August 2012

Agenda Introduction How to participate? Products overview and Trading Ideas Final Remarks

Introduction MexDer is the derivatives subsidiary of BMV Group the financial exchange operator in Mexico. Fully electronic market place, as a self-regulated exchange it has a flexible legal framework. CME Group and MexDer joined forces to link the trading platforms, a world of opportunities is brought closer to you. MexDer is the leading market place for trading derivatives on Mexican benchmarks.

Making sense of MexDer  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex® screens.  No Withholding Taxes when trading in MexDer.  Free Convertibility.  Active participation of foreigners in the underling.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation (anonymous)  One for Proprietary trading.  One for Customer trading.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Remote Membership.  Give Ups.

Making sense of MexDer  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex® screens.  No Withholding Taxes when trading in MexDer.  Free Convertibility.  Active participation of foreigners in the underling.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation (anonymous)  One for Proprietary trading.  One for Customer trading.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Remote Membership.  Give Ups.

6Clearing Members. 46Mexican Trading Members. 8 Active Remote Members. 20Market Makers. Participants

Liquidity and Strength - AAA Clearing House - Asigna Fitch Rating Standard & Poor’s Moody’s Local Rating AAA (mex) mxAAA/mxA-1+ local currency Aaa.MX Global Rating BBB+/A-2 local currency A2 Collaterals Accepted Accepted in the US  US Dollar (cash).  T-Bills.  T-Notes Accepted in Mexico  Eligible Mexican Stocks  Eligible Mexican Bonds  Cetes (Mexican Treasury Bills)

Order Routing Agreement (CME-MexDer) N2S CME members and its clients are be able to trade MexDer’s products. MexDer’s products could be traded in the 100,000 CME’s GLOBEX ® connections. S2N MexDer’s member and its clients will have access to all the CME products through MexDer’s screen.

Risk Management Gateway (RMG) Overview. The Risk Management Gateway (RMG) is a web-based dashboard used to monitor, configure and control Futures & Options “Orders” and “Risk Filters” within the RMG system. Mexican Clearing firms will be responsible to control and configure those risk filters and view order blotter for accounts which they are entitled to see, only for their customers. The RMG dashboard provides access to the following functions:  Viewing orders  Viewing order message chains  Cancelling orders  Viewing risk filters  Creating risk filters  Modifying risk filters  Deleting risk filters  Enabling risk filters  Disabling risk filters

Pre-Trade Checks  “Quantity” Filter Reject any order with size bigger than a specified number, this filter applies for any asset class product (Futures or Options).  “Quantity per Symbol and Side” Filter Reject any order with size bigger than a specified number on a specific class and side  “Symbol, Side, Order Type, Time in Force” Filter” Reject any order matching a specific combination of symbol, side, order type, time in force and a time window (start time and end time).  “Value” Filter Reject any order exceeding a specified value (notional value) Risk Management Gateway (RMG)

Aggregated Checks  Daily Credit Limit Control for Net Long/Short Margin Reject any order exceeding the limit margin set by symbol once the aggregated amount has reached the set limit.  “Daily Quantity” Filter If the aggregated traded volume exceeds the specified value for the day, cancels and or rejects the orders resting on the book and the incoming ones. If an order is cancelled, the unfilled quantity should be removed from the day’s accumulated quantity. If an order is modified, the number of contracts should be added or removed from the day’s aggregated total. The Clearing Firm can optionally set the Side field to only check daily value for a particular side. If Side is unset it will be ignored and treated as a wildcard.  “Daily Quantity per Symbol and Side” Filter Reject any order that exceeds the maximum daily quantity for a daily quantity entry. An entry consists of a symbol, side, and maximum daily value. Each entry maintains its own limit and tracking. When orders exceed a limit on an entry it should only reject orders matching that entry. Other entries that have not exceeded their threshold should continue to allow orders through. Risk Management Gateway (RMG)

 “Daily Value” Filter The RMG will cancel the orders resting on the book and not allow new orders into the trading engine if the notional value exceeds the specified value for the day. If an order is cancelled or modified in size, the change in value will be removed or added to the day’s aggregated total.  “Daily Value per Symbol and Side” Filter The RMG will cancel the orders resting on the book and not allow new orders into the trading engine if the notional value exceeds the specified value per side for the day. If an order is cancelled or modified in size, the change in value will be removed or added to the day’s aggregated total. Risk Management Gateway (RMG)

Agenda Introduction How to participate? Products overview and Trading Ideas Final Remarks

