Innovation March, 2011.

AGENDA Market Drives BMV Group Services Roadmap OTC Derivatives Currencies Payment Management Debt Instruments Clearing House Conclutions

Drivers Regulatory Issues: Dodd Frank Basel III G-20 Market Trends High Frequency Trade (HFT) Dark Pools Direct Market Access (DMA) Block Trade Systems Algorithmic Trading Systems Merger & Acquisitions Systemic Risk OTC Derivatives growing

Capital Market Securities Money Market and Debt Instruments Listed Derivatives Currencies (F/X) OTC Derivatives Securities Lending and Repos Electronic Brokers Central Counterparties ClearingBalance and position registers Payments System Information Valuation Risk Reports Financial Markets Services OTC Derivatives Currencies Debt Securities Services Roadmap

OTC Derivatives Services

The Mexican Financial System, there are limited mechanisms to provide security, transparency and additional services for the OTC derivatives market. From the market point of view and based on available information, we can detect that the market has a very important dimension and volumes as well as a big business opportunity: Statistics Market Share % *** Million Mexican Pesos *** Year: Amount: Listed: Market: OTC:

Statistics Billion of US Dollars *Source: Bank For International Settlements (BIS) Total Notional Value Includes all OTC Derivatives

Stages PHASE 1 1)Register (Repository) 2)Match 3)Reference Codes 4)PDF hard copies FpML PHASE 2 1)Cash Flows 2)Calculation 3)Authorization 4)Instructions Delivery 5)Settlement PHASE 3 1)Clearing 2) Settlement Should be eliminate Manual Processing Handwritten Signatures Hard Copies Centralized proccesing and just one place for calculation

Phase : Securities Collateral According with the client request, we will develop a system to offer clients the availability of making valuations, margin calls and administering cash and securities collateral. DerivaRE OTC Derivatives Services

Phase 5: Central Counterparty for OTC Derivatives For this phase we will deliver the CCP for OTC Derivatives. OTC Derivatives Services OTC

Currencies Payment Management

Some Advantages FX House FX House Client Commercial Banking Commercial Banking Sistemas de Payments 100 Reducing Risk Improving Liquidity Increasing security 2 diferent systems Just one system

Mexican Pesos Withdrawals: This phase will allow Dali´s participants to withdraw their cash accounts at Indeval crediting any checking account in any commercial bank. (Beneficial owner) Foreign Currencies Withdrawals: In an automated process, Dali`s participants will be able to credit any foreign account in any foreign commercial bank with the cash received from crossborder corporate events and settlement. Securities Settlement using foreign currencies: The settlement engine of Dalí System (SLV) has been prepared to perform multicurrencies settlement for local and issued abroad securities registered at Indeval. Payment vs Payment: Finally, FX transactions performed at FX markets will be included in the Dali´s settlement processes in order to join up, in only one system, the different payment obligations of the Mexican Financial Institutions. Central Counterparty for Currencies: To obtain the highest liquidity in Fx transactions for the local market. Currencies Payment Management

The project will allow an efficient management of the currency balances in the cash accounts at Dalí System. There are four main stages for the Currencies Payment Management: Currencies Clearing House Foundation Mexican Pesos Withdrawals Foreign Currencies Hithdrawals Securities Settlement using Foreing Currencies PaymentvsPaymentCCP Foreing Currencies

CCP Foreign Currencies OTC Fx Phase 5: Central Counterparty for Foreign Currencies For this phase we will deliver the CCP for Foreign Currencies.

Debt Instruments Clearing House

The launching of the Dali system generated efficiencies for participants in terms of settlement reducing in 52% the use of cash and 26% in the use of securities. The development of a Debt Instruments Clearing House aims as main objectives to increase trading volumes, improve infrastructure and attract foreign investment. At the same time, It will also start operations anonymous debt securities electronic brokers with the intention to eliminate inequities for small and medium market participants. These mechanisms will assume the ownership of all traded positions.

With the start up of three new clearing houses, Indeval will be cover the needs of the Mexican Market, giving added value to the Dalí model. All the net payments, produced from the clearing houses will be settled in the Central Security Depository (SLV). Conclusions OTC Divisas Novaclear Equity Debt Derivatives OTCCurrencies Derivatives Security Settlement System

Added value services PRE TRADINGPOST TRADING CLEARING AND SETTLEMENT GALA OTC Divisas Novaclear PRE TRADE CONTROL OTC MATCHING TOOL SECURITIES LENDING RISK ANALISIS PRICE VENDOR POST TRADE CONTROL RISK ANALISIS PRICE VENDOR SECURITIES LENDING Equity Debt Derivatives OTC Currencies Derivatives Security Settlement System

Acciones Mercado Dinero Derivados Divisas (F/X) Derivados OTC Préstamo de Valores y Reportos Mecanismos de Negociación Contrapartes CompensaciónRegistro de Posiciones Sistema de Pagos (Banxico) Información Valuación Reportes Reg. Grupo BMV tiene áreas factibles de crecimiento Mercados Servicios OTC Divisas Novaclear OTC Derivatives Debt Currensies

Thanks!!!!!! March, 2011.