1. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F 32nd Annual International Futures Industry Conference 32nd Annual International Futures Industry Conference Info Exchange The Brazilian Mercantile & Futures Exchange - BM&F Info Exchange The Brazilian Mercantile & Futures Exchange - BM&F Boca Raton – March 14 th 2007

2. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Improved Macroeconomic Fundamentals Brazilian Business Environment is Attractive to International Capital Flows Brazilian Business Environment is Attractive to International Capital Flows

3. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Enhanced Performance of Brazilian Economy Reflects Upon the Decrease of Sovereign Risk Enhanced Performance of Brazilian Economy Reflects Upon the Decrease of Sovereign Risk EMBI BR - Spread Over US Treasury Source: JP Morgan Securities WC, Emerging Markets Research and Bloomberg 100 200 300 400 500 600 700 800 900 Feb-04Jul-04Jan-05Jun-05Nov-05Apr-06Sep-06Feb-07

4. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Building Up International Reserves Protects the Brazilian Economy Against External Turbulences Building Up International Reserves Protects the Brazilian Economy Against External Turbulences Source: Brazilian Central Bank Brazilian Central Bank International Reserves 0 15 30 45 60 75 90 105 Feb-04Jun-04Oct-04Feb-05Jun-05Oct-05Feb-06Jun-06Oct-06Feb-07 US$ Billions 101.1

5. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F 0 500 1,000 1,500 2,000 00010203040506 US$ Billion 0% 4% 8% 12% 16% Traded Contracts% of Total Contracts of BM&F Non-Residents Investors at BM&F Helping to Attract Non-Resident Investors

6. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Improved Macroeconomic Fundamentals Strong Base to Build Derivatives Business Brazilian Business Environment is Attractive to International Capital Flows Brazilian Business Environment is Attractive to International Capital Flows

7. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F World class derivatives exchange and self–regulatory organization Markets are supervised by the Brazilian Securities Commission (CVM) and Clearinghouses are regulated by the Brazilian Central Bank (BCB) Provides hedge and asset allocation related to the main exposures of the Brazilian economy and exports commodities prices The number of traded contracts grew 42.2% in 2006 to USD 283.6 million The financial volume increased 38.9% in 2006 to USD 10.6 trillions More than 90% of BM&F clients are qualified investors buyers BM&F Highlights

8. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Source: FIA’s Monthly Volume Reports 199,900,022 155,511,862 104,586,832 84,707,576 New York Mercantile Exchange (Nymex) National Stock Exchange of India (NSE) Dalian Commodity Exchange (DCE) ICE Futures 7th 8th 9th 10th 235,862,979 Bolsa de Mercadorias & Futuros (BM&F)6th 1,010,066,878 890,077,317 630,869,854 397,660,221 265,881,288 Chicago Mercantile Exchange (CME) Eurex Deutchland (EUREX) Chicago Board of Trade (CBOT) Euronext Mercado Mexicano de Derivados (MexDer) 1st 2nd 3rd 4th 5th Traded Contracts Jan – Nov 2006 Traded Contracts Jan – Nov 2006 Exchange Rank One of the Top 10 Futures Exchanges in the World

9. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F is an Institutional Investor Arena Institutional Investor 23.06% Financial Institutions 52.25% Private Individuals 6.66% Foreign Investors 16.30% Others 1.72% Breakdown by Financial Volume

10. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F Business Model Guarantees the Safety and Soundness of Brazilian Financial Markets BM&F Business Model Guarantees the Safety and Soundness of Brazilian Financial Markets BM&F Trading and Registration Systems BM&F Trading and Registration Systems GOVERNMENT BONDS Electronic platform  SISBEX – trading OTC registration platform DERIVATIVES Open outcry Electronic platform  GTS and WebTrading (E-mini) OTC registration platform FOREIGN EXCHANGE OTC registration platform Open outcry Settlement Bank 2004 Settlement Bank 2004 Derivatives Clearinghouse 1986 Derivatives Clearinghouse 1986 Securities Clearinghouse 2004 Securities Clearinghouse 2004 FX Clearinghouse 2002 FX Clearinghouse 2002

11. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Growth of Daily Traded Volume at BM&F CAGR = 28% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 00010203040506Jan-Feb 07 Thousand Contracts

12. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Increasing and Steady Open Interest at BM&F 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 00010203040506Feb-07 Thousand Contracts

13. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F SWAPS - INTEREST RATE - EXCHANGE RATE - PRICE INDEX - STOCK INDEX - GOLD FLEXIBLE OPTIONS - STOCK INDEX - EXCHANGE RATE - INTEREST RATE FUTURES & OPTIONS - STOCK INDEX - INTEREST RATE - EXCHANGE RATE - DOLLAR DENOMINATED DOMESTIC YIELD CURVE -INTEREST RATE X PRICE INDEX (PPI/CPI) SPREAD -PRICE INDEX (PPI/CPI) - SOVEREIGN DEBT BOND - GLOBAL BOND - A BOND - US TREASURY STRUCTURED PRODUCTS - SPREAD STRATEGIES - VOLATILITY TRADING - STOCK INDEX - INTEREST RATE - EXCHANGE RATE - FORWARD RATE AGREEMENTS What Can You Trade at BM&F? FUTURES & OPTIONS - - ARABICA COFFEE - CONILLON COFFEE - SUGAR - ETHANOL - COTTON - CORN - SOYBEAN - LIVE CATTLE - FEEDER CATTLE SPOT - GOLD - U.S. DOLLAR EXCHANGE RATE OTC DERIVATIVES FINANCIAL DERIVATIVES COMMODITY DERIVATIVES

14. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F - Full Fledged Exchange Offering Solutions to Non-Resident Investors BM&F - Full Fledged Exchange Offering Solutions to Non-Resident Investors Feb’07 BM&F Product Breakdown Exchange Rates 25.61% Interest Rates 66.38% Stock Indices 6.96% OTC Market 0.63% Agricultural Commodities 0.42%

15. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F A Sharp Increase of Non-Resident Participation at BM&F A Sharp Increase of Non-Resident Participation at BM&F 41 million traded contracts ( 05 78.5%) Average traded volume of 166 thousand contracts ( 05 81.4%) 14.7% of negotiated contracts ( 05 25.5%) USD 1.6 trillion in financial volume ( 05 66.0%) Average daily financial volume of USD 6.3 billion ( 05 68.7%) 14.8% of the total financial volume negotiated ( 05 20.3%)

16. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F 7.4 3.1 1.3 14.1 25.4 12.4 13.3% 7.4% 10.6% 7.7% 18.3% 17.7% Interest RatesExchange RatesStock Indexes 20052006Relative Participation 2005Relative Participation 2006 Million Contracts Non-Resident Investors Are Trading More Contracts in the Most Liquid Markets Non-Resident Investors Are Trading More Contracts in the Most Liquid Markets

17. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F 353.8 67.8 44.5 530.5 993.7 482.2 13.5% 9.5% 20.0% 21.3% 22.0% 17.3% USD Billion Interest RatesExchange RatesStock Indexes Non-Resident Investors Are Increasing Volumes in the Most Liquid Markets Non-Resident Investors Are Increasing Volumes in the Most Liquid Markets 20052006Relative Participation 2005Relative Participation 2006

18. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F 7.5 14.2 1.1 3.6 21.5% 4.0% 7.9% 1.9% 1.7% 10.1% Agricultural CommoditiesGoldSovereign Bonds Thousand Contracts Non-Resident Investors Are Trading More Agricultural Commodities Markets Contracts Non-Resident Investors Are Trading More Agricultural Commodities Markets Contracts 20052006Relative Participation 2005Relative Participation 2006 105.7 135.5

19. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F 1,196.0 16.9 840.5 75.0 1,447.7 6.5 5.6% 5.3% 11.8% 11.9% 1.7% 0.6% USD Million Agricultural CommoditiesGoldSovereign Bonds Non-Resident Investors Participation is Increasing in the Agricultural Commodities Markets Non-Resident Investors Participation is Increasing in the Agricultural Commodities Markets 20052006Relative Participation 2005Relative Participation 2006

20. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Pledged Collateral by Non-Resident Investors Will be Facilitated in New York Pledged Collateral by Non-Resident Investors Will be Facilitated in New York 0% 5% 10% 15% 20% 010203040506

21. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Clears, guarantees and settle every contract traded at BM&F Average daily trading volume: 1.8 million contracts Average daily notional financial volume: USD 64 billion Open interest: 13.71 million contracts Open interest notional financial value: USD 656 billion Value deposited as collateral: USD 28.3 billion Derivatives Clearinghouse CCP to Every Contract Traded at BM&F Derivatives Clearinghouse CCP to Every Contract Traded at BM&F Feb’07

22. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F’s financial safeguard system is based on self contained layers of protection facilitated by a defaulter, survivor, and third party payment structure BM&F’s has expertise in dealing with unexpected volatility peaks and a capacity to handle a boost in the settlement volume BM&F utilizes state-of-the-art risk management procedures to mitigate market and counterparty risk Why it is Safe to Trade at BM&F?

23. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Customer Local Customer Brokerage House Brokerage House Brokerage House Brokerage House Brokerage House Brokerage House Derivatives Clearinghouse Participant Structure BM&F Participants Structure BM&F Clearing Member Clearing Member Clearing Member Clearing Member

24. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Customer collateral Customer collateral USD 28.3 billion Feb’07 Derivatives Clearinghouse Sound Safeguards System

25. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Sturdy and Conservative Collateralization Feb’07 BM&F Derivatives Clearinghouse Collateral Composition Gold 0.05% Other Assets 0.87% Stocks 4.15% Federal Government Bonds 87.13% Bank CDs 2.56% Letters of Credit 5.23%

26. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Brokerage House proprietary collateral Customer collateral Customer collateral Clearing Fund USD 80 million Clearing Member proprietary collateral Joint and several equity liability USD 28.3 billion Mutualized Funds USD 40 million Clearing Member Brokerage House Brokerage House Customer Feb’07 USD 469 million BM&F equity Guarantee Fund USD 45 million Derivatives Clearinghouse Sound Safeguards System

27. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F’s financial safeguard system is based on self contained layers of protection facilitated by a defaulter, survivor, and third party payment structure BM&F’s has expertise in dealing with unexpected volatility peaks and a capacity to handle a boost in the settlement volume BM&F utilizes state-of-the-art risk management procedures to mitigate market and counterparty risk Why it is Safe to Trade at BM&F?

28. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F High Standards for Liquidity Risk Management Achievement of Lamfallusy Plus Criteria 2002/2003 Event May 2006 Event Access to Central Bank Discount Window 0 100 200 300 400 500 600 700 800 900 12/0106/0212/02 06/0312/0306/0412/0406/05 12/05 06/06 12/06 USD Million Sum of the two largest clearing members' settlement debts BM&F credit facilities

29. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F’s financial safeguard system is based on self contained layers of protection facilitated by a defaulter, survivor, and third party payment structure BM&F’s has expertise in dealing with unexpected volatility peaks and a capacity to handle a boost in the settlement volume BM&F utilizes state-of-the-art risk management procedures to mitigate market and counterparty risk Why it is Safe to Trade at BM&F?

30. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Intraday risk calculation Portfolio stress testing Economic outlook analysis and Extreme Value Theory Models Economic outlook analysis and Extreme Value Theory Models Collateral market risk Credit analysis Concentration limits Additional margin calls Collateral credit risk Central Bank discount window and 5 banking repo facilities Price variation limits Achievement of Lamfalussy Plus Criteria Collateral liquidity risk Business recovery plan Contingency hot site Independent internal and external audits ISO 9001 compliance Brazilian Payment System Law 10214 Finality and netting Insolvency protection Market Risk Credit Risk Liquidity Risk Operational Risk Legal Risk BM&F Derivatives Clearinghouse Risk Management Efficient and Modern Risk Management

31. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F The world’s first clearing and settlement system for interbank FX market 95% market share on T+1 and T+2 BRL/USD FX Transactions 72 participating banks Average daily registered gross volume: USD 2.5 billion Average daily net settled volume: USD 932 million 81% of netting power The Clearinghouse mitigates principal, volatility, and operational risks through DVP, pre-pledged collateral and deferred net settlement Foreign Exchange Clearinghouse CCP for Interbank FX Transactions Foreign Exchange Clearinghouse CCP for Interbank FX Transactions

32. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F FX Clearinghouse Central Bank Correspondent Bank abroad Bank of America Correspondent Bank abroad Citibank Correspondent Bank abroad Standard Chartered Foreign currency settlement account Local currency settlement account Correspondent Bank abroad Wachovia Bank FX Clearinghouse Settlement Accounts

33. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Renders registration, clearing and settlement services for federal government bonds cash transactions on the spot market Provides services that contributes to higher liquidity and lower operational and credit risks General and specific collateralized repos for the cash driven and securities driven repo markets Settlement of primary government auctions Securities lending facility Average daily volume of USD 6.5 billion (Mar-06 to Feb-07) Clearing 41% of the Brazilian repo market, i.e., the “on the run” National Treasury Bills trading (LTN) Securities Clearinghouse CCP and SSS for government Bonds Securities Clearinghouse CCP and SSS for government Bonds

34. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F REAL-TIME QUOTES REFERENCE PRICES NEWS AUCTIONS Sisbex Screen

35. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F The business model is based on three pillars Risk management mitigation – Access to Brazilian Central Banking reserves accounts, efficiency of margin charge and allocation, and a full platform integrated to the BM&F clearing systems Settlement facilities – Real time collateral management and liquidity assistance trough repo transactions and FX services for non-resident investors Custody – Pre-matching and post trading reconciliation of securities positions under fiduciary ownership of the CSDs A wholly-owned BM&F subsidiary, with capital of USD 11 million STP structure not exposed to market and credit risks Services 50% of BM&F’s members Settlement Bank Enhances Competitiveness of Brokers and Clearing Members Settlement Bank Enhances Competitiveness of Brokers and Clearing Members

36. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Brazilian Business Environment is Attractive to International Capital Flows Brazilian Business Environment is Attractive to International Capital Flows Improved Macroeconomic Fundamentals Strong Base to Build Derivatives Business Sound Regulatory Framework for Investments

37. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Resolution 2689 – An Efficient Legal Gateway for Non-Resident Investors to Access Brazilian Markets Resolution 2689 – An Efficient Legal Gateway for Non-Resident Investors to Access Brazilian Markets Allows nonresidents investors to invest in the Brazilian capital and financial markets, including BM&F’s products Focuses on foreign institutional investors, financial institutions, corporations, and individuals Creates a Privileged Taxation Regime for Non-Resident Investors from Non-Tax Havens Makes foreign investment more efficient Eliminating investment restrictions Simplifying procedures Creating operational safety

38. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Resolution 2689 – A Step by Step Process for Non-Resident Investors Access to BM&F Resolution 2689 – A Step by Step Process for Non-Resident Investors Access to BM&F 1.Select a legal representative in Brazil 2.Receive a registration number from CVM 3.Select a local custodian 4.Select a BM&F Brokerage House member 5.Provide documents required 6.Select a Brazilian bank FX transactions 7.Starts to trade

39. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Brazilian Business Environment is Attractive to International Capital Flows Brazilian Business Environment is Attractive to International Capital Flows Improved Macroeconomic Fundamentals Strong Base to Build Derivatives Business Sound Regulatory Framework for Investments Following Global Tendencies

40. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F

41. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F

42. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Volumes are Moving to Our Electronic Trading System 92.9 7.1 87.6 12.4 78.8 21.2 74.9 25.1 66.6 33.4 51.8 48.2 46.0 54.0 010203040506Jan-Feb 07 Open OutcryElectronic Trading

43. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F WebTrading Facility

44. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Number of Traded Contracts (WebTrading) The WebTrading Volume Reached 8.8 million Contracts Traded in 2006 The WebTrading Volume Reached 8.8 million Contracts Traded in 2006 0 1,000 2,000 3,000 4,000 1Q052Q053Q054Q051Q062Q063Q064Q06Jan-Feb 07 0% 2% 4% 6% 8% 10% Thousand Contracts % of Contracts Traded Electronically (WebTrading + GTS)

45. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Electronic Certified Emission Reduction Auctions Web based trading system To be scheduled on demand Direct Access to Authorized Participants BM&F Brokers Carbon Funds Carbon Brokers/Traders Government Entities Multilateral Organizations First Stage Spot market (already issued CERs) Clearing: Delivery Versus Payment CER Physical Delivery: CDM Registry UN / EU ETS Full integration with BM&F Carbon Facility Carbon Trading System

46. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F Carbon Facility

47. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Demutualization: A Tendency Adopted by the Top Exchanges Creates competitive advantages Maximizes the value of members’ titles Provides access to capital markets to boost investments on new projects Creates opportunities to businesses combinations, joint ventures, and strategic alliances with other exchanges and markets participants

48. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F Demutualization Agenda Demutualization approved by General Meeting of Members in December 2006 Appointment of Rothschild as advisor Expected changes on Bylaws and corporate structures in July 2007 Regulatory approvals IPO expected to be conclude at the end of 2007

49. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F BM&F New York Office Phone (1-212) 750-4197 BM&F Shanghai Office Phone (86-21) 5037-2886 BM&F Headquarters São Paulo BM&F Headquarters São Paulo Phone (55-11) 3119-2320 internacional@bmf.com.br

50. 32nd Annual International Futures Industry Conference The Brazilian Mercantile & Futures Exchange - BM&F www.bmf.com.br The Brazilian Mercantile & Futures Exchange – BM&F 32nd Annual International Futures Industry Conference 32nd Annual International Futures Industry Conference Boca Raton – March 14 th 2007