1 BVMF’s Self-Assessment ACSDA Worskshop on CPSS-IOSCO Principles for FMIs September, 25 th 2012 BVMF’s Self-Assessment ACSDA Worskshop on CPSS-IOSCO Principles for FMIs September, 25 th 2012

2 BVMF is a vertically integrated multi-asset class and multi- market operator with a broad range of products and services Listing (stocks, bonds, funds, asset-backed securities, Among others ) Listing (stocks, bonds, funds, asset-backed securities, Among others ) Commodities Certification Commodities Certification Trading (stocks, derivatives, corporate and government Bonds, funds, spot US Dollar, among others) Trading (stocks, derivatives, corporate and government Bonds, funds, spot US Dollar, among others) Central Counterparty (CCP) Clearing and Settlement (for all products) Central Counterparty (CCP) Clearing and Settlement (for all products) Central Depository (stocks and corporate bonds) Central Depository (stocks and corporate bonds) Securities Lending (stocks and corporate bonds) Securities Lending (stocks and corporate bonds) Custody (services provided for funds and other market participants) Custody (services provided for funds and other market participants) Market Data Indices Licensing Software Licensing (used by brokerage Houses and other market participants) Software Licensing (used by brokerage Houses and other market participants) OTC Derivatives (registration and collateral management) OTC Derivatives (registration and collateral management) Services for issuers, brokers and commodities trading Trading, Clearing and Depository ActivitiesOther Services Trading Access (Brokers) Trading Access (Brokers) About BM&FBOVESPA

3 Securities Settlement System (SSS) Central Securities Depository (CSD) Central Counterparty (CCP)  Interposes itself between counterparties in transactions or contracts, becoming the buyer to the seller and the seller to the buyer.  The legal process through which the counterparties are replaced is known as “novation.”  Allows the transfer of securities and assets between investors, either free of payment or against payment.  When a securities transaction is settled, a transfer will occur through the accounts held at a the CSD and the corresponding financial resources will be settled, in general, in an interbank funds transfer system, which, in most cases, is managed by the Central Bank.  Service provider or institution which holds securities in a centralized form and allows financial transactions to be processed by book entry.  In addition to the traditional securities safekeeping and treatment of corporate actions, a CSD may also incorporate trade comparison, clearing and settlement. BM&FBOVESPA’s Post-trade Infrastructure The company’s post-trade infrastructure may be divided into three major business units: SSS, CCP and CSD

4 Three key issues were identified, highlighting the need for robust planning and tracking of the self-assessment Major issues identified before the self-assessment Time to Review/Understand CPSS-IOSCO Principles Identify Critical Departments Gather Information/Data Directors and managers to review/understand the principles, key considerations and questions Identify critical departments and establish a routine for them to take responsibility for the principles consistency analysis Gather all information/data to answer the Key Explanations demanded time and effort from multiple areas of BVMF Robust workplan and tracking process: Ensure an approach that allows the completion of the self-assessment in a timely-manner; Estimate the most effective and efficient workforce approach; Ensure the plan is aligned to current workforce expectations; Monitor the plan and ensure it can be adapted to variance in workforce trends and areas availability Robust workplan and tracking process: Ensure an approach that allows the completion of the self-assessment in a timely-manner; Estimate the most effective and efficient workforce approach; Ensure the plan is aligned to current workforce expectations; Monitor the plan and ensure it can be adapted to variance in workforce trends and areas availability

5 Self-assessment workplan The workplan developed for the BVMF self-assessment was comprised of 3 major phases  Collect data  Develop Status Report framework  Compile data in a single document under Assessment Methodology (AM)  Develop Answers Control Doc  Send the document to the responsible areas MAIN ACTIVITIES Development and Validation of the Final Document Data Analysis Data Collection and Organization  Analyze the responses received  Evaluate the information with the responsible areas Develop a draft document of the company’s self-assessment  Validate draft  Develop final version of BVMF’s self assessment Working Committee meetingsFinal presentation PRODUCTS  Status report  Document compiled according to AM  Answers Control Doc  Draft of the company’s self- assessment  Final version of BVMF’s self assessment Kick-off meeting Phase 1Phase 2Phase 3

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7 During the Phase 1 of the project, 3 products were developed by the Working Committee Overview and control of the questions not answered Understanding the effort being undertaken in the development of the document Provide overview of the data collected Identification and control of respondents Data Organization Facilitate understanding of the documents provided by CPSS-IOSCO A) Status report C) Answers control doc B) Compiled document Objetives Phase 1 - Products

8 The Status Report was the tool developed by the Working Committee to keep track of the principles responsibles Status Report Exemple