and Over the Counter (OTC). It is responsible for managing the only national stock
market and OTC market for trading of variable income securities, including stocks, stock
receipts, Brazilian Depository Receipts, stock derivatives, subscription bonuses, various types of
closed investment funds, shares representing audiovisual investment certificates, non-standard
options (warrants) to purchase and sell securities and other securities authorized by the CVM.

BM&F Segment

The BM&F Segment covers the main steps of the cycles of trading and settlement of securities
and contracts, i.e.: (i) trading systems in an environment of electronic trading and trading via
internet (WebTrading), (ii) recording, clearing and settlement systems, integrated with a robust
and sophisticated risk management system to ensure the proper settlement of the transactions
recorded, and (iii) custodian systems for agribusiness securities, gold and other assets
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
77

In addition, this segment includes the trading of commodities, foreign exchange, and public debt,
and services provided by Banco BM&F and the Brazilian Commodities Exchange.

Corporate products

Refer basically to services provided as depository of securities, as well as loans and listing of
securities (registration of issuers of trading securities on our systems), data services, classification
of commodities and design of technological products.

Currently there is no segment allocation for operating expenses and other results, which are
therefore shown in the "Other" column, below.

Other

Refers, basically, to revenues generated by the businesses of its subsidiaries and dividends from
shares.

Institutional

Currently there is no segmented allocation of operational expenses, financial income and taxes,
therefore, they are presented in Institutional column.


Information by segment
March 30,2010
Bovespa
BM&F
Corporate
Segment Segment
Products
Other
Institutional
Total
Gross operating revenue
256,494
170,213
75,562
8,391
510,660
Deductions from revenue
(25,778) (17,896)
(5,414)
(2,444)
(51,532)
Net operating revenue
230,716
152,317
70,148
5,947
459,128
Operating expense
(133,804)
(133,804)
Depreciation and Amortization
(9,302)
(9,302)
General and administrative expenses
(124,502)
(124,502)
Operating income
(133,804)
325,324
Equity
-
-
Financial income
67,696
67,696
Taxes on income
(108,805)
(108,805)
background image
(A free translation of the original in Portuguese)
BM&FBOVESPA S.A. ­ Bolsa de Valores, Mercadorias e Futuros
Notes to the Financial Statements
at March 31, 2010 and 2009
(All amounts in thousands of reais)
78
Net income
230,716
152,317
70,148
5,947
(174,913)
284,215





Information by segment
March 30,2009
Bovespa
BM&F
Corporate
Segment Segment
Products
Other
Institutional
Total
Gross operating revenue
155,718
126,442
57,783
11,975
351,918
Deductions from revenue
(16,048) (13,308)
(5,414)
(600)
(35,370)
Net operating revenue
139,670
113,134
52,369
11,375
316,548
Operating expense
(148,760)
(148,760)
Depreciation and Amortization
(8,951))
(8,951)
General and administrative expenses
(139,809)
(139,809)
Operating income
(148,760)
167,788
Equity
-
-
Financial income
67,859
67,859
Taxes on income
(8,372)
(8,372)