CBLC BRAZILIAN CLEARING AND DEPOSITORY CORPORATION October 8, 2007 CBLC BRAZILIAN CLEARING AND DEPOSITORY CORPORATION CLEARING AND SETTLEMENT SERVICES 1 1

Evolution of Securities Settlement Transactions - (USD billion) CBLC CBLC IN NUMBERS Evolution of Securities Settlement Transactions - (USD billion) 18.93 12.07 8.58 7.75 450 Quantity - Nº (million) 2 4 6 8 10 12 14 16 18 20 400 350 $ 232 300 250 Volume - USD (billion) $ 336 $ 159 200 150 $ 118 $ 188 100 $ 121 50 $ 91 2004 2005 2006 2007* Financial volume – Until July Financial volume – After July Number of settled trades – Until July Obs.: Exchange rate from July 31st * Until July 2007 2 2

Risk Management Services Central Bank Money Settlement CBLC CBLC CLEARING AND SETTLEMENT SERVICES Novation Risk Management Services Clearing Services Settlement Services CSD Settlement Central Bank Money Settlement 3 3

Risk Management Services Central Bank Money Settlement CBLC CBLC CLEARING AND SETTLEMENT SERVICES Novation Risk Management Services Clearing Services Settlement Services CSD Settlement Central Bank Money Settlement 4 4

CLEARANCE & SETTLEMENT SERVICES STP – STRAIGHT TRHOUGH PROCESSING Trade matching and confirmation are automated. The trades are locked in for settlement to CBLC. Equities Derivatives Fixed Income Real Time CBLC 5 5

Risk Management Services CBLC CBLC CLEARING AND SETTLEMENT SERVICES Novation Risk Management Services Clearing Services Settlement Services CSD Settlement Central Bank Money Settlement 6 6

Risk Management Services CBLC CBLC… AS A CENTRAL COUNTERPARTY - CCP Novation Risk Management Services Clearing Services Settlement Services CSD Settlement Central Bank Money Settlement 7 7

CBLC becames a CCP at this moment CENTRAL COUNTERPARTY Equities Derivatives Fixed Income Securities Lending Trading information is captured on a real-time basis and in a STP fashion All trades are previously collateralized CBLC becames a CCP at this moment BOVESPA’s Trading Systems CBLC’s Risk Management, Clearing and Depository Services STP 8 8

Hybrid model: Collateralization and Settlement Fund CBLC RISK MANAGEMENT SERVICES Special Net Worth CBLC Model Settlement Fund Collateralization Participants Requirements Hybrid model: Collateralization and Settlement Fund 9 9

RISK MANAGEMENT SERVICES CBLC RISK MANAGEMENT SERVICES DEALING WITH FAILURES DELIVERY PAYMENT 1st: Securities Lending 2nd: Buy-in Procedures 1st: Collaterals posted by the defaulter 2nd: Settlement Fund 3rd: Special Net Worth 10 10

SECURITIES LENDING SERVICES - BTC CBLC SECURITIES LENDING SERVICES - BTC Evolution of the quantity and volume of delivery failures treated by BTC Nº of treated delivery failures Treated delivery failures - volume (R$) Quantity volume (USD million) 25,968 93,751 61,254 30,883 USD 1,931 USD 1,294 USD 783 USD 453 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2004 2005 2006 2007* 500 1,000 1,500 2,000 2,500 Exchange rate as of July 31st, 2007 * Until July 2007 11 11

Risk Management Services Central Bank Money Settlement CBLC CBLC CLEARING AND SETTLEMENT SERVICES Novation Risk Management Services Clearing Services Settlement Services CSD Settlement Central Bank Money Settlement 12 12

Risk Management Services Central Bank Money Settlement CBLC CBLC… AS A SECURITIES SETTLEMENT SYSTEM - SSS Novation Risk Management Services Clearing Services Settlement Services CSD Settlement Central Bank Money Settlement 13 13

CLEARANCE & SETTLEMENT SERVICES CBLC CLEARANCE & SETTLEMENT SERVICES NET SETTLEMENT Multilateral netting across different markets and instruments (equities, derivatives and fixed income instruments) SFI-DVP Model 3 (BIS) SETTLEMENT CYCLE Equities - Cash T+3 Equities - Derivatives T+1 Fixed Income T+0 T+1 14 14

CLEARANCE & SETTLEMENT SERVICES CBLC CLEARANCE & SETTLEMENT SERVICES GROSS SETTLEMENT Public offerings, initial public offerings, privatizations, special services and fixed income instruments SFI-DVP Model 1 (BIS) SETTLEMENT CYCLE Equities T+0 T+n Fixed Income T+0 15 15

CBLC’s DVP process CLEARANCE & SETTLEMENT SERVICES CBLC CBLC Settlement Account at the Central Bank 3 p.m. 10 a.m. CBLC Settlement Account at the CSD S Sell-side CSD Account Buy-side Central Bank Account Sell-side Central Bank Account Buy-side CSD Account 3:25 p.m. 16 16

National System Financial Network (XML) CBLC RELATIONSHIP WITH CENTRAL BANK CENTRAL BANK MONEY April 2002 - New Brazilian Payment System (SPB) Mitigation of Systemic Risk Compliance with best practices and BIS’s international recommendations CBLC: one of the SPB’s clearings SPB Central Bank National System Financial Network (XML) STR CBLC Account CBLC 17 17

TRANSFER NETWORK SYSTEM - STR CBLC RELATIONSHIP WITH CENTRAL BANK TRANSFER NETWORK SYSTEM - STR CBLC Settlement Account Central Bank Bank X Bank Y SPB PRINCIPLES Real Time Gross Transfers Overdrafts not allowed 18 18

CLEARANCE & SETTLEMENT SERVICES CBLC CLEARANCE & SETTLEMENT SERVICES SPECIAL SERVICES TESOURO DIRETO Developed by Brazilian National Treasury in a partnership with CBLC Enables natural people to acquire Federal Government Bonds directly through the internet PUBLIC OFFERING SUPPORT SERVICES Operational support for the IPOs Centralization of institutional and retail investors allocation process Gross Settlement Services Objectives • Popularize the government bond market. • Encourage individuals to build up a long-term 19 19

PUBLIC OFFERING SUPPORT SERVICES CBLC PUBLIC OFFERING SUPPORT SERVICES Public Offering Evolution - Quantity and Volume (USD billion) 60 52 USD 25 46 % 42 50 USD 20 40 118 % USD 15 20 30 $ 21.0 USD (billion) 144 % USD 10 13 20 $ 14.4 USD 5 10 $ 6.6 $ 2.7 USD 0 2004 2005 2006 2007* Number Volume Exchange rate as of July 31st, 2007 * Until July 2007 20 20

RAQUEL FERRARI SILVA BEATO Settlement Services Supervisor CBLC THANK YOU! rbeato@cblc.com.br (55) 11 3233-2181 RAQUEL FERRARI SILVA BEATO Settlement Services Supervisor 21 21