Mexico GLOBEX Hub Match Engine 40 Mbps line Lines to GLOBEX GLOBEX Infrastructure US MEXICO MCM (Asigna Clearing Member) (One letter to access MexDer directly) Business Opportunities in MexDer HF Trader Fund HF Trader Clearing Member at CME Group Customers trade directly through certified trading systems. DMA Paperwork required

How to participate? 1.As a Member of a Recognized Market 2. As an Omnibus Account in MexDer 3. As a Client of a MexDer Omnibus Account 4. As a Remote Member

How to participate? 1.As a Member of a Recognized Market.  Fastest and easiest way to take advantage of the CME Group – MexDer order routing agreement (ORA).  Have access to CME Globex  Direct execution in MexDer, Co-location available.  Clears through a MexDer Clearing Member (MCM), the only paperwork required. 2. As a MexDer Omnibus Account. 3. As a client of a MexDer Omnibus account. 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system clearing through a local Clearing Member

Mexico GLOBEX Hub Match Engine 40 Mbps line CMEG Member: As a Client of an MCM Lines to GLOBEX GLOBEX Infrastructure US MEXICO MCM (Asigna Clearing Member) (Paperwork required) Account with MCM required (1) As a Member of a Recognized Market Co-location available

How to participate? 1.As a Member of a Recognized Market  Executing as a customer of a Trading Member or even through an Omnibus Account. 2. As a MexDer Omnibus Account.  The CME member that qualifies as an omnibus account executes directly in MexDer and clears through a MexDer Clearing Member.  Minimum legal paperwork required with MexDer.  The omnibus clients identity is not disclosed. 3. As a client of a MexDer Omnibus account 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system clearing through a local Clearing Member

(2) As a MexDer Omnibus Account Mexico GLOBEX Hub Match Engine 40 Mbps line CMEG Member : As a MexDer Omnibus Account Lines to GLOBEX GLOBEX Infrastructure US MEXICO MCM (Asigna Clearing Member) (Paperwork required) Account with MCM required

How to participate? 1.As a Member of a Recognized Market.  Executing as a customer of a Trading Member or even through an Omnibus Account. 2. As a MexDer Omnibus Account.  The CME member that qualifies as an omnibus account executes directly in MexDer and clears through a MexDer Clearing Member.  The omnibus clients identity is not disclosed. 3. As a client of a MexDer Omnibus account  When executing through an Omnibus Account, you will only need one simple letter to notify MexDer.  Trade through your existing agreement with the CME Member (registered omnibus in MexDer) 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system and clearing through a local Clearing Member

Mexico GLOBEX Hub Match Engine 40 Mbps line Customer: As a Client of a MexDer Omnibus Account Lines to GLOBEX GLOBEX Infrastructure US MEXICO (3) As a Client of a MexDer Omnibus account MCM (Asigna Clearing Member) CMEG Member : Omnibus Account (One simple letter to access MexDer directly)

How to participate? 1.As a Member of a Recognized Market.  Executing as a customer of a Trading Member or even through an Omnibus Account. 2. As a MexDer Omnibus Account.  The CME member that qualifies as an omnibus account executes directly in MexDer and clears through a MexDer Clearing Member.  The omnibus clients identity is not disclosed. 3. As a client of a MexDer Omnibus account 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system.  Legal paperwork required with the Exchange.  Clear through a MexDer Clearing Member.

(4) As a Remote Member Mexico GLOBEX Hub Match Engine 40 Mbps line Lines to GLOBEX GLOBEX Infrastructure US MEXICO (Paperwork required) Account with MexDer Clearing Member required MCM (Asigna Clearing Member) (Paperwork required) Co-location available CMEG Member : MexDer member & Omnibus Account

FIX Access  MexDer provides Access via (FIX) protocol  Certified ISV’s in MexDer:  Certified ISV’s in Globex to trade MexDer:  **Proprietary trading systems.

