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Business Model Premises

Major Sources of Revenue

The Gross revenues of the Company consist of:

 

I - Income from trading and/OR settlement, BM&F

Derivatives: trading and post-trading in futures and options on futures. Revenue is derived from the following fees:

Exchange fee: charged on contracts traded, including position closeouts and transfers (in BRL per contract).

Settlement fees: charged when a position is closed out at maturity or when physical delivery is settled in cash (in BRL per contract).

Registration fee: charged on all new positions and on any position closed out before maturity (in BRL per contract).

Permanence fee: charged by the Clearinghouse to cover the costs of monitoring positions, and issuing reports and statements (in BRL per contract based on daily open interest).

Revenue per contract (RPC) deriving from the above fees may vary depending on the type of contract, time to expiration or maturity, and the type of transaction (e.g. whether it is a day trade).

Foreign exchange: spot US dollar transactions settled by the FX Clearinghouse pay fees at differing rates calculated by trade value band.

Government bonds: exchange and registration fees are charged on transactions settled by the Securities Clearinghouse, which is responsible for registration, clearing, settlement and risk management of transactions involving Brazilian government bonds.

 

II - Income from trading and/OR settlement, BOVESPA

 

Trading and pos-trading fee: a percentage fee is charged on the financial volume traded, varying with the type of trade (e.g. day trades), market (cash, forward, options) and investor.

 

III - Other revenues

 

Securities lending: the Equities Clearinghouse operates a securities lending facility known as BTC. A fee is charged as a percentage of the financial value of each open interest position.

Listing: consists of the issuers’ registration for trading the securities they issued in the Bovespa segment. The revenue comes from a percentage levied annually on the capital of companies listed at BM&FBOVESPA. Investment funds, encouraged companies and companies listed on the OTC pay an annuity.

Central Securities Depository (CSD); custody and back-office services: a fixed monthly fee is charged for each individual account held with the central securities depository (CSD), plus a percentage for domestic investors with positions in excess of R$300,000. The CSD provides fungible custody services, holding fiduciary title to the securities in its custody.

Market data fee: BM&FBOVESPA sells the information generated by its systems, authorizing vendors and brokers to distribute its market data feed to their customers, both Brazilian and foreign, in real time. Fees for access to this information are charged in accordance with the type of participant or customer.

BM&FBOVESPA Settlement Bank: as the main means of operational support for participants in the markets managed by BM&FBOVESPA, BM&FBOVESPA Settlement Bank provides settlement, custody and financial control services for investment clubs and funds, as well as custody and representation for non-resident investors. A schedule of fees applies to each of these services.

 

IV - DEDUCTIONS

 

PIS and COFINS: these two taxes are levied at rates of 1.65% and 7.60% respectively on gross income less the cost of services provided, in compliance with the applicable legislation.

 

V - Operating expenses

 

General and administrative expenses consist mainly of: (i) payroll; and (ii) data processing.

Payroll: wages and salaries (including 13th salaries and vacations), overtime, benefits (meal tickets, transportation vouchers, medical and dental care etc.), contributions (social security, severance fund etc.), profit sharing, and recognition of expenses incurred by the stock option program.

Adjusted expenses (2016): Adjusted to depreciation and amortization, stock grant plan costs – principal and payroll taxes – and stock option plan,  transaction cost and planning of the proposed business combination with Cetip that is still pending regulatory approval and transfer of fines, provisions and incentive programs to market participants.

 

VI - TAXES

Income tax and social contribution for the current year and deferred: calculated at a rate of 15%, plus 10% of taxable income exceeding R$240 thousand for income tax and 9% for social contribution, less any losses and negative social contribution base, limited to 30% of taxable income.

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