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Markets Managed by B3

Exchange Segment

Securities exchanges are organized physical or virtual environments on which securities are bought and sold. For transactions to occur, an extensive chain of trading and post-trading services must function harmoniously.

Trading platform: the system that enables buyers and sellers to meet and execute trades.

Clearing system: responsible for calculating long and short positions by multilateral netting and for controlling market risk. The clearinghouse also acts as a central counterparty (CCP), i.e. as the buyer to all sellers and the seller to all buyers for settlement purposes, assuming the responsibility of honoring all sales and purchases.

Settlement system: controls and processes the exchange of money for the securities traded between buyers and sellers (or only money in the case of derivatives), extinguishing the rights and obligations that arise from the clearing process.

Central securities depository (CSD): responsible for bookkeeping, safeguarding, updating and coordinating corporate events (payment of dividends, bonus issues etc.) relating to the assets traded: for this purpose it temporarily acts as fiduciary owner of the assets deposited. Also responsible for physical movement of assets in the settlement process. The CSD service is not extensive to the derivatives market.

In Brazil, the exchange sector is vertically integrated. B3 performs all trading and post-trading activities for equities, derivatives and other securities. Hence the Company provides all the services required by market participants (investors and brokerage houses) from buy and sell transactions to clearing and risk control, settlement and complete custody of assets.

The characteristics of the exchange industry vary from country to country, as can be seen from the chart below.

Services provided by stock exchanges in different countries and continents:

Securities Unit (UTVM) – Cetip

UTVM offers the market a totally integrated business model. Its activities comprise (a) the provision of registration, clearing, settlement and custody systems; (b) central securities depository (CSD); (c) registration of assets and of security interests on such assets; (d) registration of instruments posted as collateral; and (e) other related services.

UTVM’s main assets are private fixed-income securities, such as certificates of deposit (CDs), interbank certificates of deposit (Certificados de Depósito Interbancário, CDI), bank bonds (Letras Financeiras, LF), real estate letters of credit (Letras de Crédito Imobiliário, LCI), real estate receivables certificates (Certificados de Recebíveis Imobiliários, CRI), and debentures, among others; and OTC derivatives.


Financing Segment (UFIN) - Cetip

UFIN offers an integrated private electronic system for financial agents to insert financial restrictions relating to automotive vehicle and real estate financing transactions, covering all such registrations in Brazil, and custody of this information. The platform can be used to register security interests and other guarantees given to secure vehicle and real estate loans, and the ownership of leased automotive vehicles in accordance with the applicable rules and regulations.

UFIN also operates an electronic service whereby information regarding financing contracts is delivered on behalf of lenders to traffic departments so that the latter can register the contracts and security interests concerned, and provides support for the appraisal of real estate loan guarantees.

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