Agenda Introduction How to participate? Products overview and Trading Ideas Final Remarks

Products overview ILCTRAC BCTRAC

Products available through the CME ORA Asset ClassFuturesGlobex Symbol FXDollar-Peso FuturesM:DA FXEuro FuturesM:Euro FXMonthly Dollar-Peso FuturesM:DEUA Equity IndexIPC Index FuturesM:IPC Equity IndexOptions on Mexican Stock ExchangeM:IP Equity IndexRollover Futures for IPCM:SIPC Interest Rates3-Year Bond FuturesM:M3 Interest Rates5-Year Bond FuturesM:M5 Interest Rates10-Year Bond FuturesM:M10 Interest Rates20 -Year Bond FuturesM:M20 Interest Rates30-Year Bond FuturesM:M30 Interest Rates28-Day Interbank IR FuturesM:TE28 Interest Rates91-Day T Bill FuturesM:CE91 Interest Rates2-Year (26x1) IR Swap FuturesM:02

Products available through the CME ORA… cont Asset ClassFuturesGlobex Symbol Interest Rates10-Year (130x1) IR Swap FuturesM:10 Interest Rates10-Year IR Swap FuturesM:SW10 Inflation IndexInflation Index FuturesM:UDI Single Stock Futures*América Móvil LM:AXL Single Stock Futures*Cemex CPOM:CXC Single Stock Futures*Femsa UBDM:FEM Single Stock Futures*Gcarso A1M:GCA Single Stock Futures*Telmex LM:TXL Single Stock Futures*Walmex VM:WAL Single Stock Futures*BRTRAC 10M:BRT Single Stock Futures*ILCTRAC ISHRS M:ILC Single Stock Futures*GMEXICOM:GMEX Single Stock Futures*CEMEXM:CXCA Single Stock Futures*Rollover Futures for AXLM:SAXL * U.S. market based participants are restricted from trading the Single Stock Futures For more information on MexDer products, please visit

Bond Futures & Trading Ideas…  Underlying, Bonds issued by the Mexican government (BBB+).  The most actively traded securities in Mexico.  A benchmark for Mexican domestic interest rates.  Most efficient way to hedge and short positions.  Spread Trades and arbitrage opportunities.  Adjust portfolio duration.  Anticipate shift in slope of yield curve.  Take advantage of perceived price anomalies.  Settled through physical delivery using conversion factor pricing.  Common denominator to spread: CTD (Cheapest to Delivery).

Bond Futures & Trading Ideas… Source: Banxico Trade the whole yield curve of the Mexican Sovereign that is available:  3 Year Bond (M3)  5 Year Bond (M5)  10 Year Bond (M10)  20 Year Bond (M20)  30 Year Bond (M30) + 91 Day Treasury CETE. Foreign Investment in MXP Debt Government Securities

Bond Futures & Trading Ideas…

IPC Index Futures & Trading Ideas…  The IPC is a capitalization Index and the leading indicator of the Mexican Stock Exchange performance.  The easiest and cheapest way to hedge and short the Mexican equity market.  Active participation of local and foreign investors Return 2012 : 7.96% MXN / 15.06% USD** MexDer Ticker Symbol:IPC Quotation:IPC Points Size:IPC x $10 MXP Tick:5 points Maturity Months: Quarterly, up to one year Settlement:Cash Trading Hours: 07: hrs. (GMT -06:00) Bloomberg ISA CT Reuters MXN/FUTEX10#IPC:

 Several opportunities available with the Future of the IPC spreads with:  IPC Future vs S&P 500 E-mini.  IPC Future vs Naftrac and EWW (ETFs).  IPC Future vs Equity cash basket.  IPC Future vs Mexican ADR’s.  Common denominator: Contracts notional / Face value. IPC Index Futures & Trading Ideas…

Options on the IPC Future  This contract gives access to volatility trading on the IPC and represents an efficient hedging tool for Mexican equities.  CFTC approved product.  Liquidity - Constant bids and asks in the front maturities and in a wide range of strike prices. MexDer Ticker Symbol: IP Style:European Size:IPC x $10 MXP Tick:1 point Maturity Months: Quarterly, up to one year Settlement:Cash Trading Hours: 07: hrs. (GMT -06:00) Bloomberg ISA OMON Reuters MXN/FUTEX10#IPC*.XD: Implied Volatility : 14.96% ** Volatility Index Mexico (VIMEX) vs VIX ®

USD/MXN Future Contract  USD/MXN volume increased due to the local pension funds.  Active participation of domestic, foreign members and local pension funds.  Arbitrage opportunities with the CME MXN/USD Futures.

Agenda Introduction How to participate? Products overview and Trading Ideas Final Remarks

Final remarks Opportunity to participate in a developing market. End customers, FCMs, prop traders, high frequency traders. Easy access Market Making incentive program. Liquidity and depth in the underlying securities; development in their derivatives contracts to follow. Be part of the development of this new and exciting market!

38 It’s never been so easy…. Contact Us! +52 (55) From the US: MEXDER1 The leading Marketplace for trading derivatives on Mexican benchmarks Berenice Corral